Hudson's Bay Company

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File:HBC logo.gif
Hudson's Bay Company
Compagnie de la Baie d'Hudson

Company type	Private
Industry	trade retail sale in non-specialised stores
Founded	London, England May 2, 1670
Headquarters	Toronto, Ontario, Canada
Revenue	$7.0 billion CAD ($59.7 million FY 2005)
Owner	Jerry Zucker, governor
Number of employees	70,000
Divisions	The Bay Zellers Home Outfitters Designer Depot Fields
Website	www.hbc.com

Hudson's Bay Company (HBC; Compagnie de la Baie d'Hudson in French) is the oldest commercial corporation in North America and is one of the oldest in the world. It was once the de facto government in parts of North America before European-based colonies and nation states existed. It was at one time the largest landowner in the world, with Rupert's Land being a large part of North America. From its longtime headquarters at York Factory on Hudson Bay, it controlled the fur trade throughout much of British-controlled North America for several centuries, undertaking early exploration and functioning as the de facto government in many areas of the continent before the arrival of large-scale settlement. Its traders and trappers forged early relationships with many groups of First Nations/Native Americans and its network of trading posts formed the nucleus for later official authority in many areas of western Canada and the United States. In the late 19th century, its vast territory became the largest component in the newly formed Dominion of Canada, in which the company was the largest private landowner. With the decline of the fur trade, the company evolved into mercantile business selling vital goods to settlers in the Canadian West. Today the company is best known for its department stores throughout Canada. The Hudson's Bay Company Archives are located in Winnipeg, Manitoba, Canada. They also classify the Bay in downtown Winnipeg as the flagship store.

On January 26, 2006, HBC's board unanimously agreed to a bid of $15.25 CAD/share from Jerry Zucker, whose original bid was $14.75 CAD/share, ending a prolonged fight between HBC and Zucker, a South Carolina billionaire financier and longtime HBC minority shareholder. In a March 9, 2006 press release, HBC announced that Jerry Zucker would replace George Heller as the new Governor and CEO, to become the first US citizen to lead the company.

In 2007, the HBC company records became part of the United Nations, Memory of the World project, under UNESCO. The records covered HBC history from the founding of the company in 1670. The records contained business transactions, medical records, personal journals of officials, inventories, company reports, etc.

Today's modern HBC has diversified into joint ventures and other types of business products. HBC has credit card, mortgage, and personal insurance branches. These other products and services are joint partnerships with other corporations, similar to what President's Choice Financial brands are to Loblaw Companies Limited. HBC also has other HBC Rewards corporate partners such as: Imperial Oil/Esso, M&M Meat Shops, Chapters/Indigo Books, Kelsey's/Montana's Restaurants, Thrifty Car Rental, Cineplex Odeon Theatres, etc. HBC Rewards points can be redeemed in house or into corporate partners' gift cards and certificates. Points can also be converted to Air Miles.

HBC is involved in community and charity activities. The HBC Rewards Community Program help fund raise for community causes. HBC Foundation is a charity agency involved in social issues and service.

History

Early years

In the 17th century the French had a monopoly on the Canadian fur trade. However, two French traders, Pierre-Esprit Radisson and Médard des Groseilliers, learned from the Cree that the best fur country was north and west of Lake Superior and that there was a "frozen sea" still further north; correctly guessing that this was the Hudson Bay, they sought French backing for a plan to set up a trading post on the Bay, thus reducing the cost of moving furs overland. However, the recently appointed French Secretary of State, Jean-Baptiste Colbert, was trying to promote farming in the colony, and was opposed to exploration and trapping.

Radisson and des Groseilliers then approached a group of businessmen in Boston, Massachusetts to help finance their explorations. The Bostonians agreed on the plan's merits, and brought the two to England to elicit financing. In 1668, the English commissioned two ships, the Nonsuch and the Eaglet to explore possible trade into Hudson Bay. The Nonsuch was commanded by Captain Zachariah Gillam and accompanied by Groseilliers, while the Eaglet was commanded by Captain William Stannard and accompanied by Radisson. On June 5, 1668, both ships left port at Deptford, England, but the Eaglet was forced to turn back off the coast of Ireland. The Nonsuch continued on all the way to the southern portion of James Bay, where Fort Rupert was founded at the mouth of the Rupert River. After a successful trading expedition over the winter of 1668–1669, the Nonsuch returned to England.

Rupert's Land, once controlled by the Hudson's Bay Company

The Governor and Company of Adventurers of England trading into Hudson's Bay was incorporated on May 2, 1670, with a Royal Charter from King Charles II. The charter granted the company a monopoly over the Indian Trade, especially the fur trade, in the region watered by all rivers and streams flowing into Hudson Bay in northern Canada, an area known as Rupert's Land after the first director of the Company, Prince Rupert of the Rhine. This region constitutes 1.5 million square miles (3.9 million km²) in the drainage basin of Hudson Bay, comprising over one third the area of modern-day Canada and stretching into the north central United States, but the specific boundaries were unknown at the time.

The company founded its first headquarters at Fort Nelson at the mouth of the Nelson River in present-day northeastern Manitoba. The location afforded convenient access to the fort from the vast interior waterway systems of the Saskatchewan and Red rivers. Other posts were quickly established around the southern edge of Hudson Bay in Manitoba and present-day Ontario and Quebec. Called "factories" (because the "factor", i.e. a person acting as a mercantile agent and frequently specializing in one or a small number of commodities, did business from there), these posts operated in the manner of the Dutch fur trading operations in New Netherland.

The Hudson's Bay Company's first inland trading post was established by Samuel Hearne in 1774 in Cumberland House, Saskatchewan.

During the spring and summer, First Nations traders, who did the vast majority of the actual trapping, travelled by canoe and were received at the fort to sell their pelts. In exchange they typically received metal tools and hunting gear, often imported by the company from Germany, the centre of inexpensive manufacturing in that era.

Logo on old fur trading fort

The early coastal factory model contrasted with the system of the French, who established an extensive system of inland posts and sent traders to live among the tribes of the region. The conservative nature of the English company's more centralized factory system frustrated the company's founders, Radisson and Des Groseilliers, who urged bolder explorations of the continental interior. In 1674 they switched their allegiance back to France and in 1682 they founded North West Company to directly compete with the company. After war broke out in Europe between France and England in the 1680s, the two nations regularly sent expeditions to raid and capture each other's fur trading posts. In March 1686, the French sent a raiding party under Chevalier des Troyes over 1300 km (800 miles) to capture the company's posts along James Bay. The French appointed Pierre Le Moyne d'Iberville, who had shown extreme heroism during the raids, as commander of the company's captured posts. In 1697, d'Iberville commanded a French naval raid on the company's headquarters at York Factory. On the way to the fort, he defeated three ships of the Royal Navy in the Battle of the Bay, the largest naval battle in the history of the North American Arctic. D'Iberville's depleted French force captured York Factory by a ruse in which they laid siege to fort while pretending to be a much larger army. York Factory changed hands several times in the next decade. It was finally ceded permanently to what was by then the Kingdom of Great Britain (following the union of Scotland and England in 1707) in the 1713 Treaty of Utrecht. After the treaty, the company rebuilt York Factory as a brick star fort at the mouth of the nearby Hayes River, its present location.

In its trade with native peoples, the company adopted the widespread use of issuing wool blankets, called Hudson's Bay point blankets, in exchange for the beaver pelts trapped by native hunters.

A parallel may be drawn between HBC's control over Rupert's Land and the trade monopoly and government functions enjoyed by the Honourable East India Company over India during roughly the same period.

19th century

In 1821, the North West Company of Montreal and Hudson's Bay Company merged, with a combined territory that was extended by a licence to the North-Western Territory, which reached to the Arctic Ocean on the north and the Pacific Ocean on the west. Before the merger, the employees of the HBC, unlike the North West Company, did not participate in its profits. After the merger, with all of its operations under the management of Sir George Simpson from 1826 to 1860, the company had a corps of commissioned officers, 25 chief factors and 28 chief traders who shared in the profits of the company during the monopoly years. Its trade covered 7 770 000 km² (3,000,000 square miles) and it had 1,500 contract employees.

Although the HBC maintained a monopoly on the fur trade during the early-mid 19th century, there was competition from James Sinclair and Andrew McDermot (Dermott), independent traders in the Red River Colony, who shipped furs by the Red River Trails to Norman Kittson a buyer in the United States.

Throughout the 1820s and 1830s the company controlled nearly all trading operations in the Oregon Country, based out of the company headquarters at Fort Vancouver on the Columbia River. Although authority over the region was nominally shared by the United States and Britain through the Anglo-American Convention of 1818, company policy, enforced via Chief Factor John McLoughlin of the company's Columbia District, was to actively discourage U.S. settlement of the territory. The company's effective monopoly on trade virtually forbade any settlement in the region. It established Fort Boise in 1834 (in present-day southwestern Idaho) to compete with the American Fort Hall, 483 km (300 miles) to the east. In 1837 it purchased Fort Hall, also along the route of the Oregon Trail, where the outpost director displayed the abandoned wagons of discouraged settlers to those seeking to move west along the trail. The company's stranglehold on the region was broken by the first successful large wagon train to reach Oregon in 1843, led by Marcus Whitman. In the years that followed, thousands of emigrants poured into the Willamette Valley and in 1846 the United States acquired full authority of the most settled areas of the Oregon Country south of the 49th parallel. McLoughlin, who had once turned away would-be settlers as company director, now welcomed them from his general store at Oregon City and was later proclaimed the "Father of Oregon". The company retains no presence in the Pacific Northwest of the United States today.

Also during the 1820s and 1830s, HBC trappers were deeply involved in the early exploration and development of Northern California. Company trapping brigades were sent south from Fort Vancouver, along what became known as the Siskiyou Trail into Northern California as far south as the San Francisco Bay Area. These trapping brigades sent into Northern California faced serious risks, and were often the first to explore what was one of the last regions of North America to remain unexplored by Europeans or Americans.

One major event that lead to the demise of the HBC's monopoly in Rupert's Land was the Guillaume Sayer Trial in 1849. Sayer, a Métis trapper and trader, was accused of the illegal trading of furs and brought to trial by the Court of Assiniboia, which was heavily stacked with either HBC officials or HBC supporters. During the trial, a crowd of armed Métis men led by Louis Riel Sr. gathered outside the courtroom, ready to support their Métis brother peacefully or by force if necessary. Although found guilty of illegal trade by Judge Adam Thom, no fine or punishment was levied — many reports state it was due to the intimidating crowd gathered outside the courthouse. With the cry, "Le commerce est libre! Le commerce est libre!" ("Trade is free! Trade is free!"), the HBC could no longer use the courts to enforce their monopoly on the settlers of Red River.

Another factor was the findings of the Palliser Expedition of 1857 to 1860, led by Captain John Palliser. Although the initial report was unfavourable towards settlement, it sparked a debate which ended the myth being propagated by the Hudson's Bay Company that the Canadian West was unfit for agricultural settlement.

In 1870 the trade monopoly was abolished and trade in the region was opened to any entrepreneur. The company relinquished its ownership of Rupert's Land under the Rupert's Land Act of 1868 enacted by the Parliament of the United Kingdom.

Modern operations

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The current HBC logo

One aspect of the company's operations was the Hudson's Bay Company Stores, trading posts that were established across northern Canada. Today, this is the only part of the company operation remaining, in the form of department stores under the name The Bay. The first department store opened in Winnipeg, Manitoba in 1881. Others soon followed. Many Hudson's Bay Company stores were, until quite recently, the only stores in remote towns. More recently, the stores in major downtown locations have been transformed into boutiques.

In 1970, on the 300th birthday of the company, head office functions were transferred from London, England to Winnipeg, Manitoba, Canada. As the company expanded into the east, head office functions were moved to Toronto, Ontario, Canada.

The Hudson's Bay Company building in Montreal

Today there are five retail divisions: The Bay, Zellers, Home Outfitters, Designer Depot, and Fields.

Northern Stores are no longer operated by HBC, but by a corporation organized in 1987 under the name The North West Company. Simpson's department stores which were acquired by Hudson's Bay Company in 1979 were converted to The Bay stores in 1991. In the 1970s and 1980s, HBC operated a chain of catalogue stores under the name Shop-Rite. In these stores, little merchandise was displayed openly: customers made their selections from catalogues, and staff would retrieve the merchandise from storerooms. This form of retailing, now largely disappeared, was referred to as "catalogue showroom".

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The Bay logo

The legacy of the HBC has been maintained in part by the detailed record-keeping and archiving of material by the Company. Before 1974, the records of the HBC were kept in the London office headquarters. The HBC opened an Archives department to researchers in 1931. In 1974, the Hudson's Bay Company Archives were transferred from London to their Canadian headquarters in Winnipeg and granted public access to the collection the following year. In 1991 the archival records of the company were donated to the Manitoba Archives in Winnipeg, Manitoba.

In 1987 the HBC sold off its Canadian fur auction business to Hudson's Bay Fur Sales Canada (this company is now known as North American Fur Auctions). In 1991, the Bay agreed to stop selling fur in response to complaints from people opposed to killing animals for this purpose. However, in 1997, the Bay reopened its fur salons to meet the demand of consumers desiring to buy fur. Animal rights groups such as Freedom for Animals have been campaigning to get the Bay to once again stop selling fur.

In 1994, the HBC donated the Company records to the Province of Manitoba. The appraised value of the records was nearly $60 million. A foundation, funded through the tax savings resulting from the donation, was established to support the operations of the HBCA as a division of the Archives of Manitoba, along with other activities and programs. There are more than two kilometres of documents as well as hundreds of microfilm reels now stored in a special climate-controlled vault in the Manitoba Archives Building.

In December of 2003, Maple Leaf Heritage Investments, a Nova Scotia-based company that was created to acquire shares of Hudson's Bay Company, announced that it was considering making an offer to acquire all or some of the common shares of Hudson's Bay Company. Maple Leaf Heritage Investments is a subsidiary of B-Bay Inc., whose CEO and chairman is American businessman, Jerry Zucker, the head of The InterTech Group Inc., a conglomerate that is the second-largest private firm in the state of South Carolina. Zucker had previously been the head of the Polymer Group that acquired another Canadian institution, the Dominion Textile Company.

On March 2, 2005, the company was announced as the new clothing outfitter for the Canadian Olympic team. The $100 million deal means that The Bay will provide clothing for the 2006, 2008, 2010, and 2012 games.

Rent obligation under Charter

Under the charter forming the Hudson's Bay Company, the company was required to give two elk skins and two black beaver pelts to the Canadian Monarch, or his or her heirs, whenever they visit an area that was formerly Rupert's Land. The ceremony was first conducted with the Prince of Wales (the future Edward VIII) in 1927, then with King George VI in 1939, and last with his daughter, Queen Elizabeth II in 1959 and 1970. On the last such visit, the pelts were given in the form of two live beavers, which the Queen donated to the Winnipeg Zoo.. However, when the Company permanently moved its headquarters to Canada, the Charter was amended to remove the rent obligation. Each of the four "rent ceremonies" took place in or around Winnipeg.

It is, however, a persistent "urban legend" that the company would lose its charter if it did not give the Monarch the rent any time she visits Western Canada, and so, it is alleged, there are furs and blankets stored at a Bay store in each city, with the manager prepared to rush to the airport and present them to the Queen should her plane touch down, even to refuel.

The york factory was the headquarters for the HBC company