This change from American to British possession was marked by a transfer of the metropolis from Fort George to Fort Vancouver. When Dr. John McLoughlin, upon the absorption of the Northwestern by the Hudson Bay Company, in 1821, was sent out as "Chief Factor of the Columbia River Territory," he declared that the chief post should be as central as possible to the trade; that after leaving the mouth of the river there is no disadvantage in going to the head of navigation; and that a permanent settlement must be surrounded by an agricultural country. These considerations which took McLoughlin to Vancouver are those which to-day determine the commercial strength of Portland, across the river from Vancouver. Thus Fort George sunk to a subordinate position. After the boundary was determined a new American town sprung up under the old name Astoria, where there are large salmon canneries.
Vancouver, with the outlying posts scattered throughout the territory, was the centre of a semi-feudal organization, and its life was picturesque and full of charm.
Within the palisades was the residence of the Chief Factor ("Governor" by courtesy), surrounded by those of the other gentlemen servants of the Company; together with the stores, offices, and all other important buildings. Between the fort and the river lay a clean, neat, and decorous village of about forty log houses, occupied by the inferior servants of the Company, who were, for the most part, French Canadians. Nearly every man, from the "Governor" down, had an Indian wife; for no white woman had as yet set foot in Oregon. One of these servants writes: "They all had Indian women, never more than one; old Dr. McLoughlin would hang them if they had." The farm, blacksmith's shop, and other productive activities at Vancouver not only furnished the subordinate posts of the Company, but provisions were sent to Alaska, exports were made to the Hawaiian Islands, and the American settlers were dependent upon this post for many of their supplies. Not only was Vancouver the trading centre, it was also the "heart and brains of Oregon Territory." The post hospital offered relief to American settlers as well as to the subordinate posts. Here was established the first school in the territory. The services of the English Church were regularly maintained, and opportunity was offered to missionaries of all denominations to hold service. An annual dispatch kept open communication with the outside world and brought books and papers from the centres of civilization.
The central figure and inspiring genius of Vancouver was Dr. McLoughlin, who was a striking and remarkable character. The remoteness of his post, combined with a self-reliant nature, made him practically independent of his superior officers in Montreal or London. He was indeed, absolute monarch of all the territory west of the Rocky Mountains. But the "good doctor," though firm in character, was a benevolent and a beneficent despot. "Standing over six feet, six inches, in height, he was of commanding presence, with courtly, yet affable manners." Red man and white man alike revered and loved him, for to each alike he was kind, and at the same time just. He was the soul of hospitality and every traveller found at Vancouver a ready welcome to a seat at the rich but temperate board in the common dining-hall, and a bed in the doctor's house. Library, horses, and boats were all at the visitor's command. This spirit of hospitality, joined to a freedom from national prejudice, characterized the attitude of McLoughlin towards the missionaries and other American immigrants who ultimately began to come into the territory. There was scarcely a party which was not indebted to him for material assistance in getting started, as well as for a courteous welcome at the fort. Some indeed owed their lives to him and the other officers at Vancouver, and once at least their prompt help was in marked contrast to the indifference of the American settlement. To this service the missionary records bear constant testimony, and Lieutenant Frémont, "the pathfinder," says in his report: "I found many American Emigrants at the Fort. Others had already crossed the river to their land of promise—the Willamette valley."
We must now follow these American immigrants, for with them the political dominance is to pass from Great Britain to the United States, and the metropolis to move from Vancouver to the Falls of the Willamette. Curiously enough, McLoughlin in his own course will typify this transition.
The very first settlers in the Willamette Valley were servants of the Hudson Bay Company, who settled there by the advice and with the assistance of McLoughlin, who from the first had properly estimated the value of this river and valley. He himself took possession of the falls, with the adjacent land, and held them as a personal claim, "until such time as there should be established a government which could give him title." The town which he developed on this site he called Oregon City.
The first American settlers on the Willamette were the Methodist missionary party, under Jason Lee, which crossed the plains in 1834. To these McLoughlin gave material aid. Of the Canadians, Lee's nephew writes: "They gave us a very polite and generous welcome to the best they could set before us."
Lee's mission was to the Indians, but meeting with great discouragement in this direction, he turned his attention to the more interesting task of forming a political state, which should be American and also Methodist. The missionary work was not abandoned, but only subordinated. In furtherance of his political plans, Lee secured both money and immigrants from the eastern States and invoked the protection of the United States Government. Since 1820 there had been a party in Congress, representing a sentiment in the country outside, which desired to abrogate our treaty with England and establish our government over the whole of Oregon Territory. But notwithstanding an "Oregon fever," developed by Lee and others, the United States was not yet ready for any action with regard to the new territory. In the meantime immigrations from the western States had brought to the Willamette Valley a number of people differing in spirit from the missionaries and not at all in harmony with them. These after a while outnumbered the adherents of the Mission. Hence arose three parties in the Valley of the Willamette, two American and one British. The new American party was in favor of forming a provisional government, which should maintain order until the boundary question now burning between England and America should be decided. The missionary party accepted this as an evil less than the rule of the Hudson Bay Company, which was the only established authority. The Canadians wanted only quiet. As a result, in 1845 was completed the organization of an independent commonwealth, which recognized the sovereignty of neither America nor Great Britain, but which allowed every man to retain his individual citizenship under either government until the territorial question should be settled. Against the wish of most of the missionary party, but upon the insistence of the more liberal Americans, the plan was extended so as to include the country north of the Columbia River, and McLoughlin was invited to unite in this organization. The Chief Factor thought it wise to put the property of his Company under the protection of a government which would probably be formed whether or no, and therefore he entered the organization.
The seat of the new government was called by the legislature, "Willamette Falls," but the place was afterwards incorporated under the name of Oregon City given it by McLoughlin, its founder.
There had long been disaffection in England over McLoughlin's liberal attitude towards the Americans. A climax was reached when Lieutenants Warre and Vasouver, who came to the Columbia River shortly after the formation of the provisional government, reported McLoughlin to be a disloyal subject, if not an unfaithful servant. The Chief Factor's defence was complete and he was not without friends, both in the Council of the Company and in the House of Commons. However, moved by a combination of considerations, he resigned his office, retired to Oregon City, and, after the settlement of the boundary question, became a citizen of the United States. For this much-vexed boundary question was settled by treaty in 1846. Polk was elected upon the platform, "Fifty-four forty, or fight." But more moderate counsels prevailed, and a compromise was made upon the forty-ninth parallel of latitude. This determination of the boundary line had as a result the extinguishing of the Hudson Bay trade on the Columbia River, and Vancouver was purchased by the United States for an army post, which is still maintained. A town has also grown up outside the reservation.