The British monopoly of the Northwest fur trade, 1774-1796

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I e i <o

THE BRITISH MONOPOLY OF THE NORTHWEST FUR TRADE, 1774-1796

WAYNE EDSON STEVENS

Preface

The present study represents an attempt to throw a little new light upon a phase of American history which has been somewhat neglected in the past. There is great need for a thorough study of the subject of the fur trade in all its various phases, social, economic, and political, without which the history of the American frontier can never be adeouately interpreted. In the present instance, the writer has endeavored to describe the northwest fur trade during the period of British ascendancy prior to 1800, and likewise to trace the influence of this traffic upon the diplomacy of the time.

Particular emphasis has been laid upon the economic and political aspects of the industry, the nature of the contact between the white trader and the red man having been touched upon but lightly. Limitations of time and space have made it seem desirable to omit for the present a detailed description of the more romantic aspects of the fur trade; while there is the additional consideration that this phase of the subject may best be studied in the journals and diaries of the traders themselves, a great many of which are accessible to the general reader in printed form. One who desires to obtain a picture of the romantic and adventurous side of this wilderness traffic can do no better than to secure it at first hand from the "Journals" of Peter Pond and John Long or from Alexander Mackenzie's iv.

Voyages. The writer also feels it necessary to call attention to the fact that his treatment of Anglo-American diplomacy of the period between 1774 and 1796 is in a sense incomplete, as all that has been attempted has been to trace the influence of the peltry trade in the relations between Great Britain and the United States. While little has been said concerning certain other very important considerations affecting the negotiation of the Treaty of 1785 and the Jay Treaty, at the same time an effort has been made to avoid laying an undue emphasis upon the importance of the traffic in furs.

A large part of the introductory chapter is based upon work which has already been done by others; and the frequency with which certain titles appear in the footnotes will indicate the persons to whom the writer is indebted for this material. The remaining chapters are based for the most part upon original sources, in both printed and manuscript form. In collecting this original material, the following repositories were visited personally: the Canadian Archives at Ottawa; the Archives of the District of Montreal; the library of McGill University and the Bibliotheoue Saint-Sulpice , at Montreal; the Toronto Public Library; and the Burton Collection at Detroit, which now forms a part of the Detroit Public Library. At each of these places every possible courtesy was shown the writer and every possible facility was placed at his disposal for conducting his research. A considerable amount of material in the form of transcripts has also been obtained from London archives, especially from the Public Record Office, which has served to throw much light upon diplomatic aspects of the fur trade.

The study which is contained in the following pages was undertaken at the suggestion of Professor Clarence W. Alvord and has been completed under his supervision. To him the writer desires to express his gratitude, both for the criticism and advice which he has offered from time to time during the progress of the work, and for the assistance which he has rendered in the task of gathering trie necessary material.

Introduction

The fur trade of North America began with the first contact "between Europeans and the native Indians and has continued to the present day. The geographical area which has at one time and another been the scene of the traders' operations is practically co-extensive with the continent itself. In his search for furs and peltries, the white man has roamed from the lands bordering the warm waters of the Gulf of Mexico to the frozen regions lying under the Arctic Circle and from the rock-bound shores of New England to the distant "Northwest coast." The story of the traffic in furs must of necessity constitute the principal theme of the early chapters in the history of almost any part of North America. The era of the fur trade has, generally speaking, been but a transitory stage in the historical development of any given region, beginning with the penetration of the wilderness by the explorer and disappearing before the onward march of the settler. ^ In the far North, however, where a rigorous climate has barred the settler's advance, the industry still flourishes, and the Hudson's Bay Company stands to the people of milder regions as a living reminder of their own vanished past.

In the story of no portion of North America has the peltry trade played a more important and romantic r6le than in that of the mighty region drained by the Great Lakes and the

^Turner, "The Significance of the Frontier in American History," American Historical Association Report, 1893, pp. 208-211.

upper Mississippi. This vast area was originally a country teeming with fur-bearing animals and, moreover, the marvelous system of lakes and rivers by which it was drained rendered possible the profitable exploitation of the industry. The history of the region is, in fact, utterly incomprehensible without a knowledge of the fur trade, which is so intimately bound up with the story of early settlement, Indian relations, war, and international diplomacy.

The year 1763 is of great importance for the history of the northwest trade, for it saw the consummation of a political change which had momentous consequences for the commerce of the region. It marked the close of the period of French ascendancy and the beginning of an era in which the subjects of Great Britain were to play the leading role. It is the purpose of this study to trace the development of the fur trade under British influence but before undertaking this task, a few words should be said concerning the general characteristics of the period which ended in 1763.

Trade with the Indians went hand in hand with the early exploration and settlement of Worth America. Gosnold xThis region may, for the sake of convenience, be referred to as the "Northwest," a term which has had various meanings at different times. During the period covered by the present study, the word "Northwest" was applied almost exclusively to the country beyond Lake Superior. For present purposes, however, it has not seemed wise to employ it in this restricted sense, so when the word is used in these pages, it will be understood to refer to the country lying northwest of the Ohio, and including the area drained by the Great Lakes and the upper Mississippi, as well as those more remote regions which v/ere penetrated by the traders resorting to Michillimackinac .

bartered with the savages on his voyage to the coast of .New England in 160E, and in 162£, Captain John Smith reported that a great many beaver skins had been sent from Canada and New England during the past six years."1" The rapid extension of the peltry trade was only a matter of time as the fur-bearing country along the coast became exhausted and competition increased. As the traders began pushing into the interior from the coast, it was natural that the colonies having easy access to the Mississippi Valley and the Great Lakes should enjoy superior advantages, and the result was that New iork and Pennsylvania came to possess a virtual monopoly of the English traffic in furs.2 Albany, which controlled the route to Lake Ontario, became the great center of the business, which was at first carried on largely by the frontier settlers living in the Mohawk ^iiver valley, The early traders of Pennsylvania were likewise mostly frontiersmen who transported their goods to the Indian country by means of pack horses.

In Canada, the industry was from the very first under the strict supervision of the government. Cherishing the fond hope of founding a populous colony, the French government at the beginning made an effort to prevent Canadian

•^Mcllwain, V.raxall ' s Abridgment of the Hew York Indian Records, 1678-1751, pp. XIX, XIII. For a good summary of the New England fur trade, see Note A, Ibid. , p. 1XVIII.

2i:cllwain, Wraxall's Abridgment, pp. aV. , XXVII . , XVIII .

3 Johnson, report to the Lords of Trade, Hew York Colonial Documents, VII., 953.

traders from going into the interior. To this end, great fairs were established at Montreal and Three Hivers, in the expectation that the distant tribes by bringing their furs thither to be sold, would thus make it unnecessary for the colonists to go into the Indian country themselves. The plan was a failure, however, because traders established themselves above Montreal, and intercepted the Indians as they descended the river, and purchased their furs.-1- It was but a short time before the younger and more adventurous members of the communi ty began to take to the woods in order to carry on the trade; and, as this was contrary to the policy of the government, an effort was made to prevent a general exodus from the colony by granting a limited number of licenses for carrying on the commerce of the interior. In spite of government regulations there arose a large class of forest rangers, or coureurs de bois , who played a most important part in the trade during the French regime as well as the years which followed.2 Along with the traders went the Jesuits, who established missions at remote places in the Great Lakes' country and labored to convert the savages to the Christian faith.

Parkman, The Old Regime in Canada, IL, 102-104. 2Ibid., II., 104, 105; 109-112.

^Johnson's Report, 1767, New York Colonial documents, VII., 954.

A clash between the interests of the French and English was only a question of time. During the closing years of the seventeenth century, English traders began pushing into the region which had already been entered by their opponents, while the Hudson's Bay Company on the north began to loom up as a possible rival to the French. It was becoming apparent that if the latter desired to hold their trade, they must adopt vigorous measures. -he result was that the French began to build stockaded trading posts at strategic points in the interior in order to preserve the fur trade and the friendship of the Indians, upon which the former so vitally depended. ^ A period of intense intercolonial rivalry began which did not end until the signing of the Treaty of Paris.

The English were considerably handicapped at the

outset, inasmuch as their rivals had obtained an earlier start

g

and had penetrated the Northwest long before them. ¥he French The French traders had made the most of their start in order to gain the friendship of the Indians, a task in which they were assisted by the influence which their countrymen, the Jesuits, exercised over the tribes which they visited. Then,

Turner, "The Indian Trade of Wisconsin, " 33. Johns Hookins University Studies , 9th Series, 11-12. The Hudson's Bay Company was founded in 1670, and Dongan, while governor of New York, endeavored to extend British trade into the Great Lakes' region. See also I.lcllwain, Vv'raxall ' s Abridgment, pp. LXI-LXIV.

p

Mcllwain, 7. raxall ' s Abridgment , p. XL.

^Carter, Great Britain and the Illinois Country, 78; Johnson, Report on Indian Affairs, 1767, S ew York Colonial ocuments, VII., 954.

too, the character of the ^rench traders was such that they readily adapted themselves to the manners and customs of the tribes to which they resorted, while the English, on the other hand, were often lawless persons who cheated the savages and committed many other abuses, the inevitable consequence of which was. to cause themselves to be cordially disliked."1" The French a^so possessed the inestimable advantage of a centralized control of Indian affairs, while the English were handicapped by the inefficiency of a system in v/hich the management of trade was left to the individual colonies. The French government took great pains to conciliate the Indians, and in

case a trader was guilty of abuses, took care that at least a show of punishment wr.s made. The French trade was on the other hand cursed by a false economic system, saddled upon it by a paternalistic government, which established monopolies for the export of beaver skins from Canada and compelled those who "enjoyed" this exclusive privilege to take all the skins offered them at a certain fixed sum, in utter defiance of the laws of supply and demand.

■"■Mcllwain, Wraxall' s Abridgment . p. XL; Carter, Great Britain and t he Illinois Country. 85,86; Alvord, The Mississippi Valley in British Politics. ( In press. ) This work embodies by far the most comprehensive treatment of Indian affairs and trade in British Worth America during the period from 1763 to 1774 that has yet been made, and it is to this study that the writer is indebted for a large amount of the material of the present chapter. See also Johnson's Report, 1767, Hew York Colonial Documents. VII., 954.

Carter. Great Britain and the Illinois Country. 78, 85, 86; Alvord, The Mississippi Valley in British Politics. The colonies appear to have failed in the management of Indian affairs because of their mutual rivalry and jealousy. See next page.

i

The English, however, enjoyed one very marked advantage over their rivals. With the exception of powder, their goods were much cheaper than those imported by the French and this fact accounts for the very considerable trade which English merchants came to enjoy and likewise explains how it was that in spite of so many handicaps, they were even able to threaten the supremacy of their rivals in the Great Lakes' region. The chief menace to French commerce was the trade carried on by way of Albany and the Mohawk. The colony of Hew York, however, sent very few traders into the interior, but dealt with the western tribes through the Iroquois, who controlled the route from the Hudson Hiver to the lakes and played the role of middlemen between the English and the more remote Indians. The cheapness of English goods enabled the Iroquois to carry on a trade in this way which was advantageous to all parties concerned, with the exception of the French.1 In 1722, the colony of New York established a post at Oswego, which controlled the Mohawk communication with the Upper Country, and constituted

^Parkman, in the Old Regime in Canada, II., 105-109, gives a vivid description of this French system of monopolies. This plan, whereby the holder of the monopoly v/as obliged to receive all beaver offered at a certain price, led to the enormous extension of the fur industry, inasmuch as the traders were assured of a market for all the skins which they were able to secure from the Indians. At times the market was so glutted with this variety of peltry that there was no sale for it in France, and the directors of the company holding the monopoly for its exportation resorted to the expedient of burning a large part of the supply which they received.

■1-MoIlwain, Wraxall ' s Abridgment , pp. X1I-XLV.

a continual menace and defiance to the French traders."1" So great an advantage, in fact, did the cheaper English goods possess, that the French themselves succeeded in opening up a commercial intercourse with New York which all efforts failed wholly to suppress. Their merchants were able to "buy English goods, carry them to Canada, and exchange them for furs, reaping a larger nrofit than if they had used merchandise of their own manufacture, while the unscrupulous Albany traders continued to supply them, in spite of the protests of the Iroquois and the efforts of the colonial government.

While the merchants of New York were challenging French commercial supremacy at Oswego, traders from Pennsylvania were penetrating the region between the Ohio and the lakes. As years went on, these intruders grew in number and became a menace to French authority. In 1741, De Noyan wrote from Detroit, complaining of the growing influence of the English over the Indians and declaring his intention of pillaging their traders. It is in this commercial rivalry that the beginnings of the Seven Years' War are to be found and the

^Governor Burnet was responsible for the establishment of Oswego, for the purpose of carrying on the Indian trade. The fact that the Iroquois monopolized the trade between the English and the western tribes explains why New York built no forts west of Oswego. Hcllwain, Y.raxall's Abridgment, pp. XLIV<, LI I., LXXXI.

2 Johnson's Report, 1767, New York Colonial Documents, VII., 954; Mcllwain, Wraxall's Abridgment, pp. LXIV-LXXXI.

%cllwain, T»raxall ' s Abridgment, p. aVI.

feeling of bitterness was greatly intensified by the establishment in 1748 of an English trading post at Pickawillany, on the Big Miami. ^ In 1752 a force of French and Indians reduced the post and there is doubtless a considerable element of truth in the statement that this event really marks the opening of the final struggle for the mastery of the continent.

It was not in the Indian country but rather in the heart of Canada that the French cause was lost. The reduction of Quebec and the capitulation of Montreal delivered the province into the hands of the English, together with the fur trade for which both sides had been contending for so many years. It was indeed a rich prize which had fallen to the victors, as the nature of the French commercial establishment in the Upper Country at the time of the Conquest bears ample witness. The posts occupied by the French covered an enormous range of territory and, besides those in the neighborhood of the Great Lakes, their establishments extended down into the Illinois country and hundreds of leagues into the region beyond Lake Superior. The commerce of these various places had been exploited in different ways. There were first of all the free posts, of which the principal ones were Michillimackinac and Detroit, where anyone might carry on a trade by obtaining a

"'"The post at Pickawillany was established by traders from Virginia and Pennsylvania, who were during this period pressing beyond the Alleghanies in considerable numbers. Winsor, The Mississippi Basin, 249.

%/Idlwain, V.raxall's Abridgment, p. XYII-. ; Chalmers, Revolt of the American Colonies , II., 263.

license for the purpose. At certain others, as Niagara, Presqu' Isle, and Toronto, the King had an exclusive right to the trade; and finally, there were posts which were farmed out

to individuals for a fixed sum, among which were Ouiatanon,

1 2 Chequamegon, La Baye, and St. Joseph's. With regard to the

importance of the trade, it was estimated that its average

annual value for the years preceding the Conouest was no less

The capitulation of Montreal on September 8, 1760,

completed the military conquest of Canada. Immediately after

the overthrow of French dominion in North America, there was

a great rush of British traders to the Indian country, which

rendered it necessary that measures be taken to determine the

future status of the commerce of the Upper Country. General

Gage disapproved of the French practice of exploiting the posts

by the granting of monopolies, and upon the occupation of

Montreal, the whole system of special privileges built up by

the French was done away with. He believed that a better

method of deriving a revenue from the fur trade would be to

levy a duty upon the importation of peltry into England. The

Throughout the present study, the name "La Baye" is used to designate the trading post situated upon the body of water now called Green Bay.

2GageTs letter to Amherst, dated March £0, 1762, contains an interesting account of the state of the Indian trade at the time of the reduction of Canada. Michigan Pioneer and Historical Collections , XII., 14. To this letter is appended a list of the posts at which the French were accustomed to trade with the Indians. Ibid. , 21. See also Bougainftville ' s Memoir, compiled in 1757. Wisconsin Historical Collections , XVII L, 167,

For notes 3, 4, and 5 see next page.

political change, together with the inrush of British traders, which followed the connuest of Canada naturally resulted in considerable confusion and as the commercial control formerly exercised by the French at once disappeared, it was imperative that measures should be taken to establish peace and order in the Indian country. An effort was made to restrict the activities of the traders to certain posts and to limit the sale of rum, while Sir William Johnson, during his visit to Detroit in the summer of 1761, established a scale of prices at which furs and Indian goods were to be bought and sold, the purpose of which was to ensure fair dealing and prevent disorder."1"

The hopes and expectations of the British merchants were momentarily cut short by the terrible Indian outbreak known in history as Pontiac's Conspiracy. Numerous causes con tributed to the revolt, chief among which was a fear on the part of the Indians that the English setxlers were about to occupy their lands, a belief which it is very probable the

Estimate contained in General Murray '8 Report on the State of the Government of Quebec, June 5, 1762. Shortt and Doughty, Constitutional Documents , 57.

^Winsor, The Mississippi Basin, 405.

5Gage to Amherst, March 20, 1762, Llichigan Pioneer and Historical Collections , XIX., 17. Gage recommended that the smaller posts be abolished and that the trade be confined to Kaministiquia, Michillimackinac , La Baye, Detroit, and Ouiatanon. For several years after the Conouest, however, the military commanders at the posts were accustomed to grant exclusive rights to the trade in certain quarters, but this practice was doubtless a makeshift for retaining some degree of control over commerce. Ho legal monopolies were granted, in the form of leases, as under the French regime. Henry, Travels , Bain' ed. 183.

Ijohnson's Reioort, 1767. Hew York Colonial Documents,

French did all in their power to disseminate among the savages. The policy of the British government in not giving presents to the Indians so generously as the French had done likewise caused widespread dissatisfaction. In addition to these reasons, the conduct of the British traders was likewise a contributing cause to the outbreak. They had never been as diplomatic in their dealings with the Indians as the French had been. They made the savages drunk and then proceeded to rob them, while one of the specific reasons given by the Indians for the outbreak was the exorbitant prices charged by British traders for their goods, especially powder. VJhen it is remembered that in addition to these grievances, the woods were filled with French traders who bitterly hated the English and did everything in their power to instill their own fear and dislike into the minds of the Indians, it is not surprising that the tribes in the Great Lakes' region broke out into revolt.

The immediate effect of the war upon the commerce of the Upper Country was disastrous. The traders at Michillimackinac and other smaller posts in the interior were plundered and murdered, while a similar fate befell large numbers who were on the communications. The royal proclamation of October

1Johnson to Amherst, July 11, 1763, Hew York Colonial Documents, VII., 532; Johnson's Report, 1767, ibid. , 962, 963; Parkman, Conspiracy of Pontiac , 179-186.

^Johnson's Report, 1767, New York Colonial Documents, VII., 962, 963; Parkman, Conspiracy of Pontiac, passim. For a vivid account of the Indian uprising at Michillimackinac , see Henry's Travels , Bain ed. 77-104.

7, 1763, was designed to allay the fears of the Indians by prohibiting settlers from encroaching on their great western domain but its promulgation was too late to prevent hostilities. Among other provisions, the Proclamation contained the first announcement of the general policy to be followed by the British government with respect to the fur trade. It was stipulated that commerce with the Indians should be free and open to all of his Llajesty's subjects who should take out licenses from the governors or commanders in chief of the provinces wherein they resided and give security for the observance of such rules as might be laid down for the regulation of the trade. ^

Pontiac's Conspiracy was suppressed in 1764, but meanwhile the British ministry had come to realize the necessity of adopting effective measures for the regulation of Indian affairs and trade. The Proclamation of 1763, it will be noted, did not prescribe any rules for the regulation of the fur trade but simply announced the general policy which it was intended to follow in the future, while the ministry had as yet done nothing to interfere with the laws enacted by the colonies during the preceding years. At the time of the conouest of Canada, licenses for the Indian trade were issued by the governors of the various provinces, notwithstanding the fact that in 1756, two departments for the supervision of Indian affairs had been created, a northern and a southern, the

^Shortt and Doughty, Constitutional .uocuments, 119.

former of which was in charge of V/illiam Johnson as superintendent.1

The whole question of the regulation of Indian affairs and the control of the fur trade came up for discussion in 1764; and in the summer of that year, the Lords of Trade formulated a "Plan for the future Management of Indian Affairs This plan provided for -the imperialization of the control of Indian affairs by the establishment of two departments, each composed of certain designated tribes. A superintendent was placed over each department, under whom deputies were to be appointed to assist in the administration of business. All existing colonial laws respecting trade and intercourse with the savages were to be repealed, and it was provided that in the northern district, commerce should be confined to the posts, where it could be carried on under the inspection of the department. Certain tariffs for the trade were to be established by officers known as commissaries acting in concert with the Indians and merchants at the various posts and truck houses. Traders were to obtain licenses from colonial authori ties and give security for the observance of the rules laid down for the regulation of commerce. Moreover, no one was to acquire lands save within limits determined by negotiations with the Indians. The plan was never carried into effect by.

■^Alvord, The Mississippi Valley in British Politics.

2For the text of the plan, see Illinois Historical Collections, X. , 273.

act of parliament. The proposed administration would have necessitated a large annual expenditure, which it was designel to meet by levying a tampon the fur trade, but the ministry did not feel in a position to enact such a measure at the time when the plan was formulated. Though the project was never legally put into operation, the superintendents were instructed to carry it out so far as possible in the administration of their respective departments. John Stuart, of the southern department, at once took steps to put its provisions into operation, but Johnson did not do so until 1766, when news came from the Illinois country that foreigners were monopolizing the fur trade of the region."''

While the British ministry had been considering the closely allied subjects of Indian affairs and the regulation of the fur trade, effective measures had been taken on the other side of the water to crush the revolt led by Pontiac. During the trouble, the commerce of the Upper Country had practically ceased, but* after the uprising had been suppressed in

1764, there was a second rush of merchants into the Great Lakes' 2

region. Many Europeans, including large numbers of Scotch and

^"Alvord, The Mississippi Valley in British Politics; Carter, Great Britain and the Illinois Country . 81; Alvord and Carter, The Critical Period (Illinois Historical Collections, X. ) , 273, note 2.

%Iany of the Indians who had formerly depended upon French traders for their supplies had been reduced almost to destitution by the disturbances which had been going on for the past decade. Alexander Henry, writing of a voyage to Chequamegon in 1765 says, "These people were almost naked, their trade having been interrupted, first by the English invasion of Canada, and next by Pontiac' s war." Travels . Bain ed. , 188.

Irish, came to Canada, lured thither by visions of the large profits which they believed were to be obtained in the fur industry. As the newcomers were ignorant of the methods employed in dealing with the Indians, they were obliged to make use of French and English traders who acted as their agents, and many of whom, according to Sir William Johnson, were of disreputable character."^ These British merchants, however, were men of great enterprise and ability and they began gradually to crowd out the French traders who had been their predecessors in the field?

The British government had expected to derive great benefits from the trade in the Illinois country, but it was doomed to disappointment. The Conspiracy of Pontiac delayed the occupation of Fort de Chartres by British troops until 1765? and meanwhile French traders continued to carry on the commerce of the region and incidentally to strengthen themselves in the friendship of the Indians. In 1764, Pierre Laclede established a post in Spanish territory which he called St. Louis, which was to serve as a base for future trading operations.^ Immediately after the occupation of the region had been accomplished,

-'-Johnson's Report, 1767, li ew York Colonial Documents, p

^Isaac Todd, Forrest Oakes, Richard Dobie, James Finlay, and 3enjamin Frobisher, who played an important part in the Canrdian fur trade, were all in the field by 1766. Memorial of Merchants of Montreal, March 30, 1766, Canadian Archives , Indian Affairs, series SJ Merchants to Carleton, September 20, 1766, Canadian Archives, series Q, vol. 4, p. 200.