We now found that independent of the natural difficulties of the undertaking, we should have to encounter every other which they, who were already in possession of the trade of the country, could throw in our way, and which their circumstances enabled them to do. Nor did they doubt, from their own superior experience, as well as that of their clerks and men, with their local knowledge of the country and its inhabitants, that they should soon compel us to leave the country to them. The event, however, did not justify their expectations; for, after the severest struggle ever known in that part of the world, and suffering every oppression which a jealous and rival spirit could instigate; after the murder of one of our partners, the laming of another, and the narrow escape of one of our clerks, who received a bullet through his powder horn, in the execution of his duty, they were compelled to allow us a share of the trade. As we had already incurred a loss, this union was, in every respect, a desirable event to us, and was concluded in the month of July, 1787.
This commercial establishment was now founded on a more solid basis than any hitherto known in the country; and it not only continued in full force, vigour, and prosperity, in spite of all interference from Canada, but maintained at least an equal share of advantage with the Hudson's-Bay Company, notwithstanding the superiority of their local situation. The following account of this self-erected concern will manifest the cause of its success.
It assumed the title of the North-West Company, and was no more than an association of commercial men, agreeing among themselves to carry on the fur trade, unconnected with any other business, though many of the parties engaged had extensive concerns altogether foreign to it. It may be said to have been supported entirely upon credit; for, whether the capital belonged to the proprietor, or was borrowed, it equally bore interest, for which the association was annually accountable. It consisted of twenty shares, unequally divided among the persons concerned. Of these, a certain proportion was held by the people who managed the business in Canada, and were styled agents for the Company. Their duty was to import the necessary goods from England, store them at their own expense at Montreal, get them made up into articles suited to the trade, pack and forward them, and supply the cash that might be wanting for the outfits, for which they received, independent of the profit on their shares, a commission on the amount of the accounts, which they were obliged to make out annually, and keep the adventure of each year distinct. Two of them went annually to the Grande Portage, to manage and transact the business there, and on the communication at Detroit, Michilimakinac, St. Mary's, and at Montreal, where they received, stored, packed up, and shipped the company's furs for England, on which they had also a small commission. The remaining shares were held by the proprietors, who were obliged to winter and manage the business of the concern with the Indians, and their respective clerks, etc. They were not supposed to be under any obligation to furnish capital, or even credit. If they obtained any capital by the trade, it was to remain in the hands of the agents; for which they were allowed interest. Some of them, from their long services and influence, held double shares, and were allowed to retire from the business at any period of the existing concern, with one of those shares, naming any young man in the company's service to succeed him in the other. Seniority and merit were, however, considered as affording a claim to the succession, which, nevertheless, could not be disposed of without the concurrence of the majority of the concern; who, at the same time, relieved the seceding person from any responsibility respecting the share that he transferred, and accounted for it according to the annual value or rate of the property; so that the seller could have no advantage, but that of getting the share of stock which he retained realised, and receiving for the transferred share what was fairly determined to be the worth of it. The former was also discharged from all duty, and became a dormant partner. Thus, all the young men who were not provided for at the beginning of the contract, succeeded in succession to the character and advantages of partners. They entered into the Company's service for five or seven years, under such expectations, and their reasonable prospects were seldom disappointed: there were, indeed, instances when they succeeded to shares, before their apprenticeship was expired, and it frequently happened, that they were provided for while they were in a state of articled clerkship. Shares were transferable only to the concern at large, as no person could be admitted as a partner who had not served his time to the trade. The dormant partner indeed might dispose of his interest to any one he chose, but if the transaction was not acknowledged by his associates, the purchaser could only be considered as his agent or attorney. Every share had a vote, and two-thirds formed a majority. This regular and equitable mode of providing for the clerks of the company, excited a spirit of emulation in the discharge of their various duties, and in fact, made every agent a principal, who perceived his own prosperity to be immediately connected with that of his employers. Indeed, without such a spirit, such a trade could not have become so extended and advantageous, as it has been and now is.
In 1788, the gross amount of the adventure for the year did not exceed forty thousand pounds,[1] but by the exertion, enterprise, and industry of the proprietors, it was brought, in eleven years, to triple that amount and upwards; yielding proportionate profits, and surpassing, in short, any thing known in America.
Such, therefore, being the prosperous state of the company, it, very naturally, tempted others to interfere with the concern in a manner by no means beneficial to the company, and commonly ruinous to the undertakers.
In 1798 the concern underwent a new form, the shares were increased to forty-six, new partners being admitted, and others retiring. This period was the termination of the company, which was not renewed by all the parties concerned in it, the majority continuing to act upon the old stock, and under the old firm; the others beginning a new one; and it now remains to be decided, whether two parties, under the same regulations and by the same exertions, though unequal in number, can continue to carry on the business to a successful issue. The contrary opinion has been held, which if verified, will make it the interest of the parties again to coalesce; for neither is deficient in capital to support their obstinacy in a losing trade, as it is not to be supposed that either will yield on any other terms than perpetual participation.
It will not be superfluous in this place, to explain the general mode of carrying on the fur trade.
The agents are obliged to order the necessary goods from England in the month of October, eighteen months before they can leave Montreal; that is, they are not shipped from London until the spring following, when they arrive in Canada in the summer. In the course of the following winter they are made up into such articles as are required for the savages; they are then packed into parcels of ninety pounds weight each, but cannot be sent from Montreal until the May following; so that they do not get to market until the ensuing winter, when they are exchanged for furs, which come to Montreal the next fall, and from thence are shipped, chiefly to London, where they are not sold or paid for before the succeeding spring, or even as late as June; which is forty-two months after the goods were ordered in Canada; thirty-six after they had been shipped from England, and twenty-four after they had been forwarded from Montreal; so that the merchant, allowing that he has twelve months' credit, does not receive a return to pay for those goods, and the necessary expenses attending them, which is about equal to the value of the goods themselves, till two years after they are considered as cash, which makes this a very heavy business. There is even a small proportion of it that requires twelve months longer to bring round the payment, going to, the immense distance it is carried, and from the shortness of the seasons, which prevents the furs, even after they are collected, from coming out of the country for that period.[2]
The articles necessary for this trade, are coarse woollen cloths of different kinds; milled blankets of different sizes; arms and ammunition; twist and carrot tobacco; Manchester goods; linens, and coarse sheetings; thread, lines, and twine; common hardware; cutlery and ironmongery of several descriptions; kettles of brass and copper, and sheet-iron; silk and cotton handkerchiefs, hats, shoes, and hose; calicoes and printed cottons, etc., etc., etc. Spirituous liquors and provisions are purchased in Canada. These, and the expense of transport to and from the Indian country, including wages to clerks, interpreters, guides, and canoe-men, with the expense of making up the goods for the market, form about half the annual amount against the adventure.
This expenditure in Canada ultimately tends to the encouragement of British manufactory, for those who are employed in the different branches of this business, are enabled by their gains to purchase such British articles as they must otherwise forego.