Hudson’s Bay Company history

The Hudson’s Bay Company is one of the longest-lived business organizations in history. It was chartered by the British Crown in 1670 to trade for furs in the drainage basin of Hudson Bay. Indeed, for much of its life, it was primarily a fur-trading company, purchasing a wide variety of furs, but mainly beaver pelts, at posts along the coast of Hudson Bay and inland and transporting them by ship directly from the bay to Britain. Despite the company’s prominence in the fur trade literature, it was in the early years a relatively minor player in the fur market, accounting for less than 10 percent of North American exports. Instead, the trade was dominated first by French and then by Scottish traders operating out of Montreal and farther south.

In 1821, after a long and often bitter rivalry, the Hudson’s Bay Company absorbed the North West Company and thereby established a monopoly over much of the fur-trading hinterland. By that time, however, the intense competition had led to severe depletion of animal populations, and, to allow stocks to recover, the company introduced strict conservation measures. These measures were generally successful, but by the mid-19th century the fur industry had become a minor part of Canada’s economic life. Shortly after confederation in 1867, the Hudson’s Bay Company surrendered its charter to the Crown, thus giving up its claim to the region. In return the company was paid £300,000 and was permitted to keep a 20th of the fertile land as well as land in the vicinity of its trading posts.

The relationship between the Hudson’s Bay Company and the Indians with whom it traded has become an area of special interest to economic, business, and social historians, as well as to geographers and anthropologists. This is due partly to the extensive company records, which were meticulously kept and, happily, have been preserved. These records offer a great insight into how a company with a head office thousands of miles from its main operations—and faced with premodern communication—was able to manage a complex and, in many ways, unfamiliar industry.

Central to the company’s approach, especially during the 18th century when trade was almost entirely through barter, was a system of accounts based on the Made Beaver (MB). This unit of accounts established prices for every type of fur and every type of European goods traded. For example, at its largest post, York Factory, a prime beaver pelt had a price of 1 MB, and a gun had a price of 14 MB. Thus, at the official rate, guns and beaver pelts traded at a ratio of 14 to 1. Post traders, however, were given flexibility and so actual exchanges depended on a variety of factors, among them how strong was the market for furs in Europe, how severe was the competition from the French and others, and how plentiful were the beaver stocks. Indeed, the company and its traders appear to have responded to these market conditions in a way that preserved the company’s long-run profitability.

In the 20th century, the company moved into retailing. Beginning with small outlets in Winnipeg and Vancouver in the late 19th century, the Hudson’s Bay Company expanded to the point that it now operates a large chain of department stores (The Bay/La Baie) located throughout much of Canada. The company also has a mining arm; it closed its fur trading division in 1996.

Hudson’s Bay Company history

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