Chicago and the Old Northwest, 1673-1835 / A study of the evolution of the northwestern frontier, together with a history of Fort Dearborn

by Milo Milton Quaife

[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.

[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.

[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.

[727] Ibid., 4th Congress, 1st session, 152; American State Papers, Indian Affairs, I, 583.

[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.