After trapping beaver pelts when they reached their best quality (winter), Indigenous Peoples travelled to the trading posts in summer. These traders were middlemen, bringing furs from inland communities and trading furs for manufactured goods eg tools, guns, textiles, food.
Until 1763 HBC struggled with the French for control of fur trades in southern Rupert’s Land, and naval battles erupted on Hudson & James Bays. In the Treaty of Paris 1763, the Montreal overland trade network was taken by the British. By 1774 HBC trade had been undercut enough that the Governor designed an aggressive policy of inland expansion, beginning with building facilities on the Saskatchewan River.
Intensive competition with the North West Co. spilled beyond Rupert’s Land into the Pacific slope, combining economic conflict with occasional physical violence. In 1821 the parties merged, and the British Parliament extended the Co.’s monopolies to include the N.W Territories.
Bringing together the different business traditions of the North West Co. and HBC required changes in the new Co’s administrative structure. British North America was divided into trading departments and districts. District managers met annually in departmental council meetings presided over by the Governor in North America, Sir George Simpson. These councils passed regulations governing local trade, determined workers’ deployment and established the logistical requirements. The officers also had a vested interest since they shared in the profits, according to the 1821-71 deed polls. But Simpson had considerable power, and the London Governor overruled local decisions. Post-merger, the HBC closed many unprofitable trading posts, adversely damaging Indigenous groups whose survival relied on fur.
After 1821, independent free Métis traders at the Red River Colony opposed the Co’s monopoly rights, which had been renewed in 1838. The issue ended in the famous 1849 Sayer Trial, where Métis man Pierre-Guillaume Sayer was tried and convicted of trading with Indigenous groups, violating the Co’s legal privileges. The court’s decision to free him effectively opened the trade of Rupert’s Land.
To standardise trade between posts, HBC introduced the Made Beaver as the currency (1857). All furs were valued according to the equivalent of one prime male beaver skin. Hudson's Bay Co. fur trade impacted on Indigenous peoples, many of whom abandoned their life-styles and economy, and relied on European manufactured goods for survival.
Although the Co.’s primary concern remained the fur trade, it increasingly provided government for settlers in Red River Valley and Vancouver Island. Only in 1849 did Britain grant the Vancouver Island colony to the HBC, to be used as an agricultural settlement.
During the Fraser Gold Rush in 1858, the mainland colony of British Columbia was created out of New Caledonia. Governor James Douglas was required by the British government to resign his HBC commission before becoming Governor of BC. Thus the Co. began to relinquish its colonial responsibilities. It was then Canada’s growing expansionist movement saw the annexation and settlement of the NW as essential to Canada’s future.
Expansionists portrayed the HBC as delaying Canada’s growth; they claimed that to protect its fur trade interests, the HBC had proclaimed that the NW was a barren wasteland, unsuited to agricultural settlement. But this belief was challenged by reports of the Palliser and Hind expeditions in 1857-60 which encouraged westward British settlement.
In 1863, International Financial Society bought control in HBC, signalling a shift in the Co: most new shareholders were less interested in the fur trade than in real estate and economic development in the West. Negotiations held with the Colonial Office and with the Canadian government DID result in selling Rupert’s Land to Canada in 1870. In the agreement the Co retained title to the old trading lands.
In 1970, 300th year in HBC history, the Queen formally transferred it from U.K to Canada, with new headquarters in Winnipeg. The Co. owned 239 department stores in Canada and U.S then. But after failing to secure new financing or buyers, the historic 355-year-old retailer permanently closed its last doors in 2025 and completed liquidation.
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