Situated on a small bay at the mouth of Pigeon river, Grand Portage had been for several years the general dépôt for the trader of the North West Company, the lair from which those "sly wolves of the North" had sallied forth to work such havoc with the trade of the English on Hudson Bay. Along the shore ran a line of docks, which each summer were piled high, now with the parcels of merchandise for the interior trade, now with the packs of furs which had been gathered from the distant trading posts for the market in the east. Along the bay front and up the bank of the river sprawled the village of log huts in which dwelt the half-breed families of the French voyageurs.

The fort itself was in keeping with the dignity of the Company and the magnitude of its operations. A palisade eighteen feet high enclosed the great square in which stood the various offices—storehouses, servants' quarters, and lodgings for the clerks. In the centre of the courtyard towered the main building, a stout log structure surmounted by a high balcony. This contained the apartments of the partners, and the great hall, its walls covered with portraits of the leading members of the Company in all the glory of ruffles and scarlet coats. Here took place the grave deliberations of the merchants, and here each evening they dined in solemn state. The stone powder magazine, the jail with its barred windows, and the sentry in the archway of the great gate lent a touch of grimness to the picture of this far-flung outpost of commerce.

At Grand Portage, Thompson received a warm welcome from those of the partners who were at the time present in the fort. On his way down he had met Roderick Mackenzie, cousin to the famous Sir Alexander, and Simon Fraser, soon to win distinction as the discoverer of the Fraser river. At the post he found the Honourable William McGillivray, prominent in the councils of the Company, and Sir Alexander Mackenzie himself. Sir Alexander had been the first white man to descend the Mackenzie river to its mouth, and he had blazed a trail across the Rocky Mountains to the Pacific. He had but recently returned from England, wearing the honour of knighthood which he had earned for his explorations. All of these gentlemen impressed Thompson as being men of enterprise and vision, and among them he found the liberal and public spirit which in his former employers he had sought in vain.

At that time, questions of serious import were agitating the minds of the partners. By the treaty which closed the American Revolutionary War, the boundary between the British dominions and the territories of the United States had been fixed as a line drawn from the northwest corner of the Lake of the Woods to the source of the Mississippi, which was then thought to lie considerably north of its true position. Nine years later, the forty-ninth parallel of latitude had been accepted as the boundary; and by the Treaty of Amity and Commerce subsequently passed, it had been agreed that all British trading posts south of this line should be withdrawn. This made it necessary for the Company to fix at once the location of their houses on the upper Red river, and incidentally if possible to discover the true source of the Mississippi. The partners were also anxious to have a route surveyed to the headwaters of the Missouri river, where there existed the villages of an Indian people who got their living from the cultivation of the soil. The scientific spirit of the merchants was shown by their further desire to search for the fossil bones of prehistoric animals and any monuments which might throw light on the earlier condition of the regions surveyed. Finally, they wished to ascertain the courses of the rivers and the situation of the lakes, in order that they might rearrange their network of trading houses so as to cover more completely the territory under their sway.

Thompson's arrival came therefore at an opportune moment. He was promptly engaged as astronomer and surveyor to the company, and the partners and agents all agreed to send orders to their various trading posts that he should be given any assistance he required. In August, the great canoes arrived from Montreal with the goods for the Indian trade. When these were unloaded, the merchandise was assorted and made up in parcels each of ninety pounds' weight, so that the boatmen might be able to shoulder them over the portages. These were then taken in charge by the various agents and their shouting crews of voyageurs. Five days of hard labour were needed for the carry over Grand Portage to the upper waters of Pigeon river. When all was ready, Thompson climbed the long trail from the lake. Armed with his precious instruments, he joined the Swan river brigade of four canoes, and embarked on what was to be the longest, fastest and most brilliant piece of survey in his whole career.

Progress was tedious until the party had crossed the watershed beyond which all streams flow north-westward into Lake Winnipeg and thence into Hudson Bay. They then made a rapid descent through Rainy lake and the Lake of the Woods to the Winnipeg river (the mad or foaming water of the Indians), down which they paddled and portaged to its mouth. Coasting along the south shore of Lake Winnipeg under the shelter of its low limestone cliffs, they came to the mouth of the Dauphin or Little Saskatchewan river. The ascent of this stream brought them to the waters of Lake Manitoba. They had only to paddle to the head of this lake, and from thence the length of Lake Winnipegosis, in order to find themselves at the mouth of the Swan river. Twelve miles up this stream was their objective—Swan River House.

As they approached their goal, Thompson observed that the land was rapidly improving in character; until at Swan River House he found himself in the heart of a fine varied country of hill and plain, woodland and meadow—the beaver country par excellence. Here on every side were to be found traces of the labours of these industrious animals; the dammed brooks, the flooded meadows, the dome-like huts in which they lived and the burrows to which they fled for refuge when attacked. All this fine country was the hunting ground of the Cree Indians, the possession of which they had from time immemorial disputed with the beaver, the bison, and the red deer.

When the early French traders arrived, they brought with them chisels, knives, and other implements of iron. The Indians, having got possession of these, were able to cut through the dams, drain the waters of the ponds, and thus expose the huts and burrows of the beaver. Then, assisted by their small half-savage dogs, they would chisel their way through the thick walls of the huts until they came to the beaver. Since there was a ready market for his skin among the French traders, they soon became rich, and for several years men, women, and children were gay with brooches, ear-rings and beads, and gaudy with scarlet coats.

But then the Nipissing and Iroquois Indians, who had exhausted their own countries, spread to the north and west. Armed with their new steel traps, they began a war of annihilation upon the beaver; and by the year 1797, when Thompson travelled through the Swan river district, almost the whole of that extensive region was denuded. The short phase of prosperity was over. The greed of the white man and the improvidence of the Indian had done their work, and while the native might still hope to gain a bare subsistence from hunting the deer and the bison, he was once more poor, thus to remain for ever.

Over this country, Thompson made a series of rapid excursions by horse and canoe, in order that he might fix the location of the various trading houses of the North West Company. In the course of five weeks, he had crossed to the basins of the Red Deer and the Assiniboine rivers, and surveyed each of these streams to its source. He then descended the Assiniboine to its confluence with the Souris, near where the city of Brandon now stands. Here toward the end of November he put up at Assiniboine House, which was at that time kept by a trader called John McDonnell.