Chapter XIII: 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.]

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.]