History of the Pacific Northwest
Oregon and Washington 1889
Volume I
Page 89 - 94

Copyright 2000 - 2003 - Janine M. Bork
 This page is part of the  Union County, OR AGHP

(1814 - 1824.)

The North West Company Exclusive Occupants of the Territory West of the Rocky Mountains - Antecedent History and Policy of Said Company - Rivalry and Open Hostility Between the North West and Hudson's Bay Companies - Adjustment of the Differences by a Partnership in Fur Trade Prosecuted Under Charter of Hudson's Bay Company - License of Exclusive Trade Extending to the Pacific Ocean Granted by the British Government - The Hudson's Bay Company Succeed to All Rights Under Said License - The North West Company Merged Into the Hudson's Bay Company.

THE disastrous and disgraceful termination of Astor's enterprise in October, 1813, left the Northwest Company in exclusive occupancy of the Columbia. Their posts extended through the basins of the Columbia and New Caledonia. With the exceptions of the establishments of the Russians upon the extreme northwest, and one or two trading posts of the American Fur Company in the extreme southeast, the North West Company enjoyed sole possession, and were without competition in the Indian and fur trade, in the territory west of the Rocky Mountains. This state of affairs continued without change for several years. The Joint-Occupancy Treaty of October 20, 1818, between the United States and Great Britain, conferred upon the company as British subjects full sanction to prosecute their trade in the territory.

     For a period the North West company wielded a powerful influence in British America. Its operations reached far and wide into the unexplored, unoccupied interior of the continent. It respected no right of territory; it sent out its parties wherever profit remunerated its labors. The inland voyages of discovery of Sir Alexander Mackenzie were made in its interest. In 1804, advised of the proposed expedition of Lewis and Clark, it attempted to forestall that great project of Jefferson to acquire knowledge of the interior and great west, by sending Daniel W. Harmon in charge of a party, with instructions to reach the mouth of the Columbia in advance of the United States expedition. Owing to his health, that effort at circumvention proved abortive. Mr. Laroque, another partner, started the next year (1805) to establish posts and occupy the territory upon the Columbia and its tributaries. The Mandan country was the western terminus of his expedition.

     In 1806, Simon Fraser, another partner, successfully led a party across the Rocky Mountains, and established a post on Fraser's Lake, fifty-four degrees north. The country west of the Rocky Mountains north of fifty-two degrees north latitude was thereafter called New Caledonia by the North West Company; and in it several of their trading-posts had soon after been established. In every instance the territory had been taken in the name of the British Crown, for the North West Company. Identified with the region for years the company controlled its native population, and absorbed the wealth of the


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country. The territory in fact was its domain. Its establishments and possessions constituting those material acts upon which Great Britain relied to support her territorial claim, it becomes interesting to learn the antecedents, the origin, the policy, the history of the North West Company, - how far it molded the history of the region.

     Although organized in 1784, the North West Company did not attain to its imperial influence and prestige until early in the present century. In 1805 it had become the successful rival of the Hudson's Bay Company for the fur trade of the interior and the northern part of the continent of North America. It not only prosecuted the trade, but aggressively denied the vast territorial claims of the Hudson's Bay Company; it insisted that the company's grant should be strictly construed and restricted to the Hudson's Bay Territory as defined in its charter. For upwards of a century before the North West Company had an existence, the Hudson's Bay Company, to a very great extent, had enjoyed the fur trade of the interior and northern part of North America. The policy and organization of those two model trading companies were radically dissimilar. The internal regulation, system of trade and establishments were widely different. The ultimate purpose was the same; its accomplishment was by methods that were diametrically opposite.

     The Hudson's Bay Company had been granted by the Crown vast territories, under which they made settlements, occupied country and prosecuted trade. The North West Company was a joint-stock association, a partnership of enterprising traders who waited for no royal charter, but pursued their business in the unoccupied wilderness. To them possession was sufficient. They cared not for territory; settlement was no part of their mission. The Hudson's Bay Company relied upon its franchise of exclusive trade to guarantee it against competition within the territories granted by Charles II. Its trading-posts were established sufficiently near to each other to render them accessible to the whole Indian population, thus absorbing the entire Indian trade, - sufficiently near for assuring co-operation in the event of Indian outbreaks. Thus were the native tribes held in check; and the brigades were furnished convenient halting places in the transportation of supplies and trading goods to the remote posts, and the returns from them of furs and peltries. At each fort a store well supplied with articles ministered to the wants, or gratified the desires of the natives. The Indians had become dependent upon those posts for the necessaries of life; zealously they collected furs to barter for articles which to them had become indispensable. That company's entire dependence for furs was upon the native hunters. The winter months were occupied by Indians in hunting and trapping; in the summer they visited the posts to sell their winter's work. The system of the Hudson's Bay company encouraged the Indians to bring to their posts furs and peltries. At stationary posts, the company prosecuted the trade. It neither employed nor sent out hunting parties. The furs were brought to them and exchanged at their own fixed tariff of prices. As all competitors were excluded from their territory, the company enjoyed a perfect monopoly.

     The old North West company (a French association which had ceased to exist when the Canadas became British provinces) had become competitors of the Hudson's Bay Company, beyond the recognized area of the Hudson's Bay Territory. The boundaries of Prince Rupert's Land or the Hudson's Bay Territory had never been definitely determined. There had always been contention in those regions to which the Hudson's Bay Company asserted claim, but which other fur traders or companies would not recognize. Upon the retirement of the old French company, the fur trade continued to be prosecuted by

                                                                        HISTORY AND POLICY OF THE NORTH WEST COMPANY.                                                        91

individuals, many of whom were prominent merchants of Montreal. These enterprises proved powerless against the competition of the Hudson's Bay Company. The North West Company of Montreal assimilated those individuals into a joint-stock association. Its theory of trade was the reverse of the stationary policy of the Hudson's Bay Company. From the center of operations, from established posts, the company dispatched at all seasons of the year parties in all directions to scour the whole country, to the villages and resorts of the natives. At the homes of the hunters, furs and peltries were bought. Trading-points or places of rendezvous among the various tribes were established, which were visited at regular intervals by traders, to which the natives brought their furs for barter. Combined with this was the regular trade at permanent forts. At each of these forts a winter-partner superintended the trade of a district, of which the post was the center. The Hudson's Bay Company required but few employés compared with the North West Company, which in its best days employed several thousands. The clerks or traders of the North West Company served as apprentices for a term of seven years, for a small salary and clothing. That term completed successfully, the salary was doubled; meritorious service entitled the trader to be eligible for partner. This incentive was productive of the best results. Preferment was open to the shrewd and thrifty trader. He was stimulated to effort; successful trading found its sure reward.

     In the Hudson's Bay Company, the compensation of every grade was fixed. Promotion was slow, passing through these several grades by length of service. No stimulus was offered to invoke extraordinary diligence. Faithful service was exacted, but nothing more than in the routine of allotted duty.

     The Hudson's Bay Company had been granted vast regions north of the Canadas, called Prince Rupert's Land, or the Hudson's Bay Territory, so vaguely described that the boundary continued an interminable dispute, - first between the French and the English, afterwards between the company itself and other fur traders. Beyond the Hudson's Bay basin, the North West traders considered the interior of the country an open field. Beyond the conceded jurisdiction, or those districts in which the Hudson's Bay Company had established trading-posts, the North Westers penetrated the remote northwest, established their posts, and prosecuted the fur trade. The Hudson's Bay Company claimed all territory westward from Hudson's Bay, southward to the old line of New France, - all of British North America except the Canadas. Adverse claims to trading fields necessarily engendered constant strife between the rival fur traders. The bitterest competition had arisen in what was known as the North West Country, the territory lying west and north of Lake Superior.

     In 1811, Lord Selkirk, a wealthy Scotch nobleman, joined the Hudson's Bay Company and acquired a majority of its stock. On the 12th of June of that year, he secured from that company a grant of the territory upon the Red river of the North, for the purpose of establishing agricultural colonies from Scotland. His grant extended from fifty-two degrees, thirty-one minutes north latitude to the high land dividing the waters of the Red river from those flowing into the Missouri and Mississippi, and including a large part of the present State of Minnesota. It embraced not only a vast area of the Hudson's Bay Territory, but also a large portion of United States territory. The Selkirk grant was drained by the Red river and its tributaries on the western side, while the basin of the Winnipeg, from its extreme source, constituted the eastern portion. The area of those two basins, with the intermediate country, was over one hundred thousand square miles.

     The project of establishing agricultural colonies in the Red river country provoked

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bitter hostilities of the North West Company. The introduction of civilization would prove the precursor of the destruction of the fur trade. But this scheme occasioned greater opposition because it was an attempt to obstruct the channels of the North West Company's trade.

     The Selkirk country laid directly across the path between Montreal and the interior, - between Fort William and the northern and northwestern posts. Its occupancy was a blockade, - an obstruction of the North Western routes to and from Fort William to their trading-posts. The intended effect was to cut their communication, interposing a hostile territory between their posts and the center of operations. From these very plains the North West Company had drawn their supplies of pemmican and provisions for voyages from Fort William to the north. Colonization was inimical to the presence of fur-producing animals, - was destructive of the business in which they were engaged. The North West Company resolved to defeat Lord Selkirk's scheme. They protested to the government against the validity of the grant to Selkirk, alleging that it had been corruptly secured, and that he received it as a free grant. They denounced the grant of territory as an usurpation by the Hudson's Bay Company, who had no territorial rights that could be conveyed, claiming that such grant could only emanate from the Crown. They denied that said grant was within the Hudson's Bay Territory, and urged that suit be instituted, to test the validity of the Selkirk deed. But the British government declined to interfere; it favored the Selkirk project. In 1912 and 1813, considerable numbers of Highlanders arrived in the Red river country, forming a colony called Assiniboia. The Governor (Colonel Miles McDonell) warned off parties of the North West Company, and prohibited the killing of any animals within the territory. To these proclamations the North Westers paid no respect. Difficulties between the settlers and employés of the company became of constant occurrence. Many settlers abandoned the colony; some were taken back to Canada. In 1814, Governor McDonell issued a proclamation in which he set forth the boundaries of Assiniboia. He prohibited all other persons under penalty of seizure and prosecution form carrying out of the defined limits during that year "any provisions, either of flesh, dried meat, grain or vegetables." This proclamation, aimed to prevent the North West Company from purchasing supplies, was successfully ignored by the North West Company employés. The settlers generally disregarded it. A number of farmers abandoned the settlement; it became a dead letter. In 1815, the colony was reinforced from Scotland by Lord Selkirk. Open hostilities followed; posts and forts were taken and destroyed. On the 19th of June, 1816, a decisive battle was fought in which the forces of the North West Company routed the colonists, twenty-two of whom were killed, among whom was Mr. Semple, the Governor of Assiniboia. This terminated the Red river colonization scheme of Thomas, Earl of Selkirk. As a civil magistrate, Lord Selkirk seized Mr. McGillivray, the principal partner of the North West Company, in charge of Fort William, and all the property. Numerous arrests were made of the North Westers who participated in the battle. They were tried in Canada and acquitted. The British Cabinet ordered the Governor-General of Canada "to require the restitution of all captured posts, buildings and trading stations, with the property they contained, to the proper owners, and the removal of any blockade or any interruption to the free passage of all traders and British subjects, with their merchandise, furs, provisions and effects throughout the lakes, rivers, roads and every route of communication used for the purpose of the fur trade in the interior of North American, and the full and free permission for all persons to pursue their usual and accustomed trade without hindrance or molestation."

                                    PARTNERSHIP BETWEEN THE NORTH WEST AND HUDSON'S BAY COMPANY.                                                    93

     The competition between the two fur companies continued. The Governor-General of Canada appointed a commissioner to make investigation, who recommended, as the only means of restoring peace, the union of the two companies in the prosecution of the fur trade. Nothing resulted from that investigation; the competition was more embittered and ruinous than ever. Both companies were reduced to the verge of insolvency. At this juncture, in the winter of 1819-20, Lord Bathurst, British Secretary of State for the colonies, interposed to promote a union of the two companies. His mediation was finally successful. On the 20th of March, 1821, an agreement was entered into by which both companies were to carry on the fur trade under the charter of the Hudson's Bay Company. The leading features of that settlement were that both companies should share equally the profits of the trade for the term of twenty-one years, commencing with the outfit of 1821. Each company was to furnish an equal amount of capital. The expenses were to be paid by and out of trade. No expense relating to colonization, nor to any business separate from the fur trade, could be a charge upon the partnership. Profits were divided into one hundred shares, forty of which were divided among the chief factors and chief traders. If a loss occurred one year on the forty shares allotted to the factors and traders, it was to be made up by the profits of the next year. An inventory and general account were to be made out annually on the 1st of June; and, of profits were not paid to the shareholders in fourteen days, an interest of five per cent was allowed.

     The governor and company were to appoint governors to preside at councils of chief factors, who carried into effect all acts authorized by the charter. In the absence of chief factors, senior chief traders were called upon to fill the council. Two-thirds constituted a majority for decision. It was necessary to have three chief factors, besides the president, to form a council.

     The forty shares to be divided among the chief factors and chief traders were subdivided into eighty-five shares. To each chief factor was allotted two of these subdivided shares; to each chief trader, one; the remaining seven were reserved for seven years to be divided among old servants in certain proportions.

     Auxiliary to and as a guarantee of the accomplishment of the arrangement, a bill ws introduced into the British Parliament entitled, "An act for regulating the fur trade and establishing a criminal and civil jurisdiction in certain parts of North America." This act passed July 2d, and enabled the Crown to issue a license of exclusive trade to this partnership," as well over the country to the east as beyond the Rocky Mountains, and extending to the Pacific Ocean, saving the rights of the Hudson's Bay Company over this territory." That is to say, in the territory granted to the Hudson's Bay Company by their charter, this license did not operate. The company in the Hudson's Bay Territory already enjoyed exclusive privileges; and this license recognized that territory as a province, excepting it as a British province from the operation of this license.

     On the 5th of December, the British government, by virtue of the provisions of the Statue of July 2d, granted to the Hudson's Bay Company and to William McGillivray, Simon McGillivray and Edward Ellice, representing the shareholders of the North West Company, a license of exclusive trade for twenty-one years, as against all other British subjects, "in all such parts of North America to the northward and westward of the lands and territories belonging to the United States or to any European government, state or power, reserving no rent. The grantees executing a penal bond in the sum of L5,000, conditioned to duly execute civil process in suits where the matter in controversy exceeded in value L200, all criminal process, and to deliver for trial in Canada all persons charged

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with the commission of crime. In brief, the law required, and they covenanted, that British law and judicature should be enforced in the countries they occupied. By this operation, criminal jurisdiction, and civil jurisdiction in matters over L200, of the courts of Upper Canada, were extended to the Pacific Ocean, in all places outside of organized British provinces, and not included in "any legally defined civil government of the United States." In civil actions involving less than L200, the matter was cognizable by a Justice of the Peace, appointed by the Crown. Every British subject in the territory west of the Rocky Mountains was guaranteed the protection of British law. There was no exemption for a citizen of the United States from being sent to Upper Canada to be tried for an offense in such unorganized American territory as this company might enter and conduct its trade. Despite the obligations of the treaty of 1818, which had expressly provided that neither nation would assert rights of sovereignty against the other, but that all subjects and citizens of both nations should be permitted to occupy, yet, in 1811, the Oregon territory was, by an act of the British Parliament and a license issued under it, declared to be west and north of the United States, and as such was conferred upon this partnership of the two great British fur companies. They were granted the exclusive trade upon the consideration that they would convert the territory into a British governed province. This fur-trading partnership was assigned a political mission, - to occupy the "territory westward of the Stony Mountains," and therein enforce British law.

     In 1824, the Hudson's Bay company acquired to themselves all the rights and interests of the shareholders of the late North West company, and became the sole grantees under the license of exclusive trade of December 5, 1821. The North West Company had been absorbed by its rival and enemy. It did not long survive the treacherous demoralization and supplanting of the Pacific Fur Company. The northwest coast of America, between California, and the Russian settlements, had become to be known quite generally as Oregon. In 1824, the Hudson's Bay Company, by its license for a term of years, enjoyed exclusively the Indian trade of that region; practically, it was the sole occupant of the territory.


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