Factory System

aka: Indian Trading Posts
aka: Indian Factory System

The Indian factory system was a system of trading posts created by an act of Congress in 1795 with the express intention of developing and maintaining Native American friendship and allegiance through government control of trade on the frontiers of the new nation. Within the present borders of the state of Arkansas, three factories were established for this purpose: Arkansas Post (1805–1810), Spadra Bayou (1817–1822), and Sulphur Fork (1818–1822).

The United States took formal possession of Arkansas Post (Arkansas County) from Spanish authorities on March 23, 1804. An Indian factory (or trading post) was established in October 1805 with James B. Treat as factor (or chief trader). Most of the trade was directed to the local Quapaw. However, prior to the establishment of the factory, private trader Jacob Bright got permission from the federal government to develop a trading post for the local settlers and Indians. Bright and Company quickly became the largest and most important trading house on the Arkansas River. When Treat arrived in September 1805, he quickly comprehended the problem he was faced with from these private traders who had been given the right of “free trade throughout the whole extent of the Arkansas river for two years” by Secretary of War Henry Dearborn. Given the size of the Bright enterprise, it could easily under-price Treat’s factory. In the spring of 1806, when barges were sent to New Orleans, Louisiana, sixty packs belonged to the U.S. factory, while Bright and Company sent hundreds of packs and pounds of deer and bear skins, beaver pelts, small furs, assorted hides, and a considerable quantity of oil and tallow. Although Treat warned his superiors of the problems, he received no support, and as a result, the Arkansas Post factory was closed in 1810.

In 1800, some 300 Cherokee from Tennessee led by Chief Tahlonteskee traveled up the Arkansas River and took possession of a tract given up by the Osage. Other Cherokee followed, and in 1817, the federal government signed a treaty with them and promised to establish a factory for their convenience. The factory site was in the vicinity of present-day Clarksville (Johnson County) at Spadra Bayou at the confluence of the Arkansas River. The factory developed trade and promoted agriculture among the Cherokee but was plagued by other problems. Isaac Rawlings was appointed early in 1819, established the complex, and then resigned due to poor health. During his tenure, Rawlings had to deal with unwanted woolen goods and vermin in the skins, furs, and goods. The factors were also faced with the aggressive Osage and a war that had broken out between them and the Cherokee in the spring of 1821, in addition to the possible plunder of the factory. The most famous factor was the Irish immigrant and local politician Matthew Lyon, who was appointed in early 1820 and remained through the closing of the factory. Goods, primarily deerskins, were shipped down the Arkansas River to New Orleans.

The third factory was started at Natchitoches, Louisiana, to serve the numerous Indians living in the Red River valley and to check Spanish influence in Texas, which was felt across the international boundary. When John Fowler first arrived in 1817, he faced hostility from the community and eventually decided to relocate the factory at the confluence of the Sulphur Fork and Red River in Miller County. Within a hundred miles of the site, there were numerous large villages of Caddo, many displaced tribes, and Indians who were attracted to the area by the abundance of game and illegal alcohol provided by private traders. Besides acting as a factory, Fowler’s establishment sought laborers and interpreters; settled disputes between traders and Indians; gathered detailed information on the Indians, as well as artifacts; promoted agriculture among the Indians; and assisted missionaries entering the area. His thorniest problem was with the military and a lack of troops to defend the factory. Due to poor relations with the army, Fowler left for the East and eventually resigned. He died in December 1820. He was replaced by William McClellan of Tennessee in January 1821. Trade flourished from the autumn of 1821 through the following summer as whites and Indians visited the factory.

Despite the good work of the factors at Spadra Bayou and Sulphur Fork, lobbying pressure from the American Fur Company was at work in Washington DC. As a result, the factory system was ended by Congress on May 6, 1822, and the factories closed in the coming months.

For additional information:
Magnaghi, Russell M. “Sulphur Fork Factory, 1817–1822.” Arkansas Historical Quarterly 37 (Summer 1978): 168–183.

Morris, Wayne. “Traders and Factories on the Arkansas Frontier, 1805–1822.” Arkansas Historical Quarterly 28 (Spring 1969): 28–48.

Peake, Ora B. A History of the United States Factory System, 1795–1822. Denver: Sage Books, 1954.

Plaisance, Aloysius. “The Arkansas Factory, 1805–1810.” Arkansas Historical Quarterly 11 (Autumn 1952): 184–200.

Russell M. Magnaghi
Northern Michigan University


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