North West Company

Beginnings

There are historical references to a North West Company as early as 1770, including the Montreal-based traders Benjamin Frobisher, Isaac Todd, Alexander Henry the elder and others, but the standard histories trace the company to a 16-share organization formed in 1779, which included Todd, Simon McTavish and James McGill. Seeking to break the Hudson's Bay Company monopoly over the North American fur trade, in 1780, the organization was joined by Peter Pond and Alexander Ellice, with his brothers, Robert and James, (and, later, his sons, including Edward Ellice).

In the winter of 1783–1784, the North West Company was officially created on a long-term basis, with its corporate offices on Vaudreuil Street in Montreal. It was led by businessmen Benjamin Frobisher, his brother, Joseph, and McTavish, along with investor-partners who included the Ellices, Robert Grant, Nicholas Montour, Patrick Small, William Holmes, and George McBeath.

Official founding

In 1787 the North West Company merged with a rival organization, Gregory, McLeod and Co., which brought several more able partners in, including John Gregory, Alexander Mackenzie, and his cousin Roderick Mackenzie. The 1787 company consisted of 20 shares, some held by the agents at Montreal (see below), and others by wintering partners, who spent the trading season in the fur country and oversaw the trade with the aboriginal peoples there.

The wintering partners and the Montreal agents met each July at the company's depot at Grand Portage on Lake Superior, later moved to Fort William. Also under the auspices of the company, Alexander Mackenzie conducted two important expeditions of exploration. In 1789, he descended the Grand River (now called the Mackenzie River) to the Arctic Ocean, and in 1793 he went overland from Peace River to the Pacific Ocean. Further explorations were performed by David Thompson, starting in 1797, and later by Simon Fraser. These men pushed into the wilderness territories of the Rocky Mountains and Interior Plateau and all the way to the Strait of Georgia on the Pacific Coast.

Organizational history

The history of the partnership is complex, but it is necessary to keep track of who was competing with whom. Note that the definition of partner is not completely clear. For example, after Duncan McDougall surrendered Fort Astoria, he became a NWC partner with one one-hundredth of a share.

1771: William Grant and several others form a partnership which they call the "N. W. Société"

1775: Alexander Henry the elder speaks of a pool on the North Saskatchewan similar to 1779 (see Fort Sturgeon).

1779: Of 16 shares: 2 shares: Todd & McGill, B & J Frobisher, McGill & Patterson, McTavish & Co, Holmes & Grant, Wadden & Co, McBeath & Co; 1 share: Ross & Co, Oakes & Co. The first three were large and closely connected. Peter Pond was a partner of McBeath and Patrick Small of McTavish.

By 1810, another crisis hit the fur industry, brought on by the over-harvesting of animals, the North American beaver in particular. The destruction of the North West Company post at Sault Ste. Marie by the Americans during the War of 1812 was a serious blow during an already difficult time. In addition, the company was hurt by the refusal after the war with the United States to let Canadian traders freely cross its northern border. This reduced much of the border trade, which had previously been profitable for them, and artificially divided traders' relations with those several Native American tribes whose territories spanned the border.

All these events intensified competition between the companies. When Thomas Douglas convinced his fellow shareholders in the Hudson's Bay Company to grant him the Selkirk Concession, it marked another in a series of events that would lead to the demise of the North West Company. The Pemmican Proclamation, the ensuing Battle of Seven Oaks in 1816, and its violence, resulted in Lord Selkirk arresting William McGillivray and several North West Company proprietors. He ordered the seizure of their outpost property in Fort William and charged them with the deaths of 21 people at Seven Oaks. Although this matter was resolved by the authorities in Montreal, over the next few years some of the wealthiest and most capable partners began to leave the North West Company, fearful of its future viability. The form of nepotism within the company too had changed, from the strict values of Simon McTavish to something that was harming the business in both its costs and morale of others.

By 1820, the company was issuing coinage, each copper token representing the value of one beaver pelt. But the continued operations of the North West Company were in great doubt, and shareholders had no choice but to agree to a merger with their hated rival after Henry Bathurst, the Secretary of State for War and the Colonies, ordered the companies to cease hostilities. In July 1821, under more pressure from the British government, which passed new regulations governing the fur trade in British North America, a merger agreement was signed with the Hudson's Bay Company. By this, the North West Company name disappeared after more than 40 years of operations. At the time of the merger, the amalgamated company consisted of 97 trading posts that had belonged to the North West Company and 76 that belonged to the Hudson's Bay Company. When the competition between both companies came to an end, new board of directors wanted two field governors to oversee the newly defined territory, and George Simpson was appointed to the Northern Department. George Simpson (1787–1860), the Hudson's Bay Company Governor-in-Chief of Rupert's Land, who became the Canadian head of the northern division of the greatly enlarged business, made his headquarters in the Montreal suburb of Lachine. The trading posts were soon reduced in number to avoid redundancy.