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The Remarkable History of the Hudson's Bay Company

Renewal of licence—Labouchere's letter—Canada claims to Pacific Ocean—Commissioner Chief-Justice Draper—Rcsta on Quebec Act, 1774—Quebec overlaps Indian territories—Company loses Vancouver Island—Cauchon's memorandum—Committee of 1857 —Company on trial—A brilliant committee—Four hundred folios of evidence—To transfer Red River and Saskatchewan— Death of Sir George—Governor Dallas—A cunning scheme— Secret negotiations—The Watkin Company floated—Angry winterers—Dallas's soothing circular—The old order still—Ermatin-ger's letters—McDougall's resolutions—Cartier and McDougall as delegates—Company accepts the terms.

As is well known to those who have followed the history of the Hudson's Bay Company, while the possession of Rupert's Land was secured by charter, the territory outside Rupert's Land was secured to the Company by licence. This licence ended every twenty-one years. The licence in force at the time of the troubles which have been described was to terminate in 1859. Accordingly, three or four years before this date, as their Athabasca, New Caledonia, and British Columbia possessions had become of great value to them, the Company with due foresight approached the British Government with a request for the renewal of their tenure. Men of understanding on both sides of the Atlantic saw the possible danger of a refusal to their request, on account of the popular ferment which had taken place both in Red River and British Columbia. Others thought the time had come for ending the power of the Company.

Sir Henry Labouchero, Secretary of State for the Colonies, entered into correspondence with Sir Edmund Head, Governor-General of Canada, on the subject. Anxious about the state of things in every part of the Empire as the Colonial Office always is, the turbulence and defiance of law in Red River settlement called for special attention. Accordingly the Governor-General was informed that it was the intention of the Home Government to have, not only the question of the licence discussed, but also the "general position and prospects" of the Company considered, by a Committee of the House of Commons. The Canadian Government was therefore cordially invited to have its views, as well as those of the Canadian community, represented before the Committee.

This invitation was the thing for which Canada had been waiting. A despatch was sent by the Canadian Government, in less than seven weeks from the time when the invitation left Downing Street, accepting the proposal of the Mother Country. The Canadian Ministry was pleased that British-American affairs were receiving such prominent notice in England. It suggested the importance of determining the limits of Canada on the side towards Rupert's Land, and went on to state that the general opinion strongly held in the New World was "that the western boundary of Canada extends to the Pacific Ocean." Reference is made to the danger of complications arising with the United States, and the statement advanced that the "question of the jurisdiction and title claimed by the Hudson's Bay Company is to Canada of paramount importance."

In 1857 Chief Justice Draper crossed to Great Britain as Canadian representative, with a very wide commission to advance Canadian interests. He was called before the Committee appointed by the House of Commons, and answered nearly two hundred questions relating to Canada and to the Hudson's Bay Company interests in Rupert's Land and beyond. The capable and active-minded Chief Justice kept before the Committee these points :—

(1) What he conceived to be the true western boundary of Canada, and in so doing gave his opinion, based on the Quebec Act of 1774, that Canada should be allowed to extend to the Rocky Mountains and should have the privilege of exploring and building roads in that region.

(2) The earnest desire of the Canadian people that Rupert's Land and the Indian territories should be maintained as British territory.

(3) That Canada should be allowed to extend her settlements into these territories.

Chief Justice Draper argued his case with great clearness and cogency, and made an excellent impression upon the Committee.

The matter of the Company's hold on Vancouver Island seems to have been settled without any great difficulty. Mr. Richard Blanshard, the former Governor, who received so cool a reception in Vancouver Island, gave a plain and unvarnished tale. The Company had evidently made up its mind to surrender all its claims to Vancouver Island. And the island, as we have seen, became independent.

Canada entered with great spirit into the case presented before the Committee. The question of the licence was quite overshadowed by the wider discussion covering the validity of the Hudson's Bay Company charter, the original boundary line of the province of Canada, and the manner in which the Company had carried out its responsibilities. An industrious minister of the Canadian Government, Hon. Joseph Cauchon, with true Gallic fire and a French Canadian spirit, prepared a memorandum of a most elaborate kind on the Hudson's Bay Company's claim and status. In this, Mr. Cauchon goes back to the earliest times, shows the limits of occupation by the French explorers, follows down the line of connection established by the North-West traders, deals with the troubles of Lord Selkirk, and concludes that the Red River and the Saskatchewan are not within the limits of the Company's charter. This vigorous writer then deals with the Treaty of Paris, the Quebec Act, and the discoveries of Canadian subjects as giving Canada a jurisdiction even to the Rocky Mountains.

As might have been expected, the Committee of 1857 became a famous one. The whole economy of the Company was discussed. The ground gone over by Isbister and others during the preceding decade supplied the members with material, and the proceedings of the Committee became notable for their interest. The Committee held eighteen meetings, examined twenty-nine witnesses, and thoroughly sifted the evidence.

The personnel of the Committee was brilliant. The Secretary of State was Chairman. Mr. Roebuck and Mr. Gladstone represented the inquiring and aggressive element. Lord Stanley and Lord John Russell added their experience, Edward Ellice—"the Old Bear"—watched the case for the Company, and Mr. Lowe and Sir John Pakington took a lively interest in the proceedings and often interposed. Altogether the Committee was constituted for active service, and every nook and cranny of Rupert's Land and the adjoining territories was thoroughly investigated.

Among the witnesses was the distinguished Governor Simpson. He was at his best. Mr. Roebuck and he had many a skirmish, and although Sir George was often driven into a corner, yet with surprising agility he recovered himself. Old explorers such as John Ross, Dr. Rae, Co]. Lefroy, Sir John Richardson, Col. Crofton, Bishop Anderson, Col. Caldwell, and Dr. King, gave information as to having visited Rupert's Land at different periods. Their evidence was fair, with, as could be expected in most cases, a "good word" for the Company. Rev. Mr. Corbett gave testimony against the Company, Governor Blanshard in the same strain, A. K. Isbister, considerably moderated in his opposition, gave evidence as a native who had travelled in the country, while John McLoughlin, a rash and heady agitator, told of the excitement in Red River settlement. Edward Ellice became a witness as well as a member of the Committee, and with adroitness covered the retreat of any of his witnesses when necessity arose.

From time to time, from February to the end of July, the Committee met, and gathered a vast amount of evidence, making four hundred pages of printed matter. It is a thesaurus of Hudson's Bay Company material. It revealed not only the localities of this unknown land to England and the world, but made everyone familiar with the secret methods, devices, and working of the fur trade over a space of well-nigh half a continent. The Committee decided to recommend to Parliament that it is "important to meet the just and reasonable wishes of Canada to assume such territory as may be useful for settlement; that the districts of the Red River and the Saskatchewan seem the most available; and that for the order and good government of the country," arrangements should bo made for their cession to Canada. It was also agreed that those regions where settlement is impossible be left to the exclusive control of the Hudson's Bay Company for the fur trade. The Committee not only recommended that Vancouver Island should be made independent, but that the territory of the mainland in British Columbia should be united with it.

Four years after the sitting of this Committee, which gave such anxiety to the Hudson's Bay Company, Sir George Simpson, after a very short illness, passed away, having served as Governor for forty years. In an earlier chapter his place and influence have been estimated and his merits and defects shown.

Sir George, in his high office as Governor of Rupert's Land, was succeeded by A. J. Dallas, a Scottish merchant, who had been in business in China, had retired, and afterwards acted as Chief Factor of the Hudson's Bay Company at Fort Victoria, in Vancouver Island, and had then married the daughter of Governor James Douglas. Dallas had shown great nerve and judgment in British Columbia, in a serious brush with the United States authorities in 1859. Three years after this event he was called to succeed the great Governor of Rupert's Land. On his appointment to this high position, he took up his residence at Fort Garry, and had, in conjunction with the local Governor, William McTavish, to face the rising tide of dissatisfaction which showed itself in the Corbett and Stewart rescues. Writers of the period state that Dallas lacked the dignity and tact of old Sir George. In his letters, however, Governor Dallas shows that he thoroughly appreciated the serious state of matters. He says: "I have had great difficulty in persuading the magistrates to continue to act. Mr. William McTavish, Governor of Assiniboia, has resigned his post." Governor Dallas says he "finds himself with all the responsibility and semblance of authority over a vast territory, but unsupported, if not ignored, by the Crown." He states that people do not object to the personnel of the Hudson's Bay Company government, but to the "system of government." He fears the formation of a provisional government, and a movement for annexation to the United States, which had been threatened. He is of opinion that the "territorial right should revert to the Crown." These are strong, honest words for an official of the Company whose rule had prevailed for some two centuries.

And now Governor Dallas appears co-operating in an ingenious and adroit financial scheme with Mr. E. W. Watkin, a member of the British House of Commons, by which the Hudson's Bay Company property changed hands. Edward Watkin was a financial agent, who had much to do with the Grand Trunk Railway of Canada, and had an intimate knowledge of Canadian affairs. He had succeeded in interesting the Colonial Secretary of State, the Duke of Newcastle, in a railway, road, and telegraphic scheme for connecting the British possessions in North America.

Difficulties having arisen in inducing staid old Governor Berens, the London head of the Company, to accept modern ideas, a plan was broached of buying out the whole Hudson's Bay Company possessions and rights. Difficulty after difficulty was met and surmounted, and though many a time the scheme seemed hopeless, yet in the end it succeeded, though not without much friction and heart-burning. Watkin describes graphically the first interview between throe members of the Hudson's Bay Company, Berens, Eden Colville, and Lyall, of the first part, and Glynn, Newmarch, himself, and three other capitalists of the second part. The meeting took place in the Hudson's Bay Company House, Fenchurch Street, February 1st, 1862. "The room was the 'Court' room, dark and dirty, faded green cloth, old chairs almost black, and a fine picture of Prince Rupert. Governor Berens, an old man and obstinate, was somewhat insulting in his manner. We took it patiently." It was a day of fate for the old Company.

Many interviews afterwards took place between Watkin and the accountant and solicitors of the Company. The Company would hear of no dealings, except on the basis of a cash payment. The men of capital accordingly succeeded in interesting the "International Financial Association," a new corporation looking for some great scheme to lay before the public.

At length the whole shares, property, and rights of the Hudson's Bay Company were taken over, the final arrange-ments being made by Mr. Richard Potter on June 1st, 1863. Thus the Company begun in so small a way by Prince Rupert and his associates nearly two centuries before, sold out, and the purchase money of one and a half millions of pounds was paid over the counter to the old Company by the new Association.

A now company was now to be organized whose stock would be open for purchase, and the International Association would, on such organization being formed, hand over the Company's assets to the new stockholders. In a short time the Company was reconstituted, Sir Edmund Head being the new Governor, with, as prominent members of the Board of Directors, Richard Potter, Eden Colville, E. B. Watkin, and an American fur trader of experience, Sir Curtis Lampson.

Secretly as the negotiations for the formation of a new company had been conducted, the news of the affair reached Canada and Rupert's Land, and led to anxious inquiries being made and to a memorial from the Company's officers being presented to the Board of Directors asking for information. So thoroughly secret had the interviews between the London parties been carried on that the officials of the London office know nothing of them, and stated in their reply to the memorialists that the rumours were incorrect. In July, when the transfer had been consummated and the news of it appeared in the public press, it created surprise and indignation among the chief factors and chief traders, who, under the deed poll or Company arrangement which had been adopted in 1821, though somewhat modified thirteen years later, had been regarded as having certain partnership rights in the Company.

Mr. Edward Watkin informs us, in his interesting "Reminiscences," that he had intended that the "wintering partners," as the officers in Rupert's Land were called, should have been individually communicated with, but that on account of his hasty departure to Canada the matter had been overlooked. It certainly was irritating to the officers of the fur trade to learn for the first time from the public press of an arrangement being perfected involving their whole private Watkin expresses his great apprehension lest the news in a distorted form should reach the distant regions of the fur country, where the Company had one hundred and forty-four posts, covering the continent from Labrador to Sitka, Vancouver Island and San Francisco. He feared also that there would be a new company formed to occupy the ground with the old.

On reaching Canada, Mr. Watkin was agreeably surprised at the arrival of Governor Dallas from Red River in Montreal. After consultation it was decided on that the Governor should send a conciliatory circular to the commissioned officers of the Company, explaining the objects of the new Company, and stating that all the interests of the wintering partners would be conserved. It is evident that the attitude of the officers had alarmed even such stout-hearted men as Watkin and Dallas. There lies before the writer also a personal letter, dated London, July 23rd, 1863, signed by Edmund Head, Governor, to a chief trader of the Company, stating that it was the intention of the Committee "to carry on the fur trade as it has been hitherto carried on, under the provisions of the deed poll.". None of the collateral objects of the Company "should interfere with the fur trade." He begs the officers to "have with him free and unreserved communication through the usual channel." Evidently the echo of the angry voices in Athabasca had been heard in London.

The old deed poll, which they had intended to suspend, as shown by Watkin, was thus preserved. This document secured them as follows: According to both deed polls of 1821 and 1834, forty per cent. of the net profits of the trade, divided into eighty-five shares of equal amount, were distributed annually among the wintering partners of the Company. A chief trader received an eighty-fifth share of the profits, and a chief factor two eighty-fifth shares. Both had certain rights after retiring.

The proposed abolition of these terms of the deed poll and the substitution therefor of certain salaries with the avowed purpose of reducing the expenses, of course meant loss to every wintering partner. The interests thus involved justified the most strenuous opposition on the part of the partners, and, unless the proposal were modified, would almost certainly have led to a disruption of the Company.

In harmony with Governor Head's circular letter no action in the direction contemplated was taken until 1871, when, on the receipt of the three hundred thousand pounds voted by Canada to the Company, the sum of one hundred and seven thousand and fifty-five pounds was applied to buying out the vested rights of the wintering partners, and the agitation was quieted.

The effect of the arrangement made for the payment of officers of the Company since 1871, as compared with their previous remuneration, has been a subject of discussion.

There lies before the writer an elaborate calculation by an old Hudson's Bay Company officer to the effect that under the old deed poll a chief factor would receive two eighty-fifth shares, his total average being seven hundred and twenty pounds per annum ; and under the new (taking the average of twenty-five years) two and one half-hundredths shares, amounting to five hundred and thirty-two pounds annually, or a loss nearly of one hundred and eighty-eight pounds; similarly that a chief trader would receive three hundred and nineteen pounds, as against three hundred and sixty formerly, or a loss per annum of forty-one pounds.

Besides this, the number of higher commissioned officers was reduced when the old deed poll was cancelled, so that the stockholders received the advantage from there being fewer officials, also the chances of promotion to higher offices were diminished.

During the progress of these internal dissensions of the Hudson's Bay Company public opinion had been gradually maturing in Canada in favour of acquiring at least a portion of Rupert's Land. At the time of the Special Committee of 1857, it will be remembered the Hind-Gladman expedition had gone to spy out the land. A company, called the North-West Transportation Company, was about the same time organized in Toronto to carry goods and open communication from Fort William by way of the old fur traders' route to Fort Garry.

The merits and demerits of the north-western prairies were discussed in the public press of Canada. Edward Ermatinger, whose name has been already mentioned, was a steady supporter of the claim of the Hudson's Bay Company in a series of well-written letters in the Hamilton Spectator, a journal of Upper Canada. Taking the usual line of argument followed by the Company, he showed the small value of the country, its inhospitable climate, its inaccessibility, and magnified the legal claim of the Hudson's Bay Company against the Canadian contention. It is amusing to read in after years, when his opinion of Sir George Simpson was changed, his declaration of regret at having been led to so strenuously present his views in the Spectator.

Ten years had passed after the setting of the great Committee of 1857, and nothing practical as to the transfer of the country to Canada had been accomplished. The confederation movement had now widened the horizon of Canadian public men. In the very year of the confederation of the Canadian provinces (1867), Hon. William McDougall, who had been a persistent advocate of the Canadian claim to the North-West, moved in the Dominion Parliament a series of resolutions, which were carried. These resolutions showed the advantage, both to Canada and the Empire, of the Dominion being extended to the Pacific Ocean; that settlement, commerce, and development of the resources of the country are dependent on a stable Government being established; that the welfare of the Red River settlers would be enhanced by this means; that provision was contained in the British North-American Act for the admission of Rupert's Land and the North-West territory to the Dominion ; that this wide country should be united to Canada; that in case of union the legal rights of any corporation, as the Hudson's Bay Company, association, or individual should be respected ; that this should be settled Judicially or by agreement; that the Indian title should be legally extinguished ; and that an address be made to Her Majesty to this effect. The resolutions were carried by a large majority of the House. This was a bold and well-conceived step, and the era of discussion and hesitancy seemed to have passed away in favour of a policy of action.

The Hudson's Bay Company, however, insisted on an understanding being come to as to terms before giving consent to the proposed action, and a despatch to the Dominion Government from Her Majesty's Government called attention to this fact. As soon as convenient, a delegation, consisting of Hon, George E. Cartier and Hon. William McDougall, proceeded to England to negotiate with the Company as to terms. The path of the delegates on reaching England proved a thorny one. The attitude of the Imperial Government was plainly in favour of recognizing some legal value in the chartered rights of the Company, a thing denied by some, specially Mr. McDougall. No progress was being made. At this Juncture D'Israeli's Government was defeated, and a delay resulted in waiting for a new Government.. Earl Granville was the new Secretary of State for the Colonies. While negotiations were going on, the Hudson's Bay Company sent in to the Secretary of State a rather hot complaint that Canadian surveyors and road builders had entered upon their territory to the west of the Lake of the Woods. This was quite true, but the action had been taken by the Canadian Government under the impression that all parties would willingly agree to it. Not being at this Juncture able to settle anything, the commissioners returned to Canada. The Imperial Government was, however, in earnest in the matter, and pressed the Hudson's Bay Company to consent to reasonable terms, the more that the government by the Company in Red River was not satisfactory—an indisputable fact. At length the Company felt bound to accept the proposed terms. The main provisions of bargain were that the Company should surrender all rights in Rupert's Land; that Canada pay the Company the sum of three hundred thousand pounds; that the Company be allowed certain blocks of land around their posts; that they be given one-twentieth of the arable land of the country; and that the Company should be allowed every privilege in carrying on trade as a regular trading company. Thus was the concession of generous Charles the Second surrendered after two centuries of honourable occupation.

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