21. Hudson's Bay Company

The Hudson's Bay Company, one of the oldest, still active companies in the world, was almost 200 years old when Canada was created in 1867. Since its inception in 1670, the Company controlled fully one-third of present-day Canadian territory. That area, designated Rupert's Land, encompassed most of Northern Ontario and Northern Quebec, all of Manitoba, most of Saskatchewan, the southern half of Alberta and a large part of the Northwest Territories.

Though the North West Company was the more successful of the two competitors in this period, the Hudson's Bay Company still had one great advantage: control of Hudson's Bay. The North West Company was based in Montreal - twice the distance from the far west and the rich Athabasca country than Hudson's Bay.

There were various attempts by the North West Company to get control of the Hudson's Bay route. It attempted to buy out the Hudson's Bay Company in 1804. In 1805 it offered the Hudson's Bay Company two thousand pounds for the right to use the route. In 1808 McKenzie tried to buy control of the Hudson's Bay Company by purchasing the shares owned by Lord Selkirk. However, Lord Selkirk was planning to establish the Red River Colony, and did not sell the shares to McKenzie.

Both companies increasingly saw the futility in their competition. The only solution to the problem lay in the union of the two rivals. Numerous attempts were made during the early 1800's, until on March 26, 1821, the companies merged under the name "Hudson's Bay Company". The terms of amalgamation were set out in an act of British Parliament. The new company adopted many of the strongest features of the North West Company. Officers, Chief Factors, and Traders became partners with 40% of the shares, while the apprentice clerks could look forward to a share of the profits upon promotion to the rank of "Commission Gentlemen". The 40% was divided into 85 portions: 25 Chief Factors received 50 portions, 28 portions went to Chief Traders, and 7 portions were set aside as a retirement fund for Commission Officers. In addition, the act not only gave the Hudson's Bay Company monopoly control over the original charter grant (all lands draining into the Hudson's Bay), but extended this monopoly to include the Pacific slopes and the Arctic.

Further benefits were to come. In 1821, Parliament expanded the Company's monopoly trading area, under license, so that it stretched from the boundary of Labrador to the Pacific and from the lower reaches of the Mackenzie River to the U.S. passes over the Rocky Mountains.

However, not everyone liked the idea of a monopoly. The main criticisms were alleged misuse of monopoly power and opposition to settlement. The Parliamentary Inquiry of 1857 found that what is now southern Alberta, Saskatchewan and Manitoba, and known as the fertile belt, were suitable for settlement, and should be ceded to Canada. It was the beginning of the end for the Company's monopoly.