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The Hudson’s Bay Company and the management of long-distance trade, 1670-1730 Mancke, Elizabeth 1984

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THE HUDSON'S BAY COMPANY AND THE MANAGEMENT OF LONG-DI STANCE TRADE, 1670-1730 By ELIZABETH MANCKE B.A., The Colorado Col lege, 1977 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES DEPARTMENT OF HISTORY We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA September 1984 6 E l izabeth Mancke, 1984 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of the requirements f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and study. I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying of t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the head o f my department o r by h i s o r her r e p r e s e n t a t i v e s . I t i s understood t h a t copying or p u b l i c a t i o n of t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be allowed without my w r i t t e n p e r m i s s i o n . Department of The U n i v e r s i t y of B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V 6 T 1Y3 DE-6 (3/81) ABSTRACT T h i s t h e s i s examines the H u d s o n ' s Bay Company f rom 1670 to 1730 f o c u s s i n g on i t s management o f l o n g - d i s t a n c e t r a d e , the way i t maximized o p p o r t u n i t i e s and m i n i m i z e d r i s k and u n c e r t a i n t y . The company 's i n v o l v e m e n t in the London f u r m a r k e t , i t s p rocurement o f t r a d e g o o d s , the b a r t e r t r a d e in Nor th A m e r i c a , and t h e i r i n t e r -r e l a t i o n s h i p a r e a n a l y s e d a l m o s t e n t i r e l y f rom the p e r s p e c t i v e o f the Committee in London which managed the company. The o r g a n i z a -t i o n o f t h e s e commerc ia l d e t a i l s in the c o n t e x t o f the s e v e n t e e n t h -and e i g h t e e n t h - c e n t u r y economic w o r l d e x p l a i n how the company c o o r d i n a t e d the d i s p a r a t e s p h e r e s o f i t s o p e r a t i o n and how i t s u r v i v e d the drop in f u r p r i c e s which o c c u r r e d s h o r t l y a f t e r i t s a d v e n t . H i s t o r i o g r a p h i c a i l y the paper r e l i e s h e a v i l y on a g rowing body o f l i t e r a t u r e d e a l i n g w i t h l o n g - d i s t a n c e t r a d e and the e x p a n s i o n o f E u r o p e . In t h i s r e s p e c t the work b r i n g s a new p e r s p e c t i v e t o f u r t r a d e h i s t o r i o g r a p h y . TABLE OF CONTENTS ABSTRACT INTRODUCTION 1 CHAPTER I "The Hudson's Bay Company and 1 0 Patterns of European Expansion" CHAPTER II "The Hudson's Bay Company and 2 6 The European Fur Market, 1 6 7 0 - 1 7 2 6 " CHAPTER III "Trade Goods Management" 5 0 CHAPTER IV "The Standard of Trade, Problems of Commerce, and Economic Behavior in 6 7 the Ear ly Modern Per iod. A Few Thoughts." CHAPTER V "Merchandising and The Standard of 8 1 Trade" CONCLUSION 9 2 BIBLIOGRAPHY 9 6 LIST OF TABLES I. Beaver Imports Into England from the Engl ish 38 Colonies 1697~1726 II. Market Shares, Five Year Averages 38 III. Average Pr ice per Piece of Beaver, 1682-1726 40 IV. Import, Sales, and Warehouse Volumes 43 V. Trade Good Pr ices in S te r l i n g 61 Via. Trade Good P r i ces , Standard of Trade, and 84 Mark-ups: York For t , 1720 VIb. Trade Good P r i ce s , Standard of Trade, and 85 Mark-ups: Fort Albany", 1720 i v INTRODUCTION T h i s e x a m i n a t i o n o f the H u d s o n ' s Bay Company management f rom 1670 to 1730, f o c u s e s on the company 's p l a c e in the h i s t o r y o f the e x p a n s i o n o f E u r o p e , more p a r t i c u l a r l y , the management o f l o n g - d i s t a n c e t r a d e as one a s p e c t o f t h a t e x p a n s i o n . C e n t r a l to t h i s a n a l y s i s a r e the o b j e c -t i v e s o f the company, the way i t max imized o p p o r t u n i t i e s and m i n i m i z e d r i s k and u n c e r t a i n t y , the o r g a n i z a t i o n o f i t s a f f a i r s to c o o r d i n a t e the b a r t e r t r a d e in Nor th A m e r i c a and the London f u r m a r k e t , and t h e i r i n f l u e n c e on the l o n g - t e r m s u r v i v a l o f the Company. An a t tempt to t r a n s c r i b e the beaver v a l u e which the Ind ian p a i d f o r European t r a d e goods to a s t e r l i n g v a l u e f i r s t prompted t h i s s t u d y . S i n c e the H u d s o n ' s Bay Company's r a t e o f exchange o f f u r s f o r t r a d e goods f l u c t u a t e d v e r y l i t t l e between 1670 and 1870, the y e a r s when t h a t r a t e was e s t a b l i s h e d were the l o g i c a l p o i n t t o b e g i n the i n q u i r y . The c l u e s to s o l v i n g t h i s p r o b l e m d i r e c t e d me t h r o u g h amaze i n v o l v i n g the c o m p i l a -t i o n , c o r r e l a t i o n , and a n a l y s i s o f t r a d e good p r i c e s and f u r p r i c e s in London. T h i s p e r e g r i n a t i o n l ed to the answer o f the i n i t i a l q u e s t i o n but a l s o r e v e a l e d the d i f f i c u l t y o f d rawing a s i m p l e c o r r e l a t i o n between the p r i c e o f t r a d e g o o d s , the p r i c e o f f u r s , and the p r o f i t a b i l i t y o f the Company. D u r i n g the f i r s t s i x t y y e a r s t r a d e good p r i c e s f l u c t u a t e d remarkab ly l i t t l e , f u r p r i c e s dropped p r e c i p i t u o u s l y b e f o r e s t a b i l i z i n g , and ye t d e s p i t e the narrowed gap in t r a d e good p r i c e s and f u r p r i c e s the company a f t e r n e a r l y f i f t y y e a r s in b u s i n e s s began to d i s t r i b u t e annual d i v i d e n d s . T h i s p a t t e r n i s not u n l i k e t h a t found in o t h e r s e v e n t e e n t h -and e i g h t e e n t h - c e n t u r y c o l o n i a l t r a d e s . The d r o p p i n g p r i c e f o r f u r s 1 p a r a l l e l s the p r i c e movements o f o t h e r c o l o n i a l c o m m o d i t i e s , c a u s e d by i n c r e a s e s in s u p p l y and the ease o f s u b s t i t u t i o n a f f o r d e d by the r e l a -t i v e l y homogeneous c h a r a c t e r o f most c o l o n i a l g o o d s . How the company s u r v i v e d t h i s t r a n s i t i o n wrought by the growth in the Nor th Amer ican f u r t r a d e became the f o c u s o f t h i s s t u d y , and p r i c e movements the t r a i l to be f o l l o w e d t r a c i n g l o n g - t e r m t r e n d s in the Company's f o r t u n e s . Recent work on the o r g a n i z a t i o n o f commerc ia l e n t e r p r i s e s in p r e -i n d u s t r i a l E u r o p e , e s p e c i a l l y a s m a l l but g rowing body o f l i t e r a t u r e on the o r g a n i z a t i o n o f l o n g - d i s t a n c e t r a d e , has g r e a t l y f a c i l i t a t e d t h i s work . It p r o v i d e s the h i s t o r i o g r a p h i c a i c o n t e x t w i t h i n wh ich t h i s s t u d y f i n d s p l a c e . One o f the e n d u r i n g myths o f Western c i v i l i z a t i o n i s t h a t o f the t r a d e r v e n t u r i n g away from h e a r t h and home, r i s k i n g l i f e and l i m b , and r e t u r n i n g t o fame and f o r t u n e . The a d v e n t u r e s o f Marco P o l o e x c i t e d the homebound i m a g i n a t i o n o f s u c c e e d i n g g e n e r a t i o n s . Every s c h o o l c h i l d knows t h a t C h r i s t o p h e r Columbus landed on the s h o r e s o f the Western Hemi-s p h e r e w h i l e s e a r c h i n g f o r a r o u t e t o the r i c h e s o f the O r i e n t . C o n q u i s t a d o r s and f u r t r a d e r s pushed i n t o the i n t e r i o r s o f the A m e r i c a n c o n t i n e n t s s e a r c h i n g f o r g o l d , s i l v e r , and f u r s . The ease w i t h wh ich we d i s c o u n t t h i s f o l k mytho logy f o r i t s e x t r a -vagant e m b r o i d e r i n g o f r e a l i t y does not w h o l l y e m a s c u l a t e i t . T h u s , in more tempered s c h o l a r l y a c c o u n t s h i s t o r i a n s and e c o n o m i s t s have o f t e n c o n c l u d e d t h a t l o n g - d i s t a n c e t r a d e , a l m o s t by i t s v e r y n a t u r e , g e n e r a t e d g r e a t e r p r o f i t s than were g e n e r a t e d f rom d o m e s t i c e n t e r p r i s e s . Ma lachy Pos11ethwayt, an e i g h t e e n t h - c e n t u r y e c o n o m i s t , wro te in the Un i v e r s a l  D i c t i o n a r y o f Commerce t h a t E n g l i s h " e s t a t e s got by t r a d e have perhaps been f a r more numerous than those got by any way w h a t s o e v e r . " 1 Contem-p o r a r y s c h o l a r s h i p r e v e a l s an o n g o i n g , l i v e l y , and at t imes hea ted debate on the r e l a t i o n s h i p between l o n g - d i s t a n c e t r a d e and p r o f i t s , l o n g - d i s t a n c e 2 trade and indus t r i a l growth, and long-distance trade and the present economic hegemony of the i n d u s t r i a l i z e d nations. Some scholars argue that the present economic d i spa r i t y between regions of the world has i t s o r i g in s in the s ixteenth century, a watershed between p r e - c a p i t a 1 i s t i c and c a p i t a l i s t i c business p rac t i ce s . Integral to th is argument is the importance of European expansion beyond the Mediterranean and B a l t i c commercial arenas of the medieval world. According to th is theory cap i t a l i sm, whose sa l i en t features are high p r i ce s , high p r o f i t s , and the exp lo i t a t i on of labour, propel led European economic development. The p r o f i t s gained from trade, and e spec i a l l y co lon ia l trades, f ue l l ed European economic growth and made poss ib le the Industr ia l Revolution. European long-distance trade t rans ferred large amounts of wealth from the periphery (the underdeveloped areas of the world) to the core states (northern Europe and la ter the United States) . Had th i s not happened, i t is suggested, the core states could not have experienced such rapid growth v i s - a - v i s the pe r iphery . 2 His tor ians chal lenging th i s theory argue that the leve ls of p r o f i t in co lon ia l trades such as tobacco, s laves , and sugar were not as high as has long been presumed, and were often not as high as the p r o f i t s made in domestic commerce and i ndus t r y . 3 Drawing on studies of the pro-f i t a b i l i t y of co lon ia l trades, Patr ick O'Brien suggests that trade with the periphery was not large enough to substant iate the claim that i t was a primary source of cap i ta l for the Industr ia l Revolution. 1* Richard Grassby in a study of the formation of seventeenth-century business f o r -tunes and merchant cap i ta l i sm challenges the b e l i e f that overseas trade created many, i f not most, of the great Engl ish fortunes. Trade provided advancement for men of small fortunes; f i nanc i a l serv ices and the mani-pu lat ion of money made the large f o r tunes . 5 3 As evidence accumulates which undermines the thes is that high pro-f i t s from long-distance trade p rec ip i t a ted the wor ld ' s present economic d i s p a r i t y , i t nonetheless remains d i f f i c u l t , and hasty, to cast aside the notion that trade, as a nexus between Europe and the rest of the world, holds a clue to understanding the world 's economic development. 6 The h i s t o r i c a l emphasis given to overseas expansion has indeed exagger-ated i t s place in the European economy and overshadowed less spectacular e n t e r p r i s e s . 7 Nevertheless, the changes which resul ted from the expan-sion of Europe recommend the merits of studying i t s dynamics in d e t a i l , even i f we f a i l to discover the i n f l a t ed p r o f i t s which i t seemed to promise. The h i s t o r i c importance of long-distance trade, Fernand Braudel argues, is that i t concentrated p r o f i t s in the hands of a few merchants. Thus, he can s ta te , " i n the eighteenth century, one can undoubtedly say that almost everywhere in Europe, 1 arge-sca le p r o f i t s from trade were superior to large-sca le p r o f i t s from industry or a g r i c u l t u r e . " 8 [ I t a l i c s in the or ig ina l ] The commercial mechanism which accounted for much of th is concentrat ion of p r o f i t s was the large j o i n t - s t o c k trading company, which Braudel concludes is among the best examples of merchant cap i ta l i sm in early-modern Europe, cap i ta l i sm which was as soph i s t i ca ted as l a te r indus t r i a l c a p i t a l i s m . 9 The j io int-stock trading companies emerged in northern Europe in response to the entrepreneur ia l problems posed by long-distance trade and co lon ia l expansion. While some would argue that they evolved na tura l -ly from the trading partnerships of medieval I ta ly , and presage the modern mul t i -nat iona l c o r p o r a t i o n , 1 0 th i s does not adequately account for the i r many mutations and r e g r e s s i o n s . 1 1 Rather, the j o i n t - s t o c k trading company was one of the many organizat iona l forms which Europeans devised to deal with the problems posed by expansion into non-European k l a n d s . 1 2 This expansion demanded larger and more speculat ive investments than had intra-European trade. Greater distances lengthened the turnover time of an investment and heightened the r isks of p i racy , shipwrecks, and wastage. The Spanish and Portuguese financed much of the i r i n i t i a l ex-pansion through government cont ro l l ed monopolies, the northern Europeans through j o i n t - s t o c k companies. 1 3 In a s ignal work on the spice trade, Niels Steensgaard seeks to expla in the seventeenth-century e c l i p se of the Portuguese and Venetians by the Dutch and Eng l i sh. Not su rp r i s i n g l y , ' he o r i g i n a l l y attempted to determine whether the sea route around A f r i c a , u t i l i z e d by the Dutch and the Eng l i sh , was more p r o f i t a b l e than the overland route across Asia to the Mediterranean. Discovering no s i g n i f i c a n t cost advantage to e i the r route he concludes instead that the Dutch and Engl ish East India Companies d i f f e r e d fundamentally from the commercial organizat ions of the Portuguese and the I t a l i ans ; the s h i f t in commercial dominance from the Mediterranean to the North A t l a n t i c can only be explained as a s t ruc tura l c r i s i s . 1 1 1 By switching to the sea route the Dutch and Engl i sh companies i n te rna l i zed the protect ion costs t r a d i t i o n a l l y paid to rulers along the caravan routes, and they sought to s t a b i l i z e the v io lent f luc tuat ions in the market by i n s t i t u t i o n a l i z i n g controls on both the pr ices and supply of goods. While these innovations did not create greater p r o f i t s , at least i n i t i a l l y , they did increase the transparency of the market, making for more e f f i c i e n t economic planning and con t ro l , and thereby better assuring the long-term surv iva l of the companies. 1 5 S i m i l a r l y , K. N. Chaudhuri, in a study of the Engl ish East India Company, from 1660 -1760 , maintains that the "most d i f f i c u l t task for the . . . managers was the creat ion of an economic decision-making process that would e s tab l i sh equ i l ib r ium between the supply and the consuming markets." 5 The E a s t I n d i a Company m i n i m i z e d d i s e q u i l i b r i u m by c o n s t r u c t i n g a mana-g e r i a l and a d m i n i s t r a t i v e s t r u c t u r e which s y s t e m i z e d d e c i s i o n - m a k i n g and e s t a b l i s h e d the o p e r a t i o n a l pa ramete rs o f the t r a d e , both a t the s o u r c e s o f s u p p l y and the s o u r c e s o f demand. From t h i s s t r u c t u r e wh ich d i f f e r e d r a d i c a l l y f rom med ieva l and most o t h e r e a r l y modern t r a d i n g p a r t n e r s h i p s in E u r o p e , the E n g l i s h Eas t I n d i a Company d e r i v e d i t s economic and p o l i -t i c a l s t r e n g t h . 1 7 In C h a u d h u r i ' s o p i n i o n the managers o f the E a s t Ind ia Company "had v e r y l i t t l e to l e a r n f rom the modern s y s t e m t h e o r i s t s . " 1 8 H i s t o r i c a l l y , the d i s t r i b u t i o n o f i n v e s t m e n t r i s k has been c o n s i -de red the p r i m a r y s i g n i f i c a n c e o f the j o i n t - s t o c k c o m p a n y - . 1 9 P u r s u i n g t h i s theme f u r t h e r , S t e e n s g a a r d and Chaudhur i emphas ize the ways in which the Dutch and E n g l i s h E a s t I n d i a Companies e v o l v e d s t r a t e g i e s f o r d e a l i n g w i t h the market u n c e r t a i n t y in l o n g - d i s t a n c e t r a d e c r e a t e d by the v i o l e n t f l u c t u a t i o n s in p r i c e and s u p p l y . In S t e e n s g a a r d ' s w o r d s , " t h e companies t r a n s f o r m e d the g a m b l e r ' s p r o f i t o f the l o n g - d i s t a n c e t r a d e r i n t o the s a f e r , i f l e s s s p e c t a c u l a r p r o f i t o f c o n s e r v a t i v e me r c h a n t s . " 2 0 Th u s , a c l u e to u n d e r s t a n d i n g l o n g e v i t y o f t r a d e i s p r o v i d e d not t h r o u g h a s i m p l e e x a m i n a t i o n o f p r o f i t s , but th rough an e x a m i n a t i o n o f the a b i l i t y o f f i r m s to o f f s e t the r i s k and u n c e r t a i n t y endemic in the s e v e n t e e n t h and e i g h t e e n t h - c e n t u r y economic w o r l d . 2 1 The c e n t r a l i z e d a d m i n i s t r a t i o n o f the H u d s o n ' s Bay Company makes i t p o s s i b l e to a n a l y z e in d e t a i l the ways in which i t c o o r d i n a t e d the d i s -p a r a t e s p h e r e s o f i t s t r a d e . The Company's i n v o l v e m e n t in the London f u r m a r k e t , i t s p rocurement o f t r a d e g o o d s , the t r a d e in North A m e r i c a and the i n t e r - r e l a t i o n s h i p o f the t h r e e w i l l be c o n s i d e r e d h e r e , a l m o s t e n -t i r e l y f rom the p e r s p e c t i v e o f the Committee in London which managed the company. W h i l e t h i s i s a new a p p r o a c h to s t u d y i n g the H u d s o n ' s Bay Company and a r e f o c u s s i n g o f the European p e r s p e c t i v e i t i s not w h o l l y 6 d i v o r c e d f rom p r e v i o u s work on the f u r t r a d e . A major i s s u e in f u r t r a d e h i s t o r i o g r a p h y has been the r o l e o f the t r a d e in the e x p a n s i o n o f European c i v i l i z a t i o n a c r o s s Nor th A m e r i c a , and the r i v a l r y o v e r who would c o n t r o l the c o n t i n e n t . Much o f t h a t a n a l y s i s has been p r e s e n t e d in terms o f the i m p e r i a l and m e r c a n t i l e p o l i c i e s o f the European a c t o r s , y e t l i t t l e a t t e n t i o n has been g i v e n to the commerc ia l s t r u c t u r e s which s u s t a i n e d t h a t e x p a n s i o n . In the c a s e o f the H u d s o n ' s Bay Company, the l a c k o f e x p a n s i o n beyond the s h o r e s o f the Bay f o r n e a r l y a c e n t u r y must be u n d e r s t o o d in terms o f the commerc ia l w o r l d o f Europe and not j u s t in t h o s e o f the Nor th Amer ican f u r t r a d e . 2 2 7 Notes 1 Quoted in Richard Grassby, "Eng l i sh Merchant Capita l i sm in the Late Seventeenth Century: the Composition of Business Fortunes," Past  & Present 46 (1970): p. 103. 2 See Immanuel Wa l l e r s te in , The Modern World System (New York, 1974) and The C a p i t a l i s t i c World Economy (New York, 1979)• 3 See S. L. Engerman, "The Slave Trade and B r i t i s h Capital Formation in the Eighteenth Century: A Comment on the Will iams Thes i s , " Bus i ness  History Review (1972): 430-2; G. Walton, "The New Economic History and the Burdens of the Navigation Ac t s , " Economic History Review, 2d ser. (1971): 533-42; and J . R. Ward, "The P r o f i t a b i l i t y of Sugar Plant ing in the B r i t i s h West Indies," Economic History Review, 2d ser. (1978): 208-9-For a d issent ing voice see J . E. In i kor i , "Market Structure and the Pro f i t s of the B r i t i s h Af r ican Trade in the Late Eighteenth Century," Journal of Economic H i s tory , 41 , (1981): 745"776. ^ Patr ick O 'Br ien, "European Economic Development: the Contr ibution of the Per iphery, " Economic History Review, 2d ser. 35 (1982): 1 -18; Wa11erstein , "European Economic Development: A Comment on O 'B r i en , " Economic History Review, 2d ser. 36 (1983): 580-583; and O'Brien,. 1 "European Economic Development: A Reply," i b i d . , 584-5-5 Grassby, "Eng l i sh Merchant Cap i ta l i sm, " p. 103-6 Barry Supple, "The Nature of E n t e r p r i s e , " in vo l . 5, Cambri dge  Economic History of Europe, eds. E. E. Rich and C. H. Wilson (Cambri dge: Cambridge Un iver s i t y , 1977), P- 445-7 K r i s t o f Glamann, "The Changing Patterns of Trade, " in i b i d . , p. 195-8 Fernand Braudel , The Wheels of Commerce (London: C o l l i n s , 1982), pp. 407, 428. 9 Ib id . , pp. 400-433-1 0 P. W. K le in , "The Orig ins of Trading Companies," in Companies and  Trade, eds. L. Blusse and F. Gaastra (Leiden: Leiden Univers i ty Press, T 9 8 T T , p. 22. 1 1 Niel Steensgaard, "The Companies as a S p e c i f i c I n s t i tu t ion in the History of European Expansion," in i b i d . , p. 247-1 2 Supple, "The Nature of En te rp r i s e , " p. 439-1 3 K l e in , "The Orig ins of Trading Companies," p. 25-1 1 + N ie ls Steensgaard, Carracks, Caravans and Companies: The Struc- tural C r i s i s in European-Asian Trade in the Early Seventeenth Century (Odense, Denmark: Student 1i t te ra tur Andelsbogtrykker iet , 1973) , P P - 7 , 10, 114. 1 5 Ib id . , pp. 11, 14-15, 47, 141-143-8 1 6 K. N. Chaudhuri, The Trading World of Asia & the English East  India Company, 1660-1760 (Cambridge: N.Y.: Cambridge University Press, 1978), p. 457. 1 7 Ibid., pp. 19-22, 46, 457-8. 1 8 Chaudhuri, "The English East India Company in the 17th and 18th Centuries: A Pre-Modern Multinational Organization," in Companies and Trade, p. 46. 1 9 W. R. Sco11, The Constitution and Finance of English, Scottish  and Iris h Joint-Stock Companies to 1720, 3 vo1s. (London: Cambri dge University Press, 1912); and K. G. Davies, The Royal African Company (London: Longmans, Green & Co. Ltd., 1957), 32-37-20 Steensgaard, The Companies as a S p e c i f i c I n s t i t u t i o n , " p. 254. 2 1 Supple, "The Nature of Enterprise," p. 440-445; and Peter Musgrave, "The Economics of Uncertainty: The Structural Revolution in the Spice Trade, 1480-1640," in Shipping, Trade, and Commerce (Leicester, U.K.: Leicester University Press , 1981), pp. 9 _21. 2 2 See W. J. Eccles, "The Fur Trade and Eighteenth-Century Imperialism," William and Mary Quarterly 40, No. 3 (1983): 341-362; for the most recent contribution to this discussion. 9 CHAPTER I THE HUDSON'S BAY COMPANY AND PATTERNS OF EUROPEAN EXPANSION The u n e q u a l l e d l o n g e v i t y o f the H u d s o n ' s Bay Company b e l i e s the commonplaceness o f i t s b e g i n n i n g s . It was o n l y one o f the many m a r i t i m e companies which Europeans e s t a b l i s h e d d u r i n g the s e v e n t e e n t h c e n t u r y f o r commerce, c o l o n i z a t i o n , and d i s c o v e r y ; most c o l l a p s e d a f t e r a few voyages and t r a d i n g g e n e r a l l y w i t n e s s e d a r e t u r n to i n d i v i d u a l l y - o w n e d f i r m s o r s m a l l p a r t n e r s h i p s . P a t t e r n s o f company s u c c e s s do emerge t h o u g h . The Dutch and E n g l i s h E a s t Ind ia Companies denote the s u c c e s s o f company t r a d i n g in A s i a . In the A t l a n t i c t h e r e a r e no p a r a l l e l s t o the E a s t I n d i a Companies in terms o f s i z e and power; o f the tens o f E n g l i s h com-p a n i e s c h a r t e r e d to t r a d e to the A m e r i c a s and A f r i c a o n l y the H u d s o n ' s Bay Company and the Royal A f r i c a n Company p r o v e d e c o n o m i c a l l y v i a b l e . 10 A t l a n t i c companies founded by the Dutch, French, Danish, Portuguese, and 1 Spanish fared no better than did Engl ish companies. The pers i s tence of the Hudson's Bay Company in the New World when other companies per ished, most in the i r infancy, can be explained par t l y by i t s monopoly s tatus, par t ly by the geographic condit ions which made co lon iza t ion superf luous, and par t ly by the spec i a l i zed nature of i t s 2 trade. But to c red i t the company's success to external factors would imply that internal factors of o rgan izat ion , the a b i l i t y to maximize op-por tun i t ie s and minimize r i s k , are large ly i n s i g n i f i c a n t to the success-ful prosecution of trade. External factors though can be negative as well as p o s i t i v e . Commercial enterpr i se is always suscept ib le to external d i srupt ions - war, natural d i s a s te r , currency f l u c tua t i on s , changes in the market - and internal organizat ion becomes a c ruc i a l factor in determining whether a business can withstand external economic tremblings. In the case of the Hudson's Bay Company the h i s t o r i c a l record leaves signs of entrepreneur ia l innovation and r a t i o n a l i z a t i o n which resulted in the development of a managerial and admin i s t rat ive s t ructure capable of co-ord inat ing the disparate spheres of i t s trade, separated one from the other by time, space, and cu l tu re . This managerial and admin i s t rat ive development must account, in part , for the t r an s i t i on of the Hudson's Bay Company from a highly speculat ive seventeenth-century venture with co lon ia l overtones to an eighteenth-century g i l t -edged company. The men who founded the Hudson's Bay Company enterta ined v i r t u a l l y every expans ion i s t i c a sp i ra t ion which a seventeenth-century European could imagine. Hopes for f ind ing the fabled Northwest Passage to the South Seas were renewed, trading p o s s i b i l i t i e s appeared leg ion, mines would y i e l d "Gold S i l v e r Gemms and Precious Stones", "Cast les F o r t i f i -cations Forts Garrisons Colonyes . . . Plantacions Townes or V i l l a g e s " 11 would dot the landscape. Some of the expectations expounded in the charter were the stock l i t a n y of adventurers hedging bets in t h e i r con-tract with the Crown. But high hopes and b l i n d l y extravagant romanticism were the opium of the adventurers pipe-dreams. From the haze enveloping the promoters of the Hudson's Bay Company only one-dream became a r e a l i t y -- the fur trade -- and i t alone kept Europeans in the Canadian North for many decades. Experience disabused dreamers of r e a l i z i n g t h e i r other aspirations. Fathoming the harshness of the country named Rupert's Land c l e a r l y exceeded the imaginations of the men who founded the Hudson's Bay Company despite the discouraging reports brought back by early explorers. From 1550 onwards Europeans had been exploring the A r c t i c , f i r s t along the cost of Scandinavia and Russia, then westwards to Greenland and the north-east coast of North America, most on a qu i x o t i c search for the fabled northern waterway to Cathay. In 1610 Henry Hudson became the f i r s t European to enter the inland sea which bears his name. Unable to s a i l out of the Bay made unnavigable and impassable by ice, Hudson wintered on James Bay, only to be l e f t to perish by a mutinous crew. In 1612 two of that crew again s a i l e d for Hudson's Bay, this time under the command of Thomas Button. English merchants financed another two voyages that same decade under the commands of Bylot and B a f f i n . In 1619 the Danish sent out an expedition led by Jens Munk to try his hand at finding the i l l u s o r y Northwest Passage. The autumn onset of winter in the Bay caught Munk unawares forcing him to e s t a b l i s h winter quarters at Churchill River. The following spring he and the two surviving members of his crew of s i x t y - f o u r returned to Denmark. Word of the horror of Munk's f i r s t voyage quickly spread among Danish s a i l o r s , none of whom would volunteer for a second Danish voyage to the harsh and unmerciful Hudson's Bay. The 12 English, yet undeterred, funded two more voyages both of which s a i l e d in 1631.t* Despite repeated e f f o r t s no voyage to Hudson's Bay produced anything save an enlarged knowledge of the world. None discovered the trade, the land to s e t t l e , or the promise of a passage to the Orient which would prompt Europeans to return annually or s e t t l e permanently. London merchants had funded most of the early f r u i t l e s s voyages to Hudson's Bay and i t is therefore not s u r p r i s i n g that in 1666 when two Frenchmen, Radisson an r o s e i . l l i e r s , came to town with a tale about furs from Hudson's Bay merchants had few pounds to spare for the financing of a voyage to v e r i f y the story. A group of Restoration c o u r t i e r s , however, smitten by the t a l e , assembled the necessary resources to o u t f i t two ships. One of the two ships, the Nonsuch, completed the voyage in 1669, returning to London with a cargo of furs worth £ 1379-6s.10d, hardly a fortune but the f i r s t marketable goods to be brought from Hudson's Bay. 5 The safe homecoming of the Nonsuch buoyed the s p i r i t s of the organi-zers, but i t would be erroneous to conclude that t h e i r primary intention was to pursue the fur trade for i t s own ends. Furs guaranteed income, the income necessary to sustain an expansionistic venture over an extended period. The wording of the Charter, the early composition of the shareholders, the early organization of the company, and the economic function of the fur trade in other North American colonies suggests that the promoters intended for the fur trade to be a way of financing other avenues of development in Hudson's Bay. Despite numerous voyages of discovery the land around Hudson's Bay remained unclaimed u n t i l the establishment of trading posts by the Hudson's Bay Company. European custom held that claims to the non-Christian world had to be legitimized with permanent settlements. 6 Where Europeans did s e t t l e permanently they adopted one of two pr i n c i p a l forms. The f i r s t 13 included trading s ta t ions , f o r t s , and f a c t o r i e s , settlements designed to f a c i l i t a t e annual trading voyages and to va l ida te European claim and presence. Settlement was permanent, but s e t t l e r s were for the most part impermanent, employees of a company stat ioned at a post for a number of years before being t rans fer red , sent home, or q u i t t i n g employment. These settlements were e s s e n t i a l l y company towns and character ized most European settlements in Asia and A f r i c a . Only gradual ly did enclaves of permanent European s e t t l e r s emerge. Settlements in the Americas were, for the most part , of the more f am i l i a r second type: permanent s e t t l e -ments of permanent s e t t l e r s . Economics determined great ly this d i f fe rence in settlement patterns between Asia and A f r i c a on the one hand, and the Americas on the other. Europeans had been trading with Asians for centur ies before the Portuguese rounded the Cape of Good Hope or the powerful East India Companies had been es tab l i shed. The rapid growth of European trade with Asia in the s ixteenth and seventeenth centur ies was founded on we l l -e s tab l i shed patterns of commerce, and depended on the highly s t r a t i f i e d and sophis-t i ca ted s o c i a l , p o l i t i c a l and economic systems of Asian s o c i e t i e s . The Asian goods which Europeans wanted were produced by an Asian labour force organized and cont ro l l ed by Asians. For many years Europeans functioned only as merchants, providing the l ink between Asian supply and the European market. Europeans operated much the same way in the slave trade; A f r i can s lavers amassed the slaves which the Europeans then bought, transported, and sold on the slave market in the Americas. In th is type of trade where the merchant trader was e s s e n t i a l l y the only missing l ink between sources of demand and sources of supply, permanent settlements of impermanent s e t t l e r s met both the commercial and s t r a teg i c requirements of expanding Europe. 7 14 In the American trade the missing economic l inks for gett ing American products to the European market were more numerous and presented greater problems of organizat ion than had been presented in the Asian or A f r i can trade. The commodities which the Americas promised and which Europe desired - - tobacco, sugar, cocoa, indigo, f i s h , timber, gold, and s i l v e r - - were not produced in marketable quant i t ies by indigenous Americans. Therefore, Europeans had to commit themselves intensely and extens ive ly to the Americas i f they were to have the r iches of the con-t inents . Two fundamental transformations had to t ransp i re . The New World's landscape had to be redesigned for the c u l t i v a t i o n of surplus a g r i cu l t u r a l products and a labour supply had to be found. Indigenous Americans res i s ted bonding t h e i r labour to Europeans and hence labour was imported: s e t t l e r s and indentured labour from Europe; enslaved labour from A f r i c a . 8 The concatenation of developments p rope l l ing th is economic transformation of the New World became inext r i cab ly entwined in i t s emerging s o c i a l , p o l i t i c a l , and cu l tu ra l f a b r i c . One notable exception to th i s pattern in North America was the fur trade, in which the Indians cont ro l l ed the production of furs and Europeans served almost so le l y as t raders . The Hudson's Bay fur trade broke the New World pattern of permanent settlement with permanent s e t t l e r s , though not without a reconceptua1 izat ion of the European a t t i tude that in the Americas commerce and co lon iza t ion were f l i p - s i d e s of the same co in . In the American colonies along the eastern seaboard fur became an immediate "cash crop" marketable in Europe for the few manufactures required by the s e t t l e r s . In V i r g i n i a and New England-the fur trade became an adjunct of sett lement, the trade which allowed s e t t l e r s to pur-sue other economic ends: for New Englanders the development of mixed farming; for V i rg in ians a tobacco economy. In New France, New Netherlands, 15 and Nova S c o t i a a g r e a t e r t e n s i o n e x i s t e d in r e c o n c i l i n g whether the f u r t r a d e would be the s e t t l e m e n t s " r a i s o n d ' e t r e " o r whether i t would be the major economic u n d e r p i n n i n g o f a l a r g e r c o l o n i a l e n d e a v o u r . 9 S i m i l a r l y , the p romoters o f the H u d s o n ' s Bay Company a n t i c i p a t e d and p l a n n e d f o r c o l o n i z a t i o n to f o l l o w on the h e e l s o f the f u r t r a d e . That i t came to resemble the o r g a n i z a t i o n and the s e t t l e m e n t p a t t e r n s o f the A s i a n t r a d e was c o i n c i d e n c e not d e s i g n . The aims o f the p romoters o f e x p a n s i o n i s t i c v e n t u r e s were not d i r e c t e d i n d i s c r i m i n a t e l y o r r a n d o m l y , though in most c a s e s they landed wide o f the mark. The f o u n d i n g o f t h r e e c o m p a n i e s , the Company o f Royal A d v e n -t u r e r s i n t o A f r i c a in 1660, the C a r o l i n a Company in 1665, and the H u d s o n ' s Bay Company in 1670, i l l u s t r a t e s t h i s . A l l t h r e e s h a r e d as p r i n c i p a l p romoters a group o f c o u r t i e r s i n f l u e n t i a l in the R e s t o r a t i o n c o u r t and i n t e n t upon t e r r i t o r i a l and e c o n o m i c j o c k e y i n g w i t h European r i v a l s . The Company o f Royal A d v e n t u r e r s i n t o A f r i c a was to c o u n t e r the Dutch and P o r t u g u e s e c o n t r o l o f the s l a v e t r a d e . S e t t l e m e n t in the C a r o l i n a s would e x t e n d E n g l i s h s e t t l e m e n t s o u t h o f V i r g i n i a and b l o c k S p a n i s h s e t t l e m e n t n o r t h o f F l o r i d a . The H u d s o n ' s Bay Company would f l a n k F r e n c h Canada on the n o r t h complement ing r e c e n t l y won New York on the s o u t h , and both would h e l p u n d e r c u t the F r e n c h dominance o f the f u r t r a d e . The i n t e n d e d means f o r a c h i e v i n g t h e s e s i m i l a r Imper ia l ends d i f f e r e d s i g n i f i c a n t l y d e s p i t e t h e i r s h a r e d p r o m o t e r s . The c h a r t e r o f the Company o f Royal A d v e n t u r e r s i n t o A f r i c a c o n t a i n e d a l m o s t s o l e l y p r o v i s i o n s f o r t r a d e , a l t h o u g h l i k e o t h e r c h a r t e r s f o r t r a d e to n o n - C h r i s t i a n lands i t a l l o w e d f o r the e s t a b l i s h m e n t o f f a c t o r i e s and t r a d i n g p o s t s . 1 0 In the c h a r t e r o f the C a r o l i n a Company o n l y e i g h t men were named and i t g r a n t e d to them the r i g h t to p l a n t a p r o p r i e t o r y c o l o n y to be s e t t l e d f o r a g r i c u l t u r a l d e v e l o p m e n t . T h i s c h a r t e r f o r c o l o n i z a t i o n c o n t a i n e d s p e c i f i c d e t a i l s 16 on l a n d t e n u r e and the e s t a b l i s h m e n t o f c i v i l g o v e r n a n c e . 1 The H u d s o n ' s Bay Company c h a r t e r f a l l s somewhere between the o t h e r two. It p r e s c r i b e d g u i d e l i n e s f o r the e s t a b l i s h m e n t o f permanent and a b i d i n g s e t t l e m e n t s and c i v i l g o v e r n a n c e , as w e l l as t r a d i n g p r i v i l e g e s and the means o f s u b -c o n t r a c t i n g t h o s e t r a d i n g p r i v i l e g e s t o s e t t l e r s . 1 2 Of the t h r e e companies the H u d s o n ' s Bay Company a l o n e s u r v i v e d as a c h a r t e r e d c o n c e r n . In 1672 the Company o f Royal A d v e n t u r e r s i n t o A f r i c a r e o r g a n i z e d i t s e l f as the Royal A f r i c a Company. Wi th the change came a marked t r a n s i t i o n in the s h a r e h o l d e r s f rom p r i m a r i l y members o f the p e e r -age to p r i m a r i l y merchants and C i t y men. The company underwent a n o t h e r r e o r g a n i z a t i o n in 1712-1713, and then d i s s o l v e d in 1752 n e v e r h a v i n g d i s t r i b u t e d r e g u l a r d i v i d e n d s . The C a r o l i n a Company n e a r l y c o l l a p s e d d u r i n g i t s f i r s t f o u r y e a r s , and was o n l y m a i n t a i n e d f o r a s h o r t w h i l e l o n g e r th rough the e x e r t i o n s o f S i r Anthony C o o p e r . Time and e x p e r i e n c e brought to prominence the commerc ia l f a c e t s o f the H u d s o n ' s Bay Company w h i l e a t the same t ime mut ing e g r e g i o u s l y m i s -g u i d e d c o l o n i a l a m b i t i o n s . N e v e r t h e l e s s , the company l a b o u r e d f o r n e a r l y t h i r t y y e a r s under the i l l u s i o n t h a t c o l o n i e s a l o n g H u d s o n ' s Bay were t e n a b l e and d e s i r a b l e . V a r i a t i o n s in the i n i t i a l o r g a n i z a t i o n and s t r u c -t u r e o f the Company o f Royal A d v e n t u r e r s i n t o A f r i c a , the C a r o l i n a Company, and the H u d s o n ' s Bay Company i n d i c a t e t h a t p romote rs o f t h e s e v e n t u r e s d i d a t tempt to t a i l o r them t o p e r c e i v e d p o s s i b i l i t i e s . T h u s , i t i s n e c e s s a r y t o r e c o g n i z e t h a t the f o u n d e r s o f the H u d s o n ' s Bay Company o r i g i n a l l y e n v i s i o n e d someth ing much d i f f e r e n t than what emerged f rom the e n t e r p r i s e . The company 's d e t e r m i n a t i o n to p l a n t a c o l o n y waxed and waned. E a r l y on the Committee in London t o y e d w i t h the idea o f s e n d i n g men and b u i l d i n g s u p p l i e s to beg in a s e t t l e m e n t . In J a n u a r y 1672 they d i s c u s s e d 17 s e n d i n g two s h i p s and h i r i n g t h i r t y men " f o r S t a y e i n g in the C o u n t r e y in r e s p e c t e to m o r t a l i t y . " 1 3 By F e b r u a r y the h e a d - c o u n t f e l l to twenty -f i v e m e n , 1 4 and by A p r i l to f i f t e e n . 1 5 It i s u n c l e a r whether the r e d u c -t i o n s were f o r r e a s o n s o f c o s t o r whether few men c o u l d be p e r s u a d e d to s i g n - o n . The f i r s t b a y s i d e g o v e r n o r seems t o have been chosen w i t h a v iew to g o v e r n i n g a c o l o n y r a t h e r than managing t r a d e , as the Quaker C h a r l e s B a y l y never e x h i b i t e d b u s i n e s s acumen but d i d f o s t e r a m i a b l e r e l a t i o n s w i t h the I n d i a n s . 1 6 The company d i d a t tempt to r e p l a c e him in 1674 " - p r o b a b l y because o f h i s b u s i n e s s s h o r t c o m i n g s - - w i t h W i l l i a m L y d a l l "who ha th made many Voyages to and f rom R u s s i a and L i v e d many y e a r e s t h e r e i n . " 1 7 James Bay was not R u s s i a and a f t e r one s o r r y w i n t e r L y d a l l r e t u r n e d to London and B a y l y resumed c o m m a n d . 1 8 In 1679 the com-pany r e c a l l e d B a y l y and r e p l a c e d him w i t h John N i x o n , f o r m e r l y in the employe o f the E a s t I n d i a Company, and hence a s i g n t h a t the company i n t e n d e d to g i v e more a t t e n t i o n to m a t t e r s o f t r a d e . 1 9 For the next twenty y e a r s the t r a d e r s were i n t e r m i t t e n t l y i n s t r u c t e d on measures to be taken f o r p r e p a r i n g f o r s e t t l e r s . In 1683 Henry S e r g e a n t went to James Bay t a k i n g a l o n g h i s w i f e and her m a i d . 2 0 The Committee a d v i s e d him t o have the men engage " e i t h e r in c u l t i v a t e i n g the l a n d , in f i s h i n g and in makeing o y l e , o r in makeing p o t t ashes o r e l s e you may j u d g e f o r the s e r v i c e o f the Company, we i n t e n d i n g as soone as may be to p l a n t a C o l l o n e y t h e r e . " 2 1 It u rged S e r g e a n t , as i t had h i s p r e d e c e s s o r s , to a p p l y h i s "u tmost s k i l l and i n d u s t r e y " to l e s s e n i n g the c o s t s o f p r o v i s i o n i n g the p o s t . To t h i s end i t i n c l u d e d in the 1683 sh ipment " s e v e r a l 1 s o r t s o f seeds and g r a y n e s . " 2 2 In 1684 the company s e n t t o Norway f o r two g o a t s to s h i p to the b a y . 2 3 In the minds o f the commit tee members the c r e a t i o n o f the p a s t o r a l l i f e on the s h o r e s o f H u d s o n ' s Bay was p o s s i b l e . In 1692 they p l e a d e d w i t h George G e y e r , 18 governor at York Fort, to remain another year. Not only would i t be in the company's int e r e s t , but i t would allow Geyer to "have the honour and s a t i s f a c t i o n you seeke, of Leaving that Trade which you enlarged, that Building which you have erected, that Vineyard which you have Planted, in a Peaceable and f l o r i s h i n g Condition, and out of danger of being under-mined by the Foxes, or destroyed by the Wild Boares of the Forrest." 2 1* Geyer remained at York Fort but presumably not to refine the pastoral l i f e . The Committee in London, however, thought he should be about the task and the following year they sent elaborate instructions on how to prepare York Fort for the a r r i v a l of c a t t l e . A barn was to have been b u i l t to stable sixteen to eighteen head of c a t t l e , hay gathered, and the Indians encouraged to k i l l "wolves and Revenous beasts" in the area. The committee, l i k e l y swayed by i t s Deputy Governor Samuel Clarke "whoe hath l i v e d 20 years in Cold Counteryes", presumably Scandinavia, was convinced that the plan was f e a s i b l e " f o r Findland and Lapland are as Cold and colder and more barren and u n f r u t f u l l and much Longer Nights then at Yorke fort and yett at those places C a t t e l l are maintained." 2 5 The committee did q u a l i f y t h e i r instructions t e l l i n g Geyer that i f he found "upon mature deli b e r a t i o n the climate a l l together imposeble for t h e i r [the catties'] Subsistance" the plan for r a i s i n g them would be rethought. 2 6 Horticulture was not to be neglected at York Fort and seeds, farm implements, and a book on gardening were included in the 1693 shipment. To make the seeds grow to perfection the men should " r a i s e a heighth of Ground or Hedge of reeds or some fence to keep the Norwest wind from them, and then there is noe Doubt of th e i r comming to pfection as well as in any pte. of Sweeden and Norway." 2 7 At James Bay h o r t i c u l t u r e was pursued with marginally more success than at York Fort. The committee, hoping to 19 c a p i t a l i z e on the prospects, decided that f l ax might be commercially grown. In the same l e t t e r in which they gave ins t ruct ions for doing so, they retracted the plan as i t took s k i l l e d help to harvest and process f l a x . 2 8 The slowness with which the shareholders of the company surrendered the i r v i s ions of a pastoral l i f e on Hudson's Bay to the r e a l i t y of the Canadian Subarct ic was only exceeded by the i r slowness in accepting the fact that v i r t u a l l y the only marketable products ava i l ab le were fu r s . Annual admonitions issued forth from London suggesting that the men were g iv ing i n s u f f i c i e n t at tent ion to d i v e r s i f y i n g the trade. Mining was long thought to be p o t e n t i a l l y p r o f i t a b l e . In 1682 the company had sent out George Geyer to develop the mining of i s i n g l a s s , 2 9 and in 1684 Sergeant was ordered to send ten men to East Main to s e t t l e i t for the i s ing la s s t r a d e . 3 0 Minerals , the committee explained to Walsh in 1694, "are e a s i l y found by the Couler of the water that owzeth or springeth out of the earth where they are being of a Brownish Coulor some what enc l ine ing to blew or seeming Greasy, which must be traced to the head of the spr ing , Copper mines the water green and G r e a s e y . " 3 1 Geyer had orders to send men to Church i l l River to e s tab l i sh a whaling s t a t i on . The committee would suf fer no excuses for not proceeding noting that "Capt. Young tho never in Greenland in his l i f e , for the time he was in Church i l l River he struck and took as many Whales as the Harponier, that we gave double wages, and soe did some of his men . . . for i t s a s l i gh t of hand and noe great art . . . a l l the men de l i ght in taking them making i t a sport and not a Labor or t o y l e . " 3 2 Some of the envisioned expansion of the trade involved having the Indians d i v e r s i f y the goods they brought to trade. Among those items suggested by the Committee in London were goose feathers , castoreum and 20 seahorse teeth (walrus tusks), yet despite a l l the e f f o r t s nothing developed. Over a number of years the odd shipment of feathers , castoreum or ivory would make i t to London but met with mixed market success. A f te r a few bundles of q u i l l s reached London the committee wrote the traders not to send any more as there was no market for them. 3 3 A 280 lb. shipment of castoreum was sent to Amsterdam in 1698 because i t would not s e l l in London. 3 t t The re l i ance of the Hudson's Bay Company on fu r s , e s p e c i a l l y beaver, caused i t some concern. Many of the committee's exhortat ions to d i ver -s i f y the trade were with the hope of lessening the dependence on beaver. What d i v e r s i f i c a t i o n did occur was with small luxury furs l i ke fox and o t ter but mostly marten. A f ter the Treaty of Utrecht when James Knight returned to the bay to re -e s tab l i sh the trade at York the committee encouraged him to pursue the p o s s i b i l i t y of copper mining or trade as " i t would turn to better accompt than S k i n s . " 3 5 Thus as late as 1715 the company was s t i l l looking for other areas of trade. What the ear ly organizat ion and goals of the Hudson's Bay Company suggests for understanding i t s place in the expansion of Europe and the fur trade is that external condit ions determined i t s s ingular re l i ance on beaver, not internal decision-making or an exaggerated b e l i e f in the p r o f i t a b i l i t y of the fur trade. Geography and cl imate placed qui te i n f l e x i b l e constra ints on the company within which i t had to operate. I r o n i c a l l y , those l im i ta t ions probably increased the l i ke l i hood of the company's s u r v i v a l . Climate precluded ag r i cu l tu ra l settlement and thereby el iminated a population which would probably have challenged the company's hegemony as had happened elsewhere in North America. Lack of avenues for economic expansion into areas l i ke mining had the pos i t i ve e f f e c t of keeping the company's labour force smal l , s p e c i a l i z e d , and manageable. 21 The h a r s h n e s s o f the Canad ian s u b a r c t i c a l s o d i s c o u r a g e d c h a l l e n g e r s . T h e r e f o r e the c o n s t r a i n t s imposed by e n v i r o n m e n t a l c o n d i t i o n s had some p o s i t i v e e f f e c t s . They were not however s u f f i c i e n t to o f f s e t the f i c k l e n e s s and v i c i s s i t u d e s o f l o n g - d i s t a n c e t r a d e d u r i n g t h i s p e r i o d . Management and a d m i n i s t r a t i o n a r e s t i l l c r u c i a l components in the e x p l a -n a t i o n o f the s u r v i v a l o f the H u d s o n ' s Bay Company. 22 Notes Niel Steensgaard, "The Companies as a S p e c i f i c In s t i tu t ion in The History of European Expansion," in Companies and Trade, eds. L. Blusse and F. Gaastra (Leiden: Leiden Univers i ty Press, 1981 ) , pp. 2 5 6 -259-2 Ib id. , p. 2 5 8 . 3 "The Royal Charter Incorporating The Hudson's Bay Company, A.D. I 6 7 O , " rpt. in ed. E. E. Rich, Minutes o f . the Hudson's Bay Company, 1671 - 1674, Publ icat ions of the Hudson's Bay Record Soc iety , Vo l . 5~, (London: The Hudson's Bay Record Soc iety , 1 9 4 2 ) , pp. 1 3 1 , 139 , 145. 4 Detai l s on the ear ly explorat ions to Hudson's Bay were taken from E. E. Rich Hudson's Bay Company, 1 6 7 0 - 1 8 7 0 , Vo l . 1: 1 6 7 0 - 1 7 6 3 , (London: The Hudson's Bay Record Soc iety , 1 9 5 8 ) , pp. 6~7 ; J . H. Parry, The Age of  Reconnai ssance, (New York: Mentor Books, 1 9 6 3 ) , pp. 2 2 1 - 2 2 2 ; and W. A. Kenyon, ed. and Intro. The Journa1 of Jens Munk, 1 6 1 9 " 1 6 2 0 , (Toronto: Royal Ontario Museum, 1 9 8 0 ) , pp. vi i - x i i i . 5 E. E. Rich, Hudson's Bay Company, 1 6 7 0 - 1 8 7 0 , Vo l . 1, pp. 29~30, 42. 6 Kenneth G. Davies, The North A t l a n t i c World in the Seventeenth  Century, (Minneapolis: Un ivers i ty of Minnesota, 1 9 7 4 ) , p. 3 6 . 7 Kenneth G. Davies, Royal A f r i can Company, (London: Longmans, Green, S Co., L t d . , 1 9 5 7 ) , P- 3 - 4 ; Fernand Braudel, The Wheels of Commerce, Vo l . 2 , C i v i l i z a t i o n and Cap i ta 1 i sm 15 th -1 8 th Century"^ (London: Col 1i ns , 1980) p. 4 4 7 ; and Steensgaard, "The Companies as a S p e c i f i c I n s t i t u t i o n , " p. 2 5 3 . 8 See E. E. Rich, "Co lon ia l Settlement and Its Labour Problems," in The Economy of Expanding Europe in the 161h and 17 th Centuries Vo l . 4 , The Cambridge Economic History of Europe eds. E. E. Rich and C. H. Wilson, (Cambri dge: Cambridge Univers i ty Press, 1967) , pp. 3 0 2 - 3 7 3 . 9 E. E. Rich, Hudson's Bay Company, 1 6 7 0 - 1 8 7 0 , Vo l . 1, pp. 8 , 1 2 - 1 3 , 4 5 - 6 , and John G. Reid, Acadia, Maine and New Scot land, (Toronto: Un ivers i ty of Toronto Press, 1 9 8 1 ) , p. 1 9 - 2 0 . 1 0 The Charters for the Company of Royal Adventurers Into A f r i c a and the Royal A f r i can Company can be found in Cec i l T. Carr, ed . , i n t r o . , Se lect Charters of Trading Companies, A.D. 1530-1707) ( 1 9 1 3 ; rpt. New York: Burt F rank l in , 1 9 7 0 ) , pp. 1 7 2 - 1 7 7 , 177~181 , 1 8 6 - 1 9 2 . A short d iscuss ion of the A f r i can companies is in the in t roduct ion, pp. x l i i - x l v i i i . See a lso Davies, Royal A f r i can Company, pp. 3 6 ~ 7 , 9 7 _ 9 9 • 1 1 The charter for the Carol ina Company can be found in Francis Newton Thorpe, ed . , The Federal and State Const i tut ions , Colonial Charters,  and Other Organic Laws of the States, T e r r i t o r i e s , and Colonies Now or  Heretofore Forming the United States of Americ, Vo l . 5- (Wash i ngton: Government P r in t ing O f f i c e , 1 9 0 9 ) , pp. 2 7 4 3 - 2 7 5 3 . For a d iscuss ion of the founding of the Carol ina Company, see. Charles M. Andrews, The Colonial Period of American H i s tory , (New Haven, Ct . : Yale Univers i ty Press, 1 9 3 4 - 3 8 ) , Vo l . 3 , pp. 1 8 2 - 3 , 192 ; and M. Eugene Sirmans, 23 Colonial South Caro l ina : A P o l i t i c a l H i s tory , 1663~1763 , (Chapel H i l l : Un ivers i ty of North Carol ina Press, 1 9 6 6 ) , pp. 3 - 6 . 1 2 The charter for the Hudson's Bay Company can be found in Appendix A of Minutes of the Hudson's Bay Company, 1 6 7 1 - 1 6 7 4 , pp. 131-148. See a l so Rich, Hudsons Bay Company, 1670-1870 , Vo l . 1; pp. 52 -60; and Carr, Se lect Charters, pp. lxxx ix -xc . 1 3 Rich, Minutes, 1 6 7 1 - 1 6 7 4 , 16 January 1 6 7 1 / 7 2 , p. 19-l k Ib id. , 1 February 1 6 7 1 / 7 2 , p. 2 2 . 1 5 Ib id. , 17 Apri1 1672 , pp. 3 5 " 6 . 1 6 Rich, H.B.C., 1 6 7 0 - 1 8 7 0 , Vo l . 1, pp. 6 7 , 80. 1 7 Rich, Minutes, 1 6 7 1 - 1 6 7 4 , 29 January 1 6 7 3 / 7 4 , p. 7 4 . 1 8 Rich, H.B.C. , 1 6 7 0 - 1 8 7 0 , Vo l . 1, p. 79-1 9 E. E. Rich, Minutes of the Hudson's Bay Company, 1 6 7 9 - 1 6 8 4 , The Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 8^ (London: Hudson's Bay Record Soc iety, 1 9 4 5 ) , pp. 2 5 2 - 2 5 3 . 2 0 Letter Outward (hereafter L.O.) to Henry Sergeant, 16 May 1684, in Letters Outward, 1679~1694, ed. E. E. Rich, Publ i cat i ons--of the Hudson's Bay Record Soc iety , Vo l . 1 1 , (London: Hudson's Bay Record Soc iety, 1 9 4 8 ) , p. 8 8 . 2 1 L.O. to Henry Sergeant, 27 Ap r i l 1683 , Letters Outward, Vo l . 1 1 , pp. 7 6 - 7 7 -22 Ib id. , p. 77-2 3 Minutes, 16 May 1685, Hudson's Bay Company Arch ives , Prov inc ia l Archives of Manitoba (H.B.C.A., P.A.M.), A.1/8, fo. 32d. (Hereafter only the arch iva l c l a s s i f i c a t i o n number is given.) 2 k L.O. to Geyer, 17 June 1692, Letters Outward, Vo l . 20, p. 140. 2 5 L.O. to Geyer, 17 June 1693, Ib id . , pp. 192, 194-5-2 6 Ib id. , p. 194-5-2 7 Ib id. , p. 195-6. 2 8 L.O. to Knight, 30 May 1698, Ib id . , pp. 272, 274. 2 9 L.O. to Sergeant, 16 May 1684, Letters Outward, Vo l . 11, pp. 121-122. 3 0 Ib id. , pp. 121-122. 3 1 L.O. to Walsh, 30 May 1694, Letters Outward, Vo l . 20, p. 237-24 3 2 L . O . to G e y e r , 17 June 1693, I b i d . , p . ' l 8 7 " 8 . 3 3 L . O . to M a c k l i s h , 28 May 1723, A . 6 / 4 , f o . 72d. 3 4 J o u r n a l o f F o r e i g n A c c o u n t i n g , A . 1 7 / 1 , f o . 42 . 3 5 L . O . to K n i g h t , 31 May 1717, A . 6 / 4 , f o . 12. 25 CHAPTER I I THE HUDSON'S BAY COMPANY AND THE EUROPEAN FUR MARKET, 1670-1726 In 1669 the f i r s t sh ipment o f f u r s a r r i v e d f rom H u d s o n ' s Bay and s i g n a l l e d the p o s s i b i l i t y o f a s i g n i f i c a n t new s u p p l y o f f u r s f o r a market a l r e a d y in a s t a t e o f t r a n s i t i o n . Only two y e a r s b e f o r e w i t h the T r e a t y o f Breda the Dutch had r e l i n q u i s h e d to the E n g l i s h t h e i r c l a i m t o New N e t h e r l a n d s (renamed New York ) and w i t h i t the s i z e a b l e f u r t r a d e o f the Hudson R i v e r and i t s h i n t e r l a n d . P r i o r to then a modest but s t e a d y s t r e a m o f f u r s had been coming i n t o Eng land f rom New E n g l a n d , V i r g i n i a , and M a r y l a n d , but in t o t a l volume l e s s than the p o t e n t i a l o f e i t h e r the Hudson R i v e r o r H u d s o n ' s Bay t r a d e . The n e a r l y s i m u l t a n e o u s a c q u i s i t i o n o f New York and H u d s o n ' s Bay by the E n g l i s h had a t w o f o l d impact on the European f u r m a r k e t . On the one hand f u r s f rom New York now went i n t o London r a t h e r than Amsterdam. The D u t c h , though l o s i n g t h e i r d i r e c t s u p p l y o f Nor th Amer ican f u r s , n e v e r t h e l e s s s t i l l dominated B a l t i c s h i p p i n g 26 and served as middlemen in the beaver trade with Russia. On the other hand the Engl ish suddenly had two new substant ia l suppl ies of furs which e i t he r had to be absorbed into the domestic market or re-exported to other parts of Europe. Moreover, the volume of furs from New France was growing and saturat ing the market. By 1690 the European fur market was flooded with beaver and pr ices for the fur began to dec l ine . The oversupply of beaver and the resultant f a l l in pr ices mirrors a market phenomenon of this period associated with nearly every commo-d i ty of long-distance trade. In 1639 an over-production of tobacco caused tobacco pr ices to slump. French and Engl ish growers on St. K i t t s agreed not to plant tobacco for a year. V i r g i n i a placed a 1,500,000 pound c e i l i n g on 1639*5 production and a 1,200,000 c e i l i n g on the f o l -lowing two year ' s production. In 1650 tea in England sold from between £6 and £10 per pound. By 1703 the pr ice had sunk to 16s. per pound. In 1760 an excessive s tockp i l e of nutmeg and mace prompted Dutch merchants in Amsterdam to burn much of i t in order to maintain p r i ce s . When sugar production on the West Indian is lands of Martinique and Guadeloupe came on stream raw sugar pr ices dropped by nearly a ha l f . In the East Indies the Dutch regulated the s i ze of clove p lantat ions in order to prevent overproduct ion. 1 Increasing supply and dropping pr ices often resulted in expanded consumption, but i t a l so wreaked havoc for merchants. It is argued that a f te r the drop in beaver pr ices in the 1690s the Canadian beaver trade was not economically v i ab le , but that the French government maintained i t for imperial and m i l i t a r y purposes. 2 The Hudson's Bay Company, in contras t , operat ing under the protect ion of a government charter yet not with d i rec t f i nanc i a l backing from the government emerged in the f i r s t ha l f of the seventeenth century as a prof i t -making en terpr i se , despite 27 the d i f f i c u l t two decades f rom 1690-1710. For the H u d s o n ' s Bay Company the d e c l i n e in beaver p r i c e s in the 1690s d i d not h e r a l d the c r i p p l i n g o f a p r e v i o u s l y t h r i v i n g commerc ia l e n t e r p r i s e ; though f o r the most p a r t h e a l t h y , the H u d s o n ' s Bay Company was y e t a s t r u g g l i n g y o u n g s t e r in 1690. Opt imism and h i g h b e a v e r p r i c e s , not f i n a n c i a l s t a b i l i t y , a c c o u n t f o r the f o u r d i v i d e n d s d i s t r i b u t e d in 1684, 1688, 1689, and 1690, the o n l y ones p a i d from 1670 to 1718 - 3 The r e c o v e r y o f the H u d s o n ' s Bay Company and the commencement o f annual d i v i d e n d s in 1718 thus s t a n d s in j u x t a p o s i t i o n to the p i c t u r e drawn o f the F r e n c h t r a d e . The s u r v i v a l o f the H u d s o n ' s Bay Company i s p a r t l y a t t r i b u t a b l e to the w i l l i n g n e s s o f s h a r e h o l d e r s to f o r e g o d i v i d e n d s . What has not been a c c o u n t e d f o r in p r e v i o u s s t u d i e s i s what happened to the beaver market a f t e r 1700. The p u r p o s e s h e r e a r e to e x p l o r e the p a r t i c i p a t i o n o f the H u d s o n ' s Bay Company in the European f u r market f rom i t s e a r l y y e a r s to 1726. T h i s t ime span encompasses the shaky b e g i n n i n g s o f the company, the e b u l l i e n t y e a r s when the f i r s t d i v i d e n d s were d i s t r i b u t e d , the y e a r s o f a d e p r e s s e d f u r market and no d i v i d e n d s , the y e a r s o f war wh ich ended w i t h the T r e a t y o f U t r e c h t in 1713, and f i n a l l y the y e a r s o f a s t a b i l i z e d t r a d e w i t h r e g u l a r d i v i d e n d s . T h r e e major a r e a s w i l l be c o n s i d e r e d : o n e , how the company used i t s c h a r t e r to r e s t r i c t and i n f l u e n c e the t r a d e ; two, the i m p o r t a n c e the company p l a c e d on market i n f o r m a t i o n and the r o l e i t p l a y e d in i t s d e c i s i o n - m a k i n g ; t h r e e , the p r i c e wh ich the Company r e c e i v e d f o r i t s f u r s and the volume o f f u r s i t impor ted i n t o E n g l a n d . From t h i s i t w i l l then be p o s s i b l e to b e g i n to s u g g e s t some o f the ways in wh ich the company managed i t s a f f a i r s to cope w i t h the v i c i s s i t u d e s o f l o n g - d i s t a n c e t r a d e . One o f the p r i v i l e g e s g r a n t e d a c h a r t e r e d company was c o n t r o l o v e r the t r a d e t o , f r o m , and in the a r e a d e f i n e d by i t s c h a r t e r . However , 28 most of the companies which intended to bring in co l on i s t s , as the Hudson's Bay Company f i r s t planned, included clauses for sub-contract ing trading rights. 1 * The Hudson's Bay Company charter reads: Wee s t r e i gh t l y Charge Command and proh ib i te for us our heires and successors . . . that none of them d i r e c t l y or i n d i r e c t l y doe v i s i t haunt frequent or Trade T r a f f i c k e or Adventure by way of Merchandize into our from any the said Te r r i t o rye s . Lymittes or Places . . . unlesse i t t bee by the Lycence and agreement of the said Governor and Company in wr i t ing f i r s t had and obteyned under the i re Common Seale . . . [under 1i n i ng mine] 5 I n i t i a l l y the company appears to have allowed some pr ivate trade by sh ips ' captains and by the i r f i r s t governor, Charles Bayly, but by 1673 the Committee in London was author iz ing searchs of the ships to look for smuggled f u r s . 6 Despite repeated proh ib i t ions of pr ivate trade the prac-t i c e pers i s ted and the Company sought e f f i c a c i ou s ways to stop i t , with only l imi ted success. Oaths of f i d e l i t y were frequently required. In the 1683 annual l e t t e r to the bay the committee instructed John Bridgar to administer an oath to a l l o f f i c e r s forswearing pr ivate trade "which by the Tenor of our Charter you have the power to admin i s te r . " 7 A f t e r -wards he was to not i f y the committee of the names of the men who had taken the oath. Before the s a i l i n g of the ships from England the committee had the sh ips ' captains and o f f i c e r s take a s im i l a r oath; some protested voc i fe rous ly at the re s t ra in t s the company t r i e d to place on them. 8 During the tenure of John Nixon at the bay ships' captains had been given beaver coats. In 1685 Henry Sergeant was ordered to stop the p r a c t i c e , " f o r under the Colour of such presents they frequent ly conveigh away several 1 other F u r r s . " 9 Pr ivate trade continued. In 1686 the committee sent messages, to Capt. Robert Porten, Capt. John Outlaw, and Capt. Wi l l iam Bond that Mr. Morgan Lodge had been retained by the company to board the i r ships and search for smuggled fur s . If Mr. Lodge discovered c l an -dest ine trade they would "proceed against every one we f ind c u l p a b l e . " 1 0 29 P r i v a t e t r a d e never went away e n t i r e l y but was checked f o r a w h i l e f o r when the commit tee c o n t r a c t e d w i t h Mr. Lodge in 1693 f o r h i s s e r v i c e s i t remarked t h a t i t had " n o t o f La te had o c a s i o n to T r o u b l e y o u . " 1 1 N e v e r t h e l e s s , " g r e a t Q u a n t i t i e s o f C a s t o r i u m and F u r r s " s t i l l came in as p r i v a t e t r a d e t h a t y e a r . 1 2 The l i m i t s to which the company would push i t s p r i v i l e g e to r e s t r i c t p r i v a t e t r a d e and i n t e r l o p e r s v a r i e d f rom y e a r to y e a r , l a r g e l y d e p e n d i n g on how i t and i t s cha11engers chose t o i n t e r p r e t the c h a r t e r , an a m b i -guous document at b e s t . The Outward L e t t e r o f 1682 a l e r t e d the C o u n c i l a t A l b a n y R i v e r to the rumours t h a t fo rmer employees o f the company were d e s i g n i n g i n t e r l o p i n g voyages to H u d s o n ' s Bay . The c o u n c i l was to s e i z e E n g l i s h s h i p s s a i l i n g i n t o the bay and have them s e n t back to E n g l a n d f o r p r o s e c u t i o n . F o r e i g n s h i p s c o u l d be s e i z e d "as l a w f u l p r i z e p u r s u a n t to the A c t o f P a r l i a m e n t f o r the Encouragemt . o f N a v i g a t i o n . " At the end o f the l e t t e r , however , the commit tee appended i n s t r u c t i o n s to John N i x o n , the G o v e r n o r , n e g a t i n g t h e i r p r e c e d i n g o r d e r . " Y e t b e i n g f u r t h e r S e n s i b l e o f the g r e a t e Contempt such p e r s o n w i l l o f f e r t o h i s M a j e s t i e s G r a t i o u s P a t t e n t g r a n t e d t h i s Company Have thought f i t to take t h i s m a t t e r i n t o a f u r t h e r C o n s i d e r a t i o n . " 1 3 Back in London the company had prob lems o f i t s own i n c l u d i n g the t h r e a t o f c h a l l e n g e s to i t s c h a r t e r 1 4 and an u n d e f i n e d l e g a l b a t t l e brought a g a i n s t i t by C a p t a i n Greenway, f o r m e r l y in t h e i r e m p l o y e . 1 5 These e v e n t s p r o b a b l y e x p l a i n the i n s t r u c t i o n s to Nixon t o a c t d i s c r e e t l y and c a u t i o u s l y w i t h i n t e r l o p e r s . The l o g i s t i c a l d i f f i c u l t y o f m a i n t a i n i n g a v i a b l e t r a d e o v e r g r e a t d i s t a n c e s o c c a s i o n a l l y c r e a t e d prob lems f o r the r e g u l a t i o n o f p r i v a t e t r a d e . In 1681 t r a d e goods ran low at the bay and Governor Nixon a l l o w e d the men at the f o r t and on the s h i p s to t r a d e t h e i r b l a n k e t s and c l o t h e s w i t h the Ind ians so as not to have to r e f u s e the f u r s they had b r o u g h t . 30 When the s h i p s r e t u r n e d to Eng land in O c t o b e r o f t h a t y e a r many o f the f u r s on board b e l o n g e d to the men. The commit tee o r d e r e d them to be s e i z e d and taken to the company 's w a r e h o u s e , and the men would be r e i m -b u r s e d in m o n e y . 1 6 On December 9 the commit tee had the f u r s t r a n s p o r t e d to committeeman John L e t t o n ' s house to be s o l d and the p r o c e e d s were t o have been d i v i d e d e q u i t a b l y among the men who had owned the f u r s . 1 7 By December 14 the commit tee had a g r e e d to r e t u r n the d r e s s e d moose s k i n s but s t i l l i n s i s t e d on s e l l i n g the f u r s , and two days l a t e r they were t o be put on d i s p l a y f o r p r o s p e c t i v e b u y e r s . 1 8 Between then and J a n u a r y 5 s o m e t h i n g t r a n s p i r e d which made the commit tee change i t s mind and a l l o w the owners to come and r e c l a i m t h e i r f u r s . 1 9 T h e r e i s no h i n t as to why the o r i g i n a l d e c i s i o n was r e v e r s e d but the i n c i d e n t s u r e l y i m p r e s s e d upon the company the n e c e s s i t y o f not s k i m p i n g in the q u a n t i t y o f t r a d e g o o d s , and i l l u s t r a t e d the di lemmas c r e a t e d when o t h e r s s t e p p e d in to f i l l the v o i d . In the l e t t e r t o Nixon the f o l l o w i n g s p r i n g the commit tee t o l d him they had r e t u r n e d the f u r s to t h e i r r e s p e c t i v e owners as he had r e q u e s t e d in h i s l e t t e r , but tha t h e n c e f o r t h i f the s i t u a t i o n a r o s e the company would s e i z e a l l f u r s as r i g h t f u l l y b e l o n g i n g to i t . 2 0 The monopoly s t a t u s wh ich the company e n j o y e d was a h i g h l y q u a l i f i e d m o n o p o l y , e s p e c i a 11y . in i t s e a r l y y e a r s . In Nor th A m e r i c a the c h a r t e r s u p p o s e d l y p r o t e c t e d the company f rom compet ing w i t h i t s own n a t i o n a l s but t h e r e remained the e x p e r i e n c e d F r e n c h t r a d e r s . In E n g l a n d the c h a r t e r a f f o r d e d the company no p r o t e c t i o n f rom c o m p e t i t i o n w i t h merchants d e a l i n g in f u r s f rom New Y o r k , New E n g l a n d , o r V i r g i n i a , and on the European mar-ke t i t a l s o had t o compete w i t h the F r e n c h and the Dutch midd lemen . In t h i s market c l i m a t e i n f o r m a t i o n became impor tan t to the company 's d e c i s i o n -m a k i n g , much o f i t g l e a n e d f rom a network o f p e o p l e a s s o c i a t e d w i t h the London f u r t r a d e . Many o f t h e s e i n f o r m e r s a r e i m p o s s i b l e to i d e n t i f y , but 31 the ve i l ed references to information about the competition which appear in the minutes and l e t te r s outward connote the importance placed on having good contacts among London f u r r i e r s , in the customs house, in Court, and in Parl iament. On 28 October 1681 the committee decided to schedule and announce i t s next sale of beaver for Wednesday, November 16 th . Before the meeting ended Mr. B y f i e l d , a f u r r i e r who sorted the company's fu r s , a r r ived to say that a sale of New York beaver had been scheduled for Tuesday, November 1 5 t h . Thereupon the Hudson's Bay Company sa le was moved ahead a week to November 9 t h . 2 1 On the day of the sale the committee got wind of a rumour that the a r r i v a l of another ship from the bay was imminent suggesting that the f u r r i e r s might wait out the company in hopes of a better p r i c e . Rea l iz ing the rumour might queer the sa le i t was to be declared "at the Candle that the Company doth not expect any other ship th i s yeare and That They w i l l not s e l l any other Goods before Michaelmas next [September 2 9 ] . 1 , 2 2 During the Company's f i r s t two decades one of i t s most important customers and informants was Thomas Glover a large London f u r r i e r . How Glover got his news is unclear. In October 1690 he reported "from another" that Parliament had passed a law al lowing the importation of Dutch fur with a small duty. The committee met with Glover to consider ways of blocking the a c t , 2 3 and a lso asked the S o l i c i t e r General, S i r John Summers, to introduce a bi11 to lay a duty on a l l imported beaver w o o l . 2 4 On November 12 a Mr. Healer and a Mr. Baker, probably f u r r i e r s , approached the committee with the news that beaver skins and wool were coming into England despite the Navigation Acts and asked i f i t would assume part of the charges for a su i t against the importers; the committee agreed to pay two-thirds of the c h a r g e . 2 5 Contacts with the Customs 32 House a lso kept the company informed of movements of fur in and out of the port of London. A f ter impounding a shipment of Dutch beaver in 1692 the Customs House then sold the fur to the Hudson's Bay Company for 8 s h i l l i n g s a pound. 2 6 The company paid a high pr ice for those furs . The average pr i ce they received for beaver during the period was 7s.Id. in 1691, 8s.9d. in 1692, and 7s.3id. in 1693-2 7 The company placed great value on maintaining good re la t ionsh ips with London's f u r r i e r s , as can be seen in the c o n f l i c t which arose over the 1690 sa le of beaver to Thomas Glover. Wanting to purchase beaver Glover approached the company in Apr i l 1690 to discuss what arrangements could be made. 2 8 A sub-committee agreed with Glover to r i g -a sale in which coat beaver would be set up at 11s. a pound but would be sold at 8s. a pound to Glover who agreed to buy 100 lots at that p r i ce . At the committee meeting at which th is arrangement was d i sc losed Mr. Thomas Chambers, a member, proposed a counter -o f fer of the same pr ice plus two hundred pounds. "And i t being debated in th i s Committee whether they thought the two hundred pounds advance a valuable Consideration for Rejecting the o f f e r made by Mr. Glover, i t was put to the vote and by the Majority i t passed in the Negat ive." A f ter re jec t ing the o f f e r of Chambers, some committee members requested that the Deputy Governor enjo in them " to an oath of secresey that noe mention bee made out of the Committee Concerning the agreement with Mr. G l o v e r . " 2 9 On July 2 the sale was held as planned, but Mr. Chambers and Mr. Foote, another committee member, refused to p a r t i c i p a t e . 3 0 Two hundred pieces of coat beaver were sold at 11s.2d. a pound to a small r e t a i l e r and two thousand pieces to Glover at 8s.2d. a pound. 3 1 At the annual General Court on 5 August 1690 Chambers submitted a r t i c l e s against the Deputy Governor and the rest of the committee for 33 the h a n d l i n g o f the J u l y 2 s a l e . A g r e a t f u r o r a r o s e , the c h a r g e s were d e n i e d , the a c c u s e d o f f e r e d a v i n d i c a t i o n , and p r o p o s e d a d i s c u s s i o n o f the c o n t e s t e d s a l e . A t i m e l y ad journment by the G o v e r n o r , E a r l o f M a r l b o r o u g h , because o f the summer heat t a b l e d the whole mat te r and the s h a r e h o l d e r s were reminded to "Keepe S e c r e t t the Debates and T r a n s a c t i o n s o f t h i s Genera l 1 C o u r t . " 3 2 The Genera l C o u r t convened a g a i n on August 8 and the commit tee came p r e p a r e d to answer Chamber 's c h a r g e s and l e v e l i t s own a g a i n s t h i m . Chambers l e f t , the Genera l C o u r t c h a r g e d him w i t h contempt and s t r i p p e d him o f h i s commit tee r e s p o n s i b i l i t i e s and p r i v i -1 e g e s . 3 3 The company 's i n t e r n a l c o n f l i c t a l s o had i t s e x t e r n a l d i m e n s i o n s in the London and European f u r m a r k e t . S i n c e 1688 the company had been h a v i n g d i f f i c u l t y d i s p o s i n g o f i t s f u r s . S i x t e e n thousand coa t beaver had remained u n s o l d from the March 1688 s a l e . In November the company o f f e r e d h a l f o f t h o s e f u r s and s o l d them, but a t a December s a l e Mr. S k i n n e r , a l a r g e London f u r r i e r , was the o n l y p u r c h a s e r o f c o a t beaver and he o n l y bought 800 s k i n s . The company b roached the p o s s i b i l i t y o f a p r i v a t e s a l e to S k i n n e r wh ich r e s u l t e d in a s p l i t in the Genera l Cour t o v e r whether to s e l l by p u b l i c a u c t i o n o r p r i v a t e c o n t r a c t . The c o u r t r u l e d at i t s m e e t i n g in F e b r u a r y 1689 t h a t a l l s a l e s would be by p u b l i c a u c t i o n by the c a n d l e u n l e s s i t a u t h o r i z e d the commit tee to n e g o t i a t e p r i v a t e s a l e s to d i s p o s e o f e x c e s s f u r s . Hav ing e x e r t e d i t s a u t h o r i t y to d i c t a t e p o l i c y to the commit tee the c o u r t i m m e d i a t e l y empowered the commit tee to d i s p o s e o f the p r e s e n t s t o c k o f e x c e s s f u r s . b y p r i v a t e c o n t r a c t . 3 4 T r a n s p i r i n g s i m u l t a n e o u s l y were c h a l l e n g e s t o the company 's c h a r t e r by the Company o f F e l t m a k e r s o f the C i t y o f London . The m a t t e r went to P a r l i a m e n t in 1690 , where the c h a r t e r was c o n f i r m e d f o r a n o t h e r seven y e a r s , but w i t h the added p r o v i s o t h a t , 34 the sa id Governor and Company sha l l make at least two publ ic Sales of Coat Beaver in every year and not exceeding four and that they sha l l proport ion the same into lots each of about one hundred pounds s t e r l i n g but not exceeding two hundred pounds value. And that in the in terva l s of the publ ic Sales the said Company may not s e l l Coat Beaver by pr ivate Contract at any lower pr ice than i t was set up at the last pub l ic Sale and that the Coat Beaver now in the Companies Hands sha l l be l i a b l e to the same r u l e s . 3 5 The proviso emphasized the marketing of coat beaver in order to pac i fy small r e t a i l e r s in the Company of Feltmakers who wanted access to i t in quant i t ies small enough to purchase d i r e c t l y from importers. Parchment beaver did not in terest them for at th is time the Engl ish lacked the knowledge to remove the guard ha i r s , and so parchment beaver had to be sent to Russia for process ing. The parliamentary proviso might have been adhered to had there not been an excess of coat beaver coming into England, forc ing the Hudson's Bay Company to t reat with large fu r -r i e r s , l i ke Thomas Glover, who exported much of what they bought. Two in te r re l a ted issues came into p lay: one, whether to s e l l large lots to exporters or small lots to r e t a i l e r s , and two, whether to s e l l by auction or pr ivate sa le . Had the Engl ish market not been g lutted i t might have been poss ib le to accommodate everyone, but the need to arrange su i tab le means of gett ing furs out of England forced the company into co l lu s ion with exporters of f u r s , and added to the c o n f l i c t ' w i t h i n the company. For the years p r io r to 1694 i t is impossible to judge how many of the furs from Hudson's Bay were re-exported, but in 1694 the company began own consignments of furs to agents in Amsterdam, Hamburg, and Narva. Between 1694 and 1698 i t exported 58965 parchment beaver skins and 40166 coat beaver s k i n s 3 6 out of the tota l sales of 90902 parchment beaver and 60486 coat b e a v e r , 3 7 or s i x t y - f i v e percent. Of the 45466 pel ts shipped to Amsterdam 5250 were re-exported to Archangel; of the 49203 pel ts shipped to Hamburg 7200 were re-exported to Narva and 32292 35 to A r c h a n g e i . 3 8 Agents in Narva and Archangel then exchanged furs for B a l t i c products among them hogs b r i s t l e s , f l a x , goat sk ins, h ides, hemp, j u t , matts, ta l low, and beaver wool which the company then had to s e l l in western Europe. The returns from th is trade came very s l o w l y . 3 9 In 1701 the company's agent in Amsterdam f i n a l l y disposed of 8500 coat beaver skins at 4s.8d. a pound much less than the pr ice of 6s. a pound at which they o r i g i n a l l y went on the books . 4 0 In 1701 and 1707 the company con-signed furs to committee-man John Nicholson for export to Russia; the returns from these furs again came slowly and were only achieved through the importation of Russian hemp some as late as 1711-4 1 The d i rec t involvement of the Hudson's Bay Company with re-export ing beaver pelts connotes a few important features of the fur market within which i t operated. The f i r s t , most obvious and most remarked upon fea -ture is the g lutted Engl ish market for furs and the need to dispose of some of those furs elsewhere. Secondly, to pa r t i c i pa te d i r e c t l y in the intra-European trade demanded a commitment to a longer turn-over time of an i n i t i a l investment and the wi l l ingness of the company to carry that cost. The time lengthened considerably when the Hudson's Bay Company had to s e l l Russian commodities in order to f i n a l i z e t ransact ions . Assessing the gains from this trade, e spec i a l l y the exchange of American furs for Russian products, is v i r t u a l l y impossible. Between 1694 and 1706 the company kept a Journal of Foreign Accounting. The f i na l balance on the p r o f i t and loss account l i s t s a gain of £ 7 8 5 6 . 9 s . 5 d . on furs ca lcu la ted at a value of £35508.14s. 4 2 As i t bald ly stands th is amounts to a healthy p r o f i t of 22%, yet that was over a twelve year period on furs shipped from 1694 to 1698. There are no allowances for the expense involved in procuring the fu r s , nor for the interest charges on the money the company borrowed during th is per iod, costs which were ca r r i ed instead in the 36 Grand Ledger. Therefore a true p r o f i t p i c ture would be much lower. T h i r d l y , by export ing furs i t s e l f , the company may have been avoiding some of the need to co l lude with the large f u r r i e r s l i ke Thomas Glover, and thereby gain marginal ly more market con t ro l . Regardless of poss ib le gains the process was too involved for the company to continue the prac-t i c e i f poss ib ly avoidable. From the records of the Customs House and the company records i t is poss ib le to gain some apprec iat ion of the magnitude of the increased volume of beaver coming into England from North America. In the table below are the to ta l s taken from the Custom's House records, the volume imported from Hudson's Bay, i t s percentage of the t o t a l , and the com-bined percentage of the New York and Hudson's Bay trade. In the far r ight column are the f igures taken from the company's records. These f igures are cons i s tent ly higher than the Custom's House f i gu res . To evade paying customs fees the company instructed the men at the for t s to pack heavy furs for ty to f o r t y - f i v e to a bundle and th in furs f i f t y - f i v e to s ix ty to a bundle. Conceivably th i s would make a l l bundles nearly the same s i z e . The thin l i gh t furs were then to be stowed on the ship f i r s t so they came o f f l a s t , 1 * 3 hopeful ly a f te r the customs va luat ion had been done. The ploy must have worked. Thus the beaver on the Engl i sh market was even greater than the customs records t e l l . The increased volume of beaver from Hudson's Bay alone would have forced adjustments in the Engl ish fur market. The Hudson's Bay trade and the New York trade, occur r ing a 1 most simultaneously dominated the market. While the Custom's House f igures are surely low and do not date from the beginning of the company they do connote why the Hudson's Bay Company was forced into co l lud ing with exporters or exporting i t s e l f to re l i eve the glut of beaver in England. They a lso suggest why the pr i ce for beaver dropped so p rec ip i t i ous1y in the 1690s. 3 7 Table I Beaver Imports Into England From the [ Engli sh Colonies 1697" 1726. "*h H.B.C. % N .Y.& H.iB.C. H.B.C.per Year Total H.B.C. of Total % of Total Co.Records 1697 42 ,902 34,341 80 % 83 'a 42,990 1698 3,165 60 2 % 2. °/ • '0 0 1699 54 ,508 20 ,477 38 % 79 °/ '0 33,741 1700 39 , 989 12,669 32 % 73 °/ 19,329 1701 22 ,536 30 0 % 50 °/ 'O 0 1702 20,501 9 ,244 45 % 58 °/ 'O 14 ,838 1703 35 ,356 30 ,089 85 % 92 °/ 'O 42,080 1704 12 ,851 0 0 % 28 °/ '0 0 1705 0 0 0 % 0 °/ 'Q 0 1706 38 ,294 33,121 87 % 87 °/ 'O 50,092 1707 6,474 0 0 % 45 °/ 2 5 , 9 4 3 1708 38 , 477 14,680 38 % 63 °/ 'a 12,680 1709 34 , 655 7 ,344 21 % 68 °/ '0 0 1710 8 ,987 0 0 % 60 °/ '0 0 1711 2 3 , 4 3 8 2,000 9 % 38 °/ '0 51 , 129 1712 0 0 0 % 0 °/ '0 5 1 , 0 2 5 1713 63 ,515 36,663 58 % 84 °/ 0 1714 86 ,127 34 ,909 41 % 78 °/ 42 ,848 1715 28 , 969 0 0 % 39 °/ 'O 0 1716 92 ,364 65,931 71 % 91 °/ 76,718 1717 73 ,709 41 ,475 56 % 83 "/ 'O 55,554 1718 80 ,990 41,186 51 % 88 °/ 48 ,177 1719 43,646 18,606 43 % 84 "/ 'O 20,694 1720 83 ,600 52 ,594 63 % 95 °/ '0 55,483 1721 78,670 52,231 66 % 96 °/ 60 ,899 1722 86 ,645 58 ,368 67 % 97 °/ ' 65,434 1723 8 0 , 1 1 7 56,693 71 % 99 °/ 'O 63,222 1724 56,052 32 , 565 58 % 100 °/ 36,731 1725 92 ,337 57 ,808 63 % 97 9 60 , 855 1726 88,956 48 ,593 55 % 96 °/ '0 52,364 Table I I Market Shares, Five Year Averages Years H.B.C. i. Comb i ned 1697-1701 41 % 32 °/ '0 73 % 1702-1706 68 % 8 °/ 76 % 1707-1711 21 % 37 °/ '0 58 % 1712-1716 51 % 29 °/ 80 % 1717-1721 57 % 33 °/ 90 % 1722-1727 63 % 35 °/ 98 % Sou rces: Cus toms Records, col 1ected by Arthur J . Ray. H.B.C. A . 1 5 / 2 - A . 1 5 / 5 , H.B.C . Grand Journals 38 The average pr ices at which Hudson's Bay sold fur from 1682 to 1726 are l i s t e d in the fo l lowing tab le. The pr ices given are an average pr ice per piece rather than an average pr ice per pound which is the way the Company sold beaver. The pr ices are ca lcu la ted in th is way large ly to f a c i l i t a t e the la ter d iscuss ion of the trade with the Indians from whom the company o r i g i n a l l y purchased the fur on a per piece basis. Stat ing the pr ice by the piece rather than by the pound gives a better p ic ture of the d i f fe rence in value between a coat beaver and a parchment beaver pe l t . For example coat beaver sold at 7 s . l i d . per pound in 1692 which was an average of 8 s . 2 i d . per p iece. A year l a ter parchment sold for 7 s . 1 1 d . per pound which was 9 s . k d . per p iece. The d i f fe rence is because parchment beaver is a heavier pel t than coat b e a v e r . 4 5 What is most s ta r t1 i ng about these f igures is that the pr ice of beaver decl ined throughout the 1690s before reaching a low and s t a b i l i -zing in the f i r s t - q u a r t e r of the eighteenth century at approximately one-hal f of the pr ices in the 1680s. In the 1730s pr ices would begin to r i se again, more s lowly, and in re l a t ionsh ip to the larger economy of England. This suggests a number of things. One is that to maintain a market for the large volume of furs coming in the pr ice had to remain r e l a t i v e l y low. Secondly, though pr ices for beaver did not recover the Hudson's Bay Company began d i s t r i b u t i n g annual dividends in 1718 i nd ica t ing that i t had recovered f i n a n c i a l l y . Therefore, s i g n i f i c a n t adjustments had to be happening other places in the company's operations in order to counter-act this major pr i ce t r an s i t i on in the European fur market. The d i rec t impact the Hudson's Bay Company had on the p r i ce of fur was l im i ted , but i t did have a much greater measure of control over the volume of furs i t brought to the market. As noted prev ious ly , market information played a c ruc i a l role in the company's dec is ion on how many 39 T a b l e II! Average P r i c e per P i e c e o f B e a v e r , 1682-1726 Coat Parchment Average 1682 14 :2 12 :3 13 \ 1683 9 5 12 :4 10 0 1684 8 :6V2 13 :7 10 :8 1685 8 8 12 :7V2 10 1 1 1686 11 :3 12 :5 11 9 1687 13 6 10 :3 11 6 1688 11 :6 13 : 11 12 9 1689 8 10 12 :3 9 11V 2 1690 10 : V 2 10 1691 6 5 9 ••% 7 6T/2 1692 8 2 V 2 11 :6 10 4 1693 7 4 9 :4 8 4 1694 6 5V2 10 : 1 8 7V2 1695 8 2 9 :3 8 8V2 1696 8 2 V 2 10 : 2 V 2 9 9V 2 1697 6 2 7 :9 7 1 1698 5 7 10 : 10 7 11V 2 1699 4 v 2 6 :6 5 1 1700 4 7 6 :5 6 1 1701 3 10* 3 10 1702 5 5 9 = V 2 6 4 1703 5 4 5 4 1704 5 :8V2 5 8V2 1705 1706 5 % 5 '% 1707 6 = 9 6 3 1708 5 5 6 : 10 6 1V2 1709 5 10V 2 5 10V2 1710 ? ? ? 1711 ? ? ? 1712 ? ? ? 1713 4:7V2 5 10V 2 5 4 1714 7 11 5 2 5:5V2 1715 1716 8 4V2 4 8 4: U% 1717 8: 4 5 2 5: 3% 1718 7 = 3V2 4 11 5: 1 1719 6 5V 2 4 7 5: 3 1720 5- 9V 2 5 6V2 5: 7V2 1721 5 10 5 - 5: 1V2 1722 4: 11V 2 4 7 4: 8V2 1723 5- 6 V 2 6 W 2 6: 3 1724 5: 11V 2 6 6V 2 6: 5 1725 6: 4 5 9V 2 5: 10V 2 1726 7: 5 5 - 5: 7V2 * o l d c o a t beaver o n l y no s a l e o f t h a t type ? unknown s h i 1 1 i n g s : p e n c e 40 furs to put on the auction block, or whether to dispose of furs on foreign markets. This type of marketing has some important repercussions on the operat ion of the company. It necess i tated recognizing the f i n i t e l im i t s of the market and then operat ing within those parameters. This in turn places constra ints on the extent to which trade can expand before the market l imi t s are met. In the 1670s, 1680s, and 1690s the beaver trade expanded beyond the market l i m i t s . What emerged in the f i r s t decades of the eighteenth century was a market capable of carry ing a larger volume of furs but at the cost of lower p r i ce s . Therefore to survive f i nan -c i a l l y in the fur trade the Hudson's Bay Company had to adapt i t s operations to the new market parameters which i t s own advent had helped to reshape. Regulating the flow of furs coming onto the market was one strategy i t employed. To succeed in c o n t r o l l i n g the volume of furs in Europe the Hudson's Bay Company had to monitor the flow from North America in order to avoid excessive s tockp i les in London warehouses. Modest s tockp i les in London were des i rab le as insurance against the miscarriage or delay in a sh ip-ment from the bay, to respond to moderate f luc tuat ions in market demand or to take up market s lack should a competitor be caught with inadequate supp l ies . Large s t ockp i l e s , however, t i ed up working cap i ta l and de-pressed the market. In the 1690s when coat beaver accumulated in the company's London warehouses the committee instructed the traders at the bay to discourage the Indians from bringing in coat beaver to t r ade . 1 + 7 Upon orders from London Governor F u l l e r t i n e shipped no coat or stage beaver in 1708, leaving i t instead to accumulate in the Fort Albany ware-house. 1 + 8 This had two e f f e c t s ; i t delayed the customs expenses in London and i t reduced the beaver ava i l ab le on the London market without having to turn away Indian traders in North America. Two years l a ter the London 41 s tockp i les of coat beaver had been reduced and the men at the bay were to ld to se lect 12,000 of the best coat beaver to ship to London. 1 4 9 By 1713 and the Treaty of Utrecht s tockp i les in England had been nearly e l iminated large ly due to reduced imports; only 14,488 parchment beaver and 8 ,636 coat beaver remained in the company's London warehouse. 5 0 The f igures below on the volume of imports, the volume of sales and the estimates of the furs remaining in the warehouse ind icate the s t r a -tegy of c o n t r o l l i n g volume which the management of the Hudson's Bay Company evolved a f te r the glut in the 1690s. As exact values these f igures should be used caut ious ly , e spec i a l l y those in the warehouse column. This column begins with the assumption of a zero value for 1680 since data for the f i r s t decade is very spotty. As w e l l , the Dutch furs purchased from the Customs House in 1692 are not in the imports and thus further skews the warehouse f i gures . Therefore, un t i l 1712 the warehouse f igures are to i l l u s t r a t e the re la t ionsh ip between imports and sa les . In 1713 before the f a l l sa le the company took an inventory of beaver in order to balance the i r ledger, and hence the warehouse f igures a f te r that time are quite accurate. That inventory f i gure is l i s t e d in the 1712 row because i t predated the 1713 fur sa les . The import volumes are taken from the journal valuat ions which the company began in 1684, re t roact ive to 1681 and are r e l a t i v e l y accurate. Despite an unavoidable degree of inexact itude in the f igures the i r overa l l conf igurat ion sketches a r e l a t i v e l y accurate p ic ture of the turnr) over of inventory. Throughout the 1680s imports and sales moved in tandem with imports s l i g h t l y out -d i s tanc ing sa les . Then in 1690 sales slumped, imports jumped and the company's fur surplus suddenly doubled. With the capture of York Fort from the French in 1693 and the acqu i s i t i on of the i r furs as booty s tockp i les climbed to over 90,000 p e l t s , a three to four 42 T a b l e IV Impor t , S a l e s , and Warehouse Volumes Volume Volume Volume in Imported S o l d Warehouse 681 24 ,123 [17 ,973] 6 , 1 5 0 682 18 ,690 7 ,600 17,240 683 2 0 , 0 7 5 23,002 14,313 684 18,924 11 ,800 21,437 685 14,950 13,400 2 2 , 9 8 7 686 2 0 , 1 5 2 16 ,000 2 7 , 1 3 9 687 2 0 , 4 8 5 18 ,368 2 9 , 2 5 6 688 2 0 , 9 2 8 2 2 , 2 0 0 2 7 , 9 8 4 689 27 ,201 2 9 , 9 2 0 2 5 , 2 6 5 690 3 7 , 5 2 0 12 ,373 50,412 691 2 8 , 1 1 7 2 9 , 3 7 0 4 9 , 1 5 9 692 24,236 3 3 , 2 2 3 40,172 693 9 2 , 3 4 9 40 ,598 9 1 , 9 2 3 694 6 2 , 0 0 5 5 5 , 9 8 3 9 7 , 9 4 5 695 - 3 2 , 5 6 2 6 5 , 3 8 3 696 19 ,623 2 0 , 3 0 2 64 ,704 697 4 2 , 9 9 0 42,541 6 5 , 1 5 3 698 - 13,136 5 2 , 0 1 7 699 33,741 3 0 , 6 1 6 55,142 700 19 ,329 15 ,610 58 ,861 701 - 40 ,000 18,861 702 14,838 2 4 , 1 2 8 9,571 703 4 2 , 0 8 0 9 ,994 41,657 704 - 2 1 , 7 2 0 19 ,937 705 - - 19 ,937 706 5 0 , 0 9 2 . [ 7 ,500 ] 6 2 , 5 2 9 707 2 5 , 9 4 3 2 2 , 5 3 6 6 5 , 9 3 6 708 12 ,680 16 ,084 6 2 , 5 3 2 709 - [ 1 ,680 ] 6 0 , 8 5 2 710 - ? ? 711 5 1 , 1 2 9 ? ? 712 51 ,025 7 23,124-'' 713 - 20,271 2 , 8 5 3 714 42,848 3 7 , 5 4 9 8 , 1 5 2 715 - - 8 ,152 716 7 6 , 7 1 8 70,211 14,659 717 5 5 , 5 5 4 5 2 , 7 9 5 17 ,418 718 48,177 4 5 , 9 0 0 19 ,695 719 2 0 , 6 9 4 2 7 , 9 0 5 12,484 720 5 5 , 4 8 3 3 9 , 3 6 6 28 ,601 721 6 0 , 8 9 9 5 9 , 7 5 4 29,746 722 6 5 , 4 3 4 71,614 2 3 , 5 6 6 723 6 3 , 2 2 2 64,885 2 1 , 9 0 3 724 36,731 40,432 18 ,202 725 6 0 , 8 5 5 6 2 , 6 0 6 16,451 726 5 2 , 3 6 4 5 3 , 6 5 6 15 ,159 no impor ts o r s a l e s » f rom the b a l a n c e o f the Grand ? unknown Ledger 30 September 1713-[] e s t i m a t e s based on T h i s f i g u r e i s l i s t e d as 1712 s a l e s by we ight because the s a l e s f o r 1713 came a f t e r 30 Sep tember . 43 y e a r b a c k l o g . The i n a b i l i t y o f the company t o t u r n - o v e r i t s i n v e n t o r y p r o b a b l y c r i p p l e d i t as much as d i d the d e c l i n e in p r i c e s . E x c e s s i n v e n -t o r y not o n l y g l u t t e d the market but a l s o r e p r e s e n t e d p r o d u c t i o n c o s t s wh ich c o u l d not be e a s i l y r e c o v e r e d . The company had to reduce i t s i n v e n t o r y , and d i d so by e x p o r t i n g f u r s and by not b r i n g i n g in as many f rom the bay. S i x o f the f o u r t e e n y e a r s f rom 1700 t o 1713 the company r e c e i v e d no sh ipments f rom the b a y . Some o f t h o s e y e a r s the company chose not to send out s h i p f o r " t h e badness o f the M a r k e t t f o r Beaver would not Answer o u r C h a r g e . " 5 2 O t h e r y e a r s the h a z a r d s o f war t ime s h i p p i n g and the d i f f i c u l t y o f g e t t i n g seamen p r e c l u d e d voyages to H u d s o n 1 s B a y . 5 3 The p e a c e - t i m e y e a r s a f t e r 1713 a l l o w e d the company to r e g u l a t e i t s a f f a i r s much more c l o s e l y . The i n v e n t o r y i t c a r r i e d o v e r f rom y e a r to y e a r never exceeded s a l e s . It a p p e a r s t h a t a t t e m p t s were made not to c o m p l e t e l y e l i m i n a t e s t o c k p i l e s . In 1715 no s h i p r e t u r n e d f rom the bay and the l e t t e r s outward the f o l l o w i n g y e a r c o n t a i n e d c o m p l a i n t s o f the h a r d s h i p i t c a u s e d in L o n d o n . 5 4 In 1719 the d e c l i n e in volume impor ted a l s o c r e a t e d a one y e a r d e c l i n e in s a l e s even though the company had a n o t h e r 11,000 f u r s in i t s w a r e h o u s e . The p a t t e r n f o r o t h e r y e a r s i s very s i m i l a r w i t h volume o f impor ts and s a l e s v e r y c l o s e and a modest s t o c k p i l e r e t a i n e d in the w a r e h o u s e . In l o n g - d i s t a n c e t r a d e d u r i n g the e a r l y modern p e r i o d i n v e s t m e n t s in i n v e n t o r i e s to c o v e r a y e a r ' s s a l e s in the even t o f s h i p p i n g d i f f i -c u l t i e s became an i m p o r t a n t mechanism f o r m i t i g a t i n g market u n c e r t a i n t y , c r e a t i n g g r e a t e r market c o n t r o l s and t h e r e b y g r a n t i n g g r e a t e r f i n a n c i a l s e c u r i t y . In London s t o c k p i l e s o f beaver were m a i n t a i n e d and at the bay s t o c k p i l e s o f t r a d e g o o d s . T h i s i n v o l v e d l a r g e i n v e s t m e n t s , both in w o r k i n g c a p i t a l f o r i n v e n t o r i e s and f i x e d c a p i t a l f o r w a r e h o u s e s . It kk also necess i tated quite a soph i s t i cated managerial and admin is t rat ive s t ructure to oversee the operat ion. This was a more conservat ive ap-proach to trade based on the goal of long-term surv iva l rather than short-term p r o f i t s . In assessing the f i nanc i a l recovery of the Hudson's Bay Company a f te r the g lutted market of the 1690s and the dec l ine in beaver pr ices much of the c red i t has to be given to the management of the beaver market which the company evolved. Attent ion to market i n fo r -mation, and control of inventor ies were very important f ac to r s . The control of inventor ies rests on one further aspect of the Hudson's Bay Company, namely that i t did not have to contend with per-manent s e t t l e r s pressing the i r own trading i n te re s t s , and gave the company greater f l e x i b i l i t y to monitor the volume of trade in North America in re la t ionsh ip to the volume of sales in Europe. This is perhaps a c ruc i a l d i f fe rence between the Hudson's Bay Company and the French-Canadian fur trade, or the-Eng l i sh fur trade in New York. In the eighteenth-century the French-Canadians shipped many more furs to France than the Hudson's Bay Company did to England. S u p e r f i c i a l l y this suggests that the French were more successful than the Eng l i sh , but th i s would only be so i f trade in North America did not out-pace sales of furs in Europe. If i t did then i t would prove commercially d isasterous. The contention that the French-Canadian beaver trade was bankrupt a f te r the 1690s may be because of over-product ion of furs rather than the dec l ine in pr i ces . It is perhaps t e l l i n g that when the Hudson's Bay Company had excessive p r o f i t s to invest in the 1720s and 1730s they did'not expand the fur trade but invested instead in South Sea Company annuit ies and East India Company bonds . 5 5 The continued des ire to d i v e r s i f y the trade and lessen the de-pendence on beaver indicates that the Hudson's Bay Company had discovered the l im i t s of the beaver trade and chose not to move beyond them. 45 The a b i l i t y o f the H u d s o n ' s Bay Company to adapt i t s t r a d e to the European f u r market t h r o u g h a t t e n t i o n t o market i n f o r m a t i o n and c o n t r o l o f i n v e n t o r i e s f i g u r e s s i g n i f i c a n t l y in any a s s e s s m e n t o f i t s f i n a n c i a l r e c o v e r y a f t e r the 1690s and o f i t s l o n g - t e r m s u r v i v a l . T h i s s h i f t s a t t e n t i o n away from s h e e r volume o f t r a d e o r p r i c e , n e i t h e r o f which a r e s u f f i c i e n t to e x p l a i n who s u r v i v e d in the f u r t r a d e and why. The i n c r e a s i n g l y s o p h i s t i c a t e d management and a d m i n i s t r a t i o n o f the mar-k e t i n g o f f u r s has i t s p a r a l l e l in the procurement o f t r a d e goods and t h e i r exchange f o r f u r s . T h i s becomes the next a r e a o f a n a l y s i s . kb Notes 1 G.B. Masef ie ld , "Crops and L ives tock, " in The Economy of Expanding  Europe in the Sixteenth Century Vo l . 4 , Cambridge Economic History of  Europe eds. E. E. Ri ch and C. H. Wi1 son (Cambri dge: Cambridge Universi ty Press, 1 9 6 7 ) , pp. 2 8 7 , 2 8 9 , 291., 2 9 4 , 2 9 8 . 2 W. J . Ecc les , "The Fur Trade and Eighteenth-Century imper ia l i sm," Wi l l iam and Mary Quarter ly , 3d . s e r . , 15 , No. 3 ( 1 9 8 3 ) , PP- 3 4 1 - 2 , 344; and W. J . Ecc les , "A Belated Review of Harold Adam Innis, The Fur Trade  in Canada," Canadian H i s t o r i a l Review, 60 , no. 4 . ( 1 9 7 9 ) , pp. 4 2 2 - 3 . 3 K. G. Davies, "The Years of No Div idends," in People and Pe l t s , ed. Malvina Bolus (Winnipeg: Peguis, 1 9 7 2 ) , p. 6 7 . h E. E. Rich, Hudson's Bay Company, 1 6 7 0 - 1 8 7 0 , Vo l . 1: 1 6 7 0 - 1 7 6 3 , (London: Hudson's Bay Record Soc iety, 1958) , p. 55". 5 The Royal Charter Incorporating the Hudson's Bay Company, A.D. 1670 , rpt. in Minutes of the Hudson's Bay Company, 1 6 7 1 - 1 6 7 4 , The Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 5 , ed. E. E. Rich (London: Hudson's Bay Record Soc iety , 1942), p. 142. 6 Minutes, 13 October 1673 , i b i d . , p. 5 1 . 7 Letter Outward (hereafter L.O.) to John Bridgar, 25 Ap r i l 1683 , in Letters Outward, 1 6 7 9 - 1 6 9 4 , ed. E. E. Rich, Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 1 1 , (London: Hudson's Bay Record Soc iety, 1 9 4 8 ) , p. 8 8 . 8 Minutes, 28 May 1682, in Minutes of the Hudson's Bay Company, 1 6 7 9 - 1 6 8 4 , The Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 8 , ed. E. E. Rich (London: Hudson's Bay Record Soc iety , 1 9 4 5 ) , p. 2 2 8 . 9 L.O. to Henry Sergeant, 22 May 1685 , in Letters Outward, Vo l . 1 1 , p. 142. 1 0 L.O. to Capt. Wm. Bond, 6 October 1686, and L.O. to Mr. Morgan Lodge, 6 October 1686, in i b i d . , p. 2 0 3 . 1 1 L.O. to Mr. Morgan Lodge, 14 November 1693 , in Letters Outward, 1688 - 1696, ed. E. E. Rich, Publ icat ions of the Hudson's Bay Record Soc iety , Vo l . 2 0 , (London: Hudson's Bay Record Soc iety , 1 9 5 7 ) , p. 2 2 6 . 1 2 L.O. to Walsh, 3 June 1694, in i b i d . , p. 2 3 8 - 9 . 1 3 L.O. to Nixon, 22 May 1682 , in Letters Outward, Vo l . 1 1 , pp. 46 - 4 7 -l h Rich, H.B.C., 1670-1870 Vo l . 1, pp. 1 0 2 - 3 -1 5 Minutes, in Minutes, 1679-1684 Vo l . 8 , pp. 1 6 1 , 166 , 172 , 178 , 180 , 195 , 2 0 1 . 16 Minutes, 20 October 1681 , in i b i d . , p. 134. 47 1 7 Minutes, 9 December 1681, in i b i d . , p. 159-1 8 Minutes, 14 December 1681, in i b i d . , p. 162; and Minutes, 16 December 1681, in i b i d . , pp. 164-5-1 9 Minutes, 5 January 1 6 8 1 / 2 , in i b i d . , p. 169-2 0 L.O. to Nixon, 15 May 1682 in Letters Outward, Vol. 1 1 , p. 41. 2 1 Minutes, 28 October 1681 , in Minutes, 1679-1684 Vol. 8 , p. 137" 138. 2 2 Minutes, 9 November 1681, in i b i d . , p. 145. 2 3 Minutes, 22 October 1690, Hudson's Bay Company Archives, Provin-c i a l Archives of Manitoba (H.B.C.A., P.A.M.),' A.1/12, fo. 33d. (hereafter only the archival c l a s s i f i c a t i o n number is given.) 2 h Minutes, 25 October 1690 , A.1/12, fo. 34d. 2 5 Minutes, 12 November 1690, A.1/12, fo. 36. 2 6 Minutes, 2 November 1692, A.1 / 14 , and Minutes, 25 November 1692, A.1/14. 2 7 Prices compiled from records of fur sales in the Grand Journals. A.15/3-A.15 /5-2 8 Minutes, 15 April 1690, A.1/12, fo. 14. 2 9 Minutes, 25 June 1690, A.1/12, fos. 23"23d. 3 0 Minutes 2 July 1690, A.1/12, fo. 24. 3 1 Grand Ledger, A.14/5, fo. 53-3 2 Minutes, 5 August 1690, A.1/12, fo. 25-3 3 Rich, H.B.C., 1670-1870, Vol. 1 , p. 270. 3 4 Ibid., pp. 258-9-3 5 Ibid., p. 269-3 6 Journal of Foreign Accounting, 1694-1706, A.17/2, fo. 42. 3 7 Compiled from Grand Journals, A.15/3-A.15/5-3 8 A.17/2, fos. 1, 5, 17, 18, 19 , 20, 39, 58, 8 7 , 101 . 3 9 A.17/2, fos. 36-39, 42, 59, 70. k 0 A.17/2, fo. 138. 4 1 A.1/23, fos. 27d -28 ; A.15/5, fos. 7 ^ - 7 8 ; A.15/5, fos. 142-3; and E. E. Rich, H.B.C., 1670-1870, Vol. 1, p. 461. 48 4 2 A . 1 7 / 2 , fos. 4 1 , 42 . k s L.O. to Governor Fu11ertine, 26 May 1708, A . 6 / 3 , fo. 90d . 1 + 4 Customs Ledgers, Imports and Exports, PRO, London.. Data from Arthur J . Ray. Grand Journals , A . 1 5 / 2 - A . 1 5 / 8 . 1 + 5 Below are average weights for coat and parchment beaver pelts from 1684-1699-Coat Pa rchment Coat Parchment 1684 1.12 1 .48 1692 1 .04 1 .25 1685 1.15 1.53 1693 1 .03 1 .20 1686 1.09 1.41 1694 1 . 08 1.39 1687 1 .12 1.53 1695 1 .02 1.16 1688 1.03 1.15 1696 1 .02 1.35 1689 1.08 1.17 1697 1 .04 1.25 1690 - 1 .24 1698 0 . 9 8 1.30 1691 1.01 1.26 1699 0 . 9 9 1 .32 avg. 1.06 1.3 Calculated from fur sa le records, Grand Journals and Grand Ledgers 1 + 6 Compiled from Grand Journals , A. 1 5 / 1 -A . 15 /8 and Grand Ledgers, A . 1 4 / 2 - A . 1 4 / 9 . 4 7 L.O. to Governor Geyer, 22 May 1690 , Letters Outward, Vo l . 2 0 , p. 9 8 . 4 8 L.O. to Governor F u l l e r t i n e , 26 May 1708, A . 6 / 3 , fos. 9 0 d - 9 1 . 1 + 9 L.O. to Governor F u l l e r t i n e , 29 May 1710, A . 6 / 3 , fo. 101 . 5 0 Grand Journa l , A . 1 5 / 6 , fo. 1,. 5 1 Compiled from Grand Journals , A . 1 5 / 1 " A . 1 5 / 8 and Grand Ledgers, A . 1 4 / 2 - A . 1 4 / 9 . 5 2 L.O. to Governor F u l l e r t i n e , 1701 , A . 6 / 3 , fo. 4 7 . 5 3 L.O. to Governor F u l l e r t i n e , 3 June 1701 , A . 6 / 3 , fos. 52~52d . 5 4 L.O. to Governor 'Knight, 15 May 1715 , A . 6 / 4 , fo. 3-5 5 Grand Ledger, A . 1 4 / 8 , fos. 3 2 , 100; and Grand Journa l , A . 1 5 / 7 , fo. 150. 49 CHAPTER I I I TRADE GOODS MANAGEMENT The two greatest management and admin i s t rat ive tasks for the committee in London enta i l ed preparations for the spr ing dispatch of the company's ships and the fur sales a f te r the autumn return. The f o r -tunes of the company rested on the sound management of these two spheres of a c t i v i t y . As discussed in the last chapter, to prosper from the mer-chandising of furs a t tent ion had to be given to the timing of sa les , the volume of furs o f f e red , the volume of f u r s imported and the a c t i v i t i e s of competitors. S imi lar care had to be taken with the purchase of trade goods. A myriad of de ta i l s concerning the q u a l i t y , quant i ty , p r i c e , s e l e c t i o n , and supply of merchandise occupied much of the committee's time from January through May. In i t s ear ly years the company's methods for procuring trade goods and c o n t r o l l i n g inventory were often haphazard, experimental, and consequently co s t l y . Slowly, the company developed 50 systematic procedures for purchasing merchandise and c o n t r o l l i n g the s i ze of the trade inventory which by the second decade of the eighteenth cen-tury assured r e l a t i v e cost e f f i c i e n c y in th is part of i t s business. Coordinating trade good purchases in England with the consumer demands of the Canadian Sub-Arct ic Indian a continent and a cu l ture away posed both f i nanc i a l and organizat iona l d i f f i c u l t i e s . A shortage of trade goods in 1681 opened the door to undesired pr ivate trade by the company's employees and made manifest the need to guarantee adequate i suppl ies of trade goods. 1 But problems of i n su f f i c i ency could only too ea s i l y be remedied by creat ing problems of excess. Thus procedures had to be devised to assure adequate suppl ies and to avoid i n s u f f i c i e n t or excessive supp l ies . In add i t i on , the drop in fur pr ices in the 1690s compelled the company to r a t i o n a l i z e a l l aspects of i t s business. More e f f i c i e n t management of the trading inventory absorbed some of the f i nan -c i a l shock of the pr ice t r an s i t i on in the European fur market. Determining what to buy, not how much at what p r i ce , or from whom, but simply what was one of the f i r s t problems with which the committee had to grapple. The wisdom of hindsight and long p rac t i ce makes the issue seem simple: guns and re lated accessor ies , knives, hatchets, I k e t t l e s , b lankets, B raz i l tobacco, brandy, beads. These few stock items of the trade, however, represent a number of years of experience on the part of the company and habit on the part of the Indians; blankets, Braz i l tobacco, and brandy were l a ter addit ions to the inventory. Many items the company purchased only once, and when they had been traded or had rusted or rotted to a state of i r r e p a i r were not replaced. Lack of knowledge about what the Indians wanted occasioned wide l a t i tude for errors of judgement. Despite sagacious advice from experienced traders there pers i s ted throughout the seventeenth century a considerable degree of guesswork 51 in the se lec t ion of merchandise. In the 1690s the Company o f fered the Indians an array of c loth to r i va l that o f fered by an Engl ish shopkeeper: s i l k , serge, Scottish p l a i d s , shallone, canvas duck, perpetuanas, broad-c l o t h , d u f f e l , baize, cotton, f l a n n e l , and b lanket s . 3 By 1713 and the repossession of York Fort the company had learned that i t only paid to stock broadcloth, d u f f e l , b lankets, and small quant i t ie s of baize and f l a n n e l . 4 The forts housed a v i r tua l haberdashery in an attempt to coax the Indians out of the i r fur garments. Coats, s h i r t s , pants, hats, caps, socks, shoes, mittens, g loves, sashes, hankerchiefs, and women's sleeves in assorted s izes and v a r i t i e s were s tocked. 5 Hankerchiefs and women's sleeves disappeared from the s e l e c t i o n , coats and pants became trade g i f t s and the var iety of other items was reduced cons iderably. The com-mittee purchased c u r i o s i t i e s and t r inket s with which to tempt the Indians: arm, neck, and nose jewels, ivory and copper p ipes, t r a v e l l i n g spectac les , jews ' -harps, c a t - c a l l s , and w h i s t l e s . 6 But the Sub-Arct ic Indians desired only a l imi ted number of t r i n k e t s , c h i e f l y beads, feathers , look ing-g lasses, and r ings. The Indians moving from the Stone Age to the Iron Age rejected the company's o f f e r of metal arrowheads, which rusted on the shel f and were eventual ly d i s ca rded . 7 The cargo for 1670, the year of the company's founding, included beads, looking-g lasses, combs, guns and accessor ies , hatchets, k e t t l e s , knives, arrowheads, and d u f f e l . 8 V i g i l an t to the p o s s i b i l i t i e s of im-proving i t s trading pos i t ion the Hudson's Bay Company introduced goods which became stock items of i t s trade. Blankets slowly gained prominence. For the 1678 cargo the committee bought a tota l of s ix pieces of kersey b lankett ing from three d i f f e ren t people, suggesting that these were t r i a l purchases. 9 By 1682 the company was purchasing a much larger number of b lankets, many from O x f o r d s h i r e . 1 0 That same year the committee arranged 52 to have samples of French blankets sent to them. 1 1 They ar r i ved but what was made of them is unclear. White broadcloth was shipped to York Fort in 1689 because Wee understand by Capt. Ford that White Cloth is more desired by the Indians than Col loured white being not soe Subject to f r i gh t the i r Game as Redd or Blue, when they hunt, and i t being lesse Charge to us, then Dyed Wee therefore have Sent Three Cloths for a T r y a l i . 1 2 Unti l I685 the company only traded V i r g i n i a tobacco, but that year adopted the French prac t i ce of importing Braz i l tobacco from the Portuguese, the var ie ty preferred by the I nd ians . 1 3 Thereafter the company went to great lengths to obtain th is South American luxury. In the Fort Albany account books brandy is f i r s t l i s t e d as a trade good in I 6 9 8 , 1 4 and at York Fort in 1 7 1 8 . 1 5 One of the few items introduced a f te r the Treaty of Utrecht in 1713 was rundlets or kegs in one, two, and three gal lon s i z e s . 1 6 The range of t r i a l goods which passed through the company's ware-houses i l l u s t r a t e s a few important points about i t s ear ly h i s tory . Many of these goods were an investment which the company recovered s lowly, i f at a l l . No s i l k , arrowheads, black hats, or waistcoats were traded at York Fort from July 1690 to July 1691. Only 1 of 322 women's s leeves, 5 of 197 sashes, and 31 of 399 jewels a t t racted any beaver. The fo l lowing years the pattern was roughly the same. Nor were these goods popular as trade g i f t s . 1 7 The experimentation with many goods a lso indicates how long i t took the company (nearly four decades) to determine the range of goods i t paid to stock. H is tor ians of the fur trade have long debated who had superior goods, the French or the Eng l i sh , and what advantage i t might have given e i ther s i d e . 1 8 The question has leg i t imacy, yet a de ta i l ed analys i s of the pro-curement of trade goods by the Hudson's Bay Company shows that qua l i t y was a factor over which the ind iv idua l actors could exert considerable in f luence. 53 The company expended much time and money t ry ing to assure q u a l i t y , taking specia l pains to c e r t i f y the workmanship of guns. Before p lac ing an order the committee often had gunsmiths submit samples of the i r work , 1 9 and gunsmiths had to stamp the i r wares with a trademark so that defect ive guns could be r e t u r n e d . 2 0 Sample guns were kept in the London warehouse to be lent as pattern guns . 2 1 And before being shipped gun surveyors inspected the c a r g o . 2 2 Less e laborate, though s im i l a r procedures were followed to v e r i f y the qua l i t y of other goods, e spec i a l l y ironwares, which l i ke guns had to be stamped with the i r maker t rademark. 2 3 The records of the Hudson's Bay Company indicate that i t overcame many of i t s ear ly problems with qua l i t y . The ear ly minutes and journals frequent ly mention the return of defect ive merchandise. ; Fortyr.three defect ive guns and other unsaleable goods were returned in 1679 - 2 ^ The 1681 cargo from the bay contained another 122 guns . 2 5 The minutes of the committee do not descr ibe the nature of the defect s , whether t ru ly defec-t i ve or in need of maintenance. The company eventual ly sent a gunsmith to the bay to serv ice i t s own guns and those of the Indians, a move which surely helped to stem the flow of guns from Hudson's Bay to London. Routine problems with qua l i t y remained. For many years the company had purchased su i tab le hatchets then in 1718 hatchets with slender eyes were de l i ve red , much to the d i s s a t i s f a c t i o n of trader and Indian a l i k e . 2 6 In the previous year cannon powder was shipped instead of gunpowder. 2 7 These types of problems can never be wholly e l iminated from the commercial en te rpr i se , ju s t minimized, which the company seems to have accomplished ear ly in the eighteenth century. There was no one cause of poor q u a l i t y . As the committee knew well much of i t could be traced to ind iv idua l craftsmanship and consequently i t s requirement that gunsmiths and ironmongers stamp the i r wares. In 5k 1695 James Knight complained of poor qua l i t y guns and could determine that those from the smiths Lawes and Austin were the offending o n e s . 2 8 In other instances poor qua l i t y resulted from attempts to reduce costs. Knight reported that the guns he received in 1716 were not of the same qua l i t y as those he had taken with him in 1714. The committee acknow-ledged his observation with the assurance that i t was paying smiths-three s h i l l i n g s per gun more to guarantee the necessary q u a l i t y . 2 9 A look at the pr ices the company paid for guns shows that in 1713 and 1714 i t paid twenty-one s h i l l i n g s , in 1715 and 1716 twenty s h i l l i n g s , and in 1717 twenty-three s h i l l i n g s , var ia t ions undoubtably re su l t ing from pr ice and qua l i t y agreements the company had with i t s gunsmiths. Qual i ty depended p a r t i a l l y on what the company was w i l l i n g to p a y . 3 0 Some of the continual complaining about the qua l i t y of metal goods must be a t t r ibu ted to the lack of technology to produce metals which would perform well in extreme co ld . Jens Munk, the Danish explorer who camped at Church i l l the winter of 1 6 1 9 - 2 0 , noted in his journal the hard-ships which the extreme cold caused him and his men. When I had the body of Hans Brook buried . . . I ordered that two fa lconets should be f i r e d in his honour . . . But the very sharp f ros t had made the iron so b r i t t l e that the trunnions broke o f f both weapons when they were discharged, with the resu l t that the man who f i r e d them nearly lost his l e g s . 3 1 On the night of the twenty-eighth [January] the cold was so severe that i t burst a t in ke t t l e which the boy had l e f t in the cabin with a l i t t l e water in i t . As t in cannot stand the t e r r i b l e f ros t s of such icy seas I don't know what kind of vessels should be used to preserve precious waters in that r e g i o n . 3 2 Even taking into account var ia t ions in the qua l i t y of i ron, many of the problems with metals or i g inated with the state of metal technology rather than with poor workmanship or the level of i n d u s t r i a l i z a t i o n in any one European country. Thus, complaints about poor qua l i t y metal goods need 55 to be c a r e f u l l y judged to determine from whence the problem came, whether from craftmanship over which the company had some control or from tech-nolog ica l and environmental condit ions over which i t had no c o n t r o l . The factors which inf luence qua l i t y are numerous, complex, and cannot be reduced to a s ing le issue of the national character of production. The Hudson's Bay Company f u l l y rea l i zed that i t s Indian customers would turn to i t s French competitors i f d i s s a t i s f i e d with q u a l i t y . As w e l l , the company could i l l - a f f o r d to have sub-standard merchandise wasting in i t s warehouses. Some French goods were super ior to Engl ish goods. The company could not purchase Engl ish f l i n t s of the equivalent qua l i t y of French f l i n t s , and so purchased French f l i n t s when i t c o u l d . 3 3 French gunpowder was considered super ior to E n g l i s h . 3 4 But i t is not log ica l to conclude that the success of any one actor in the fur trade rested p r i -mari ly on the qua l i ty of trade goods. It was a business problem which demanded continual a t ten t ion . By the ear ly eighteenth century the Hudson's Bay Company had learned to minimize poor qua l i t y and heed the signs of changed qua l i t y . These two management pract ices contr ibuted more to the company's commercial success than did the umbrella of Engl ish i ndust r i a 1 i sm. Cont ro l l i ng the volume of inventory was probably the most important aspect of trade goods management. Inadequate inventories would d i s -courage the Indians from coming to trade, excessive inventor ies were co s t l y . Merchants in the seventeenth and eighteenth centur ie s , l i ke merchants today, wanted to recover the i r investment in inventory as quick-ly as poss ib le , and t r i e d to avoid ty ing up working cap i ta l in dead stock. Yet, as the Hudson's Bay Company learned, long-distance trade necess i tated a two-year supply of goods as insurance against the miscarr iage of a cargo and, by consequence, larger warehouse capacity for storage. The 56 i n v e s t m e n t f o r the i n v e n t o r y - - m e r c h a n d i s e and warehouses • - - was g r e a t e r in l o n g - d i s t a n c e t r a d e as a p e r c e n t a g e o f the annual b u s i n e s s then in many o t h e r a r e a s o f commerce, a c o s t o f wh ich s h a r e h o l d e r s had to be w i l l i n g to b e a r . L a r g e i n v e n t o r i e s s t o c k e d o v e r l o n g e r p e r i o d s o f t ime i n c r e a s e d the chances f o r damage. The Committee in London o c c a s i o n a l l y saw f i t to remind the men a t the bay to take p r e c a u t i o n s to p r e v e n t the r u s t i n g o f i r o n g o o d s 3 5 and to t u r n the b a r r e l s o f g u n p o w d e r . 3 6 And the s t o c k had to be r o t a t e d , o l d b e i n g t r a d e d b e f o r e new. T i m e - l a g s c o m p l i c a t e d the management o f the i n v e n t o r y f o r the Committee in London had to p l a n t w e l v e to e i g h t e e n months ahead o f the o p e r a t i o n s a t the b a y . It g r a d u a l l y came to r e l y on annual c o r r e s p o n -d e n c e , i n d e n t s f rom the t r a d e r s , and the a c c o u n t books f rom the f o r t s to c o o r d i n a t e p u r c h a s e s in E n g l a n d w i t h the t r a d i n g needs in Nor th A m e r i c a . It i s d o u b t f u l whether the company o r i g i n a 1 1 y r e a l i z e d the n e c e s s i t y f o r t h i s c a r e f u l r e c o r d - k e e p i n g and a w e l l s t r u c t u r e d a d m i n i s t r a t i v e s y s t e m . The e a r l y m inu tes c o n t a i n no ment ion o f the a n a l y s i s o f the f o r t r e c o r d s as do l a t e r m i n u t e s . In the l e t t e r s outwarid f rom the e a r l y 1680s the commit tee s t r e s s e d the improvement o f b o o k k e e p i n g a t a v e r y b a s i c l e v e l . 3 7 In London v e r y r u d i m e n t a r y a c c o u n t i n g methods were f i r s t used and i t i s u n l i k e l y t h a t more e l a b o r a t e a c c o u n t i n g would have been employed a t the b a y . Only a t the end o f the 1670s w i t h the t r a n s i t i o n in s h a r e h o l d e r s f rom men o f the Cour t to men o f the C i t y was a s i m p l e form o f d o u b l e -e n t r y a c c o u n t i n g i n t r o d u c e d . 3 8 C a r e f u l a c c o u n t i n g o f the t r a d e in Nor th A m e r i c a p r o b a b l y began at the same t i m e , and w i t h i t g r e a t e r a t t e m p t s to s y n c h r o n i z e the two a renas o f the company 's b u s i n e s s . D i s t a n c e d f rom the t r a d e the commit tee depended g r e a t l y on the a d v i c e o f t r a d e r s when o r d e r i n g t r a d e g o o d s , e s p e c i a l l y in the e a r l y y e a r s . T r a d e r s r e t u r n e d from the bay o f t e n a t t e n d e d commit tee meet ings and the '57 ear ly minutes and annual l e t te r s frequent ly mention the i r ass i s tance "Mr. Bai ley gives his opinion accordeing to an order formerly made that for an add i t ionna l l cargo for the year ensueing there may bee Suplyed . . . . 3 9 "We have sent you by Mr. Knights Direct ions 100 party Cul lerd coates . . . . " 4 0 Wee have taken the advise of Mr. Knight and Mr. Bridgar, whome wee have found very ingenious and knowing men in the business of our t r a d e . 4 1 "Mr. Piere Radison haveing viewed over the Merchantdeis cargo and does judge that 500 Ice Ch i s se l l s be added m o r e . " 4 2 Traders at the bay a lso requested orders for goods. As the commit-tee began to have trading records to analyse i t a lso s tarted to s c r u t i n i z e indents from the bay. Finding Henry Sergeant's 1683 order out of pro-port ion to the volume of trade he transacted, the committee elaborated i t s super-abundance in the fo l lowing spr ing ' s annual l e t t e r . The Invoice of Goods you say that is wanting in the Countrey we Judge is very Extravagant for your Advicer has done i t without cons iderat ion as in some things we w i l l touch upon to make you sens ib le of the rest . you wold have 350 short guns of 3 i foote for HI 100 di t to k & k\ Mr. Knight he writs for 700 guns of a l l seizes 1150 in a l l Now consider what quantety you s e l l in a yeare at RR 13 at HI 26 at AR 32k 363 in a l l And by your Accte. there are 962 remaineing in the Countrey (though our bookes mentions 991) yet take your Accte. thereof there are enough to last you above 2 yeares and a halfes Trade & now we are upon th is subject we wold have you remove our Merchantdizes S l ikewise Proviss ions which does exceed two yeares supply from one Factorey to the other where is most need as at RR 118 guns & s e l l but '13 in a yeare at HI k~\k & s e l l but 26 in a yeare at both which places they Ley & rust to our Detriment & remove them to Albany River where our Chiefe Trad is only leaveing 2 yeares suppl ie of such guns as doe most u s i a l l y s e l l and so for shott you have remaineing 399^5 l i . by your accte. (though ours' mention k50k7 l i . ) and you sel1 at 58 AR 8250 1 i . HI 485 RR 1000 9735 1 i• i n a yea re which remainder of shott is s u f f i c i e n t for 4 yeares Trade by your owne computation and yet you write for HI 19600 l i . & s e l l but 485 l i . in a yea re & there you have remaineing l i . 13675 Mr. Knight writes for 21500 l i . and he s e l l s but 8250 l i . and there is remaineing at his Factorey 26386 l i . by both which examples we think may convince you of such extravigant Demands and so many other sortes of goods our Rules have beene S sha l l be to supply you with a l l sortes of Merchantdizes for 2 yeares yet we have in some goods exceeded those Rules th is yeare as in guns shott & powder e t c . 4 3 Much of the confusion resulted from the f a i l u r e to account p rec i se l y for the disposal of a l l the company's goods, not jus t those traded but also goods expended for other purposes. A s izeab le part of the stock of guns, shot, and powder the men spent on hunting. The trading stock pro-vided payment to the Indians for miscellaneous se rv i ce s , and g i f t s to the Indians a l so reduced the inventory. Some goods, such as shot, came in a number of v a r i e t i e s , and had to be inventoried separate ly, which did not always happen. " [L j i kewi se acquaint the Bookkeeper that for the future he mention in the Book of Accts the p a r t i c u l a r Number 6 Sorts of Guns traded, as l ikewise p a r t i c u l a r l y by the Sorts of S h o t t . " 4 4 Kett les were sold by the pound, but only slowly did the company r e a l i z e that volume not weight determined the Indians' choice. In 1730 the committee informed the traders that " i n your Indent for Kett les . . . send Us the quantity You would have each Kett le contain and not the Weight as f o r m e r l y . " 4 5 Defective goods had to be properly recorded as untradeable and returned to London. 4 6 And occas iona l l y the committee had to educate c lerks on the id iosyncras ies of Engl ish weights and measures, for instance, that a hundredweight of shot was not 100 pounds as a c lerk at York had recorded i t , but 112 pounds . 4 7 59 One s h o u l d not d i s c o u n t l i g h t l y t h e s e a d m i n i s t r a t i v e e p i s o d e s . Viewed i n d i v i d u a l l y one i s a p r o b l e m o f poor q u a l i t y , a n o t h e r a p r o b l e m o f o r d e r i n g , a n o t h e r a p rob lem o f b o o k k e e p i n g . Viewed c o l l e c t i v e l y each r e p r e s e n t s a p rob lem r e l a t e d to the a c q u i s i t i o n and d i s p o s i t i o n o f the t r a d e i n v e n t o r y . The d i s t a n c e s e p a r a t i n g the s o u r c e o f s u p p l y f rom the s o u r c e o f demand c r e a t e d d i s e q u i l i b r i u m wh ich the company l e a r n e d to c o r r e c t th rough b o o k k e e p i n g , i n d e n t s , and annual c o r r e s p o n d e n c e . The f a l l in the p r i c e o f beaver in the 1690s c o m p e l l e d the company to r e f i n e f u r t h e r t h e s e a d m i n i s t r a t i v e p r a c t i c e s which i t had i n t r o d u c e d the p r e -v i o u s decade, so as to weather the t r a n s i t i o n f rom t r a d i n g the s c a r c e l u x u r y o f f u r to t r a d i n g the more abundant l u x u r y o f f u r . P r i c e s f o r t r a d e g o o d s , compared t o the p r i c e o f b e a v e r , were r e l a -t i v e l y s t a b l e d u r i n g the f i r s t h a l f - c e n t u r y o f the company 's e x i s t e n c e . Wi th modest p u r c h a s e s the company c o u l d do l i t t l e to reduce the p r i c e o f t r a d e m e r c h a n d i s e , e x c e p t to p u r c h a s e d i r e c t l y f rom m a n u f a c t u r e r s w h i c h i t had done f rom e a r l y o n , o r to lower q u a l i t y a t the r i s k o f o f f e n d i n g the I n d i a n s . The t a b l e below l i s t s the p r i c e s f o r f o u r t e e n d i f f e r e n t i tems from 1680-1728. P r i c e s f o r metal goods changed l i t t l e . The p r i c e o f powder r o s e s h a r p l y a t the t u r n o f the c e n t u r y and then d e c l i n e d a g a i n . P r i c e s f o r the two items wh ich were i m p o r t e d , B r a z i l t o b a c c o and f l i n t s , f l u c t u a t e d more than the p r i c e s f o r d o m e s t i c g o o d s . The s l i g h t r i s e in the p r i c e s o f a l l t h r e e c l o t h i tems - b l a n k e t s , b r o a d c l o t h , and d u f f e l -a f t e r 1715 and then t h e i r marked d e c l i n e at the end o f the 1720s s u g g e s t the p o s s i b l e impact o f i n d u s t r i a l i z a t i o n in t h i s s e c t o r o f the economy and the p o s i t i v e e f f e c t i t had on the company 's f o r t u n e s . The s p o t t y p r i c e da ta f o r the e a r l y y e a r s c o n t r a s t s s h a r p l y w i t h the d a t a f o r the y e a r s a f t e r 1713- T h i s i s p a r t l y due to the d i f f i c u l t y o f l o c a t i n g p r i c e s f o r some y e a r s , p a r t l y a r e s u l t o f changes in r e c o r d 60 T a b l e V T r a d e Good P r i c e s in S t e r l i n g ^ G u n s / K e t t l e s / H a t c h e t s , L g . R o a c h Powder / S h o t / V e r m i l l i o n / p c . l b . m e d / p c . K n i f e / d z . cwt . cwt . l b . 680 1 : 3 * 2 14:0 681 1:3 682 22 .6 1 :4 10 2 2 2 10 :0 1 2 : 1 0 - 1 4 : 1 0 683 684 - 12 685 24 17 : 0 , : 0 * 1:4 12 2 8 2 6 0 12 :6 -14 :6 686 687 24 0 - 12 2 8 2 9 0 1 2 : 0 - 1 4 : 0 688 689 24 0 1 :4 690 24 0 1 : 3 i 3 5 0 691 25 0 - 12 692 693 694 1 :4 1 0 : 6 - 1 2 : 6 695 25 0 1 0 : 6 - 1 2 : 6 696 697 698 26 0 1:5 2 7 0 699 1 :5 2 8 0 700 1:5 9 0 701 24 0 3 15 :0 702 24 0 1 : 4 i 4 10 :0 703 24 0 704 705 24 0 1 : 3 i 10 4 1 0 6 6 706 24 0 4 0 0 6 6 707 708 1 : 4 i 3 10 :0 7 3 > 709 710 24 0 j : 4 i 3 1 5 : 0 8 0 711 24 0 1:3 3 5 0 7 6 712 23 0 1 :4 * 3 5 0 713 21 0 1:44 11 2 6 10 :0 7 6 714 21 0 1:4 10 2 4 3 5 0 11 :5 7 6 715 20 0 1 :5 1 0 i 2 6 3 0 0 12 :0 6 4 716 20 0 1:6 10± 2 4 3 5 0 9 : 6 - 1 0 : 6 7 0 717 23 0 1:6 10 2 1 3 10 :0 1 0 : 6 - 1 3 : 6 7 0 718 23 0 1:5 3% 2 4 3 10 :0 1 2 : 3 i 7 8 719 23 0 1 : 5 i i o i • 2 4 3 10 :0 12:11 8 0 720 22 0 1:6 10 2 4 3 5 0 1 2 : 5 i 8 0 721 22 0 1:6 10 2 4 3 5 0 1 2 : 8 i 8 0 722 22 0 1:6 11 2 4 3 5 0 1 2 : 0 - 1 5 : 0 8 0 723 22 0 1 : 5 i 11 2 4 3 5 0 12 :6 -14 :6 7 6 724 22 0 1:5 1 1 i 2 4 3 5 0 1 5 : 6 - 1 7 : 6 7 0 725 22 0 1:5 11'i 2 4 3 5 0 1 5 : 0 - 1 7 : 0 7 0 726 22 0 1:5 11± 2 4 3 15 :0 1 5 : 9 - 1 9 : 6 7 0 727 22 0 1:5 11± 2 4 4 15 :0 1 5 : 1 1 i 7 0 728 22 0 1:5 1 1 i 2 4 2 18 :0 17 :± 7 0 61 F l i n t s / Braz 'Tob / Twine/ Combs/ B lankets / Broadc lo th / D u f f e l / 1000 lb . sk. pc. pc. yd. yd. 1680 5 0 3 10 1681 - 6 i 3 11 1682 1 2 - 6 1 0 : 9 , 8 : 9 3 3 i 1683 1684 1685 3 3 i - 6 2 11 1686 - 6 i 3 : 2 - • 3 : 9 1687 2 : 0 0 - 6 i 1688 1689 1690 - 6 1691 1692 1693 1694 7 :6 3 4 1695 14 0 - 7 1696 8 : 6 1697 8 :6 1698 1699 1700 1 3 1701 1 3 1 2 6 : 6 1702 1 2 6 : 9 3 2 i 2 6 1703 2 7 i 1704 1705 - 11 1 2 - 63/ 4 6 : 4 3 4 2 6 1706 3 1 2 6 1707 1708 2 1 3 1 i 1709 1710 - 7 1711 1 3 - 7 i 3 0 1712 - 9 2 4 i 1713 10 0 - 9 1 2 - 7 6 : l i 3 9+ 2 6 1714 7 6 - i i i 1 2 - 6 i 6 : 4 3 8 i+ 2 8 1715 11 0 1 3 1 3 - 6 i 6 : 4 3 - 2 8 1716 - 104 1 2 - 6 i 6 : 4 3 5 i + 2 8 1717 - 104 1 2 - 64 6 :4 3 4 2 8 1718 10 0 1 2 - 64 6 : 6 3 4 2 9 1719 10 0 1 3 i 6 : 6 3 - 2 9 1720 10 0 1 4 1 2 - 64 6 :6 3 2 i 2 9 1721 10 0 1 3 1 2 - 64 6 : 6 3 2 2 9 1722 10 0 1 3 1 2 - 64 6 : 4 3 3 2 8 1723 1 3 - 64 6 : 0 2 10 2 6 1724 10 0 1 2 - 64 6 : 0 2 9 1725 10 0 1 3 1 2 - 64 5 : 8 2 7 i 2 4 1726 10 0 1 0 1 2 - 64 5 : 6 2 4 i 1727 1 0 - 5 5 : 2 2 3 1 9 1728 1 2 1 2 - 64 4 : 2 2 5 1 10 pounds:shi11i ngs:pence "-•Dutch Guns #cwt.=hundredweight=112 lbs . +with charges 62 keeping. But mostly i t denotes i r r e g u l a r i t i e s in purchasing. One year the committee would over-stock an item and then not purchase i t for two or three years. A f ter 1713 the company purchased most goods every year having learned to turn over th is port ion of i t s working cap i ta l on an annual bas is . This deve1opment comp1imented the s t ab i 1 i z a t i on of the beaver inventory in London. Both these factors provide much of the ex-planat ion for why the company s tarted d i s t r i b u t i n g annual dividends in 1718. The capab i l i t y of managing the trade goods inventory economically necess i tated an admin i s t rat ive system comprised of bookkeeping and cor-respondence both in London and North America. The most pedestr ian de ta i l s of q u a l i t y , quant i ty , and se lec t ion had to be recorded fo r , th is system served as the only form of communication poss ib le . The Committee in London did not o r i g i n a l l y recognize the need for such a system and only at the end of i t s f i r s t decade did i t begin to emerge. The drop in the pr i ce of beaver compelled i t s refinement, h o s t i l i t i e s in Europe and at Hudson's Bay prolonged i t s f u l l emergence unt i l 1713 and the Treaty of Utrecht. By 1718 the Hudson's Bay Company shareholders were p r o f i t t i n g from the carefu l a t tent ion the committee had given to the economical management of i t s operat ion. 63 Notes 1 See chapter 2 , pp. 3 0 - 3 1 . 2 Minutes, A . 1 / 8 , f os . 4 d , 6 d , 8 d , 17d, 19d, 23 , 2 5 d , 2 8 . 3 Fort Account Books, B . 2 3 9 / d / 3 , fos . I O d - 1 1 ; B . 2 3 9 / d / 4 , fos. 9 d -10 ; and B . 3 / d / 2 , fos. 2 9 " 6 2 . k Compare the 1693-94 York Fort Account Book, B . 2 3 9 / d / 5 , fos. 18?-) I8d with a post-Treaty of Utrecht account book such as B . 2 3 9 / d / 1 1 , fos . 2 d - 3 . 5 B . 2 3 9 / d / 1 , fos . 5 3 " 5 3 d ; B . 2 3 9 / d / 4 , fo. 2 1 d ; and B . 3 / d / 2 , fos. 2 9 - 6 2 . 5 B . 2 3 9 / d / 3 , fos. 1 5 d - 3 9 , B . 3 / d / 7 , fo. 16. 7 B . 3 / d / 2 , fos. 2 9 - 6 2 ; and B . 3 / d / 7 , fo. 16. 8 E. E. Rich ed. and i n t r o . , Minutes of the Hudson's Bay Company, 1 6 7 1 - 1 6 7 4 , the Publ icat ions of the Hudson's Bay Record Soc iety , Vo l . 5 , (London: Hudson's Bay Record Soc iety , 1 9 4 2 ) , p. xxx i . 9 Grand Journa l , A . 1 5 / 1 , fos . 8 - 8 d , 10. 1 0 Minutes, 3 March 1 6 8 1 / 2 , in Minutes of the Hudson's Bay Company, 1679~1684, The Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 8 , ed. E. E. Rich (London: Hudson's Bay Record Soc iety, 1 9 4 5 ) , p. 189• 1 1 Minutes, 25 January 1 6 8 1 / 2 , i b i d . , p. 177 ; and A . 1 5 / 2 , fo. 4 l d . 1 2 Letter Outward (hereafter L.O.) to Geyer, 6 June 1689 , in Letters  Outward, 1688 -1696 , ed. E. E. Rich, Publ icat ions of the Hudson's Bay Record Soc iety , Vo l . 2 0 , (London: Hudson's Bay Record Soc iety, 1 9 5 7 ) , p. 6 1 . 1 3 L.O. to Sergeant, 22 May 1685 , in Letters Outward, Vol . 11, p. 142. 1 4 Fort Albany Account Book, 1 6 9 8 - 9 9 , B . 3 / 9 , fos. 4 l d - 4 2 . 1 5 Compare the York Fort Account Book, 1717~18 , B . 2 3 9 / d / 9 , fo. 13 with the Account Book, 1 7 1 8 - 1 9 , B . 2 3 9 / d / 1 0 , fo. 6 d . 1 6 Albany, 1 7 1 8 - 1 9 , B . 3 / d / 2 7 , fo. 7 and York, 1 7 2 1 - 2 2 , B . 2 3 9 / d / 1 2 , fo. 3 2 d . 1 7 B . 2 3 9 / d / 3 , fos. 1.5d-37. 1 8 See W. J . Ecc le s , "A Belated Review of Harold Adams Innis, The Fur Trade in Canada," Canadian H i s t o r i c a l Review LX, No. 4 ( 1 9 7 9 ) ; PP- 429" 434 for an overview of a ha l f -century of controversy over this issue. 1 9 Minutes, 21 January 1679 / 80 and 14 November 1681 in Minutes, 1679"  1684, pp. 2 5 , 147-2 0 Minutes, 2 February 1679 /80 in i b i d . , p. 31-64 172. 2 1 Minutes, 16 November 1683 , in i b i d . , p. 155-2 2 Minutes, 18 May 1681 in i b i d . , p. 123-2 3 Minutes, 2 February 1679/80; 7 December 1683 , in i b i d . , pp. 3 2 , 2 4 Minutes, 14 January 1 6 7 9 / 8 0 , 2 February 1 6 7 9 / 8 0 , in i b i d . , pp. 2 2 , 3 1 . 2 5 Minutes, 20 January 1681 /2 in i b i d . , pp. 173-2 6 L.O. to Mackleish, 30 May 1720 , A . 6 / 4 , fo. 4 l d . 2 7 L.O. to Mackleish, 3 May 1719, A . 6 / 4 , fo. 33d . 2 8 L.O. to Knight, 30 May 1696 in Letters Outward, Vo. 2 0 , p. 270 2 9 L.O. to Knight, 31 May 1717 , A . 6 / 4 , fo. l i d . 3 0 A . 2 4 / 2 , fos. 3 2 d - 3 3 , 3 7 d - 3 8 , 6 0 - 6 0 d , 6 7 ~ 6 7 d , 8 1 . 3 1 Jens Munk, The Journal of Jens Munk, ed. and in t ro . W. A. Kenyon, (Toronto: Royal Ontario Museum, 1 9 8 0 ) , p. 2 8 . 3 2 Ib id. , p. 2 8 . 3 3 L.O. to Beale, 10 June 1713 , A . 6 / 3 , fo. 120d . 3 4 L.O. to F u l l e r t i n e , 3 June 1705 , A . 6 / 3 , fo. 70 . 3 5 L.O. to Sergeant, 16 May 1684, Letters Outward, Vo l . 1 1 , p. 125-3 6 L.O. to Geyer, 6 June 1689 , Letters Outward, Vo l . 2 0 , p. 6 1 . 3 7 L.O. to Nixon, 15 May 1682 and L.O. to Sergeant, 16 May 1684 in Letters Outward, Vo l . 1 1 , pp. 4 5 , 48, 120 , 1 2 2 - 4 . 3 8 Compare the Grand Ledgers 1667-1675 and 1676 -1682 , A . 14 /1 and A .14 / 3 . 3 9 Minutes, 16 January 1 6 7 1 / 2 , Minutes, 1 6 7 1 - 1 6 7 4 , Vol . 5 , P- 19-4 0 L.O. to Sergeant, 16 May 1684, Letters Outward, Vo l . 1 1 , p. 126. 4 1 L.O. to Nixon, 15 May 1682 , i b i d . , p. 38 . 4 2 Minutes, 1 Apr i l 1685 , A . 1 / 8 , fo. 23-4 3 L.O. to Sergeant, 16 May 1684, Letters Outward, Vo l . 11 , p. 122-124. 4 4 L.O. to Mackleish, 30 May 1 7 2 1 , A . 6 / 4 , fo. 5 2 d . 4 5 L.O. to Mackleish, 30 May 1719 , A . 6 / 5 , fo . 3 6 d . 65 4 6 L.O. to Richard Stanton, 28 May 1724, A.6/4, fo. 86d. 4 7 L.O. to Mackleish, 28 May 1723, A.6/4, fo. 72. 4 8 Grand Journals, A.15 /1-A.15 /8 ; Grand Ledgers, A.14/2-A.14/9; Shipment Records, A.24/2-A.24/3-66 CHAPTER IV THE STANDARD OF TRADE, PROBLEMS OF COMMERCE, AND ECONOMIC BEHAVIOR IN THE EARLY MODERN PERIOD. A FEW THOUGHTS. The Hudson's Bay Company has bequeathed to pos ter i t y one of the more enigmatic of pr ice schedules extant, the "Standard of Trade" used by the company's traders in North America, and which expressed the pr ice of European trade goods as a quantity of beaver p e l t s . For instance, in 1715 at Fort Albany a gun cost ten p e l t s , a yard of broadcloth two p e l t s , and a pound of Braz i l tobacco one p e l t . 1 Coming into existence with in ten years of the Company's founding in 1670 and remaining in use for over two centur ies , the Standard e s s e n t i a l l y made the beaver pelt the North American currency of the Hudson's Bay Company. The beaver pelt assumed the three functions normally ascr ibed to money: a medium of exchange, a unit of account, and a store of v a l u e . 2 Thus, the Standard is one of the best surv iv ing examples of i n s t i t u t i o n a l i z e d barter , t h e o r e t i c a l l y e l im ina t ing exchange v a r i a b i l i t y , and viewed broadly, an example of the prolonged use of a non-meta l l ic currency. 67 What economic h i s tor ians of the fur trade have found p a r t i c u l a r l y puzz l ing is that pr ices on the Standard remained v i r t u a l l y s t a t i c for nearly two centur ies and were revised only occas iona l l y by the Committee in London which managed the company. The pers istence of s t a t i c pr ices in a period of economic growth and in a period well-known for i t s d i s -courses on the re la t ionsh ip between pr ices and the rhythm of the economy has l e f t scholars groping for an explanation for th is seeming economic paradox. However, the major hiriderance impeding the inquiry is the pen-chant for expla in ing i t in terms of economic theory rather than in h i s -t o r i c a l terms. The intent of the fo l lowing analys i s is to place the Standard in h i s t o r i c a l pe r spec t i ve . 3 The s t a t i c pr ices on the Standard have become a centra l feature of a d iscuss ion on the economic motivation and behavior of the North American Indian in the fur trade. One l i ne of reasoning suggests that the s t a t i c pr ices of the Standard transgress fundamentally the received wisdom of what const i tutes rat iona l economic behavior for Europeans. The log ic of this argument is that any economically rat iona l European merchant would want pr ices to be responsive to supply and demand. If the pr ices the Hudson's Bay Company paid for furs did not change i t was because the company faced an obstac le so insurmountable that they were obl iged to adopt behavior that would otherwise be deemed economically i r r a t i o n a l . That insurmountable obstacle was Indian economic behav ior . 4 Indians, i t is suggested, did not have an economic system in which market forces worked; supply and demand did not inf luence Indian economic decis ion-making. The exchange of goods had a soc ia l and p o l i t i c a l func-t ion in Indian society which superseded cons iderat ions of market fo rces , and the fur trade became a way for Indians to forge p o l i t i c a l and m i l i t a r y a l l i a n c e s with Europeans and with other Indian groups. The acqu i s i t i on 6 8 of guns from European traders f igured large ly in that scenario. Secon-d a r i l y trade was a way for Indians to acquire the other European manufactures they might have des i red; blankets, k e t t l e s , knives, hatchets, and other assorted goods, a trade for which pr i ce did not play a deter-mining r o l e . 5 The challenge to th is theory of Indian economic behavior is based on a quant i ta t i ve analys i s of var ia t ions in the volume of furs traded as a ra t i o of trade goods. Findings from this study showed that when competition between French and Engl ish traders increased so did the pr ice the Indians received for the i r fur s . This was poss ib le within the con-s t r a in t s of the r i g i d Standard for the company's traders would i n f l a t e pr ices above the Standard, bu i ld ing back into the trade some f l e x i b i l i t y for h igg l ing and haggling. The impl icat ions for Indian behavior is that they did respond to competit ive pr ices in a manner associated with the marketplace. Pr ices in the fur trade were not as s t a t i c as the Standard might lead one to be l ieve ; the Standard became, rather, the maximum pr i ce the Company would pay for furs . While th is ana lys i s e f f e c t i v e l y cautions against f a c i l e l y a t t r i b u t i n g the s t a t i c i t y of the Standard to Indian economic behavior, i t does not answer the question of why i t remained unchanged for so l ong . 6 It becomes h e l p f u l , with due caut ion, to pose a simple counterfactua1 scenario in order to i dent i f y some problems of ana lys i s and point towards new avenues of inves t i ga t ion . Suppose for a moment that pr ices on the Standard had f luc tuated. How then would they have f luctuated? Up? Down? In response to changes in the pr i ce of furs in London?' In response to changes in the pr ice of trade goods in London? In response to both? Where would a l l of these decis ions have been made? In London? A t ' the Bay? And by whom? The Committee in London? The traders at the Bay? And how would a l l of this information on pr ices have been 69 coordinated and disseminated? By slow boat? How else? It was the seven-teenth and eighteenth centur ies a f te r a l l . One of the points which th is l ine of quest ioning i l l u s t r a t e s is the magnitude of the l o g i s t i c a l problems inherent to long-distance trade during th is per iod, and which rendered c lea r - s i gh ted decision-making exceedingly d i f f i c u l t , i f not at! times v i r t u a l l y impossible. Responding r a t i o n a l l y to supply and demand f luc tuat ions in the market without f u l l and accurate information plagued merchants in a l l sectors of the pre-indus t r i a l economy, but none so acutely as those deal ing in long-distance t r a d e . 7 L iv ing in an age in which a f lood of information threatens to consume us we are constant ly aware of i t s impact in the way we order our l i ves p o l i t i c a l l y , s o c i a l l y , c u l t u r a l l y , and economical ly. Cur ious ly , however, we often overlook the way in which a lack of information forced a d i f f e r e n t order ing of a f f a i r s in bygone times. It is one of the missing pieces to understanding the Standard of Trade not jus t as an economic phenomenon but a lso as a h i s t o r i c a l phenomenon. The Standard of Trade, a pr i ce schedule using the beaver pelt as the unit of value, evokes more p r im i t i ve times, an anachronism l inger ing on in the i n d u s t r i a l i z i n g nineteenth-century world because the fur trade remained on the f r inge of that economic order. This a t a v i s t i c method of t ransact ing business has been construed to be an outcome of the meeting of the Indian and the European during England's commercial expansion in the seventeenth century. Trading pract ices coalesced from an amalgamation of two d i s s i m i l a r cu l tu re s , and the Standard represented a European accom-modation to the Indian. 8 This construct ion i s , however, a h i s t o r i c a l , the shadow of the present darkening the past, for the Standard has i t s roots as much in the economic world of seventeenth-century Europe as in the economic world of seventeenth-century North American Indian. This is not 70 to suggest that the two economic cu l tures are readi ly comparable, had the same needs, moved to the same r.hythms. It is to say that for the seven-teenth-century European the Standard of Trade was not a t a v i s t i c , but was rather a c reat i ve response to s t ructura l problems i n t r i n s i c to the economy of the time. To demonstrate that the Standard of Trade has a h i s t o r i c a l dimension as well as an economic dimension derived from a European context i t is necessary to look beyond the North American fur trade to the larger European commercial world. From this vantage point i t is poss ib le to appreciate better two major c h a r a c t e r i s t i c s of the Standard: one, the way i t formalized barter trade and two, that i t f ixed the pr ices of that trade. Both pract ices have precedents in European commerce predating the Hudson's Bay Company. Barter pers i s ted as a common and accepted method of trade well into the eighteenth century both in Europe and the Americas. In internat iona l trade merchants had long used barter to grease the wheels of commerce in the absence of hard cash and in a lack of f a i t h in paper money and b i l l s of exchange. Glasgow merchants transacted much of the i r trade with West A f r i c a and the West Indies on a barter basis well into the eighteenth century . 9 The B a l t i c ports often o f fered no a l t e rna t i ve to barter. Unable to obtain cash payments for furs shipped to Russia between 1694 and 1710 the Hudson's Bay Company accepted payment in Russian commodities: hog s -b r i s t l e s , dressed hides, potash, ta l low, yarn, but mostly hemp which i t then flogged to the Lords of the A d m i r a l t y . 1 0 Throughout Europe much of the domestic trade in small local centres was bar ter ; people l i v i n g in the countryside seldom saw co ins, even more seldom used them. 1 1 In bu l l i on - s ta rved co lon ia l North America metal-based currencies served as a unit of value and a unit of account, but only e r r a t i c a l l y 71 as a medium of exchange. Colonia ls transacted most of the i r business as barter which took two forms: truck barter with a simultaneous exchange of goods and bookkeeping barter which allowed for a t ime- lag. Surviv ing accounting records from the period suggest that co lon ia l merchants u t i -l i zed bookkeeping pr imar i l y to lubr i ca te the mechanism of barter trade, f a c i l i t a t i n g complex and extended exchange in the absence of c i r c u l a t i n g currency. Instruct ions for methods of recording barter transact ions warranted a separate chapter in the s ix th ed i t i on of John Mair ' s Book- keeping Modernized pr inted in 1 7 9 3 - 1 2 Throughout the co lonies merchants would extend c red i t to co lon i s t s in the form of European imports and received payment in co lon ia l commodit ies . 1 3 In some instances, wages were ca lcu la ted in commodities. Christopher Jea f f reson , a planter and merchant in the West Indies paid wages in sugar. In 1681 he considered competent t a i l o r s , coopers, carpenters, j o i n e r s , masons, and smiths worth a thousand pounds of sugar a year; indentured servants received four hundred pounds of sugar at the end of a minimum four year term of serv ice . Barter trade and furs share a long and intertwined h i s tory . Per-manence of value, d u r a b i l i t y , and ease of transport made sable a medium of exchange in cash-poor f u r - r i c h Russia. In ear ly Kievan Russian and Novgorod furs c i r c u l a t e d as a currency and when used as such were referred to by the spec i a l i zed word kuny, an o ld Russian word for marten. By the f i f t e e n t h century furs were no longer valued in terms of themselves but in terms of a me ta l l i c currency; nonetheless, they remained a subst i tute for cash for another two centur ies . In the f i r s t ha l f of the seventeenth century the tsar es tab l i shed the Sable Treasury as a branch of the S iber ian Department. When suppl ies of precious metals ran low the state would discharge i t s debts with sable. Foreign merchants to Russia 72 frequent ly received payment in fu r s , and the state remunerated foreigners for the i r services with f u r s . 1 5 In Western Europe furs did not play a key funct ion in the economy l i ke they did in Russia, in part due to the fact that by the Middle Ages furbear ing animals had been great ly reduced in numbers and the i r habitat encroached upon by s e t t l e m e n t . 1 6 It was not long a f ter a r r i v i n g in North America, however, that European s e t t l e r s discovered furs to be one com-modity which could be readi ly acquired and ea s i l y marketed, thereby generating the necessary earnings to purchase the European goods they needed. Obtained from the Indians by barter ing European goods and hence requir ing a minimal amount of labour, furs were an ideal commodity to undergird the economics of the labour - intens ive a g r i cu l t u r a l sett lements. There is a paucity of information on the pedestrian de ta i l s of how th i s trade was organized, but i so lated examples ind icate that some traders evolved methods of regu la r i z ing barter trade which bear marked s i m i l a r i t y to the pract ices of the Hudson's Bay Company. Evert Wendell, a New York trader, sketched beavers in his account book to record c red i t transact ions with Indian cus tomers . 1 7 The Pychons in Massachusetts, sub-contracted the i r monolopy trading r ight to others with the proviso that traders buy trading goods from the Pychon store paid for in b e a v e r . 1 8 Thus, the prac t i ce of barter trade by the Hudson's Bay Company was an accommodation to the p reva i l i ng economic condit ions of the time as much as i t was an accommodation to the level of economic soph i s t i ca t i on of the Indian. In fact i t s i m p l i f i e d the i r operation by l e t t i n g them s k i r t e n t i r e l y the thorny and controvers ia l issue of export ing b u l l i o n . More-over, in view of the prevalence and acceptance of barter i t is not p a r t i -c u l a r l y surpr i s ing that the Hudson's Bay Company es tab l i shed pr ices to control i t . Nevertheless, understanding the role of f ixed pr ices in 73 pre - i ndus t r i a 1 entrepreneur ia l s t rateg ies and planning, whether in a barter economy or a monetized economy, is important enough to rehearse b r i e f l y some h igh l i ghts of i t s h i s t o r i c a l development. In the Letters Outward, the annual correspondence from the Committee in London to the traders- at the Bay, the Committee frequent ly admonished the traders to adhere to the Standard. Some have noted that this empha-s ized the employee status of the t raders , in contrast to the f l e x i b i l i t y and independence enjoyed by French traders. E. E. Rich suggests that because of th i s " the French . . . could make a generous bargain in order to a t t rac t trade and then dr ive hard terms to take advantage of the oppor-t u n i t i e s . " This analys i s needs to be tempered and q u a l i f i e d for the f l e x i b i l i t y of the French was not necessar i ly an advantage nor was the constra int on trade imposed by the Standard necessar i ly a " h a n d i c a p " . 1 9 Again we return to the problem of the re la t ionsh ip between informa-tion and rat iona l economic decision-making. P r o f i t a b l e resu l t s from h igg l ing and haggling require r e l a t i v e l y good market information. In an ideal marketplace the s e l l e r knows at the least the minimum pr ice his goods must command in order to cover expenses. The Hudson's Bay t rader , hired to conduct the fur trade in the absence of the shareholder, lacked the information necessary to ca l cu la te a base p r i ce . Without th is i n f o r -mation the prospect of trading at unprof i tab le pr ices increased dramati-c a l l y . A French t r ader ' s suppleness and independence in trading which allowed him to take advantage, of opportuni t ies may have been the undoing of many. With l i t t l e or no information about the European market what may have appeared to have been an opportunity may instead have been a cos 11y i11 us i on. As the distance between markets increased, the r e l i a b i l i t y of the information which coordinated those markets decreased. The a b i l i t y of merchants to organize t h e i r a f f a i r s so as to mitigate the problems caused by inadequate information often spelled the difference between success and f a i l u r e . A number of measures recommended themselves. Bookkeeping, correspondence, and p r o f i t incentives were administrative procedures frequently employed. 2 0 As well, the employment of r e l i a b l e and t r u s t -worthy factors to prosecute the trade in the absence of the owners was c r u c i a l . Demanding a personal commitment to the merchant, employment of kin was the l o g i c a l solution to this problem. The American colonial trade, dominated by individually-owned businesses or small partnerships, evolved a t r a n s a t l a n t i c commercial network held together by the bonds of kinship and long acquaintance. 2 1 In some circumstances merchants adopted yet another mechanism of c o n t r o l , p r i c e - f i x i n g , e s s e n t i a l l y creating market information in i t s absence. One of the aims of the early regulatory companies, organizations of merchants trading overseas to the same lands, was to attempt to control the volume of trade and to set minimum prices for goods in hopes of tem-pering v i o l e n t fluctuations in price and s u p p l y . 2 2 In 1599 a group of merchants trading in the Levant agreed on a minimum price for the English kersey sold to Turkish merchants; the agreement became null and void when a merchant evaded the l e t t e r of the contract by bartering kersey for indigo. A 1626 agreement proved more successful, incorporating r e s t r i c -tions on b a r t e r . 2 3 Joint stock companies whose markets were protected by royal charter from competition with th e i r own nationals were most successful in f i x i n g prices. Because competition in the domestic and the overseas markets was never wholly absent, companies tended to favour moderate but stable prices in order to achieve long-term control of the market to high prices and short-term p r o f i t s . 2 4 The establishment by the Hudson's Bay Company of fixed-prices for i t s North American sphere 75 of trade conforms to the entrepreneur ia l pract ices of other j o i n t stock, companies. It created information, reduced uncerta inty, and increased the transparency of the market. One further aspect of Indian economic behavior, tangent ia l l y re lated to the above issues, warrants b r i e f mention before proceeding to a more deta i l ed ana lys i s of the Standard of Trade. Scholars have noted and general ly agree that f luc tuat ions in the pr i ce of trade goods did not inf luence s i g n i f i c a n t l y the consumer habits of the Indian and, the pro-duction of furs . Indians had r e l a t i v e l y i n e l a s t i c consumption patterns and produced furs s u f f i c i e n t to f i l l t he i r needs. If Europeans o f fered a higher pr i ce for fu r s , and hence a lower pr i ce for trade goods i t would have reduced the production of fur s . Competitive p r i c i n g would inf luence the flow of goods e i the r to the French or to the Engl ish but lower pr ices for trade goods would not increase the production of fur s . Some argue that because f luc tuat ions in pr ice did not a f fec t production then the pr ice mechanism did not work and the fur trade was not a market economy. 2 Others conclude that because Indians did respond to competit ive pr ices then market forces were operat ing, yet the issue of the re la t ionsh ip between pr i ce and production is l e f t in abeyance. 2 6 The d i f f i c u l t y ar i ses from an o v e r - s i m p l i f i c a t i o n of the co r re l a t i on between pr i ce mechanisms, markets, and product ion, as i f they const i tuted an i n d i v i s i b l e whole. They are in fact two phenomena, re lated yet d i s -t ingu ishable one from the other. The f i r s t is the short-term interp lay of pr ices and the market, where competit ive pr ices are observed. The second is the long-term economic and soc ia l impact from what transpires in the marketplace, and which is not e n t i r e l y pred ic tab le . When this d i f f e r e n t i a t i o n is made i t becomes poss ib le to reconc i le competit ive pr ices in the fur trade, the observed behavior of the Indian as a shrewd 76 and hard bargainer, and the i n e l a s t i c consumption patterns of the Canadian Sub-Arct ic Indians. H is tor ians looking at medieval economies are f ind ing economic behavior which is markedly s i m i l a r : behavior res-ponsive to competit ive p r i ce s , yet r e l a t i v e l y constant consumption p a t t e r n . 2 7 It ra ises the question of what p rec ip i t a te s the t r an s i t i on from a non-growth to a growth economy, yet cautions not to answer too h a s t i l y pr ice mechanisms. The h i s t o r i c a l record points increas ing ly towards the need to examine with greater care the ways in which s o c i a l , c u l t u r a l , and p o l i t i c a l factors impinge upon the long-term development of economic s tructures and economic b e h a v i o r . 2 8 The Standard of Trade when viewed from a broad perspect ive of econo-mic h i s tory rather than from the more narrow perspect ives of fur trade h i s tory or economic theory is not so le l y an accommodation of economically soph i s t i ca ted Europeans to p r im i t i ve Indians. It is instead a mechanism which a l so responded to s t ruc tura l weakness in the European economy engendered by the shortage of hard currencies and by the d i f f i c u l t i e s of coordinat ing markets in long-distance trade. It is in th is l i ght that a systematic ana lys i s of the Standard w i l l be cast. 77 Notes 1 Hudson's Bay Company Arch ives , Prov inc ia l Archives of Manitoba. B . 3 / d / 2 5 , fos. 1 5 - 1 5 d . 2 Po lany i , Ka r l , "The Economy as Inst i tuted Process, " in George Dal ton e d . , P r im i t i ve , Archaic and Modern Economics: Essays of Karl  Polanyi , (Garden Ci ty, N.J. : Anchor Books, 1 9 6 8 ) , pp. 166- 169. Thi s d e f i n i t i o n is the one used by Arthur J . Ray and Donald Freeman i n ' G i ve  Us Good Measure' (Toronto: Un ivers i ty of Toronto Press, 1 9 7 8 ) , pp. 54 -55-3 See C. H. Wilson, "The H i s t o r i c a l Study of Economic Growth and Decline in Ear ly Modern H i s t o r y , " in Vo l . 5 , ed. E. E. Rich and C. H. Wilson, The Cambridge Economic History of Europe (Cambridge: Cambridge Un i vers i ty Press, 1 9 7 7 ) , for a d iscuss ion of the growing t r an s i t i on in economic h i s tory towards the development of endogenous theory rather than the borrowing of exogenous theory. 4 E. E. Rich, "Trade Habits and Economic Motivation Among the Indians of North America," Canadian Journal of Economics and P o l i t i c a l Science, 26 ( 1 9 6 0 ) : 3 5 - 5 3 ; Abraham Rotste in, "Fur Trade and Empire: An In s t i tu t iona l Ana l y s i s , " (PhD d i s s . , Un ivers i ty of Toronto, 1 9 6 7 ) , PP- 2 , 1 1 , 16 , 46, 6 1 ; and Rotstein " Inn i s : The Alchemy of Wheat and Fur , " Journal of Canadian Studies 12 (Winter, 1 9 7 7 ) : 6—31-5 This part of the analys i s of Indian economic behavior has been developed by Rotstein based on the theory of administered trade developed by the economic anthropologist Karl Po lany i . Rotste in, "Fur Trade and Empi r e , " p. 2 . • 6 Ray and Freeman, 'Give Us Good Measure', pp. 2 1 8 - 2 2 2 . 7 Barry Supple, "The Nature of En te rp r i se , " in Vo l . 5 , The Cambridge  Economic History of Europe, pp. 3 9 4 , 39.6-7, 4 0 7 " 8 , 439 . The impact of market uncerta inty on entrepreneur ia l undertakings is a major theme in much of the recent economic h i s to ry , e spec i a l l y that deal ing with long-distance trade. See Bernard Ba i l yn , "Communications and Trade: The A t l a n t i c in the Seventeenth Century," Journal of Economic H is tory, 13 ( 1 9 5 3 ) : 3 8 0 ; J . M. Sos in, Engl ish America and the Restoration Monarchy of Charles II (L inco ln: Un ivers i ty of Nebraska Press, 1980) pp". 5 " 2 3 ; Niel Steensgaard, Carracks, Caravans and Companies (Copenhagen, 1973) PP- 7 , 10 , 114. 8 Rotste in, " Inn i s : The Alchemy of Wheat and Fur , " p. 12 ; Rich, "Trade Habits and Economic Mot iva t ion , " p. 42; and Ray and Freeman, 'G i ve  Us Good Measure', pp. 5 4 - 5 5 -9 C. H. Wilson, "Trade, Society and the S ta te , " Vo l . 5 , Cambri dge  Economic H i s tory , p. 5 1 3 ; and Herman van der Wee, "Monetary, Credit and Banking Systems," i b i d . , p. 3 0 6 - 7 -1 0 E. E. Rich. The Hudson's Bay Company, 1670-1870 Vol- 1 :1670 -1763 (London: Hudson's Bay Record Soc iety , 1958) pp. 3 9 8 , 4 6 1 . 78 1 1 F. P. Braudel and F. Spooner, "P r i ces in Europe from 1450 to 1 7 5 0 , " Vo l . 4 , Cambridge Economic H is tory, p. 377-1 2 W. T. Baxter, "Accounting in Colonial America" in A. C. L i t t l e t o n and B. S. Yamey, eds., Studies in the History of Accounting (Homewood, I l l i n o i s : Richard D. Irwin, Inc., 1956) pp. 2 7 2 - 2 7 5 , 2 7 8 . 1 3 Letter from Christopher Jeaf f reson, St. Chr i s topher ' s Island to Mr. Poyntz, London, June 5 , 1676. in eds. Joan Thirsk and J . P. Cooper, Seventeenth-Century Economic Documents (Oxford: Clarendon Press, 1972) p. 544 . 1 4 Letter from Christopher Jea f f reson, St. Chr i s topher ' s Island to Mr. Poyntz, London, May 5 , 1681 ; ib id . ' , p. 549-1 5 Raymond H. F i sher , The Russian Fur Trade, 1550"1700 (Berkeley and L.A.: Univers i ty of C a l i f o r n i a Press, 1943) pp. 8 - 9 , 123 , 1 2 9 - 3 0 , 132 , 1-40-142. 1 6 Elspeth M. Veale, The Engl ish Fur Trade in the Later Middle Ages (Oxford: Oxford Univers i ty Press, 1966) p. 5 9 . 1 7 Thomas E l l i o t Norton, The Fur Trade in Colonial New York, 1686- 1776 (Madison: Un ivers i ty of Wisconsin Press, 1974) pp. 2 9 - 3 0 . 1 8 Francis X. Moloney, The Fur Trade in New England, 1620-1676 (Cambridge: Harvard Un i vers i ty Press, 1931) pp. 5 6 - 7 • 1 9 Rich, Hudson's Bay Company, pp. 75~76 . 2 0 Supple, "The Nature of E n t e r p r i s e , " p. 417-2 1 Ib id . , p. 412. 2 2 Ba i l yn , "Communications and Trade, " p. 3 8 0 ; and J . M. Sosin, Engli sh Ameri ca, p. 5 " 2 3 -2 3 Niels Steensgaard, "Consuls and Nations in the Levant from 1570 to 1 6 5 0 , " Scandinavian Economic History Review, 15 , No. 1 ( 1 9 6 7 ) : 13~55 pp. 4 5 - 6 . 2 4 N ie ls Steensgaard. Carracks, Caravans and Companies, pp. 4 7 , 1 4 2 - 3 , 152. 2 5 Rich, "Trade Habits and Economic Mot ivat ion, " pp. 42, 48 - 5 0 , 5 2 ~ 3 ; Rotste in, " I nn i s : The Alchemy of Wheat and Fur , " pp. 1 2 . 1 6 . 26 Ray and Freeman, 'Give Us Good Measure', pp. 2 1 8 - 2 2 8 . 2 7 M. M. Postan, The Medieval Economy and Society (London: Penguin Books, L t d . , 1972) pp. 224-225; and Marilyn Gerr iets "The Organization of Exchange in Early Chr i s t i an I re land," Journal of Economic H i s tory , 41, No. 1 (March 1981): 176. 79 2 8 See Neil McKendrick, John Brewer, and J . H. Plumb, The B i r th  of a Consumer Soc iety: The Commercialization of Eighteenth-Century  England. (London: Europa Publ icat ions L t d . , 1 9 8 2 ) ; and Martin J . Wiener, Engl i sh Culture and the Decline of the Industr ial S p i r i t , 1850-1980 (Cambi rdge: Cambridge Univers i ty Press, 1981 ) ; for examples of work i n th is area. 80 CHAPTER V MERCHANDISING AND THE STANDARD OF TRADE The Standard of Trade as a mechanism to s t a b i l i z e trading condit ions had to be coupled with merchandising s t ra teg ies which would draw the Indians into trade, as the Hudson's Bay Company had to compete with the French traders for the business of shrewd Indian traders who knew the competition between than the European pa r t i c i pan t s . A number of s t r a t e -gies presented themselves: g i f t s , r e l i a b l e supply, s e l e c t i o n , and se rv i ce . Pr ice too played a r o l e , but i t is d i f f i c u l t for twentieth-century minds to appreciate for whom the pr ices of the Standard of Trade are v i r t u a l l y meaningless as measure of value. Ten beaver pelts for a gun, one for a ha l f pound of Braz i l tobacco, two for a yard of white broadc loth 1 express l i t t l e more than equiva lencies of European manufactures for fur s . No measure of gain or value by e i the r Indians or Europeans is read i ly d i s -cernable. By using the pr ices the company paid for trade goods and the pr ices 81 i t received for furs i t is poss ib le to reconstruct the Committee in London's perspect ive on pr ices by t ranscr ib ing the Made Beaver pr ices of the Standard into s t e r l i n g values. From th is can be suggested the ways the company viewed pr ices and used them to further i t s trading po s i t i on . The o r i g in s of the Standard are obscure, except to note that i t was f i r s t estab l i shed during Charles Bayly ' s tenure as governor at the Bay from 1670 to 16 79 - 2 Bayly ' s replacement, John Nixon, modi f i ed the Standard to the advantage of the Indians and the displeasure of the Committee in London. His errors to which the committee drew p a r t i c u l a r a t tent ion were the lowering of the pr i ce of guns and the revaluat ion of marten skins as four equal to one beaver pe l t instead of the previous eight to one beaver. When questioned by the committee as to why he had a l tered the Standard he gave, in i t s op in ion, "a very slender account" and his successor, Henry Sergeant, was ordered to re ins ta te the S t anda rd i sed by Bay ly . 3 S t i l l d i s s a t i s f i e d the committee sent out P ierre Radisson in 1685 as "Ch ie f D irector of . . . Trade at Port Nell son . . . to promote the Interest of the Company & to Se t t le a Standard of Commerce with the Na t i ve s . " 4 Radisson's work seemed to have given the committee some content for i t advised George Geyer to adhere to the Standard which Radisson had s e t . 5 What Radisson accomplished is unclear as there are no surv iv ing trading records from that per iod. Later at York Fort (Port Nelson) guns cost the Indians the committee's des ired ten pe l t s for a " shor t " gun and twelve for a " l ong " gun, 6 but marten remained valued at four to one beaver. 7 At Fort Albany where Nixon had committed his transgressions guns were valued between s ix and twelve pelts in 1 6 8 9 , 8 below the nine to twelve pelts recommended to Sergeant in 1 6 8 4 . 9 A f ter Radisson's serv ice as "Ch ie fe D irector of Trade" the company made no further attempts to revise the en t i r e Standard but frequent ly recommended adjust ing the pr ices of i n d i -vidual items, e spec i a l l y guns. 82 The frequent orders to ra ise the Standard on guns ind ica tes , in part, the i r prominence in the trade. No other s ing le item cost as much in s t e r l i n g or beaver as guns nor presented the d i f f i c u l t i e s of qua l i ty which guns d id . Students of the fur trade cannot overlook the i r s i g n i -f i cance , yet importance should not be construed as representat iveness. In his treatment of the mid-nineteenth century Parliamentary inquiry of the Hudson's Bay Company Rich concluded that " there was nothing revealed which approached a p r o f i t of two thousand per cent " , as had been charged, by noting that the mark-up on guns was around 175 p e r c e n t . 1 0 The fo l lowing two tab les , one for Fort Albany and one for York Fort , l i s t the trade goods for 1720, the Standard of Trade, the cost from the supp l ie r , the Standard expressed as a s t e r l i n g value, and the percentage mark-up. The Standard in s t e r l i n g is ca lcu la ted using the average pr i ce the company received for beaver between 1716 and 1726.11 For example, at York Fort a gun cost fourteen beaver pelts which the company sold at 5s6ifd per pe l t or £3 -17 = 3 for a l l fourteen, making a 251 percent mark-up over the £ 1 : 2 : 0 which the company paid gunsmiths for the guns. No over-head costs are ca lcu la ted into these f i gu res , neither of a general nature such as shipping or wages nor of a s p e c i f i c nature such as gun chests or the dying of c l o t h . Thus some items, most p a r t i c u l a r l y guns and c l o t h , have a lower mark-up in re la t ionsh ip to other goods then the f igures ind icate . Miscellaneous charges are d i f f i c u l t both to c o l l e c t and to aggregate and hence the f i r s t cost from the suppl ier is used. What these f igures show most c l e a r l y is that the mark-up on guns does not represent the mark-up on other goods. And some items had mark-ups over 2000 percent, though what th is means about p r o f i t , at least aggregated p r o f i t , is unclear. It a lso becomes obvious why the company expressed more concern about the Standard for guns than for any other s ing le i tern. 83 Table Via Trade Good P r i ces , Standard of Trade, and Mark-ups: York Fort, 1720 Trade Good Suppl iers ' Pr ice Standard S ter l ing Stan- %Mark-12 13 dard n # up Thread lb. 2 o . 1 to 1* 5 :6 176 Guns pc. 1 :2 0 1 to 14 3 :17 :3 251 Shi rt pc. 2 9 1 to 2 11 :0 302 Duffel Yd. 2 9 1 to 2 11 :0 302 Shoes pr. 3 10 1 to 3 6 = 7 332 (1717) Hawk Bel Is pc. 1 3 per 12 pc. 12 to 1 5 :6 342 + Twi ne sk. 1 2 1 to 1 5 :6 373 Beads, sm. lb. 2 2 1 to 2 11 :0 410 Broadcloth yd. 3 2 1 to 3 16 7 423 Kett les lb. 1 6 1 to 1. 5 8 •4 452 Blankets pc. 6 6 1 to 7 1:18 :8 495 Hatchets pc. 1 0 V 2 1 to 1 5 :6 531 + Sword Blades pc. 10 1 to 1 5 .6 563 (1723) Roll Tobacco lb. 9 1 to 1 5 6 636 Brandy ga 1. 3 0 1 to 4 1:2:1 636 Kn i ves pc. 2.1 4 to 1 5 6 • 689 + Brazi1 Tobacco lb. 1 4 1 to 2 11 0 728 Breast Buttons pc. 8 per 72 pc. 72 to 1 5 6 728 (1718) Coat Buttons pc. 8 per 48 pc. 48 to 1 5 6 728 Bai ze yd. 1 1 1 / , 1 to 1 . 5 8 4 783 Bath Rings pc. 6 to 1 5 6 783 (1715) Socks pr. 1 6 1 to 2 . 5 13 10 820 (1718) Powde r lb. 7 1 to 1 5 6 846 Gloves pr. 7 1 to 1 5 6 846 (1717) Beads, lg. lb. 2 2 1 to 4 1:2 1 919 Flannel yd. 9 V 2 1 to 1. 5 8 4 946 Ivory Combs pc. 6 V, 1 to 1 5 6 960 Spoons pc. 6Vi+ per 2 pc. 2 to 1 5 6 960 Seal Rings pc. 2 3 to 1 5 6 1004 Vermi11i on oz. 6 1 to 1 5 6 1004 Shot lb. 1 V 3 4 to 1 5 6 1174 (1719) Powder Horns pc. 5 1 to 1 5 6 1225 Looking Glasses pc. 5 1 to 1 5 6 1225 F i les pc. 5 . 1 to 1 5 6 1225 Fi re Steels pc. 3V2 per 4 pc. 4 to 1 5 6 1793 Guns Worms pc. 3V3 per 4 pc. 4 to 1 5 6 1908 Horn Combs pc. 1 V 2 2 to 1 5 6 2108 Garter!ng yd. 2% per 1. 5 yd. 1. 5 to 1 5 6 2309 Sci ssors pc. 1 V 3 2 to 1 5 6 2448 Tobacco Tongs pc. 1 V 3 2 to 1 5 6 2448 Aw les pc. 2 V 2 per 8 pc. 8 to 1 5 6 2550 Tobacco Box pc. 2 V 2 1 to 1 5 6 2550 Thimbles pc. 2 1 / , per 6 pc. 6 to 1 5 6 2844 Fl i nts pc. 2 per 16 pc. 16 to 1 5 6 3213 Needles pc. lV 2 per 12 pc. 12 to 1 5 6 4317 + Egg Boxes pc. % per 3 pc. 3 to 1 5 6 8733 Mocotogans pc. D 4 to 1 5 6 Scrapers pc. § 2 to 1 5 6 1ce Chi sels pc. @ 1 to 1 5 6 Net Lines pc. @ 1 to 1 5 6 pounds :sh i 1 1 i ngs : pence »[ t rade good] to [beaver] # prices rounded + avg.of more than one @ made at the fort (year) pr ice in that yr. s ize and pr ice a l l other pr ices from 1720 84 Table VIb Trade Good Pr i ces , Standard of Trade, and Mark-ups: Fort Albany, 1720 Trade Good Pr ice in London 12 Shoes pr. 3 :10 Gun, 3 f t . pc. 1 :2 0 Pi s to l pc. 12:6 Bayonets pc. 1 :6 Shi rt pc. 2 : 9 Gun, 3i f t . pc. 1:2 0 Gun, 4 f t . pc. 1 :2 0 Red Feathers pc. 1 0 Hatchets pc. 10 Hawk Bel 1s pc. 1 8 per 16 pc. Sword Blade pc. 10 Beads lb. 2 2 Broadcloth yd. 3 2 Socks pr. 1 6 Kett les lb. 1 6 Kn i ves pc. 2.1 Duffel yd. 9 Gogles pc. 8 B raz i1 Tobacco lb. 1 4 Twi ne sk. 1 2 Roi1 Tobacco lb. 9 B1ankets pc. 6 6 Spoons pc. 1 V2 per 4 pc. Ivory Comb pc. 6 % Coat Buttons pc. 12 per 72 pc. Thread 1 b. 2 0 Ba i ze yd. H V 4 Powde r lb. 7 Looki ng Glass pc. 5 Powder Horn pc. 5 Keg 1 ga l . pc. TO Flannel yd. 9V2 Keg 2 gal . pc. 1 2 Brancy gal . 3 0 Vermi11 ion oz. 6 Leaf Tobacco lb. 5V2 Breast Buttons pc. 8 per 72 pc. Bath Ring pc. iVu G1oves pr. 7, Laced Hats pc. 3V3 Shot lb. 1.3 Seal Ring pc. 2 Scraper pc. 3 Fi les pc. 5 Tobacco Box pc. 2V2 Ga r ter i ng Yd. 3 .75 per 2 yd Awl es pc. 3.75 pe r12 pc Fi re Steels pc. 3V2 per 4 pc Gun Worms pc. 3.3 per 4 pc Standa rd Standa rd i n % Mark-13 Ster1 ing up 1 to 1 5 6 44 (1717) 1 to 7 1 : 1 8 : 8 76 1 to 4 1 :2 1 77 2 to 1 5 6 84 1 to 1 5 6 101 1 to 8 2 : 4 2 101 1 to 10 2 : 1 5 : 3 151 2 to 1 5 6 176 (1718) 2 to 1 5 6 231 + 16 to 1 5 6 231 + 2 to 1 5 6 231 (1723) % to 1 5 6 240 1 to 2 11 0 249 1 to 1 5 6 268 (1718) 1 to 1 5 6 268 8 to 1 5 6 294 + 1 to 2 11 0 302 2 to 1 5 6 314 1 to 1 5 6 314 1 to 1 5 6 373 lV2to 1 5 6 391 1 to 6 1 : 1 3 : 2 410 4 to 1 5 6 430 2 to 1 5 6 430 72 to 1 5 6 452 1 to 2 11 0 452 1 to 1 5 6 489 1.5 to 1 5 6 531 2 to 1 5 6 563 2 to 1 5 6 563 (1717) 1 to 1 5 6 563 (1724) 1 to 1 5 6 597 1 to 1.5 5 6 610 (1724) 1 to 4 1:2 1 636 1 V2to 1 5 6 636 1V2 to 1 5 6 703 (1718) 72 to 1 •5 6 728 (1718) 6 to 1 5 6 783 (1715) 1 to 1 5 6 846 (1717) 1 to 4 1 :2 1 862 (1718) 5 to 1 5 6 919 (1719) 3 to 1 5 6 1004 2 to 1 5 6 1004 (1722) 1 to 1 5 6 1225 2 to 1 5 6 1225 2 to 1 5 6 1667 12 to 1 5 6 1667 4 to 1 5 6 1793 4 to 1 5 6 1908 85 Trade Good Pr ice in London Standard Standard in % Mark-12 13 S ter1 i ng up Fish Hooks pc. :3 per 20 pc. 20 to 1 5 6 2108 Lead lb. 1 to 1 5 6 2108 (1718) Tobacco Tongs pc. :1 . 3 2 to 1 5 6 2kk8 Sci ssors pc. : 1 . 3 2 to 1 5 6 2448 F l i n t s pc. : 2 V 2 p e r 20 pc. 20 to 1 5 6 2550 Th i mbles pc. : 2 . 2 per 6 pc. 6 to 1 5 6 2844 Needles pc. :)l72per 12 pc 12 to 1 5 6 4317 + Egg Box pc. : 1 per 4 pc. 4 to 1 5 6 6525 Net Lines pc. @ 2 to 1 Ice Chisels pc. @ 2 to 1 Mocotogans pc. @ 2 to 1 pounds:shi11 i ngs:pence + avg. of more than one s ize and pr ice --[trade good] to [beaver] # pr ices rounded (year) p r i ce in that year; a l l other pr ices from 1720 @ made at the fo r t 85a In a d d i t i o n t o t h e s e s e l f - e v i d e n t o b s e r v a t i o n s some o t h e r i n t e r e s t i n g p a t t e r n s emerge. Those goods w h i c h were some o f the most i m p o r t a n t t r a d e i tems and t o w h i c h t he I n d i a n s gave g r e a t e s t a t t e n t i o n t o q u a l i t y a l s o have some o f the l o w e s t m a r k - u p s . I t i s r e a s o n a b l e t o c o n c l u d e t h a t t he p r i c e s f o r g u n s , c l o t h , and me ta l goods were r e l a t i v e l y low because o f c o m p e t i t i v e p r e s s u r e f rom the F r e n c h and t o a t t r a c t the t r a d e . The com-m i t t e e a d v i s e d Geyer to keep " t o t he S t a n d a r d t h a t Mr . R a d i s s o n e a g r e e d t o , but w i t h a l l t o g i v e t he I n d i a n s a l l manner o f C o n t e n t and S a t i s f a c t i o n and i n Some goods Under S e l l the F r e n c h t h a t t hey may be i n c o u r a g e d t o Come to o u r F a c t o r y ' s . " 1 4 Th ree y e a r s l a t e r Thomas W a l s h was t o l d to t r e a t t he I n d i a n s " w i t h a l l K i n d n e s s I m a g i n a b l e & t o a s s u r e them o f good wares c h e a p e r t hen the F r e n c h can g i v e t h e m . " 1 5 In t he 1720s t he I n d i a n s t r i e d t o ge t the t r a d e r s to change the C o m p a r a t i v e S t a n d a r d on mar ten f rom t h r e e pe r b e a v e r t o two pe r b e a v e r , s i n c e t he F r e n c h r a t e d mar ten as e q u i v a l e n t to one b e a v e r . The commi t t ee r e f u s e d t o a c c e p t the I n d i a n s ' p r o p o s a l n o t i n g t h a t t he F r e n c h p r i c e d guns a t t h i r t y beave r w h i l e t h e i r s c o s t o n l y t e n . 1 6 The company r e c o g n i z e d the need t o use p r i c e s t o a t t r a c t the t r a d e and the S t a n d a r d b u i l t i n t o the t r a d e c o m p e t i t i v e p r i c e s on some g o o d s . Guns a t t r a c t e d t r a d e and had much lower mark -ups than the n e c e s s a r y a c -c e s s o r i e s . A t Y o r k F o r t the mark -up was 251% f o r guns but 846%, 11 ~]h%, 1225%, and 1908% r e s p e c t i v e l y f o r powder , s h o t , powderhorns and gunworms. A t F o r t A l b a n y t he p a t t e r n was s i m i l a r ; 76%, 101%, and 151% mark -ups on guns and 531%, 536%, 919% and 1908% r e s p e c t i v e l y on powder , s h o t , powder -h o r n s , and gunworms. Guns h e l p e d t o a t t r a c t t he b u s i n e s s f o r t he more l u c r a t i v e t r a d e in o t h e r g o o d s , as d i d o t h e r me ta l and c l o t h g o o d s . The r i g i d i t y o f the S t a n d a r d has been c o n t r a s t e d w i t h the s u p p l e n e s s o f t h e F r e n c h s y s t e m i n w h i c h a t r a d e r " c o u l d make a g e n e r o u s b a r g a i n i n 86 order to a t t r ac t the trade and then dr ive hard terms to take advantage of oppor tun i t i e s . " While ind iv idua l Hudson's Bay Company traders could not set pr ices a comparison of mark-ups on the goods shows that "generous bargains" and "hard terms" were bu i l t into the Standard. Rather than e1iminating competit ive pr ices the Standard guaranteed them on some items, enough so that the Chief Factors could sometimes ra ise i t yet remain competit ive with the F r e n c h . 1 7 The company attempted to use pr ices to modify Indian behavior. When the supply of coat beaver (pelts which had been worn by the Indians in coats) began to exceed European demand the committee urged the traders to "encourage the Indians, to weare C loth, Bayes, F lannel l Duff les or any Wollen thing rather than B e a v e r . " 1 8 One way they did th is was to keep the pr i ce of c lo th and ready made garments low, as the mark-ups on sh i r t s and c loth ind ica te . Attempts to ra i se the Standard met with res i s tance from the Indians. Attempts to lower the Standard met with res istance from the Committee in London. The committee thought "presents . . . a more proper method [to encourage trade] then by abatement in the S t a n d a r d . " 1 9 It saw g i f t s as a way to make increases in the Standard acceptable to the Indians. A f ter Geyer had f a i l e d to a f f ec t the requested increases in the Standard the committee recommended making " a larger present than usual l to the Cheif Capt. of the Rivers and leading men. . . . so that they may be induced to advance the standard." No understanding Indian soc ia l s tructures i t erroneously thought " t h i s may be done p r i va te l y the Comon Indians not knowing of i t . " 2 0 Having met with the Indians' res i s tance to outr ight p r i ce increases the committee t r i e d to work around the problem in other ways. A f ter the o f t repeated l i t any on ra i s ing the p r i ce on guns had f a i l e d to produce 87 results the committee decided in 1702 not to send the shortest guns "by Reason that the Standard upon short Guns would not answer the f i r s t cost of them, Therefore they [the Indians] must not expect anymore short Guns of that goodness unless they w i l l allow the same Number of Skins in trade . .. for that they are a l l of one price to u s . " 2 1 Another time the com-mittee introduced striped blankets and reasoned that they were of a superior q u a l i t y and therefore warranted a higher p r i c e . 2 2 The miscar-riage of a French ship and a foreseeable shortage of French trading goods promised the p o s s i b i l i t y of advancing the Standard. 2 3 One way for the company to improve trading conditions was to esta-b l i s h contact with Indians unaccustomed to the trade, or who did not trade regularly with the French. Albany's Standard was lower than York's for this reason. On the whole the practice worked, though the York Fort traders occasionally complained that some Indians would travel the extra distance to Albany to receive better p r i c e s . 2 4 The differences in the Standards at the two forts r e f l e c t e d the impact of competition on pri c e s . This difference also suggests what might have resulted had traders been given free rein to e s t a b l i s h prices in a competitive market. With prices quoted in beaver, which had a high unit value in comparison to trade goods and was not e a s i l y d i v i s i b l e , price adjustments tended to produce large f l u c t u a t i o n s . For example kettles at Albany were one pound per beaver, and at York one pound per one and a half beaver, a 268% mark-up at Albany compared to a h52% mark-up at York. The repossession of York Fort a f t e r the Treaty of Utrecht had a p o s i t i v e e f f e c t on the fortunes of the Hudson's Bay Company for this reason. Competition at the southern end of the bay forced down prices at Albany. Given the unpredictable results of unrestrained price competition and the wide fluctuations i t could produce both p o s i t i v e l y and negatively, the conservative and prudent 88 prac t i ce of f i xed pr ices probably worked to the long-term advantage of the Hudson's Bay Company. The Standard of Trade had an important funct ion in the seventeenth-and eighteenth-century world. By e s tab l i sh ing pr ices for barter trade i t minimized e r r a t i c p r i ce f luc tua t ions and s t a b i l i z e d market condit ions in the absence of information to coordinate supply and demand markets. The Standard helped bridge the communication gap between London and the Bay, and the traders and the Indians. Fixed pr ices did not preclude competit ive p r i c i n g , they only es tab l i shed which goods would be competi-t i v e l y p r i ced . In th is respect the Standard cod i f i ed the trading exper i -ence of the company's ear ly traders and el iminated some of the business hazards associated with the turnover of personnel. The Standard of Trade was a commercial mechanism adapted to both the competit ive condit ions of the North American.fur trade and the problems inherent to long-distance trade. For these reasons i t is an important component in any explanation of the Hudson's Bay Company's success and longevity. 89 Notes 1 York Fort Account Book, July 1690 to July 1691 , Hudson's Bay Company Arch ives , Prov inc ia l Archives of Manitoba (H.B.C.A., P.A.M.), B . 2 3 9 / d / 3 , fos. 1 0 d - l l . (Hereafter only the arch iva l c l a s s i f i c a t i o n number is given.) 2 Letter Outward (hereafter L.O.) to Henry Sergeant, 27 Ap r i l 1683 , in Letters Outward, 1 6 7 9 - 1 6 9 4 , ed. E. E. Rich, Publ icat ions of the Hudson's Bay Record Soc iety, Vo l . 1 1 , (London: Hudson's Bay Record Soc iety , 1 9 4 8 ) , p. 7 6 . 3 L.O. to Henry Sergeant, 16 May 1684, in i b i d . , pp. 1 2 0 - 1 2 1 . k L.O. to P ier re Radisson, 22 May 1685 , in i b i d . , p. 147. 5 L.O. to Geyer, 2 June 1688 , in Letters Outward, 1 6 8 8 - 1 6 9 6 , ed. E. E. Rich, Pub l icat ions of the Hudson's Bay Record Soc iety, Vo l . 2 0 , (London: Hudson's Bay Record Soc iety , 1 9 5 7 ) , P- 14. 6 York Fort Account Book, July 1 6 8 9 - 1 6 9 0 , B . 2 3 9 / d / 1 , fos. 53~53d . 7 Grand Journa l , A . 1 5 / 3 , fos . 6 8 , 9 5 - 6 . 8 Fort Albany Account Book, July 1 6 8 9 - 1 6 9 0 , B . 3 / d / 9 , fos. 2 1 - 4 5 -9 L.O. to Sergeant, 16 May 1684, Letters Outward, Vo l . 1 1 , p. 121 . 1 0 E. E. Rich, The History of the Hudson's Bay Company, 1670 -1870 , Vol. 1: 1 6 7 0 - 1 7 6 3 , (London: Hudson's Bay Record Soc i ety , 1958) ," p.' 594 . 1 1 The year 1720 was chosen for r e l a t i v e l y complete trade good p r i ce s . 1 2 York Fort Standard, 1720 , B . 2 3 9 / d / 1 0 , fo. 5 2 d ; Fort Albany Standard, 1720 , B . 3 / d / 2 8 , fos. 1 0 d - 1 1 . 1 3 Trade Goods P r i ces , A . 2 4 / 2 - A . 2 4 / 3 • 1 4 L.O. to Geyer, 2 June 1688 , in Letters Outward, Vo l . 2 0 , p. 14. 1 5 L.O. to Walsh, 21 May 1691 , in i b i d . , p. 128. 1 6 L.O. to Myatt, 30 May 1727 , A . 6 / 5 , fo. 1. 1 7 E. E. Rich, History of the Hudson's Bay Company, 1 6 7 0 - 1 8 7 0 , p. 594 . 1 8 L.O. to Geyer, 6 May 1689 , Letters Outward, Vo l . 2 0 , p. 6 0 - 6 1 . 1 9 L.O. to Knight, 30 May 1696, i b i d . , p. 2 7 1 . 2 0 L.O. to Geyer, 17 June 1693 , i b i d . , p. 186. 2 1 L.O. to F u l l e r t i n e , 3 June 1702 , A . 6 / 3 , fo. 52d . 90 2 2 L.O. to F u l l e r t i n e , 28 May 1601, A.6/3, fo. 48. 2 3 L.O. to F u l l e r t i n e , 30 May 1605, A.6/3, fo. 6 9 . 2 4 L.O. to Knight, 30 May 1694, Letters Outward, Vol. 20, p. 230. 91 CONCLUSI ON The organizat iona l and f i nanc i a l demands of the trans-oceanic ex-pansion of Europe and long-distance trade in the ear ly modern period p rec ip i t a ted new forms of commercial p r a c t i c e , among them the j o i n t -stock company. As long-distance trade matured suppl ies of co lon ia l com-modities increased beyond the demands of the European market and pr ices dropped dramat ica l ly . Much of the problem resulted from inadequate or non-existent mechanisms to balance co lon ia l supply with European demand. Thus management and admin i s t rat ive techniques had to be developed which would coordinate the widely separated arenas of an expanded economic world. The North American fur trade was no exception. Its rapid expansion at the end of the seventeenth century increased suppl ies of beaver and forced down pr ices in a trade which had previous ly promised easy p r o f i t s . This examination of the internal working of the Hudson's Bay Company from 1670 to 1730 shows many areas where operat ional improvements were devised which helped the company to survive this t r an s i t i on in the trade. The long-term surv iva l of the company owes much to this internal refinement, which was large ly an elaborate and interconnected system of bookkeeping, correspondence and p r i c i n g . The Committee in London organized the company's operations largely in re l a t i onsh ip to the consumption demands of the Engl ish and European fur markets. In i t s ear ly years i f suppl ies of beaver in London exceeded demand then the company would not send out a ship or would request the traders discourage the trade of beaver, e spec i a l l y coat beaver. As the European market s t a b i l i z e d in the 1710s the company learned how much 92 beaver i t could reasonably expect to market and could control the level of i t s London fur inventory around that demand without resort ing to the ear ly pract ice of not sending out ships. This s i g n i f i e d a g r e a t commer-c i a l achievement for i t made poss ib le the regular turn-over of cap i ta l and an accounting of the company's status on an annual bas is . E f f i c i e n t maintenance of the fur inventory also meant that the trade goods inventory could be more economically managed. The adminis trat ive mechanisms for doing th is had the i r o r i g ins in the late 1670s when the committee began to demand that records be kept of the trade at the Bay. These records could then be s c ru t i n i zed back in London and purchasing decis ions made with the hindsight of the trade of the previous years, and knowledge of the remaining inventory. Record-keeping and annual correspondence between London and the Bay a lso made i t poss ib le to pay c lose at tent ion to other de ta i l s such as the qua l i t y and se lec t ion of trade goods. Record-keeping and correspondence served to communicate between London and the Bay so the i r re lated a f f a i r s could be coordinated. To compensate for distance and the hazards of trans-oceanic trade the com-pany maintained a two year supply of trade goods at the Bay and a modest surplus of furs in London. The absence of information to e s tab l i sh trade goods pr ices was a l l e v i a t e d by the Standard of Trade which f ixed the i r pr ices and thereby provided stable market information for the Indians coming to trade, the company's t raders , and the Committee'in London. While this p rac t i ce was quite conservat ive, e spec i a l l y in re la t ionsh ip to the company's French competitors, i t a l so reduced the chance of pr ices being forced to unprof i tab ly low levels which was a l l too poss ib le con-s ider ing the paucity of adequate information. Within the r i g i d s t ructure of the Standard the company was able to vary the pr ice increases and 93 bui ld into the trade competit ive pr ices on goods which would a t t r ac t the Indians to come trade and high pr ices on other goods. Much of the company's success must be a t t r ibu ted to the management and admin is t rat ive s t ructure which i t evolved during i t s f i r s t ha l f - century . Some external factors eased th is process and should be recognized with in the larger context of the North American fur trade. The harsh geographic condit ions of Hudson's Bay which precluded ag r i cu l tu re in turn precluded settlement and consequently the company did not have to t a i l o r i t s ob-j ec t i ve s to the interests of s e t t l e r s . Unlike the French-Canadian fur trade, which had to accommodate pr ivate t raders , the Hudson's Bay Company's business could be organized almost e n t i r e l y around the volume of trade which the European fur market could absorb. The lack of p ro f i t ab l e com-mercial enterpr i ses other than the fur trade r e s t r i c t e d p o s s i b i l i t i e s for expansion, but in turn meant that the number of employees could be kept low and the company did not have to f ind f inancing for new ventures. Thus the need to rely almost so le l y on the fur trade eased both labour and f i nanc i a l problems. The small c a p i t a l i z a t i o n of the company d i s t r i -buted among a r e l a t i v e l y large number of investors , almost none of whom depended on the fur trade for the i r l i v e l i h o o d , minimized the demands of shareholders and made poss ib le the years of no dividends. The advantages of being a small s pec i a l i zed business operating in a region unsuited for settlement did not assure the surv iva l of the Hudson's Bay Company. They only s i m p l i f i e d the task of management and administrat ion which in the end assured i t s s u r v i v a l . Within the larger context of the economic expansion of Europe the Hudson's Bay Company is a good example of the s t ructura l changes in bus i -ness management which evolved a f ter pr ices for co lon ia l commodities dropped. So long as the supply of products remained below European demand 3k pr ices remained high and lax management pract ices could be to le ra ted . But as trade in c o l o n i a l commodities became increas ing ly competit ive and pr ices dropped commercial pract ices had to be developed which would f a c i -l i t a t e economical and e f f i c i e n t management of long-distance trade. Because the Hudson's Bay Company weathered th is t r an s i t i on i t has been poss ib le to trace some of these changes in management p rac t i ce s . This study touches b r i e f l y on some broader impl icat ions of economic development. The Indians involved in the fur trade were some of the only nat ive peoples in the New World who maintained control over the produc-t ion of a commodity for the European market. Yet trade was i n i t i a t e d large ly by Europeans and in the case of the Hudson's Bay Company adapted to levels of European consumption more than to Indian demand. Thus, while Indians retained a high degree of commercial autonomy economic development remained very dependent on condit ions in Europe. The fur trade was not simply a case of the economic exp lo i t a t i on of Indians. The drop in fur pr ices in Europe was a cost borne almost e n t i r e l y by the Hudson's Bay Company. The long-run ga in, however, was the company's for i t had been forced to develop more complex and sophis t icated business pract ices i f i t was to surv ive, which had far greater u t i l i t y and value than any loss which they took in the ear ly years. This suggests that one of the most important economic gains which Europeans derived from long-distance trade might well have been more s k i l l f u l commercial pract ices rather than simply p r o f i t . 95 BIBLIOGRAPHY Primary Sources Arch i va1 Hudson's Bay Company Records. Hudson's Bay Company Arch ives , Prov inc ia l Archives of Manitoba. Customs House Records. Publ ic Records O f f i c e , London. P r i nted Carr, Cec i l T . , ed. Select Charters of Trading Companies, AD 1530 -1707 . 1913 ; rpt . 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