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The Hudson's Bay Company

"The Governor and Company of Adventurers of England trading into Hudson's Bay" was chartered in 1670 by King Charles II, under the governorship of Prince Rupert, the king's cousin. Under the terms of the charter, the Company was granted a trade monopoly over one and one-half million square miles of territory comprising much of today's Canada. That license to what came to be called Rupert's Land included today's provinces of Ontario, Manitoba, north and west Quebec, most of Saskatchewan, south Alberta, and most of the North West Territories. Although royally-chartered companies had been accepted trading organizations for over a century, by the seventeenth century such creatures came to include monopoly privileges and imperial powers: the East India Company, which swelled to such significance in the eighteenth and nineteenth centuries in India, had its roots in an early seventeenth century charter.

The original charter established an executive body, located in London, comprised of a governor and a committee who were responsible to the investors, an organizational structure that lasted over three hundred years. Soon after its establishment, the Company appointed a governor, responsible to London, who was required to oversee operations in North America. Much later, in the early nineteenth century, commissioned gentlemen--the men who directed fur-trading operations in the field--became partners, with a percent of the profits and shares in the company, and, through a North American council, wide powers in the operation of the company.

In the first fourteen years of its existence, the Company built a chain of forts--also called factories--at the mouths of rivers flowing into Hudson's Bay: by 1682 they included Fort Nelson--later York Factory--on the west coast of Hudson's Bay at the confluence of the Nelson and Hayes Rivers, and Moose Factory, Albany Factory and Rupert's House on James Bay. Natives came to these posts to trade furs for beads, blankets, and other imported goods. Company ships from London would bring provisions and trade goods to their North American employees, collect the pelts gathered along the bay, and sail back to England, where their rich cargoes were sold to profit the Company.

Between 1682 and 1713, the Company ships and employees were engaged in skirmishes with French fur traders and militia from New France over the trade and territory. Mter Great Britain declared war on France in 1689, royal naval ships were periodically sent to Hudson's Bay to assert Great Britain's claim to the lands and protect the fur trade; Company posts, ships and furs were won and lost throughout these years. Between 1690 and 1713 the Company posted no dividends. Finally, in 1713, the Treaty of Utrecht closed the War of the Spanish Succession; included in the settlement was the award of Hudson's Bay to the British.

In the eighteenth century, the story of the Company was largely one of expansion and exploration of the vast territory its charter encompassed. By the 1730s, the Company had six forts and its stock had trebled in value. However, its only inland post at that time was Henly House, less than two hundred miles from Hudson's Bay on the Albany River. Under the pressure of competition from French Canadian trappers, the loss of trade due to Indian wars, and shrinking returns of fur along the Bay, the Company, after mid-century, ordered a series of expeditions into the interior; by 1774 its first deep interior post, Cumberland House, on the Saskatchewan, was established. Inland expeditions for furs, under the command of officers far from the Bay posts, necessitated the construction of new trading posts far from the maritime supply bases, and a degree of autonomy for the men in charge. By the end of the century, the posts on the Bay were largely depots, or warehouses, for furs and goods to and from England: the interior became the heart of the Company's operations.

With the fall of Quebec in 1759, the French regime in Canada ended, but the Company soon faced competition from British traders based in Montreal--the Nor'westers. By 1774 private traders utilizing their own capital or backed by Montreal merchants, had made the 1500 mile trip via rivers, lakes and portages to trade for furs in the Saskatchewan valley, where the Company's Cumberland House was located. In 1775 some of these independent traders began to pool their resources, and in 1776 the North West Company was established, based in Montreal. A second organization, Gregory, McLeod and Company, also out of Montreal, became another rival in the 1780s. After some years of rivalry and bloody clashes, these two organizations were merged into the North West Company: to a great extent, their strength was in an organization in which shares were held not only by the merchants and agents in Montreal, but by the "wintering partners" who lived in and directed the interior business. Until 1800, the North West Company headquarters were at Grand Portage on Lake Superior; after the international boundary was drawn, placing Grand Portage in the United States, the headquarters were moved to Fort William, Ontano.

While the Hudson's Bay Company was cautiously and slowly moving westward, one man in the North West Company, Alexander Mackenzie, greatly expanded knowledge of the territory through his explorations to the Arctic Ocean in 1789, discovering new areas of rich furs and adding to the evidence contraindicating the existence of the Northwest Passage, which had driven Captain James Cook in his voyages of discovery in the preceding decades. In 1793 Mackenzie led an expedition from the junction of the Peace and Smoky rivers to the Pacific Coast. His expedition was followed by others from the North West Company, pushing its operations into the Columbia River basin: in 1805 the Nor'westers established Fort McLeod on McLeod Lake, the first inland trading post west of the Rocky Mountains. By 1810 another Nor'wester, David Thompson, had followed the Columbia River to Astoria, opening up new trade routes. [1]

To counter moves of the Canadian firms, the Hudson's Bay Company, by necessity, began to establish additional interior posts, often within site of posts established by Montreal concerns. Between 1776 and 1802, nineteen new posts were built, including two in the rich fur-bearing region of the Athabasca. Rivalry between the North West Company and the Hudson's Bay Company increased in the first two decades of the nineteenth century. Fur-trading competition was exacerbated by the establishment of what became known as the Red River Colony, a settlement established under the auspices of Thomas Douglas, the fifth Earl of Selkirk, who by 1811 had purchased enough Hudson's Bay Company stock to obtain a grant from the Company to 116,000 square miles of land on which he wished to establish agrarian colonies. The Red River colony was sited at the forks of the Assiniboine and Red rivers, now Winnipeg, at the crossroads of the North West Company's transportation network. The Red River settlement, as it came to be known, was bitterly opposed by the North West Company, and had little support from the Hudson's Bay Company's own traders. Settlement was viewed--and continued to be viewed well past the mid-nineteenth century--as anathema to the fur trade. In 1815 and 1816 the colony was attacked by North West Company agents; the second attack became known as the massacre of Seven Oaks. During this same period, a brigade of 100 Hudson's Bay Company voyageurs, acting under instructions from London, were directed to follow North West Company routes into the Athabasca to trade. For several years ambushes and stolen fur returns added fuel to the battle for the Athabasca furs between the Hudson's Bay Company and the Nor'westers.

The North West Company in these years was overtaxed by long transportation routes and far-flung posts; plagued by internal mistrust, primarily between the wintering partners and the Montreal agents, and weakened by its structural nature, which, unlike the Hudson's Bay Company was not inclined to reserve a percentage of profits for reserve funds. Facing chaos, in 1820-21, various factions of the North West Company, approached the Hudson's Bay Company with proposals for merger. Overtures from Edward Ellice, a partner in a firm acting as London Agents for the North West Company to Andrew Colvile, a member of the Hudson's Bay Company's London Committee began in the late 'teens. The wintering partners of the North West Company sent two representatives to London in 1820 to present proposals to the Company--one of these was Dr. John McLoughlin. William and Simon McGillivray, Montreal's representatives, also, separately, approached the Governor and Committee. The British government was, by 1818, concerned with ending the unprofitable competition between the Hudson's Bay Company and the Northwest Company, and was hoping to bury the bloody business.

A "deed of co-partnership" was agreed to between the Hudson's Bay Company and Ellice and the McGillivrays in 1821. The fur trade monopoly was reinforced in a British Parliament statute in 1821, and a new license to trade for twenty-one years was granted for all territory east of the Rocky Mountains; the Company already held sole British right of trade to the country west of the Rockies. The charter and name of the Hudson's Bay Company were retained, as was the organization of its London headquarters. Under the union, North America was divided into two districts: the Northern Department of Rupert's Land, covering all country north of the boundary with the United States and west of the west shore of Hudson's Bay to the Pacific Ocean, including New Caledonia and the Columbia district, and the Southern Department of Rupert's Land, covering the territory east of the Northern Department's boundaries, including Lake Huron and Lake Superior. Each was to be managed by a governor appointed by London, and two councils, comprised of partners in the company--field agents of the two former enemies: "commissioned gentlemen," consisting of chief factors, who generally were responsible for districts within each department; and, as it later worked out, chief traders, who usually managed posts or headed fur brigades. George Simpson, a Scot in the service of the Hudson's Bay Company in North America, was appointed to the governorship of the Northern Department; m 1826 he was also appointed head of the Southern Department, and from that time on, effectively administered all the Company's activities in North America, under direction from London. [2]

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Last Updated: 27-Oct-2003