The North West Company was a fur trading business headquartered in Montreal from 1779 to 1821. It competed with increasing success against the Hudson's Bay Company in what was to become Western Canada. With great wealth at stake, tensions between the companies increased to the point where several minor armed skirmishes broke out, and the two companies were forced to merge.
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There are historical references to a North West Company as early as 1770, involving the Montreal-based traders Benjamin Frobisher, Isaac Todd, and others, but the standard histories trace the Company to a 16-share organization formed in 1779. For the next four years, it was little more than a loose association of a few Montreal merchants who discussed how they might break the stranglehold the Hudson's Bay Company held on the North American fur trade. In the winter of 1783-84, 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 Simon McTavish, along with investor-partners who included Robert Grant, Nicholas Montour, Patrick Small, William Holmes and George McBeath.
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 twenty shares, some held by the so-called agents at Montreal, 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,[1] and in 1793 he went overland from Peace River to the Pacific Ocean[2] 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 all the way to the Gulf of Georgia on the Pacific Coast.[3]
The death of Benjamin Frobisher opened the door to a takeover of the North West Company by Simon McTavish, who made a deal with Frobisher's surviving brother Joseph. The firm of McTavish, Frobisher and Company, founded in November 1787, effectively controlled eleven of the company’s twenty outstanding shares. At the time the company consisted of 23 partners, but "its staff of Agents, factors, clerks, guides, interpreters, more commonly known today as voyageurs amounted to 2000 people."[4] In addition to Alexander Mackenzie, this group included Americans Peter Pond and Alexander Henry. Further reorganizations of the partnership occurred in 1795 and 1802, the shares being subdivided each time to provide for more and more wintering partners.
Vertical integration of the business was completed in 1792, when Simon McTavish and John Fraser formed a London house to supply trade goods and market the furs, McTavish, Fraser and Company. While the organization and capitalization of the North West Company came from Anglo-Quebecers, both Simon McTavish and Joseph Frobisher married French Canadians. Numerous French Canadians played key roles in the operations both in the building, management, and shareholding of the various trading posts scattered throughout the country, as well numbering among the voyageurs involved in the actual trading with natives.
In the northwest, the Company expanded its operations as far north as Great Bear Lake, and westwards beyond the Rocky Mountains. For several years, they tried to sell furs directly to China, using American ships to avoid the British East India Company's monopoly, but little profit was made there. The company also expanded into the American Northwest Territory. In 1796, to better position themselves in the increasingly global market, where politics played a major role, the North West Company briefly established an agency in New York City.
Despite its efforts, the North West Company was at a distinct disadvantage in competing for furs with the Hudson's Bay Company, whose charter gave it a virtual monopoly in Rupert's Land, where the best furs came from. The company tried to persuade the British Parliament to change arrangements, at least so the North West Company could obtain transit rights to ship goods to the west needed for trading for furs. It is said that Simon McTavish made a personal petition to Prime Minister William Pitt, but all requests were refused.
A few years later, with no relief to the Hudson's Bay Company's stranglehold, McTavish and his group decided to gamble. They organized an overland expedition from Montreal to James Bay and a second expedition by sea. In September 1803, the overland party met the company's ship at Charlton Island in what is now Nunavut Territory. There, they lay claim to the region, inhabited by the Inuit, in the name of the North West Company. This bold move caught the Hudson's Bay Company off guard. In succeeding years it retaliated rather than reaching a compromise, which McTavish had hoped might be negotiated.
Simon McTavish brought several members of his family into the company, but nepotism took a back seat to ability. His brother-in-law, Charles Chaboillez, oversaw the Lower Red River trading post. McTavish also hired several cousins and his nephews William McGillivray and Duncan McGillivray to learn the business. William McGillivray was groomed by his uncle to succeed him as Director of the North West Company, and by 1796 he had effectively done so, acting as Montreal agents' representative at the annual meetings at Grand Portage, and later at Fort William.
Simon McTavish was an aggressive businessman who understood that powerful forces in the business world were always ready to pounce on any weakness. As such, his ambition and forceful positions caused disagreements between him and some of the shareholders, several of whom eventually left the North West Company during the 1790s. Some of these dissidents formed their own company, known unofficially as the "XY Company", allegedly because of the mark they used on their bales of furs. Their cause was greatly strengthened in 1799, when the North West Company's hero explorer, Alexander Mackenzie, quit his old partnership and soon after joined them.
There was intense competition between the rivals. When Simon McTavish died on July 6, 1804, the new head William McGillivray set out to put an end to the four years' rivalry. It had escalated to a point where the master of the North West Company post at Great Bear Lake had been shot by an XY Company employee during a quarrel. McGillivray was successful in putting together an agreement with the XY Company in 1804. It stipulated that the old North West Company partners held 75 per cent of the shares, and the former XY Company partners the remaining 25 per cent. Alexander Mackenzie was excluded from the new joint partnership.[5]
Under William McGillivray, the Company continued to expand, and apparently to profit, during the first decade of the 19th century. Competition with the Hudson's Bay Company was intense, however, and profit margins were squeezed. The North West Company branch in New York City had allowed the Canadians to get around the British East India Company's monopoly and ship furs to the Chinese market. Cargo ships owned by the North West Company conveniently sailed under the American flag, and doing so meant continued collaboration with John Jacob Astor.
However, Astor was as aggressive as Simon McTavish had been. An intense rivalry soon developed between him and William McGillivray over the Oriental market and westerly expansion to unclaimed territory in what is now the Columbia River basin, in the present-day states of Washington and Oregon. Astoria's Pacific Fur Company beat the North West Company in an effort to found a post near the mouth of the Columbia, Fort Astoria. A collapse in the sea otter population and the imminent possibility of British seizure of Astoria during the War of 1812 led to its sale to the North West Company in 1813, resulting in an awkward situation when HMS Racoon and its Captain Black arrived and went through a ceremony of possession, even though the fort was already ostensibly a British possession. Due to treaty complications of the Treaty of Ghent requiring the return of seized assets, putative ownership of the site was returned to the United States in 1817, although the fort, renamed Fort George by the North West Company, continued to operate until the Hudson's Bay Company's takeover and the replacement of Fort Astoria by Fort Vancouver.[5]
The Canadian fur trade began to change in 1806, after Napoleon Bonaparte ordered the blockade of the Baltic Sea as part of the ongoing struggle between France and Britain for world dominance. Britain was dependent for almost all of its timber on the Baltic countries and on New Hampshire and Massachusetts. By then, however, tensions had also begun to escalate again between Britain and America, and in 1809 the American Government passed the Non-Intercourse Act, which effectively brought about an almost complete cessation of trade between the two countries. Britain then found itself totally dependent on her Canadian colony for its timber needs, especially the great white pine used for ships' masts. Almost overnight, timber and wood products replaced fur as Canada's number one export. Fur remained profitable, however, as it had a high value-to-bulk ratio, and in an economy short of ready money, fur was routinely used by Canadian merchants to remit value to their London creditors.
By another crisis hit the fur industry, brought on by the over-harvesting of animals, the 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. All these events only intensified competition, and 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, seizing their outpost property in Fort William and charging them with responsibility for the deaths of twenty-one 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 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 now was harming the business in both its costs and morale of others.[6][7]
By 1820, the company was issuing coinage, each coin representing the value of one beaver pelt. However, the continued existence of the North West Company was 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, whereby the North West Company name disappeared after more than forty years in existence. 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. 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.
In 1990 the northern trading posts of the Hudson's Bay Company were sold to an employee consortium, which revived the name The North West Company.
Beyond the non-operating investors, these were some of the post proprietors, clerks, interpreters, explorers and others of the nearly 2,500 employed by the North West Company in 1799[8]:
Further information on the North West Company can be found in Marjorie Wilkins Campbell's 1957 book The North West Company, as well as her 1962 biography of William McGillivray, McGillivray, Lord of the North West. Campbell served as a consultant to the government of Ontario for the restoration of the North West Company trading post in Fort William, Ontario, Fort William Historical Park. Campbell also wrote a book for young adults—The Nor'westers—which won the 1954 Governor General's Awards. In addition, the North West Company is a case example in John Roberts The Modern Firm (Oxford).
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