United States Government Fur Trade Factory System

The factory system was set up on the initiative of George Washington who thought it would neutralize the influence of British traders doing business on United States territory.

Thomas Jefferson shared Washington's expectations, but was also hoping that leading men of the Indian Nations would go into debt and be forced to cede land to pay it off.

In 1821, Senator Benton of Missouri, who stood in a close relationship with that company's owner, John Jacob Astor, started hearings with the aim to abolish the factory system and open the fur trade for uninhibited private enterprise and profit-making.

[3] Through the lobbying of John Jacob Astor, Congress in 1816 outright banned foreigners from the fur trade other than in a subordinate capacity.

[4] In his 1793 State of the Union Address, President Washington suggested that a scheme of trading without profit with the Indian Nations would gain their friendship and fealty.

[6] Washington recommended the factory system to Congress because he believed it would undercut the influence of British traders in the Indian country.

The Department of the Treasury optimistically reported in 1800 that the Indian Nations were pleased with the government trading houses because through them they were sure to find a buyer for their furs as well as a fair treatment.

Sale of alcohol was prevented and the business of the North West Company, the largest Montreal trading firm, was cut short.

[2] In a message to Congress in 1802, Jefferson claimed that the government factories undersold private and foreign interest, driving them away and thereby ridding the Indian country of a class of men that undermined the United States in the eyes of the Native Americans.

Recommending an expansion of the factory system, he portrayed it as a means of making the Native Americans adopt a sedentary lifestyle.

[7] On several occasions, Jefferson wrote to various officials that the job of the trading posts was to encourage indebtedness beyond the leading men's personal ability to pay thereby goading them into surrender land to get rid of the debt.

[8] At the very beginning, the Purveyor of Public Supplies was in charge of buying the merchandise to be sold at the government factories and also for selling the furs and other items received in trade.

In 1801, William Irvine, Superintendent of Military Stores, was appointed Agent for the fur trading factories in addition to the office he already held.

He was to handle both the purchase of merchandise for the factories and the disposal of goods received from them, thereby also assuming the job previously done by the Purveyor of Public Supplies.

[9] In 1806, John Shee was appointed Superintendent of Indian Trade, in charge of both the purchase of merchandise for the factories and the disposal of goods received from them.

Other employees of the factory system, many on a part-time-basis, handled purchasing and transportation in Philadelphia, New York, New Orleans, Savannah, Albany and St.

[12] President Washington insisted that government trade with the Indian Nations be free of fraud and extortion, supply merchandise plentifully and without delay and provide a market for Native American goods at fair and stable prices.

[15] The merchandise included blankets, strouds, siamoise cotton, mammoodies cotton, calamanco, Bocking bay, pullicats, rumals, shalloons, guns, gunpowder, lead, axes, knives, gorgets, kettles, tin cups, cowbells, maul rings, hoes, frying pans, arm bands, shirts, earbobs, silk stock, tinsel hatbands, Jew's harps, side-saddles, wampum, trinkets, coffee, and food items.

Merchandise bought at Philadelphia, and later Georgetown, was received by forwarding agents in New Orleans, St. Louis or Detroit who distributed them to the factories by boats, wagons or pack horses.

The factory at Green Bay, Wisconsin showed a decline in business already in 1818, as a result of the establishment of the American Fur Company in the area.

The frontier press regularly censured the factory system and prominent businessmen added their political influence to its detractors.

He regarded private traders as the root of most evil in the Indian country and wanted the factory system to be a means for "civilizing" Native Americans.

[19] In 1821, Thomas Hart Benton of Missouri, chairman of the Committee on Indian Affairs, started hearings with the aim to abolish the factory system and open the fur trade for uninhibited private enterprise.

[24] Benton argued that the factory system had been established to contest the influence of the British fur traders that made business on United States territory under the Jay Treaty.

[26] Ramsay Crooks was the general manager of the American Fur Company, while Indian Agent Benjamin O'Fallon had been appointed on the recommendation of Astor.

Congress required his office to procure trade goods on the home market, thereby putting a severe handicap on the factory system.

McKenney claimed that intrigues of the American Fur Company harmed the official trade to the extent that the posts at Chicago and Green Bay was about to be closed down.

The army aided the factories by ordering soldiers to assist with transporting goods, beating and packing furs and erecting buildings.