^The Dawes Act was intended to run for 25 years, a period assumed to be one generation. Unfortunately, "temporary" laws, then as now, had an unintended way of becoming permanent. And in this case, the culprit was a concept called "fractionation," affecting mainly lands in the Great Plains and Rocky Mountain regions. In a nutshell, as the original Indian owners died off, their intestate heirs received an equal and undivided interest in the lands. But Indians rarely, if ever, employed wills for transferring property to heirs. And rather than work the land, they typically leased it or granted rights-of-way to whites, living off the revenues. With each generation, properties were increasingly fragmented by undivided interests. As a result, a single parcel of land eventually could acquire dozens, if not hundreds, of owners. Annual financial returns often amounted to less than one cent per owner.

This exponential logic has created extreme inefficiency. According to Interior Department records, as of September 30, 2009 there were 143,663 individual Indian allotments, but more than 4 million fractionated interests. Around 131,600 these accounts had balances of less than $15. In many cases, a single piece of property has a per-person ownership interest of less than 0.0000001 percent, or well under a penny. And things are likely to become even more absurd. The 4 million interests may expand to 11 million by 2030. Congress formally repealed the Dawes Act's allotment policy when it passed the Indian Reorganization Act of 1934, but the consequences of fractionation remain today over 75 years later.

A majority of owners of a given parcel typically must agree as to economic activity requiring a lease or right-of-way. But in situations of high fractionation and small ownership interests, diseconomies of scale have prevented land from being used for the benefit of individual Indians or their tribal community. The lack of consolidation not only thwarts economic activity, but also reduces the value of the land. Appraisal studies generally have concluded that when the number of owners per tract exceeds 10, the fair market value of each individual's interest declines, often dramatically. Wouldn't it make sense, then, for each nominal owner to sell the land? From an economic standpoint it would. But to Indian owners, this isn't simply land; it is their nation, a manifestation of collective tribal history.

The federal government - that is to say, taxpayers - bears the brunt of these inefficiencies. The Interior Department's Bureau of Indian Affairs not only absorbs the entire cost of land management, but also returns to the Indians whatever modest incomes are generated by the land. This isn't a new problem. During the 1920s the Brookings Institution and the General Accounting Office (i.e., Government Accountability Office) each conducted studies revealing how fractionation had rendered Indian land nearly worthless, while holding taxpayers hostage. GAO auditors, having visited 12 reservations, counted around 80,000 individual owners yet over a million associated ownership records. Divided by fractional interests, many holdings consisted of less than one square foot. In 2002, the Interior Department, attempting to update the GAO report with the same methodology, found that fractionation had grown by more than 40 percent since 1992.

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And now the kicker, one example:

^Tract 1305 is 40 acres and produces $1,080 in income annually. It is valued at $8,000. It has 439 owners, one-third of whom receive less than $.05 in annual rent and two-thirds of whom receive less than $1. The largest interest holder receives $82.85 annually. The common denominator used to compute fractional interests in the property is 3,394,923,840,000. The smallest heir receives $.01 every 177 years. If the tract were sold (assuming the 439 owners could agree) for its estimated $8,000 value, he would be entitled to $.000418. The administrative costs of handling this tract are estimated by the BIA at $17,560 annually. Today, this tract produces $2,000 in income annually and is valued at $22,000. It now has 505 owners but the common denominator used to compute fractional interests has grown to 220,670,049,600,000. If the tract were sold (assuming the 505 owners could agree) for its estimated $22,000 value, the smallest heir would now be entitled to $.00001824. The administrative costs of handling this tract in 2003 are estimated by the BIA at $42,800.^