THE INDIAN TRADE
To omit from the history of early Chicago an account of the Indian
trade would be like giving the play of Hamlet with the principal
character left out. Its origin is coeval with the advent of the white
man in this region; and until almost the close of the period covered
by this volume it constituted the basis of the commerce of the region
tributary to the upper Great Lakes and the Mississippi Basin. With the
advance of the settler into the Northwest the wild game receded before
him; and its disappearance marked the passing of the Indian trade, soon
to be followed by the red man himself. As a rule, the first white man
to penetrate the wilderness was the trader, and the Indian's conception
of the white race was based upon his intercourse with the traders,
the class of whites with whom he was most familiar. Upon these he was
dependent for the gun, ammunition, and other supplies which quickly
became essential to his existence; and most of the problems which grew
out of the contact of the two races centered around the conduct of the
Indian trade.
As early as 1675, Marquette found French traders had entered Illinois
and established themselves below Chicago, in the vicinity, apparently,
of the junction of the Des Plaines River with the Kankakee.[709] Thus
early, too, certain of the Indians themselves had turned traders, and
Marquette was attended, on his second visit to Illinois, by a party
of Illinois Indians who were returning from Canada with merchandise
to trade with the members of their own race for furs.[710] One of
the party, named Chachagwessiou, was "greatly esteemed" among his
nation because, in part at least, he was engaged in the fur trade; and
this, in spite of the fact that he and his associates subjected their
kinsmen to the same extortion as did the white traders. That it was
primarily for the sake of the fur trade that the French valued the
country is a fact easily demonstrable. The economic foundation of La
Salle's colony was the Indian trade which he expected to develop. For
its exclusive possession he sought and obtained the royal license, and
against interlopers upon his privileged monopoly he waged relentless
warfare. With his death the license to carry on trade at Fort St. Louis
passed to his faithful Heutenant, Tonty, For many years from his lofty
stronghold he continued to trade with the Indians of the surrounding
region. But the French government looked upon the enterprise with a
jealous eye, and early in the eighteenth century at its request Tonty's
establishment at the rock of St. Louis was abandoned and he himself
departed for lower Louisiana, where he shortly met his death.
[Footnote 709: _Jesuit Relations_, LIX, 175 ff.]
[Footnote 710: _Ibid._, LIX, 165, 167, 175 _et passim_.]
During the greater part of the eighteenth century there was, as far as
known, no civilized establishment at Chicago, That traders may have
established themselves here for a shorter or longer time is entirely
possible, but there was no regular French post here as has often been
stated. Until the end of the French régime the trade of the territory
around Chicago found outlet at the neighboring posts. The nearest of
these was St. Joseph, but there were others at Mackinac, Green Bay,
Ouiatanon, and in the French settlements of lower Illinois.[711]
[Footnote 711: For the posts of the interior and their trade, toward
the close of the French régime, see Bougainville's memoir in _Wisconsin
Historical Collections_, XVIII, 167 ff.]
The first trading establishment at Chicago of which we have any
certain knowledge was that of Baptiste Point du Sable in the latter
years of the eighteenth century. Hugh Heward, who in 1790 passed from
Lake Michigan by way of the Chicago Portage to the Illinois, tarried
at Chicago a day to prepare for the further journey. He exchanged
his canoe for a pirogue belonging to Du Sable, and bought from him a
quantity of flour and pork, for which he gave in exchange thirteen
yards of cotton cloth.[712] How long Du Sable continued to reside here
or how extensive was his trade is somewhat conjectural. It is evident
that during the closing years of the century the St. Joseph traders,
Burnett and Kinzie, at times extended their trading operations around
the lake as far as Chicago. It is evident, too, from the fact that when
the garrison came in 1803 there were four traders' huts here, that
still other traders had established themselves at Chicago for a shorter
or longer period.[713]
[Footnote 712: Heward, _Journal_.]
[Footnote 713: See in this connection the letters of William Burnett,
the St. Joseph trader, in Hurlbut, _Chicago Antiquities_, 49-70,
_passim_.]
So far as existing records are concerned, the first quarter of the
nineteenth century marks the heyday of the Indian trade at Chicago.
The establishment of the garrison here not only attracted traders
and others, as in the case of Kinzie, but it also resulted in the
handing down of more numerous and extensive accounts of the trading
activities of this region than had ever been done before. Perhaps the
most important private source of information for the period prior to
1812 is the transcript of names in Kinzie's account books.[714] Far
overshadowing this in importance for the whole period from 1805 to
1822, however, are the records of the Department of Indian Trade, which
maintained a government factory at Chicago.
[Footnote 714: _Barry Transcript_.]
The trading operations of Kinzie during the first period of his
residence at Chicago were evidently of considerable importance. An
entry at St. Joseph in April, 1804, less than a month before the
removal to Chicago, shows that the sum of two hundred and forty-five
pounds was invested in a single "adventure" at Peoria. That similar
enterprises were being simultaneously conducted appears from an entry
a week later concerning "Billy Caldwell's adventure." At Chicago, in
addition to the trade he himself conducted and the "adventures" he
financed, Kinzie was in partnership with his half-brother, Thomas
Forsyth, during the entire period prior to 1812. Although the
articles of indenture of Jeffrey Nash describe Kinzie and Forsyth as
"Merchants of Chicago,"[715] Forsyth was stationed at Peoria until his
establishment was broken up by Captain Craig's militia in the late
autumn of 1812. In Kinzie's account book under date of June 13, 1806,
settlements with four individuals, amounting in all to fourteen hundred
and thirty-one pounds, are noted. The names of these men, Sigrain,
Bourbonnais, LaVoy, and Maisonneuf, furnish a typical illustration of
the nationality of the men who conducted the Illinois fur trade in the
first decade of the nineteenth century.
[Footnote 715: _Supra_, p. 150-52.]
Some individual entries taken at random from Kinzie's account books
may be of interest as showing the prices that prevailed at Chicago
a century ago. Thirty bushels of corn sold in 1805 for forty-five
dollars. The same year, however, two bushels were sold by Kinzie to
Ramsey Crooks for five dollars. Another entry for 1806 states that
tobacco sold at fifty cents a pound; whisky at fifty cents a quart;
powder at $1.50 a pound; and shot at thirty-three cents a pound. In May
of this year butter was quoted at fifty cents, the same price which
Kinzie paid at Detroit ten years later for a shipment of ten pounds
sent on his first Chicago adventure after the return of the garrison
to Fort Dearborn. This same "adventure" included two barrels of whisky
invoiced at ten shillings or $1.25 a gallon. A comparison of this with
the selling price already noted of fifty cents a quart would seem to
indicate that the profit from the sale of fire-water proceeded mainly
from the dilution of it with water, which the traders customarily
practiced. Returning to 1806, flour is priced at ten cents a pound,
while the pay of six boatmen, hired to assist in pulling a trader's
craft up the river, is fifty cents a day. In 1810 raisins sold for four
shillings and tea for twenty shillings a pound; while the price of "1
tyson" which Jouett ordered was thirty shillings. "A silver brooch for
six rats," "2 large silver crosses, $7.50," and "Francis Bourbonnaé Dr.
to 1 negro wench sold him by Indenture £160" are entries which suggest
their own explanation.
It seems evident that the fur trade of Illinois in the period under
consideration was of considerable magnitude. "I had no idea of
there being so extensive a trade carried on in that quarter," wrote
Colonel Kingsbury to Captain Whistler in the fall of 1804, in reply
to an inventory which the latter had sent him of peltries passing
Fort Dearborn the preceding spring.[716] The operations of Kinzie
and Forsyth could have constituted but a small part of the fur trade
of Illinois at this period. In the spring of 1805 Kingsbury was
himself at Chicago, seeking to conduct a company of soldiers down
the Illinois River to establish a new fort near the mouth of the
Missouri.[717] Whistler had been ordered to secure suitable boats for
the transportation of the detachment, but his efforts to do so had been
unavailing. Upon Kingsbury's arrival at Chicago, however, he succeeded
in securing two traders' bateaux on condition that the goods, amounting
to one hundred packs of peltry and ten bags, should be transported to
Mackinac in the brig "Adams," which had brought the troops to Chicago.
A few entries from Kinzie's account book will serve further to show
the extent of the trade which passed through Chicago. June 14, 1806,
Ouilmette is charged with the hire of a wagon and oxen to transport a
trader's goods to the forks of the Illinois River. Three weeks later
Hugh Pattinson and Company become indebted to Kinzie for the labor of
four men for six days each pulling boats up the river, and at the same
time for the portage of one hundred and fifty-six packs of peltries. In
July, 1807, Kinzie transported forty-six packs across the portage for
James Aird, and in the same month on two occasions transported enough
for Auguste Chouteau to incur charges of almost forty pounds. A similar
entry in July, 1808, charges Chouteau with two hundred and fifty-six
dollars for carrying one hundred and twenty-eight packs from Mount
Joliet to Chicago.
[Footnote 716: _Kingsbury Papers_, Whistler to Kingsbury, August 14,
1804; Kingsbury to Whistler, September 10, 1804.]
[Footnote 717: For this expedition see _ibid._, Gushing to Kingsbury,
February 20, 1805; Kingsbury to Smith, June 2, 1805; Smith to
Kingsbury, June 1, 1805; Kingsbury to Brevoort, June 2, 1805; Kingsbury
to Williamson, July 10, 1805, _et passim_.]
The government factory or trading house constituted a notable feature
of the Indian trade at Chicago after 1805. The policy of the government
toward the red man which found expression in the factory system was
fraught with such significance, not only for the Indian trade, but also
for the larger subject of the relations between the two races, that
it seems desirable at this point to present a somewhat comprehensive
account of it. The origin of the policy of government trading houses
dates from the early colonial period. In the Plymouth and Jamestown
settlements all industry was at first controlled by the commonwealth,
and in Massachusetts Bay the stock company had reserved to itself the
trade in furs before leaving England.[718] In the last-named colony
a notable experiment was carried on during the first half of the
eighteenth century in conducting "truck houses" for the Indians. About
the close of this period Benjamin Franklin, whose attention had been
called to the abuses which the Indians of the Pennsylvania frontier
suffered at the hands of the private traders, investigated the workings
of the Massachusetts system and recommended the establishment of public
trading houses at suitable places along the frontier.[719]
[Footnote 718: Turner, _Indian Trade in Wisconsin_, 58.]
[Footnote 719: Franklin, _Works_, II, 221. The letter is not certainly
by Franklin, but he is supposed to have been its author. See _ibid._,
217, footnote.]
The first step toward a national system of Indian trading
establishments was taken during the opening throes of the Revolution.
The establishment of friendly relations with the Indians appeared to
the second Continental Congress a matter of the "utmost moment."[720]
Accordingly it was resolved, July 12, 1775, to establish three Indian
departments, a northern, a middle, and a southern, with appropriate
powers for supervising the relations of the United Colonies with the
Indians. In November of the same year a committee, of which Franklin
was a member, was directed to devise a plan for carrying on trade with
the Indians, and ways and mean for procuring the goods proper for
it.[721]
[Footnote 720: _Journals of the Continental Congress_, II, 174.]
[Footnote 721: _Ibid._, III, 350, 365, 366.]
Acting upon the report of this committee, in January, 1776, the
Congress adopted a series of resolutions outlining a general system
of governmental supervision of the Indian trade, and appropriating
the sum of forty thousand pounds to purchase goods for it.[722] These
were to be disposed of by licensed traders, acting under instructions
laid down by the commissioners, and under bond to them to insure
compliance with the prescribed regulations. The following month
Congress further manifested its good intentions toward the native
race by passing resolutions expressing its faith in the benefits to
accrue from the propagation of the gospel and the civil arts among the
red men, and directing the commissioners of Indian affairs to report
suitable places in their departments for establishing schoolmasters
and ministers of the gospel.[723] Owing to the exigencies of the war,
however, these plans for the establishment of a trading system and for
the civilization of the Indians were alike frustrated. The struggle
with the mother country absorbed all the energies and resources of
the Revolutionary government. How this affected the prosecution of
the plans for the Indian Departments, which had been entered upon so
hopefully in the beginning of the war, is sufficiently shown by the
fact that the expenses of the government in behalf of the Indians fell
from two hundred and sixty-one thousand dollars in 1776 to thirty-five
hundred dollars in 1779; and the total amount for the five years from
1779 to 1783 inclusive was less than one-tenth the sum spent in the
single year 1776.[724]
[Footnote 722: _Ibid._, IV, 96-98.]
[Footnote 723: _Ibid._, IV, III.]
[Footnote 724: _American State Papers, Indian Affairs_, II, 210. The
sum spent in 1776 was $261,783.44; for the five years from 1779 to 1783
inclusive it was $25,641.34.]
During the period of the Confederation the subject of the Indian trade
was frequently acted upon by Congress, but no systematic effort was
made to regulate it until 1786. In that year an ordinance was passed
dividing the Indian Department into two districts and appointing a
superintendent and a deputy for each.[725] They were to execute the
regulations of Congress relating to Indian affairs, and to grant
licenses to trade with the Indians. Only citizens of the United States
whose good moral character had been certified to by the governor of a
state were eligible to licenses; they were to run for one year and to
be granted upon the payment of fifty dollars and the execution of a
bond to insure compliance with the established regulations. To engage
in trade without a license incurred a penalty of five hundred dollars
and forfeiture of goods.
[Footnote 725: For a sketch of the relations of the government with the
Indians see the report of Calhoun, Secretary of War, to Congress in
1816 (_American State Papers, Indian Affairs_, II, 181 ff.); for the
act of 1786 see _ibid._, I, 14.]
This was, apparently, a judicious system, but the government of the
Confederation had about run its course, and the general paralysis
which overtook it, and the confusion incident to the change to a new
form of government, prevented the new policy toward the Indians from
being carried into effect. Prominent among the problems which the new
national government found pressing upon it for solution was the subject
of Indian relations and, in this connection, the question of the
regulation of the Indian trade. In 1790 the licensing system of 1786
was temporarily adopted, but shorn of some of its valuable features.
There was no prohibition against foreigners and no fee was required
for a license. This system was continued without essential change
until 1816, when an act was passed prohibiting foreigners from trading
with Indians of the United States, except by special permission of the
President and under such regulations as he should prescribe.
The young government shortly entered upon the most serious Indian war
in all its history, and not until one of its armies had been repulsed
and another destroyed did Anthony Wayne succeed, in 1795, in bringing
the hostile red men to recognize the superior might of the nation he
represented. At the close of this war Congress, at the instigation
of Washington, determined to experiment with another system of
conducting the Indian trade. In the session of 1795, stirred up by the
repeated recommendations of Washington, that body debated a bill for
the establishment of Indian trading houses.[726] Though the bill was
defeated at this time its purpose as stated by its supporters is worth
noting. It was regarded as constituting a part only of a comprehensive
frontier policy; this policy embraced the threefold design of the
military protection of the frontier against Indian invasions, the legal
protection of the Indian country against predatory white incursions,
and the establishment of trading houses to supply the wants of the
Indians and free them from foreign influence. It was believed that
these three things embraced in one system would bring about the great
desideratum, peace on the frontier; but that without the last the other
parts of the plan would prove totally ineffectual.
[Footnote 726: _Annals of Congress_, 3d Congress, 1262-63.]
The defeat of the advocates of the system of government trading houses
in 1795 was neither final nor complete. Their principal measure had
failed of passage, but at this same session Congress appropriated the
sum of fifty thousand dollars to begin the establishment of public
trading houses,[727] and two were accordingly started among the
Cherokees. Creeks, and Chickasaws of the Southwest. The next year a
second act was passed, carrying an appropriation of one hundred and
fifty thousand dollars, in addition to an annual allowance for the
payment of agents and clerks.[728] The President was authorized to
establish trading houses at such places as he saw fit for carrying on
a "liberal trade" with the Indians. The agents and clerks employed
were prohibited from engaging in trade on their own account, and were
required to give bonds for the faithful performance of their duties.
The act was to run for two years, and the trade was to be so conducted
that the capital sum should suffer no diminution.
[Footnote 727: _Ibid._, 4th Congress, 1st session, 152; _American State
Papers, Indian Affairs_, I, 583.]
[Footnote 728: _Annals of Congress_, 4th Congress, 1st session, 282-85;
for the act itself, see _ibid._, 4th Congress, 2d session, 2889-90.]
Notwithstanding the appropriation and act of 1796, for several
years no extension of the system of trading houses beyond the two
experimental establishments of 1795 was attempted; nor did the
government avail itself, to any considerable extent, of the money
appropriated for this purpose. The total amount appropriated in 1795
and 1796 was two hundred thousand dollars. In December, 1801, the
Secretary of War reported that only ninety thousand dollars of this
amount had been drawn upon, and that the number of trading houses was
still limited to the two that had been first established.[729] Even
the act authorizing the system had expired in 1799, and in spite of
repeated recommendations to Congress in the matter no action had been
taken to renew it.
[Footnote 729: _American State Papers, Indian Affairs_, I, 653-55.]
In the debates over the passage of the Act of 1796 it was made evident
that even the supporters of the measure regarded it in the light of an
experiment.[730] The recent war had cost one and a half million dollars
annually; it was worth while to try another method of securing peace
on the frontier. Since the Canadian trading company was too powerful
for individual Americans to compete successfully with it the government
must assume the task. If upon trial the plan should prove a failure,
it could be abandoned. On the other hand it was objected that public
bodies should not engage in trade, which was always managed better by
individuals; fraud and loss could not be guarded against; nor should
the people be taxed for the sake of maintaining trade with the Indians.
In spite of these objections and prophecies, the report of 1801 showed
that the original capital had suffered no diminution, but had, in
fact, been slightly increased; this, too, despite losses that had been
incurred through the failure of the sales agent, to whom the peltries
had been assigned, to dispose of them before many had become ruined.
[Footnote 730: _Annals of Congress_, 4th Congress, 1st session, 220-32.]
It remains to speak of the degree of success achieved in the broad
objects for the attainment of which the system had been inaugurated.
Concerning this the report of the Secretary of War in 1801 was entirely
favorable.[731] As far as it had been established the effects of the
system upon the disposition of the Indians had been very salutary. The
several tribes were desirous of participating in its advantages, and
no doubt was felt that its extension would be attended by all the good
effects originally contemplated by the government, and this without any
diminution of the original fund.
[Footnote 731: _American State Papers, Indian Affairs_, I, 653-55.]
Two years later, in January, 1803, Jefferson stated in a message
to Congress that private traders, both foreign and domestic, were
being undersold and driven from competition, that the system was
effective in conciliating the good will of the Indians, and that
they were soliciting generally the establishment of trading houses
among them.[732] At the same time the Secretary of War reported the
establishment of four new stations, at Detroit, Fort Wayne, Chickasaw
Bluffs, and among the Choctaws, to which the remainder of the money
appropriated in 1796 had been applied.[733] This remained the number
until 1805, when four more were established: at Arkansas on the
Arkansas River, at Nachitoches on the Red River, at Belle Fontaine
near the mouth of the Missouri, and at Chicago.[734] The following
year a trading house was established at Sandusky on Lake Erie, and in
1808 three more, at Mackinac, at Fort Osage, and at Fort Madison.[735]
Meanwhile the two original houses had been removed to new locations and
two others, those at Detroit and at Belle Fontaine, had been abandoned.
[Footnote 732: _Ibid._, I, 684.]
[Footnote 733: _Ibid._, I, 683.]
[Footnote 734: Report of John Mason, Superintendent of Indian Trade,
April 12, 1810, _ibid._, I, 768 ff.]
[Footnote 735: _Ibid._]
From 1808 until the beginning of the War of 1812 there were thus
twelve factories in operation. At each was stationed an agent, or
factor, and at most an assistant, or clerk, as well. The salaries of
the former prior to 1810 ranged from $750 to $1,250, in most cases
not exceeding $1,000; the pay of the latter from $250 to $650; in
both cases subsistence was granted in addition.[736] In 1810 the
superintendent of the trade estimated that of the total amount of
$280,000, which had been invested in the business, $235,000 still
remained; the loss in the capital invested to this date was therefore,
in round numbers, $45,000.[737] The four-year period ending in 1815,
on the other hand, in spite of the disturbance to trade which attended
the operations of the War of 1812, produced a profit of almost
$60,000.[738] Approximately three-fourths of this gain was swallowed up
in the destruction, during the war, of the factories at Chicago, Fort
Wayne, Sandusky, Mackinac, and Fort Madison; but this was the fortune
of war and not in any way the fault of the system.
[Footnote 736: _Ibid._]
[Footnote 737: _Ibid._]
[Footnote 738: Report of Crawford, Secretary of War, March 13, 1816,
_ibid._, II, 26-28.]
The establishment of a factory at Chicago was determined upon in the
spring of 1805, and on March 19 Ebenezer Belknap of Connecticut was
commissioned as factor.[739] The factory at Detroit was to be abandoned
and the goods and furniture for the factor's dwelling to be removed to
Chicago.[740] To supplement the stock of goods for the Indian trade
removed from Detroit an initial invoice of new goods to the value
of eight thousand dollars was ordered to be sent to Detroit for the
Chicago factory.[741] Belknap's instructions shed much light upon the
practice followed when a new factory was to be established. He was
to receive a salary of $1,000 a year and in addition to this $365 in
lieu of subsistence.[742] He was empowered to employ, if necessary, a
"principal clerk" at a salary not to exceed $500; if a young man could
be procured for the place at a salary of $200 or $300, this was to be
done. When a new factory was established an allowance to the factor of
$200 for household furniture and domestic utensils and $25 yearly for
the same purpose after the first year was made. Since Belknap was to
take over the outfit of the Detroit factory his initial allowance for
this purpose was reduced to $100.
[Footnote 739: Belknap's commission, Indian Office, Letter Book B, 69.
In some cases two or more of these letter books are designated in the
same way. In such cases the volume in question can be determined by
taking account of the dates of the contents.]
[Footnote 740: _Ibid._, 72, War Department (unsigned) to Belknap, April
12, 1805; _ibid._, 438, Dearborn to John Johnston, June 3, 1805.]
[Footnote 741: _Ibid._, 68, John Smith to William Davy, April 12, 1805.]
[Footnote 742: Belknap's commission, _ibid._, 69; his instructions,
April 12, 1805, _ibid._, 72.]
The establishment of the Chicago factory was not unattended with
difficulties. Munroe, the Detroit factor, was indisposed to surrender
the public property in his possession, and much embarrassment was
experienced on this account.[743] Scarcely had Belknap had time to
proceed to his destination when warning came to the War Department
that his character was not what it should be.[744] Our information
concerning the difficulty is but scanty, but the outlines of the
situation are clear. An investigation into the fitness of Belknap for
the position was instituted,[745] and as a precautionary measure it
was decided to appoint a "suitable character" as his assistant, with
instructions to report faithfully to the War Department concerning
the character and conduct of his superior.[746] Apparently the
investigation confirmed the charges against Belknap, for before the end
of November the choice of a successor to him was being considered,[747]
and on December 31, 1805, the luckless factor's services at Chicago
terminated.[748] He was superseded by Thomas Hayward, who had been
acting as his assistant since the third of the preceding October.
Belknap proceeded to Washington, and in a preliminary interview with
his superiors gave such an account of himself as to imbue them with
the belief that partisan rancor had been responsible for the charges
preferred against him.[749] With this our information concerning the
matter abruptly terminates, and we can only hope that the fuller
investigation established his innocence of the charge against him.
[Footnote 743: Various letters in the Indian Office letter books refer
to this difficulty, particularly one from the War Department (unsigned)
to William Davy, Superintendent of Indian Trade, May 17, 1805 (Letter
Book B, 76). I have not been able to learn how the trouble was finally
settled.]
[Footnote 744: Indian Office, Letter Book B, 104, War Department to
William Davy, August 31, 1805.]
[Footnote 745: _Ibid._, 104, War Department to Davy, August 31, 1805;
_ibid._, 136, War Department to Davy, November 22, 1805.]
[Footnote 746: _Ibid._, 104, War Department to Davy, September 26,
1805.]
[Footnote 747: _Ibid._, 136, War Department to Davy, November 22, 1805.]
[Footnote 748: Indian Office, Letter Book A, 94, John Mason to Davy,
March 10, 1808.]
[Footnote 749: Indian Office, Letter Book B, 218, War Department to
Davy, May 12, 1806.]
Thomas Hayward continued in charge of the Chicago factory until the
spring of 1807, when he resigned his appointment. No successor could
be found at once, and accordingly Jouett, the Indian agent, was asked
to take temporary charge of the factory,[750] A few weeks later the
President of the United States "approbated" the appointment of Joseph
B. Varnum, a clerk in the War Department, to the vacant position.[751]
Varnum came highly recommended by his superiors, and his services as
factor gave equal satisfaction to his new employer. "No young man
possess[es] more purity of morals or integrity of Character," wrote
his superior at the time he was appointed to his new position, and he
further expressed the conviction that Varnum would perform his new
duties with "perfect fidelity."[752]
[Footnote 750: _Ibid._, 304, War Department to General John Shee,
Superintendent of Indian Trade, May 12, 1807; _ibid._, 314, War
Department to Jouett, May 19, 1807.]
[Footnote 751: _Ibid._, 318, War Department to Shee, June 6, 1807.]
[Footnote 752: Indian Office, Letter Book B. The letter is unsigned but
probably was written by Dearborn.]
Varnum took up his new work at Chicago the last of August. The invoice
of the household furniture belonging to the factory made on this date
by Jouett and Kinzie is still preserved.[753] His predecessors had not
made use of the full $200 allowed for this purpose, apparently, for the
invoice shows the total original cost of the equipment to have been
$142.87. The appraisers estimated the present value of the articles at
about 80 per cent of the original cost. The meager equipment included
six chairs, one table, and one camp and two cot bedsteads; the most
prominent items among the kitchen utensils being two brass and four tin
kettles, valued at fifteen dollars.
[Footnote 753: Department of Indian Trade, Chicago invoice book.]
In 1808 it was decided to establish a factory at Mackinac. Under the
impression that Varnum preferred this station to the one at Chicago the
appointment was made, and Matthew Irwin of Philadelphia was designated
to succeed Varnum at Chicago.[754] Varnum, too late, protested against
his transfer, preferring to remain at Chicago, but the appointment of
Irwin had already been made, and it was decided that the arrangement
could not be altered. Irwin's salary and subsistence was fixed at
$1,165, $200 less than his predecessor had been given.[755] He was
expected to proceed to Chicago at once, and to arrive there in time
to permit Varnum to open the factory at Mackinac the same season.
This plan miscarried, however. Irwin in charge of a consignment of
goods went as far as Albany; here the goods were stored and the factor
returned to Philadelphia to pass the winter. In the spring of 1809
he again started for Chicago.[756] His tenure as factor lasted three
years. The outbreak of war in 1812 terminated the usefulness of the
factory for the time being, and Irwin proceeded to wind up its affairs.
The stock of furs on hand was sent by vessel to Mackinac, only to fall
into the hands of the British. On July 5 Irwin left Chicago, having
closed the storehouse and delivered the keys to Doctor Van Voorhis.[757]
[Footnote 754: Indian Office, Letter Book A, 196, John Mason to Matthew
Irwin, August 8, 1808; Letter Book B, 436, War Department to Irwin, May
6, 1809.]
[Footnote 755: Indian Office, Letter Book A, 196, Mason to Irwin,
August 8, 1808.]
[Footnote 756: _Ibid._, 348, Mason to Irwin, May 6, 1809.]
[Footnote 757: Indian Office, Letter Book C, 131, Mason to Irwin,
February 9, 1813.]
With the plans for the restoration of the Chicago factory after the war
Irwin was again appointed factor, but before the factory had actually
been established his appointment was changed from Chicago to Green
Bay. His was the only incumbency of the latter factory, his service
there continuing from its establishment in 1816 to the abandonment of
the factory system six years later. Irwin returned to Pennsylvania,
his native state, where he died in 1845.[758] He was of medium height,
well proportioned, "of pleasing deportment, and quite interesting and
popular in his address."
[Footnote 758: For a sketch, of Irwin's life see _Wisconsin Historical
Collections_, VII, 269-70.]
From the records of the Department of Indian Trade, and the reports
of the Superintendent printed in the volumes of the American State
Papers devoted to Indian affairs, considerable information concerning
the operations of the Chicago factory can be gleaned. The buildings of
the factory cost $1,000, and the value of the furniture prior to the
war was placed at $134.31.[759] The operations for the four-year period
ending September 30, 1811, produced a profit of $3,454.24.[760] This
favorable showing was due to the fact that the peltries received at the
Chicago factory consisted chiefly of hatters' furs on which a profit
was made, and shaved deer skins, which deteriorated comparatively
little in handling.[761] For the year ending April 1, 1812, the
business done at Chicago showed a profit of $1,773.94, a larger gain
than for any similar period thus far.[762] At the last-mentioned date
the stock on hand amounted to almost $12,500, and the total value of
the stock, buildings, peltries, and other assets was $13,727.15. When
Fort Dearborn was evacuated in the following August, Captain Heald
distributed the merchandise of the factory, amounting in value to more
than $6,000, among the Indians. Prior to this nearly $5,000 worth of
peltries and furs had been shipped to Mackinac, all of which, like
the peltries belonging to Kinzie and Forsyth, fell into the hands
of the British. Together with the loss incurred through debts owed
by the Indians or by members of the Fort Dearborn garrison, and the
destruction of the buildings and furniture of the factory, the total
loss of the Chicago factory was $13,074.47.[763]
[Footnote 759: _American State Papers, Indian Affairs_, I, 770, 792.]
[Footnote 760: _Ibid._, 792.]
[Footnote 761: _Ibid._, 788, 792.]
[Footnote 762: _Ibid._, II, 40.]
[Footnote 763: _American State Papers, Indian Affairs_, U, 59.]
That the operations of the Chicago factory prior to the War of
1812 were, on the whole, successful, can scarcely be doubted. The
realization of a profit from the Indian trade had never entered into
the calculations of the founders of the factory system, yet, as has
been shown, a steady profit was realized from the Chicago factory,
at least from the year 1807 on. How well the factory fulfilled its
primary function of regulating the prices of the private traders is
significantly shown by the unconscious testimony of Black Partridge
and Petchaho, the latter the brother and successor of Gomo, the head
chief of the Illinois River Pottawatomies. In 1814 they complained to
Thomas Forsyth, who visited them as a representative of the United
States Indian Department, of the high prices of goods in the sutler's
store at Fort Clark. They pleaded that the United States take pity on
them and establish a factory at Fort Clark, and expressed the hope that
they would be able to get goods as cheap in this way "as they formerly
did in the factory at Chicago."[764] At another time Forsyth himself,
than whom no one was more familiar with the conditions affecting the
Indian trade in Illinois, stated that no one who bought his goods in
this country could sell them as cheaply as the factories. The British
traders only could oppose the factories, and this was possible because
of their extensive credit, and the superior quality of their goods.[765]
[Footnote 764: _Wisconsin Historical Collections_, XI, 337.]
[Footnote 765: _Ibid._, XI, 344.]
[Illustration: MRS. REBEKAH HEALD
From a daguerreotype taken in later life
(By courtesy of Mrs. Lillian Heald Richmond, St. Louis. Missouri)]
From the time of its re-establishment in 1816 the factory was conducted
at Chicago until the abolition of the government trading-house system
in 1822; but the Chicago factory did not acquire during this time the
trade and influence enjoyed by the first factory in the period before
the War of 1812. The reasons for this failure to recover the old-time
influence will be set forth in connection with the consideration of the
failure and abolition of the factory system as a whole.
We have seen that the system of government trading houses was entered
upon as an experiment, and that as such it was renewed from time to
time. Congress never abolished the earlier system of licensed private
traders, and never gave a whole-hearted support to the competing
system. Herein lay the chief cause of the ultimate failure of the
experiment, and here, too, is to be found the principal reason for the
limited degree of influence and success achieved by the government
trading houses during its continuance. Upon the formation of the
American Fur Company by John Jacob Astor, that powerful corporation,
operating from Mackinac as a center, undertook to monopolize the Indian
trade of the Northwest. There ensued for a few years the most vigorous
exploitation of the fur trade which this region ever witnessed. The
American Fur Company, in connection with other private traders, was
antagonized by the government factory system, and consequently left no
stone unturned to overthrow it. Partly because of this, but in part
from the operation of other factors, to be noted in their place, the
trade of the Chicago and Green Bay factories largely disappeared prior
to 1820; and it had been decided, in fact, to discontinue them and
establish a new one on the St. Peter's River when Congress, under the
urging of Senator Benton, decided in 1822 to abolish the entire factory
system.
The system of government trading houses had been established under
the influence of a twofold motive. The primary consideration of
the government's Indian policy was the maintenance of peace on the
frontier. This could best be accomplished by rendering the Indian
contented, and by freeing him from the influence of foreigners. Not
merely his happiness, but his very existence depended upon his securing
from the whites those articles which he needed but which he himself
could not produce; and since the private traders took advantage of his
weakness and ignorance to exploit him outrageously in the conduct of
the Indian trade, it was argued that the welfare of the Indian would
be directly promoted, and indirectly the peace of the frontier be
conserved, by the establishment of government trading houses upon the
principles that have been indicated.
The theory underlying the government factory system seemed sound, but
in practice several obstacles to its successful working, powerful
enough in the aggregate to cause its abandonment, were encountered. Not
until 1816 was an act passed excluding foreigners from the trade, and
even then such exceptions were allowed as to render the prohibition of
little value.[766] The amount of money devoted to the factory system
was never sufficient to permit its extension to more than a small
proportion of the tribes. However well conducted the business may have
been, this fact alone would have prevented the attainment of the larger
measure of benefit that had been anticipated.
[Footnote 766: See report of the Committee on Indian Affairs to
Congress in 1817, in _American State Papers, Indian Affairs_, II,
127; Irwin-McKenney correspondence and report of Jedediah Morse in
_Wisconsin Historical Collections_, VII, 269 ff.]
Another and inherent cause of failure lay in the difficulty of public
operation of a business so special and highly complicated in character
as the conduct of the Indian trade. Great shrewdness, intimate
knowledge of the native character, and a willingness to endure great
privations were among the qualifications essential to its successful
prosecution. The private trader was at home with the red man, his
livelihood depended upon his exertions, and he was free from the moral
restraints which governed the conduct of the government factor. Above
all he was his own master, free to adapt his course to the exigencies
of the moment; the factor was hampered by regulations prescribed by a
superintendent who resided far distant from the western country; and
he, in turn, by a Congress which commonly turned a deaf ear to his
repeated appeals for amendment of the act governing the conduct of
the trade. The factor's income was assured, regardless of the amount
of trade he secured; nor was he affected by losses due to errors of
judgment on his part, as was the private trader. Too often he had, at
the time of his appointment, no acquaintance with the Indian or with
the business put in his charge. To instance a single case, Jacob Varnum
at the time of his appointment to the Sandusky factory was a native
of rural New England, who had neither asked for nor desired such an
appointment. It is doubtful whether he had ever seen an Indian, and he
was certainly entirely without mercantile experience; yet he had for
competitors such men as John Kinzie, Thomas Forsyth, and Antoine De
Champs, men who had spent practically their whole lives in the Indian
trade.
The goods for the government trade must be bought in the United
States, and the peltries secured in its conduct must be sold here.
This worked disaster to the enterprise in various ways. From their
long experience in supplying the Indian trade the English had become
expert in the production of articles suited to the red man's taste.
It was impossible for the government, buying in the United States, to
match, in quality and in attractiveness to the Indian, the goods of
the Canadian trader. Even if English goods were purchased of American
importers, the factory system was handicapped by reason of the higher
price which must be paid. On the other hand the prohibition against
the exportation of peltries compelled the superintendent of the trade
to dispose of them in the American market. Experience proved that
the domestic demand for peltries, particularly for deer skins, did
not equal the supply; so that the restriction frequently occasioned
financial loss. But there were further restrictions in the act of
1806 which narrowed the choice of a market even within the United
States.[767] That these restrictions would operate to diminish the
business, and accordingly the influence of the government trading
houses, is obvious.
[Footnote 767: Report of the Superintendent of Indian Trade, January
16, 1809, _American State Papers, Indian Affairs_, I, 756; for the act
of 1806 see _Annals of Congress_, 9th Congress, 1st session, 1287-90.]
Another group of restrictions worked injury to the factory system
through their failure to accommodate the habits and desires of the
Indian. To trade with the government the Indian must come to the
factory. The private trader took his goods to the Indian. The red
man was notably lacking in prudence and thrift, and was careless and
heedless of the future. He was, too, a migratory being, his winters
being devoted to the annual hunt, which frequently carried him several
hundred miles away from his summer residence. Before setting out on
such a hunt he must secure a suitable equipment of supplies. Since he
never had money accumulated, this must be obtained on credit and be
paid for with the proceeds of the ensuing winter's hunt. The factor was
prohibited, for the most part, from extending such credit; the private
trader willingly granted it, and furthermore he frequently followed
the Indian on his hunt to collect his pay as fast as the furs were
taken. In such cases as the factor did extend credit to the Indian, the
private trader often succeeded in wheedling him out of the proceeds of
his hunt, leaving him nothing with which to discharge his debt to the
factor.
The greatest advantage, perhaps, enjoyed by the private trader
involved at the same time the most disgraceful feature connected
with the Indian trade. From the first association of the Indian with
the white race his love of liquor proved his greatest curse. The
literature of the subject abounds in narrations of this weakness, and
the unscrupulous way in which the white man took advantage of it. For
liquor the Indian would barter his all. It constituted an indispensable
part of the trader's outfit, and all of the government's prohibitions
against its use in the Indian trade were in vain, as had been those of
the French and British governments before it. The Indians themselves
realized their fatal weakness, but although they frequently protested
against the bringing of liquor to them, they were powerless to overcome
it. The factor had no whisky for the Indian, and consequently the
private trader secured his trade.
The remedy for this state of affairs is obvious. Either the government
should have monopolized the Indian trade, at the same time extending
the factory system to supply its demands; or else the factory system
should have been abandoned and the trade left entirely to private
individuals under suitable governmental regulation. The former course
had been urged upon Congress at various times, but no disposition to
adopt it had ever been manifested. The time had now arrived to adopt
the other alternative. Soon after Thomas Hart Benton entered the
Senate he urged upon Calhoun, then Secretary of War, the abolition
of the factory system. Calhoun's opinion of the Superintendent of
Indian Trade, Thomas L. McKenney, was such that he did not credit
Benton's charges of gross mismanagement, and accordingly he refused to
countenance the proposition.[768] This refusal led Benton to make an
assault upon the system, in the Senate.[769] In this two advantages
favored his success: as the inhabitant of a frontier state he was
presumed to have personal knowledge of the abuses of the system he was
attacking; and as a member of the Committee on Indian Affairs he was
specially charged with the legislative oversight of matters pertaining
to the Indians.
[Footnote 768: Benton, _Thirty Years View_, I, 21.]
[Footnote 769: For the debate see _Annals of Congress_, 17th Congress,
1st session, I, 317 ff. For the documents see _American State Papers,
Indian Affairs_, II, _passim_.]
Benton believed and labored to show that the original purpose of
the government trading houses had been lost sight of; that the
administration of the system had been marked by stupidity and fraud;
that the East had been preferred to the West by the Superintendent
of Indian Trade in making purchases and sales; in short that the
factory system constituted a great abuse, the continued maintenance
of which was desired only by those private interests which found a
profit therein. In view of all the circumstances of the situation his
conclusion that the government trading houses should be abolished
was probably wise; but the reasons on which he based this conclusion
were largely erroneous. His information was gained from such men as
Ramsey Crooks, then and for long years a leader in the councils of
the American Fur Company. This organization had a direct interest in
the overthrow of the factory system. Its estimate of the value of
the latter was about as disingenuous as would be the opinion today
of the leader of a liquor dealers' organization of the merits of the
Prohibition party. In view of the charges of Crooks it is pertinent
to inquire why, if the factory system was so innocuous, the American
Fur Company was so eager to destroy it; and if a monopoly of the fur
trade was so repugnant to the sense of fairness why was Crooks willing
to see his company replace the government of the United States in the
enjoyment of that monopoly?[770]
[Footnote 770: Chittenden, _American Fur Trade of the Far West_, I, 18.]
Benton's charge of fraud on the part of the superintendent and the
factors failed to convince the majority of the senators who spoke in
the debate, and the student of the subject today must conclude that the
evidence does not sustain them. There was more truth in his charges
with respect to unwise management of the enterprise; but for this
Congress, rather than the superintendent and factors, was primarily
responsible. It is evident, too, that in spite of his claim to speak
from personal knowledge, Benton might well have been better informed
about the subject of the Indian trade. One of his principal charges
concerned the unsuitability of the articles selected for it by the
superintendent. But the list of items which he read to support this
charge but partially supported his contention.[771] Upon one item,
eight gross of jews'-harps, the orator fairly exhausted his powers of
sarcasm and invective. Yet a fuller knowledge of the subject under
discussion would have spared him this effort. Ramsey Crooks could have
informed him that jews'-harps were a well-known article of the Indian
trade. Only a year before this tirade was delivered the American Fur
Company had supplied a single trader with four gross of these articles
for his winter's trade on the Mississippi.[772]
[Footnote 771: _Annals of Congress_, 17th Congress, 1st session, I,
319.]
[Footnote 772: American Fur Company invoices of goods sold to traders,
MSS in the Detroit Public Library. For similar invoices see _Wisconsin
Historical Collections_, XI, 377-79; _Michigan Pioneer Collections_,
XXXVII, 309-11. Mr. Lewis Beeson of Niles, Michigan, has several dozen
jews'-harps in his collection of relics from the site of old Fort St.
Joseph.]
Although Benton's charges so largely failed of substantiation, yet the
Senate approved his motion for the abolition of the factory system.
The reasons for this action are evident from the debate.[773] Even
his colleagues on the Committee of Indian Affairs did not accept
Benton's charges of maladministration. They reported the bill for
the abolition of the trading-house system in part because of their
objections to the system itself. It had never been extended to more
than a fraction of the Indians on the frontier; to extend it to all
of them would necessitate a largely increased capital, and would
result in a multiplication of the obstacles already encountered on
a small scale. The complicated nature of the Indian trade was such
that only individual enterprise and industry was fitted to conduct it
with success. Finally the old argument which had been wielded against
the initiation of the system, that it was not a proper governmental
function, was employed. The trade should be left to individuals, the
government limiting itself to regulating properly their activities.
[Footnote 773: See, for example, the arguments of Johnson and Lowrie,
_Annals of Congress_, 17th Congress, 1st session, I, 339-44.]
Benton's method of abolishing the factory system exhibited as little
evidence of statesmanship as did that employed by Jackson in his
more famous enterprise of destroying the second United States Bank.
In 1818 Calhoun, as Secretary of War, had been directed by Congress
to propose a plan for the abolition of the trading-house system. In
his report he pointed out that two objects should be held in view in
winding up its affairs : to sustain as little loss as possible, and to
withdraw from the trade gradually in order that the place vacated by
the government might be filled by others with as little disturbance as
practicable.[774] Neither of these considerations was heeded by Benton.
He succeeded in so changing the bill for the abolition of the system as
to provide that the termination of its affairs should be consummated
within a scant two months, and by another set of men than the factors
and superintendent.[775] That considerable loss should be incurred in
winding up such a business was inevitable. Calhoun's suggestions would
have minimized this as much as possible. Benton's plan caused the
maximum of loss to the government and of confusion to the Indian trade.
According to a report made to Congress in 1824 on the abolition of the
factory system, a loss of over 50 per cent of the capital stock was
sustained.[776]
[Footnote 774: _American State Papers, Indian Affairs_, II, 181-85.]
[Footnote 775: _Annals of Congress_, 17th Congress, 1st session, I,
318, 351, 354.]
[Footnote 776: _American State Papers, Indian Affairs_, II, 513.]
The journal of Jacob Varnum sheds some light upon the losses sustained
at the Chicago factory, by reason of the operation of Benton's
amendments. Varnum relates that A. B. Lindsay, "a hanger-on about the
offices for an appointment for years," superseded him in charge of the
factory. "After remaining in Chicago as long as his instructions would
permit without making any sale or collecting the debts, he packed all
the goods and shipped them to Detroit, where they were again offered
for sale; and were finally auctioned off without a guarantee of any
kind as to payment. They sold at good prices--the purchasers, not
intending to pay, were indifferent as to the prices offered, and, what
was foreseen in Detroit, no satisfaction of value was received by the
government, and Lindsay, a man without a single business qualification,
got credit for the prompt and satisfactory manner with which he had
closed the business, and subsequently received an appointment in the
Custom service."
These statements, coming from an interested source, should, of
course, be subjected to due scrutiny; but in at least one respect
they receive confirmation from Lindsay himself. In 1823 in the course
of a congressional investigation into the closing up of the Indian
trading houses, under cross-examination at the hands of McKenney, the
deposed superintendent, Lindsay stated that he had never been engaged
in the Indian trade, and that he did not know the proper weight of a
three-point northwest blanket, nor what its dimensions should be.[777]
It further appears from the financial statement rendered by him that
though the property at Chicago invoiced nearly $16,000 he turned over
to the government less than $1,250 in cash, the two principal items in
his account consisting, in round numbers, of bills receivable to the
amount of $5,000 and losses on sales of $7,000.[778]
[Footnote 777: _Ibid._, 420.]
[Footnote 778: _Ibid._, 518.]
The failure of the trading-house system constitutes but one chapter
in the long and sorrowful story of the almost total failure of the
government of the United States to realize in practice its good
intentions toward the Indians. The factory system was entered upon from
motives of prudence and humanity; that it was productive of beneficial
results cannot be successfully disputed; that it failed to achieve
the measure of benefit to the red race and the white for which its
advocates had hoped must be attributed by the student, as it was by
Calhoun, "not to a want of dependence on the part of the Indians on
commercial supplies but to defects in the system itself, or in its
administration."[779] The fatal error arose from the timidity of the
government. Instead of monopolizing the field of the Indian trade, it
entered upon it as the competitor of the private trader. Since its
agents could not stoop to the practices to which the latter resorted,
the failure of the experiment was a foregone conclusion. Yet it did
not follow from this failure that with a monopoly of the field the
government would not have rendered better service to the public than
did the private traders. Lacking the courage of its convictions, it
permitted the failure of perhaps the most promising experiment for the
amelioration of the condition of the red man upon which it has ever
embarked.
[Footnote 779: _Ibid._, 181-85.]