Economy of South Dakota - History

History

Humans have lived in what is today South Dakota for at least several thousand years. The first inhabitants were Paleoindian hunter-gatherers, and disappeared from the area around 5000 BC. Between 500 AD and 800 AD, a semi-nomadic people known as the Mound Builders lived in central and eastern South Dakota. In the 14th century, the Crow Creek Massacre occurred, in which several hundred men, women, and children were killed near the Missouri River.

By 1500 the Arikara (or Ree) had settled in much of the Missouri River valley. European contact with the area began in 1743, when the LaVerendrye brothers explored the region. The LaVerendrye group buried a plate near the site of modern day Pierre, claiming the region for France as part of greater Louisiana. By the early 19th century, the Sioux had largely replaced the Arikara as the dominant group in the area.

In 1803, the United States purchased the Louisiana Territory, an area that included most of South Dakota, from Napoleon Bonaparte, and President Thomas Jefferson organized a group commonly referred to as the "Lewis and Clark Expedition" to explore the newly acquired region. In 1817, an American fur trading post was set up at present-day Fort Pierre, beginning continuous American settlement of the area. In 1855, the U.S. Army bought Fort Pierre but abandoned it in 1857 in favor of Fort Randall to the south. Settlement by Americans and Europeans was by this time increasing rapidly, and in 1858 the Yankton Sioux signed the 1858 Treaty, ceding most of present-day eastern South Dakota to the United States.

Land speculators founded two of eastern South Dakota's largest present-day cities: Sioux Falls in 1856 and Yankton in 1859. In 1861, the Dakota Territory was established by the United States government (this initially included North Dakota, South Dakota, and parts of Montana and Wyoming). Settlement of the area, mostly by people from the eastern United States as well as western and northern Europe, increased rapidly, especially after the completion of an eastern railway link to Yankton in 1873.

In 1874 gold was discovered in the Black Hills during a military expedition led by George A. Custer and miners and explorers began illegally entering land promised to the Lakota. Custer's expedition took place despite the fact that the US had granted the entire western half of present-day South Dakota (West River) to the Sioux in 1868 by the Treaty of Laramie as part of the Great Sioux Reservation. The Sioux declined to grant mining rights or land in the Black Hills, and war broke out after the U.S. failed to stop white miners and settlers from entering the region. Eventually the US defeated the Sioux and broke up the Great Sioux Reservation into five reservations, settling the Lakota in those areas. (In 1980, the US Supreme Court and Congress ordered payment to the Lakota for the illegal seizure of the Black Hills. The case remains unsettled, as the Lakota refuse to accept the money and instead insist on the return of the land.)

A growing population caused Dakota Territory to be divided in half and President Benjamin Harrison signed proclamations formally admitting both South Dakota and North Dakota to the union on November 2, 1889. Harrison had the papers shuffled to obscure which one was signed first and the order went unrecorded.

On December 29, 1890, the Wounded Knee Massacre occurred on the Pine Ridge Indian Reservation. Commonly cited as the last major armed conflict between the United States and the Lakota Sioux Nation, the massacre resulted in the deaths of at least 146 Sioux, many of them women and children. 31 U.S. soldiers were also killed in the conflict.

During the 1930s, several economic and climatic conditions combined with disastrous results for South Dakota. A lack of rainfall, extremely high temperatures and inappropriate cultivation techniques produced what was known as the Dust Bowl in South Dakota and several other plains states. Fertile topsoil was blown away in massive dust storms, and several harvests were completely ruined. The experiences of the Dust Bowl, coupled with local bank foreclosures and the general economic effects of the Great Depression, resulted in many South Dakotans leaving the state. The population of South Dakota declined by more than 7% between 1930 and 1940.

Economic stability returned with the U.S. entry into World War II in 1941, when demand for the state's agricultural and industrial products grew as the nation mobilized for war. In 1944, the Pick–Sloan Plan was passed as part of the Flood Control Act of 1944 by the U.S. Congress, resulting in the construction of six large dams on the Missouri River, four of which are at least partially located in South Dakota. Flood control, hydroelectricity, and recreational opportunities such as boating and fishing are provided by the dams and their reservoirs.

In recent decades, South Dakota has been transformed from a state dominated by agriculture to one with a more diversified economy. The tourism industry has grown considerably since the completion of the interstate system in the 1960s, with the Black Hills becoming more important as a destination. The financial service industry began to grow in the state as well, with Citibank moving its credit card operations from New York to Sioux Falls in 1981, a move that has since been followed by several other financial companies. South Dakota was the first state to eliminate caps on interest rates.

In 2007, the site of the recently closed Homestake gold mine near Lead was chosen as the location of a new underground research facility, the Deep Underground Science and Engineering Laboratory. Despite a growing state population and recent economic development, many rural areas have been struggling over the past 50 years with locally declining populations and the emigration of educated young adults to larger South Dakota cities, such as Rapid City or Sioux Falls, or to other states. Mechanization and consolidation of agriculture has contributed greatly to the declining number of smaller family farms and the resulting economic and demographic challenges facing rural towns.