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The Indian trading-house which had been planned for the agency at Fort Snelling never materialized. Failure of the houses in operation to pay expenses and the opposition of the private traders led to their abolition in 1822. Thereafter, whatever attention the government directed toward the trade was influenced by the desire to prevent tampering with the allegiance of the Indians on the part of foreigners and to control this traffic which could contribute so much good or so much evil to the lives of the government’s wards.

With the Indian trade left to the private traders, great trading companies developed, since the fur trade easily lent itself to the corporation system. Cooeperation in the marketing of furs and in the buying of goods eliminated many of the difficulties which a single individual would meet. The American Fur Company, so long guided by John Jacob Astor, had a practical monopoly of the trade during the time that Old Fort Snelling was in existence. Mendota was the headquarters of a vast region which extended from the Mississippi to the headwaters of the streams flowing into the Missouri. At various places throughout this territory were trading posts called “forts”, although they consisted of no more than a few huts within a stockade. These were all subsidiary to the post at Mendota.

Goods for the Indian trade were much the same as those given as presents by the government officials blankets, trinkets, tobacco, knives, and the like. These goods were sent in great Mackinac boats from the East to be distributed among the posts. Each Indian hunter received on credit goods valued at forty or fifty dollars in payment for which he pledged the spoils of his winter’s hunt. If the trader did not go with his band, he visited them occasionally or sent his engages to see that they were hunting and that no other trader was tampering with them to secure their furs. In the spring the Indian would deliver furs valued at twice the amount of the goods received. The trading company’s profit was, accordingly, about one hundred per cent. To carry out the details of the traffic there grew up within the company a complicated system of factors, clerks, voyageurs, and hivernants.

With the entire system of the fur trade the military officials had little to do except in the matter of regulation. Not much military protection was necessary as the Indian looked upon the trader more as a friend than an enemy. Care in respect to the character of the men engaged and supervision of the method of carrying on trade were the two things necessary. According to the act of March 30, 1802, which was supplemented by the acts of April 29, 1816, and June 30, 1834, no one could carry on trade with the Indians without obtaining a license from an Indian agent, which was subject to revocation by the superintendent of the district.

Many were the problems which Major Taliaferro was obliged to consider when he granted a license. A license was valid for trade only at a certain place and among a certain tribe. The trader must be an American citizen. He was not allowed to carry with him any insignia of a foreign power. An invoice of his goods was presented to the agent, who had to certify to its correctness. Liquor was prohibited, and the trader was responsible for the conduct of all the members of his party in this matter. To guarantee the fulfillment of all these requirements, bond had to be given at the time of obtaining the permit.

To examine all the applicants, to keep in touch with them in the field, and to obtain the truth in regard to their conduct was enough to keep both agent and officers at Fort Snelling busy. In 1826 twenty-five licenses were granted; in 1827, eleven; in 1830, thirteen; and in 1831, fourteen. The amount of this trade was very large, as is indicated by the case of Mr. Faribault who traded on the Cannon River. One year he marketed 50 buffalo-robes, 39,080 muskrats, 2050 pounds of deer skins, 125 pounds of beaver, 130 martin, 1100 mink, 663 raccoons, 331 otter, 25 lynx, and 5 foxes.

There was a great deal of vagueness as to the application of the trade laws “a mist of uncertainty” as Taliaferro called it. Governor Cass of Michigan Territory allowed foreigners to enter into expeditions as interpreters or boatmen, who upon entering the wilderness took active charge of the crew and all operations. As far as Fort Snelling was concerned there was little call for the ejection of foreigners by force. In 1833 it was rumored that a foreigner was trading on the Sheyenne River a tributary of the Red River. But with the despatch of a company of troops and the rumor of their approach, the culprit immediately decamped.

The building of the fort was in itself enough to impress British subjects with the firmness of the United States government. Joseph Renville, Kenneth McKenzie, and William Laidlaw, former employees of the English companies, in 1822 organized the Columbia Fur Company, and obtained a license from Major Taliaferro. In five years they had posts from Green Bay to the Missouri River, with their headquarters at Land’s End, a short distance up the Minnesota River from Fort Snelling. But in 1827 a union with the American Fur Company was brought about.

Traders licensed by the agent at Fort Snelling covered the territory as far west as the Missouri River. No post could be established without his approval; and he even attempted to regulate the form in which the establishment should be built. On the whole, cooeperation between the factors of the fur companies and the officials at the post was desired by both parties. The most notable disagreement is that which existed between Alexis Bailly, the chief factor at Mendota, and Major Taliaferro. This disagreement continued until September 15, 1834, when the agent reported that he had refused to allow Bailly to hold further intercourse with the natives, “not only in Consequence of his bad tongue, but on account also of his frequent Violations of the intercourse laws”. In this action he was seconded by the authorities of the fur company, who sent Mr. H. H. Sibley to fill Mr. Bailly’s place. The pleasant relations which existed between Mr. Sibley and all the government officials civil and military is one of the charming chapters in the history of the fort.

Intimately connected with the fur trade was the liquor traffic. Not that the traders were always responsible for the introduction of the tabooed commodity, but they were connected with it to such an extent as to be always under suspicion. Nor was the attitude of the government consistent. When Pike ascended the Mississippi he spoke of the evil effects of rum to the chiefs who ceded to the United States the military reservation; but the explorer closed with the words: “before my departure I will give you some liquor to clear your throats." Even Taliaferro, foe that he was of liquor, knew its power. When a neighboring chief and thirty of his men visited the agency, he recorded: “After council gave him 30 Rats Bread 50 Rats Pork 10 lbs Tobacco 3 gallons of whiskey the last for good Conduct towards the Chippeways."

Liquor was an important asset in carrying on the fur trade. The object was to please the red man, not to stupefy him to such an extent that he could be swindled. With the growth of the great companies and the influx of numbers of private traders there were many bidders for each Indian’s furs. Complaint was continual that the British traders about the Lake of the Woods successfully offered whiskey as an inducement to get the trade of the American Indians. Governor Cass, thinking it would be worse to lose the trade than admit the liquor, allowed its introduction, in “limited quantities”, by those engaged in business along the boundary. But the act of July 9, 1832, provided, that “no ardent spirits shall be hereafter introduced, under any pretence, into the Indian country." This put an end to the stock excuse. At the same time Americans suffered to such an extent that Mr. Norman W. Kittson at Pembina wanted permission to destroy all liquor and punish all offenders, promising “that very little would be introduced after a short time". So acute was the difficulty that it became the subject of diplomatic correspondence with Great Britain; but the authorities of the Hudson’s Bay Company retorted that “spirits are even clandestinely introduced into the Company’s territories by citizens of the United States."

During the first years stringent measures were in force at the mouth of the Minnesota River. At Prairie du Chien, Taliaferro had seen the barrels rolled out from the river vessels and they foretold to him coming murders and depredations. His cooeperating friend, Colonel Snelling, graphically described its evil effects. “Herds of Indians”, he said, “are drawn together by the fascinations of whisky, and they exhibit the most degraded picture of human nature I ever witnessed." The drunken Indian did not molest the trader; his peaceful fellow-tribesman suffered more. “An Indian killed at Al [?] Faribault’s Trading house whiskey was given the Indian for his furs by Mr. F. The deceased then invited one of his friends to drink with him the invitation was accepted when this friend becoming inflamed with the Liquor very inhospitably sunk his Tomahawk into the head of his host whiskey it is said does no harm in the Trade by persons interested but the foregoing is only one of the many hundred fatal occurrences from its use in procuring furs unlawfully."

In fact, the Indians were continually agitated. If they received the spirits they naturally revelled. When their supply was exhausted they raged and fumed until they secured more. Sometimes the disease was more desirable than the cure. “I have thus far seen but few of the indians of this place and I am in hopes of passing on North without much trouble there has just arrived a fresh supply of whiskey which will keep them busy for a few days and by that time my carts will be almost out of their reach."

The eagerness for liquor on the part of the Indians made its introduction all the more easy. For it they were willing to pay much: eight horses were at one time exchanged for eight kegs of whiskey, and the current rate at which it sold is indicated by the complaint which a Chippewa chief poured into the ears of the agent: “My Father Is it right for our traders to make us pay 200 Musk Rats, and 3 otters for a 3 gallon keg of mixed whiskey?" They would undergo extreme physical suffering, lying out in the rain and wading rivers and swamps, to bring the precious liquid to their villages.

The officers were never successful in entirely banishing the prohibited article. Conditions depended upon the eagerness of the military and civil agents, on the number of soldiers stationed at the fort, and on the wiliness of the culprits. On one occasion liquor “was found secreted in barrels of corn, buried on the beach and in other secret places, and destroyed."

Major Taliaferro was not lax in enforcing the laws. Every boat passing Fort Snelling was searched, and no liquor was allowed to enter the Indian country. A few stray references seem to indicate what was a usual occupation of the troops. “The Sub Agent Mr. Grooms left with 10 men on his 2d expedition below Lake Pepin in quest of whiskey Smuglers as our Indians even entering the country with it from Prairie du Chiens and the Traders of the Am Fur Cpy are geting whiskey over the country by land and water". During May, 1827, the agent called the attention of Colonel Josiah Snelling to the fact that in Mr. Bailly’s store at Mendota there was whiskey which had been introduced into the Indian country contrary to law. Accordingly a detachment of soldiers was sent under the command of Lieutenant J. B. F. Rupel, who succeeded in finding two barrels which were taken away and stored in the fort.

The year 1832 saw especial activity in the destruction of liquor. The boat of one trader passed up the Mississippi during April, having on board eighteen barrels of whiskey. Later in the season the vigilance of the officers had direct results. In July eleven kegs of high wines, very strong in quality, and in quantity amounting to one hundred and ten gallons, were taken from the boat of Hazen Moores by Captain J. Vail. The value of this liquor was $330. In October of the same year, five kegs of high wines and one keg of whiskey were found by Lieutenant I. K. Greenough in the boat of Louis Provencalle. These confiscated kegs were stored in the fort, and an interesting side-light on their ultimate fate is contained in the report of Major Taliaferro “I am of opinion”, he wrote, “from what I hear that the High Wines, and Whiskey Seized by Lieuts Vail and Greenough, and in Store here will soon be of little account in Consequence of loss by leakage, and the property Not in charge of any responsible person Other than its mere deposite in the public store.” Whether any efforts were made to stop the leaks is not mentioned.

These energetic movements caused “consternation among those natives who have not yet joined the temperance Societties". But they also caused violent opposition from the men whose goods had been seized. These traders commenced a suit in the courts at Prairie du Chien against the commanding officer at Fort Snelling, arguing that while the law prohibited the introduction of liquor into the Indian country, this seizure had been made on the Mississippi River “a common highway open to all the Citizens of the United States".

It is impossible to follow the course of the whiskey traffic through its ups and downs. Numerous cases are recorded where the soldiers “knocked in the head” the whiskey barrels. But it was probably true, as the missionary S. R. Riggs wrote from Lac qui Parle on June 15, 1847, to the Indian agent: “The whiskey destroyed by the efforts of yourself and the commanding officer at Fort Snelling forms the glorious exception, and not the rule."

Under the regulations existing in 1830 the traders were allowed to take with them into the Indian country one gallon per month for every person engaged in the party. Under plea of this they brought in high wines which were later diluted with water and distributed among the Indians. Of the amount brought in, the employees actually saw only one-third, and this they paid for at the rate of from eight to sixteen dollars per gallon. Accordingly, Major Taliaferro issued a circular letter in which he stated that high wines and whiskey would be allowed to be brought in “in no case whatever". Actions such as these by the agent, who was still a young man, brought about the remark which Mr. Aitkin, a trader among the Chippewas, is reported to have made to some chiefs: “The Medals and Flags which you received at St Peters are nothing more than pewter and dish rags, and were given to you by a boy, and with a boys paw."

Much of the good which should have resulted from the activities of the officers was lost because the Indian could not be punished. If liquor was found in his possession and seized there was nothing to prevent his going back and obtaining more, taking the chance of being more successful in evading the authorities the second time. Accordingly prevention as well as cure was tried, and Captain Eastman, Mr. Sibley, and others sought, with some success, to persuade the Indians to refuse to accept liquor. Two years later the Indian agent, R. G. Murphy, organized a temperance society among the Sioux, who, an observer stated, were careful in living up to the pledge when once taken; and added, “One such man as Major Murphy does more real, practical good than all the missionary societies of New York and Boston."