Hudson's Bay Company

  • By Jack and Claire Nisbet
  • Posted 7/24/2011
  • HistoryLink.org Essay 9881

The Hudson's Bay Company, a fur-trading enterprise headquartered in London, began operations on the shores of Hudson Bay in 1670. During the next century and a half, it gradually expanded its network of trading posts west across Canada. In 1821, it merged with its prime rival, the North West Company out of Montreal, thus acquiring several posts in the Pacific Northwest. Under the leadership of Governor George Simpson (1787-1860) and Chief Factor John McLoughlin (1784-1857), the company dominated the land-based fur trade in the Northwest for the next four decades. After the Oregon Treaty of 1846 settled the international boundary at the 49th parallel, the company gradually phased out its operations in Oregon and Washington territories and moved its Northwest headquarters to Vancouver Island.   

Beginning with the Beaver

When Jacques Cartier (1491-1557) sailed up the St. Lawrence River in 1535 in search of the Northwest Passage, he met 50 canoeloads of men, probably Micmac Indians, who signaled a desire to trade by waving furs on sticks. During the session that followed, Cartier reported that "they bartered all they had to such an extent that they all went back naked without anything on them; and they made signs to us that they would return on the morrow with more furs" (Nisbet, Sources of the River, 11). 

By the end of the sixteenth century, the French had established a colony on the St. Lawrence River, and European gentlemen and military officers had developed a taste for expensive hats fashioned from beaver pelts. French entrepreneurs set up shop in New France, importing wool cloth, iron utensils, firearms, copper pots, sewing needles, and beads for exchange with the tribes along the St. Lawrence. Vigorous hunting quickly depleted the nearby beaver grounds, and some of the more adventurous Frenchmen took to the interior in pursuit of pelts, paddling along aboriginal trade routes through Quebec's network of rivers and lakes. They moved north toward Hudson Bay, west toward the Saskatchewan River, and south across the Great Lakes into the Ohio Valley.  

Organizing the Company

In 1659, two of these French traders, Pierre-Esprit Radisson (1636-1710) and Medard Chouart (1618-1696), Sieur Des Groseilliers, had traveled quite a distance north when they met Cree Indians carrying a large quantity of unusually rich pelts. When questioned, the Crees explained that they had captured the prime furs on an inland sea some distance northwards. The Frenchmen deducted that this must be Hudson Bay, the vast body of water that had been partially explored by a series of European mariners. 

Upon their return to Quebec, Radisson and Groseilliers tried to interest the French governor in sponsoring a trading expedition to Hudson Bay to exploit the rich fur sources spoken of by the Crees. When he refused, they traveled to Boston in search of financing, and there they met a well-connected Englishman who invited them to London and presented them to King Charles II (1630-1685) in 1666. The king's cousin, Prince Rupert of Batavia (1619-1682), sponsored an exploratory trading mission in 1668. This proved so successful that the prince organized a group of 18 investors to form the Hudson's Bay Company, also known as The Governor and Adventurers of England Trading into Hudson's Bay. 

In 1670 Charles II awarded a royal charter to the Hudson's Bay Company, granting it the rights to all the commerce of the bay's entire drainage. Known as Rupert's Land, the area encompassed 1.5 million square miles, stretching west to the Rocky Mountains and south into present-day Minnesota and North Dakota. The charter vested control of the company in a governor, deputy-governor, and a committee of five directors chosen by stockholders at an annual meeting in London. The London directors appointed a representative, the Governor of Rupert's Land, to oversee operations in North America. The London office forwarded instructions and directives across the Atlantic on a ship that left London each spring, delivered supplies and trading goods to the posts on the bay, and picked up furs and detailed reports and accounts. 

Geography gave the Bay Company a major advantage, for supply ships docking on the bay's western shore were already halfway across the continent, right on the doorstep of rich fur country. At first, the company's governors took a conservative approach to their huge fiefdom, building trading posts at the mouths of the Churchill and Hayes rivers and relying on Cree and Assiniboin emissariese to ferry goods to the interior tribes and bring pelts back to the bay. 

Conflict and Competition

Before long, traders at the Bay posts noticed increased competition from French traders, who chose to ignore the claims of Great Britain in their quest for the thick pelts available from the cold northern regions. The two countries and the tribes with whom they were each allied skirmished in the north and in the south until their spats grew into the long series of battles known as the French and Indian Wars, or the Seven Years War, which lasted from 1756 until 1763. When the British finally prevailed and the French surrendered all claims to New France in 1763, the Hudson's Bay Company expected to have a monopoly on the northern fur trade. 

But it wasn't long before a new generation of "pedlars from Quebec" appeared on the scene. Experienced French traders teamed up with Scots emigrating from the depressed Highlands, Yankee opportunists from the American colonies, and Englishmen who saw potential on the Canadian frontier. By the late 1700s, several independent operators had pooled their resources to form the North West Fur Company, headquartered in Montreal, and their upstart coalition was gaining strength. Organized into efficient brigades, the "Nor'Westers" forged across Lake Winnipeg into the prairies and penetrated as far northwest as Lake Athabasca, where they tapped into an enormous lode of prime pelts. They built a series of new trade houses at strategic intervals and intercepted the Native middlemen on their way to Hudson Bay, treating them to rum and bartering for their choicest furs. They strangled the flow of pelts that had previously poured into the posts on the bay, and the Bay Company's profits began to suffer. 

In response, the Bay Company built a pair of inland posts in 1774, but the effort was expensive, and a series of difficulties delayed further expansion for another decade, when the governors resolved to make a renewed push into the interior. They sent contingents up the north and south branches of the Saskatchewan and into the Athabasca region to build posts in direct competition with the Nor'Westers. By 1800 the two companies had expanded their operations far up the north fork of the Saskatchewan toward the east front of the Rocky Mountains. Here they were occasionally visited by tribes from the Columbia Plateau west of the Continental Divide who reported abundant supplies of beaver in their homelands and encouraged traders from both companies to establish posts across the mountains. The North West Company was the first to respond to this invitation, sending an expedition under David Thompson (1770-1857) across the Divide in 1807.  

Three years later, in June 1809, the Bay Company dispatched a party under clerk Joseph Howse (1774-1852) to make a brief survey of the situation west of the Rockies. The following summer, Howse led a small brigade across the Divide and south into the Flathead country in present-day western Montana. He built a small trade house, passed the winter, and returned to the Saskatchewan the following spring with 36  bundles of good furs and a conviction "that it would be folly to repeat the venture," for he had been visited by a group of Piegan Blackfeet who were furious that traders were supplying guns to their Flathead enemies and who warned that if he returned "they would not only plunder and kill him, but that they would make dry meat of his body" (Nisbet, Mapmaker, 96). 

Reaching the Pacific Northwest

The Bay Company directors did not pursue any further plans for establishments west of the Divide until 1821, when they completed negotiations to merge with their chief rival, the North West Company. The joint concern assumed the name of the Hudson's Bay Company, with most of the former employees of both companies retaining their positions.  

The Hudson's Bay Company's enlarged territory was divided into four divisions for administrative purposes: the Northern, Southern, Montreal, and Western, or Columbia, departments. The trade was supervised from London by a governor, deputy governor, and a committee of four men. In North America, George Simpson reigned as the governor of operations of the transcontinental enterprise, assisted by a council that met annually to review progress and make plans for the coming year.  

Looking over accounts soon after the merger, the London committee expressed doubts about the future of the Columbia Department, which included posts established by the North West Company west of the Divide in present-day Western Montana, Idaho, Oregon, Washington, and British Columbia. "We understand," they wrote to Simpson in February 1822, "that hitherto the trade of the Columbia has not been profitable, and from all that we have learnt on the subject we are not sanquine in our expectations of being able to make it so in future" (Simpson, l). Simpson decided to make a personal tour of the district in order to analyze its prospects, and in the fall of 1824 he journeyed west to survey the situation with John McLoughlin, the Chief Factor of the Columbia Department. 

After visiting Spokane House, Fort Okanogan, and Fort Walla Walla, Simpson was not pleased with the conditions he had found: "the Columbia Dept. from the Day of its Origin to the present hour has been neglected, shamefully mismanaged and a scene of the most wasteful extravagance and the most unfortunate dissention. It is high time the system should be changed and I think there is ample Field for reform and amendment" (Simpson, xx). Simpson spent the winter of 1824-1825 at Fort George, near the mouth of the Columbia, outlining his suggested reforms and amendments and making a detailed list of recommendations for decreasing waste and increasing efficiency. "It is now, however, necessary that a radical change should take place and we have no time to lose in bringing it about," he wrote (Simpson, lii).  

Another consideration was the state of negotiations regarding the international boundary between the United States and Great Britain. The two countries had signed a Joint Occupation Agreement in 1818, which was due to be renewed in 1828, and conventional wisdom held that the eventual boundary would be settled at either the 49th parallel or the Columbia River. No matter which option was eventually decided upon, Great Britain would lose the territory south of the Columbia. With this in mind, the British Foreign Office had recommended that the Hudson's Bay Company relocate its headquarters from Fort George, on the south side of the Columbia, to a site on the north shore. After scouting for possible locations, Simpson and McLoughlin selected a broad meadow about 100 miles upriver known as Belle Vue Point or Jolie Prairie, with a large area suitable for the farm that Simpson envisioned as part of his plan for increased self-sufficiency at all posts. By June 1825, workers were busily ferrying the contents of Fort George upstream to the newly christened Fort Vancouver. 

Trapping, Trading, and Governing

As the shipping and receiving depot, Fort Vancouver was the central business hub for the Columbia Department. Chief Factor McLoughlin occupied the pinnacle of the regional organizational chart, while the middle tier held Chief Traders, who commanded trade houses or trapping expeditions. Numerous clerks completed the ranks of the "gentlemen" who kept accounts and helped oversee the trade at the various posts. Most of the "managers" were natives of England or Scotland. Many of the fur agents lived with tribal or mixed-blood wives in a form of common-law marriage known as "the custom of the country" in recognition of the distance from clergy or civil officialdom. Their children often worked in the trade as laborers or sometimes as clerks. The labor force, referred to as "the men" or "the servants," included Orkney Islanders, French Canadian voyageurs, Iroquois Indians who had migrated west, and Hawaiians who had been recruited by ships' captains en route to the Columbia. Local tribesmen served as hunters, interpreters, horse tenders, and guides, and independent trappers were sometimes hired as seasonal labor. 

From the new headquarters on the north bank of the Columbia, John McLoughlin worked to make the district profitable. He efficiently coordinated operations and logistics between outlying posts and introduced strict economies. He built a grist mill and sawmill and experimented with exports of salmon and timber to California and Hawaii. He expanded trade into Puget Sound, inland to new areas north and south, and along the coast to the Russian settlements in Alaska. Following Simpson's instructions, he sent brigades into the Snake River drainage to create a fur desert by trapping out all marketable fur-bearing animals, in hopes of discouraging Americans from moving into the area. During the mid-1830s, McLoughlin directed approximately "1,000 men, occupying 21 permanent trading establishments, two migratory trading and trapping expeditions, a steam vessel, and five sailing vessels from 100 to 300 tons burthen" (Simpson, lv). 

For many years, the Hudson's Bay Company served as a defacto government in the Northwest, with McLoughlin and his agents acting as legislators, executive officers, judges, and police forces. On the whole, the 1820s and 1830s were relatively peaceful and orderly, for McLoughlin imposed military-style discipline and order, prohibited the trading of alcohol to Indians, and encouraged amiable relations with regional tribes.  

Northwest Fur Trade

The Northwest fur trade operated on a predictable schedule. Each spring, traders from the satellite posts loaded up the pelts they had traded during the previous months and traveled to Fort Vancouver. In years when all went according to plan, the convergence of traders would coincide with the arrival of the annual supply ship from London, laden with trade goods, supplies, clothing, staples, mail, and luxuries such as sugar, tea, and chocolate. After the cargo was unloaded from the ship and each post's allotment for the coming year was dispersed, the large canoes and bateau of the interior brigade put back into the Columbia, headed toward various destinations from Puget Sound to Western Montana to central Oregon and southern Idaho. The supply ship took on a cargo of lumber and sailed for Hawaii, returning in late summer or early fall to receive bales of pelts for sale in Canton or Great Britain. 

In addition to the annual visit of the supply ship from London, the traders in the Columbia Department received a mail delivery each fall via light, fast-moving express canoes that journeyed between York Factory on Hudson Bay and the Northwest, carrying correspondence, accounts, and official dispatches between Governor Simpson and his council and the interior posts. 

Beginning in the mid-1820s, many of the dispatches from the Columbia made reference to the "Yankee" presence in the region. Increasing numbers of American trappers were filtering across the Rockies into the Snake and Umpqua regions, competing with independent trappers and tribal hunters for furs. The London committee directed that, "if the American Traders settle near our Establishments, they must be opposed, not by violence, which would only be the means of enabling the Traders to obtain the interference of their government, but by underselling them" (Lavender, 137). When two Boston ships sailed into the Columbia in 1829, the resulting trade war devastated profits. 

In 1840, at the suggestion of George Simpson, the company began a new enterprise, the Puget Sound Agricultural Company, based at Fort Nisqually. This subsidiary raised livestock and food crops to sell to the Russian American Company's posts in present-day Alaska, as well as to ships sailing along the Northwest coast. 

Last Years in the Pacific Northwest

As waves of immigrants reached the Oregon Territory in the 1840s, tensions mounted between the newcomers and the employees of the Hudson's Bay Company, which controlled the economy of the region to a great extent. A settler "had no place to sell his wheat or furs except the company warehouse, no place to buy goods except at the company store. He could not even repair a broken tool without taking it to the company forge" (Lavender, 184). An agent for the U.S. government who had visited the Columbia in the late 1830s advised that "some steps must be taken by our government to protect the settlers and traders, not from the hostility of the Indians, but from a much more formidable enemy ... the Hudson Bay Company" (Slacum, 42).  

When the United States and Great Britain finally agreed to the Oregon Treaty establishing the 49th parallel as their boundary in 1846, the southern portion of the Hudson Bay Company's domain fell into the possession of the United States. The treaty granted the company free navigation on the Columbia as well as trading rights, but increasing numbers of settlers and the resulting hostilities with the tribes severely curtailed the fur trade, and in 1860 the directors closed Fort Vancouver and moved the headquarters of the Columbia Department to Fort Victoria on Vancouver Island.

The company maintained Fort Nisqually (near present-day Olympia) and Fort Colvile near the international boundary for another decade, when declining profits dictated their closure. The United States government purchased the land on which the forts had been built, and the Hudson's Bay Company's half-century occupation of the Northwest came to a close.


Sources: Lloyd Keith, The North West Company’s Adventure to the Columbia: Reassessment of Financial Failure (Winnipeg: Centre for Rupert’s Land Studies, University of Winnipeg, 1989); David Lavender, Land of Giants: The Drive to the Pacific Northwest 1750-1950 (New York: Doubleday & Company, 1956); Richard Somerset Mackie,Trading Beyond the Mountains: The British Fur Trade on the Pacific 1793-1843 (Vancouver: University of British Columbia Press, 1997); Peter C. Newman, Company of Adventurers: The Story of the Hudson's Bay Company (New York: Penquin Books, 1985); Jack Nisbet, Mapmaker's Eye (Pullman: Washington State University Press, 2005);  Jack Nisbet, Sources of the River (Seattle: Sasquatch Books, 1994); E. E. Rich, Hudson's Bay Company 1670-1870 (Toronto: McClelland and Stewart Limited, 1960); H. M. Robinson, The Remarkable Activities of the Gentlemen Adventurers of the Great Hudson's Bay Company During the Years 1670-1879 (Ashland: The Oregon Book Society, 1977); George Simpson, Fur Trade and Empire ed. by Frederick Merk (Cambridge: Harvard University Press, 1968); William A. Slacum, Memorial of William A. Slacum, Praying Compensation for his Services in Obtaining Information in Relation to the Settlements on the Oregon River, Sen. Doc. 24, 25th Congress, 2nd Session, 1837 (Fairfield: Ye Galleon Press, 1972).

Related Topics:   Business | Exploration | Northwest Indians

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