Smuggler Nation (22 page)

The fur-for-alcohol trade created great fortunes, most famously that of John Jacob Astor, America’s richest man at the time and now remembered as the country’s first multimillionaire. Illicit alcohol, more than fur, was arguably the secret of Astor’s extraordinary financial success. “It is fair to state,” writes W.J. Rorabaugh, “that Astor’s wealth came from selling liquor rather than from buying furs, a fact that may explain why later, with a touch of conscience perhaps, he gave money to the temperance movement.”
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Alcohol was fantastically profitable for Astor’s American Fur Company, which he ran until 1834. For instance, in 1817 and 1818 the company “sold the Indians at Mackinaw ‘whiskey’ made of 2 gallons of spirits, 30 gallons of water, some red pepper, and tobacco.” This concoction sold for fifty cents a bottle but cost only five cents a gallon to produce.
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The American Fur Company, established with the approval of Thomas Jefferson in 1808, soon had a near monopoly over the fur trade through its subsidiaries across the country, starting in the Great Lakes
region and the Midwest and then expanding to the Great Plains and the Rocky Mountains. In the process, the company played a lead role in developing and settling the vast western frontier, including the outposts of St. Paul, Detroit,
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Milwaukee, and Chicago,
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and building up key transportation routes such as the Missouri River and the Santa Fe Trail. At its height, the company controlled three-quarters of the U.S. fur trade.

Figure 7.2 John Jacob Astor (1763–1848), America’s most famous fur trader and first multimillionaire. Nineteenth-century wood engraving depicts Astor’s first fur-buying expedition up the Hudson Valley, ca. 1787 (Granger Collection).

Astor and his company strenuously opposed a total alcohol ban, arguing that this put the company at a competitive disadvantage relative to the Hudson Bay Company and other British traders across the northern border who were not similarly constrained.
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Moreover, Astor complained that the British traders had the additional advantage of cheaper access to legal goods, such as blankets, used in the Indian trade. He wrote to Senator Thomas Hart Benton in January 1829 that “It is known that none of the woolen goods fit for the Indian trade … are as yet manufactured in this country. We are therefore obliged to import them from England, and it so happens that those are just the articles paying the heaviest duty. The English [fur] traders have theirs free of
duty, which enables them to bring their goods 60 percent and over cheaper than what we pay and they are thereby enabled to undersell us.”
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What Astor didn’t mention is that this disadvantage made his company especially dependent on illicit alcohol as a trade item to stay competitive in the international fur business.

The American Fur Company was both creative and brazen in subverting the federal alcohol prohibition.
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In October 1831 Andrew Hughes wrote from St. Louis to Lewis Cass, the secretary of war: “The traders that occupy the largest and most important space in the Indian country are the agents and engages of the American Fur Trade Company. They entertain, as I know to be the fact, no sort of respect for our citizens, agents, officers or the Government, or its laws or general policy.”
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For example, Kenneth McKenzie, nicknamed the “King of the Missouri” for his exploits as the company’s agent in the Upper Missouri River frontier, set up a crude whiskey distillery at Fort Union in 1833, a major trading post in present-day North Dakota. McKenzie’s rationalization was that the law applied only to
introducing
whiskey, not to
making
it. In a boastful letter to a company associate, McKenzie wrote: “For this post I have established a manufactory of strong water, it succeeds admirably.… I believe no law of the U.S. is hereby broken though perhaps one may be made to break up my distillery but liquor I must have or quit any pretension to trade at this post, especially while our opponents can get any quantity passed up the Mo or introduce it as they have done by another route.”
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In time, the government found out about the distillery—probably through informants from rival companies—and shut it down.
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The company’s bootlegging business nevertheless continued to thrive: “Although the still house had been destroyed,” wrote a contemporary fur trader, “the Company found means to smuggle plenty of liquor.”
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In 1842 the company even used its political connections to have a former employee, Andrew Drips, appointed to the post of special agent in the Indian service in 1842. Historian Jeanne Leader writes that “as a special agent in the Indian service he notified company men of impending inspections and advised them as to the best techniques for destroying or concealing whiskey.… When the office of Indian affairs dismissed Drips in 1846, the American Fur Company immediately welcomed him back into their ranks.”
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After years of mounting evidence of the company’s alcohol smuggling activities, the government finally brought it to trial in 1846. The suit called for a $25,000 fine as well as the recovery of a minimum of forty-three hundred gallons of alcohol illegally brought into Indian country. But the company’s obstructionist tactics, including bribing and disappearance of key witnesses, repeatedly bogged down proceedings. After several years of delays and a greatly weakened case, the government settled the suit for $5,000. After the company’s license for the upper Missouri Indian trade was renewed, one of its first cargoes into Indian country in the spring of 1849 included a shipment of sixty gallons of pure alcohol—officially approved for the purposes of combating cholera.
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Even as the fur trade began to decline in the 1840s, whiskey smuggling continued to grow as westward expansion accelerated. This was made possible by the provision of millions of dollars in federal funds to Indian tribes in exchange for land concessions.
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Federally allocated annuity funds increasingly replaced furs as the means for Indians to purchase illicit alcohol. The federal government’s annuity payment system, in other words, ended up as a subsidy to an alcohol trade based on violating federal law. And this, in turn, further weakened Indian communities while stimulating non-Indian population growth and economic development of the western frontier. The annuity payments were meant to pacify. As Senator John C. Calhoun noted in 1836, as long as Indians were paid annuities, it “made it their interest to keep at peace.”
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But the side effect was to also fuel the illicit alcohol trade.

This dynamic did not go unnoticed, and indeed it was applauded in some quarters. When the Iowas and Kickapoos obtained a substantial supply of whiskey at St. Joseph, Missouri, after receiving their annuity payments in 1854, a St. Louis newspaper praised the exchange as “the cheapest way of exterminating them.”
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“A few years ago,” reported a local newspaper in 1858, “the Iowas numbered 15,000 souls; now they scarcely exceed 400—and not the least among the causes is the facility with which they get whiskey.”
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Meanwhile, even as the government formally banned alcohol sales to Indians, government agents continued the old practice of dispensing alcohol as a diplomatic tool in Indian treaty negotiations. For example,
Michigan territory Governor Lewis Cass (who went on to become secretary of war) was one of the government commissioners at the 1825 treaty at Prairie du Chien, where whiskey was given to the Chippewas. In 1827 he exclaimed: “Every practicable method has been adopted by the government of the United States, effectually to prevent this [liquor] traffic.”
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Yet Cass had previously provided more than six hundred gallons of whiskey for the Saginaw Chippewa treaty of 1819 and in excess of nine hundred gallons of whiskey for the Ottawa, Chippewa, and Potawatomi treaty of 1821.
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Echoing their colonial-era predecessors, some Indian leaders made impassioned pleas to the federal government to stem the tide of alcohol. A leader of the Miamis, Little Turtle, said to President Jefferson in 1802, “When our white brothers came to this land, our forefathers were numerous and happy; but since their intercourse with the white people, and owing to the introduction of this fatal poison [alcohol], we have become less numerous and happy.”
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“We are afraid of the wicked water brought to us by our white friends,” a Kickapoo tribal spokesman told U.S. Commissioner E. A. Ellsworth in 1832. “We wish to get out of its reach by land or water.” Ellsworth responded with promises to put a stop to it.
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Government authorities also used such concerns about alcohol as a convenient rationale to push for Indian removal to more distant lands. In its efforts to negotiate a removal treaty, an executive commission warned the Miamis: “If you continue here where you now are … and let the white people feed you whiskey and bring among you bad habits, in a little while where will be the Miami Nation? They will all be swept off.” But the commission also suggested an alternative: “Situated as you are, your Great Father cannot prevent his white people from coming among you. He wants to place you in a land where he can take care of you [and] protect you against all your enemies, whether red men or white.”
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Conveniently left unstated was that alcohol smugglers moved west along with the Indians being pushed west, and that the government had little will or capacity to stop them. From 1825 to 1847, the federal government relocated some seventy thousand Indians to Indian country west of Missouri and Arkansas. Soon, the new “boundary of Indian country became literally inundated with whiskey dispensed by prominent merchants and
small-time hucksters whose principal customers were Indians.”
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And flush with annuity payments from the federal government, Indians could now pay with cash, not just furs. In 1842, Superintendent Mitchell wrote to his superiors in Washington that “whenever money is around it soon finds its way into the hands of the whiskey dealers who swarm like birds of evil omen around the place where annuities are paid.”
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He also reported that hundreds of Indians had died of alcohol in the previous two years alone.

Missouri grain and distilleries kept the lower Kansas and Platte valleys and the Sioux country to the northwest well supplied with alcohol. There were a dozen distilleries based in the St. Louis area by 1810, with production rising sharply by the 1830s. One need only look at prices to understand the incentive to smuggle into nearby Indian country: in the early 1830s, a twenty-five-cent gallon of whiskey in St. Louis was worth thirty-four dollars at Fort Leavenworth, and as much as sixty-four dollars at the intersection of the Missouri and Yellowstone rivers. Bellevue, on the west bank of the Missouri River in present-day Iowa, served as both a bustling fur trade center and a distribution hub for alcohol brought in by steamers from St. Louis distilleries, earning it the title of the “whiskey capital” of Indian country.
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The illicit alcohol trade, coupled with the lethargic enforcement of the federal ban, left a powerful impression on foreign travelers. Charles Dickens noted in 1842 that the alcohol ban was “quite inefficacious, for the Indians never fail to procure liquor of a worse kind, at a dearer price, from traveling peddlers.”
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Another Englishman, George Frederick Ruxton, observed, “The misery entailed upon these unhappy people by the illicit traffic must be seen to be fully appreciated.... With such palpable effects, it appears only likely that the illegal trade is connived at by those whose policy it has ever been, gradually, but surely, to exterminate the Indians, and by any means to extinguish their title to the few lands they now own.”
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One British visitor to Kansas in 1855, traveling with a wagon train that was also transporting several dozen barrels of alcohol for the Indian trade, was especially struck by the openness of the illicit business:

It seems almost impossible that a blind man, retaining the senses of smell, taste and hearing, could remain ignorant of a thing so
palpably plain. The alcohol is put into wagons, at Westport or Independence, in
open daylight
, and taken into the territory,
in open daylight
, where it remains a week or more awaiting the arrival of its owners. Two Government agents reside at Westport, while six or eight companies of Dragoons are stationed at Fort Leavenworth, ostensibly for the purpose of protecting Indians and suppressing this infamous traffic,—and yet it suffers no diminution from
their vigilance!
What
faithful
public officers! How prompt in the discharge of their
whole duty
! … These gentlemen cannot plead ignorance as an excuse. They well know that alcohol is one of the principal articles in Indian trade—this fact is notorious—no one pretends to deny it; not even the
traders themselves
.
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