restricted access 16. Establishment of Government Trading Houses April 18, 1796
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16 made for inflicting adequate penalties upon all those who, by violating their rights, shall infringe the treaties and endanger the peace of the Union. A system corresponding with the mild principles of religion and philanthropy toward an unenlightened race of men, whose happiness materially depends on the conduct of the United States, would be as honorable to the national character as conformable to the dictates of sound policy. . . . [James D. Richardson, comp., Messages and Papers of the Presidents, 1:96–97.] 15. President Washington on Government Trading Houses December 3, 1793 Washington repeatedly stressed the importance of properly regulated trade with the Indians. In his Fifth Annual Message to Congress he suggested that the United States government itself should enter the trade, a recommendation later incorporated in the factory system. . . . . After they [Congress] shall have provided for the present emergency, it will merit their most serious labors to render tranquillity with the savages permanent by creating ties of interest. Next to a rigorous execution of justice on the violators of peace, the establishment of commerce with the Indian nations in behalf of the United States is most likely to conciliate their attachment. But it ought to be conducted without fraud, without extortion, with constant and plentiful supplies, with a ready market for the commodities of the Indians and a stated price for what they give in payment and receive in exchange. Individuals will not pursue such a traffic unless they be allured by the hope of profit; but it will be enough for the United States to be reimbursed only. Should this recommendation accord with the opinion of Congress, they will recollect that it can not be accomplished by any means yet in the hands of the Executive. . . . [James D. Richardson, comp., Messages and Papers of the Presidents, 1:133.] 16. Establishment of Government Trading Houses April 18, 1796 Washington’s proposal for government trading houses was accepted as a trial measure in 1795, and in 1796 Congress established a system of Indian trading houses, which would provide “liberal trade with the several Indian nations.” This so-called factory system was extended periodically until it was abolished in 1822. An Act for establishing Trading Houses with the Indian Tribes. Section 1. Be it enacted . . . , That it shall be lawful for the President of the United States, to establish trading houses at such posts and places on the western and southern frontiers, or in the Indian country, as he shall judge most convenient for the purpose of carrying on a liberal trade with the several Indian nations, within the limits of the United States. Sec. 2. And be it further enacted, That the President be authorized to appoint an agent for each trading house established, whose duty it shall be, to receive, and dispose of, in trade, with the Indian nations aforementioned , such goods as he shall be directed by the President of the United States to receive and dispose of, as aforesaid, according to the rules and orders which the President shall prescribe; and every such agent shall take an oath or affirmation, faithfully to execute the trust committed to him; and that he will not, directly or indirectly, be concerned or interested in any trade, commerce or barter, with any Indian or Indians whatever , but on the public account. . . . Sec. 3. And be it further enacted, That the 17 agents, their clerks, or other persons employed by them, shall not be, directly or indirectly , concerned or interested in carrying on the business of trade or commerce, on their own, or any other than the public account , or take, or apply to his or their own use, any emolument or gain for negotiating or transacting any business or trade, during their agency or employment, other than is provided by this act. . . . Sec. 4. And be it further enacted, That the prices of the goods supplied to, and to be paid for by the Indians, shall be regulated in such manner, that the capital stock furnished by the United States may not be diminished. Sec. 5. Be it further enacted, That during the continuance of this act, the President of the United States be, and he is hereby authorized to draw annually from the treasury of the United States, a sum not exceeding eight thousand dollars, to be applied, under his direction , for the purpose of paying the agents and clerks; which agents shall be allowed to draw out of the public supplies, two rations each...


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