Hudson’s Bay Company Essay ⋆ Business Essay Examples ⋆ EssayEmpire

North America’s oldest continuously operating commercial enterprise, the Hudson’s Bay Company (HBC), officially known as The Governor and Company of Adventurers of England trading into Hudson’s Bay, was founded on May 2, 1670, to trade with aboriginals in Canada, mostly for furs. At one time the HBC was the world’s largest landowner, controlling the massive drainage area around the Hudson’s Bay known as Rupert’s Land. The company’s head, styled a Governor, was, in essence, in control of most of what is now northern Canada, chiefly through overseeing aspects of trade with the aboriginal peoples. Today the company is a retail entity in Canada.

Granted a charter by King Charles II of England in 1670, the company set up its first trading post in what is now northern Manitoba. Competing with the French-controlled fur trade out of Montreal, the HBC focused on using its access through the bay to establish links with the interior, and to build forts that allowed it to control as much of the fur trade as possible. By the end of the 18th century, the HBC had a string of forts called factories, managed by “factors” (the head of each factory), and acted as the de facto authority of state, notwithstanding the constant fighting between the HBC and French traders and French imperial forces.

The French were eventually defeated in North America, ceding all of Canada to Great Britain in 1763. However, Montreal fur trading interests persisted, establishing the North West Company in 1779. In 1821, following decades of conflict between the two entities, the HBC and the North West Company merged, giving the HBC a monopoly on the entire fur trade for northern North America. This period was overseen by George Simpson, who ran the company from 1821 to 1860. During this time, the company issued its own currency and played a key role in the administration of affairs over much of western Canada and the northwestern United States. Its traders and administrators were responsible for charting and settling much of the region.

Eventually, aboriginals and other traders protested and challenged the HBC’s monopoly over all trade in the North West. By the 1860s, the monopoly was no longer enforceable, and in 1869 the company sold Rupert’s Land for £300,000 to the young Canadian government, which had itself only been established in 1867. The handover took place in 1870, following an uprising in the Red River Colony by the Métis, the mixed aboriginal and European offspring of the original fur traders. The Métis and their charismatic leader Louis Riel challenged the transaction and forced the creation of the province of Manitoba. Donald Smith, later known as Lord Strathcona, a leading figure in Canadian business and politics, who worked for the HBC for 75 years from 1838 to 1914, negotiated the transfer. This marked the end of the HBC’s role as the de facto government of the North West, though its influence remained through its real estate holdings and stores.

By the 20th century, the company had become essentially a retail operation, known as “The Bay.” It ended its involvement with northern stores, sold most of its real estate holdings, and largely cut its ties with the fur trade. Its first department store had opened in Winnipeg, Manitoba, in 1881, and the company developed a chain across the country. In 1970, on the company’s 300th anniversary, the HBC’s headquarters were transferred from London, England, to Winnipeg. In 1979 Canadian Ken Thomson brought the firm into Canadian control by purchasing it for $641 million. Until that time, it had been controlled by British investors. In 2006 the company was purchased by American Jerry Zucker, who became the first U.S. citizen to become governor of the company. In 2008 the company was again sold, this time to U.S. firm NRDC Equity Partners, which owns U.S. retailer Lord and Taylor. In recent years the company has faced difficulties in the very competitive Canadian retail sector, especially against newer entrants such as Wal-Mart.

Because of its age and its place in Canadian history, the Hudson’s Bay Company retains significant corporate and emotional symbolism as North America’s oldest company, and the last major Canadian-based (but not Canadian-owned) retailer and department store. While many Canadians were unhappy to see the company purchased by an American, they recognized that this may have been its only choice if it wished to continue as an entity.

Bibliography:

William Cornwallis King and Mary Weekes, Trader King (Fifth House, 2007);
Robert Montgomery Martin, The Hudson’s Bay Territories and Vancouver’s Island: With an Exposition of the Chartered Rights, Conduct, and Policy of the Honble Hudson’s Bay Corporation (Kessinger Publishing, 2007);
Peter C. Newman, Caesars of the Wilderness (Viking, 1987);
Peter C. Newman, The Company of Adventurers (Viking, 1985;)
Peter C. Newman, Merchant Princes (Viking, 1991);
James Raffan, Emperor of the North: Sir George Simpson and the Remarkable Story of the Hudson’s Bay Company (HarperCollins, 2007);
Deidre Simmons, Keepers of the Record: The History of the Hudson’s Bay Company Archives (McGill-Queen’s University Press, 2007);
Gary Spraakman, “The Impact of Institutions on Management Accounting Changes at the Hudson’s Bay Company, 1670 to 2005,” Journal of Accounting and Organizational Change (v.2/2, 2006).

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