The Indian Trade refers to trade between Europeans and their North American descendants and the Indigenous people of North America (today known as Native Americans in the United States, and First Nations in Canada, but formerly as "Indians").
The term Indian Trade describes the people involved in the trade. The products involved varied by region and era. In most of Canada the term is synonymous with the fur trade, since fur for making beaver hats was by far the most valuable product of the trade, from the European point of view. Other products desired by the Europeans produced other components of the Indian Trade, including the deerskin trade in the what is now the east coast of the United States, and the Pemmican and buffalo skin and meat trade on the Great Plains.
Economic contact between Native Americans and European colonists began in the 1500s and lasted until the late 1800s. Although the relationship between Europeans and Indians was often marred by conflicts, many tribes established peaceful trade relations with the new colonists during the early stages of European settlement. From the seventeenth to the nineteenth century, the English and French mainly traded animal pelts and fur with Native Americans. On the other hand, trading between the Spanish and Native Americans was sporadic and only lasted for a couple of decades. Eventually, wars, the dwindling of Native American populations and the westward expansion of the United States led to the confinement of tribes to reservations and the end of economic relations between Indians and the descendants of European colonists. Although economic contact between Native Americans and European colonists gradually ended, it played an important role in the early colonial economy and had a lasting impact on the lifestyle of Native Americans.
Pre-European Settlements (1500-early 1600s)
Economic contact between Native Americans and Europeans can be traced back to the 1500s when English and French fishermen fishing off the coast of Canada, traded guns and other weapons for beaver fur. It has been noted that even before any Europeans settled in North America, many European fishermen regularly made voyages to the shores of Canada just to obtain fur from Native Americans. By the 1600s, the Eurasian beaver was almost extinct in France and England. Due to this economic shortage of fur, many fur traders began to look to the New World for pelts. The first explorers to conduct trade with Native Americans were Giovanni da Verrazano and Jacques Cartier in the 1520s-1530s. Verrazano noted in his book that “If we wanted to trade with them for some of their things, they would come to the seashore on some rocks where the breakers were most violent while we remained on the little boat, and they sent us what they wanted to give on a rope, continually shouting to us not to approach the land.”  As visits from Europeans became more frequent and some Europeans began to settle in Northern America, Indians began to establish regular trade relations with these new colonists.
Trade with Early European Settlers
Plymouth and Jamestown
In order to set up a thriving colony, settlers in the New World needed the five factors of production that contribute to the creation of wealth: land (natural resources), labor, capital, entrepreneurship and knowledge. Often, trading with Native Americans provided both knowledge and natural resources to colonists. Examples of this can be seen in the English settlements of Plymouth Bay and Jamestown. Chief Massasoit, a Wampanoag, and Squanto, a Patuxet Indian, helped the Pilgrims of Plymouth Bay establish their colony by teaching them the essential skills of cultivating land and hunting. Furthermore in return for weapons and tools, these Native Americans provided the colonists with important natural resources such as food. In 1621 Chief Massasoit established one of the earliest trading pacts between Europeans and Indians by signing a treaty with Plymouth Colony to engage in peaceful trade. As the number of English colonists in the New England area began to grow, the Wampanoag became uneasy of losing their land to these new settlers. Gradually, tensions escalated, leading to King Philip's War, an armed conflict between the Pilgrims and the Native Americans in the area. The war ended with the defeat of the Indian tribe, causing a serious fracture amongst relations between the Pilgrims and Native Americans. Relations between settlers in the Jamestown area and Native Americans ended similarly. Initially, the Powahatans, embraced their new English neighbors by providing them with food and clothing. However, relations between the two groups deteriorated after three years, resulting in a war.
Fur Trading Posts
Fur trading was one of the main economic activities in Northern America from the late 1500s to the mid-1800s. At the time, demand for fur was surging in Europe as it was used to make cloth and fancy hats. Data collected from England in the eighteenth century highlights that the years from 1746 to 1763 saw an increase of 12 shillings per pelt. Furthermore, it has been calculated that over 20 million beaver hats were exported from England alone from 1700 to 1770. Both trading partners, Native Americans and Europeans, provided the other a comparative advantage in the fur trade industry. The opportunity cost of hunting beavers in Europe was extremely high: by the seventeenth and eighteenth centuries, the Eurasian beaver was near extinction in England and France. On the other hand, there was plenty of wildlife in the New World that could provide fur. Native Americans benefited from trading as they did not possess the skilled labor that was needed to produce knives, axes, and guns. Furthermore, the fur trade provided a stable source of income for many Native Americans until the mid-1800s, when changing fashion trends in Europe brought about a collapse in demand for fur.
Trade with the Spanish
Trading between Spanish settlers and Native American settlers was rare and occurred in parts of New Mexico and California. The Spanish mainly intended to spread the Christian faith to Indians and to use them as slaves for work. The most significant impact of trading with the Spanish was the introduction of the horse to the Ute in New Mexico. The horse dramatically altered the lifestyle of many Native American tribes. Many Indians switched from a hunter- gatherer economy to a nomadic lifestyle after they began using horses as a mode of transportation to hunt bison and to trade with other tribes.
Relationship between Europeans and Indians
It was often hard for Europeans to understand the Native American customs of trading. On encountering a native tribe, the Europeans would often be offered fur, food or other items as gifts. The Europeans would then feel no obligation to assist the natives against their enemies, which was the purpose of the gift-giving, from the native perspective. The Europeans never did catch on and were frequently viewed by the natives as welchers on the implied pledge of alliance they'd entered into by accepting the gifts. After observing that Europeans were just as eager to trade with their enemies as themselves, the natives did eventually get the picture; but especially in New France, in Carolina, Virginia, and New England and in New Netherland the Europeans became drawn into the endemic warfare of their trading partners.
After the late-1800s
After the United States became independent, trading with the Indians/Native Americans was nominally regulated by the Trade and Intercourse Act, first passed on July 22, 1790. The Bureau of Indian Affairs issued licenses to trade in the Indian Territory, which in 1834 consisted of most of the United States west of the Mississippi River, where mountain men and traders from Mexico freely operated.
Trade between Native Americans and others ceased to exist by the 1900s due to industrialization, decreasing Native American populations and segregation of Indian tribes. After the formation of the United States, the commerce clause of the constitution gave congress the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.” In the 1800s, the American government passed legislation that pursued an agenda to relocate tribes to reservations. The Indian Removal Act of 1830 forced tribes such as the Cherokee and the Choctaw to move out of their homelands. Resistance by Native Americans to relocate resulted in conflicts such as the Second Seminole War that caused the deaths of 3000 Native Americans. Forcing tribes to relocate and to adjust to reservations made many of them dependent on the U.S. government and unable to form economic systems of their own. As outlined by Kalt and Cornell in their book What Can Tribes Do? Strategies and Institutions in American Indian Economic Development, on reservations, tribes lacked access to capital, had poor natural resources, and didn’t possess skilled labor. Today, many programs such as the Harvard Project on American Indian Economic Development exist to foster conditions that will help reservations become independent and financially stable communities.
- Vaughan 1929, p.215
- Pritzker 1998, p.102
- Dolin 2010, p.10
- Dolin 2010, p.9
- Vaughan 1929, p.68
- Vaughan 1929, p.68
- Vaughan 1929, p.73
- Vaughan 1929, p.320
- Pritzker, 88
- Vaughan, A. T. (2010). New England Frontier: Puritans and Indians, 1620-1675. University of Oklahoma Press.
- Dolin, Eric J. Fur, Fortune, and Empire: The Epic History of the Fur Trade in America.
N.p.: W.W. Norton &, 2011. Print.
- Pritzker, Barry. Native Americans: An Encyclopedia of History, Culture, and Peoples. Santa Barbara, CA: ABC-CLIO, 1998. Print
- Perdue, Theda. "The Legacy of Indian Removal." The Journal of Southern History 78.1 (2012): n. pag. Print
- Carlos, Ann and Frank Lewis. "Fur Trade (1670-1870)". EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008.
- Cornell, Stephen E., and Joseph P. Kalt. What Can Tribes Do?: Strategies and Institutions in American Indian Economic Development. Los Angeles: American Indian Studies Center, University of California, Los Angeles, 1992. Print