3/26/2010:
When Alexander Henry built a North West Company trading post near the Red River in 1801, he knew the competition would be stiff.
For nearly a century, the North West Company's bitter rival, the Hudson's Bay Company, had enjoyed a monopoly in the British fur trade. With forts along Hudson's Bay, the Hudson's Bay Company had relied on self-employed, independent traders called "pedlars" to bring in pelts to exchange for trade goods such as guns, kettles, and knives. Since pedlars competed with each other for trade with the First Nations, all too often it turned into vicious underselling and disruptive cutthroat retaliations between the traders. Eventually, a group of merchants in Montreal saw in these rivalries an opportunity to form an enterprise to compete with the Hudson's Bay Company. In 1784, they worked with the traders to pool their capital into a common stock, with each individual holding proportionate shares of the business venture. Thus was born the North West Company.
Called Nor'Westers, their freight-carrying canoe route started at Montreal, crossed the Great Lakes to Grand Portage on Lake Superior and into the river systems of Canada.
In the early years, the Nor'Westers competed successfully against the Hudson's Bay Company, thanks in part to Alexander Henry's Fort Pembina. With a far-flung trade network stretching across the expanse of northern Canada, provisions could be expensive to secure. So from Fort Pembina, Henry manufactured provisions like pemmican, sugar made from box-elder sap and other essential goods. These were then delivered to Nor'Westers scattered throughout northern Canada. With the decline in beaver from disease and over-trapping, this manufacturing became Fort Pembina's most important function. In 1808 alone, over 334 bags of pemmican and 48 kegs of sugar were shipped from the fort.
But as the North West Company successfully expanded into the interior of North America, the Hudson's Bay Company was forced to do likewise. They hired men to establish an inland trade network, often placing a trading post next to their rival's. Thus when Henry first erected the post at Pembina, the Nor'Westers were alone on the Red River. But within months of its completion, the Hudson's Bay Company built a post nearby, on the east side of the Red River. This move, duplicated throughout northern North America, put pressure on both companies' bottom lines. Profits declined while their costs rose. By the late 1810s both the Hudson's Bay and North West Companies were facing financial ruin. Making matters worse, Hudson's Bay Company established an agricultural colony on the Red River that undermined the Nor'Westers' market for pemmican and other supplies.
Finally, the conflicts and financial problems that had plagued the North West Company and Hudson's Bay Company for decades were resolved on this day in 1821 when the two merged under the name, Hudson's Bay Company.
Dakota Datebook written by Rich Campbell
Sources:
Davidson, Gordon Charles, The North West Company. University of California Press, 1918
Robinson, Elwyn B. History of North Dakota. University of Nebraska Press, 1966
Herman, Arthur. How the Scots Invented the Modern World. Three Rivers Press, 2001
Coues, Elliott, ed. New Light on the Early History of the Greater Northwest: Henry-Thompson Journals Vol. 1. New York Francis P. Harper, 1897
Lounsberry, Clement Augustus Early history of North Dakota: essential outlines of American history, F. H. Lounsberry, 1913.