The American Fur Company (AFC) was an important American business that sold furs, skins, and buffalo robes. It was started in 1808 by John Jacob Astor, a man who moved from Germany to the United States. During its most successful time in the early 1800s, the company controlled much of the fur trade in America. The company went out of business in 1842 and officially ended in 1847.
In the 1700s, furs became a valuable product in Europe, and Native American groups in North America became a major source of these goods. British companies, such as the North West Company (NWC) and the Hudson's Bay Company, competed with Astor and took advantage of the profitable fur trade. Astor used many business methods to become one of the first large business groups in America and a strong competitor to British companies in the fur trade. By expanding into areas that were once controlled by the British, the company gained control of the fur trade in the United States by 1830 and became one of the largest and richest businesses in the country.
Astor planned to operate several businesses across the Great Lakes, the Great Plains, and the Oregon Country to take control of the North American fur trade. Affordable manufactured goods were to be sent to trading posts to exchange with Native American groups for furs. The large amount of furs collected were then to be sent to the port of Canton, where they were in high demand in the Qing Empire. In return, Chinese goods were to be bought and sold in Europe and the United States. A deal with the Russian-American Company was also planned, which involved regularly supplying food for Russian American posts. This was partly to stop the British-based NWC from setting up operations along the Pacific Coast, which neither the Russian government nor Astor wanted.
Demand for furs in Europe began to drop in the early 1800s, which caused the fur trade to slow down by the middle of the 1800s. Astor left the company in 1830, the company went out of business in 1842, and the American Fur Company finally stopped trading in 1847.
Background
Before John Jacob Astor started his business in the Oregon Country, people of European descent had suggested building trade stations along the Pacific Coast for many years. Peter Pond, an American fur trader, shared maps of his explorations in parts of modern Alberta, Saskatchewan, and the Northwest Territories with the United States Congress and Henry Hamilton, Lieutenant Governor of Quebec, in 1785. Some people believe Pond wanted American money to explore the Pacific Coast for a route to the Northwest Passage, but there is no proof of this. It is more likely he sent the map to Congress because he wanted to show his achievements. Pond later became a member of the North West Company (NWC) and continued trading in Alberta.
Over time, Pond influenced Alexander Mackenzie, who later crossed the North American continent. In 1802, Mackenzie proposed a plan called the "Fishery and Fur Company" to the British government. The plan included creating a strong military and government presence on Nootka Island, with two other posts on the Columbia River and in the Alexander Archipelago. The plan aimed to avoid three major British companies—the Hudson's Bay Company, the South Sea Company, and the East India Company—to gain access to Chinese markets. However, the British government rejected the plan, leaving the NWC to continue Mackenzie’s ideas alone. Another influence on Astor was his friend, Alexander Henry, who often thought about the economic opportunities of the Pacific Coast. In a letter to a New York merchant, Henry wrote that building businesses along the Pacific shoreline was "my favorite plan." It is likely Astor discussed these ideas with Henry during visits to Montreal and the Beaver Club. Although Astor did not start the idea of building a business on the Pacific Coast, his ability to use others’ ideas helped him move forward with the plan.
Astor joined two NWC voyages in the 1790s that aimed to travel to the Qing Empire (modern China). These trips used American ships to avoid British trade laws, which at the time only allowed the East India Company to trade with China. These voyages were profitable, and Astor offered to manage all fur shipments to Guangzhou for the NWC. However, Mackenzie refused, leading Astor to consider funding his own voyages to China without Canadian traders. As an independent international merchant, Astor began funding trading trips to China with partners. Shipments often included $150,000 worth of goods like otter and beaver pelts, as well as gold or silver coins. In 1803, Astor ordered the construction of the ship Beaver to grow his trade fleet.
By the early 1800s, the Chicago area was already a major hub for the fur trade. The city was mostly occupied by soldiers at Fort Dearborn and fur traders in small camps. Before the War of 1812, the British controlled the area. However, in 1811, John Jacob Astor’s American Fur Company began working to establish a presence there. This effort started with a partnership between the American Fur Company and two British companies that supplied goods to the region. The partnership was set to last five years or until the U.S. government banned foreign investment in the United States. This partnership ended quickly after the War of 1812, when the U.S. government banned foreign investors from trading with Native Americans. Congress passed this law at Astor’s request, but it allowed the president to grant special exceptions. Later, this power was given to Native American tribes and some officials. Within one year, Astor and the American Fur Company had built enough connections in the area to take over the fur trade after the British companies were forced out.
Information
By 1808, Astor had created a large business that traded furs, teas, and silks in markets across three continents. That same year, he asked diplomats and the government for support to start a fur trading operation on the Pacific coast. In letters to New York City Mayor DeWitt Clinton, Astor explained that a state charter would provide the official approval needed for his business. He also asked the Federal government to give his operations military help to protect against Native American groups and control new trade areas. These bold plans were not officially approved, so Astor continued to share his ideas with important government officials.
President Thomas Jefferson also met with Astor. Astor shared a detailed plan for his trading business, stating it aimed to increase American control over much of the fur trade on the continent. He proposed a network of trading posts connected across the Great Lakes, the Missouri River basin, the Rocky Mountains, and ending with a fort at the mouth of the Columbia River. Once furs were collected from these far-reaching posts, they would be loaded onto ships owned by Astor and sent to the Chinese port of Guangzhou, where they would be sold for high profits. In Guangzhou, Chinese goods like porcelain, cloth, and tea would be bought. The ships would then travel across the Indian Ocean to sell these items in European and American markets.
Subsidiaries
To start his plan for trading posts across the Rocky Mountains to the Pacific Northwest, Astor created a company called the Pacific Fur Company. Astor and his partners met in New York on June 23, 1810, and signed a temporary agreement for the company. His partners were former employees of the North West Company, including Alexander McKay, Duncan McDougall, and Donald Mackenzie. Wilson Price Hunt, a businessman from St. Louis with no experience in the wilderness, was chosen to manage the company’s daily operations.
From the outpost on the Columbia River, Astor aimed to establish a commercial presence in Russian America and China. He planned to help the Russian-American Company by supplying needed goods, which would also allow his company to collect more furs. Ships traveling from the Columbia River were intended to carry supplies to Russian America and later transport furs to China. By working with Russian officials, Astor hoped to prevent British companies like the North West Company from setting up trading posts on the Pacific Coast. In 1812, a temporary agreement was made for Astor’s ships to send furs from Russian America to the Qing Empire.
The Pacific Fur Company struggled during the War of 1812. Fearing an attack by the British Royal Navy, Astor sold all his company’s property in the Oregon Country. This sale was finalized on October 23, 1813, when the British flag was raised at Fort Astoria. On November 30, 1813, the British ship HMS Racoon arrived at the Columbia River, and Fort Astoria was renamed Fort George in honor of King George III of the United Kingdom. In 1821, the North West Company merged with the Hudson’s Bay Company, a long-time competitor. Soon after, the Hudson’s Bay Company controlled most of the fur trade in the Pacific Northwest. This showed that Astor’s vision of a large economic network across multiple continents had been achieved by his competitors, who were more skilled and forward-thinking.
The South West Company managed the fur trade in the Midwest and Southwest. In the Midwest, it competed with other companies along the upper Missouri, upper Mississippi, and Platte rivers, as well as in New Mexico. These competitors were often businesses based in St. Louis, Missouri, which also traded goods like clothing and tools. These companies were usually led by families of French origin, such as the Pratte, Chouteau, Cabanne, and Ceran St. Vrain families. These families were active in the fur trade before and after the Louisiana Purchase and before Astor started his company. Fights and attacks sometimes occurred between workers of different companies in the wilderness. In 1834, the American Fur Company sold its Western Division to Bernard Pratte and Pierre Chouteau Jr., with whom they had already worked. Chouteau continued the business as Pratte, Chouteau & Company.
Later history
For a time, it seemed that the American Fur Company had been ruined. However, after the war, the United States passed a law that banned foreign traders from operating on American land. This allowed the American Fur Company to avoid competition from Canadian and British companies, especially near the Great Lakes and in the West. The company worked hard to gain control of the fur trade in the Great Lakes region and the Midwest. In the 1820s, the company expanded its control to the Great Plains and the Rocky Mountains, becoming the main fur trader in what is now Montana by the mid-1830s. To take over the industry, the company either bought or outcompeted smaller businesses, such as the Rocky Mountain Fur Company.
By 1830, the American Fur Company had almost complete control of the fur trade in the United States. However, this dominance did not last long. John Jacob Astor, the company’s leader, noticed that fur was becoming less popular in fashion and left the company in 1834. The company then divided into smaller businesses, including the Pacific Fur Company. The Northern Division, which operated in the Midwest, kept the name American Fur Company and was led by Ramsay Crooks. To save money, the company closed many of its trading posts.
During the 1830s, competition returned, and the supply of furs in the Midwest decreased. At the same time, the Hudson’s Bay Company, based at Fort Vancouver, worked to weaken American fur companies in the Rocky Mountains. The HBC reduced the number of furs available in the Snake River area and sold furs at lower prices during the Rocky Mountain Rendezvous, making it hard for American companies to compete. By the 1840s, silk replaced fur as a popular material for hats in Europe. These changes, along with declining fur supplies, made it difficult for the American Fur Company to stay profitable. Although the company tried to earn more money by entering other industries, like lead mining, it eventually went out of business. Its assets were divided into smaller operations, most of which failed by the 1850s. In 1834, John Jacob Astor sold his share of the company and used his money to buy real estate in New York City, becoming the richest man in America. After 1840, the American Fur Company’s business continued to decline.
Influence
During its time of greatest success, the American Fur Company was one of the largest businesses in the United States. By the 1820s, it had exclusive control over the profitable fur trade in the young nation. John Jacob Astor, who was born in Germany, used his profits from the company to invest in land and became the richest man in the world. He was also the first person in the United States to become a multi-millionaire.
John Jacob Astor is ranked as the eighteenth-wealthiest person in history and the eighth person to build his fortune in the United States. He used some of his wealth to create the Astor Library in New York City. Later, this library joined with the Lenox Library to form the New York Public Library.
On the frontier, the American Fur Company helped make possible the settlement and economic growth of the Midwestern and Western United States. Workers for the company, called mountain men, improved trails used by Native Americans and created new paths for settlers moving west. Many cities in the Midwest and West, such as Fort Benton, Montana, and Astoria, Oregon, grew around trading posts owned by the American Fur Company. The company played a major role in the development and expansion of the young United States.