For a quarter of a century, the United States government operated a system of public trading posts, or factories, in the eastern North American borderland. The factories sold manufactured goods to Indians at cost and bought their peltry, foodstuffs, and other wares at market rates. They also served as annuity distribution centers and host sites for treaty conferences. The U.S. government used the factories to build its influence in Indian communities, win Native American allies, and (in a few cases) to leverage Indian land sales with factory debts. For their part, Indian men and women turned t ... More

For a quarter of a century, the United States government operated a system of public trading posts, or factories, in the eastern North American borderland. The factories sold manufactured goods to Indians at cost and bought their peltry, foodstuffs, and other wares at market rates. They also served as annuity distribution centers and host sites for treaty conferences. The U.S. government used the factories to build its influence in Indian communities, win Native American allies, and (in a few cases) to leverage Indian land sales with factory debts. For their part, Indian men and women turned the trading houses to their own uses: finding alternatives to British and Spanish traders; acquiring gifts and credit; enlisting the factors to resolve interethnic disputes; and selling goods for which the market had softened. Indians ultimately viewed the factories as alliance centers: during the War of 1812 the United States' Native allies employed them as arsenals and rally points, and its Indian adversaries viewed them as targets to capture or destroy. After that war, Superintendent Thomas McKenney tried to revive the factories by tying them to the Indian “civilization” program, advocating use of the system's revenues to fund Indian schools. Congress and the president, however, had come to see Indian alliance as less important than saving public money in an era of fiscal austerity, and fur trading as incompatible with the “civilized” lifeways they wanted Indians to adopt. With some pressure from the American Fur Company, they closed the factories permanently in 1822.