A plan had to be devised to enable him to enter into successful
competition. He was aware of the wish of the American government,
already stated, that the fur trade within its boundaries should be in
the hands of American citizens, and of the ineffectual measures it had
taken to accomplish that object. He now offered, if aided and protected
by government, to turn the whole of that trade into American channels.
He was invited to unfold his plans to government, and they were warmly
approved, though the executive could give no direct aid.

Thus countenanced, however, he obtained, in 1809, a charter from the
legislature of the State of New York, incorporating a company under the
name of "The American Fur Company," with a capital of one million
of dollars, with the privilege of increasing it to two millions. The
capital was furnished by himself he, in fact, constituted the company;
for, though he had a board of directors, they were merely nominal; the
whole business was conducted on his plans and with his resources, but
he preferred to do so under the imposing and formidable aspect of a
corporation, rather than in his individual name, and his policy was
sagacious and effective.

As the Mackinaw Company still continued its rivalry, and as the fur
trade would not advantageously admit of competition, he made a new
arrangement in 1811, by which, in conjunction with certain partners of
the Northwest Company, and other persons engaged in the fur trade, he
bought out the Mackinaw Company, and merged that and the American Fur
Company into a new association, to be called the "Southwest Company."
This he likewise did with the privity and approbation of the American
government.