Red Cloud's War ends in a victory…

Northern Arapaho representatives also sign the treaty.

It establishes the Great Sioux Reservation, which includes all South Dakota territory west of the Missouri river.

It also declares the Powder River country as "unceded Indian territory", as a reserve for the natives who choose not to live on the new reservation, and as a hunting reserve for the Lakota, Cheyenne, and Arapaho.

The treaty also accords the natives continued hunting rights in western Kansas and eastern Colorado.

Most importantly, the treaty specifies what Red Cloud sought: "no white person or persons shall be permitted to settle upon or occupy any portion" of the Powder River country "or without the consent of the Indians first had and obtained, to pass through" the Powder River country.

Fort Laramie Treaty--1868" http://www.pbs.org/weta/thewest/resources/archives/four/ftlaram.htm, accessed 28 Oct. 2012)

The U.S. government had increasingly sought a peaceful rather than a military solution to Red Cloud's War despite the military successes in the Hayfield and Wagon Box Fights.

The successful completion of the transcontinental railroad takes priority, and the Army does not have the resources to defend both the railroad and the Bozeman Trail from native attacks.

The military presence in the Powder River Country is both expensive and unproductive, with estimates that twenty thousand soldiers might be needed to subdue the natives.

The U.S. government had come to the conclusion after the Fetterman Fight that the forts along the Bozeman Trail are expensive to maintain (both in terms of supplies and manpower) and do not bring the intended security for travelers along the Road.

However, Red Cloud had refused to attend any meeting with treaty commissions during 1867.