Minnesota Public School Fund

Creator: William Millikan

Roosevelt High School, ca. 1910.

In 1854, the United States took the mineral-rich lands of northeastern Minnesota Territory from the Ojibwe Nation after the signing of the Treaty of La Pointe. Four years later, it granted to the new state of Minnesota sections 16 and 36 of every one of its townships, either to be held in trust or leased to support state schools. Close to three million acres were dedicated to a public school trust fund, and the iron ore and forest lands of the Ojibwe generated over 85 percent of its value. In 2017, it is worth over a billion dollars.

In the fall of 1862, in the midst of the US–Dakota War, the first sales of public school lands began. Over 38,000 acres of prime agricultural land were sold for over $240,000. By 1875, school lands in the thirteen counties in the state’s southeastern corner were almost sold out; the public school fund had surpassed three million dollars.

After his election in 1882, State Auditor and Land Commissioner William Wallace Braden realized that valuable state lands might be sold too cheaply if current laws remained in force. The public school lands stood to lose millions of dollars of iron ore deposits. Braden quickly stopped all sales of state land in Lake, Cook, and St. Louis Counties in northeastern Minnesota. He also reserved for the state the mineral rights on timber lands across the rest of the region.

In October of 1883, Braden began selecting new public school lands on the Iron Range. He aimed to replace the over 500,000 acres of lands granted to the state but claimed by white immigrants before surveys marked the locations of sections 16 and 36. One of his early selections was the northeast quarter of section eight in Township 58 range 17. This selection concealed over sixty million tons of undiscovered iron ore.

The Mesabi Iron Range contained the richest deposit of this ore on state land. After Braden opened the first round of a land-leasing program in March 1890, the Merritt brothers won over half of the available leases. They found evidence of iron ore on the Mesabi, then invested $35 to dig a test pit. They discovered a massive iron ore deposit, built a mine to extract it, and named it the Mesabi Mountain Mine. When production began, lease holders paid the state 25 cents per ton of iron ore, and the public school fund began to receive millions of dollars in royalties.

In 1926, the Mesabi Mountain Mine was producing over five million tons of ore a year. The total royalties paid to the state had passed six million dollars. Fifteen years later, in 1941, production had surpassed sixty-nine million tons and the public school fund had received over sixteen million dollars.

While over 85 percent of the public school fund had come from the iron ore deposits and white pine forests on Ojibwe lands, only 16 percent of the invested income went back into the public schools of northeast Minnesota. In Virginia, next to the giant pit of the Mesabi Mountain Mine, the public schools prospered from the massive property tax base provided by area iron mines. The school district was able to spend almost three times as much money on each student as the average Minnesota school district. When an enormous technical high school was completed in 1921, historians and education professionals proclaimed that Virginia schools were equal to any in the country.

For the Ojibwe children of northern Minnesota, school was a very different experience. In 1899, the U.S. government opened an Indian boarding school near Tower on the Vermilion Iron Range. School staff took children from their homes and kept them isolated from their families for months. Some dressed them in poorly made uniforms and cut their hair short. Children endured severe punishment for speaking their own languages.

In 1954, the federal government closed the Lake Vermilion Indian Boarding School. On August 24, 2016, ground was broken on a new Bug-O-Nay-Ge-Shig High School on the Leech Lake Reservation, replacing a thirty-year-old pole barn. Two years earlier, the Minnesota Department of Natural Resources had reported that the public school trust fund’s balance was over one billion dollars.

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Millikan, William. "Minnesota Public School Fund." MNopedia, Minnesota Historical Society. https://www3.mnhs.org/mnopedia/search/index/thing/minnesota-public-school-fund

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First Published: May 08, 2017

Last Modified: April 15, 2025

Bibliography

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Biennial Report of the Minnesota State Auditor to the Legislature of Minnesota. St. Paul, [N.p.]: 1904. Available at the Minnesota Historical Society as part of the periodicals collection (HJ11 .M62).

Betten, Neil. “Riot, Revolution, Repression in the Iron Range Strike of 1916.” Minnesota History 41, no. 2 (Summer 1968): 82–94.
http://collections.mnhs.org/MNHistoryMagazine/articles/41/v41i02p082-094.pdf

Danziger Jr, Edmund J. “They Would Not Be Moved: The Chippewa Treaty of 1854.” Minnesota History 43, no. 5 (Spring 1973): 175–185.
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Doe, R. K. Where the Melting Pot Doth Melt. Undated. Copy in the James S. Steel Oliver Iron Mining Company research materials, Minnesota Historical Society, St. Paul.
http://www2.mnhs.org/library/findaids/00181.xml

Eleff, Robert M. “The 1916 Minnesota Miners’ Strike Against U.S. Steel.” Minnesota History 51, no. 2 (Summer 1988): 63–74.
http://collections.mnhs.org/MNHistoryMagazine/articles/51/v51i02p063-074.pdf

Gawboy, Carl. “Men of the Thick Fir Woods: Bois Fort Indians of the Vermilion.” In Entrepreneurs and Immigrants: Life on the Industrial Frontier of Northwestern Minnesota, edited by Michael G. Karni. N.p.: Iron Range Research Center, 1991.

Grover, Linda LeGarde. “From Assimilation to Termination: The Vermilion Lake Indian School.” Minnesota History 58, no. 4 (Winter 2002–2003): 224–240.
http://collections.mnhs.org/MNHistoryMagazine/articles/58/v58i04p224-240.pdf

Hamley, Jeffrey. “An Introduction to the Federal Boarding School Movement.” North Dakota History 61, no. 2 (Spring 1994): 2–9.

Hoover, Roy O. “Leonidas Merritt and the Brady Bill.” Unpublished paper, University of Minnesota Duluth. Duluth: N.p., 1979. Copy in the Minnesota Historical Society (KF1819 .H66 1979).

Iverson, Samuel G. “The Public Lands and the School Fund of Minnesota.” Minnesota Collections 15 (February 13, 1911): 287–314.

Kelley, Francis E. “A History of Public School Support in Minnesota, 1858–1917.” Research Publications of the University of Minnesota: Current Problems 12 (December 1920).
https://books.google.com/books?id=XXfKAAAAMAAJ

“An Ordinance For Ascertaining the Mode of Disposing of Lands in the Western Territory.” Journals of the Continental Congress 28 (May 20, 1785): 375–386.
http://memory.loc.gov/cgi-bin/ampage?collId=lljc&fileName=028/lljc028.db&recNum=375

OH 108
Vermilion Lake People: Vermilion Lake Bois Forte Oral History Project
Oral History Collection, Minnesota Historical Society, St. Paul
Description: Those interviewed discuss various aspects of the history of, and life on, the Bois Fort Reservation in northeastern Minnesota, including childhood, education, work, social customs, and economic and social conditions.

McClurken, James M. Fish in the Lakes, Wild Rice, and Game in Abundance. East Lansing, MI: Michigan State University Press, 2000.

Merritt family papers, 1823–1992
Northeast Minnesota Historical Center Collections, University of Minnesota, Duluth
Description: The collection contains personal and financial correspondence, letterpress books, scrapbooks, newspaper clippings, manuscripts written about local and family history, financial records, legal papers, maps, photographs, one audio cassette of an interview, and reference materials.
https://libarchive.d.umn.edu/?p=collections/controlcard&id=1026

Miscellaneous Records of the Minnesota State Auditor, 1858–1963
State Archives Collection, Minnesota Historical Society, St. Paul
Description: The collection includes extensive records relating to all aspects of state trust fund lands: mineral lease records, biennial reports, land sales records, stumpage records, school land correspondence, and trust fund land certificates. Also includes early board of investment records relating to trust fund lands.
http://www2.mnhs.org/library/findaids/audit039.pdf

Published Records and Reports of the Minnesota State Auditor, 1906–2007
State Archives Collection, Minnesota Historical Society, St. Paul
Description: Reports, newsletters, and miscellaneous print and near-print items of or about the State Auditor's Office. The records cover all aspects of the department's duties and activities, particularly timber laws and sales; peat; state parks and monuments; public lands, including school, lake front, and mineral lands; iron ore and mineral reservations; energy assistance programs; taxes and tax levies; state accounting standards; public pension funds; and county finances.
http://www2.mnhs.org/library/findaids/gr01085.xml

Public Lands Files, Miscellaneous, 1916–1963
Minnesota State Auditor; Land Department
State Archives Collection, Minnesota Historical Society, St. Paul
Description: Topics covered include condemnation, payments, federal patents, abandonment, taxation, railroad right-of-way, flowage rights, timber appraisal, disputed acreage, sale, and utilization. Types of lands involved include school, improved, American Indian, railroad, and trust fund.
http://www2.mnhs.org/library/findaids/gr00660.xml

Miscellaneous records, 1864–1882, 1918–1979
Minnesota Division of Lands and Minerals
State Archives Collection, Minnesota Historical Society, St. Paul
Description: The records include biennial reports, mine inspection reports, and various mining publications.
http://www2.mnhs.org/library/findaids/cons066.pdf

"An Ordinance for the Government of the Territory of the United States, North-west of the River of Ohio. U.S. Congress, May 20, 1787.
https://www.loc.gov/resource/bdsdcc.22501

Skaurud, Martin. “A History of Virginia, Minnesota.” Master’s thesis, University of Minnesota, June 1941.

Smith, Timothy L. Educational Beginnings: 1884–1910. [Minneapolis: University of Minnesota], 1963.

——— . School & Community: The Quest for Equal Opportunity, 1910–1921. [Minneapolis: University of Minnesota], 1963.

Souder, Jon A., and Sally K. Fairfax. State Trust Lands: History, Management and Sustainable Use. Lawrence, KS: University Press of Kansas, 1996.

Taipole, Victor K. “Missabe Mountain Mine.” Mining Congress Journal 31 (April 1945): 45–48.

United States Statutes at Large. First Congress, second session, July 22, 1790. “Chapter XXXIII: An Act to Regulate Trade and Intercourse with the Indian Tribes.”
http://rs6.loc.gov/cgi-bin/ampage?collId=llsl&fileName=001/llsl001.db&recNum=260

Oklahoma State University Digital Library. Indian Affairs: Laws and Treaties. Treaty with the Chippewa, 1854.
http://digital.library.okstate.edu/kappler/vol2/treaties/chi0648.htm

Usher, Alexandra. Public Schools and the Original Federal Land Grant Program. Washington, D.C.: Center on Education Policy, [2011?].

Duluth Land District records, 1855–1929
State Archives Collection, Minnesota Historical Society, St. Paul
Description: Abstracts of preemption declaratory statements filed in the Duluth land district under provisions of the General Preemption Act of 1841.
http://www2.mnhs.org/library/findaids/glo002.pdf

United States General Land Office – Bureau of Land Management Patent Records for Minnesota.

Walker, David A. Iron Frontier: The Discovery and Early Development of Minnesota’s Three Ranges. St. Paul: Minnesota Historical Society Press, 1979.

Wallace, Anthony F. C. “The Obtaining Lands.” In Thomas Jefferson and the Changing West, edited by James P. Ronda. Albuquerque, NM: University of New Mexico Press, 1997.

Winchell, N. H. The Iron Ores of Minnesota. Minneapolis: Harrison &Smith, 1891.

Related Resources

Primary

Office of the Revisor of Statutes. Constitution of the State of Minnesota.
https://www.revisor.leg.state.mn.us/constitution/

J. William Trygg papers, [195-]–[196-]
Manuscript Collection, Minnesota Historical Society, St. Paul
Description: Legal and background papers related to the work of an appraiser for the Indian Claims Commission. See especially dockets 18B and 18U.
http://www2.mnhs.org/library/findaids/00624.xml

Miscellaneous records, 1907–1999
State of Minnesota minerals tax office
State Archives Collection, Minnesota Historical Society, St. Paul
Description: Reports on various taxes on iron ore, particularly the royalty tax and the occupation tax.
http://www2.mnhs.org/library/findaids/gr01218

Pardee, John Stone. “In the Treasure Country.” Copy in the James Steel Papers, Manuscript Collection, Minnesota Historical Society.

Selected files regarding Minnesota Chippewa Agencies, 1890–1939
United States Bureau of Indian Affairs
Manuscript Collection, Minnesota Historical Society, St. Paul
Description: See especially records of the Chippewa Consolidated Agency.
http://www2.mnhs.org/library/findaids/00588.xml

U.S. General Land Office state trust fund land selection and approved lists, 1867–1917
State Archives Collection, Minnesota Historical Society, St. Paul
Description: An incomplete set of selection and approved lists for various categories of Minnesota state trust fund lands.
http://www2.mnhs.org/library/findaids/glo014.pdf

Secondary

Adams, David Wallace. Education for Extinction: American Indian and the Boarding School Experience 1875–1928. Lawrence: University Press of Kansas, 1995.

Eblen, Jack E. “Origins of the United States Colonial System: The Ordinance of 1787.” Wisconsin Magazine of History 51, no. 4 (Summer 1968): 294–314.

Horsman, Reginald. “The Northwest Ordinance and the Shaping of an Expanding Republic.” Wisconsin Magazine of History 73, no.1 (Autumn 1989): 21–32.

——— . Expansion and American Indian Policy, 1783–1912. Norman, OK: University of Oklahoma Press, 1967.

Larson, Agnes M. The White Pine Industry in Minnesota. Minneapolis: University of Minnesota Press, 1949.

Meyer, Melissa L. The White Earth Tragedy. Lincoln: University of Nebraska Press, 1994.

Longyear, Edmund J. Mesabi Pioneer. Edited by Grace Lee Nute. St. Paul: Minnesota Historical Society Press, 1951.

Pardee, John Stone, comp. The Children’s Heritage. Duluth: Minnesota Arrowhead Association, 1928.

Torreano, Peter F. Mesabi Miracle. Hibbing, MN: Sargent Land, 1991.

Wallace, Anthony F. C. Jefferson and the Indians: the Tragic Fate of the First Americans. Cambridge, MA: Harvard University Press, 1999.

Wirth, Fremont P. The Discovery and Exploitations of the Minnesota Iron Lands. Cedar Rapids, IA: Torch Press, 1937.

Wub-e-ke-niew. We Have The Right to Exist. New York: Black Thistle Press, 1995.

Related Images

Black and white photograph of William Wallace Braden, ca. 1863. Photographed by Joel Emmons Whitney.

Black and white photograph of Leonidas Merritt on the Vermillion Trail, 1892.

Black and white photograph of the first mine on the Mesabi Range, near Mountain Iron, ca. 1892. Photographed by Louis Perry Gallagher.

Black and white photograph of a public school in Virginia, Minnesota, 1895.

Black and white photograph of Lafayette Bliss, ca. 1900. Photographed by the Yates sisters.

Black and white photograph of an Ojibwe family in canoe on Lake Vermilion, ca. 1905.

Black and white photograph of a public school in Tower, ca. 1910.

Black and white photograph of a boarding school for American Indian children in Tower, Minnesota, ca. 1935.

Black and white photograph of the high school in Virginia, Minnesota, ca. 1920.

Black and white photograph of an iron ore shaft and stock pile in Virginia, Minnesota, 1915.

Black and white photograph of Mesabi Mountain open pit mine in Franklin, 1936. Photographed by Thor L. Nielsen.

Black and white photograph of a Duluth, Missabe & Northern Railway ore train, Duluth, ca. 1920. Photographed by Louis Perry Gallagher.

Black and white photograph of an electric shovel in operation at the Mesabi Mountain open pit mine in Franklin, ca. 1935. Photographed by Kurt B. Florman.

Roosevelt High School in Virginia

Roosevelt High School, ca. 1910.

Public domain

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Minnesota Historical Society

Articles

Minnesota Public School Fund

More Information

http://collections.mnhs.org/cms/display.php?irn=106775680

William Wallace Braden

William Wallace Braden, ca. 1863. Photographed by Joel Emmons Whitney.

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Holding Location

por 15272 r1

Articles

Minnesota Public School Fund

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http://collections.mnhs.org/cms/display.php?irn=10764618

Leonidas Merritt on Old Vermillion Trail, just north of Duluth

Leonidas Merritt on the Vermillion Trail, 1892.

Public domain

Holding Location

Minnesota Historical Society

Articles

Articles

Minnesota Public School Fund

More Information

http://collections.mnhs.org/cms/display.php?irn=10699125

Treaty of La Pointe, 1854

The Merritt Family and the Mesabi Iron Range

Native American Boarding Schools

The Ojibwe: Our Historical Role in Influencing Contemporary Minnesota

Huset School, Boy Lake Township

Destruction of Bois Forte Ojibwe Homeland, 1891–1929

Learning in the Land of Lakes: Minnesota’s Education History

Turning Point

In 1889, the Minnesota Legislature passes the Minnesota Mineral Lease Law. The law initially leases state iron ore lands for the small fee of twenty-five dollars. A royalty of twenty-five cents a ton is to be paid on all iron ore produced on lease land. Over time, the funds generate millions of dollars for the state’s permanent school trust fund.

Chronology

1785

The United States Congress passes a land ordinance to regulate the selling off of lands taken from Indian nations. Section 16 of each township is set aside to finance public schools.

1854

A treaty with the Chippewa of Lake Superior takes most of northeastern Minnesota Territory from the Ojibwe Nation. The coveted iron ore lands of the Vermilion and Mesabi Ranges become part of the public lands of the United States.

1858

The Minnesota Enabling Act sets aside sections 16 and 36 of every surveyed township in the state to finance public schools. Close to 3 million acres are dedicated to public schools.

1862

The state of Minnesota establishes a permanent school trust fund generated by land, timber, and mineral sales. The principle of the fund will never be used. Investment income from the fund will support the public schools.

1878

The United States government surveys Mesabi Mountain Township in St. Louis County. A large part of Township 58 range 17 has already been fraudulently preempted by employees of land speculators.

1883

Minnesota State Auditor William Wallace Braden halts the sale of school lands in iron ore counties of northeastern Minnesota. He then claims thousands of acres on the iron ranges in lieu of school lands that had already been taken.

1889

State Auditor Braden and iron ore explorer Leonidas Merritt develop an iron ore leasing program for state trust fund lands. Twenty-five cents per ton of iron ore produced on state lands will flow into the public school fund.

1892

Leonidas Merritt obtains state lease 59 for the rights to the iron ore on the Northeast quarter of section eight in Mesabi Mountain township. Merritt has spent 35 dollars to discover a fortune of iron ore and 25 dollars to lease it from the state.

1892

The Merritt brothers sublease the Mesabi Mountain Mine to Henry Oliver for $125,000 and a royalty of 65 cents a ton. The public school fund will receive $15 million; the Merritts will receive $24 million.

1899

A U.S. government-run Indian boarding school opens near Tower, on the Vermilion Iron Range. The mandatory school isolates Ojibwe children and forces them to give up their language and culture.

1907

Taxes on iron ore support exceptional schools in Iron Range cities. Virginia schools are financed by the taxes paid by Mesabi Mountain Mine’s owner, the Oliver Mining Company. Voluntary classes help the foreign workers adapt to American culture.

1921

An occupation tax on iron ore is established by the Minnesota legislature. Forty percent of this tax will help to enlarge the Permanent School Fund.

1950s

The Indian Boarding School at Tower is closed.

2014

The Permanent School Fund reaches one billion dollars.

2016

Ground is broken for a new Bug-O-Nay-Ge-Shig high school on the Ojibwe reservation at Leech Lake, replacing a thirty-year-old pole barn.