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North West Company



[This article was written by W. S WALLACE in 1948. For the full citation, see the end of the document.]


North West Company, an organization formed in the years following the British conquest of Canada, for the exploitation of the fur-bearing regions of the Canadian North West.


It was not, like the Hudson's Bay Company, a chartered company, but was merely a pool or syndicate of fur-trading firms or individuals, formed to abate the evils of competition; and though it came later to be dominated by the Montreal firm of McTavish, Frobisher, and Company (later McTavish, McGillivrays, and Company), it never lost its character as a partnership. To this feature of its constitution it owed, indeed, in large measure both its success and its failure. Its wintering partners, with a personal stake in the fortunes of the company, proved much more aggressive than the poorly-paid employees of the Hudson's Bay Company; and in the race for the furs which opened up the whole of the Canadian North West, from lake Superior to the Pacific ocean and from the sources of the Mississippi to the Arctic sea, the Nor' Westers easily outdistanced the Hudson's Bay men. On the other hand, when the rivalry. between the North West Company and the Hudson's Bay Company came to a head over Lord Selkirk's establishment of a colony on the Red river, cutting across the North West Company's line of communications with the interior, the loose organization of the Nor'Westers proved to be a severe handicap, as compared with the unified control of the Hudson's Bay Company.


Just when the North West Company was first formed, is difficult to determine. At an early date signs of concentration among the fur-traders in the far North West were apparent; and in 1775 Alexander Henry describes a pool or merger of interests on the Saskatchewan. There are references to "the North West Company" as early as 1776. But the first union of interest of which we have definite knowledge was the sixteen-share concern formed in 1779. The agreement on which this was based apparently broke down; but it was succeeded by a new agreement in 1783, and this is the date at which the North West Company has commonly been said to have begun. The 1783 company had to meet the competition of a rival organization of Montreal merchants, known as Gregory, McLeod, and Company, in the service of which Sir Alexander Mackenzie began his career; but in 1787 this company was absorbed by the North West Company, and a new agreement was made, under which the North West Company was reorganized on the basis of twenty shares, instead of sixteen. Opposition to the North West Company developed again after 1793, and in 1800 there was formed a "New North West Company", to which the name of XY Company came to be applied. After a severe contest, the XY Company was in 1804 absorbed in the North West Company, and was given a quarter interest in the new concern, which was reorganized on the basis of one hundred shares. The agreement of 1804 was the constitution under which the company operated for the rest of its life.


The development of the North West Company's trade during these years was spectacular. Its operations were confined at first to the lake Superior region, the valleys of the Red and Assiniboine rivers, and the Saskatchewan river. But in 1778 Peter Pond  reached lake Athabaska; in 1789 Alexander Mackenzie   followed the Mackenzie river to its mouth on the shores of the Arctic ocean, and in 1793 crossed the Rocky mountains, and reached salt water on the Pacific coast; and in 1811 David Thompson explored the Columbia river to its mouth. The opening up of these vast new territories, constituting a veritable "Umpire of the North", over which the company held sway, converted the North West Company into one of the first examples of "big business" on the North American continent; and its wilderness headquarters, situated first at Grand Portage on lake Superior, and after 1805 at Fort William, became in the height of the season a town of several thousand inhabitants. Fortunes were made in the fur-trade; but these fortunes went to the individual partners, rather than to the North West Company, which consequently built up no reserve fund, and was indeed in the position of a creditor of many of its partners.


When, therefore, the Earl of Selkirk, who had acquired a controlling interest in the Hudson's Bay Company, challenged the North West Company to a life-and-death struggle by establishing on the banks of the Red river in 1812 a colony which cut athwart of the North West Company's line of communications, the North West Company found itself ill-equipped to meet the long struggle that followed. Not only was it at a disadvantage in meeting the intensive competition in the fur-trade (for the costs of shipping furs by Hudson bay were half of what they were for transporting furs by the long canoe route to Montreal), but it had no reserves to meet the costs of this ruinous competition or of the expensive and prolonged law-suits in which the North West Company became involved. It is not possible to describe here in detail the duel which took place between Lord Selkirk and the Nor' Westers in the years following 1812 - a duel which first became acute with the massacre of Seven Oaks  in 1815, and culminated in the capture of Fort William by Lord Selkirk in 1816 and the subsequent arrest of Lord Selkirk in 1817; but the results of the struggle were painfully apparent. The Hudson's Bay Company invaded areas, such as the Athabaska country, which they had hitherto left to the Nor'Westers; and the Nor' Westers devoted all their energies to the prosecution of the struggle with the Hudson's Bay men, instead of to the prosecution of the fur-trade. On the face of things, the North West Company did not come out of the contest badly. They won, on the whole, a victory in the courts; and Lord Selkirk, his health shattered, retired to the south of France , to die an early and untimely death in 1820. But the victory was a Pyrrhic one. By 1820 the financial position of the North West Company had become so acute that no attempt was made to balance its books; and in 1821 it was driven to accept absorption in the Hudson's Bay Company.


It has been usual to say that in 1821 the Hudson's Bay Company and the North West Company were united or amalgamated; and it is true that the wintering partners of the North West Company were given an interest in the Hudson's Bay Company, and the directors of the North West Company were ultimately given shares in the Hudson's Bay Company. But the fact is that the North West Company in 1821 passed out of existence; the fur-trade was diverted from Montreal to Hudson bay; Fort William sank into the category of a third-rate post; and in 1839 Washington Irving was able to write the epitaph of the Nor' Westers in these famous words: "The feudal state of Fort William is at an end; its council chamber is silent and desolate; its banquet hall no longer echoes to the auld-word ditty; the lords of the lakes and the forests are all passed away."


Bibliography. For an account of the history of the North West Company, see G. C. Davidson, The North West Company (Berkeley, California, 1918); H. A. Innis, The North West Company ( Can. hist. rev ., 1927); and W. S. Wallace (ed.), Documents relating to the North West Company (Toronto, The Champlain Society, 1934). Much material relating to the history of the Company will be found in L. R. Masson (ed.), Les bourgeois de la Compagnie du Nord-Ouest (2 vols., Quebec, 1889-90); C. M. Gates (ed.), Five fur-traders of the north-west (Minneapolis, Minn., 1933), and the journals or narratives of Alexander Henry the elder, Alexander Henry the younger, G. Franchère, D. W. Harmon, Sir Alexander Mackenzie, Duncan McGillivray, J. B. Perrault, Peter Pond, David Thompson, and Nicholas Garry. Reference should be made also to Marion O'Neil, The maritime activities of the North West Company, 1813 to 1821 (Washington Historical Quarterly, 1930), and to the following papers by R. Harvey Fleming, McTavish, Frobisher and Company, of Montreal (Can. hist. rev.), Phyn, Ellice and Company, of Schenectady (Contributions to Canadian Economics, 1932), and The origin of "Sir Alexander and Company" ( Can. hist. rev ., 1928).


Source : W. Stewart WALLACE, "North West Company", in The Encyclopedia of Canada , Vol. V, Toronto, University Associates of Canada, 1948, 401p., pp. 17-19.


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