John Jacob Astor founded the American Fur Company in 1808 in an attempt to compete with other large fur trading companies, such as the North West Company and the Hudson’s Bay Company. The American Fur Company eventually branched out into the Pacific Fur Company and the South West Company. The Pacific Fur Company handled operations in Oregon country, and the South West Company oversaw the Midwestern fur trade.
The American Fur Company established trading posts in the Great Lakes region and traded with many American Indians. The company also established a post in Astoria, Oregon. The War of 1812 (1812–1814) hurt the company, as it lost its Pacific Fur Company and South West Company branches to the British, who seized Fort Astoria as well. Fortunately for Astor, Congress passed a bill in 1817 that excluded foreign traders from the United States, and the American Fur Company’s financial situation recovered. It held a monopoly over the fur trade in many regions, particularly in the Midwest and around the Great Lakes, and was one of the first American trusts. The company often bought out or otherwise put smaller companies out of business.
An example of how the company operated can be found by looking at the Great Lakes region. The American Fur Company’s Northern Department was stationed on Mackinac Island, which is strategically located in the Straits of Mackinac, where Michigan’s Lower and Upper Peninsulas meet, as do Lakes Huron and Michigan. Great Lakes furs were sent to London, and the company then imported goods to trade with the Indians, such as cloth, utensils, tools, and guns. Elsewhere in the Great Lakes area the fur trade was just as lucrative. In Minnesota and Wisconsin the company was divided into several smaller outfits to handle the volume of the trade. Many of the men in charge of these operations held considerable influence over local Indian affairs, particularly amongst the growing number of Indians who intermarried with the French-Canadian, Scottish, and American traders. The American fur trade would not have been as successful without the help of the Indians, who took part directly by trading for European goods and showing trappers where to hunt.
Astor used his political connections to his advantage. For example, Senator Thomas Hart Benton pushed through the abolition of the War Department’s factory system, which competed with Astor’s fur trading posts. The company also frequently lobbied Congress for increased regulation of trade and alcohol. When they traded with Indians, fur traders frequently were confronted by missionaries who detested their use of alcohol.
In 1834 John Jacob Astor left the company because he foresaw the decline in the popularity of fur in fashion. The company split into separate parts, and the Pacific Fur Company became independent while the midwestern portion of the company continued under the name American Fur Company. However, it was a losing enterprise, and many trading posts closed, which cut off a source of revenue for the Indians who traded furs at those posts. In addition, new competition surfaced, as did new fashions, such as silk. The American Fur Company had always had serious rivals in the North West Company and the Hudson’s Bay Company, and the competition never slowed down. The American Fur Company folded in 1842. However, during its peak it was one of the largest companies in the United States and helped propel John Jacob Astor into the position of one of the wealthiest men in American history.
See also Factory System; Fur Trade.
Born in Germany, John Jacob Astor emigrated to the United States in 1780. Arriving with a few dollars and seven flutes, he amassed a fur and proper
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