The Fur Trade

100_7971The Hudson’s Bay Company was founded in 1670, and for over a century dominated the fur market in eastern Canada. Two Frenchmen, Pierre-Esprit Radisson and Mèdard Chouart, Sieur des Groseilliers, turned to England for a charter (a license to trade) after unsuccessful attempts to gain French support. The company, whose charter was granted by King Charles II, was officially titled the “Governor and Company of Adventurers of England trading into Hudson Bay,” but soon became known as the Hudson’s Bay Company.

Headquartered in London, the company maintained a series of trading posts, called forts, factories, or houses, along the rivers that emptied into Hudson Bay.

In the 1770s, the North West Company entered the scene, and for almost 50 years the two companies competed fiercely for the northern fur trade. The commercial warfare between the two fur-trading companies included real fighting – ambush, arson, theft, and murder were not uncommon during the years of intense competition. To counter the rapid gains being made by the North West Company, the Hudson’s Bay Company established trading posts further inland, eventually reaching to the Pacific Ocean.

In 1821, the combatants merged under the Hudson’s Bay Company name. The newly enlarged company now had a monopoly in Canada which lasted until 1869.

The XY Company, though never as large as the “big three” companies of the fur trade, had a major impact during its years of operation.

Several of the Montrèal partners in the North West Company, dissatisfied with the leadership and dictatorial methods of Simon McTavish, and encouraged by Alexander Mackenzie, broke away to form a new company. The new company was organized in 1795-96 under the official name of the New North West Company, but soon became known as the XY Company, from the letters chosen to mark their bales of fur. The XY Company established its headquarters at Grand Portage, very near the North West Company’s major trading post.

The two companies engaged in ferocious competition – not only a war of words, but also battles with injuries on both sides. By locating posts near to those of their competitors, offering better trades for pelts, and operating with half as many men in the field, the XY Company, by 1802, had almost as much working capital as the larger company. Four months after the death of Simon McTavish, in 1804, the XY Company rejoined the North West Company. Soon after the reunion, because the establishment of the international boundary between the United States and Canada had placed Grand Portage on the American side of the line, the North West Company relocated its headquarters to Fort William (now known as Thunder Bay, Ontario), about 45 miles northeast of Grand Portage, Minnesota, making this the new rendezvous spot for the northern fur trade.

The North West Company was a major force in the fur trade from the 1770s to 1821. In the 1770s, Montrèal traders began working together to resist the advances being made by the Hudson’s Bay Company. In 1783, the North West Company was founded by this group. Grand Portage was the company’s rendezvous spot from 1784-1804. Here canoes from Montrèal, with supplies and trade goods, met the “winterers,” or “hivernants”, coming from the interior of the continent with furs. North West Company employees who had wintered in the interior for several years and produced good results were eligible to become wintering partners in the company. These employees could look forward to sharing in profits and having a voice in creating policies to increase revenue. The incentives and rewards for the North West Company employees were thus much stronger than for the Hudson’s Bay Company employees, who remained “hired help,” with the absentee owners located in London. Such powerful incentives paid off: by 1798, the North West Company had over three-quarters of the northern fur trade profits. But even as the company grew and competed successfully with the Hudson’s Bay Company, a strong rival developed after 1795 in the form of the New North West Company, or XY Company., Following nine years of cutthroat competition, the XY Company merged with the North West Company in 1804.

The American Fur Company was begun by John Jacob Astor in 1808 to compete with the great fur-trading companies in Canada – the North West Company and the Hudson’s Bay Company. The headquarters of the American Fur Company were in New York. The War of 1812 brought a temporary held to Astor’s fun operations, but following the war he made up for lost time. An act of Congress in 1816 excluded foreign trades form U.S. territory and opened the way for Astor to buy out the North West Company’s interests on American soil. From then on, the American Fur Company established its western headquarters at Mackinac Island and commanded the trade in the Great Lakes region.

An alliance made in 1821 with the Chouteaus of St. Louis gave the American Fur Company a monopoly of the trade in the Missouri River region, and later in the Rocky Mountains. Astor sold the business in 1834, and the company was divided. The American Fur Company name stayed with the northern branch operated by Ramsay Crooks. During the 1830s and 1840s, the American Fur Company maintained its fur operations, but also expanded its interests to include commercial fishing, freight hauling, government contracts, and other activities. The company’s various operations ceased by 1850.