B.A., The Colorado College, 1977




i n



We accept this thesis as conforming

to the required standard


September 1984

6 Elizabeth Mancke, 1984 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission.

Department of

The University of British Columbia 1956 Main Mall Vancouver, V6T 1Y3

DE-6 (3/81) ABSTRACT

This thesis examines the Hudson's Bay Company from 1670 to 1730 focussing on its management of long-distance trade, the way it maximized opportunities and minimized risk and uncertainty. The company's involvement in the London fur market, its procurement of trade goods, the barter trade in , and their inter•

relationship are analysed almost entirely from the perspective of the Committee in London which managed the company. The organiza• tion of these commercial details in the context of the seventeenth- and eighteenth-century economic world explain how the company coordinated the disparate spheres of its operation and how it survived the drop in fur prices which occurred shortly after its advent. Historiographicaily the paper relies heavily on a growing body of literature dealing with long-distance trade and the expansion of . In this respect the work brings a new perspective to historiography. TABLE OF CONTENTS



CHAPTER I "The Hudson's Bay Company and 10 Patterns of European Expansion"

CHAPTER II "The Hudson's Bay Company and 26 The European Fur Market, 1670-1726"

CHAPTER III "Trade Goods Management" 50

CHAPTER IV "The Standard of Trade, Problems of Commerce, and Economic Behavior in 67 the Early Modern Period. A Few Thoughts."

CHAPTER V "Merchandising and The Standard of 81 Trade"



I. Beaver Imports Into England from the English 38 Colonies 1697~1726

II. Market Shares, Five Year Averages 38

III. Average Price per Piece of Beaver, 1682-1726 40

IV. Import, Sales, and Warehouse Volumes 43

V. Trade Good Prices in Sterling 61

Via. Trade Good Prices, Standard of Trade, and 84 Mark-ups: York Fort, 1720

VIb. Trade Good Prices, Standard of Trade, and 85 Mark-ups: Fort Albany", 1720


This examination of the Hudson's Bay Company management from 1670 to 1730, focuses on the company's place in the history of the expansion of Europe, more particularly, the management of long-distance trade as one aspect of that expansion. Central to this analysis are the objec• tives of the company, the way it maximized opportunities and minimized risk and uncertainty, the organization of its affairs to coordinate the barter trade in North America and the London fur market, and their influence on the long-term survival of the Company.

An attempt to transcribe the beaver value which the Indian paid for European trade goods to a sterling value first prompted this study.

Since the Hudson's Bay Company's rate of exchange of furs for trade goods fluctuated very little between 1670 and 1870, the years when that rate was established were the logical point to begin the inquiry. The clues to solving this problem directed me through amaze involving the compila• tion, correlation, and analysis of trade good prices and fur prices in

London. This peregrination led to the answer of the initial question but also revealed the difficulty of drawing a simple correlation between the price of trade goods, the price of furs, and the profitability of the Company. During the first sixty years trade good prices fluctuated remarkably little, fur prices dropped precipituously before stabilizing, and yet despite the narrowed gap in trade good prices and fur prices the company after nearly fifty years in business began to distribute annual dividends. This pattern is not unlike that found in other seventeenth- and eighteenth-century colonial trades. The dropping price for furs

1 parallels the price movements of other colonial commodities, caused by increases in supply and the ease of substitution afforded by the rela• tively homogeneous character of most colonial goods. How the company survived this transition wrought by the growth in the became the focus of this study, and price movements the trail to be followed tracing long-term trends in the Company's fortunes.

Recent work on the organization of commercial enterprises in pre- industrial Europe, especially a small but growing body of literature on the organization of long-distance trade, has greatly facilitated this work. It provides the historiographicai context within which this study finds place. One of the enduring myths of Western civilization is that of the trader venturing away from hearth and home, risking life and limb, and returning to fame and fortune. The adventures of Marco Polo excited the homebound imagination of succeeding generations. Every school child knows that Christopher Columbus landed on the shores of the Western Hemi• sphere while searching for a route to the riches of the Orient.

Conquistadors and fur traders pushed into the interiors of the American searching for gold, silver, and furs.

The ease with which we discount this folk mythology for its extra• vagant embroidering of reality does not wholly emasculate it. Thus, in more tempered scholarly accounts historians and economists have often concluded that long-distance trade, almost by its very nature, generated greater profits than were generated from domestic enterprises. Malachy

Pos11ethwayt, an eighteenth-century economist, wrote in the Un i versal

Dictionary of Commerce that English "estates got by trade have perhaps been far more numerous than those got by any way whatsoever."1 Contem• porary scholarship reveals an ongoing, lively, and at times heated debate on the relationship between long-distance trade and profits, long-distance

2 trade and industrial growth, and long-distance trade and the present economic hegemony of the industrialized nations. Some scholars argue that the present economic disparity between of the world has its origins in the sixteenth century, a watershed between pre-capita1istic and capitalistic business practices. Integral to this argument is the importance of European expansion beyond the Mediterranean and Baltic commercial arenas of the medieval world. According to this theory capitalism, whose salient features are high prices, high profits, and the exploitation of labour, propelled European economic development.

The profits gained from trade, and especially colonial trades, fuelled

European economic growth and made possible the Industrial Revolution.

European long-distance trade transferred large amounts of wealth from the periphery (the underdeveloped areas of the world) to the core states

( and later the United States). Had this not happened, it is suggested, the core states could not have experienced such rapid growth vis-a-vis the periphery.2

Historians challenging this theory argue that the levels of profit in colonial trades such as tobacco, slaves, and sugar were not as high as has long been presumed, and were often not as high as the profits made in domestic commerce and industry.3 Drawing on studies of the pro• fitability of colonial trades, Patrick O'Brien suggests that trade with the periphery was not large enough to substantiate the claim that it was a primary source of capital for the Industrial Revolution.1* Richard

Grassby in a study of the formation of seventeenth-century business for• tunes and merchant capitalism challenges the belief that overseas trade created many, if not most, of the great English fortunes. Trade provided advancement for men of small fortunes; financial services and the mani• pulation of money made the large fortunes.5

3 As evidence accumulates which undermines the thesis that high pro• fits from long-distance trade precipitated the world's present economic disparity, it nonetheless remains difficult, and hasty, to cast aside the notion that trade, as a nexus between Europe and the rest of the world, holds a clue to understanding the world's economic development.6

The historical emphasis given to overseas expansion has indeed exagger• ated its place in the European economy and overshadowed less spectacular enterprises.7 Nevertheless, the changes which resulted from the expan• sion of Europe recommend the merits of studying its dynamics in detail, even if we fail to discover the inflated profits which it seemed to promise. The historic importance of long-distance trade, Fernand Braudel argues, is that it concentrated profits in the hands of a few merchants.

Thus, he can state, "in the eighteenth century, one can undoubtedly say that almost everywhere in Europe, 1 arge-scale profits from trade were superior to large-scale profits from industry or agriculture."8 [Italics in the original] The commercial mechanism which accounted for much of this concentration of profits was the large joint-stock trading company, which Braudel concludes is among the best examples of merchant capitalism in early-modern Europe, capitalism which was as sophisticated as later industrial capitalism.9

The jioint-stock trading companies emerged in northern Europe in response to the entrepreneurial problems posed by long-distance trade and colonial expansion. While some would argue that they evolved natural• ly from the trading partnerships of medieval Italy, and presage the modern multi-national corporation,10 this does not adequately account for their many mutations and regressions.11 Rather, the joint-stock trading company was one of the many organizational forms which Europeans devised to deal with the problems posed by expansion into non-European

k lands.12 This expansion demanded larger and more speculative investments

than had intra-European trade. Greater distances lengthened the turnover

time of an investment and heightened the risks of piracy, shipwrecks, and wastage. The Spanish and Portuguese financed much of their initial ex•

pansion through government controlled monopolies, the northern Europeans

through joint-stock companies.13

In a signal work on the spice trade, Niels Steensgaard seeks to

explain the seventeenth-century eclipse of the Portuguese and Venetians

by the Dutch and English. Not surprisingly,' he originally attempted to

determine whether the route around , utilized by the Dutch and

the English, was more profitable than the overland route across to

the Mediterranean. Discovering no significant cost advantage to either

route he concludes instead that the Dutch and English East India Companies

differed fundamentally from the commercial organizations of the Portuguese

and the Italians; the shift in commercial dominance from the Mediterranean

to the North Atlantic can only be explained as a structural crisis.111 By

switching to the sea route the Dutch and English companies internalized

the protection costs traditionally paid to rulers along the caravan

routes, and they sought to stabilize the violent fluctuations in the

market by institutionalizing controls on both the prices and supply of

goods. While these innovations did not create greater profits, at least

initially, they did increase the transparency of the market, making for

more efficient economic planning and control, and thereby better assuring

the long-term survival of the companies.15

Similarly, K. N. Chaudhuri, in a study of the English East India

Company, from 1660-1760, maintains that the "most difficult task for the

... managers was the creation of an economic decision-making process that would establish equilibrium between the supply and the consuming markets."

5 The East India Company minimized disequilibrium by constructing a mana• gerial and administrative structure which systemized decision-making and established the operational parameters of the trade, both at the sources of supply and the sources of demand. From this structure which differed radically from medieval and most other early modern trading partnerships

in Europe, the English East India Company derived its economic and poli• tical strength.17 In Chaudhuri's opinion the managers of the East India

Company "had very little to learn from the modern system theorists."18

Historically, the distribution of investment risk has been consi• dered the primary significance of the joint-stock company-.19 Pursuing this theme further, Steensgaard and Chaudhuri emphasize the ways in which the Dutch and English East India Companies evolved strategies for dealing with the market uncertainty in long-distance trade created by the violent fluctuations in price and supply. In Steensgaard's words, "the companies transformed the gambler's profit of the long-distance trader into the safer, if less spectacular profit of conservative me rchants."20 Th us, a clue to understanding longevity of trade is provided not through a simple examination of profits, but through an examination of the ability of firms to offset the risk and uncertainty endemic in the seventeenth and eighteenth-century economic world.21

The centralized administration of the Hudson's Bay Company makes it possible to analyze in detail the ways in which it coordinated the dis• parate spheres of its trade. The Company's involvement in the London fur market, its procurement of trade goods, the trade in North America and the inter-relationship of the three will be considered here, almost en• tirely from the perspective of the Committee in London which managed the company. While this is a new approach to studying the Hudson's Bay

Company and a refocussing of the European perspective it is not wholly

6 divorced from previous work on the fur trade. A major issue in fur trade

historiography has been the role of the trade in the expansion of

European civilization across North America, and the rivalry over who would control the . Much of that analysis has been presented

in terms of the imperial and mercantile policies of the European actors,

yet little attention has been given to the commercial structures which

sustained that expansion. In the case of the Hudson's Bay Company, the

lack of expansion beyond the shores of the Bay for nearly a century must

be understood in terms of the commercial world of Europe and not just in

those of the North American fur trade.22

7 Notes

1 Quoted in Richard Grassby, "English Merchant Capitalism in the Late Seventeenth Century: the Composition of Business Fortunes," Past & Present 46 (1970): p. 103.

2 See Immanuel Wallerstein, The Modern World System (New York, 1974) and The Capitalistic World Economy (New York, 1979)•

3 See S. L. Engerman, "The Slave Trade and British Capital Formation in the Eighteenth Century: A Comment on the Williams Thesis," Bus i ness History Review (1972): 430-2; G. Walton, "The New Economic History and the Burdens of the Navigation Acts," Economic History Review, 2d ser. (1971): 533-42; and J. R. Ward, "The Profitability of Sugar Planting in the British ," Economic History Review, 2d ser. (1978): 208-9- For a dissenting voice see J. E. Inikori, "Market Structure and the Profits of the British African Trade in the Late Eighteenth Century," Journal of Economic History, 41, (1981): 745"776.

^ Patrick O'Brien, "European Economic Development: the Contribution of the Periphery," Economic History Review, 2d ser. 35 (1982): 1 -18; Wa11erstein , "European Economic Development: A Comment on O'Brien," Economic History Review, 2d ser. 36 (1983): 580-583; and O'Brien,.1 "European Economic Development: A Reply," ibid., 584-5-

5 Grassby, "English Merchant Capitalism," p. 103-

6 Barry Supple, "The Nature of Enterprise," in vol. 5, Cambri dge Economic History of Europe, eds. E. E. Rich and C. H. Wilson (Cambri dge: Cambridge University, 1977), P- 445-

7 Kristof Glamann, "The Changing Patterns of Trade," in ibid., p. 195-

8 Fernand Braudel , The Wheels of Commerce (London: Collins, 1982), pp. 407, 428.

9 Ibid., pp. 400-433-

10 P. W. Klein, "The Origins of Trading Companies," in Companies and Trade, eds. L. Blusse and F. Gaastra (Leiden: Leiden University Press, T98TT, p. 22.

11 Niel Steensgaard, "The Companies as a Specific Institution in the History of European Expansion," in ibid., p. 247-

12 Supple, "The Nature of Enterprise," p. 439-

13 Klein, "The Origins of Trading Companies," p. 25-

11+ Niels Steensgaard, Carracks, Caravans and Companies: The Struc• tural Crisis in European-Asian Trade in the Early Seventeenth Century (Odense, Denmark: Student 1i tteratur Andelsbogtrykkeriet, 1973) , PP-7, 10, 114.

15 Ibid., pp. 11, 14-15, 47, 141-143-

8 16 K. N. Chaudhuri, The Trading World of Asia & the English East India Company, 1660-1760 (Cambridge: N.Y.: Cambridge University Press, 1978), p. 457.

17 Ibid., pp. 19-22, 46, 457-8.

18 Chaudhuri, "The English East India Company in the 17th and 18th Centuries: A Pre-Modern Multinational Organization," in Companies and Trade, p. 46.

19 W. R. Sco11, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, 3 vo1s. (London: Cambri dge University Press, 1912); and K. G. Davies, The Royal African Company (London: Longmans, Green & Co. Ltd., 1957), 32-37-

20 Steensgaard, The Companies as a Specific Institution," p. 254.

21 Supple, "The Nature of Enterprise," p. 440-445; and Peter Musgrave, "The Economics of Uncertainty: The Structural Revolution in the Spice Trade, 1480-1640," in Shipping, Trade, and Commerce (Leicester, U.K.: Leicester University Press , 1981), pp. 9_21.

22 See W. J. Eccles, "The Fur Trade and Eighteenth-Century Imperialism," William and Mary Quarterly 40, No. 3 (1983): 341-362; for the most recent contribution to this discussion.





The unequalled longevity of the Hudson's Bay Company belies the commonplaceness of its beginnings. It was only one of the many maritime

companies which Europeans established during the seventeenth century for

commerce, colonization, and ; most collapsed after a few voyages and trading generally witnessed a return to individually-owned firms or small partnerships. Patterns of company success do emerge though. The

Dutch and English East India Companies denote the success of company

trading in Asia. In the Atlantic there are no parallels to the East

India Companies in terms of size and power; of the tens of English com•

panies chartered to trade to the and Africa only the Hudson's

Bay Company and the Royal African Company proved economically viable.

10 Atlantic companies founded by the Dutch, French, Danish, Portuguese, and


Spanish fared no better than did English companies.

The persistence of the Hudson's Bay Company in the when other companies perished, most in their infancy, can be explained partly

by its monopoly status, partly by the geographic conditions which made

colonization superfluous, and partly by the specialized nature of its 2

trade. But to credit the company's success to external factors would

imply that internal factors of organization, the ability to maximize op•

portunities and minimize risk, are largely insignificant to the success•

ful prosecution of trade. External factors though can be negative as well as positive. Commercial enterprise is always susceptible to external

disruptions - war, natural disaster, currency fluctuations, changes in the

market - and internal organization becomes a crucial factor in determining whether a business can withstand external economic tremblings. In the

case of the Hudson's Bay Company the historical record leaves signs of

entrepreneurial innovation and rationalization which resulted in the

development of a managerial and administrative structure capable of co• ordinating the disparate spheres of its trade, separated one from the other by time, space, and culture. This managerial and administrative

development must account, in part, for the transition of the Hudson's

Bay Company from a highly speculative seventeenth-century venture with

colonial overtones to an eighteenth-century gilt-edged company.

The men who founded the Hudson's Bay Company entertained virtually every expansionistic aspiration which a seventeenth-century European

could imagine. Hopes for finding the fabled to the

South were renewed, trading possibilities appeared legion, mines would yield "Gold Silver Gemms and Precious Stones", "Castles Fortifi•

cations Forts Garrisons Colonyes ... Plantacions Townes or Villages"

11 would dot the landscape. Some of the expectations expounded in the

charter were the stock litany of adventurers hedging bets in their con•

tract with the Crown. But high hopes and blindly extravagant romanticism were the opium of the adventurers pipe-dreams. From the haze enveloping

the promoters of the Hudson's Bay Company only one-dream became a reality

-- the fur trade -- and it alone kept Europeans in the Canadian North

for many decades. Experience disabused dreamers of realizing their other


Fathoming the harshness of the country named Rupert's Land clearly exceeded the imaginations of the men who founded the Hudson's Bay Company

despite the discouraging reports brought back by early explorers. From

1550 onwards Europeans had been exploring the , first along the

cost of and Russia, then westwards to and the north•

east coast of North America, most on a quixotic search for the fabled

northern waterway to Cathay. In 1610 became the first

European to enter the which bears his name. Unable to sail out of the Bay made unnavigable and impassable by ice, Hudson wintered on , only to be left to perish by a mutinous crew. In 1612 two of that crew again sailed for Hudson's Bay, this time under the command of . English merchants financed another two voyages that

same decade under the commands of Bylot and Baffin. In 1619 the Danish

sent out an expedition led by to try his hand at finding the

illusory Northwest Passage. The autumn onset of winter in the Bay caught

Munk unawares forcing him to establish winter quarters at Churchill

River. The following spring he and the two surviving members of his crew of sixty-four returned to Denmark. Word of the horror of Munk's first voyage quickly spread among Danish sailors, none of whom would volunteer

for a second Danish voyage to the harsh and unmerciful Hudson's Bay. The

12 English, yet undeterred, funded two more voyages both of which sailed

in 1631.t* Despite repeated efforts no voyage to Hudson's Bay produced anything save an enlarged knowledge of the world. None discovered the

trade, the land to settle, or the promise of a passage to the Orient which would prompt Europeans to return annually or settle permanently.

London merchants had funded most of the early fruitless voyages to

Hudson's Bay and it is therefore not surprising that in 1666 when two

Frenchmen, Radisson an rosei.lliers, came to town with a tale about furs

from Hudson's Bay merchants had few pounds to spare for the financing of a voyage to verify the story. A group of Restoration courtiers, however, smitten by the tale, assembled the necessary resources to outfit two ships. One of the two ships, the Nonsuch, completed the voyage in 1669,

returning to London with a cargo of furs worth £ 1379-6s.10d, hardly a

fortune but the first marketable goods to be brought from Hudson's Bay.5

The safe homecoming of the Nonsuch buoyed the spirits of the organi• zers, but it would be erroneous to conclude that their primary intention was to pursue the fur trade for its own ends. Furs guaranteed income, the income necessary to sustain an expansionistic venture over an extended period. The wording of the Charter, the early composition of the shareholders, the early organization of the company, and the economic function of the fur trade in other North American colonies suggests that the promoters intended for the fur trade to be a way of financing other avenues of development in Hudson's Bay.

Despite numerous voyages of discovery the land around Hudson's Bay

remained unclaimed until the establishment of trading posts by the Hudson's

Bay Company. European custom held that claims to the non-Christian world had to be legitimized with permanent settlements.6 Where Europeans did settle permanently they adopted one of two principal forms. The first

13 included trading stations, forts, and factories, settlements designed

to facilitate annual trading voyages and to validate European claim and

presence. Settlement was permanent, but settlers were for the most part

impermanent, employees of a company stationed at a post for a number of

years before being transferred, sent home, or quitting employment.

These settlements were essentially company towns and characterized most

European settlements in Asia and Africa. Only gradually did enclaves of

permanent European settlers emerge. Settlements in the Americas were,

for the most part, of the more familiar second type: permanent settle•

ments of permanent settlers.

Economics determined greatly this difference in settlement patterns

between Asia and Africa on the one hand, and the Americas on the other.

Europeans had been trading with Asians for centuries before the Portuguese

rounded the Cape of Good Hope or the powerful East India Companies had

been established. The rapid growth of European trade with Asia in the

sixteenth and seventeenth centuries was founded on well-established

patterns of commerce, and depended on the highly stratified and sophis•

ticated social, political and economic systems of Asian societies. The

Asian goods which Europeans wanted were produced by an Asian labour force

organized and controlled by Asians. For many years Europeans functioned

only as merchants, providing the link between Asian supply and the

European market. Europeans operated much the same way in the slave trade;

African slavers amassed the slaves which the Europeans then bought,

transported, and sold on the slave market in the Americas. In this type of trade where the merchant trader was essentially the only missing link

between sources of demand and sources of supply, permanent settlements

of impermanent settlers met both the commercial and strategic requirements

of expanding Europe.7

14 In the American trade the missing economic links for getting

American products to the European market were more numerous and presented

greater problems of organization than had been presented in the Asian or

African trade. The commodities which the Americas promised and which

Europe desired -- tobacco, sugar, cocoa, indigo, fish, timber, gold, and

silver -- were not produced in marketable quantities by indigenous

Americans. Therefore, Europeans had to commit themselves intensely and extensively to the Americas if they were to have the riches of the con•

tinents. Two fundamental transformations had to transpire. The New

World's landscape had to be redesigned for the cultivation of surplus agricultural products and a labour supply had to be found. Indigenous

Americans resisted bonding their labour to Europeans and hence labour was imported: settlers and indentured labour from Europe; enslaved

labour from Africa.8 The concatenation of developments propelling this economic transformation of the New World became inextricably entwined

in its emerging social, political, and cultural fabric. One notable exception to this pattern in North America was the fur trade, in which

the Indians controlled the production of furs and Europeans served almost solely as traders. The Hudson's Bay fur trade broke the New World pattern of permanent settlement with permanent settlers, though not without a

reconceptua1ization of the European attitude that in the Americas commerce and colonization were flip-sides of the same coin.

In the American colonies along the eastern seaboard fur became an

immediate "cash crop" marketable in Europe for the few manufactures

required by the settlers. In Virginia and New England-the fur trade

became an adjunct of settlement, the trade which allowed settlers to pur• sue other economic ends: for New Englanders the development of mixed

farming; for Virginians a tobacco economy. In , New Netherlands,

15 and Nova Scotia a greater tension existed in reconciling whether the fur

trade would be the settlements "raison d'etre" or whether it would be

the major economic underpinning of a larger colonial endeavour.9

Similarly, the promoters of the Hudson's Bay Company anticipated and

planned for colonization to follow on the heels of the fur trade. That

it came to resemble the organization and the settlement patterns of the

Asian trade was coincidence not design.

The aims of the promoters of expansionistic ventures were not directed

indiscriminately or randomly, though in most cases they landed wide of

the mark. The founding of three companies, the Company of Royal Adven•

turers into Africa in 1660, the Carolina Company in 1665, and the Hudson's

Bay Company in 1670, illustrates this. All three shared as principal

promoters a group of courtiers influential in the Restoration court and

intent upon territorial and economic jockeying with European rivals. The

Company of Royal Adventurers into Africa was to counter the Dutch and

Portuguese control of the slave trade. Settlement in the Carolinas would extend English settlement south of Virginia and block Spanish settlement

north of Florida. The Hudson's Bay Company would flank French Canada on

the north complementing recently won New York on the south, and both would help undercut the French dominance of the fur trade. The intended means for achieving these similar Imperial ends differed significantly despite their shared promoters. The charter of the Company of Royal

Adventurers into Africa contained almost solely provisions for trade, although like other charters for trade to non-Christian lands it allowed

for the establishment of factories and trading posts.10 In the charter of the Carolina Company only eight men were named and it granted to them

the right to plant a proprietory colony to be settled for agricultural

development. This charter for colonization contained specific details

16 on land tenure and the establishment of civil governance. 1 The Hudson's

Bay Company charter falls somewhere between the other two. It prescribed

guidelines for the establishment of permanent and abiding settlements and

civil governance, as well as trading privileges and the means of sub•

contracting those trading privileges to settlers.12

Of the three companies the Hudson's Bay Company alone survived as a

chartered concern. In 1672 the Company of Royal Adventurers into Africa

reorganized itself as the Royal Africa Company. With the change came a marked transition in the shareholders from primarily members of the peer• age to primarily merchants and City men. The company underwent another

reorganization in 1712-1713, and then dissolved in 1752 never having

distributed regular dividends. The Carolina Company nearly collapsed during its first four years, and was only maintained for a short while

longer through the exertions of Sir Anthony Cooper.

Time and experience brought to prominence the commercial facets of

the Hudson's Bay Company while at the same time muting egregiously mis• guided colonial ambitions. Nevertheless, the company laboured for nearly

thirty years under the illusion that colonies along Hudson's Bay were

tenable and desirable. Variations in the initial organization and struc•

ture of the Company of Royal Adventurers into Africa, the Carolina

Company, and the Hudson's Bay Company indicate that promoters of these ventures did attempt to tailor them to perceived possibilities. Thus,

it is necessary to recognize that the founders of the Hudson's Bay Company originally envisioned something much different than what emerged from the enterpri se.

The company's determination to plant a colony waxed and waned.

Early on the Committee in London toyed with the idea of sending men and building supplies to begin a settlement. In January 1672 they discussed

17 sending two ships and hiring thirty men "for Stayeing in the Countrey in

respecte to mortality."13 By February the head-count fell to twenty- five men,14 and by April to fifteen.15 It is unclear whether the reduc• tions were for reasons of cost or whether few men could be persuaded to sign-on. The first bayside governor seems to have been chosen with a view to governing a colony rather than managing trade, as the Quaker

Charles Bayly never exhibited business acumen but did foster amiable relations with the Indians.16 The company did attempt to replace him in

1674 "- probably because of his business shortcomings -- with William

Lydall "who hath made many Voyages to and from Russia and Lived many yeares therein."17 James Bay was not Russia and after one sorry winter

Lydall returned to London and Bayly resumed command.18 In 1679 the com• pany recalled Bayly and replaced him with John Nixon, formerly in the employe of the East India Company, and hence a sign that the company

intended to give more attention to matters of trade.19

For the next twenty years the traders were intermittently instructed on measures to be taken for preparing for settlers. In 1683 Henry

Sergeant went to James Bay taking along his wife and her maid.20 The

Committee advised him to have the men engage "either in cultivateing the land, in fishing and in makeing oyle, or in makeing pott ashes or else you may judge for the service of the Company, we intending as soone as may be to plant a Colloney there."21 It urged Sergeant, as it had his predecessors, to apply his "utmost skill and industrey" to lessening the costs of provisioning the post. To this end it included in the 1683 shipment "several 1 sorts of seeds and graynes."22 In 1684 the company sent to Norway for two goats to ship to the bay.23 In the minds of the committee members the creation of the pastoral life on the shores of

Hudson's Bay was possible. In 1692 they pleaded with George Geyer,

18 governor at York Fort, to remain another year. Not only would it be in

the company's interest, but it would allow Geyer to "have the honour and satisfaction you seeke, of Leaving that Trade which you enlarged, that

Building which you have erected, that Vineyard which you have Planted, in a Peaceable and florishing Condition, and out of danger of being under• mined by the Foxes, or destroyed by the Wild Boares of the Forrest."21*

Geyer remained at York Fort but presumably not to refine the pastoral

life. The Committee in London, however, thought he should be about the task and the following year they sent elaborate instructions on how to prepare York Fort for the arrival of cattle. A barn was to have been built to stable sixteen to eighteen head of cattle, hay gathered, and

the Indians encouraged to kill "wolves and Revenous beasts" in the area.

The committee, likely swayed by its Deputy Governor Samuel Clarke "whoe hath lived 20 years in Cold Counteryes", presumably Scandinavia, was

convinced that the plan was feasible "for Findland and Lapland are as

Cold and colder and more barren and unfrutfull and much Longer Nights

then at Yorke fort and yett at those places Cattell are maintained."25

The committee did qualify their instructions telling Geyer that if he

found "upon mature deliberation the climate all together imposeble for

their [the catties'] Subsistance" the plan for raising them would be


Horticulture was not to be neglected at York Fort and seeds, farm

implements, and a book on gardening were included in the 1693 shipment.

To make the seeds grow to perfection the men should "raise a heighth of

Ground or Hedge of reeds or some fence to keep the Norwest wind from them,

and then there is noe Doubt of their comming to pfection as well as in any pte. of Sweeden and Norway."27 At James Bay horticulture was pursued with marginally more success than at York Fort. The committee, hoping to

19 capitalize on the prospects, decided that flax might be commercially

grown. In the same letter in which they gave instructions for doing so,

they retracted the plan as it took skilled help to harvest and process


The slowness with which the shareholders of the company surrendered

their visions of a pastoral life on Hudson's Bay to the reality of the

Canadian Subarctic was only exceeded by their slowness in accepting the

fact that virtually the only marketable products available were furs.

Annual admonitions issued forth from London suggesting that the men were giving insufficient attention to diversifying the trade. Mining was long

thought to be potentially profitable. In 1682 the company had sent out

George Geyer to develop the mining of isinglass,29 and in 1684 Sergeant was ordered to send ten men to East Main to settle it for the isinglass

trade.30 Minerals, the committee explained to Walsh in 1694, "are easily

found by the Couler of the water that owzeth or springeth out of the where they are being of a Brownish Coulor some what enclineing to

blew or seeming Greasy, which must be traced to the head of the spring,

Copper mines the water green and Greasey."31 Geyer had orders to send men to Churchill to establish a station. The committee would suffer no excuses for not proceeding noting that "Capt. Young tho never in Greenland in his life, for the time he was in Churchill River he

struck and took as many Whales as the Harponier, that we gave double wages, and soe did some of his men ... for its a slight of hand and noe great art ... all the men delight in taking them making it a sport and not a Labor or toyle."32

Some of the envisioned expansion of the trade involved having the

Indians diversify the goods they brought to trade. Among those items

suggested by the Committee in London were goose feathers, castoreum and

20 seahorse teeth (walrus tusks), yet despite all the efforts nothing developed. Over a number of years the odd shipment of feathers, castoreum or ivory would make it to London but met with mixed market success.

After a few bundles of quills reached London the committee wrote the traders not to send any more as there was no market for them.33 A 280 lb. shipment of castoreum was sent to Amsterdam in 1698 because it would not sell in London.3tt

The reliance of the Hudson's Bay Company on furs, especially beaver, caused it some concern. Many of the committee's exhortations to diver• sify the trade were with the hope of lessening the dependence on beaver.

What diversification did occur was with small luxury furs like fox and otter but mostly marten. After the Treaty of Utrecht when returned to the bay to re-establish the trade at York the committee encouraged him to pursue the possibility of copper mining or trade as "it would turn to better accompt than Skins."35 Thus as late as 1715 the company was still looking for other areas of trade.

What the early organization and goals of the Hudson's Bay Company suggests for understanding its place in the expansion of Europe and the fur trade is that external conditions determined its singular reliance on beaver, not internal decision-making or an exaggerated belief in the profitability of the fur trade. Geography and climate placed quite inflexible constraints on the company within which it had to operate.

Ironically, those limitations probably increased the likelihood of the company's survival. Climate precluded agricultural settlement and thereby eliminated a population which would probably have challenged the company's hegemony as had happened elsewhere in North America. Lack of avenues for economic expansion into areas like mining had the positive effect of keeping the company's labour force small, specialized, and manageable.

21 The harshness of the Canadian subarctic also discouraged challengers.

Therefore the constraints imposed by environmental conditions had some

positive effects. They were not however sufficient to offset the

fickleness and vicissitudes of long-distance trade during this period.

Management and administration are still crucial components in the expla•

nation of the survival of the Hudson's Bay Company.

22 Notes

Niel Steensgaard, "The Companies as a Specific Institution in The History of European Expansion," in Companies and Trade, eds. L. Blusse and F. Gaastra (Leiden: Leiden University Press, 1981), pp. 256- 259-

2 Ibid., p. 258.

3 "The Royal Charter Incorporating The Hudson's Bay Company, A.D. I67O," rpt. in ed. E. E. Rich, Minutes of.the Hudson's Bay Company, 1671- 1674, Publications of the Hudson's Bay Record Society, Vol. 5~, (London: The Hudson's Bay Record Society, 1942), pp. 131, 139, 145.

4 Details on the early to Hudson's Bay were taken from E. E. Rich Hudson's Bay Company, 1670-1870, Vol. 1: 1670-1763, (London: The Hudson's Bay Record Society, 1958), pp. 6~7; J. H. Parry, The Age of Reconnai ssance, (New York: Mentor Books, 1963), pp. 221-222; and W. A. Kenyon, ed. and Intro. The Journa1 of Jens Munk, 1619"1620, (Toronto: Royal Museum, 1980), pp. vi i-xi i i.

5 E. E. Rich, Hudson's Bay Company, 1670-1870, Vol. 1, pp. 29~30, 42.

6 Kenneth G. Davies, The North Atlantic World in the Seventeenth Century, (Minneapolis: University of , 1974), p. 36.

7 Kenneth G. Davies, Royal African Company, (London: Longmans, Green, S Co., Ltd., 1957), P- 3-4; Fernand Braudel, The Wheels of Commerce, Vol. 2, Civilization and Cap i ta 1 i sm 15th-1 8th Century"^ (London: Col 1i ns , 1980) p. 447; and Steensgaard, "The Companies as a Specific Institution," p. 253.

8 See E. E. Rich, "Colonial Settlement and Its Labour Problems," in The Economy of Expanding Europe in the 161h and 17th Centuries Vol. 4, The Cambridge Economic History of Europe eds. E. E. Rich and C. H. Wilson, (Cambri dge: Cambridge University Press, 1967) , pp. 302-373.

9 E. E. Rich, Hudson's Bay Company, 1670-1870, Vol. 1, pp. 8, 12-13, 45-6, and John G. Reid, Acadia, Maine and New Scotland, (Toronto: University of Toronto Press, 1981), p. 19-20.

10 The Charters for the Company of Royal Adventurers Into Africa and the Royal African Company can be found in Cecil T. Carr, ed., intro., Select Charters of Trading Companies, A.D. 1530-1707) (1913; rpt. New York: Burt Franklin, 1970), pp. 172-177, 177~181, 186-192. A short discussion of the African companies is in the introduction, pp. xlii-xlviii. See also Davies, Royal African Company, pp. 36~7, 97_99•

11 The charter for the Carolina Company can be found in Francis Newton Thorpe, ed., The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of Americ, Vol. 5- (Wash i ngton: Government Printing Office, 1909), pp. 2743-2753. For a discussion of the founding of the Carolina Company, see. Charles M. Andrews, The Colonial Period of American History, (New Haven, Ct.: Yale University Press, 1934-38), Vol. 3, pp. 182-3, 192; and M. Eugene Sirmans,

23 Colonial South Carolina: A Political History, 1663~1763, (Chapel Hill: University of North Carolina Press, 1966), pp. 3-6.

12 The charter for the Hudson's Bay Company can be found in Appendix A of Minutes of the Hudson's Bay Company, 1671-1674, pp. 131-148. See also Rich, Hudsons Bay Company, 1670-1870, Vol. 1; pp. 52-60; and Carr, Select Charters, pp. lxxxix-xc.

13 Rich, Minutes, 1671-1674, 16 January 1671/72, p. 19-

lk Ibid., 1 February 1671/72, p. 22.

15 Ibid., 17 Apri1 1672, pp. 35"6.

16 Rich, H.B.C., 1670-1870, Vol. 1, pp. 67, 80.

17 Rich, Minutes, 1671-1674, 29 January 1673/74, p. 74.

18 Rich, H.B.C. , 1670-1870, Vol. 1, p. 79-

19 E. E. Rich, Minutes of the Hudson's Bay Company, 1679-1684, The Publications of the Hudson's Bay Record Society, Vol. 8^ (London: Hudson's Bay Record Society, 1945), pp. 252-253.

20 Letter Outward (hereafter L.O.) to Henry Sergeant, 16 May 1684, in Letters Outward, 1679~1694, ed. E. E. Rich, Publ i cat i ons--of the Hudson's Bay Record Society, Vol. 11, (London: Hudson's Bay Record Society, 1948), p. 88.

21 L.O. to Henry Sergeant, 27 April 1683, Letters Outward, Vol. 11, pp. 76-77-

22 Ibid., p. 77-

23 Minutes, 16 May 1685, Hudson's Bay Company Archives, Provincial Archives of (H.B.C.A., P.A.M.), A.1/8, fo. 32d. (Hereafter only the archival classification number is given.)

2k L.O. to Geyer, 17 June 1692, Letters Outward, Vol. 20, p. 140.

25 L.O. to Geyer, 17 June 1693, Ibid., pp. 192, 194-5-

26 Ibid., p. 194-5-

27 Ibid., p. 195-6.

28 L.O. to Knight, 30 May 1698, Ibid., pp. 272, 274.

29 L.O. to Sergeant, 16 May 1684, Letters Outward, Vol. 11, pp. 121- 122.

30 Ibid., pp. 121-122.

31 L.O. to Walsh, 30 May 1694, Letters Outward, Vol. 20, p. 237-

24 32 L.O. to Geyer, 17 June 1693, Ibid., p.'l87"8.

33 L.O. to Macklish, 28 May 1723, A. 6/4, fo. 72d.

34 Journal of Foreign Accounting, A. 17/1, fo. 42.

35 L.O. to Knight, 31 May 1717, A. 6/4, fo. 12.





In 1669 the first shipment of furs arrived from Hudson's Bay and signalled the possibility of a significant new supply of furs for a market already in a state of transition. Only two years before with the

Treaty of Breda the Dutch had relinquished to the English their claim to

New Netherlands (renamed New York) and with it the sizeable fur trade of the and its hinterland. Prior to then a modest but steady stream of furs had been coming into England from New England, Virginia, and Maryland, but in total volume less than the potential of either the

Hudson River or Hudson's Bay trade. The nearly simultaneous acquisition of New York and Hudson's Bay by the English had a twofold impact on the

European fur market. On the one hand furs from New York now went into

London rather than Amsterdam. The Dutch, though losing their direct supply of North American furs, nevertheless still dominated Baltic shipping

26 and served as middlemen in the beaver trade with Russia. On the other

hand the English suddenly had two new substantial supplies of furs which

either had to be absorbed into the domestic market or re-exported to

other parts of Europe. Moreover, the volume of furs from New France

was growing and saturating the market. By 1690 the European fur market

was flooded with beaver and prices for the fur began to decline.

The oversupply of beaver and the resultant fall in prices mirrors

a market phenomenon of this period associated with nearly every commo•

dity of long-distance trade. In 1639 an over-production of tobacco

caused tobacco prices to slump. French and English growers on St. Kitts

agreed not to plant tobacco for a year. Virginia placed a 1,500,000

pound ceiling on 1639*5 production and a 1,200,000 ceiling on the fol•

lowing two year's production. In 1650 tea in England sold from between

£6 and £10 per pound. By 1703 the price had sunk to 16s. per pound. In

1760 an excessive stockpile of nutmeg and mace prompted Dutch merchants

in Amsterdam to burn much of it in order to maintain prices. When sugar

production on the West Indian islands of Martinique and Guadeloupe came

on stream raw sugar prices dropped by nearly a half. In the

the Dutch regulated the size of clove plantations in order to prevent


Increasing supply and dropping prices often resulted in expanded

consumption, but it also wreaked havoc for merchants. It is argued that

after the drop in beaver prices in the 1690s the Canadian beaver trade

was not economically viable, but that the French government maintained

it for imperial and military purposes.2 The Hudson's Bay Company, in

contrast, operating under the protection of a government charter yet not with direct financial backing from the government emerged in the first

half of the seventeenth century as a profit-making enterprise, despite

27 the difficult two decades from 1690-1710. For the Hudson's Bay Company the decline in beaver prices in the 1690s did not herald the crippling of a previously thriving commercial enterprise; though for the most part healthy, the Hudson's Bay Company was yet a struggling youngster in 1690.

Optimism and high beaver prices, not financial stability, account for the four dividends distributed in 1684, 1688, 1689, and 1690, the only ones paid from 1670 to 1718 -3 The recovery of the Hudson's Bay Company and the commencement of annual dividends in 1718 thus stands in juxtaposition to the picture drawn of the French trade.

The survival of the Hudson's Bay Company is partly attributable to the willingness of shareholders to forego dividends. What has not been accounted for in previous studies is what happened to the beaver market after 1700. The purposes here are to explore the participation of the

Hudson's Bay Company in the European fur market from its early years to

1726. This time span encompasses the shaky beginnings of the company, the ebullient years when the first dividends were distributed, the years of a depressed fur market and no dividends, the years of war which ended with the Treaty of Utrecht in 1713, and finally the years of a stabilized trade with regular dividends. Three major areas will be considered: one, how the company used its charter to restrict and influence the trade; two, the importance the company placed on market information and the role it played in its decision-making; three, the price which the Company received for its furs and the volume of furs it imported into England.

From this it will then be possible to begin to suggest some of the ways in which the company managed its affairs to cope with the vicissitudes of long-distance trade.

One of the privileges granted a chartered company was control over the trade to, from, and in the area defined by its charter. However,

28 most of the companies which intended to bring in colonists, as the Hudson's

Bay Company first planned, included clauses for sub-contracting trading

rights.1* The Hudson's Bay Company charter reads:

Wee streightly Charge Command and prohibite for us our heires and successors ... that none of them directly or indirectly doe visit haunt frequent or Trade Trafficke or Adventure by way of Merchandize into our from any the said Territoryes . Lymittes or Places ... unlesse itt bee by the Lycence and agreement of the said Governor and Company in writing first

had and obteyned under theire Common Seale ... [under 1i n i ng mine]5

Initially the company appears to have allowed some private trade by ships'

captains and by their first governor, Charles Bayly, but by 1673 the

Committee in London was authorizing searchs of the ships to look for

smuggled furs.6 Despite repeated prohibitions of private trade the prac•

tice persisted and the Company sought efficacious ways to stop it, with only limited success. Oaths of fidelity were frequently required. In

the 1683 annual letter to the bay the committee instructed John Bridgar

to administer an oath to all officers forswearing private trade "which

by the Tenor of our Charter you have the power to administer."7 After• wards he was to notify the committee of the names of the men who had

taken the oath. Before the sailing of the ships from England the committee had the ships' captains and officers take a similar oath; some protested vociferously at the restraints the company tried to place on them.8

During the tenure of John Nixon at the bay ships' captains had been given beaver coats. In 1685 Henry Sergeant was ordered to stop the practice,

"for under the Colour of such presents they frequently conveigh away several 1 other Furrs."9 Private trade continued. In 1686 the committee sent messages, to Capt. Robert Porten, Capt. John Outlaw, and Capt. William

Bond that Mr. Morgan Lodge had been retained by the company to board their ships and search for smuggled furs. If Mr. Lodge discovered clan• destine trade they would "proceed against every one we find culpable."10

29 Private trade never went away entirely but was checked for a while for

when the committee contracted with Mr. Lodge in 1693 for his services

it remarked that it had "not of Late had ocasion to Trouble you."11

Nevertheless, "great Quantities of Castorium and Furrs" still came in as

private trade that year.12

The limits to which the company would push its privilege to restrict

private trade and interlopers varied from year to year, largely depending

on how it and its cha11engers chose to interpret the charter, an ambi•

guous document at best. The Outward Letter of 1682 alerted the Council

at to the rumours that former employees of the company were

designing interloping voyages to Hudson's Bay. The council was to seize

English ships sailing into the bay and have them sent back to England for

prosecution. Foreign ships could be seized "as lawful prize pursuant to

the Act of Parliament for the Encouragemt. of Navigation." At the end

of the letter, however, the committee appended instructions to John Nixon,

the Governor, negating their preceding order. "Yet being further Sensible

of the greate Contempt such person will offer to his Majesties Gratious

Pattent granted this Company Have thought fit to take this matter into a

further Consideration."13 Back in London the company had problems of its

own including the threat of challenges to its charter14 and an undefined

legal battle brought against it by Captain Greenway, formerly in their

employe.15 These events probably explain the instructions to Nixon to

act discreetly and cautiously with interlopers.

The logistical difficulty of maintaining a viable trade over great

distances occasionally created problems for the regulation of private

trade. In 1681 trade goods ran low at the bay and Governor Nixon allowed

the men at the fort and on the ships to trade their blankets and clothes with the Indians so as not to have to refuse the furs they had brought.

30 When the ships returned to England in October of that year many of the furs on board belonged to the men. The committee ordered them to be seized and taken to the company's warehouse, and the men would be reim• bursed in money.16 On December 9 the committee had the furs transported to committeeman John Letton's house to be sold and the proceeds were to have been divided equitably among the men who had owned the furs.17 By

December 14 the committee had agreed to return the dressed moose skins but still insisted on selling the furs, and two days later they were to be put on display for prospective buyers.18 Between then and January 5 something transpired which made the committee change its mind and allow the owners to come and reclaim their furs.19 There is no hint as to why the original decision was reversed but the incident surely impressed upon the company the necessity of not skimping in the quantity of trade goods, and illustrated the dilemmas created when others stepped in to fill the void. In the letter to Nixon the following spring the committee told him they had returned the furs to their respective owners as he had requested in his letter, but that henceforth if the situation arose the company would seize all furs as rightfully belonging to it.20

The monopoly status which the company enjoyed was a highly qualified monopoly, especia 11y .in its early years. In North America the charter supposedly protected the company from competing with its own nationals but there remained the experienced French traders. In England the charter afforded the company no protection from competition with merchants dealing in furs from New York, New England, or Virginia, and on the European mar• ket it also had to compete with the French and the Dutch middlemen. In this market climate information became important to the company's decision• making, much of it gleaned from a network of people associated with the

London fur trade. Many of these informers are impossible to identify, but

31 the veiled references to information about the competition which appear

in the minutes and letters outward connote the importance placed on having good contacts among London furriers, in the customs house, in

Court, and in Parliament.

On 28 October 1681 the committee decided to schedule and announce

its next sale of beaver for Wednesday, November 16th. Before the meeting ended Mr. Byfield, a furrier who sorted the company's furs, arrived to say that a sale of New York beaver had been scheduled for Tuesday,

November 15th. Thereupon the Hudson's Bay Company sale was moved ahead a week to November 9th.21 On the day of the sale the committee got wind of a rumour that the arrival of another ship from the bay was imminent suggesting that the furriers might wait out the company in hopes of a better price. Realizing the rumour might queer the sale it was to be declared "at the Candle that the Company doth not expect any other ship this yeare and That They will not sell any other Goods before Michaelmas next [September 29].1,22

During the Company's first two decades one of its most important customers and informants was Thomas Glover a large London furrier. How

Glover got his news is unclear. In October 1690 he reported "from another" that Parliament had passed a law allowing the importation of

Dutch fur with a small duty. The committee met with Glover to consider ways of blocking the act,23 and also asked the Soliciter General, Sir

John Summers, to introduce a bi11 to lay a duty on all imported beaver wool.24 On November 12 a Mr. Healer and a Mr. Baker, probably furriers, approached the committee with the news that beaver skins and wool were coming into England despite the Navigation Acts and asked if it would assume part of the charges for a suit against the importers; the committee agreed to pay two-thirds of the charge.25 Contacts with the Customs

32 House also kept the company informed of movements of fur in and out of the of London. After impounding a shipment of Dutch beaver in 1692 the Customs House then sold the fur to the Hudson's Bay Company for 8 shillings a pound.26 The company paid a high price for those furs. The average price they received for beaver during the period was 7s.Id. in

1691, 8s.9d. in 1692, and 7s.3id. in 1693-27

The company placed great value on maintaining good relationships with London's furriers, as can be seen in the conflict which arose over the 1690 sale of beaver to Thomas Glover. Wanting to purchase beaver

Glover approached the company in April 1690 to discuss what arrangements could be made.28 A sub-committee agreed with Glover to rig-a sale in which coat beaver would be set up at 11s. a pound but would be sold at

8s. a pound to Glover who agreed to buy 100 lots at that price. At the committee meeting at which this arrangement was disclosed Mr. Thomas

Chambers, a member, proposed a counter-offer of the same price plus two hundred pounds. "And it being debated in this Committee whether they thought the two hundred pounds advance a valuable Consideration for

Rejecting the offer made by Mr. Glover, it was put to the vote and by the Majority it passed in the Negative." After rejecting the offer of

Chambers, some committee members requested that the Deputy Governor enjoin them "to an oath of secresey that noe mention bee made out of the Committee

Concerning the agreement with Mr. Glover."29 On July 2 the sale was held as planned, but Mr. Chambers and Mr. Foote, another committee member, refused to participate.30 Two hundred pieces of coat beaver were sold at 11s.2d. a pound to a small retailer and two thousand pieces to Glover at 8s.2d. a pound.31

At the annual General Court on 5 August 1690 Chambers submitted

articles against the Deputy Governor and the rest of the committee for

33 the handling of the July 2 sale. A great furor arose, the charges were denied, the accused offered a vindication, and proposed a discussion of the contested sale. A timely adjournment by the Governor, Earl of

Marlborough, because of the summer heat tabled the whole matter and the shareholders were reminded to "Keepe Secrett the Debates and Transactions of this General 1 Court."32 The General Court convened again on August 8 and the committee came prepared to answer Chamber's charges and level its own against him. Chambers left, the General Court charged him with contempt and stripped him of his committee responsibilities and privi-


The company's internal conflict also had its external dimensions in the London and European fur market. Since 1688 the company had been having difficulty disposing of its furs. Sixteen thousand coat beaver had remained unsold from the March 1688 sale. In November the company offered half of those furs and sold them, but at a December sale Mr.

Skinner, a large London furrier, was the only purchaser of coat beaver and he only bought 800 skins. The company broached the possibility of a private sale to Skinner which resulted in a split in the General Court over whether to sell by public auction or private contract. The court ruled at its meeting in February 1689 that all sales would be by public auction by the candle unless it authorized the committee to negotiate private sales to dispose of excess furs. Having exerted its authority to dictate policy to the committee the court immediately empowered the committee to dispose of the present stock of excess private contract.34 Transpiring simultaneously were challenges to the company's charter by the Company of Feltmakers of the City of London. The matter went to Parliament in 1690, where the charter was confirmed for another seven years, but with the added proviso that,

34 the said Governor and Company shall make at least two public Sales of Coat Beaver in every year and not exceeding four and that they shall proportion the same into lots each of about one hundred pounds sterling but not exceeding two hundred pounds value. And that in the intervals of the public Sales the said Company may not sell Coat Beaver by private Contract at any lower price than it was set up at the last public Sale and that the Coat Beaver now in the Companies Hands shall be liable to the same rules.35

The proviso emphasized the marketing of coat beaver in order to

pacify small retailers in the Company of Feltmakers who wanted access to

it in quantities small enough to purchase directly from importers.

Parchment beaver did not interest them for at this time the English

lacked the knowledge to remove the guard hairs, and so parchment beaver

had to be sent to Russia for processing. The parliamentary proviso might

have been adhered to had there not been an excess of coat beaver coming

into England, forcing the Hudson's Bay Company to treat with large fur•

riers, like Thomas Glover, who exported much of what they bought. Two

interrelated issues came into play: one, whether to sell large lots to exporters or small lots to retailers, and two, whether to sell by auction or private sale. Had the English market not been glutted it might have

been possible to accommodate everyone, but the need to arrange suitable means of getting furs out of England forced the company into collusion with exporters of furs, and added to the conflict'within the company.

For the years prior to 1694 it is impossible to judge how many of

the furs from Hudson's Bay were re-exported, but in 1694 the company began own consignments of furs to agents in Amsterdam, Hamburg, and

Narva. Between 1694 and 1698 it exported 58965 parchment beaver skins and 40166 coat beaver skins36 out of the total sales of 90902 parchment beaver and 60486 coat beaver,37 or sixty-five percent. Of the 45466 pelts shipped to Amsterdam 5250 were re-exported to Archangel; of the

49203 pelts shipped to Hamburg 7200 were re-exported to Narva and 32292

35 to Archangei.38 Agents in Narva and Archangel then exchanged furs for

Baltic products among them hogs bristles, flax, goat skins, hides, hemp, jut, matts, tallow, and beaver wool which the company then had to sell in . The returns from this trade came very slowly.39 In 1701

the company's agent in Amsterdam finally disposed of 8500 coat beaver

skins at 4s.8d. a pound much less than the price of 6s. a pound at which

they originally went on the books.40 In 1701 and 1707 the company con•

signed furs to committee-man John Nicholson for export to Russia; the

returns from these furs again came slowly and were only achieved through

the importation of Russian hemp some as late as 1711-41

The direct involvement of the Hudson's Bay Company with re-exporting

beaver pelts connotes a few important features of the fur market within which it operated. The first, most obvious and most remarked upon fea•

ture is the glutted English market for furs and the need to dispose of

some of those furs elsewhere. Secondly, to participate directly in the

intra-European trade demanded a commitment to a longer turn-over time of

an initial investment and the willingness of the company to carry that

cost. The time lengthened considerably when the Hudson's Bay Company had

to sell Russian commodities in order to finalize transactions. Assessing

the gains from this trade, especially the exchange of American furs for

Russian products, is virtually impossible. Between 1694 and 1706 the

company kept a Journal of Foreign Accounting. The final balance on the

profit and loss account lists a gain of £7856.9s.5d. on furs calculated at a value of £35508.14s.42 As it baldly stands this amounts to a healthy profit of 22%, yet that was over a twelve year period on furs shipped

from 1694 to 1698. There are no allowances for the expense involved in procuring the furs, nor for the interest charges on the money the company borrowed during this period, costs which were carried instead in the

36 Grand Ledger. Therefore a true profit picture would be much lower.

Thirdly, by exporting furs itself, the company may have been avoiding some of the need to collude with the large furriers like Thomas Glover, and thereby gain marginally more market control. Regardless of possible gains the process was too involved for the company to continue the prac• tice if possibly avoidable.

From the records of the Customs House and the company records it is possible to gain some appreciation of the magnitude of the increased volume of beaver coming into England from North America. In the table below are the totals taken from the Custom's House records, the volume imported from Hudson's Bay, its percentage of the total, and the com• bined percentage of the New York and Hudson's Bay trade. In the far right column are the figures taken from the company's records. These figures are consistently higher than the Custom's House figures. To evade paying customs fees the company instructed the men at the forts to pack heavy furs forty to forty-five to a bundle and thin furs fifty-five to sixty to a bundle. Conceivably this would make all bundles nearly the same size. The thin light furs were then to be stowed on the ship first so they came off last,1*3 hopefully after the customs valuation had been done. The ploy must have worked. Thus the beaver on the English market was even greater than the customs records tell.

The increased volume of beaver from Hudson's Bay alone would have forced adjustments in the English fur market. The Hudson's Bay trade and the New York trade, occur ring a 1 most simultaneously dominated the market.

While the Custom's House figures are surely low and do not date from the beginning of the company they do connote why the Hudson's Bay Company was forced into colluding with exporters or exporting itself to relieve the glut of beaver in England. They also suggest why the price for beaver dropped so precipitious1y in the 1690s.

37 Table I

Beaver Imports Into England From the [Engl i sh Colonies 1697" 1726. "*h

H.B.C. % N .Y.& H.iB.C. H.B.C.per Year Total H.B.C. of Total % of Total Co.Records

1697 42,902 34,341 80 % 83 'a 42,990

1698 3,165 60 2 % 2. •°/ '0 0

1699 54,508 20,477 38 % 79 '0°/ 33,741 1700 39,989 12,669 32 % 73 °/ 19,329

1701 22,536 30 0 % 50 °/'O 0

1702 20,501 9,244 45 % 58 'O°/ 14,838 35,356 92 °/ 42,080 1703 30,089 85 % 'O 1704 0 0 % 28 °/ 0 12,851 '0 0 0 0 % 0 °/ 0 1705 'Q °/ 1706 38,294 33,121 87 % 87 'O 50,092 1707 6,474 0 0 % 45 °/ 25,943 1708 38,477 14,680 38 % 63 °/ 12,680 'a 7,344 21 % 68 °/ 0 1709 34,655 '0 °/ 1710 8,987 0 0 % 60 '0 0

°/ 1711 23,438 2,000 9 % 38 '0 51,129

1712 0 0 0 % 0 °/'0 51,025 1713 63,515 36,663 58 % 84 °/ 0 1714 86,127 34,909 41 % 78 °/ 42,848

1715 28,969 0 0 % 39 °/'O 0 1716 92,364 65,931 71 % 91 °/ 76,718 1717 73,709 41,475 56 % 83 "/ 55,554 'O 1718 80,990 41,186 51 % 88 °/ 48,177 1719 43,646 18,606 43 % 84 "/ 20,694 'O 1720 83,600 52,594 °/ 55,483 63 % 95 '0 1721 78,670 52,231 66 % 96 °/ 60,899 1722 86,645 58,368 67 % 97 °/ ' 65,434 °/ 63,222 1723 80,117 56,693 71 % 99 'O 1724 56,052 32,565 58 % 100 °/ 36,731 1725 92,337 57,808 63 % 97 9 60,855 1726 88,956 96 °/ 52,364 48,593 55 % '0

Table I I Market Shares, Five Year Averages

Years H.B.C. i. Comb i ned

1697-1701 41 % 32 '0°/ 73 % 1702-1706 68 % 8 °/ 76 %

21 % °/ 58 % 1707-1711 37 '0 1712-1716 51 % 29 °/ 80 % 1717-1721 57 % 33 °/ 90 % 1722-1727 63 % 35 °/ 98 %

Sou rces: Cus toms Records, col 1ected by Arthur J. Ray. H.B.C. A.15/2-A.15/5, H.B.C . Grand Journals

38 The average prices at which Hudson's Bay sold fur from 1682 to 1726

are listed in the following table. The prices given are an average price

per piece rather than an average price per pound which is the way the

Company sold beaver. The prices are calculated in this way largely to

facilitate the later discussion of the trade with the Indians from whom

the company originally purchased the fur on a per piece basis. Stating

the price by the piece rather than by the pound gives a better picture

of the difference in value between a coat beaver and a parchment beaver

pelt. For example coat beaver sold at 7s.lid. per pound in 1692 which was an average of 8s.2id. per piece. A year later parchment sold for

7s.11d. per pound which was 9s.kd. per piece. The difference is because

parchment beaver is a heavier pelt than coat beaver.45

What is most start1ing about these figures is that the price of

beaver declined throughout the 1690s before reaching a low and stabili•

zing in the first-quarter of the eighteenth century at approximately one-

half of the prices in the 1680s. In the 1730s prices would begin to rise

again, more slowly, and in relationship to the larger economy of England.

This suggests a number of things. One is that to maintain a market for

the large volume of furs coming in the price had to remain relatively

low. Secondly, though prices for beaver did not recover the Hudson's

Bay Company began distributing annual dividends in 1718 indicating that

it had recovered financially. Therefore, significant adjustments had to

be happening other places in the company's operations in order to counter• act this major price transition in the European fur market.

The direct impact the Hudson's Bay Company had on the price of fur was limited, but it did have a much greater measure of control over the

volume of furs it brought to the market. As noted previously, market

information played a crucial role in the company's decision on how many

39 Table II! Average Price per Piece of Beaver, 1682-1726

Coat Parchment Average

1682 14 :2 12 :3 13 \ 1683 9 5 12 :4 10 0 1684 8 :6V2 13 :7 10 :8

1685 8 8 12 :7V2 10 1 1 1686 11 :3 12 :5 11 9 1687 13 6 10 :3 11 6 1688 11 :6 13 : 11 12 9 8 10 12 1689 :3 9 11V2 1690 10 10 :V2 6 T 1691 5 9 ••% 7 6 /2

1692 8 2V2 11 :6 10 4 1693 7 4 9 :4 8 4 1694 6 10 : 1 8 5V2 7V2 8 2 1695 9 :3 8 8V2

1696 8 2V2 10 2 :2V2 9 9V 1697 6 2 7 :9 7 1 1698 5 7 10 : 10 7 11V2 4 1699 v2 6 :6 5 1 1700 4 7 6 :5 6 1 1701 3 10* 3 10

1702 5 5 9 = V2 6 4 1703 5 4 5 4 1704 5 :8V2 5 8V2 1705 1706 5 % 5 '% 1707 6 = 9 6 3 1708 5 5 6 : 10 6 1V2

1709 5 10V2 5 10V2 1710 ? ? ? 1711 ? ? ? 1712 ? ? ?

1713 4:7V2 5 10V2 5 4 1714 11 2 7 5 5:5V2 1715 1716 8 4V2 4 8 4: U% 1717 8: 4 5 2 5: 3%

1718 7 =3V 2 4 11 5: 1

1719 6 5V2 4 7 5: 3 1720 5- 9V2 5 6V2 5: 7V2 1721 10 5 5 - 5: 1V2 1722 4: 4 4: 11V2 7 8V2

1723 5- 6V2 6 W2 6: 3 1724 5: 11V2 6 6V2 6: 5

1725 6: 4 5 9V2 5: 10V2 1726 7: 5 5 - 5: 7V2

* old coat beaver only no sale of that type ? unknown shi11ings:pence

40 furs to put on the auction block, or whether to dispose of furs on foreign

markets. This type of marketing has some important repercussions on the

operation of the company. It necessitated recognizing the finite limits

of the market and then operating within those parameters. This in turn

places constraints on the extent to which trade can expand before the

market limits are met. In the 1670s, 1680s, and 1690s the beaver trade

expanded beyond the market limits. What emerged in the first decades of

the eighteenth century was a market capable of carrying a larger volume

of furs but at the cost of lower prices. Therefore to survive finan•

cially in the fur trade the Hudson's Bay Company had to adapt its operations

to the new market parameters which its own advent had helped to reshape.

Regulating the flow of furs coming onto the market was one strategy it


To succeed in controlling the volume of furs in Europe the Hudson's

Bay Company had to monitor the flow from North America in order to avoid

excessive stockpiles in London warehouses. Modest stockpiles in London were desirable as insurance against the miscarriage or delay in a ship•

ment from the bay, to respond to moderate fluctuations in market demand or to take up market slack should a competitor be caught with inadequate

supplies. Large stockpiles, however, tied up working capital and de•

pressed the market. In the 1690s when coat beaver accumulated in the

company's London warehouses the committee instructed the traders at the

bay to discourage the Indians from bringing in coat beaver to trade.1+7

Upon orders from London Governor Fullertine shipped no coat or stage

beaver in 1708, leaving it instead to accumulate in the Fort Albany ware•

house.1+8 This had two effects; it delayed the customs expenses in London

and it reduced the beaver available on the London market without having

to turn away Indian traders in North America. Two years later the London

41 stockpiles of coat beaver had been reduced and the men at the bay were told to select 12,000 of the best coat beaver to ship to London.149 By

1713 and the Treaty of Utrecht stockpiles in England had been nearly eliminated largely due to reduced imports; only 14,488 parchment beaver and 8,636 coat beaver remained in the company's London warehouse.50

The figures below on the volume of imports, the volume of sales and the estimates of the furs remaining in the warehouse indicate the stra• tegy of controlling volume which the management of the Hudson's Bay

Company evolved after the glut in the 1690s. As exact values these figures should be used cautiously, especially those in the warehouse column. This column begins with the assumption of a zero value for 1680 since data for the first decade is very spotty. As well, the Dutch furs purchased from the Customs House in 1692 are not in the imports and thus further skews the warehouse figures. Therefore, until 1712 the warehouse figures are to illustrate the relationship between imports and sales.

In 1713 before the fall sale the company took an inventory of beaver in order to balance their ledger, and hence the warehouse figures after that time are quite accurate. That inventory figure is listed in the 1712 row because it predated the 1713 fur sales. The import volumes are taken from the journal valuations which the company began in 1684, retroactive to 1681 and are relatively accurate.

Despite an unavoidable degree of inexactitude in the figures their overall configuration sketches a relatively accurate picture of the turnr) over of inventory. Throughout the 1680s imports and sales moved in tandem with imports slightly out-distancing sales. Then in 1690 sales slumped, imports jumped and the company's fur surplus suddenly doubled. With the capture of York Fort from the French in 1693 and the acquisition of their furs as booty stockpiles climbed to over 90,000 pelts, a three to four

42 Table IV Import, Sales, and Warehouse Volumes

Volume Volume Volume in Imported Sold Warehouse

681 24,123 [17,973] 6,150 682 18,690 7,600 17,240 683 20,075 23,002 14,313 684 18,924 11 ,800 21,437 685 14,950 13,400 22,987 686 20,152 16,000 27,139 687 20,485 18,368 29,256 688 20,928 22,200 27,984 689 27,201 29,920 25,265 690 37,520 12,373 50,412 691 28,117 29,370 49,159 692 24,236 33,223 40,172 693 92,349 40,598 91,923 694 62,005 55,983 97,945 695 - 32,562 65,383 696 19,623 20,302 64,704 697 42,990 42,541 65,153 698 - 13,136 52,017 699 33,741 30,616 55,142 700 19,329 15,610 58,861 701 - 40,000 18,861 702 14,838 24,128 9,571 703 42,080 9,994 41,657 704 - 21,720 19,937 705 - - 19,937 706 50,092 . [7,500] 62,529 707 25,943 22,536 65,936 708 12,680 16,084 62,532 709 - [1,680] 60,852 710 - ? ? 711 51,129 ? ? 712 51 ,025 7 23,124-'' 713 - 20,271 2,853 714 42,848 37,549 8,152 715 - - 8,152 716 76,718 70,211 14,659 717 55,554 52,795 17,418 718 48,177 45,900 19,695 719 20,694 27,905 12,484 720 55,483 39,366 28,601 721 60,899 59,754 29,746 722 65,434 71,614 23,566 723 63,222 64,885 21,903 724 36,731 40,432 18,202 725 60,855 62,606 16,451 726 52,364 53,656 15,159

no imports or sales » from the balance of the Grand ? unknown Ledger 30 September 1713- [] estimates based on This figure is listed as 1712 sales by weight because the sales for 1713 came after 30 September.

43 year backlog. The inability of the company to turn-over its inventory

probably crippled it as much as did the decline in prices. Excess inven•

tory not only glutted the market but also represented production costs which could not be easily recovered. The company had to reduce its

inventory, and did so by exporting furs and by not bringing in as many

from the bay. Six of the fourteen years from 1700 to 1713 the company

received no shipments from the bay. Some of those years the company

chose not to send out ship for "the badness of the Markett for Beaver would not Answer our Charge."52 Other years the hazards of wartime

shipping and the difficulty of getting seamen precluded voyages to

Hudson1s Bay.53

The peace-time years after 1713 allowed the company to regulate its

affairs much more closely. The inventory it carried over from year to year never exceeded sales. It appears that attempts were made not to

completely eliminate stockpiles. In 1715 no ship returned from the bay

and the letters outward the following year contained complaints of the

hardship it caused in London.54 In 1719 the decline in volume imported also created a one year decline in sales even though the company had another 11,000 furs in its warehouse. The pattern for other years is

very similar with volume of imports and sales very close and a modest

stockpile retained in the warehouse.

In long-distance trade during the early modern period investments

in inventories to cover a year's sales in the event of shipping diffi• culties became an important mechanism for mitigating market uncertainty, creating greater market controls and thereby granting greater financial security. In London stockpiles of beaver were maintained and at the bay

stockpiles of trade goods. This involved large investments, both in working capital for inventories and fixed capital for warehouses. It

kk also necessitated quite a sophisticated managerial and administrative structure to oversee the operation. This was a more conservative ap• proach to trade based on the goal of long-term survival rather than short-term profits. In assessing the financial recovery of the Hudson's

Bay Company after the glutted market of the 1690s and the decline in beaver prices much of the credit has to be given to the management of the beaver market which the company evolved. Attention to market infor• mation, and control of inventories were very important factors.

The control of inventories rests on one further aspect of the

Hudson's Bay Company, namely that it did not have to contend with per• manent settlers pressing their own trading interests, and gave the company greater flexibility to monitor the volume of trade in North

America in relationship to the volume of sales in Europe. This is perhaps a crucial difference between the Hudson's Bay Company and the French-

Canadian fur trade, or the-English fur trade in New York. In the eighteenth-century the French-Canadians shipped many more furs to France than the Hudson's Bay Company did to England. Superficially this suggests that the French were more successful than the English, but this would only be so if trade in North America did not out-pace sales of furs in Europe.

If it did then it would prove commercially disasterous. The contention that the French-Canadian beaver trade was bankrupt after the 1690s may be because of over-production of furs rather than the decline in prices.

It is perhaps telling that when the Hudson's Bay Company had excessive profits to invest in the 1720s and 1730s they did'not expand the fur trade but invested instead in South Sea Company annuities and East India Company bonds.55 The continued desire to diversify the trade and lessen the de• pendence on beaver indicates that the Hudson's Bay Company had discovered the limits of the beaver trade and chose not to move beyond them.

45 The ability of the Hudson's Bay Company to adapt its trade to the

European fur market through attention to market information and control of inventories figures significantly in any assessment of its financial

recovery after the 1690s and of its long-term survival. This shifts attention away from sheer volume of trade or price, neither of which are sufficient to explain who survived in the fur trade and why. The

increasingly sophisticated management and administration of the mar• keting of furs has its parallel in the procurement of trade goods and their exchange for furs. This becomes the next area of analysis.

kb Notes

1 G.B. Masefield, "Crops and Livestock," in The Economy of Expanding Europe in the Sixteenth Century Vol. 4, Cambridge Economic History of Europe eds. E. E. Ri ch and C. H. Wi1 son (Cambri dge: Cambridge Universi ty Press, 1967), pp. 287, 289, 291., 294, 298.

2 W. J. Eccles, "The Fur Trade and Eighteenth-Century imperialism," William and Mary Quarterly, 3d. ser., 15, No. 3 (1983), PP- 341-2, 344; and W. J. Eccles, "A Belated Review of Harold Adam Innis, The Fur Trade in Canada," Canadian Historial Review, 60, no. 4.(1979), pp. 422-3.

3 K. G. Davies, "The Years of No Dividends," in People and Pelts, ed. Malvina Bolus (: Peguis, 1972), p. 67.

h E. E. Rich, Hudson's Bay Company, 1670-1870, Vol. 1: 1670-1763, (London: Hudson's Bay Record Society, 1958) , p. 55".

5 The Royal Charter Incorporating the Hudson's Bay Company, A.D. 1670, rpt. in Minutes of the Hudson's Bay Company, 1671-1674, The Publications of the Hudson's Bay Record Society, Vol. 5, ed. E. E. Rich (London: Hudson's Bay Record Society, 1942), p. 142.

6 Minutes, 13 October 1673, ibid., p. 51.

7 Letter Outward (hereafter L.O.) to John Bridgar, 25 April 1683, in Letters Outward, 1679-1694, ed. E. E. Rich, Publications of the Hudson's Bay Record Society, Vol. 11, (London: Hudson's Bay Record Society, 1948), p. 88.

8 Minutes, 28 May 1682, in Minutes of the Hudson's Bay Company, 1679-1684, The Publications of the Hudson's Bay Record Society, Vol. 8, ed. E. E. Rich (London: Hudson's Bay Record Society, 1945), p. 228.

9 L.O. to Henry Sergeant, 22 May 1685, in Letters Outward, Vol. 11, p. 142.

10 L.O. to Capt. Wm. Bond, 6 October 1686, and L.O. to Mr. Morgan Lodge, 6 October 1686, in ibid., p. 203.

11 L.O. to Mr. Morgan Lodge, 14 November 1693, in Letters Outward, 1688 - 1696, ed. E. E. Rich, Publications of the Hudson's Bay Record Society, Vol. 20, (London: Hudson's Bay Record Society, 1957), p. 226.

12 L.O. to Walsh, 3 June 1694, in ibid., p. 238-9.

13 L.O. to Nixon, 22 May 1682, in Letters Outward, Vol. 11, pp. 46-47-

lh Rich, H.B.C., 1670-1870 Vol. 1, pp. 102-3-

15 Minutes, in Minutes, 1679-1684 Vol. 8, pp. 161, 166, 172, 178, 180, 195, 201.

16 Minutes, 20 October 1681 , in ibid., p. 134.

47 17 Minutes, 9 December 1681, in ibid., p. 159-

18 Minutes, 14 December 1681, in ibid., p. 162; and Minutes, 16 December 1681, in ibid., pp. 164-5-

19 Minutes, 5 January 1681/2, in ibid., p. 169-

20 L.O. to Nixon, 15 May 1682 in Letters Outward, Vol. 11, p. 41.

21 Minutes, 28 October 1681 , in Minutes, 1679-1684 Vol. 8, p. 137" 138.

22 Minutes, 9 November 1681, in ibid., p. 145.

23 Minutes, 22 October 1690, Hudson's Bay Company Archives, Provin• cial Archives of Manitoba (H.B.C.A., P.A.M.),' A.1/12, fo. 33d. (hereafter only the archival classification number is given.)

2h Minutes, 25 October 1690, A.1/12, fo. 34d.

25 Minutes, 12 November 1690, A.1/12, fo. 36.

26 Minutes, 2 November 1692, A.1/14, and Minutes, 25 November 1692, A.1/14.

27 Prices compiled from records of fur sales in the Grand Journals. A.15/3-A.15/5-

28 Minutes, 15 April 1690, A.1/12, fo. 14.

29 Minutes, 25 June 1690, A.1/12, fos. 23"23d.

30 Minutes 2 July 1690, A.1/12, fo. 24.

31 Grand Ledger, A.14/5, fo. 53-

32 Minutes, 5 August 1690, A.1/12, fo. 25-

33 Rich, H.B.C., 1670-1870, Vol. 1 , p. 270.

34 Ibid., pp. 258-9-

35 Ibid., p. 269-

36 Journal of Foreign Accounting, 1694-1706, A.17/2, fo. 42.

37 Compiled from Grand Journals, A.15/3-A.15/5-

38 A.17/2, fos. 1, 5, 17, 18, 19, 20, 39, 58, 87, 101.

39 A.17/2, fos. 36-39, 42, 59, 70.

k0 A.17/2, fo. 138.

41 A.1/23, fos. 27d-28; A.15/5, fos. 7^-78; A.15/5, fos. 142-3; and E. E. Rich, H.B.C., 1670-1870, Vol. 1, p. 461.

48 42 A.17/2, fos. 41, 42.

ks L.O. to Governor Fu11ertine, 26 May 1708, A.6/3, fo. 90d.

1+4 Customs Ledgers, Imports and Exports, PRO, London.. Data from Arthur J. Ray. Grand Journals, A.15/2-A.15/8.

1+5 Below are average weights for coat and parchment beaver pelts from 1684-1699- Coat Pa rchment Coat Parchment

1684 1.12 1 .48 1692 1 .04 1 .25 1685 1.15 1.53 1693 1 .03 1 .20 1686 1.09 1.41 1694 1 .08 1.39 1687 1 .12 1.53 1695 1 .02 1.16 1688 1.03 1.15 1696 1 .02 1.35 1689 1.08 1.17 1697 1.04 1.25 1690 - 1.24 1698 0.98 1.30 1691 1.01 1.26 1699 0.99 1 .32

avg. 1.06 1.3

Calculated from fur sale records, Grand Journals and Grand Ledgers

1+6 Compiled from Grand Journals, A. 15/1-A. 15/8 and Grand Ledgers, A.14/2-A.14/9.

47 L.O. to Governor Geyer, 22 May 1690, Letters Outward, Vol. 20, p. 98.

48 L.O. to Governor Fullertine, 26 May 1708, A.6/3, fos. 90d-91.

1+9 L.O. to Governor Fullertine, 29 May 1710, A.6/3, fo. 101.

50 Grand Journal, A.15/6, fo. 1,. 51 Compiled from Grand Journals, A.15/1"A.15/8 and Grand Ledgers, A.14/2-A.14/9.

52 L.O. to Governor Fullertine, 1701, A.6/3, fo. 47.

53 L.O. to Governor Fullertine, 3 June 1701, A.6/3, fos. 52~52d.

54 L.O. to Governor 'Knight, 15 May 1715, A.6/4, fo. 3-

55 Grand Ledger, A.14/8, fos. 32, 100; and Grand Journal, A.15/7, fo. 150.



The two greatest management and administrative tasks for the committee in London entailed preparations for the spring dispatch of the company's ships and the fur sales after the autumn return. The for• tunes of the company rested on the sound management of these two spheres of activity. As discussed in the last chapter, to prosper from the mer• chandising of furs attention had to be given to the timing of sales, the volume of furs offered, the volume of furs imported and the activities of competitors. Similar care had to be taken with the purchase of trade goods. A myriad of details concerning the quality, quantity, price, selection, and supply of merchandise occupied much of the committee's time from January through May. In its early years the company's methods for procuring trade goods and controlling inventory were often haphazard, experimental, and consequently costly. Slowly, the company developed

50 systematic procedures for purchasing merchandise and controlling the size of the trade inventory which by the second decade of the eighteenth cen• tury assured relative cost efficiency in this part of its business.

Coordinating trade good purchases in England with the consumer demands of the Canadian Sub-Arctic Indian a continent and a culture away posed both financial and organizational difficulties. A shortage of trade goods in 1681 opened the door to undesired private trade by the company's employees and made manifest the need to guarantee adequate i supplies of trade goods.1 But problems of insufficiency could only too easily be remedied by creating problems of excess. Thus procedures had to be devised to assure adequate supplies and to avoid insufficient or excessive supplies. In addition, the drop in fur prices in the 1690s compelled the company to rationalize all aspects of its business. More efficient management of the trading inventory absorbed some of the finan• cial shock of the price transition in the European fur market.

Determining what to buy, not how much at what price, or from whom, but simply what was one of the first problems with which the committee had to grapple. The wisdom of hindsight and long practice makes the issue seem simple: guns and related accessories, knives, hatchets, I kettles, blankets, Brazil tobacco, brandy, beads. These few stock items of the trade, however, represent a number of years of experience on the part of the company and habit on the part of the Indians; blankets,

Brazil tobacco, and brandy were later additions to the inventory. Many items the company purchased only once, and when they had been traded or had rusted or rotted to a state of irrepair were not replaced. Lack of knowledge about what the Indians wanted occasioned wide latitude for errors of judgement.

Despite sagacious advice from experienced traders there persisted throughout the seventeenth century a considerable degree of guesswork

51 in the selection of merchandise. In the 1690s the Company offered the

Indians an array of cloth to rival that offered by an English shopkeeper: silk, serge, Scottish plaids, shallone, canvas duck, perpetuanas, broad• cloth, duffel, baize, cotton, flannel, and blankets.3 By 1713 and the repossession of York Fort the company had learned that it only paid to stock broadcloth, duffel, blankets, and small quantities of baize and flannel.4 The forts housed a virtual haberdashery in an attempt to coax the Indians out of their fur garments. Coats, shirts, pants, hats, caps, socks, shoes, mittens, gloves, sashes, hankerchiefs, and women's sleeves in assorted sizes and varities were stocked.5 Hankerchiefs and women's sleeves disappeared from the selection, coats and pants became trade gifts and the variety of other items was reduced considerably. The com• mittee purchased curiosities and trinkets with which to tempt the Indians: arm, neck, and nose jewels, ivory and copper pipes, travelling spectacles, jews'-harps, cat-calls, and whistles.6 But the Sub-Arctic Indians desired only a limited number of trinkets, chiefly beads, feathers, looking-glasses, and rings. The Indians moving from the Stone Age to the

Iron Age rejected the company's offer of metal arrowheads, which rusted on the shelf and were eventually discarded.7

The cargo for 1670, the year of the company's founding, included beads, looking-glasses, combs, guns and accessories, hatchets, kettles, knives, arrowheads, and duffel.8 Vigilant to the possibilities of im• proving its trading position the Hudson's Bay Company introduced goods which became stock items of its trade. Blankets slowly gained prominence.

For the 1678 cargo the committee bought a total of six pieces of kersey blanketting from three different people, suggesting that these were trial purchases.9 By 1682 the company was purchasing a much larger number of blankets, many from Oxfordshire.10 That same year the committee arranged

52 to have samples of French blankets sent to them.11 They arrived but what was made of them is unclear. White broadcloth was shipped to York Fort in 1689 because

Wee understand by Capt. Ford that White Cloth is more desired by the Indians than Col loured white being not soe Subject to fright their Game as Redd or Blue, when they hunt, and it being lesse Charge to us, then Dyed Wee therefore have Sent Three Cloths for a Tryali.12

Until I685 the company only traded Virginia tobacco, but that year adopted the French practice of importing Brazil tobacco from the Portuguese, the variety preferred by the Indians.13 Thereafter the company went to great lengths to obtain this South American luxury. In the Fort Albany account books brandy is first listed as a trade good in I698,14 and at York Fort in 1718.15 One of the few items introduced after the Treaty of Utrecht in 1713 was rundlets or kegs in one, two, and three gallon sizes.16

The range of trial goods which passed through the company's ware• houses illustrates a few important points about its early history. Many of these goods were an investment which the company recovered slowly, if at all. No silk, arrowheads, black hats, or waistcoats were traded at York Fort from July 1690 to July 1691. Only 1 of 322 women's sleeves,

5 of 197 sashes, and 31 of 399 jewels attracted any beaver. The following years the pattern was roughly the same. Nor were these goods popular as trade gifts.17 The experimentation with many goods also indicates how long it took the company (nearly four decades) to determine the range of goods it paid to stock.

Historians of the fur trade have long debated who had superior goods, the French or the English, and what advantage it might have given either side.18 The question has legitimacy, yet a detailed analysis of the pro• curement of trade goods by the Hudson's Bay Company shows that quality was a factor over which the individual actors could exert considerable influence.

53 The company expended much time and money trying to assure quality, taking special pains to certify the workmanship of guns. Before placing an order the committee often had gunsmiths submit samples of their work,19 and gunsmiths had to stamp their wares with a trademark so that defective guns could be returned.20 Sample guns were kept in the London warehouse to be lent as pattern guns.21 And before being shipped gun surveyors inspected the cargo.22 Less elaborate, though similar procedures were followed to verify the quality of other goods, especially ironwares, which like guns had to be stamped with their maker trademark.23

The records of the Hudson's Bay Company indicate that it overcame many of its early problems with quality. The early minutes and journals frequently mention the return of defective merchandise. ; Fortyr.three defective guns and other unsaleable goods were returned in 1679-2^ The

1681 cargo from the bay contained another 122 guns.25 The minutes of the committee do not describe the nature of the defects, whether truly defec• tive or in need of maintenance. The company eventually sent a gunsmith to the bay to service its own guns and those of the Indians, a move which surely helped to stem the flow of guns from Hudson's Bay to London.

Routine problems with quality remained. For many years the company had purchased suitable hatchets then in 1718 hatchets with slender eyes were delivered, much to the dissatisfaction of trader and Indian alike.26

In the previous year cannon powder was shipped instead of gunpowder.27

These types of problems can never be wholly eliminated from the commercial enterprise, just minimized, which the company seems to have accomplished early in the eighteenth century.

There was no one cause of poor quality. As the committee knew well much of it could be traced to individual craftsmanship and consequently its requirement that gunsmiths and ironmongers stamp their wares. In

5k 1695 James Knight complained of poor quality guns and could determine

that those from the smiths Lawes and Austin were the offending ones.28

In other instances poor quality resulted from attempts to reduce costs.

Knight reported that the guns he received in 1716 were not of the same

quality as those he had taken with him in 1714. The committee acknow•

ledged his observation with the assurance that it was paying smiths-

three shillings per gun more to guarantee the necessary quality.29 A

look at the prices the company paid for guns shows that in 1713 and 1714

it paid twenty-one shillings, in 1715 and 1716 twenty shillings, and in

1717 twenty-three shillings, variations undoubtably resulting from price

and quality agreements the company had with its gunsmiths. Quality

depended partially on what the company was willing to pay.30

Some of the continual complaining about the quality of metal goods must be attributed to the lack of technology to produce metals which would perform well in extreme cold. Jens Munk, the Danish explorer who

camped at Churchill the winter of 1619-20, noted in his journal the hard•

ships which the extreme cold caused him and his men.

When I had the body of Hans Brook buried ... I ordered that two falconets should be fired in his honour ... But the very sharp frost had made the iron so brittle that the trunnions broke off both weapons when they were discharged, with the result that the man who fired them nearly lost his legs.31

On the night of the twenty-eighth [January] the cold was so severe that it burst a tin kettle which the boy had left in the cabin with a little water in it. As tin cannot stand the terrible frosts of such icy seas I don't know what kind of vessels should be used to preserve precious waters in that .32

Even taking into account variations in the quality of iron, many of the problems with metals originated with the state of metal technology rather

than with poor workmanship or the level of industrialization in any one

European country. Thus, complaints about poor quality metal goods need

55 to be carefully judged to determine from whence the problem came, whether from craftmanship over which the company had some control or from tech• nological and environmental conditions over which it had no control.

The factors which influence quality are numerous, complex, and cannot be reduced to a single issue of the national character of production.

The Hudson's Bay Company fully realized that its Indian customers would turn to its French competitors if dissatisfied with quality. As well, the company could ill-afford to have sub-standard merchandise wasting in its warehouses. Some French goods were superior to English goods.

The company could not purchase English flints of the equivalent quality of French flints, and so purchased French flints when it could.33 French gunpowder was considered superior to English.34 But it is not logical to conclude that the success of any one actor in the fur trade rested pri• marily on the quality of trade goods. It was a business problem which demanded continual attention. By the early eighteenth century the

Hudson's Bay Company had learned to minimize poor quality and heed the signs of changed quality. These two management practices contributed more to the company's commercial success than did the umbrella of English i ndust r i a 1i sm.

Controlling the volume of inventory was probably the most important aspect of trade goods management. Inadequate inventories would dis• courage the Indians from coming to trade, excessive inventories were costly. Merchants in the seventeenth and eighteenth centuries, like merchants today, wanted to recover their investment in inventory as quick• ly as possible, and tried to avoid tying up working capital in dead stock.

Yet, as the Hudson's Bay Company learned, long-distance trade necessitated a two-year supply of goods as insurance against the miscarriage of a cargo and, by consequence, larger warehouse capacity for storage. The

56 investment for the inventory -- merchandise and warehouses •-- was greater in long-distance trade as a percentage of the annual business then in many other areas of commerce, a cost of which shareholders had to be willing to bear. Large inventories stocked over longer periods of time increased the chances for damage. The Committee in London occasionally saw fit to remind the men at the bay to take precautions to prevent the rusting of iron goods35 and to turn the barrels of gunpowder.36 And the stock had to be rotated, old being traded before new.

Time-lags complicated the management of the inventory for the

Committee in London had to plan twelve to eighteen months ahead of the operations at the bay. It gradually came to rely on annual correspon• dence, indents from the traders, and the account books from the forts to coordinate purchases in England with the trading needs in North America.

It is doubtful whether the company origina11y realized the necessity for this careful record-keeping and a well structured administrative system.

The early minutes contain no mention of the analysis of the fort records as do later minutes. In the letters outwarid from the early 1680s the committee stressed the improvement of bookkeeping at a very basic level.37

In London very rudimentary accounting methods were first used and it is unlikely that more elaborate accounting would have been employed at the bay. Only at the end of the 1670s with the transition in shareholders from men of the Court to men of the City was a simple form of double- entry accounting introduced.38 Careful accounting of the trade in North

America probably began at the same time, and with it greater attempts to synchronize the two arenas of the company's business.

Distanced from the trade the committee depended greatly on the advice of traders when ordering trade goods, especially in the early years.

Traders returned from the bay often attended committee meetings and the

'57 early minutes and annual letters frequently mention their assistance

"Mr. Bailey gives his opinion accordeing to an order formerly made that for an additionnall cargo for the year ensueing there may bee Suplyed . ...39

"We have sent you by Mr. Knights Directions 100 party Cul lerd coates . . . ."40

Wee have taken the advise of Mr. Knight and Mr. Bridgar, whome wee have found very ingenious and knowing men in the business of our trade.41

"Mr. Piere Radison haveing viewed over the Merchantdeis cargo and does judge that 500 Ice Chissells be added more."42

Traders at the bay also requested orders for goods. As the commit• tee began to have trading records to analyse it also started to scrutinize indents from the bay. Finding Henry Sergeant's 1683 order out of pro• portion to the volume of trade he transacted, the committee elaborated its super-abundance in the following spring's annual letter.

The Invoice of Goods you say that is wanting in the Countrey we Judge is very Extravagant for your Advicer has done it without consideration as in some things we will touch upon to make you sensible of the rest. you wold have 350 short guns of 3i foote for HI 100 di tto k & k\ Mr. Knight he writs for 700 guns of all seizes 1150 in all

Now consider what quantety you sell in a yeare at RR 13 at HI 26 at AR 32k 363 in all

And by your Accte. there are 962 remaineing in the Countrey (though our bookes mentions 991) yet take your Accte. thereof there are enough to last you above 2 yeares and a halfes Trade & now we are upon this subject we wold have you remove our Merchantdizes S likewise Provissions which does exceed two yeares supply from one Factorey to the other where is most need as at RR 118 guns & sell but '13 in a yeare at HI k~\k & sell but 26 in a yeare at both which places they Ley & rust to our Detriment & remove them to Albany River where our Chiefe Trad is only leaveing 2 yeares supplie of such guns as doe most usially sell and so for shott you have remaineing 399^5 li. by your accte. (though ours' mention k50k7 li.) and you sel1 at

58 AR 8250 1i. HI 485 RR 1000 9735 1i• i n a yea re

which remainder of shott is sufficient for 4 yeares Trade by your owne computation and yet you write for HI 19600 li. & sell but 485 li. in a yea re & there you have remaineing li. 13675 Mr. Knight writes for 21500 li. and he sells but 8250 li. and there is remaineing at his Factorey 26386 li. by both which examples we think may convince you of such extravigant Demands and so many other sortes of goods our Rules have beene S shall be to supply you with all sortes of Merchantdizes for 2 yeares yet we have in some goods exceeded those Rules this yeare as in guns shott & powder etc.43

Much of the confusion resulted from the failure to account precisely for the disposal of all the company's goods, not just those traded but also goods expended for other purposes. A sizeable part of the stock of guns, shot, and powder the men spent on hunting. The trading stock pro• vided payment to the Indians for miscellaneous services, and gifts to the

Indians also reduced the inventory. Some goods, such as shot, came in a number of varieties, and had to be inventoried separately, which did not always happen. "[Ljikewise acquaint the Bookkeeper that for the future he mention in the Book of Accts the particular Number 6 Sorts of Guns traded, as likewise particularly by the Sorts of Shott."44 Kettles were sold by the pound, but only slowly did the company realize that volume not weight determined the Indians' choice. In 1730 the committee informed the traders that "in your Indent for Kettles ... send Us the quantity You would have each Kettle contain and not the Weight as formerly."45

Defective goods had to be properly recorded as untradeable and returned to London.46 And occasionally the committee had to educate clerks on the idiosyncrasies of English weights and measures, for instance, that a hundredweight of shot was not 100 pounds as a clerk at York had recorded i t, but 112 pounds.47

59 One should not discount lightly these administrative episodes.

Viewed individually one is a problem of poor quality, another a problem of ordering, another a problem of bookkeeping. Viewed collectively each represents a problem related to the acquisition and disposition of the trade inventory. The distance separating the source of supply from the source of demand created disequilibrium which the company learned to correct through bookkeeping, indents, and annual correspondence. The fall in the price of beaver in the 1690s compelled the company to refine further these administrative practices which it had introduced the pre• vious decade, so as to weather the transition from trading the scarce luxury of fur to trading the more abundant luxury of fur.

Prices for trade goods, compared to the price of beaver, were rela• tively stable during the first half-century of the company's existence.

With modest purchases the company could do little to reduce the price of trade merchandise, except to purchase directly from manufacturerswhich it had done from early on, or to lower quality at the risk of offending the

Indians. The table below lists the prices for fourteen different items from 1680-1728. Prices for metal goods changed little. The price of powder rose sharply at the turn of the century and then declined again.

Prices for the two items which were imported, Brazil tobacco and flints, fluctuated more than the prices for domestic goods. The slight rise in the prices of all three cloth items - blankets, broadcloth, and duffel - after 1715 and then their marked decline at the end of the 1720s suggest the possible impact of industrialization in this sector of the economy and the positive effect it had on the company's fortunes.

The spotty price data for the early years contrasts sharply with the data for the years after 1713- This is partly due to the difficulty of locating prices for some years, partly a result of changes in record

60 Table V Trade Good Prices in Sterling^

Guns/ Kettles/ Hatchets, Lg.Roach Powder/ Shot/ Vermillion/ pc. lb. med/pc. Knife/dz. cwt. cwt. lb.

680 1:3* 2 14:0 681 1:3 682 22 .6 1 :4 10 2 2 2 10:0 12:10-14:10 683 684 - 12 685 24 :0, 1:4 12 2 8 2 6 0 12:6-14:6 17 :0* 686 687 24 0 - 12 2 8 2 9 0 12:0-14:0 688 689 24 0 1 :4 690 24 0 1:3i 3 5 0 691 25 0 - 12 692 693 694 1 :4 10:6-12:6 695 25 0 10:6-12:6 696 697 698 26 0 1:5 2 7 0 699 1 :5 2 8 0 700 1:5 9 0 701 24 0 3 15:0 702 24 0 1:4i 4 10:0 703 24 0 704 705 24 0 1:3i 10 4 1 0 6 6 706 24 0 4 0 0 6 6 707 3 708 1:4i 3 10:0 7 > 709 710 24 0 j:4i 3 15:0 8 0 711 24 0 1:3 3 5 0 7 6 712 23 0 1:4* 3 5 0 713 21 0 1:44 11 2 6 10:0 7 6 714 21 0 1:4 10 2 4 3 5 0 11:5 7 6 715 20 0 1 :5 10i 2 6 3 0 0 12:0 6 4 716 20 0 1:6 10± 2 4 3 5 0 9:6-10:6 7 0 717 23 0 1:6 10 2 1 3 10:0 10:6-13:6 7 0 718 23 0 1:5 3% 2 4 3 10:0 12:3i 7 8 719 23 0 1:5i ioi • 2 4 3 10:0 12:11 8 0 720 22 0 1:6 10 2 4 3 5 0 12:5i 8 0 721 22 0 1:6 10 2 4 3 5 0 12:8i 8 0 722 22 0 1:6 11 2 4 3 5 0 12:0-15:0 8 0 723 22 0 1:5i 11 2 4 3 5 0 12:6-14:6 7 6 724 22 0 1:5 11i 2 4 3 5 0 15:6-17:6 7 0 725 22 0 1:5 11'i 2 4 3 5 0 15:0-17:0 7 0 726 22 0 1:5 11± 2 4 3 15:0 15:9-19:6 7 0 727 22 0 1:5 11± 2 4 4 15:0 15:11i 7 0 728 22 0 1:5 11i 2 4 2 18:0 17:± 7 0

61 Flints/ Braz'Tob/ Twine/ Combs/ Blankets/ Broadcloth/ Duffel/ 1000 lb. sk. pc. pc. yd. yd.

1680 5 0 3 10 1681 - 6i 3 11 1682 1 2 - 6 10:9,8:9 3 3i 1683 1684 1685 3 3i - 6 2 11 1686 - 6i 3:2-•3:9 1687 2:0 0 - 6i 1688 1689 1690 - 6 1691 1692 1693 1694 7:6 3 4 1695 14 0 - 7 1696 8:6 1697 8:6 1698 1699 1700 1 3 1701 1 3 1 2 6:6 1702 1 2 6:9 3 2i 2 6 1703 2 7i 1704 2 6:4 2 1705 - 11 1 - 63/4 3 4 6 1706 3 1 2 6 1707 1708 2 1 3 1i 1709 1710 - 7 1711 1 3 - 7i 3 0 1712 - 9 2 4i 1713 10 0 - 9 1 2 - 7 6: li 3 9+ 2 6 1714 7 6 - iii 1 2 - 6i 6:4 3 8i+ 2 8 1715 11 0 1 3 1 3 - 6i 6:4 3 - 2 8 1716 - 104 1 2 - 6i 6:4 3 5i+ 2 8 1717 - 104 1 2 - 64 6:4 3 4 2 8 1718 10 0 1 2 - 64 6:6 3 4 2 9 1719 10 0 1 3i 6:6 3 - 2 9 1720 10 0 1 4 1 2 - 64 6:6 3 2i 2 9 1721 10 0 1 3 1 2 - 64 6:6 3 2 2 9 1722 10 0 1 3 1 2 - 64 6:4 3 3 2 8 1723 1 3 - 64 6:0 2 10 2 6 1724 10 0 1 2 - 64 6:0 2 9 1725 10 0 1 3 1 2 - 64 5:8 2 7i 2 4 1726 10 0 1 0 1 2 - 64 5:6 2 4i 1727 1 0 - 5 5:2 2 3 1 9 1728 1 2 1 2 - 64 4:2 2 5 1 10 pounds:shi11i ngs:pence "-•Dutch Guns #cwt.=hundredweight=112 lbs. +with charges

62 keeping. But mostly it denotes irregularities in purchasing. One year the committee would over-stock an item and then not purchase it for two or three years. After 1713 the company purchased most goods every year having learned to turn over this portion of its working capital on an annual basis. This deve1opment comp1imented the stabi1ization of the beaver inventory in London. Both these factors provide much of the ex• planation for why the company started distributing annual dividends in


The capability of managing the trade goods inventory economically necessitated an administrative system comprised of bookkeeping and cor• respondence both in London and North America. The most pedestrian details of quality, quantity, and selection had to be recorded for, this system served as the only form of communication possible. The Committee in London did not originally recognize the need for such a system and only at the end of its first decade did it begin to emerge. The drop in the price of beaver compelled its refinement, hostilities in Europe and at Hudson's Bay prolonged its full emergence until 1713 and the Treaty of Utrecht. By 1718 the Hudson's Bay Company shareholders were profitting from the careful attention the committee had given to the economical management of its operation.

63 Notes

1 See chapter 2, pp. 30-31.

2 Minutes, A.1/8, f os. 4d, 6d, 8d, 17d, 19d, 23, 25d, 28.

3 Fort Account Books, B.239/d/3, fos. IOd-11; B.239/d/4, fos. 9d- 10; and B.3/d/2, fos. 29"62.

k Compare the 1693-94 York Fort Account Book, B.239/d/5, fos. 18?-) I8d with a post-Treaty of Utrecht account book such as B.239/d/11, fos. 2d-3.

5 B.239/d/1, fos. 53"53d; B.239/d/4, fo. 21d; and B.3/d/2, fos. 29-62.

5 B.239/d/3, fos. 15d-39, B.3/d/7, fo. 16.

7 B.3/d/2, fos. 29-62; and B.3/d/7, fo. 16.

8 E. E. Rich ed. and intro., Minutes of the Hudson's Bay Company, 1671-1674, the Publications of the Hudson's Bay Record Society, Vol. 5, (London: Hudson's Bay Record Society, 1942), p. xxxi.

9 Grand Journal, A.15/1, fos. 8-8d, 10.

10 Minutes, 3 March 1681/2, in Minutes of the Hudson's Bay Company, 1679~1684, The Publications of the Hudson's Bay Record Society, Vol. 8, ed. E. E. Rich (London: Hudson's Bay Record Society, 1945), p. 189•

11 Minutes, 25 January 1681/2, ibid., p. 177; and A.15/2, fo. 4ld.

12 Letter Outward (hereafter L.O.) to Geyer, 6 June 1689, in Letters Outward, 1688-1696, ed. E. E. Rich, Publications of the Hudson's Bay Record Society, Vol. 20, (London: Hudson's Bay Record Society, 1957), p. 61.

13 L.O. to Sergeant, 22 May 1685, in Letters Outward, Vol. 11, p. 142.

14 Fort Albany Account Book, 1698-99, B.3/9, fos. 4ld-42.

15 Compare the York Fort Account Book, 1717~18, B.239/d/9, fo. 13 with the Account Book, 1718-19, B.239/d/10, fo. 6d.

16 Albany, 1718-19, B.3/d/27, fo. 7 and York, 1721-22, B.239/d/12, fo. 32d.

17 B.239/d/3, fos. 1.5d-37.

18 See W. J. Eccles, "A Belated Review of Harold Adams Innis, The Fur Trade in Canada," Canadian Historical Review LX, No. 4 (1979); PP- 429" 434 for an overview of a half-century of controversy over this issue.

19 Minutes, 21 January 1679/80 and 14 November 1681 in Minutes, 1679" 1684, pp. 25, 147-

20 Minutes, 2 February 1679/80 in ibid., p. 31-

64 21 Minutes, 16 November 1683, in ibid., p. 155-

22 Minutes, 18 May 1681 in ibid., p. 123-

23 Minutes, 2 February 1679/80; 7 December 1683, in ibid., pp. 32, 172.

24 Minutes, 14 January 1679/80, 2 February 1679/80, in ibid., pp. 22, 31.

25 Minutes, 20 January 1681/2 in ibid., pp. 173-

26 L.O. to Mackleish, 30 May 1720, A.6/4, fo. 4ld.

27 L.O. to Mackleish, 3 May 1719, A.6/4, fo. 33d.

28 L.O. to Knight, 30 May 1696 in Letters Outward, Vo. 20, p. 270

29 L.O. to Knight, 31 May 1717, A.6/4, fo. lid.

30 A.24/2, fos. 32d-33, 37d-38, 60-60d, 67~67d, 81.

31 Jens Munk, The Journal of Jens Munk, ed. and intro. W. A. Kenyon, (Toronto: Royal Ontario Museum, 1980), p. 28.

32 Ibid., p. 28.

33 L.O. to Beale, 10 June 1713, A.6/3, fo. 120d.

34 L.O. to Fullertine, 3 June 1705, A.6/3, fo. 70.

35 L.O. to Sergeant, 16 May 1684, Letters Outward, Vol. 11, p. 125-

36 L.O. to Geyer, 6 June 1689, Letters Outward, Vol. 20, p. 61.

37 L.O. to Nixon, 15 May 1682 and L.O. to Sergeant, 16 May 1684 in Letters Outward, Vol. 11, pp. 45, 48, 120, 122-4.

38 Compare the Grand Ledgers 1667-1675 and 1676-1682, A.14/1 and A.14/3.

39 Minutes, 16 January 1671/2, Minutes, 1671-1674, Vol. 5, P- 19-

40 L.O. to Sergeant, 16 May 1684, Letters Outward, Vol. 11, p. 126.

41 L.O. to Nixon, 15 May 1682, ibid., p. 38.

42 Minutes, 1 April 1685, A.1/8, fo. 23-

43 L.O. to Sergeant, 16 May 1684, Letters Outward, Vol. 11, p. 122-124.

44 L.O. to Mackleish, 30 May 1721, A.6/4, fo. 52d.

45 L.O. to Mackleish, 30 May 1719, A.6/5, fo. 36d.

65 46 L.O. to Richard Stanton, 28 May 1724, A.6/4, fo. 86d.

47 L.O. to Mackleish, 28 May 1723, A.6/4, fo. 72.

48 Grand Journals, A.15/1-A.15/8; Grand Ledgers, A.14/2-A.14/9; Shipment Records, A.24/2-A.24/3-






The Hudson's Bay Company has bequeathed to posterity one of the more enigmatic of price schedules extant, the "Standard of Trade" used

by the company's traders in North America, and which expressed the price of European trade goods as a quantity of beaver pelts. For instance, in

1715 at Fort Albany a gun cost ten pelts, a yard of broadcloth two pelts, and a pound of Brazil tobacco one pelt.1 Coming into existence within

ten years of the Company's founding in 1670 and remaining in use for over

two centuries, the Standard essentially made the beaver pelt the North

American currency of the Hudson's Bay Company. The beaver pelt assumed

the three functions normally ascribed to money: a medium of exchange, a unit of account, and a store of value.2 Thus, the Standard is one of

the best surviving examples of institutionalized barter, theoretically eliminating exchange variability, and viewed broadly, an example of the prolonged use of a non-metallic currency.

67 What economic historians of the fur trade have found particularly puzzling is that prices on the Standard remained virtually static for nearly two centuries and were revised only occasionally by the Committee

in London which managed the company. The persistence of static prices

in a period of economic growth and in a period well-known for its dis• courses on the relationship between prices and the rhythm of the economy has left scholars groping for an explanation for this seeming economic

paradox. However, the major hiriderance impeding the inquiry is the pen• chant for explaining it in terms of economic theory rather than in his•

torical terms. The intent of the following analysis is to place the

Standard in historical perspective.3

The static prices on the Standard have become a central feature of a discussion on the economic motivation and behavior of the North American

Indian in the fur trade. One line of reasoning suggests that the static prices of the Standard transgress fundamentally the received wisdom of what constitutes rational economic behavior for Europeans. The logic of this argument is that any economically rational European merchant would want prices to be responsive to supply and demand. If the prices the

Hudson's Bay Company paid for furs did not change it was because the company faced an obstacle so insurmountable that they were obliged to adopt behavior that would otherwise be deemed economically irrational.

That insurmountable obstacle was Indian economic behavior.4

Indians, it is suggested, did not have an economic system in which market forces worked; supply and demand did not influence Indian economic decision-making. The exchange of goods had a social and political func• tion in Indian society which superseded considerations of market forces, and the fur trade became a way for Indians to forge political and military alliances with Europeans and with other Indian groups. The acquisition

68 of guns from European traders figured largely in that scenario. Secon•

darily trade was a way for Indians to acquire the other European

manufactures they might have desired; blankets, kettles, knives, hatchets,

and other assorted goods, a trade for which price did not play a deter•

mining role.5

The challenge to this theory of Indian economic behavior is based on a quantitative analysis of variations in the volume of furs traded

as a ratio of trade goods. Findings from this study showed that when

competition between French and English traders increased so did the price

the Indians received for their furs. This was possible within the con•

straints of the rigid Standard for the company's traders would inflate

prices above the Standard, building back into the trade some flexibility

for higgling and haggling. The implications for Indian behavior is that

they did respond to competitive prices in a manner associated with the marketplace. Prices in the fur trade were not as static as the Standard might lead one to believe; the Standard became, rather, the maximum price

the Company would pay for furs. While this analysis effectively cautions against facilely attributing the staticity of the Standard to Indian economic behavior, it does not answer the question of why it remained unchanged for so long.6

It becomes helpful, with due caution, to pose a simple counterfactua1 scenario in order to identify some problems of analysis and point towards new avenues of investigation. Suppose for a moment that prices on the

Standard had fluctuated. How then would they have fluctuated? Up? Down?

In response to changes in the price of furs in London?' In response to changes in the price of trade goods in London? In response to both? Where would all of these decisions have been made? In London? At'the Bay? And by whom? The Committee in London? The traders at the Bay? And how would all of this information on prices have been 69 coordinated and disseminated? By slow boat? How else? It was the seven• teenth and eighteenth centuries after all.

One of the points which this line of questioning illustrates is the magnitude of the logistical problems inherent to long-distance trade during this period, and which rendered clear-sighted decision-making exceedingly difficult, if not at! times virtually impossible. Responding

rationally to supply and demand fluctuations in the market without full and accurate information plagued merchants in all sectors of the pre-

industrial economy, but none so acutely as those dealing in long-distance trade.7 Living in an age in which a flood of information threatens to consume us we are constantly aware of its impact in the way we order our

lives politically, socially, culturally, and economically. Curiously, however, we often overlook the way in which a lack of information forced a different ordering of affairs in bygone times. It is one of the missing pieces to understanding the Standard of Trade not just as an economic phenomenon but also as a historical phenomenon.

The Standard of Trade, a price schedule using the beaver pelt as the unit of value, evokes more primitive times, an anachronism lingering on

in the industrializing nineteenth-century world because the fur trade

remained on the fringe of that economic order. This atavistic method of transacting business has been construed to be an outcome of the meeting of the Indian and the European during England's commercial expansion in the seventeenth century. Trading practices coalesced from an amalgamation of two dissimilar cultures, and the Standard represented a European accom• modation to the Indian.8 This construction is, however, ahistorical, the shadow of the present darkening the past, for the Standard has its roots as much in the economic world of seventeenth-century Europe as in the economic world of seventeenth-century North American Indian. This is not

70 to suggest that the two economic cultures are readily comparable, had the

same needs, moved to the same r.hythms. It is to say that for the seven•

teenth-century European the Standard of Trade was not atavistic, but was

rather a creative response to structural problems intrinsic to the

economy of the time.

To demonstrate that the Standard of Trade has a historical dimension

as well as an economic dimension derived from a European context it is

necessary to look beyond the North American fur trade to the larger

European commercial world. From this vantage point it is possible to

appreciate better two major characteristics of the Standard: one, the

way it formalized barter trade and two, that it fixed the prices of that

trade. Both practices have precedents in European commerce predating

the Hudson's Bay Company.

Barter persisted as a common and accepted method of trade well into

the eighteenth century both in Europe and the Americas. In international

trade merchants had long used barter to grease the wheels of commerce in

the absence of hard cash and in a lack of faith in paper money and bills

of exchange. Glasgow merchants transacted much of their trade with West

Africa and the West Indies on a barter basis well into the eighteenth

century.9 The Baltic often offered no alternative to barter.

Unable to obtain cash payments for furs shipped to Russia between 1694 and

1710 the Hudson's Bay Company accepted payment in Russian commodities:

hogs-bristles, dressed hides, potash, tallow, yarn, but mostly hemp which

it then flogged to the Lords of the Admiralty.10 Throughout Europe much of the domestic trade in small local centres was barter; people living

in the countryside seldom saw coins, even more seldom used them.11

In bullion-starved colonial North America metal-based currencies

served as a unit of value and a unit of account, but only erratically

71 as a medium of exchange. Colonials transacted most of their business as barter which took two forms: truck barter with a simultaneous exchange of goods and bookkeeping barter which allowed for a time-lag. Surviving accounting records from the period suggest that colonial merchants uti• lized bookkeeping primarily to lubricate the mechanism of barter trade, facilitating complex and extended exchange in the absence of circulating currency. Instructions for methods of recording barter transactions warranted a separate chapter in the sixth edition of John Mair's Book- keeping Modernized printed in 1793-12 Throughout the colonies merchants would extend credit to colonists in the form of European imports and received payment in colonial commodities.13 In some instances, wages were calculated in commodities. Christopher Jeaffreson, a planter and merchant in the West Indies paid wages in sugar. In 1681 he considered competent tailors, coopers, carpenters, joiners, masons, and smiths worth a thousand pounds of sugar a year; indentured servants received four hundred pounds of sugar at the end of a minimum four year term of service.

Barter trade and furs share a long and intertwined history. Per• manence of value, durability, and ease of transport made sable a medium of exchange in cash-poor fur-rich Russia. In early Kievan Russian and

Novgorod furs circulated as a currency and when used as such were referred to by the specialized word kuny, an old Russian word for marten. By the fifteenth century furs were no longer valued in terms of themselves but in terms of a metallic currency; nonetheless, they remained a substitute for cash for another two centuries. In the first half of the seventeenth century the tsar established the Sable Treasury as a branch of the

Siberian Department. When supplies of precious metals ran low the state would discharge its debts with sable. Foreign merchants to Russia

72 frequently received payment in furs, and the state remunerated foreigners for their services with furs.15

In Western Europe furs did not play a key function in the economy like they did in Russia, in part due to the fact that by the Middle Ages furbearing animals had been greatly reduced in numbers and their habitat encroached upon by settlement.16 It was not long after arriving in North

America, however, that European settlers discovered furs to be one com• modity which could be readily acquired and easily marketed, thereby generating the necessary earnings to purchase the European goods they needed. Obtained from the Indians by bartering European goods and hence requiring a minimal amount of labour, furs were an ideal commodity to undergird the economics of the labour-intensive agricultural settlements.

There is a paucity of information on the pedestrian details of how this trade was organized, but isolated examples indicate that some traders evolved methods of regularizing barter trade which bear marked similarity to the practices of the Hudson's Bay Company. Evert Wendell, a New York trader, sketched beavers in his account book to record credit transactions with Indian customers.17 The Pychons in Massachusetts, sub-contracted their monolopy trading right to others with the proviso that traders buy trading goods from the Pychon store paid for in beaver.18

Thus, the practice of barter trade by the Hudson's Bay Company was an accommodation to the prevailing economic conditions of the time as much as it was an accommodation to the level of economic sophistication of the

Indian. In fact it simplified their operation by letting them skirt entirely the thorny and controversial issue of exporting bullion. More• over, in view of the prevalence and acceptance of barter it is not parti• cularly surprising that the Hudson's Bay Company established prices to control it. Nevertheless, understanding the role of fixed prices in

73 pre-industria 1 entrepreneurial strategies and planning, whether in a barter economy or a monetized economy, is important enough to rehearse briefly some highlights of its historical development.

In the Letters Outward, the annual correspondence from the Committee in London to the traders- at the Bay, the Committee frequently admonished the traders to adhere to the Standard. Some have noted that this empha• sized the employee status of the traders, in contrast to the flexibility and independence enjoyed by French traders. E. E. Rich suggests that because of this "the French ... could make a generous bargain in order to attract trade and then drive hard terms to take advantage of the oppor• tunities." This analysis needs to be tempered and qualified for the flexibility of the French was not necessarily an advantage nor was the constraint on trade imposed by the Standard necessarily a "handicap".19

Again we return to the problem of the relationship between informa• tion and rational economic decision-making. Profitable results from higgling and haggling require relatively good market information. In an

ideal marketplace the seller knows at the least the minimum price his goods must command in order to cover expenses. The Hudson's Bay trader, hired to conduct the fur trade in the absence of the shareholder, lacked the information necessary to calculate a base price. Without this infor• mation the prospect of trading at unprofitable prices increased dramati• cally. A French trader's suppleness and independence in trading which allowed him to take advantage, of opportunities may have been the undoing of many. With little or no information about the European market what may have appeared to have been an opportunity may instead have been a cos 11y i11 us i on.

As the distance between markets increased, the reliability of the information which coordinated those markets decreased. The ability of merchants to organize their affairs so as to mitigate the problems caused by inadequate information often spelled the difference between success and failure. A number of measures recommended themselves. Bookkeeping, correspondence, and profit incentives were administrative procedures frequently employed.20 As well, the employment of reliable and trust• worthy factors to prosecute the trade in the absence of the owners was crucial. Demanding a personal commitment to the merchant, employment of kin was the logical solution to this problem. The American colonial trade, dominated by individually-owned businesses or small partnerships, evolved a transatlantic commercial network held together by the bonds of kinship and long acquaintance.21

In some circumstances merchants adopted yet another mechanism of control, price-fixing, essentially creating market information in its absence. One of the aims of the early regulatory companies, organizations of merchants trading overseas to the same lands, was to attempt to control the volume of trade and to set minimum prices for goods in hopes of tem• pering violent fluctuations in price and supply.22 In 1599 a group of merchants trading in the Levant agreed on a minimum price for the English kersey sold to Turkish merchants; the agreement became null and void when a merchant evaded the letter of the contract by bartering kersey for indigo. A 1626 agreement proved more successful, incorporating restric• tions on barter.23 Joint stock companies whose markets were protected by royal charter from competition with their own nationals were most successful in fixing prices. Because competition in the domestic and the overseas markets was never wholly absent, companies tended to favour moderate but stable prices in order to achieve long-term control of the market to high prices and short-term profits.24 The establishment by the Hudson's Bay Company of fixed-prices for its North American sphere

75 of trade conforms to the entrepreneurial practices of other joint stock, companies. It created information, reduced uncertainty, and increased the transparency of the market.

One further aspect of Indian economic behavior, tangentially related to the above issues, warrants brief mention before proceeding to a more detailed analysis of the Standard of Trade. Scholars have noted and generally agree that fluctuations in the price of trade goods did not influence significantly the consumer habits of the Indian and, the pro• duction of furs. Indians had relatively inelastic consumption patterns and produced furs sufficient to fill their needs. If Europeans offered a higher price for furs, and hence a lower price for trade goods it would have reduced the production of furs. Competitive pricing would influence the flow of goods either to the French or to the English but lower prices for trade goods would not increase the production of furs. Some argue that because fluctuations in price did not affect production then the price mechanism did not work and the fur trade was not a market economy.2

Others conclude that because Indians did respond to competitive prices then market forces were operating, yet the issue of the relationship between price and production is left in abeyance.26

The difficulty arises from an over-simplification of the correlation between price mechanisms, markets, and production, as if they constituted an indivisible whole. They are in fact two phenomena, related yet dis• tinguishable one from the other. The first is the short-term interplay of prices and the market, where competitive prices are observed. The second is the long-term economic and social impact from what transpires in the marketplace, and which is not entirely predictable. When this differentiation is made it becomes possible to reconcile competitive prices in the fur trade, the observed behavior of the Indian as a shrewd

76 and hard bargainer, and the inelastic consumption patterns of the

Canadian Sub-Arctic Indians. Historians looking at medieval economies are finding economic behavior which is markedly similar: behavior res• ponsive to competitive prices, yet relatively constant consumption pattern.27 It raises the question of what precipitates the transition from a non-growth to a growth economy, yet cautions not to answer too hastily price mechanisms. The historical record points increasingly towards the need to examine with greater care the ways in which social, cultural, and political factors impinge upon the long-term development of economic structures and economic behavior.28

The Standard of Trade when viewed from a broad perspective of econo• mic history rather than from the more narrow perspectives of fur trade history or economic theory is not solely an accommodation of economically sophisticated Europeans to primitive Indians. It is instead a mechanism which also responded to structural weakness in the European economy engendered by the shortage of hard currencies and by the difficulties of coordinating markets in long-distance trade. It is in this light that a systematic analysis of the Standard will be cast.

77 Notes

1 Hudson's Bay Company Archives, Provincial Archives of Manitoba. B.3/d/25, fos. 15-15d.

2 Polanyi, Karl, "The Economy as Instituted Process," in George Dal ton ed., Primitive, Archaic and Modern Economics: Essays of Karl Polanyi , (Garden Ci ty, N.J. : Anchor Books, 1968), pp. 166- 169. Thi s definition is the one used by Arthur J. Ray and Donald Freeman i n ' G i ve Us Good Measure' (Toronto: University of Toronto Press, 1978), pp. 54- 55-

3 See C. H. Wilson, "The Historical Study of Economic Growth and Decline in Early Modern History," in Vol. 5, ed. E. E. Rich and C. H. Wilson, The Cambridge Economic History of Europe (Cambridge: Cambridge Un i vers i ty Press, 1977), for a discussion of the growing transition in economic history towards the development of endogenous theory rather than the borrowing of exogenous theory.

4 E. E. Rich, "Trade Habits and Economic Motivation Among the Indians of North America," Canadian Journal of Economics and Political Science, 26 (1960): 35-53; Abraham Rotstein, "Fur Trade and Empire: An Institutional Analysis," (PhD diss., University of Toronto, 1967), PP- 2, 11, 16, 46, 61; and Rotstein "Innis: The Alchemy of Wheat and Fur," Journal of Canadian Studies 12 (Winter, 1977): 6—31-

5 This part of the analysis of Indian economic behavior has been developed by Rotstein based on the theory of administered trade developed by the economic anthropologist Karl Polanyi. Rotstein, "Fur Trade and Empi re," p. 2.

•6 Ray and Freeman, 'Give Us Good Measure', pp. 218-222.

7 Barry Supple, "The Nature of Enterprise," in Vol. 5, The Cambridge Economic History of Europe, pp. 394, 39.6-7, 407"8, 439. The impact of market uncertainty on entrepreneurial undertakings is a major theme in much of the recent economic history, especially that dealing with long• distance trade. See Bernard Bailyn, "Communications and Trade: The Atlantic in the Seventeenth Century," Journal of Economic History, 13 (1953): 380; J. M. Sosin, English America and the Restoration Monarchy of Charles II (Lincoln: University of Nebraska Press, 1980) pp". 5"23; Niel Steensgaard, Carracks, Caravans and Companies (Copenhagen, 1973) PP- 7, 10, 114.

8 Rotstein, "Innis: The Alchemy of Wheat and Fur," p. 12; Rich, "Trade Habits and Economic Motivation," p. 42; and Ray and Freeman, 'G i ve Us Good Measure', pp. 54-55-

9 C. H. Wilson, "Trade, Society and the State," Vol. 5, Cambri dge Economic History, p. 513; and Herman van der Wee, "Monetary, Credit and Banking Systems," ibid., p. 306-7-

10 E. E. Rich. The Hudson's Bay Company, 1670-1870 Vol- 1:1670-1763 (London: Hudson's Bay Record Society, 1958) pp. 398, 461.

78 11 F. P. Braudel and F. Spooner, "Prices in Europe from 1450 to 1750," Vol. 4, Cambridge Economic History, p. 377-

12 W. T. Baxter, "Accounting in Colonial America" in A. C. Littleton and B. S. Yamey, eds., Studies in the History of Accounting (Homewood, Illinois: Richard D. Irwin, Inc., 1956) pp. 272-275, 278.

13 Letter from Christopher Jeaffreson, St. Christopher's Island to Mr. Poyntz, London, June 5, 1676. in eds. Joan Thirsk and J. P. Cooper, Seventeenth-Century Economic Documents (Oxford: Clarendon Press, 1972) p. 544.

14 Letter from Christopher Jeaffreson, St. Christopher's Island to Mr. Poyntz, London, May 5, 1681 ; ibid.', p. 549-

15 Raymond H. Fisher, The Russian Fur Trade, 1550"1700 (Berkeley and L.A.: University of California Press, 1943) pp. 8-9, 123, 129-30, 132, 1-40-142.

16 Elspeth M. Veale, The English Fur Trade in the Later Middle Ages (Oxford: Oxford University Press, 1966) p. 59.

17 Thomas Elliot Norton, The Fur Trade in Colonial New York, 1686- 1776 (Madison: University of Wisconsin Press, 1974) pp. 29-30.

18 Francis X. Moloney, The Fur Trade in New England, 1620-1676 (Cambridge: Harvard Un i vers i ty Press, 1931) pp. 56-7•

19 Rich, Hudson's Bay Company, pp. 75~76.

20 Supple, "The Nature of Enterprise," p. 417-

21 Ibid., p. 412.

22 Bailyn, "Communications and Trade," p. 380; and J. M. Sosin, Engli sh Ameri ca, p. 5"23-

23 Niels Steensgaard, "Consuls and Nations in the Levant from 1570 to 1650," Scandinavian Economic History Review, 15, No. 1 (1967): 13~55 pp. 45-6.

24 Niels Steensgaard. Carracks, Caravans and Companies, pp. 47, 142-3, 152.

25 Rich, "Trade Habits and Economic Motivation," pp. 42, 48-50, 52~3; Rotstein, "Innis: The Alchemy of Wheat and Fur," pp. 12.16.

26 Ray and Freeman, 'Give Us Good Measure', pp. 218-228.

27 M. M. Postan, The Medieval Economy and Society (London: Penguin Books, Ltd., 1972) pp. 224-225; and Marilyn Gerriets "The Organization of Exchange in Early Christian Ireland," Journal of Economic History, 41, No. 1 (March 1981): 176.

79 28 See Neil McKendrick, John Brewer, and J. H. Plumb, The Birth of a Consumer Society: The Commercialization of Eighteenth-Century England. (London: Europa Publications Ltd., 1982); and Martin J. Wiener, English Culture and the Decline of the Industrial Spirit, 1850-1980 (Cambi rdge: Cambridge University Press, 1981); for examples of work i n this area.




The Standard of Trade as a mechanism to stabilize trading conditions had to be coupled with merchandising strategies which would draw the

Indians into trade, as the Hudson's Bay Company had to compete with the

French traders for the business of shrewd Indian traders who knew the competition between than the European participants. A number of strate• gies presented themselves: gifts, reliable supply, selection, and service.

Price too played a role, but it is difficult for twentieth-century minds to appreciate for whom the prices of the Standard of Trade are virtually meaningless as measure of value. Ten beaver pelts for a gun, one for a half pound of Brazil tobacco, two for a yard of white broadcloth1 express

little more than equivalencies of European manufactures for furs. No measure of gain or value by either Indians or Europeans is readily dis- cernable.

By using the prices the company paid for trade goods and the prices

81 it received for furs it is possible to reconstruct the Committee in

London's perspective on prices by transcribing the Made Beaver prices of

the Standard into sterling values. From this can be suggested the ways

the company viewed prices and used them to further its trading position.

The origins of the Standard are obscure, except to note that it was

first established during Charles Bayly's tenure as governor at the Bay

from 1670 to 16 79 -2 Bayly's replacement, John Nixon, modi fied the Standard

to the advantage of the Indians and the displeasure of the Committee in

London. His errors to which the committee drew particular attention were

the lowering of the price of guns and the revaluation of marten skins as

four equal to one beaver pelt instead of the previous eight to one beaver.

When questioned by the committee as to why he had altered the Standard he gave, in its opinion, "a very slender account" and his successor, Henry

Sergeant, was ordered to reinstate the Standardised by Bayly.3 Still dissatisfied the committee sent out Pierre Radisson in 1685 as "Chief

Director of ... Trade at Port Nell son ... to promote the Interest of the

Company & to Settle a Standard of Commerce with the Natives."4 Radisson's work seemed to have given the committee some content for it advised

George Geyer to adhere to the Standard which Radisson had set.5 What

Radisson accomplished is unclear as there are no surviving trading records from that period. Later at York Fort (Port Nelson) guns cost the Indians the committee's desired ten pelts for a "short" gun and twelve for a

"long" gun,6 but marten remained valued at four to one beaver.7 At Fort

Albany where Nixon had committed his transgressions guns were valued between six and twelve pelts in 1689,8 below the nine to twelve pelts

recommended to Sergeant in 1684.9 After Radisson's service as "Chiefe

Director of Trade" the company made no further attempts to revise the

entire Standard but frequently recommended adjusting the prices of indi•

vidual items, especially guns.

82 The frequent orders to raise the Standard on guns indicates, in part, their prominence in the trade. No other single item cost as much in sterling or beaver as guns nor presented the difficulties of quality which guns did. Students of the fur trade cannot overlook their signi• ficance, yet importance should not be construed as representativeness.

In his treatment of the mid-nineteenth century Parliamentary inquiry of the Hudson's Bay Company Rich concluded that "there was nothing revealed which approached a profit of two thousand per cent", as had been charged, by noting that the mark-up on guns was around 175 percent.10

The following two tables, one for Fort Albany and one for York Fort, list the trade goods for 1720, the Standard of Trade, the cost from the supplier, the Standard expressed as a sterling value, and the percentage mark-up. The Standard in sterling is calculated using the average price the company received for beaver between 1716 and 1726.11 For example, at York Fort a gun cost fourteen beaver pelts which the company sold at

5s6ifd per pelt or £3-17 = 3 for all fourteen, making a 251 percent mark-up over the £1:2:0 which the company paid gunsmiths for the guns. No over• head costs are calculated into these figures, neither of a general nature such as shipping or wages nor of a specific nature such as gun chests or the dying of cloth. Thus some items, most particularly guns and cloth, have a lower mark-up in relationship to other goods then the figures indicate. Miscellaneous charges are difficult both to collect and to aggregate and hence the first cost from the supplier is used.

What these figures show most clearly is that the mark-up on guns does not represent the mark-up on other goods. And some items had mark• ups over 2000 percent, though what this means about profit, at least aggregated profit, is unclear. It also becomes obvious why the company expressed more concern about the Standard for guns than for any other single i tern.

83 Table Via Trade Good Prices, Standard of Trade, and Mark-ups: York Fort, 1720

Trade Good Suppliers' Price Standard Sterling Stan- %Mark- 12 13 dard n # up

Thread lb. 2 o. 1 to 1* 5 :6 176 Guns pc. 1 :2 0 1 to 14 3:17 :3 251 Shi rt pc. 2 9 1 to 2 11 :0 302 Duffel Yd. 2 9 1 to 2 11 :0 302 Shoes pr. 3 10 1 to 3 6 = 7 332 (1717) Hawk Bel Is pc. 1 3 per 12 pc. 12 to 1 5 :6 342 + Twi ne sk. 1 2 1 to 1 5 :6 373 Beads, sm. lb. 2 2 1 to 2 11 :0 410 Broadcloth yd. 3 2 1 to 3 16 7 423 Kettles lb. 1 6 1 to 1. 5 8 •4 452 Blankets pc. 6 6 1 to 7 1:18 :8 495

Hatchets pc. 10V2 1 to 1 5 :6 531 + Sword Blades pc. 10 1 to 1 5 .6 563 (1723) Roll Tobacco lb. 9 1 to 1 5 6 636 Brandy ga 1. 3 0 1 to 4 1:2:1 636 Kn i ves pc. 2.1 4 to 1 5 6 • 689 + Brazi1 Tobacco lb. 1 4 1 to 2 11 0 728 Breast Buttons pc. 8 per 72 pc. 72 to 1 5 6 728 (1718) Coat Buttons pc. 8 per 48 pc. 48 to 1 5 6 728 Bai ze yd. 111/, 1 to 1 5. 8 4 783 Bath Rings pc. 6 to 1 5 6 783 (1715) Socks pr. 1 6 1 to 2. 5 13 10 820 (1718) Powde r lb. 7 1 to 1 5 6 846 Gloves pr. 7 1 to 1 5 6 846 (1717) Beads, lg. lb. 2 2 1 to 4 1:2 1 919 Flannel yd. 1 to 1. 8 4 946 9V2 5 Ivory Combs pc. 6 V, 1 to 1 5 6 960 Spoons pc. 6Vi+ per 2 pc. 2 to 1 5 6 960 Seal Rings pc. 2 3 to 1 5 6 1004 Vermi11i on oz. 6 1 to 1 5 6 1004 Shot lb. 4 1V3 to 1 5 6 1174 (1719) Powder Horns pc. 5 1 to 1 5 6 1225 Looking Glasses pc. 5 1 to 1 5 6 1225 Files pc. 5 . 1 to 1 5 6 1225 Fi re Steels pc. pc. 4 3V2 per 4 to 1 5 6 1793 Guns Worms pc. pc. 4 3V3 per 4 to 1 5 6 1908

Horn Combs pc. 1V2 2 to 1 5 6 2108 Garter!ng yd. 2% per 1. 5 yd. 1. 5 to 1 5 6 2309

Sci ssors pc. 1V3 2 to 1 5 6 2448

Tobacco Tongs pc. 1V3 2 to 1 5 6 2448

Aw les pc. 2V2 per 8 pc. 8 to 1 5 6 2550

Tobacco Box pc. 2V2 1 to 1 5 6 2550 Thimbles pc. 21/, per 6 pc. 6 to 1 5 6 2844 Fl i nts pc. 2 per 16 pc. 16 to 1 5 6 3213 Needles pc. to 1 + lV2 per 12 pc. 12 5 6 4317 Egg Boxes pc. % per 3 pc. 3 to 1 5 6 8733 Mocotogans pc. D 4 to 1 5 6 Scrapers pc. § 2 to 1 5 6 1ce Chi sels pc. @ 1 to 1 5 6 Net Lines pc. @ 1 to 1 5 6 pounds :sh i 1 1 i ngs : pence »[trade good] to [beaver] # prices rounded + avg.of more than one @ made at the fort (year) price in that yr. size and price all other prices from 1720 84 Table VIb Trade Good Prices, Standard of Trade, and Mark-ups: Fort Albany, 1720

Trade Good Price in London Standa rd Standa rd i n % Mark• 12 13 Ster1ing up

Shoes pr. 3:10 1 to 1 5 6 44 (1717) Gun, 3 ft. pc. 1 :2 0 1 to 7 1:18:8 76 Pi stol pc. 12:6 1 to 4 1 :2 1 77 Bayonets pc. 1 :6 2 to 1 5 6 84 Shi rt pc. 2:9 1 to 1 5 6 101 Gun, 3i ft. pc. 1:2 0 1 to 8 2:4 2 101 Gun, 4 ft. pc. 1 :2 0 1 to 10 2:15:3 151 Red Feathers pc. 1 0 2 to 1 5 6 176 (1718) Hatchets pc. 10 2 to 1 5 6 231 + Hawk Bel 1s pc. 1 8 per 16 pc. 16 to 1 5 6 231 + Sword Blade pc. 10 2 to 1 5 6 231 (1723) Beads lb. 2 2 % to 1 5 6 240 Broadcloth yd. 3 2 1 to 2 11 0 249 Socks pr. 1 6 1 to 1 5 6 268 (1718) Kettles lb. 1 6 1 to 1 5 6 268 Kn i ves pc. 2.1 8 to 1 5 6 294 + Duffel yd. 9 1 to 2 11 0 302 Gogles pc. 8 2 to 1 5 6 314 B raz i1 Tobacco lb. 1 4 1 to 1 5 6 314 Twi ne sk. 1 2 1 to 1 5 6 373 Roi1 Tobacco lb. 9 5 6 391 2to 1 B1ankets pc. 6 6 1lV to 6 1:13:2 410 Spoons pc. 1 4 to 1 5 6 430 per 4 pc. Ivory Comb pc. 6V%2 2 to 1 5 6 430 Coat Buttons pc. 12 per 72 pc. 72 to 1 5 6 452 Thread 1 b. 2 0 1 to 2 11 0 452 Ba i ze yd. HV4 1 to 1 5 6 489 Powde r lb. 7 1.5 to 1 5 6 531 Looki ng Glass pc. 5 2 to 1 5 6 563 Powder Horn pc. 5 2 to 1 5 6 563 (1717) Keg 1 gal. pc. TO 1 to 1 5 6 563 (1724) Flannel yd. 9V2 1 to 1 5 6 597 Keg 2 gal . pc. 1 2 1 to 1.5 5 6 610 (1724) Brancy gal . 3 0 1 to 4 1:2 1 636 Vermi11 ion oz. 6 5 6 636 1 V2to 1 Leaf Tobacco lb. 5V2 5 6 703 (1718) to 1 Breast Buttons pc. 8 per 72 pc. 71V2 2to 1 •5 6 728 (1718) Bath Ring pc. 6 to 1 5 6 783 (1715) G1oves pr. 7iV, u 1 to 1 5 6 846 (1717) Laced Hats pc. 3V3 1 to 4 1 :2 1 862 (1718) Shot lb. 1.3 5 to 1 5 6 919 (1719) Seal Ring pc. 2 3 to 1 5 6 1004 Scraper pc. 3 2 to 1 5 6 1004 (1722) Fi les pc. 5 1 to 1 5 6 1225 Tobacco Box pc. 2 to 1 5 6 1225 Ga rter i ng Yd. 2V3.725 per 2 yd 2 to 1 5 6 1667 Awl es pc. 3.75 per12 pc 12 to 1 5 6 1667 Fi re Steels pc. 3V2 per 4 pc 4 to 1 5 6 1793 Gun Worms pc. 3.3 per 4 pc 4 to 1 5 6 1908

85 Trade Good Price in London Standard Standard in % Mark• 12 13 Ster1i ng up

Fish Hooks pc. :3 per 20 pc. 20 to 1 5 6 2108 Lead lb. 1 to 1 5 6 2108 (1718) Tobacco Tongs pc. :1 .3 2 to 1 5 6 2kk8 Sci ssors pc. :1.3 2 to 1 5 6 2448 Flints pc. :2V2per 20 pc. 20 to 1 5 6 2550 Th i mbles pc. :2.2 per 6 pc. 6 to 1 5 6 2844

l Needles pc. :)72per 12 pc 12 to 1 5 6 4317 + Egg Box pc. : 1 per 4 pc. 4 to 1 5 6 6525 Net Lines pc. @ 2 to 1 Ice Chisels pc. @ 2 to 1 Mocotogans pc. @ 2 to 1

pounds:shi11i ngs:pence + avg. of more than one size and price --[trade good] to [beaver] # prices rounded (year) price in that year; all other prices from 1720 @ made at the fort

85a In addition to these self-evident observations some other interesting patterns emerge. Those goods which were some of the most important trade items and to which the Indians gave greatest attention to quality also have some of the lowest mark-ups. It is reasonable to conclude that the prices for guns, cloth, and metal goods were relatively low because of competitive pressure from the French and to attract the trade. The com• mittee advised Geyer to keep "to the Standard that Mr. Radissone agreed to, but withall to give the Indians all manner of Content and Satisfaction and in Some goods Under Sell the French that they may be incouraged to

Come to our 's."14 Three years later Thomas Walsh was told to treat the Indians "with all Kindness Imaginable & to assure them of good wares cheaper then the French can give them."15 In the 1720s the Indians tried to get the traders to change the Comparative Standard on marten from three per beaver to two per beaver, since the French rated marten as equivalent to one beaver. The committee refused to accept the

Indians' proposal noting that the French priced guns at thirty beaver while theirs cost only ten.16

The company recognized the need to use prices to attract the trade and the Standard built into the trade competitive prices on some goods.

Guns attracted trade and had much lower mark-ups than the necessary ac• cessories. At York Fort the mark-up was 251% for guns but 846%, 11 ~]h%,

1225%, and 1908% respectively for powder, shot, powderhorns and gunworms.

At Fort Albany the pattern was similar; 76%, 101%, and 151% mark-ups on guns and 531%, 536%, 919% and 1908% respectively on powder, shot, powder- horns, and gunworms. Guns helped to attract the business for the more lucrative trade in other goods, as did other metal and cloth goods.

The rigidity of the Standard has been contrasted with the suppleness of the French system in which a trader "could make a generous bargain in

86 order to attract the trade and then drive hard terms to take advantage of opportunities." While individual Hudson's Bay Company traders could not set prices a comparison of mark-ups on the goods shows that "generous bargains" and "hard terms" were built into the Standard. Rather than e1iminating competitive prices the Standard guaranteed them on some items, enough so that the Chief Factors could sometimes raise it yet remain competitive with the French.17

The company attempted to use prices to modify Indian behavior. When

the supply of coat beaver (pelts which had been worn by the Indians in coats) began to exceed European demand the committee urged the traders

to "encourage the Indians, to weare Cloth, Bayes, Flannell Duffles or any

Wollen thing rather than Beaver."18 One way they did this was to keep

the price of cloth and ready made garments low, as the mark-ups on shirts and cloth indicate.

Attempts to raise the Standard met with resistance from the Indians.

Attempts to lower the Standard met with resistance from the Committee

in London. The committee thought "presents ... a more proper method

[to encourage trade] then by abatement in the Standard."19 It saw gifts as a way to make increases in the Standard acceptable to the Indians.

After Geyer had failed to affect the requested increases in the Standard the committee recommended making "a larger present than usuall to the

Cheif Capt. of the and leading men. ... so that they may be induced to advance the standard." No understanding Indian social structures it erroneously thought "this may be done privately the Comon Indians not knowing of it."20

Having met with the Indians' resistance to outright price increases the committee tried to work around the problem in other ways. After the oft repeated litany on raising the price on guns had failed to produce

87 results the committee decided in 1702 not to send the shortest guns "by

Reason that the Standard upon short Guns would not answer the first cost of them, Therefore they [the Indians] must not expect anymore short Guns of that goodness unless they will allow the same Number of Skins in trade .

.. for that they are all of one price to us."21 Another time the com• mittee introduced striped blankets and reasoned that they were of a superior quality and therefore warranted a higher price.22 The miscar•

riage of a French ship and a foreseeable shortage of French trading goods promised the possibility of advancing the Standard.23

One way for the company to improve trading conditions was to esta•

blish contact with Indians unaccustomed to the trade, or who did not

trade regularly with the French. Albany's Standard was lower than York's

for this reason. On the whole the practice worked, though the York Fort

traders occasionally complained that some Indians would travel the extra distance to Albany to receive better prices.24 The differences in the

Standards at the two forts reflected the impact of competition on prices.

This difference also suggests what might have resulted had traders been given free rein to establish prices in a competitive market. With prices quoted in beaver, which had a high unit value in comparison to trade goods and was not easily divisible, price adjustments tended to produce

large fluctuations. For example kettles at Albany were one pound per beaver, and at York one pound per one and a half beaver, a 268% mark-up at Albany compared to a h52% mark-up at York. The repossession of York

Fort after the Treaty of Utrecht had a positive effect on the fortunes of the Hudson's Bay Company for this reason. Competition at the southern end of the bay forced down prices at Albany. Given the unpredictable

results of unrestrained price competition and the wide fluctuations it could produce both positively and negatively, the conservative and prudent

88 practice of fixed prices probably worked to the long-term advantage of

the Hudson's Bay Company.

The Standard of Trade had an important function in the seventeenth-

and eighteenth-century world. By establishing prices for barter trade

it minimized erratic price fluctuations and stabilized market conditions

in the absence of information to coordinate supply and demand markets.

The Standard helped bridge the communication gap between London and the

Bay, and the traders and the Indians. Fixed prices did not preclude

competitive pricing, they only established which goods would be competi•

tively priced. In this respect the Standard codified the trading experi•

ence of the company's early traders and eliminated some of the business

hazards associated with the turnover of personnel. The Standard of Trade was a commercial mechanism adapted to both the competitive conditions of

the North American.fur trade and the problems inherent to long-distance

trade. For these reasons it is an important component in any explanation

of the Hudson's Bay Company's success and longevity.

89 Notes

1 York Fort Account Book, July 1690 to July 1691, Hudson's Bay Company Archives, Provincial Archives of Manitoba (H.B.C.A., P.A.M.), B.239/d/3, fos. 10d-ll. (Hereafter only the archival classification number is given.)

2 Letter Outward (hereafter L.O.) to Henry Sergeant, 27 April 1683, in Letters Outward, 1679-1694, ed. E. E. Rich, Publications of the Hudson's Bay Record Society, Vol. 11, (London: Hudson's Bay Record Society, 1948), p. 76.

3 L.O. to Henry Sergeant, 16 May 1684, in ibid., pp. 120-121.

k L.O. to Pierre Radisson, 22 May 1685, in ibid., p. 147.

5 L.O. to Geyer, 2 June 1688, in Letters Outward, 1688-1696, ed. E. E. Rich, Publications of the Hudson's Bay Record Society, Vol. 20, (London: Hudson's Bay Record Society, 1957), P- 14.

6 York Fort Account Book, July 1689-1690, B.239/d/1, fos. 53~53d.

7 Grand Journal, A.15/3, fos. 68, 95-6.

8 Fort Albany Account Book, July 1689-1690, B.3/d/9, fos. 21-45-

9 L.O. to Sergeant, 16 May 1684, Letters Outward, Vol. 11, p. 121.

10 E. E. Rich, The History of the Hudson's Bay Company, 1670-1870, Vol. 1: 1670-1763, (London: Hudson's Bay Record Soc i ety , 1958) ," p.' 594.

11 The year 1720 was chosen for relatively complete trade good prices.

12 York Fort Standard, 1720, B.239/d/10, fo. 52d; Fort Albany Standard, 1720, B.3/d/28, fos. 10d-11.

13 Trade Goods Prices, A.24/2-A.24/3•

14 L.O. to Geyer, 2 June 1688, in Letters Outward, Vol. 20, p. 14.

15 L.O. to Walsh, 21 May 1691, in ibid., p. 128.

16 L.O. to Myatt, 30 May 1727, A.6/5, fo. 1.

17 E. E. Rich, History of the Hudson's Bay Company, 1670-1870, p. 594.

18 L.O. to Geyer, 6 May 1689, Letters Outward, Vol. 20, p. 60-61.

19 L.O. to Knight, 30 May 1696, ibid., p. 271.

20 L.O. to Geyer, 17 June 1693, ibid., p. 186.

21 L.O. to Fullertine, 3 June 1702, A.6/3, fo. 52d.

90 22 L.O. to Fullertine, 28 May 1601, A.6/3, fo. 48.

23 L.O. to Fullertine, 30 May 1605, A.6/3, fo. 69.

24 L.O. to Knight, 30 May 1694, Letters Outward, Vol. 20, p. 230.


The organizational and financial demands of the trans-oceanic ex• pansion of Europe and long-distance trade in the early modern period precipitated new forms of commercial practice, among them the joint- stock company. As long-distance trade matured supplies of colonial com• modities increased beyond the demands of the European market and prices dropped dramatically. Much of the problem resulted from inadequate or non-existent mechanisms to balance colonial supply with European demand.

Thus management and administrative techniques had to be developed which would coordinate the widely separated arenas of an expanded economic world.

The North American fur trade was no exception. Its rapid expansion at the end of the seventeenth century increased supplies of beaver and forced down prices in a trade which had previously promised easy profits.

This examination of the internal working of the Hudson's Bay Company from

1670 to 1730 shows many areas where operational improvements were devised which helped the company to survive this transition in the trade. The long-term survival of the company owes much to this internal refinement, which was largely an elaborate and interconnected system of bookkeeping, correspondence and pricing.

The Committee in London organized the company's operations largely in relationship to the consumption demands of the English and European fur markets. In its early years if supplies of beaver in London exceeded demand then the company would not send out a ship or would request the traders discourage the trade of beaver, especially coat beaver. As the

European market stabilized in the the company learned how much

92 beaver it could reasonably expect to market and could control the level of its London fur inventory around that demand without resorting to the early practice of not sending out ships. This signified agreat commer• cial achievement for it made possible the regular turn-over of capital and an accounting of the company's status on an annual basis.

Efficient maintenance of the fur inventory also meant that the trade goods inventory could be more economically managed. The administrative mechanisms for doing this had their origins in the late 1670s when the committee began to demand that records be kept of the trade at the Bay.

These records could then be scrutinized back in London and purchasing decisions made with the hindsight of the trade of the previous years, and knowledge of the remaining inventory. Record-keeping and annual correspondence between London and the Bay also made it possible to pay close attention to other details such as the quality and selection of trade goods.

Record-keeping and correspondence served to communicate between

London and the Bay so their related affairs could be coordinated. To compensate for distance and the hazards of trans-oceanic trade the com• pany maintained a two year supply of trade goods at the Bay and a modest surplus of furs in London. The absence of information to establish trade goods prices was alleviated by the Standard of Trade which fixed their prices and thereby provided stable market information for the Indians coming to trade, the company's traders, and the Committee'in London.

While this practice was quite conservative, especially in relationship to the company's French competitors, it also reduced the chance of prices being forced to unprofitably low levels which was all too possible con• sidering the paucity of adequate information. Within the rigid structure of the Standard the company was able to vary the price increases and

93 build into the trade competitive prices on goods which would attract the

Indians to come trade and high prices on other goods.

Much of the company's success must be attributed to the management and administrative structure which it evolved during its first half-century.

Some external factors eased this process and should be recognized within the larger context of the North American fur trade. The harsh geographic conditions of Hudson's Bay which precluded agriculture in turn precluded settlement and consequently the company did not have to tailor its • jectives to the interests of settlers. Unlike the French-Canadian fur trade, which had to accommodate private traders, the Hudson's Bay Company's business could be organized almost entirely around the volume of trade which the European fur market could absorb. The lack of profitable com• mercial enterprises other than the fur trade restricted possibilities for expansion, but in turn meant that the number of employees could be kept low and the company did not have to find financing for new ventures.

Thus the need to rely almost solely on the fur trade eased both labour and financial problems. The small capitalization of the company distri• buted among a relatively large number of investors, almost none of whom depended on the fur trade for their livelihood, minimized the demands of shareholders and made possible the years of no dividends. The advantages of being a small specialized business operating in a region unsuited for settlement did not assure the survival of the Hudson's Bay Company.

They only simplified the task of management and administration which in the end assured its survival.

Within the larger context of the economic expansion of Europe the

Hudson's Bay Company is a good example of the structural changes in busi• ness management which evolved after prices for colonial commodities dropped. So long as the supply of products remained below European demand

3k prices remained high and lax management practices could be tolerated.

But as trade in colonial commodities became increasingly competitive and

prices dropped commercial practices had to be developed which would faci•

litate economical and efficient management of long-distance trade.

Because the Hudson's Bay Company weathered this transition it has been

possible to trace some of these changes in management practices.

This study touches briefly on some broader implications of economic

development. The Indians involved in the fur trade were some of the only

native peoples in the New World who maintained control over the produc•

tion of a commodity for the European market. Yet trade was initiated

largely by Europeans and in the case of the Hudson's Bay Company adapted

to levels of European consumption more than to Indian demand. Thus,

while Indians retained a high degree of commercial autonomy economic

development remained very dependent on conditions in Europe. The fur

trade was not simply a case of the economic exploitation of Indians.

The drop in fur prices in Europe was a cost borne almost entirely by the

Hudson's Bay Company. The long-run gain, however, was the company's for

it had been forced to develop more complex and sophisticated business

practices if it was to survive, which had far greater utility and value

than any loss which they took in the early years. This suggests that one of the most important economic gains which Europeans derived from long•

distance trade might well have been more skillful commercial practices

rather than simply profit.


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