Year after year, a significant portion of the annuities ended up in the pockets of federal Indian agents and traders.  In the summer of 1862, the federal government was late making its annuity payments to the Dakota Sioux, who were in desperate need of supplies.  At a meeting in Redwood, Minnesota, on August 15 between representatives of the two southernmost tribes (the Mdewakantons and Wahpekutes), the federal Indian agent, and the traders, the latter refused to distribute goods on credit.  Said one trader, "If they are hungry, let them eat grass."  Traders with the two northernmost tribes, however, agreed to allocate the supplies on credit, and these tribes did not participate in the subsequent violence.  Unknown to all parties in Minnesota, the long-delayed annuities were finally on their way.

The Indian retaliation began on August 17, when a band of braves killed a group of five settlers.  Over the next few days, hundreds of settlers were killed, towns burned, and thousands became refugees fleeing the carnage.  On August 26, Governor Alexander Ramsey authorized Colonel Henry Sibley to put down the uprising.  (Both men were former Indian agents who had collected large claims from previous annuities.)  The Indians continued their successful offensive through early September until momentum shifted in mid-month to the state militia.  The decisive battle took place on September 23 at Wood Lake, where the Dakota suffered heavy casualties and were forced to retreat.  Meanwhile, northern tribes allied with the state militia captured and released nearly 300 soldiers and settlers taken prisoner by the southern tribes.  Surrounded, hungry, and dispirited, the southern Dakota surrendered.

On September 28, Colonel Sibley hastily named a military commission to try the Dakota for murder and related crimes.  During the first day, 16 trials were held, resulting in ten convictions carrying a death sentence and six acquittals.  Continuing through November 3, the military tribunal conducted a total of 393 cases, convicting and sentencing 303 to death.  Since participation in the uprising was considered evidence of murder, admission of firing guns quickly resulted in guilty verdicts.  Two mob attacks on the convicted Indians while they were in transit to prison were unsuccessful.  

After aides sifted through the evidence, President Abraham Lincoln allowed the execution of 38 of the Indians, who were hanged in Mankato, Minnesota, on December 26, the largest mass execution in American history.  In April 1863, Congress passed a law for the removal of the Sioux remaining in Minnesota to a reservation in South Dakota.  The other Indian prisoners were transferred to Iowa, and in 1866, President Andrew Johnson pardoned the 177 survivors, who were sent to a reservation in Nebraska.  Hostilities between the Sioux and the American military continued over the decades until the Indians' final defeat at Wounded Knee in 1890.

Although those involved in the Dakota uprising were not allied with the Confederacy (as the cartoon falsely indicates), 20,000 American Indians did fight in the American Civil War:  11-12,000 for the Confederacy and 8-9,000 for the Union.  They served in various capacities and engaged in numerous battles.  The highest-ranking Indian in the Civil War was Brigadier General Stan Waite, Confederate commander of the Indian Brigades in the Trans-Mississippi West.  The Civil War ruined the economy of the five Indian nations of the South--Cherokee, Choctaw, Creek, Chickasaw, and Seminole--and devastated the tribes in the western Indian Territory.  Nor did the end of the war bring rewards for service to the Union cause, but rather an intensified effort to place them on reservations, which sparked a series of bloody wars over the next two decades.