establishing posts at Manhattan and what is now Albany. Thus began the
rivalry between two great economic systems—the one based on the St. Lawrence,
the other on the Hudson and the port of New York, soon to be joined by
a third, based in London and gaining access to the North American interior
by way of Hudson Bay. See
The French government supported the St. Lawrence traders by defending their territorial claims to the region and encouraging the activities of French missionaries in their work of converting the Indians to Roman Catholicism. Montreal (originally known as Ville-Marie) was founded in 1642 as a centre for missionary activity, but it soon became the base of the expanding continental fur trade. The French trade was conducted by private companies granted monopoly trading powers by the French king in exchange for commitments to promote settlement and the work of the Church. Between 1627 and 1645 the trade and the administration of New France were entrusted to the Compagnie des Cent Associés, established by Cardinal Richelieu to improve the settlement efforts and the fur trade. After a period of local administration, the colony was subjected to direct French rule in 1663. Under the French Minister of Marine, Colbert, efforts were made to increase the rate of settlement and to broaden and diversify the economic base of New France. Many men sent to the colony as settlers, however, were drawn into the more immediately profitable fur trade, often forsaking the settlements for a life in the woods where some took up the ways of the native people. Efforts by the French authorities to regulate the trade were seldom successful.
In the late 1600’s the French fur traders on the St. Lawrence were confronted by a new source of British competition. In 1670 a group of English aristocrats and merchants induced the King to grant them the privilege of exploiting the resources of all the lands draining into Hudson Bay, a huge territory which they named Rupert’s Land". The French disputed the British claim to this territory which lay to the north and west of New France, and they tried to prevent the new Hudson’s Bay Company from establishing trading posts on the coast of the Bay. Under the terms of the Treaty of Utrecht in 1713, however, France abandoned its claims in the region and the Hudson’s Bay Company subsequently developed a well-organized fur trade there.
As the fur trade moved inland to the Great Lakes region in the first half of the 17thth Century the southern branch of the trade was drawn into the conflict between Britain and France. The English established posts in the Hudson River Valley and, allied with the Iroquois, engaged in a fierce competition with the French traders (allied mainly with the Hurons) for control of the trade in the central interior region. Until the early 18th century most of the latter were organized as independent proprietors or partnerships but, as the Montreal-based trade expanded further into the continental interior, increasing amounts of capital were required and a number of larger organizations were formed. Most of these were financed by wealthy Montreal "bourgeois", some of whom organized small companies to lease trading posts and hire workers to voyage west each spring with trade goods and bring back furs in the fall. (Some historians speculate that these fur-trading groups, largely concentrated in Montreal, constituted the beginning of a local, French Canadian business class, the further development of which was cut short by the British conquest in the 1760’s.) The trade goods they used were usually obtained through other Montreal merchants, some of whom also acted as intermediaries in marketing the furs in France. By the outbreak of the Seven Years’ War in 1756 the Montreal fur trade had expanded westward through the southern part of the Canadian Shield, south into the upper part of the Mississippi Valley and west across the prairies to the foothills of the Rocky Mountains.
After the British conquest of New France in 1759-60, the French Canadian merchants and bourgeois of Montreal were supplanted by American, English and Scots businessmen. The success of these newcomers in redeveloping the Montreal-based trade in the interior and in establishing trading relations with dealers in London threatened the HBC interests and forced the company to revise its mode of operations. It abandoned its former practice of trading only at its major posts along the coast of Hudson Bay in favour of sending its employees inland to compete for furs near their source. In the early 1780’s the Montreal traders (led by immigrant entrepreneurs from the Scottish Highlands and by some Empire Loyalists fleeing the American Revolution) reacted to the new aggressiveness of the HBC by forming the North West Company. This new organization quickly established a dominant position in the northwestern interior and virtually monopolized the Montreal-based trade.
There ensued a vigorous competition between the HBC and the NWC in the course of which the fur trade was pushed to the limits of the continent. Alexander Mackenzie, employed by the NWC, reached the Arctic Ocean in 1789 and the Pacific in 1793.
After a management reorganization in 1810, the HBC successfully challenged the NWC monopoly in the Athabaska region and supported the efforts of the Earl of Selkirk, one of the new major shareholders of the HBC, who was interested in establishing an agricultural settlement in what is now southeastern Manitoba. (He had earlier undertaken to establish settlements of displaced Scottish Highlanders in Prince Edward Island and in Upper Canada.) His new venture, Red River Colony, was initiated in 1812, utilizing a land grant from the HBC. The project was strongly opposed by the NWC and its many Métis supporters. The conflict culminated in violence at Seven Oaks in 1816, prompting the British government to bring pressure on the two companies to enter into some form of business agreement with one another. The outcome was the union of the two companies in 1821 — in effect, the absorption of the NWC into the HBC.
Under the direction of George Simpson, the HBC successfully coped with competition from a number of sources on the fringes of its vast inland empire —the Russians and Americans on the west coast, Métis traders in the Red River country, and the American Fur Company in the Great Lakes region. The company was, however, forced to vacate the Columbia River territory south of the 49th parallel in 1846. Simpson’s efficient management extended to carefully devised policies with respect to the native people of the region, the over-all effect of which was to make most of that population dependent upon its relationship with the company and, indirectly, on the European economic system, while ensuring the availability of fur supplies to the company. The HBC remained profitable even after silk replaced beaver as the raw material for hat manufacturing around 1830.
The end of the fur trade as an important force in Canadian development came as a result of the encroachment of new forms of economic activity on its territory. In the south and east it was done in by agricultural settlers and the forest industries. In the west it was the prospect of large-scale prairie settlement. Three years after Simpson died in 1860, the Hudson’s Bay Company was sold to a group of investors whose primary interest was in profiting from land speculation. In 1870 most of the HBC territory was surrendered to Canada and the historic fur trade came to an end. The HBC remained a major force in the trapping industry, although it relinquished much of its former responsibility for the welfare of the native people to the church missions and the government. The fur industry subsequently played a minor role in the Canadian economy as a whole, although it remained important in the northern regions where it was the main source of employment and income for native people and a small number of Europeans who derived a living in whole or in part from trapping.
The fur trade has been called the quintessential staple industry, and its history provides perhaps the clearest demonstration of how a particular form of production could influence not only the development of an economy, but a country’s social, cultural and political institutions as well.
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