Treaty Fuels New Settler, Indian Feud

This small town in the scenic Allegheny Mountains was settled by whites in the early 1800s and is like no other place in the nation. It is the only U.S. municipality that lies almost entirely within the confines of a recognized Indian reserve: the Seneca Nation’s 30,469-acre Allegany Reservation.

For most of the history of this community, whose present-day population is about 6,600, this unique arrangement presented few problems. Whites and Indians managed to coexist in peace and harmony, particularly after a federally negotiated agreement in 1890 resolved a series of often acrimonious disputes over land ownership.

That accord, known as the Seneca Nation Settlement Act, permitted the Senecas to retain ownership in perpetuity of the land on which the town is built, while Salamanca’s residents and business owners were granted 99-year leases on favorable financial terms. In some cases, rents were set as low as $1 a year for the life of the lease.

“This will aid you to build up this beautiful village and make it a large city . . . and benefits us by enhancing the values of our lands about here,” Harrison Halftown, a Seneca Nation leader, was reported to have said at a civic celebration in 1892 to mark the start of the 99-year lease agreement.

But two years ago, nearly a century of peace and goodwill between Salamanca’s residents and the Seneca Nation was shattered as the agreement’s expiration neared and as the Senecas imposed tough new terms on the townspeople.

Rents were sharply boosted, rising by an overall average of more than 1,200%. Leases were limited to 40 years, with an option to renew only for another 40. And, in perhaps the most contentious step of all, the Senecas claimed title not only to the land itself but to all the homes and buildings on Indian land in the community.

Under New York state law, they contended, any improvements on leased property belong to the landlord. And in Salamanca, they declared, they most decidedly are the landlord.

Now, outrage among the residents of this town about 60 miles south of Buffalo has grown so strong that one irate resident jacked up his house from its foundation and moved it a mile off the reservation. Fifty other townspeople have obtained city permits to demolish their homes with dynamite rather than let the Senecas gain title to them.

And angry voters last fall ousted the old City Council, which had approved the new lease agreement, and swept into office an entire slate of members, each a sworn enemy of the hated land pact.

“It’s the most unfair, unjust and unconstitutional thing I’ve ever seen,” said the new council president, Phyllis Paquet, a Salamanca businesswoman whose family roots go back to the town’s earliest days. “You lose all your assets, all the equity in your home. I’ll take my house to the ground too before I let that happen.”

In one of its first acts after taking office last January, the five-member council attempted--unsuccessfully, as it turned out--to stop payment of the $751,313 check representing the town’s annual lease payment.

That payment is made each February under a 1950 federal law requiring the town’s approximately 3,300 homeowners and businesses to pay their annual rentals to the city, which in turn delivers a lump sum check to the Senecas. Before the new lease agreement went into effect, the annual payment amounted to only about $57,000.

(For the owner of a two-story, three-bedroom home on an acre of land, the annual rent is about $600, a fee that is in addition to local and state property taxes.)

In April, in a move whose legality still remains in question, the council took the offensive again. The five members voted unanimously to declare the new lease agreement null and void on the grounds that it had been improperly negotiated. The mayor vetoed the move, but was promptly overridden by another unanimous vote.

The Senecas justify their tough stance as a means of rectifying almost a century of exploitation by whites. They say it is part of a growing national trend among American Indians to redress historical inequities and to expand and strengthen tribal sovereignty.

“We’re on a par with modern times now,” said Calvin John, the Seneca Nation president. “In 1890, we didn’t have any legal assistance and, as witnesses testified in a congressional investigation in 1920 or ‘30, the Indians were plied with liquor to coerce them into signing. The old agreement was unfair to both sides, really.”

Although he has made statements at other times to the contrary, John also maintained that any Salamanca resident or business owner who has signed a lease with the Senecas has nothing to worry about in regard to the title to their home or business.

“I made it clear in a letter in April that, as long as they have a signed lease, it’s their property,” he said. “We won’t interfere. It’ll be just like it was under the old agreement. But if they don’t have a signed lease, well, that’s another question.”

He said only about 4% of Salamanca’s homeowners and businesses have refused to sign leases under terms of the new agreement--an indication to him, he adds, that the overwhelming majority of the townspeople must feel comfortable with the new terms.

But Jennifer Coleman, an attorney for a group calling itself the Salamanca Coalition of United Taxpayers, or SCOUT, says that among those who have signed new contracts with the Senecas, “at least half did so kicking and screaming.”

And, despite John’s assurances that signed leaseholders have nothing to worry about, banks and other mortgage lenders do not feel so confident about the situation.

“It’s just about killed the housing market,” said Marty Kowsky, a real estate broker. “Until the lease situation gets completely settled, people can’t get bank financing because the titles are in question. And without financing, you can’t buy. People just don’t walk around with 20, 30 or 40 thousand dollars in their pockets to buy a home.”

Tensions were heightened recently when the Senecas blocked roads and dropped burning tires off a nearby state highway overpass in a protest of a state court ruling allowing the state to tax sales of gas and cigarettes to non-Indians on reservations.

The Senecas contended that the ruling violated old treaties with the federal government affirming the sovereignty of the Seneca Nation and its freedom from state taxation.

“That situation made everybody pretty tense,” recalled Salamanca Mayor Jerry Lockwood. “There were all kinds of rumors in the city, such as, if the state wouldn’t negotiate with the Senecas, they were going to take the city back or shut off power to us by felling trees on the electrical lines. Things got pretty hairy.”

The two-day protest ended after a state appeals court judge temporarily suspended the state tax plan and left the issue for the full court of appeals to take up this fall.

But the Senecas have threatened to revoke right-of-way agreements through the reservation for power lines, railroads and state highways if the ultimate decision goes against them.

“Our backs are to the wall, and, regrettably, these and similar actions may be our only means of effectively protesting this latest attempt by the state to undermine the economies of the Iroquois nations,” the Senecas, who are part of the six-nation Iroquois confederation, said in a petition being circulated to win support for their side.

In the dispute over the new lease agreement, both sides see themselves as victims fighting to preserve their way of life and attempting to redress the wrongs done to them by outsiders.

But many townspeople point out that the Seneca Nation, whose 6,200 members are spread out over three reservations in western New York, also received $60 million from the federal and New York state governments as financial compensation for the discriminatory nature of the old lease pact. The money went into tribal funds following expiration of the 99-year lease in 1991.

“We need to renegotiate this lease so that we have something that everybody can live under,” said City Council President Paquet. “The Senecas have got us stuck between a rock and a hard spot, and I don’t know how to get out of it.”

About 56% of Salamanca’s residents are elderly people on fixed incomes, she added, and the local economy is so bad that about half of the labor force must seek jobs outside of town, often as far away as Buffalo, 60 miles to the north.

Salamanca was once a prosperous, bustling railway hub that was renamed in the 1860s for the Spanish marquis who financed construction of the railroad line that helped transform the town from a small way station called Hemlock Mills. The town has stagnated economically and lost almost a quarter of its population since the decline of the railroad industry in the 1950s and ‘60s.

Downtown Salamanca, with its blocks of vintage red-brick, late 19th-Century office buildings and store fronts, several of them boarded up, is a mere shell of its old self. The city’s unemployment rate is more than 10%, well above the statewide average.

Says Sen. Alfonse M. D’Amato (R-N.Y.): “You just cannot abandon those people who have their whole life’s savings in a home or business they have purchased or built and, with no fault of their own, find themselves in this untenable position.”

Until then, most townspeople are keeping their fingers crossed and wishing for the best.

“Relations were always excellent between the city and the Seneca Nation,” said Mayor Lockwood. “I hope to see those excellent relations some day come back. This thing is going to have to be settled for the town to progress.”