Trading posts
Trading posts were pivotal centers of economic exchange, particularly in North America, beginning with the establishment of the Hudson's Bay Company's trading posts in 1670. These posts facilitated trade between European settlers and Indigenous peoples, primarily involving the exchange of beaver pelts for goods like firearms and metal tools, which were highly valued by Indigenous communities. The trading post system served as a crucial economic lifeline for many Indigenous groups, especially in regions west of the Mississippi, where survival often depended on the fur trade.
From 1790 to 1876, trading posts were mainly government-operated, aimed at ensuring fair treatment of Native Americans in trade transactions. However, in 1822, the system transitioned to allow private companies, led by figures like John Jacob Astor, to dominate the market. This shift led to significant changes in Indigenous economies and lifestyles, resulting in increased exposure to diseases and economic dependency on European goods.
By the mid-1870s, changes such as the decline of the buffalo population and the rise of the railroad industry contributed to the decline of trading posts. As a result, these centers of commerce eventually gave way to new economic systems, including reservation economies that incorporated elements of tourism. Understanding the history of trading posts sheds light on the complex interactions between Indigenous communities and European settlers, revealing both the economic opportunities and the challenges that arose from these exchanges.
Trading posts
Tribes affected: Pantribal
Significance: Trading posts served as places of economic exchange in the period when the fur trade was significant
In 1670 the Hudson’s Bay Company received the right to control all trade in lands drained by waters flowing into that great bay. In this huge territory, covering thousands of square miles, the company established its “factories,” which became the first permanent trading posts in North America. Company agents exchanged firearms and metal tools, the items most preferred by Indians, for beaver pelts. These pelts, rather than money, became the standard exchange medium in the north country. This system was used until 1810.
In the United States from 1790 to 1876, furs were the most important economic trade goods exchanged between American Indians and whites. West of the Mississippi, Indian survival depended upon trade in beaver pelts and buffalo hides. Until 1822 most of this trade with Native Americans came through government-owned trading posts. Congress began to establish the posts in 1796 to guarantee fair treatment of Native Americans. Indians were to receive a just price for their goods. Some members of Congress hoped that by treating Indians fairly and by allowing them to acquire American-made products they would acquire new desires—for shoes and cotton cloth perhaps—that would gradually draw them away from their traditional cultures.
The government-owned system lasted until 1822, when John Jacob Astor, founder of the American Fur Company, persuaded Congress to open Indian trading posts to private companies. Between 1822 and 1840, Astor opened 140 posts in the West and became the dominant force in many American Indian economies. Wherever there were posts, Indians began to cluster, and they soon became exposed to epidemics, alcohol—which had been forbidden at government posts—and economic dependence on white trade. The impact of these posts was generally negative, as thousand of Indians began to die from white diseases such as smallpox and whooping cough. Astor’s posts remained open until the mid-1870’s; by that time the railroads and a number of related factors had killed most of the buffalo, and most beaver had been hunted out of existence. After those disasters, trading posts were gradually replaced by a reservation economy based at least partially on tourism.