Husdon's Bay Company : The Hudson's Bay Company was incorporated in 1670 under a charter which provided a monopoly to trade extending over the territory drained by the rivers flowing into Hudson Bay. However, the history of the Company is typified more by the development of techniques to combat fierce competition from a number of rivals, both within and without the fur trade, rather than by the sheltered development of monopolied capitalist enterprise. Throughout its long history, the Company successfully contended with French military and economic competition, challenges to its chartered rights from various interests in England, and bitter rivalry from the North West Company. The charter was surrendered only as portions of its territories began to develop from fur trade outposts to organized settlements and colonies.
The essential strength of the Company derived largely from its administrative structure which preserved integrity of purpose in its enterprises and exploited the advantages of the Hudson Bay route. Under the original Charter of 1670, control of the organization was vested in a governor, deputy governor, and a committee of seven members; all were required to be shareholders. The decisions of these directors were subject to approval by the shareholders at the annual General Court. Establishments on Hudson Bay were subject to the supervision of the resident Governors reporting to the Governor and Committee in London.
The Charter notwithstanding, a dominant theme in the Company's early history is the struggle with the fur trading empire of New France. Strong competition from French traders disrupted the Company's trade from 1686 until the peace of Utrecht in 1713. The restoration of York and Moose Factories together with the development of Churchill and Eastmain initiated a long period of steady if unspectacular growth.
Throughout the eighteenth century, the Company pursued a policy of gradual expansion while confining its activities primarily to the shores of Hudson Bay. This policy produced continuous dividends but provoked severe criticism from Arthur Dobbs, an Irish M.P., who maintained that the Company had refused to explore the full extent of its territories and had therefore violated its Charter. Although the Parliamentary Inquiry convened to investigate the charges in 1749 vindicated the Company's conduct, it could not disguise the potential vulnerability of the Company's position on the shores of Hudson Bay. After the conquest of North America by the British in 1759, the old challenge of the French fur traders was renewed by a new group of independent traders operating from Montreal. The Company responded to this challenge by establishing Cumberland House, 450 miles inland from York Factory in 1774.
On moving inland, the Company found surprising numbers of independent traders throughout large tracts of the North West. The two major rivals, the XY and North West companies merged in 1804 under the name North West Company and began spirited and often violent competition for the furs of the far west. The Hudson's Bay Company retaliated by establishing inland forts from Lake Superior to Lake Athabasca. However, the expansion placed a serious strain on the Company's financial resources and brought about a corresponding decline in dividends. The North West Company also found itself in serious difficulty because of the struggle, and in 1819 negotiations began for a merger of the two companies.
Union of the two companies in 1821 led to a reformation of the Hudson's Bay Company's organization in North America. Under the terms of the merger, the governor, deputy governor, and committee hierarchy remained intact except for the addition of an advisory board composed of two men from each company who reported to the governor and committee. This advisory board was short lived and lapsed in 1824. In North America, the Company was organized into specific territories or departments. The Northern Department, with its main depot at York Factory, included the territory from Rainy Lake on the western end of Lake Superior to the Pacific Ocean. It also included the posts in the old Oregon Territories. The Southern Department, with its headquarters at Moose Factory, controlled the trade of certain posts in what is now Ontario and Quebec. Later the Montreal Department was established to supervise the trade on the north shore of the St. Lawrence, the Labrador, and some Districts previously controlled by the Southern Department. Under the agreement of 1821, the Northern and Southern Departments were each controlled by a governor. However, by 1826, all departments were placed under the administration of George Simpson as Governor of Rupert's Land. Within each department, councils of commissioned officers from the various districts met annually to advise the governors on the conduct of the trade.
The merger of 1821 extended the Company's undisputed control over a territory stretching from Labrador to British Columbia. Though a chain of forts encompassed much of this area, it remained largely unsettled country. With the exception of Lord Selkirk's Red River colony and the settlement of Fort Victoria, the Company had yet to encounter the problems of administering a settled area. However, by mid-century, the expanding population of Upper Canada was agitating for access to the unsettled territories of Rupert's Land. A Select Committee of the British House of Commons inquired into the Company's license for exclusive trade in 1857, and recommended that Vancouver Island be given the status of a Crown Colony, and that the Company's license should extend only over areas unsuitable for settlement. The Committee further suggested that areas such as Red River be ceded to Canada when suitable arrangements could be made. The Company itself was divided on the issue but began a series of negotiations with the Province of Canada and the British Government. The issue remained unsettled until the British Government devised the terms of the agreement which eventually comprised the Deed of Surrender of 1869, given Royal assent in 1870.