A History of Canadian Wealth/Chapter III

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Chapter III. The Hudson's Bay Company




Preface | Chapter I | Chapter II | Chapter III | Chapter IV | Chapter V | Chapter VI | Chapter VII | Chapter VIII | Chapter IX | Chapter X | Chapter XI | Chapter XII | Chapter XIII | Chapter XIV | Chapter XV | Chapter XVI | Chapter XVII


King Charles II found in America an easy way of rewarding servitors and favorites. To one group of these he gave an extensive baronial feudal dominion in Virginia. Another group of intimates and servers composed of Prince Rupert, Count Palatine of the Rhine, Duke of Bavaria, Cumberland, etc., the Duke of Albermarle, otherwise General Monk, who had been instrumental in restoring Charles II to the throne, the Earl of Craven, Lord Arlington, Lord Ashley together with Sir John Robinson, Sir Charles Vyner and other knights and merchants of London, obtained from Charles what turned out to be a far more substantial and enduring gift. This was the charter in perpetuity for the Hudson’s Bay Company, granted by Charles II in 1670 to “the Governor and Company of Adventurers Trading into Hudson’s Bay.”

At the very time that Charles munificently conferred this charter, Canada was claimed as French territory ; and in fact the King of France, 43 years previously, had granted a similar charter to a French company. Canada — or at least what was then called Canada — did not become British territory by conquest until more than a century after the granting of the Hudson’s Bay Company’s charter. It was the asserted illegality of the whole charter that much later caused the most emphatic protests1 against the alleged usurpations and extravagant claims of that Company.2

Extraordinary Powers Conferred

The charter granted by Charles II to the Hudson’s Bay Company conferred the most extraordinary powers and sweeping privileges.

The Company was endowed with an exclusive and perpetual monopoly of trade and commerce of all the seas, straits, bays, rivers, lakes, creeks, and sounds “ in whatsoever latitude they shall be ” that lay within the entrance of Hudson’s Straits “ together with all the lands, countries and territories ” adjacent to those waters “ not now possessed by any of our own subjects or the subjects of any other Christian Prince or State.”

Sovereignty Guaranteed

But these rights and privileges were by no means all. Besides the exclusive trade and commerce, the Company was granted possession of the lands, mines, minerals, timber, fisheries, etc., and was vested with the full power of making laws, ordinances and regulations at pleasure, and of revoking them at pleasure. It could also impose penalties and punishments, “ provided the same are reasonable, and are not repugnant to the laws of England ” — a superfluous provision considering that little news of what subsequently happened in the vast wilderness controlled by the Hudson’s Bay Company ever reached England, although the profits never failed to reach there.

No British subjects were allowed to trade within the Company’s territories without leave from the Company in writing and under its seal ; if this law was violated all goods of the trespassers brought to England were to be forfeited, one-half to go to the King, and the other half to the Company. No liberty of trade was to be given by the King to any person without the Company’s consent. There was to be, it was provided, one vote at the Company’s meetings for every £100 put in. All of the territories, forts, factories, agencies, etc., were placed under the absolute jurisdiction of the Company, which was vested with the right of appointing Governors and other officials to preside in its territories, and judge in all causes, civil and criminal, according to the laws of England ; it was further provided that criminals could be judged on the spot or be sent to England for trial.

Force Placed at the Company’s Disposal

For the protection of its trade and territory the Company was empowered to employ an armed force, appoint commanders, erect forts and take other necessary measures. If any British subject was found trading without the Company’s leave, the Company could seize him and pack him off to England for trial. All admirals and other naval and military officers, also mayors, sheriffs and other authorities were obliged, by the terms of the charter, to aid and assist in the execution of the rights, powers and privileges thus granted to “ the Governor and Company of Adventurers Trading into Hudson’s Bay,” otherwise the Hudson’s Bay Company of which Prince Rupert was named first Governor.3 The only payment demanded for these immense powers was that the Company was required to pay two elks and two black beavers whenever and as often as “ His Majesty, and his Majesty and his successors ” should enter their (the Company’s territories), etc.

Thus came into existence a Company of mighty and entrenched powers which since that time to this present day has had the most dominating relation to the economic development and the economic exploitation of Canada. The enormous profits, compounded and invested and re-invested with multifold returning profits which the Hudson’s Bay has drawn from Canada during more than 240 years of its aggressive existence, can be traced back to the gratuitous charter in perpetuity that Charles II, in a bold “ royal stroke of business ” granted for a huge territory to which (so far as strict technical legal jurisdiction went) it is a question whether his government had the remotest claim.

Stock Watering Begins Early

The Hudson’s Bay Company had not been long in operation before it began a process of stock-watering. In 1676 its stock was £10,500. In 1690 the stock was trebled, not by subscription but by the creation of a nominal or watered stock, and the capital stock was increased to £31,5oo. By the same hydraulic process the stock was again trebled and declared to be £94,500, and a subscription was paid in of £3,150, which was also trebled. Of the total capital of £103,950 on December 23, 1720, only £13,150 had been actually paid in.4

Manifestly there must have been large profits to justify this successive stock-watering. The profits were, in truth, not merely large but great. In response to a summons from the Lords of the Committee of Privy Council for Trade, J.H. Pelly, Governor of the Hudson’s Bay Company in 1838, examined the old books and, in a communication dated Hudson’s Bay House, February 7, 1838, informed the committee that : —

Great Profits from the Start

“Between the years 1670 and 1690, a period of 20 years, the profits appear to have been very large, as, notwithstanding losses sustained by the capture of the Company’s establishments by the French in the years 1682 to 1688, amounting to £118,014, they [the Hudson’s Bay Company] were enabled to make a payment to the proprietors in 1684 of 50 per cent.; and a further payment in 1689 of 25 per cent.

“ In 1690 the stock was trebled without any call being made, besides affording a payment to the proprietors of 25 per cent. on the increased or newly-created stock.”

Pelly went on to say that notwithstanding losses to the amount of £97,500 in the years 1692-1697 because of the capture of the Company’s establishments by the French, and the consequent necessity of borrowing money at six per cent interest, the Company “were enabled, nevertheless, in 1720, again to treble their capital stock with only a call of 10 per cent. on the proprietors, and, notwithstanding another heavy loss sustained by the capture of their establishments by the French under La Perouse, in 1782, they [the Company] appear to have been enabled to pay dividends of from 5 to 12 percent., averaging nine per cent.; and showing, as nearly as I am able to judge from the defective state of the books during the past century, profits on the originally subscribed capital stock, actually paid up, of between 60 and 70 per cent. per annum from the years 1690 to 1800.”5 Further large profits, as we shall see, were gathered in after that date.

The Company’s System Described

The traffic of the Hudson’s Bay Company was then and long remained almost exclusively that of furs. These continuing great profits were extracted, it appears, not only from a systematic exploitation of the Indian tribes but also by a rigorous, tyrannical exploitation of the Company’s own employes, or “servants” as they were then called. These facts are not conjecture, but were disclosed in the ample and corroborative testimony given by employes of the Company before the Select Investigating Committee of the House of Commons in 1749.

Matthew Sergeant testified on that occasion that the Indians bartered their furs for brandy, tobacco, blankets, beads and other goods ; that the servants of the Company were absolutely forbidden to trade for themselves with the Indians ; that he had seen one employe beaten merely for going to an Indian tent to light a pipe, and that these punishments were inflicted at the arbitrary will of the Governor of the Company. Sergeant further testified that he heard frequent complaints of the Indians being beaten by the Governor ; that but very few of the Indians would steal, and that they were very civil and good-natured when sober. The chief complaint of the Indians, said Sergeant, was that they were allowed too little for their goods.6

Starvation and Lashing

John Hayter, who had been house carpenter for the Hudson’s Bay Company at Moose River, Churchill and Albany (on James’ Bay) for six years, testified that the last year he was there the Company’s servants “ were starved, though there were victuals enough in the storehouse ”; that men were lashed for trading with the Indians ; and that one man, named Pilgrim, died from want of provisions, although there were provisions enough in the factory [agency].7

Edward Thompson, a surgeon, for three years in the Company’s service at Moose River, testified that he had seen the Company’s officials abuse the Indians. “ And being asked, if he knew for what reason the Governors beat the Indians, he said, He remembered an Instance of two Indians almost starved, who came down aboard them to get some bread and cheese ; upon which the Governor took an Oar and beat them most unmercifully, saying, ‘ I’ll teach you to go aboard without my leave.’” That the Governor could not imagine that these Indians had been trafficking, since he knew they had not one skin ; and the Witness thinks his Reason for treating them in that manner was that they would give the witness and the Rest some Intelligence of the Country.” Thompson added that he never knew the Indians to pilfer “ except when hard put to it.”8

Shortweighting Practised

That shortweighting was then practised was shown by the testimony of Christopher Bannister, armorer for the Hudson’s Bay Company for 22 years. Asked whether the Company did not give a better price to the Indians than formerly for their furs he replied that he believed not; “ for that he himself had been ordered to shorten the Measure for Powder which ought to be a Pound, and within these 10 years had been reduced to an Ounce or two.”9

The same fact of cheating the Indians was testified to by Richard White who had been for more than 10 years with the Hudson’s Bay Company at Churchill. He stated that the trade with the Indians was fixed by a Company Standard of Instructions, and that the Governors never traded lower than the Standard directed, but on the contrary generally doubled the Standard;—“that is, where the Standard directs one skin they generally take two.” Testifying further, White stated that one of the Company’s servants had been put in irons and whipped for conversing with Indians ; that the Company’s men were positively prohibited, on pain of forfeiting all wages, from conversing, trading and trafficking with the Indians, directly or indirectly.”10

Various other witnesses testified that the Company’s governors would not allow them to raise even a little grain and vegetables for themselves. The Company allowed no consideration to interfere with its monopoly or profits ; it reserved the exclusive right to itself not only to sell but to raise produce. Accustomed now to the use of guns in hunting, the Indians were forced to depend upon the Company for gunpowder ; if denied this, it was often equivalent to consigning them to starvation. This fact, as we shall see in a later chapter, eventually produced conditions of the most tragic character, causing frequent and widespread mortality among various Indian tribes throughout Canada.

Liquor for Furs

When liquor was first introduced, it was brought over from Europe in large barrels, but in the overland transportation it was found convenient to divide it into small kegs. By diluting the liquor with water, a greater quantity, of course, produced a greater amount of furs. Much later the Indians learned that poured on a fire, good liquor would flame up ; but if diluted it would quench the fire. Hence the common usage of the term “fire water” among the Indians.

Writing in 1752, Joseph Robson declared that the Hudson’s Bay Company never gave orders for “ virtue and sobriety until after several hearings in which its barbarity to the natives and their servants was proved by sundry affidavits,” and that the Company “ had never attempted to civilize the one or sent over a clergyman for the instruction of the other, nor kept up the least appearance of any factory in the Bay . . .”11 But this display of reformation was of the most superficial and ephemeral nature, intended for public effect. As we shall have frequent occasion to note in later chapters, the process of unmitigated exploitation was carried on by the Hudson’s Bay Company for more than a century later.

Thanks to this early parliamentary investigation, we are able to get some salient details of the methods used in the early years of the Hudson’s Bay Company which has been and still is so puissant a factor in the economic life of Canada. The testimony of nearly two centuries ago affords some significant glimpses into the methods employed in the primitive accumulation of capital in Canada. It was estimated that by 1857 the Hudson’s Bay Company chiefly had pulled £20,000,000 sterling in profits out of Canada. But this sum is by no means to be estimated by the present purchasing power of money. During the decades and centuries when money was of greater value than in its later progressive decline in purchasing power, every pound or dollar was of far greater value than subsequently. Judged by modern standards, this £20,000,000 obviously represented an amount many times greater. Moreover, gathered in as it was during the course of nearly two centuries, it was repeatedly compounded by repeated investments and reinvestments.

Here was one of the prime origins of the capital flowing into England, part of which capital went later into factories, mines and other capitalist concerns at home, and part into investments in Canada and elsewhere. An additional source of the origin of English capital was the profits derived from the traffic in Negro slaves.

Of the later history of the powerful Hudson’s Bay Company :—its exploitation of the Indian tribes ; its wars with competitive trading companies ; its supremacy over a stupendous territory, reaching even to what is now San Francisco ; its methods and its profits ; its demanding and receiving great sums from the United States and Canada for the surrendering of title to territory which it claimed under the grant of Charles II ; and its retention of immense and valuable areas, much of which it still owns — all of these facts will be narrated in subsequent chapters. From the Hudson’s Bay Company came officials who developed into land, railroad, steamship, and bank magnates — men promoting or controlling transportation and banking systems and owning vast wealth and resources.

Notes

1. The charter was granted on the nominal condition that a new passage to the “South Seas” was to be discovered. In 1746, Arthur Dobbs and other petitioners insisted that the Hudson’s Bay Company had not carried out this condition, and that its charter was void and forfeited. Dobbs and associates asked in vain for similar powers and privileges.— Parl. Report of Aug. 10, 1748, British House of Commons.

2. In his testimony before the Canadian Legislative Committee of 1857, William MacD. Dawson, head of the Crown Woods and Forests Branch of the Government at Toronto, stated these facts, and pointed out that the early boundaries of Canada, or New France, undisputedly included the whole of Hudson’s Bay. The petition of the Board of Trade of Toronto likewise set forth the same facts.—See Report from the Select Committee on the Hudson’s Bay Company, etc., House of Commons, 1857, p. 398, and Ibid., Appendix No. XII, p. 435. For fuller details see Chapter IX of this volume.

3. The full text of this remarkable charter is given in Report from the Select Committee on the Hudson’s Bay Co., etc. (ordered by the House of Commons to be printed, July 31 and August 11, 1857), Appendix No. Xl, Enclosure A, pp. 411-413.

4. These facts are incorporated in the Report from the Committee Appointed to Inquire into the State and Condition of the Countries Adjoining Hudson’s Bay and the State of Trade Carried on There, 1749, contained in Vol. 40 of Imperial Blue Books on Affairs Relating to Canada. Also see Report from the Select Committee on the Hudson’s Bay Company, House of Commons, 1857, p. 344.

5. Report front the Select Committee on the Hudson’s Boy Co., etc., House of Commons, 1857, Appendix No. VIII, pp. 427-42.4. The Company’s ancient motto, Pro pelle cutem"—skin for skin—certainly produced results justifying both the literal and figurative application of that motto.

6. Report from the Committee Appointed to Inquire into the State and Condition of the Countries Adjoining Hudson’s Bav, and the State of Trade Carried on There, Imperial Blue Books on Affairs Relating to Canada, Vol. 40, p. 220.

7. Ibid., p. 222.

8. Ibid., p. 223.

9. Ibid., p. 225.

10. Ibid., pp. 217-219. Of these and similar long-prevalent practices, the reader will find further ample and corroborated details in Chapters VIII and IX of this volume.

11. An Account of Six Years’ Residence in Hudson’s Bay, from 1733 to 1736 and 1744 to 1747, by Joseph Robson, Late Surveyor of the Buildings to the Hudson’s Bay Co., London, 1752, pp. 55-56.



Preface | Chapter I | Chapter II | Chapter III | Chapter IV | Chapter V | Chapter VI | Chapter VII | Chapter VIII | Chapter IX | Chapter X | Chapter XI | Chapter XII | Chapter XIII | Chapter XIV | Chapter XV | Chapter XVI | Chapter XVII


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