The Fur Trade Factory System was a U.S. system used from 1796 to 1822 that gave control of the fur trade to the federal government, which in turn placed "factors" at military posts to conduct the trade alongside official Indian agents empowered to oversee treaty obligations.

The factory system began as an attempt to eliminate the worst excesses of the fur trade by prohibiting alcohol sales and providing goods to Indians at wholesale prices.

The system began under President George Washington and was expanded to four factories under President Thomas Jefferson in 1802. It was extended to Mackinac in 1808, and to Fort Howard at Green Bay and Fort Crawford at Prairie du Chien in 1816. By then, the system was no longer simply a means of attempting to treat the tribes fairly but was also used to diminish the power and influence of British traders.

For its last 15 years, the system was aggressively opposed and undermined by commercial American traders and their peers across the border in Canada. The factory system was aboloished in 1822, partly from political maneuvering by commericial fur trade companies and partly because it had failed in its original purpose.

[Sources: Wyman, Mark. "The Wisconsin Frontier," Bloomington: Indiana University Press, 1998; Wisconsin Historical Collections, XIX: 311 and XX: xiii-xix]

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