North West Company - Late 18th/early 19th Century

Late 18th/early 19th Century

Simon McTavish brought several members of his family into the company, but nepotism took a back seat to ability. His brother-in-law, Charles Chaboillez, oversaw the Lower Red River trading post. McTavish also hired several cousins and his nephews William McGillivray and Duncan McGillivray to learn the business. William McGillivray was groomed by his uncle to succeed him as Director of the North West Company, and by 1796 he had effectively done so, acting as Montreal agents' representative at the annual meetings at Grand Portage, and later at Fort William.

Simon McTavish was an aggressive businessman who understood that powerful forces in the business world were always ready to pounce on any weakness. As such, his ambition and forceful positions caused disagreements between him and some of the shareholders, several of whom eventually left the North West Company during the 1790s. Some of these dissidents formed their own company, known unofficially as the "XY Company", allegedly because of the mark they used on their bales of furs. Their cause was greatly strengthened in 1799, when the North West Company's hero explorer, Alexander Mackenzie, quit his old partnership and soon after joined them.

There was intense competition between the rivals. When Simon McTavish died on July 6, 1804, the new head William McGillivray set out to put an end to the four years' rivalry. It had escalated to a point where the master of the North West Company post at Great Bear Lake had been shot by an XY Company employee during a quarrel. McGillivray was successful in putting together an agreement with the XY Company in 1804. It stipulated that the old North West Company partners held 75 per cent of the shares, and the former XY Company partners the remaining 25 per cent. Alexander Mackenzie was excluded from the new joint partnership.

Under William McGillivray, the Company continued to expand, and apparently to profit, during the first decade of the 19th century. Competition with the Hudson's Bay Company was intense, however, and profit margins were squeezed. The North West Company branch in New York City had allowed the Canadians to get around the British East India Company's monopoly and ship furs to the Chinese market. Cargo ships owned by the North West Company conveniently sailed under the American flag, and doing so meant continued collaboration with John Jacob Astor.

However, Astor was as aggressive as Simon McTavish had been. An intense rivalry soon developed between him and William McGillivray over the Oriental market and westerly expansion to unclaimed territory in what is now the Columbia River basin, in the present-day states of Washington and Oregon. Astoria's Pacific Fur Company beat the North West Company in an effort to found a post near the mouth of the Columbia, Fort Astoria. A collapse in the sea otter population and the imminent possibility of British seizure of Astoria during the War of 1812 led to its sale to the North West Company in 1813, resulting in an awkward situation when HMS Racoon and its Captain Black arrived and went through a ceremony of possession, even though the fort was already ostensibly a British possession. Due to treaty complications of the Treaty of Ghent requiring the return of seized assets, putative ownership of the site was returned to the United States in 1817, although the fort, renamed Fort George by the North West Company, continued to operate until the Hudson's Bay Company's takeover and the replacement of Fort Astoria by Fort Vancouver.

The Canadian fur trade began to change in 1806, after Napoleon Bonaparte ordered the blockade of the Baltic Sea as part of the ongoing struggle between France and Britain for world dominance. Britain was dependent for almost all of her timber on the Baltic countries and on New Hampshire and Massachusetts (which at that time included Maine). By then, however, tensions had also begun to escalate again between Britain and America, and in 1809 the American Government passed the Non-Intercourse Act, which effectively brought about an almost complete cessation of trade between the two countries. Britain then found herself totally dependent on her Canadian colony for her timber needs, especially the great white pine used for ships' masts. Almost overnight, timber and wood products replaced fur as Canada's number one export. Fur remained profitable, however, as it had a high value-to-bulk ratio, and in an economy short of ready money, fur was routinely used by Canadian merchants to remit value to their London creditors.