The Hudson’s Bay Company
The story of The Hudson’s Bay Company, which once claimed and traded on millions of acres in Canada and the United States, is fraught with intrigue and exploitation. It begins in October 1666, when King Charles II of England granted an audience to two men. Médard Chouart des Groseilliers and Pierre-Esprit Radisson were brothers-in-law and adventurers who were desperate to tell the king about the “great store of beaver” they’d discovered across the Atlantic, west of France’s imperial claims.
Why hadn’t they pitched the discovery to his cousin, King Louis XIV of France? Well, they initially presented their bounty of beaver fur to New France’s governor, Pierre de Voyer D’Argenson a few years earlier, and rather than being rewarded for their entrepreneurial spirit, they were arrested for traveling without the government’s permission as well as abandoning their post. After serving their sentences, they decided to take their vision of an imperial, today we’d call it a global, fur trading company to England instead.
In addition to fur, investors hoped they would discover other natural resources, such as gold or silver. Explorers and monarchs were also eager to find the much sought-after Northwest Passage. All this motivated Charles II when he granted the charter establishing the Hudson’s Bay Company, officially “The Governor and Company of Adventurers of England, trading into Hudson’s Bay,” on May 2, 1670. Characteristic of British imperial ventures at the time, the charter established a legal monopoly aimed at preventing others from doing the same.
Crucially, the charter also claimed some 1.5 million square kilometers of land inhabited by Inuit and First Nations communities. This was land connected to all of the riverways — “Seas, Streights, Bays, Rivers, Lakes, Creeks, and South” — that fed into Hudson Bay. Charles understood that he couldn’t take land that didn’t belong to him all the while ignoring the territory’s Indigenous inhabitants. Charles baked this belief into the HBC’s charter by outlining whose land he would not claim: that of British subjects, or “the Subjects of any other Christian Prince or State.” In other words, any other European power.
As part of Charles II’s refusal to recognize Indigenous sovereignty, he granted a new name for the region: Rupert’s Land, in honor of his cousin, Prince Rupert, who served as the HBC’s first royal governor. By the mid-19th century, as the HBC’s landholdings grew, the region encompassed some eight million square kilometers and large parts of modern-day Alberta, Saskatchewan, Manitoba, Nunavut, Ontario, and Quebec, as well as the northwestern and midwestern United States.
From the perspective of English officials, this achievement was nothing short of extraordinary, a true marker of how British commerce could transform — or “civilize” — the globe.
The basics of the HBC’s fur trade were relatively simple, even if the day-to-day operations were anything but. The company built posts, staffed by English officials and mostly Scottish traders, along rivers that connected to Hudson Bay. From there, traders waited for Indigenous trappers and their middlemen to bring them furs, which they exchanged for goods that were becoming increasingly important to the community’s survival, such as guns and wool. The furs were then brought back to Europe.
To standardize the terms of the trade, the company established its own currency, known as “Made Beaver.” This currency valued goods by placing them against the standard of one prime beaver pelt, which could buy you, for example, two pounds of sugar or a pound of black lead.
The men who worked for HBC were hungry for adventure, and in the process of discovering new territories, they helped spread British business and trade practices, as well as their culture and social values, across the region. They did the work of colonizing and nation-building, almost always with the help of Indigenous guides. They were probably the world’s first traveling salesforce.
Changing fashion trends in the late 1800s contributed to the fur trade losing importance. But, western settlement and the Gold Rush brought a new type of client to HBC — one that shopped with cash. With the Deed of Surrender in 1870 between HBC and Canada, HBC relinquished its territories to the new country. The Company’s focus began to shift to retail, as it concentrated on transforming its existing trading posts into shops, stocked with a wider variety of goods than ever before.
In 1912, HBC began an aggressive modernization program and retail expansion exploded across Canada. Strategic acquisitions enabled HBC to diversify into myriad commercial pursuits.
- A thriving wholesale business featuring liquor, canned salmon, coffee, tea, and tobacco supplemented fur and retail pursuits.
- Large holdings of land negotiated as part of the Deed of Surrender took the Company into real estate.
- The sale of homesteads to newly arrived settlers would later evolve into a full-scale interest in commercial property holdings and development.
- Shipping and natural resources, particularly oil and gas, were other important sidelines.
Oddly enough, it wasn’t until 1970 during its 300th anniversary year that HBC became a Canadian corporation. But the economic downturn of the 1980s left the Company with major debt and caused HBC to return to its core business, retail, where it has remained.
The history of HBC is the history of global capitalism, North American colonialism, and the power of the British Empire. It is also a painful example of the exploitation indigenous people suffered at the hands of opportunistic settlers.
While abhorrent by any modern measure, there was something classically entrepreneurial about HBC’s approach. It’s that thing all of us have said at some point, “Let’s give this a shot and see what happens.”
Risk and innovation are a start-up’s time-honored business model, whether you’re dealing with furs or financial services. HBC as an entrepreneurial ideology is a Masterclass in changing course, finding opportunities where there weren’t before, and deftly rolling with adversity.
