United States Government Fur Trade Factory System
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The United States Government Fur Trade Factory System was a system of government non-profit trading with Native Americans that existed between 1795 and 1821.
The factory system was set up on the initiative of George Washington who thought it would neutralize the influence of British traders doing business on United States territory. As an honest alternative to private trade it would also further the prestige of the United States among Native Americans. Thomas Jefferson shared Washington's expectations, but was also hoping that leading men of the Indian Nations would go into debt and be forced to cede land to pay it off.
Private interests generally criticized the factory system. American Fur Company was hurt by competition from the government's trading houses and began a campaign to have them closed down. In 1821, Senator Benton of Missouri, who stood in a close relationship with that company's owner, John Jacob Astor, started hearings with the aim to abolish the factory system and open the fur trade for uninhibited private enterprise and profit-making. Among the system's defenders were the future Vice President Richard Mentor Johnson and the future President Martin Van Buren. Nevertheless, Congress abolished the government fur trade factories in 1821, giving the government one year to liquidate the system.