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Free trade — the fight to end the Hudson’s Bay Company’s charter monopoly over trade in Red River
Sep 15, 2017

by Bruce Cherney (part 1)

Free trade has been a regular feature of news reports for the past few months, especially with the ongoing NAFTA renegotiations between the United States, Canada and Mexico. While U.S. President Donald Trump has threatened to tear up the free trade agreement between the three countries if the U.S. doesn’t get its way, there was a time in Manitoba’s history when free trade was actively pursued.

In 1835, when the Hudson’s Bay Company (HBC, or simply the Company) took over administration of the colony established by Lord Selkirk in 1812 (following his 1820 death, the colony had been in the hands of his heirs), there were 5,000 residents in the Red River Settlement along the banks of the Red and Assiniboine rivers. The administration of the settlement was an expense that the Company believed it could save the British government.

As such, the HBC asked for and received a 20-year renewal of its charter that had been first granted to the Company in 1670, which still included the provision for retention of the trade monopoly that extended across Rupert’s Land (all the waters that drained into Hudson Bay, according to the original charter).

The British government seems to have been so grateful that the HBC took over the settlement’s administrative costs that it extended its charter to include Vancouver Island (Politics as Métis Ethnogenesis in Red River: Instrumental Ethnogenesis in the 1830s and 1840s in Red River, by Rob Ferguson).

Unfortunately for the residents of Red River, the HBC was organized as a trading corporation and not a governing body. Governing of its vast territory was a secondary concern for the Company, which had the primary purpose of being a successful commercial enterprise for its shareholders.

As a result, the secondary preoccupation was treated as an afterthought. Too often, Company officials also found themselves mired in judicial duties, for which they had little competency and no formal legal training. It was another point of contention in the settlement.

In its pursuit of profits, the HBC would reveal itself as a self-serving tyrant in the minds of the Métis, who cherished the freedom they enjoyed while wandering unrestrained across the plains.

The only rein on their freedom for the Métis was their inability to deal with traders other than those employed by the HBC.

Essentially, only the Company could purchase furs from British subjects, which included the Métis, Canadians and Indigenous people. This meant that the HBC had control of the prices paid for furs. At the same time, as the largest purchaser of pemmican and tallow, the Company also dictated the prices paid for these goods.

In the case of tallow, derived from buffalo fat and used for soap and candles, the Company sold the product in England for triple the price it paid to the residents of Rupert’s Land and the District of Assiniboia (Red River Settlement).

One enterprising individual named James Sinclair got wind of the profits realized in England and shipped some tallow to that country aboard an HBC ship. His venture did quite well, so he decided to duplicate the transaction in the following year.

In 1844, however, the Company refused to allow his tallow onto its ship, seized the cargo and placed it in storage at York Factory. It remained in storage until Sinclair agreed to sell the tallow to the Company at a price it set.

It was alleged that preventing Sinclair from selling his tallow for a profit in England made him an active supporter of the free trade movement.

The Company further ensured a market for its own goods by levying a heavy tariff on goods entering its territory from the United States.

 On February 12, 1835, a council (termed the Council of Assiniboia) was convened at Upper Fort Garry with Sir George Simpson, as the HBC governor of Rupert’s Land, presiding as president. The council was further made up of Alexander Christie, the governor of Assiniboia, and other influential men in the settlement, including a number of merchants and clergy.

In his opening address to the council, Governor Simpson said that the only way to hold society together was by putting “the adminstration of justice on a more firm and regular footing, and that immediate steps ought to be taken to guard against dangers from abroad or difficulties at home, for the maintenance of good order and tranquility, and for the security and protection of lives and property.”

It was this council that created a constitution that included the establishment of a court system, a police force and imposition of a 7.5 per cent duty on goods imported into the settlement by the Company. The duty was later seen as “obnoxious” and reduced to four per cent.

Alexander Ross, who served on the first council, wrote in his book, The Red River Settlement, that the members of the new administrative body were essentially “either sinecurists (defined as those holding a position yielding profits or honours) or paid servants of the Company.” As such, “they did not carry the public feeling with them, consequently (they) were not, perhaps, the fittest persons, all things considered, to legislate for the colony.”

Ross wrote that the people of Red River never placed much confidence in the council, but would have if it had included members from all classes, “and not exclusively from the ruling party.”

Instead, according to Ross, the cry in the settlement was for responsible government.

Despite his views about the council and being personally disliked by Governor Simpson, Ross was appointed sherriff and commanded a 60-member volunteer police force.

Ross, who was born in Scotland in 1783, became a teacher in Lower Canada (Quebec) in 1804, was later a fur trader on the Pacific Coast and then served with the North West Company (Nor’Westers), which merged with the HBC in 1821 after years of mutual hostility. He was forced into retirement in 1825, settling at Red River.

Simpson should have been more prudent in his accepting Ross as sherriff, since the fur trader turned historian refused to enforce the Company’s fur trade monopoly.

To act as an arbitrator of the law, Simpson appointed Adam Thom, a lawyer from Lower Canada, to the post of Recorder of Rupert’s Land in 1839. He was a paid servant of the HBC with a generous salary of £700.

“In the nature of things, a paid servant must have a special eye to his employer’s interest, above that of all others,” wrote Ross of Thom’s appointment.

It also didn’t help that Thom was known as being rabidly anti-French while residing in Lower Canada, going as far as criticizing the French residents of the province as being an “incubus on the spirit of commercial enterprise” in one Montreal Herald editorial.

Thom would later play a central role in the free trade debate within Red River.

Meanwhile, Ross wrote that the Company went a step too far in attempting to restrain the Métis from crossing and recrossing the border to the U.S. with goods.

A case arose against a Canadian named Registe Larant, who was alleged to have violated the Company’s charter rights. His house was broken into by Company’s officers and all his furs seized.

Two other seizures were made by the Company. At Manetoba Lake (today’s Lake Manitoba), an owner of furs was made a prisoner and conveyed to York Factory and threatened with deportation to England.

As a result of these incidents, Canadians and Métis allied in their “ill-will against the rule of the Company,” reported Ross.

The alliance arose as a result of an “English half-breed,” (the common term then in use for all people of Indiginous and European ancestry, although English-speakers were also called “country-born”) a respectable man, according to Ross, wanting the hand of a young lady. Her other suitor was a “Scotch lad.” She preferred the former, but her guardian, who happened to be the chief officer of the Company at Red River, preferred the latter. He summoned the Métis man and reprimanded him for “aspiring to the hand of a lady accustomed ... to the first society.”

He showed the man the door, “but being the leading man among his countrymen, the whole fraternity took fire at the insult.

“‘This is the way,’said they, ‘that we half-breeds are despised and treated.’”

Ross wrote that the English-speaking Métis then “joined the French malcontents against their rulers; so that for years afterwards this spirit of combination and hatred gave rise to plots, plans, and unlawful meetings among them ...”

The Company’s trade restrictions became increasingly harsh during the 1840s. Duties on American goods were arbitrarily levied, and another 20 per cent duty was placed on goods imported from Britain, an enterprise controlled by the HBC.

Restrictions were also placed on Red River Settlement land, which was leased from the Company by its occupants. Any settler who violated the Company’s fur trade monopoly could potentially have their land confiscated.

Traders from the American side of the border entered the picture when they realized that a profit could be made by offering Red River residents an alternative market for their furs.

The American Fur Company expanded its operation to trading posts along the U.S. side of the border under a private contract with Norman Kittson. A major post was set up by Kittson at Pembina.

One of Kittson’s aims was to prevent pelts obtained by Red River Métis buffalo hunters in the U.S from going to Red River. By this time, buffalo had virtually vanished from the settlement, forcing the Métis to hunt the animals in the U.S.

As the hunters held a rendez-vous at Pembina before crossing over to Company territory, Kittson was positioned to intercept and purchase their buffalo hides. By selling hides in the U.S., the hunters were in violation of their contracts with the HBC, and thus technically breaking British law.

(Next week: part 2)