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The Causes and Origins of the North American Fur Trade Rivalry: 1804–1810

Published online by Cambridge University Press:  03 March 2009

Ann Carlos
Ann Carlos
Affiliation:
Departments of Economics, Huron College and University of Western Ontario, London, Ontario, Canada.
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Extract

Two ideas contrary to those of the existing literature are advanced. First, the early years of the Hudson's Bay Company/Northwest Company duopoly were characterized by passive rather than by predatory competition. Second, the Hudson's Bay Company initiated the changes that eventually led to predatory competition. The Company's financial crisis of 1809–1810 brought about by the decline in demand due to the Napoleonic Wars shocked it out of complacency and into aggressive competition.

Type
Articles
Information
The Journal of Economic History , Volume 41 , Issue 4 , December 1981 , pp. 777 - 794
Copyright
Copyright © The Economic History Association 1981

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References

1 Rich, E. E., The Fur Trade and the Northwest to 1857 (Toronto, 1967), p. 194.Google Scholar

2 Easterbrook, W. T. and Aitken, Hugh, Canadian Economic History (Toronto, 1956), pp. 174, 177.Google Scholar

3 Merk, Frederick, “Fur Trade and Empire,” George Simpson's Journal 1824/25 (Cambridge, Massachusetts, 1931), p. x.Google Scholar

4 London Correspondence Outward-Official, Public Archives of Canada (PAC), HBC MG20A6, Albany Factory, 1803.Google Scholar

5 Ibid., 1806.

6 Ibid., 1808.

7 Ibid., 1803 para. 5; 1809 para. 3.

8 Ibid., 1803.

9 Morton, Arthur, A History of the Canadian West to 1870/71 (London, 1939).Google Scholar

10 Harmon, Daniel, A Journal of Voyages and Travels in the Interior of North America (New York, 1922).Google ScholarCoues, Elliot, ed., New Light on the Early History of the Greater Northwest (New York, 1897).Google Scholar

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12 Coues, New Light, p. 594.Google Scholar

13 Eastmain and Moose Factories were situated on the eastern and southern shores of James Bay.Google Scholar

14 Minutes of Transactions between HBC and NWC 1804–1806, PAC HBC MG2OA1, Reel 18.Google Scholar

15 Ibid., Letter, 31st 01 1806, para. 39.

16 Ibid., para. 40. The Committee was informing the NWC agents that since it was required by a Navigation Act clause in its charter to sell its furs only on the English market, the NWC would have to be bound also by the same clause.

17 London Correspondence Outward, 1798/1806.Google Scholar

18 The sales records are not complete. The records only list the furs sold and their prices for 1798, 1799, 1800, 1801, 1807, and 1808.Google Scholar

19 Minute Book, PAC HBC MG2OA 1, Reel 18. The Company's assets were its total stock valued at £103,950, its funded property in London, and its bonds consisting of £30,000 invested in 3 percent consols, £10,000 in old south sea annuities, and £366. 14.6 in 3 percent reduced annuities.Google Scholar

20 Ibid., 1807. This sum of £30,000 was not credited directly to the company's account, but placed in the names of three committee members: Mainwaring, Neaves, and Raikes. In 07 1808, the Company become responsible for the full £50,000 credit facility.

21 Ibid., 1808, or Rich, E. E., The Hudson's Bay Company (London, 1958–1959), p. 266.Google Scholar

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23 This would seem to suggest that the Company was facing very real financial problems and this may be part of the reason why they moved to a private banking company and away from the Bank of England. The Company also obtained short-term cash from its committee members on which it paid 5 percent. Minute Book examples of some such short-term borrowing are for 1809: 11th January 1809—“Received £1,000 from Thomas Langley esq., for use of the Company.” 15th February 1809—”Received from William Mainwaring, £1193.7.0 for use of Company.” 23rd August 1809—” Secretary borrowed on 14th Inst. of William Mainwaring £500.”Google Scholar

24 Minute Book, Minutes of Transactions, Reel 18.Google Scholar

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26 Sir Alexander McKenzie Papers, 23rd October, 1807.Google Scholar

27 Ibid., 28th 07 and 22nd 10, 1808.

28 Fine beaver prices were: 1804, 21/7; 1805, 23/9; 1806, 28/7; 1807, 27/11; 1808, 27/1. Auction Catalogue of Fur Trade Produce, PAC HBC MG20A54.Google Scholar

29 Sir Alexander McKenzie Papers, 22nd October 1808.Google Scholar

30 Minute Book, 1808.Google Scholar

31 Ibid., 17th 05, 1809.

32 London Correspondence, 1806.Google Scholar

33 It is difficult to measure the elasticity because of the lack of information concerning the quantities of furs sold on the English market by the Northwest Company and the lack of precise data on income levels in the United Kingdom and Europe for these years.Google Scholar

34 London Correspondence, 1807.Google Scholar

35 Ibid., 1808.

36 London Correspondence, Annual letter to Churchill Factory, 1804.Google Scholar

37 Ibid., 1807.

38 Coues, New Light, p. 558. By “in season” Henry means the fur season on the London market.Google Scholar

39 Colin Robertson was an ex-northwesterner whom the Company ultimately hired to outfit a brigade destined for Athabasca. Robertson's, Colin suggestions to the Company, 1810; Selkirk Papers, Papers relating to the Red River Settlement PAC MG 19. P. 530.Google Scholar

40 1809 was a bad year because of the severe winter. Sir Alexander McKenzie Papers, Letter Book XY. Wolf, mink, and marten were demanded principally in Europe. The stickiness of prices appears to contradict Ray, Arthur and Freeman, Donald, “Give us Good Measure”: An Economic Analysis of Relations Between the Indians and the HBC before 1736 (Toronto, 1978). But two very different periods are involved.Google Scholar

41 London Correspondence, Annual letter to all Factories, 1809.Google Scholar

42 Ibid., 1809, para. 8.

43 Ibid., para. 10.

44 Storing unsaleable furs at the Bay lasted only one year. In their 1810 letter, the Committee ordered “you will send home all the furs, skins and every article of trade as well of this year as those left behind last year.” London Correspondence, 1810.Google Scholar

45 This fits in with the Rich-Rotstein thesis on the importance for the fur trade of the alliance structure among the Indian tribes.Google Scholar

46 Selkirk Papers, p. 530.Google Scholar

47 Selkirk Papers, p. 25.Google Scholar

48 Carlos, Ann, “The Birth and Death of Predatory Competition in the North American Fur Trade: 1810–1821,” University of Western Ontario Working Paper, 1980.Google Scholar