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Lecture

Chapter 7.docx

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Department
Economics
Course
ECON 2P19
Professor
Indra Hardeen
Semester
Fall

Description
Chapter 7 – The West Economy 1713-1870 The Era of the Middleman, 1713-1770s • The pattern of trade that existed through much of the 18 century rested on four elements • The first was the Hudson’s Bay Company th • Early in the 18 century, French military incursions against Hudson’s Bay Company posts had been resolved by the 1713 Treaty of Utrecht • Under this treaty, the French relinquished all claim to Hudson Bay • The fur trade was divided between the great North American powers on the basis of geography – the French operating out of Montreal, and the English from the bay • Those bringing the furs, the Cree and the Assiniboine, provided the second central element in the trade • The third element was the French traders • Guns, hatchets, blankets, knives, chisels, tobacco, and liquor formed the staples of the trade. This is the fourth element • The Europeans operated only on the periphery of the region, their impact on the native community was considerable • The economy of the Native populations depended on adapting to the implications of these European imports, the horse and gun • A high demand for furs and a ready supply would mean economic prosperity • European technology and European trade had an impact, but did not alter this fact in any fundamental way until much later • The Cree and the Assiniboine were able to dominate the exchange of goods between the Europeans and the Native peoples of the interior • Control of the trade by this northern coalition of tribes put them in a very powerful position, both economically and politically, because they could decide to what degree European technology would filter inland, and at what price • They could determine what furs, and in what quantities, went to each of the European companies • Transportation was difficult and, if the timing relative to seasons was wrong, highly dangerous • These two groups were located in a strategic position geographically • Scattering along forest and parkland to the south and west of the bay, they were the first Native peoples who had regular contact with the Hudson’s Bay Company traders • They could also save more distant Native traders the difficulties of transport by buying their furs and, in return, selling to them Hudson’s Bay Company or French goods • The traditional practice was for the middlemen to use the implement or weapon for a while and then to pass it off at high prices to tribes in the interior • The access to guns by the middleman made this show of force somewhat more persuasive • By the early 18 century, the fur trade system was in place • The Cree and the Assiniboine had established themselves between the fur resources and the European traders, and, much like the merchants of Montreal, profited by facilitating the exchange of these resources • The French did penetrate beyond the Great Lakes to the Prairies by the 1730s • These two Native groups had what has been described as a virtual monopoly over the supply of furs to the Europeans • There are two other striking things about the 18 century fur trade • First, as the presence of the middlemen indicates, this trade was more controlled and dominated by the Native peoples than by the Europeans • The Hudson’s Bay Company sat, their trade centres at such places at Fort Albany, Fort Churchill, and Fort York acted as collectors of furs brought from the interior by Native bands • Even when the French began to push on into the Prairies in the 1730s, they affected only the edge of the fur trade • Trade practices had to alter to conform to the patterns of Native life • A barter accounting system on the basis of MB (made beaver), which denoted the rate of exchange based on a primate beaver pelt, became the standard usage of the company • The failure of a European currency system to penetrate the country indicates the degree to which the indigenous population retained economic dominance in the region • Native traders wanted only so much in terms of kettles, axes, guns, and the like • Once they had these goods, better prices or more attractive durable goods would not produce a change in supplies • Only when Native traders were enticed with ephemeral goods, such as liquor, or easily transportable ones, such as beads, could the pattern be broken • Native traders routinely made ritual exchanges of goods between themselves • Band meeting band would give presents as a token of friendship and goodwill • When the Europeans arrived, they found it expedient to adopt this practice • When a group of traders arrived at a Hudson’s Bay Company fort, a ceremony occurred in which the leading officials at the fort would welcome the leading Native representatives, and gifts would be exchanged • This institutionalized gift giving had led to the argument that the Native peoples’ economy should not be seen in market terms at all • The coming of the market system, according to this view, had still to await the development of peaceful conditions, adequate and reliable policing, and a common legal framework • There is no doubt that the ritual gift giving was derived from such a diplomatic practice • The Native population was interested in using goods to secure friendship and security, or course The Era of Renewed Competition • New traders began to spread westward from the Great Lakes • These were the so-called pedlars, operating once again out of Montreal • The canoemen and traders were men familiar with the business from before the fall of New France • This time, they were backed by English and Scottish capital, and the expeditions were headed by the representatives of the new British merchant class moving into Montreal • As the Hudson’s Bay Company would quickly discover, the change of rulers at Quebec did not alter the fundamental rivalry between the two major routes to the West – the St. Lawrence River and Hudson Bay • The pedlars out of Montreal were small outfitters, but the nature of the fur trade encouraged combination • The first is that there did emerge, by the 1780s, a dominant syndicate out of Montreal, known as the North West Company • Headed by the Scottish merchants of the McTavish and Frobisher clans and held together by a series of partnership arrangements, the North West Company had the resources and desire to challenge the Hudson’s Bay Company head-on • The second point, the advantages of combination might be very clear, there was no easy way to ensure that some new interloper did not appear on the scene • Both the Hudson’s Bay Company and the North West Company were harassed by the appearance of new fur-trade partnerships out of Montreal • If the new companies could be driven out of business, then all was well, if not, then the best practice, at least as far as the North West Company was concerned, was to absorb them • In 1794, the British signed Jay’s Treaty with the United States, handing over thousands of square kilometres of British-occupied territory south and west of the Great Lakes • The southwest fur trade was reserved for American citizens • In 1798, two new Montreal firms emerged to challenge the supremacy of the North West Company • The rivalries that sprang up in the northwest after 1770 had a marked effect on the nature of the fur trade • The Montreal companies quickly expanded their operations to territories never visited by the French before the conquest • By the early 1800s, as the three cornered rivalry between the North West, XY, and Hudson’s Bay companies reached new heights, scores of posts sprang up along the rivers of the parkland and forest belt • This rapid penetration inland brought major changes in the economic activity of the interior • The first change was on the part of the Hudson’s Bay Company • The Native middlemen had made the trek to it • As the Montreal traders penetrated the Saskatchewan River system and then the Athabasca River, the Native traders found it less and less necessary to make the arduous trop to the shores of Hudson Bay • The result was that the company began to lose its share of the trade • York Factory, saw a rapid decline as the central entrepot of the fur trade • The Hudson’s Bay Company had to respond or face bankruptcy • When it became obvious that Native traders were no longer making the trek to the bay, the company decided to move inland • In 1774, it established Fort Cumberland on the Saskatchewan River, about 400 kilometres southwest of York Factory • It spread westward along the Saskatchewan system and its tributaries until, in 1795, it established Fort Edmonton • In the early 19 century, it hauled its goods not by the traditional canot du nord but the York boat • This 12 metre long boat required the same number of crew as a canot du nord, but carried twice the cargo • The efficiency of such loads more than made up for the difficulties in portaging and in loading and unloading • The use of the York boat, in combination with the efficiency of transporting goods to the interior via Hudson Bay, was the greatest strength of the Hudson’s Bay Company • One of the great disadvantages faced by the Hudson’s Bay Company was of its own making • The North West Company rested on a series of partnerships and incentives that tied the success of the company to the income of senior personnel • The experts in the day to day operations of the trade in the field thus had both incentive and involvement in company policy • Their ideas made the North West Company innovative and tremendously expansionary • Hudson’s Bay Company was rigidly centralized • Wages were determined in London, and there was little flexibility for those acting in the territories • Only when pushed by its competition did it begin to change policy • In 1770, a system of bonuses was developed for Hudson’s Bay Company employees • Salary was only a part of the problem, and the lack of consultation, centralized decisith making, and rigid practices continued to plague the company well into the 19 century • The Montreal merchants, undaunted by the countermoves of their rivals, simply pushed their network farther afield, competing with one another as well as with the Hudson’s Bay Company • Between 1789 and 1805, some 325 new posts were built in the thinly populated interior • In 1804, the North West Company merged with the XY Company, that dominance seemed all the greater • The expansion into the interior and fierce competition had several important results • First, it altered and eventually undermined the role of the northern coalition as middlemen in the fur trade • European trades now brought trade goods directly to the Blackfoot tribe and others at a fraction of the costs previously imposed by the middlemen • The trading post moved with the Indian trappers, access to it could no longer be controlled by native tribes • The European presence also destabilized the balance of power among the various tribes, and a series of conflthts, from small skirmishes to major shifts in power, occurred through the later 18 century • New circumstances also brought new opportunities • But especially from the buffalo regions of parkland and prairie, a series of new trade patterns developed • The Cree and the Assiniboine send provisions to fur trade posts along the well- travelled Saskatchewan River and Lake Winnipeg routes • Alexander Mackenzie could comment of the Assiniboine that they are not beaver hunters, they confine themselves to hunting buffalo and trapping wolves, which cover the country • Arthur Ray has estimated that, at one medium sized post on the Pembina River, nearly 150 buffalo were killed, more than 1,000 fish caught, and 325 bushels of potatoes were required to provide basic food supplies for one year • The traders found that both the geography and the Native population of British Columbia posed problems • It was extremely difficult to find an easily travelled river route that would permit the ready transport of furs, trade goods, and supplies • Not until about 1811 was the Columbia River route sufficiently well known that it provide that link – a link that was, but a thin ribbon travelling through a vast and segmented geography • In 1813, the North West Company used the War of 1812 and a nearby British warship to coerce the American Fur Company into selling Fort Astoria on the Columbia River, and the network was complete • The North West Company was never able to develop a series of stable trade relationships with the tribes of the far west • For this region was much more heavily populated than the Prairies, or to the different types of band and tribal relationships that had grown out of the geography and culture of the region • The vast expansion of the Montreal trade network created problems not only for the Europeans, whether of the Hudson’s Bay or the North West companies, but also for the Native population • The extension of the European trading networks rapidly destroyed the privileged position of the Cree and the Assiniboine • Interior bands could now trade directly with any of two or three companies without making the arduous journey to the bay and without paying the high mark- up demanded by the Native middlemen • The ailing Hudson’s Bay Company had been vulnerable to a takeover for some time, and the Earl of Selkirk was able to take control of the company • Selkirk’s primary purpose was to assist the disposed Scottish Highlanders • The settlement, established at the confluence of the Red and Assiniboine rivers, lay along one of the primary supply routes to the northern posts • To the North West Company, the Red River settlement was but another move in the escalating competition between the bay and the river • The government of Red River interrupted pemmican shipments to the interior, thus threatening starvation to a good many North West Company employees in the interior • The Nor’Westers tried to entice the settlers away and, when that effort failed, turned to the emergent bois-brule or Metis people, who saw their interests as allied with those of the North West Company • Competition had turned to harassment, and harassment to something approaching open warfare • The violence at Red River brought the chaos in the interior of N
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