American Fur Company
The American Fur Company was founded by John Jacob Astor in 1808.[1] The company grew to monopolize the fur trade in the United States by 1830, and became one of the largest businesses in the country.
The company was one the first great trusts in American business and one of the first major competitive ventures to challenge British business interests in North America. During the 18th century furs had become a major commodity in Europe and North America become a major supplier. Several British companiess, most notably the Hudson's Bay Company, capitalized on the lucrative trade in furs. When the U.S. gained its independence at the end of the 18th century, it rapidly moved to challenge British business dominance in North America, with the fur trade becoming an especially important issue. Astor's company was able to capitalize on the young nation's anti-British sentiments to take over many formerly British fur-trapping regions and trade routes. It was thus able to expand very rapidly and successfully.
Unfortunately for the company, demand for furs in Europe began to decline during the early 1800s leading to the stagnation of the fur trade by the mid 19th century. Competition among fur suppliers became fierce. The American Fur Company ultimately went out of business in 1842.
History
Creation
After receiving a charter from New York City, Astor established the American Fur Company on April 8, 1808.[2]: 167 The original plan for the company was to establish a trading post at the mouth of the Columbia River, send an annual supply ship from New York City to the post, then take fur from the post to China, where it would be traded for goods to be sold in New York.[2]: 167 Astor also hoped to trade with other posts along the coast of the Pacific Northwest, including Russian outposts of the Russian-American Company.[2]: 167 From the beginning, Astor formed subsidiaries of the American Fur Company to manage the company's business in these areas.[2]: 168
Subsidiaries
The South West Company handled the Midwestern fur trade, while the Pacific Fur Company dealt with operations in Oregon Country. The early operations of the company often competed with the great Canadian and British fur trading companies: the Hudson's Bay Company and the North West Company. During the War of 1812, many of the American Fur Company's trading posts were lost to the British; those in the Pacific Northwest, including Astoria, were sold to the North West Company.
For a time it seemed that the company had been destroyed, but following the war, the United States passed a law excluding foreign traders from operating on U.S. territory. This freed the American Fur Company from having to compete with the Canadian and British companies. The AFC competed fiercely among American companies to establish a monopoly in the Great Lakes region and the Midwest. In the 1820s the AFC expanded its monopoly into the Great Plains and the Rocky Mountains. To achieve control of the industry, the company bought out or beat out many smaller competitors. By 1830, the AFC had nearly complete control of the fur trade in the United States.
The company's time at the top of America's business world was short-lived. Sensing the eventual decline of fur's popularity in fashion, John Jacob Astor withdrew from the company in 1834. The company split up, and the Pacific Fur Company became independent. The Midwestern outfit would continue to be called the American Fur Company, and was then led by Ramsay Crooks. To cut down on expenses, the company began closing many of its trading posts.
Decline
Through the 1830s, competition began to resurface. At the same time, the availability of furs in the Midwest declined. During this period, the Hudson's Bay Company began an effort to destroy the American fur companies from its Columbia District headquarters at Fort Vancouver. By depleting furs in the Snake River country and underselling the American Fur Company at the annual Rocky Mountain Rendezvous, the HBC effectively ruined American fur trading efforts in the Rocky Mountains.[3] By the 1840s, silk was replacing fur for hats as the clothing fashion in Europe. The company was unable to cope with all these factors. Despite efforts to increase profits by diversifying into other industries like lead mining, the American Fur Company folded. The assets of the company were split into several smaller operations, most of which failed by the 1850s.
Influence
During its heyday, the American Fur Company was one of the largest enterprises in the United States and held a total monopoly of the lucrative fur trade in the country. The company provided the income for the land investments that catapulted John Jacob Astor to the position of richest man in the world and the first multi-millionaire in America. The German-born Astor remains the eighteenth wealthiest person of all time, and the eighth to create that fortune in the United States. He used part of his fortune to found the Astor Library in New York City. Later it merged with the Lenox Library to form the New York Public Library.
On the frontier, the American Fur Company opened the way for the settlement and economic development of the Midwestern and Western United States. Mountain men working for the company improved Native American trails and carved others that led settlers into the West. Many cities in the Midwest and West, such as Astoria, Oregon and Fort Benton, Montana, developed around American Fur Company trading posts. The American Fur Company played a major role in the development and expansion of the young United States.
See also
References
- ^ Ingham, John M. (1983). Biographical dictionary of American business leaders. Westport, Conn: Greenwood Press. pp. 26–27. ISBN 0-313-23907-X.
- ^ a b c d Chittenden, Hiram Martin (1902). The American Fur Trade of the Far West. New York: Francis P. Harper.
- ^ Mackie, Richard Somerset (1997). Trading Beyond the Mountains: The British Fur Trade on the Pacific 1793-1843. Vancouver: University of British Columbia (UBC) Press. pp. 107–111. ISBN 0-7748-0613-3.