Trade and Intercourse Act of 1790

Defining Trade With Indian Nations

Jun 15, 2009 Jeffrey R Gudzune

The first Trade and Intercourse Act, passed in 1790, outlined the rules governing economic relationships between the United States and Indian tribes.

In an effort to outline a national policy on future expansion, the American government passed the Northwest Ordinance in 1787. This legislation was drafted by a caretaker legislature, the Confederation Congress, and passed amid a period of relative confusion over the powers reserved for the fledgling national government. It has been called the most significant piece of legislation to be created by the Confederation Congress. While the debate over this distinction is best left to political theorists, the Northwest Ordinance truly is a multi-faceted effort to determine a national expansionist policy for the United States. The underlying theme of this legislation is the extension of U.S. law into new territories. While seemingly comprehensive, this legislation makes only two direct references to Indian nations. These two references, however, would come to form the basis of America’s policy towards native peoples. While the Northwest Ordinance promised to practice the “utmost good faith” towards Indian tribes and assured that “their lands and property shall never be taken,” it did not elaborate on a national policy. The Trade and Intercourse Acts would define that policy.

Favored Nations

While the Northwest Ordinance laid the foundation for future trade and diplomatic exchange with Indian tribes, the Trade and Intercourse Act of 1790 established the rules governing this relationship. Covering trade compacts, the extension of legal rights for Americans traveling in Indian territories, the sovereignty of individual tribes, and the rules governing the purchase of Indian land, this legislation established the principal that native communities are foreign nations and should be treated as such. The first article of the Trade and Intercourse Act outlines the rules for the establishment of trade with Indian nations. Trade contracts could only be negotiated by agents of the federal government, or independent traders who had obtained special licenses.

Government Oversight

The second article of the Trade and Intercourse Act concerned the government agents responsible for overseeing trade with Indian nations. These agents, or superintendents, were empowered to ensure that all trade contracts with Indian tribes were fairly executed. The superintendents were also responsible for issuing licenses to independent traders. These licenses were key to the economic success of independent traders. Without a license, one could not conduct trade with Indian tribes. Any independent trader who was found to be in violation of the terms of this legislation could face the revocation of his trade license. If a trader’s license were to be revoked, he would forfeit all profits.

Public Treaty and Land

Regarding the sale of Indian lands, the Trade and Intercourse Act states that only the federal government has the authority to negotiate for the purchase of native territory. Only through public treaty could any lands be purchased. Independent agents and representatives of third party land developers, however, could bid on these lands once they were acquired by the federal government.

Although the Trade and Intercourse Act was set to expire in 1792, subsequent revisions of the legislation redefined its parameters and made it a fluid document.

Sources:

Mark M. Boatner III, Encyclopedia of the American Revolution. (Mechanicsburg: Stackpole Books, 1994).

Mark C Carnes, Ed. U.S. History. (New York: MacMillan Library Reference, 1998).

Marilyn Miller and Martin Faux, American History Desk Reference. (New York: MacMillan, 1997).

Carl Waldman, Atlas of the North American Indian. (New York: Checkmark Books, 2000).

Carl Waldman, Encyclopedia of Native Tribes. (New York: Checkmark Books, 2006).

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