page_title: Territorial era of Minnesota
section_title: Commercial enterprises
hierarchical_section_title: Territorial era of Minnesota / Commercial enterprises
caption_attribution_description: Steam Boats docked in Saint Paul, Minnesota in 1858. Grey Eagle, Frank Steele, Jeanette Roberts and Time and Tide at dock in St. Paul, foot of Jackson Street.
context_page_description: The territorial era of Minnesota lasted from the Louisiana Purchase in 1803 to Minnesota's achieving statehood in 1858. The Minnesota Territory itself was formed only in 1849 but the area had a rich history well before this. Though there was a long history of European presence in the area before 19th century, it was during the 19th century that the United States began to establish a firm presence in what would become Minnesota.
  Many of the facets of Minnesota culture that are perceived as the area's early history in fact originated after this period. Notably, the heavy Scandinavian immigration for which the state is known, and the pioneering days chronicled by author Laura Ingalls Wilder occurred after statehood in the later 19th century. Unlike these later years, the first half of the 19th century was characterized by sparsely populated communities, harsh living conditions, and to some degree, lawlessness.
  This era was a period of economic transition. The dominant enterprise in the area since the 17th century had been the fur trade.
context_section_description: The most important commercial enterprise in the early part of the territorial era was the lucrative fur trade. At the beginning of the 19th century two British companies competed for dominance in the North American trade: Hudson's Bay Company and the North West Company. The North West company had used Grand Portage as its western headquarters along with other smaller companies that operated in the area. Grand Portage was one of the four principal British trading and shipping points furs in North America. Following the Treaty of Paris, in 1783, British operations at Grand Portage were technically illegal though the trade continued. However, beginning in 1801 the North West Company began re-establishing its headquarters north of the border at the newly constructed Fort William in what is now Ontario. After 1804 Grand Portage had been reduced to a minor trading center and most traders eventually abandoned the area. In 1842, the Hudson Bay Company, which had by then absorbed the North West Company, shipped out a final band of Ojibwe who were employed by the company.
  Before 1816 the majority of the fur trading posts in the Minnesota area were owned by the North West Company, but by 1821 the American Fur Company, founded in 1808 by John Jacob Astor in New York, had taken over most of these.
  As well as Grand Portage, another significant fur shipping point in Minnesota was Fort Frances in the Rainy Lake region, near modern International Falls in the far north of the state. This location became significant as it was key to multiple waterways for shipping furs to the Atlantic. Both the  North West Company and the American Fur Company had posts at this location. Pembina, originally part of the Red River Colony, was a significant trading post for the Hudson's Bay Company, and once it was claimed by the U.S., became for a time key to U.S. interests in the fur trade. By 1830 American Fur dominated the trade within the United States because of the exclusion of British companies by the U.S. government.
  Beginning in the 1820s, a fur trading route developed between the Red River Colony (in modern Manitoba) and the trading posts in Minnesota, first primarily at Mendota and later at Saint Paul. The system of ox cart trails came to be known as the Red River Trails and was used principally by the Métis as a way to avoid the fur trade monopoly of the Hudson's Bay Company (which had absorbed the North West Company). Though this cross-border trade was entirely illegal and violated the policies of the Hudson's Bay Company, enforcement against the trade by American and British authorities was virtually non-existent. The trail system would reach its peak usage in the mid-19th century. The Hudson's Bay Company continued to expand its presence north of the U.S. border establishing new posts such as Fort Alexander and Rat Portage.
  The fur trade was in decline by the late 1830s. The American Fur Company went bankrupt in 1842, though the Missouri Fur Company and other operations kept the trade from collapsing entirely. As this trade declined the lumber industry began to grow substantially in areas such as the Saint Croix Valley where valuable white pine was plentiful. New saw mills appeared in Marine and Stillwater. Lumber was typically cut during winter and sent downstream in the spring. In 1848, businessman Franklin Steele built the first private sawmill on the Saint Anthony Falls (which would later become the town of Saint Anthony) opening commercial lumbering on the Mississippi River. More sawmills quickly followed. Soon the Saint Croix and Mississippi Rivers in Minnesota had become major conduits for lumber headed for Saint Louis and other destinations.
  The first flour mill in Minnesota was built in 1823 at Fort Snelling as a retrofitting of a lumber mill. The first private grain mill was built in Washington County by Samuel Bowles. Minneapolis gained its first grain mill in 1847. During the 1850s grain production began to develop rapidly but Minnesota did not become a significant grain exporter until 1858.
  In 1823 the first steamboat, known as the
caption: Steamboats docked at Saint Paul in 1858
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