The American Fur Company — America’s First Monopoly

1808–1864

The American Fur Company was founded by John Jacob Astor in 1808. It became the first business monopoly in the United States, dominating as much as 90% of the Fur Trade during the first half of the 1800s.

John Jacob Astor, Portrait, Jarvis

John Jacob Astor. Image Source: National Portrait Gallery.

American Fur Company Summary

The American Fur Company, founded by John Jacob Astor in 1808, aimed to compete with Canadian fur companies and establish a dominant presence in the American fur trade. Astor formed partnerships, such as the Southwest Fur Company, to expand his operations and gain control of the Great Lakes Region.

Despite setbacks in the Pacific Northwest due to rival trading companies and the War of 1812, Astor regained control after the conflict and bought out competitors. The company expanded into the Western Fur Trade centered in St. Louis, using political connections and strategic maneuvers to undermine rivals and make connections with Native American Indian trading partners.

Astor’s empire was highly structured, with agents overseeing different divisions. Although it faced challenges in the Rocky Mountains with the Rocky Mountain Fur Company, it eventually absorbed nearly all of its competitors.

In 1834, Astor realized the Fur Trade Era was coming to an end and sold his interests in the company. The American Fur Company continued operating but eventually faded out by the 1860s. During its heyday, it controlled as much as 90% of the Fur Trade in the United States, making it the first business monopoly in the nation’s history.

Thomas Jefferson, Painting, Rembrandt Peale
President Thomas Jefferson authorized the Louisiana Purchase, which opened the Western Frontier to American businesses. Image Source: Wikipedia.

American Fur Company Facts

  1. The American Fur Company was founded by John Jacob Astor in 1808 as a competitor to Canadian fur companies to gain control of the Fur Trade industry.
  2. Astor formed partnerships and subsidiaries, such as the Southwest Fur Company and the Pacific Fur Company, to expand the company’s operations.
  3. In 1811, the American Fur Company established a trading post, Astoria, at the confluence of the Columbia River and the Pacific Ocean to serve as a hub for the company’s Trading Post Network in the Pacific Northwest.
  4. After the War of 1812, Astor regained control of the Fur Trade and bought out Canadian competitors, establishing dominance in the Great Lakes region.
  5. During the Era of Good Feelings, Astor used his financial resources and political connections to undermine competitors and break up the Government-run Indian Factory Trading System, further increasing his control of the Fur Trade and establishing the company as a monopoly.
  6. The American Fur Company expanded into the Western Fur Trade centered in St. Louis, facing competition and engaging in trading wars with rival entrepreneurs.
  7. The American Fur Company’s operations were structured, with headquarters in New York City and key agents overseeing different divisions.
  8. The company established a Trading Post System in fur-rich lands, such as the Blackfoot Indian territories and the Upper Missouri Region.
  9. Astor recognized the limitations of the fur trade and decided to sell his interests in the company in 1834.
  10. The American Fur Company continued operating after Astor sold it but eventually ended by the 1860s.

American Fur Company History

The American Fur Company, founded in 1808 by John Jacob Astor, was a prominent fur-trading enterprise that played a pivotal role in the development of the American Fur Trade industry. Under Astor’s direction, the company came to control a significant amount of the Fur Trade, making it one of the earliest examples of a corporate monopoly in the United States.

The company was based in New York City and dominated the fur trade in the Great Lakes region and along the Missouri River during the 1820s and 1830s. The company traded in beaver, marten, fox, and buffalo hides, as well as other animal furs.

The American Fur Company was highly successful, and at its peak, it employed more than 3,000 people and controlled nearly 90% of the fur trade in the United States. The company established a network of trading posts throughout the West, and its traders worked closely with Native American Indian Tribes to obtain furs, including the Blackfoot.

Ramsay Crooks, Portrait, Painting
Ramsay Crooks played a significant role in the American Fur Company. Image Source: Wikipedia.

Purpose of the American Fur Company

Astor, a renowned American entrepreneur and one of the richest men in the nation at the time, established the American Fur Company with the goal of competing against Canadian fur companies and dominating the American Fur Trade. 

He envisioned a Trading Post Network stretching from the Great Lakes Region to the Pacific Northwest. He knew if he could establish the network, then he would be able to increase trade with China. He would also free himself from dependence on Canadian and British markets and suppliers for furs, which were used to make luxury items like hats and coats. 

When Astor started the company, his right-hand man was Ramsay Crooks. Together, they identified companies to work with, in hopes the companies would make mistakes and falter. When that happened, the American Fur Company was there to buy them up or take control of them as subsidiaries.

Jefferson Opens the American West

Although Astor was a Federalist, he owed the opportunity to move into the Western Frontier to President Jefferson. In 1803, Jefferson authorized the Louisiana Purchase, which doubled the size of the United States.

Even before the agreement was made, Jefferson had plans to explore the region and organized the Lewis and Clark Expedition. It was followed by other prominent explorers, including Zebulon Pike and Stephen H. Long, who mapped the region, opening it to business ventures and settlement.

Sacagawea, Lewis and Clark Expedition
Lewis and Clark with one of their guides, Sacagawea. Image Source: Wikipedia.

Establishment of the Pacific Fur Company and Astoria

Astor set up the Pacific Fur Company in 1810, in an effort to establish a presence for the American Fur Company in the Pacific Northwest. 

Astor sent an expedition to the region — known as the Astor Expedition — which not only started America’s business and territorial interest in Oregon but also led to the establishment of the Oregon Trail. The trail, which played a significant role in Westward Expansion and Manifest Destiny, was blazed by Astor’s employee, Robert Stuart when he traveled from Astoria to St. Louis in 1812.

The Pacific Fur Company established several posts in the Columbia River Basin, including a key trading post at the confluence of the Columbia River and the Pacific Ocean in present-day Oregon. Named “Fort Astoria,” it was intended to be the central hub for the Trading Post Network in the region. 

Fort Astoria, built in 1811, was the first American settlement in the Pacific Northwest Region of North America.

Unfortunately, as tension between the United States and Great Britain increased over the issues that would lead to the War of 1812, Astoria was targeted by rival companies, including the Hudson’s Bay Company.

Astoria, Oregon, circa 1812, Illustration
This illustration depicts Astoria in 1812. Image Source: New York Public Library Digital Collections.

Establishment of the South West Company

In 1811, Astor reached an agreement with the North West Company and the Michilimackinac Company, Canadian competitors, that divided the Fur Trade in the area east of the Rocky Mountain Region, typically known as the Old Northwest, or the Northwest Territory

The agreement created a partnership, called the South West Company. Crooks and Robert Stuart played key roles in the development, operation, and expansion of the South West Company. Under the provisions of the agreement, the South West Company agreed to operate south of the Canadian border.

In 1817, Astor took complete control of the South West Company. He set up the Northern Department of the American Fur Company, which was headquartered at Michilimackinac.

The War of 1812 and the Capture of Astoria

In 1813, the War of 1812 was in its second year. Fighting between the United States and Great Britain continued on the East Coast, Northwest Territory, Canada, and on the high seas. As the war continued, the Americans living in Astoria feared attacks from the British, who could easily sail into the Columbia River from the Pacific Ocean.

Although accounts vary on the circumstances, the officers at Fort Astoria decided to sell the Pacific Fur Company — including the fort — to the North West Company. The North West Company took control of the fort in October 1813 and it was later renamed Fort George, after King George III. 

The loss of Astoria effectively ended Astor’s dream of a coast-to-coast Fur Trade operation. The British controlled the Trading Post until the 1840s. It was returned to the United States when the United States and Great Britain agreed to the Oregon Treaty on June 15, 1846.

The American Fur Company and the Era of Good Feelings

Following the War of 1812, the United States entered the “Era of Good Feelings” under President James Monroe. It was a time of immense nationalism and pride, triggered by new territorial gains in the American Southeast and the fact the United States had, for the second time in less than 50 years, held its own against the mighty British Empire.

James Monroe, 5th President, Founding Father
President James Monroe. Image Source: Wikipedia.

The American Fur Company Enters the Western Fur Trade

In 1821, Astor set his sights on the Western Fur Trade. He came to an agreement with the company Berthold and Chouteau to supply them with trade goods. However, the company faltered and became part of the American Fur Company. 

The acquisition gave Astor control of the Fur Trade in a wide area. It started at the Platte River and went north to the Canadian border. In the East, the territory stretched from the Missouri River west to the Rocky Mountains.

At the time, the primary competitors in the region were Bernard Pratte and Company and the Columbia Fur Company, which was under the control of Kenneth McKenzie. Within five years, Astor started to systematically eliminate his competitors:

In December 1826, he bought out Bernard Pratte and Company, which became the Western Department of the American Fur Company.

The following year, Ramsay Crooks reached an agreement with the Columbia Fur Company. The agreement established the Upper Missouri Outfit — which received goods and supplies from the American Fur Company.

Expansion into the Rocky Mountain Region

The American Fur Company pushed further into western territory in 1829 when it built Fort McKenzie at the mouth of the Marias River. 

In the Rocky Mountain Region, the main competition was the Rocky Mountain Fur Company, which had been started by William Henry Ashley and Andrew Henry in 1822 as the Ashley-Henry Company.

William Henry Ashley, Illustration
This illustration depicts William Henry Ashley.

By 1829, the company was under the control of William Sublette and Robert Campbell. Over its short time in business, some of the most famous Mountain Men of the era trapped for the company, including: 

The two companies operated as rivals in the region from 1830 to 1834. However, by 1834, the Rocky Mountain Fur Company was unable to continue to compete, and it was bought out by the American Fur Company.

The American Fur Company Trading Post Network

The company set up a Trading Post Network throughout the central and northern areas of the Great Plains Region. There were three primary Trading Posts:

  1. Fort Union (1829) — at the mouth of the Yellowstone River.
  2. Fort Pierre (1832) — near the junction of the Cheyenne River and Missouri River
  3. Fort Laramie (1834) — on the North Platte River.

In Astor’s system, Indians had to travel to the Trading Posts in order to trade with the American Fur Company. The Indians were more than willing to trade, and they became the primary workforce in Astor’s monopoly. 

The Missouri River served as the primary transportation route for the furs, which were collected at the Trading Posts and then sailed to St. Louis.

Fort Laramie, Interior, Painting, Miller
This 1837 illustration by Alfred Jacob Miller depicts the interior of Fort Laramie. Image Source: Walters Art Museum.

Overall, it was a business that started on the Great Plains with the harvesting and processing of fur pelts, which were then shipped to Europe. There, manufacturers turned the pelts into hats, coats, and other luxury goods and sold them all over the world. 

The entire operation was controlled by Astor, who operated out of his New York offices. From there, he coordinated with the heads of each branch of the company:

  • Ramsay Crooks — Served as the company’s general manager. 
  • Pierre Chouteau Jr. — Oversaw the Western Department from the St. Louis offices.
  • Robert Stuart — Manager of the Great Lakes Region. 
  • Kenneth McKenzie — Oversaw operations in the West, managing the Fort Union Trading Post at the convergence of the Missouri and Yellowstone Rivers.

Astor’s operation extended to Europe, where his agent, Curtis M. Lampson, managed business relationships and monitored the markets. Not only was the American Fur Company a monopoly in the United States, but it was also an international business.

Astor Uses Political Connections to Eliminate the Factory Trading System

Like many businessmen of his time, Astor was involved in politics, serving as a member of the New York State Assembly from 1798 to 1799. He was a firm supporter of the Federalist Party and a vocal opponent of Thomas Jefferson and the Democratic-Republican Party. His political connections helped him in his business ventures, including the American Fur Company.

In 1795, an act of Congress established the “Indian Factory System,” a series of government-run Trading Posts that were set up to conduct trade with Indians on behalf of the Federal Government. The men who ran these trading posts were called “factors,” which is why the system is referred to as the Factory Trading System.

George Washington, Portrait, Stuart
George Washington suggested the original Factory Trading System. Image Source: Wikipedia.

Astor worked with Thomas Hart Benton and Lewis Cass to successfully convince the Federal Government to eliminate the Factory Trading System in 1822, further reducing his competition in the fur trade. Astor also helped pass legislation that led Congress to pass legislation that prohibited foreigners — primarily British and French — from operating in the fur trade business.

Astor Exits the American Fur Company

As fur was replaced by silk for making hats and garments, Astor believed the Fur Trade would decline. In 1834, he sold the Northern Department of the American Fur Company to Ramsay Crooks and the Western Department to the St. Louis firm of Pratte, Chouteau, and Company.

Crooks operated in the Great Lakes Region for nearly a decade and diversified into shipbuilding and fisheries. However, the business faltered and he was forced to end it in 1842.

Under the control of Pierre Chouteau Jr., the system established by the American Fur Company in the Western Fur Trade continued. However, as bison pelts became more popular, the company struggled and eventually went out of business, selling its assets to the Northwest Fur Company in 1864.

Criticism of the American Fur Company

Over time, the company, and Astor, have been criticized for their business methods. Astor was not afraid to use his political connections and financial power to eliminate obstacles or opposition. And he was also willing to work with politicians to enact laws that benefitted his companies and harmed his competitors.

Although the company is also viewed as taking advantage of the Indian Tribes it traded with, it should be noted the Indians were also skilled negotiators. However, Astor’s efforts to eliminate the Factory System, which forced Indians to trade with the American Fur Company, may have created a one-sided system that diminished the economic power of the Indians.

American Fur Company Significance

The American Fur Company is important to United States history because it was the first modern business monopoly in America. At one time, it controlled as much as 90% of the Fur Trade in the United States through a business empire that reached from the Rocky Mountains to Europe. The company also existed at a time when the United States was transitioning from a new nation to a global power, operating from the Jeffersonian Era, through the War of 1812, into the Era of Good Feelings, the Jacksonian Era, before finally fading away as the nation fell into Civil War.

American Fur Company Frequently Asked Questions

Is the American Fur Company still in business?

No, the American Fur Company is no longer in business. It operated from 1808 until 1834 when John Jacob Astor sold his interests in the company to two different parties. Although the name was still used, it was not the same company. One half ceased operations in 1842 and the other operated until 1864 when it was bought out by a rival company.

What did the American Fur Company do?

The American Fur Company was primarily involved in the Fur Trade and was a dominant force during the Fur Trade Era. Founded by John Jacob Astor to compete with Canadian fur companies, establish dominance in the American fur trade, and expand its operations across regions like the Great Lakes, the Pacific Northwest, and the Great Plains. The company established a vast Trading Post Network, traded with Native American Indians, and controlled the trade through strategic business acquisitions, partnerships, and political connections.

What was the American Fur Company in the 1800s?

In the 1800s, the American Fur Company dominated the American Fur Trade. Founded in 1808 by John Jacob Astor, it aimed to compete with Canadian fur companies and establish a vast Trading Post Network. The company expanded its operations, controlled key regions such as the Great Lakes and the western fur trade centered in St. Louis, and engaged in strategic moves to undermine competitors. It is estimated it controlled as much as 90% of the Fur Trade, making it the first monopoly in American business.

American Fur Company APUSH Notes and Study Guide

Use the following links and videos to study the War of 1812,  Manifest Destiny, and the Era of Good Feelings for the AP US History Exam. Also, be sure to look at our Guide to the AP US History Exam.

American Fur Company APUSH Definition

The American Fur Company was a prominent fur trading company founded by John Jacob Astor in 1808, during the Fur Trade Era. The company played a significant role in the expansion of the Fur Trade in North America, controlling a vast network of trading posts and establishing dominance over competitors. The company became the first business monopoly in the United States, controlling as much as 90% of the Fur Trade in America.

American History Central Resources and Related Topics

American Fur Company for APUSH Notes

This video from Gene Preuss provides an overview of the Fur Trade in the American West.

Key Concepts Related to the American Fur Company

John Jacob Astor — John Jacob Astor was a German-born American entrepreneur and fur trader who founded the American Fur Company. Astor’s astute business strategies and extensive fur trading operations made him one of the wealthiest individuals in the United States during the early 19th century.

Astor Expedition — The Astor Expedition refers to a venture initiated by John Jacob Astor to establish a fur trading outpost at the mouth of the Columbia River in the early 19th century. The expedition aimed to secure a profitable position in the fur trade industry and expand American influence in the Oregon Country.

Ramsay Crooks — Ramsay Crooks was a Scottish-American fur trader and one of the early leaders of the American Fur Company. He played a vital role in the expansion of the fur trade in the Western United States, including participating in the Astor Expedition and later serving as the company’s president.

Fur Trade Era — The Fur Trade Era encompasses the period from the late 17th century to the mid-19th century when the fur trade industry flourished in North America. It involved the exchange of furs, primarily beaver pelts, between European traders and Native American tribes, shaping colonial economies and facilitating intercultural interactions.

Hudson’s Bay Company — The Hudson’s Bay Company, established in 1670, was a British fur trading enterprise that played a dominant role in the fur trade in North America. It operated extensive trading networks, including in the Oregon Country, and often competed with American fur companies, such as the American Fur Company.

Oregon Country — Oregon Country refers to a region in the Pacific Northwest of North America, which encompassed present-day Oregon, Washington, Idaho, and parts of Montana and Wyoming. In the 19th century, it was subject to joint occupation by the United States and Great Britain, leading to territorial disputes and eventual American control.

Oregon Trail — The Oregon Trail was a historic emigrant route used by pioneers during the mid-19th century to travel from the eastern United States to the Oregon Country. It stretched over 2,000 miles, presenting significant challenges and dangers but promising fertile land and new opportunities in the West.

Oregon Trail Campfire, Painting, Bierstadt
Oregon Trail Campfire, Albert Bierstadt, 1863. Image Source: Wikipedia.

Rocky Mountain Fur Company — The Rocky Mountain Fur Company was a fur trading enterprise established in 1822 by William H. Ashley and Andrew Henry. It competed with the American Fur Company and operated in the Rocky Mountain region, playing a crucial role in the exploration and exploitation of the Western Fur Trade.

Trading Post System — The Trading Post System was a network of trading posts established by fur trading companies across North America during the Fur Trade Era. These posts served as centers for trade between European fur traders and Native American tribes, facilitating the exchange of goods, especially furs, and shaping relationships on the frontier between Indians and Americans.

Citation Information

The following information is provided for citations, including APA Style, Chicago Style, and MLA Style.

  • Article Title The American Fur Company — America’s First Monopoly
  • Date 1808–1864
  • Author
  • Keywords American Fur Company, John Jacob Astor, Fur Trade, Fur Trade Era,
  • Website Name American History Central
  • Access Date July 22, 2024
  • Publisher R.Squared Communications, LLC
  • Original Published Date
  • Date of Last Update January 25, 2024

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