Beads To Billions: The Story of the H.B.C.
The Company of Adventurers now sells moccasins to the Indians, Pablum to papooses, and bargains to suburbanites
ONE day last May the Hudson’s Bay Company’s Winnipeg department store scored a minor triumph over its archrival, the T. Eaton Company, by snapping up the exclusive Canadian rights to “every-day-in-the-week pantie briefs.” These dated drawers, the Bay was pleased to announce, came in sets of seven, “each a different color with the day of the week beautifully embroidered in contrasting color on the left leg.” At a scant 95 cents per scantie, Winnipeggers snapped
them up. Meanwhile, a few blocks down Portage Avenue, Eaton’s was doing a swift business in a novel line of its own: boy’s cowboy suits, complete with chaps.
This was an isolated though fairly typical skirmish in the commercial cold war the Bay (full name: the Governor and Company of Adventurers of England trading into Hudson’s Bay) is presently waging throughout the Canadian West against Eaton’s, the invader from the East.
For years this pair of merchandising giants has been grappling, pitting bargain against bargain in Winnipeg, Saskatoon, Edmonton and Calgary, but it wasn’t until early this year that their rivalry was fanned to its present heat.
Eaton’s was the aggressor. By buying up David Spencer Ltd., the nation’s fourth largest department store chain, Eaton’s pushed their own chain— by far Canada’s biggest—to the Pacific Coast. There, in Victoria and Vancouver, they presented a new challenge to the Bay, the third largest chain. (Simpson’s is second.) The Bay now faced Eaton competition in every one of the six Western cities in which it operates department stores.
Eaton’s are rated by some observers as tough competition for the Governor and Adventurers to handle. They’re known to be highly skilled at pushing anything from witch hazel to roller skates and their mail-order catalogue has won its place in the pattern of Canadian culture.
But anyone who has delved into the Adventurers’ background has no qualms about the merchandising capabilities of a company which once made a practice of swapping the Indians two red feathers for one beaver skin, or which even today sells chewing gum and outboard motors to the Eskimos, and Coca Cola and cowboy records to the Indians.
This is the way Bay officials seem to feel about it too. Publicly, at least, they won’t even admit there’s a war on. Eaton’s invasion of Victoria and Vancouver is considered simply routine, if spirited, competition. And, says Philip Alfred Chester, the tall, silver-haired managing director of the company in Canada, “We love competition.”
Chester, an assured, pleasant Englishman who is Canadianized to the point where he uses both “guy” and “bloke,” recalls that his company is the oldest of its kind in the world (280 years next May) and, away back in 1682 was operating the first, chain store system on the North American continent. “The Hudson’s Bay Company,” he remarks coolly, “has experienced everything. And survived.”
For over 200 years the Bay Company was absolute ruler of nearly half of Canada. It could marry a man, or hang him. It could coin money, and did
He doesn’t say that Eaton’s challenge in British Columbia is just another fleeting interlude in the long life of the Hudson’s Bay Company. But he infers it. As Chester, and most other Canadians well know, the three provincial capitals where his company operates stores (Winnipeg, Edmonton and Victoria) evolved from Hudson’s Bay trading posts and the Bay once owned the land on which four of Eaton’s stores now stand.
The war is being fought chiefly in full-page newspaper advertisements and with sales and slogans (both stores harp on the promise of satisfaction or your money back). Waging it are rival groups of high-powered salesmen who know a bargain in kitchen linoleum or paring knives when they see one, backed up by such auxiliary troops as the comparative shoppers who steal into the enemy store to bring back intelligence on prices and sales gimmicks.
But compared with some of the scrapping the Bay has done in the past to turn an honest pound note for its English investors, it is kid’s stuff.
In the late 17th century the Bay fought a 10-year war (complete with naval battles) against the French on Hudson Bay. And early last century it waged a wilderness campaign of ambush, starvation and sudden death against the North West Company over the same Canadian West where
the Eaton forces have chosen to make a stand.
The Nor’westers rubbed out 22 Bay men in a single massacre but the bulk of the Adventurers lived to see the North West Company go to the wall. Eaton’s can count itself lucky it is not going to the mat with the Hudson’s Bay Company of a century or two ago.
In its swashbuckling days the Hudson’s Bay Company stuck strictly to the fur trade, but today it is a merchandising giant doing more than $100 millions worth of business a year. Most of these millions pour into the tills of the company’s six large department stores. The rest are gleaned from the fur trade and a multitude of strange sidelines.
In all the history of commerce there has never been anything quite like this company which owes its beginning to a couple of eager French beaver trappers (Radisson and Groseilliers) and a businessminded English king (Charles II). And even today it remains unique.
The Eskimo fashions his igloo with a Hudson’s Bay snow knife, the Indian buys his machine-made moccasins from a company post and the paleface graduate of the University of Manitoba goes to the Bay to rent his convocation gown.
The Bay runs a Persian lamb ranch in South Africa, an apartment house, a fur-breeding farm, vast beaver preserves, a museum, a shipping fleet, a high-quality quarterly magazine, a radio network and laboratory, a cargo airline, a couple of golf courses, and a wholesale department which peddles tea, coffee, tobacco, candy and its own brand
of bottled liquor — rye, Scotch, rum and gin:
The Bay sells rich prairie farm land and dabbles in Alberta oil. It sells the rights to timber, hay and oyster shells on 30 islands it owns in the Gulf of St. Lawrence.
The Bay’s retail store operations include 14 small department stores in towns from Quebec to British Columbia and 35 general stores in small farming, railroad, mining and paper towns. Its modern store in the gold-mining boom town of Yellowknife on Great Slave Lake ran its gross sales to $1 million in its opening year with such promotion stunts as a New Look fashion show.
The Bay owns 202 fur trading posts scattered over Canada from Atlantic to Pacific and from the 49th parallel to the Arctic straits. Its fur sales are the world’s second largest—only the Russian Government has it beaten.
The company once owned two fifths of Canada and held a trading monopoly over a good deal more of it. When Charles II granted the company its charter on May 2, 1670, all the territory drained by rivers flowing into Hudson’s Bay went with it. Charles had no way of knowing, but this included parts of Quebec, Ontario, Alberta, the Northwest territories, most of Saskatchewan and all of Manitoba.
Over this domain the company was king. It made laws and enforced them. It could hang a man or marry him. It issued its own currency and levied its own taxes. It had the power to raise an army and to declare war.
At its peak the company not only held regal sway over most of Western Canada, but it also was running trading posts in Russian Alaska, Siberia, California, and Hawaii.
Apart from the Canadian Pacific it is the only Canadian company to win prominent mention in school history books or to have itself glamourized in a Hollywood movie. The company would just as soon forget Hollywood’s tribute. “The Hudson’s Bay Company,” starring Paul Muni and Laird Cregar, turned out to be such a Technicolor turkey that Bay executives shunned its Canadian premiere.
The Bay surrendered the major part of its territories, under pressure and for a price, to the newly born Dominion of Canada in 1869. Its price was £300,000, 45,000 acres surrounding 120 trading posts, and one twentieth of all arable land between the Rockies and Lake Winnipeg. All in all this left the Bay with roughly 7 million acres. Long ago the company pulled out of Siberia and Hawaii, but even today it still clings to a few of its ancient trappings.
It still pays £300 a year to the Bishop of Rupert’s Land (Bay territory was called Rupert’s Land after the firm’s first governor, Prince Rupert) and stitchés its initials, H.B.C., on the red ensign, as it has had a right to do for more than a century.
It persists in calling its shareholders proprietors, its board chairman the governor, and its annual meeting the general court. And it is still obligated —or feels it is—to fork out two elks and two black beaver skins to members of the Royal Family whenever they visit Canada. The Duke of Windsor and the present King and Queen have collected.
In all other respects the company is as modern as air conditioning and fluorescent lighting can make it.
London Pulls the Strings
DERBYSHIRE-BORN Philip Chester, the 53-
year-old managing director for Canada, runs his empire from Hudson’s Bay House on Winnipeg’s Main Street just a musket shot from the company’s old Fort Garry. The ruins of one fort can be seen from the office windows.
Chester’s colleagues call him the modern George Simpson. Simpson was the merchandising genius who revitalized the company after its merger in
1821 with the North West Company which climaxed their ruinous war. Simpson was Canadian governor at the peak of the Bay’s fur trade greatness. Chester, a chartered accountant who joined the Adventurers in 1923, put new fire into the firm after it had taken a beating in the 30’s.
In keeping with a company tradition that discourages personal publicity, Chester has seldom been photographed and his interviews with the Press are invariably on an off-the-record basis.
Though the company’s business is done almost entirely in Canada, its top direction still comes from the London board headed by Sir Patrick Ashley Cooper, its 30t.h governor. It is still 90% British-owned and its annual meetings are held in Beaver Hall, Garlick Hill, London. Chester heads the Canadian Committee that conducts the business in Canada, and is a member of the London board.
The fur trade remains the company’s most fascinating aspect. Its personnel manager is harassed by young men who hanker after Arctic adventure and by magazine writers who romanticize the fur trader’s life, to the dismay of the fur trader. Many young aspirants think they’ll get a whip and a dog team when they join the service. Some picture themselves playing poker with the Mounties.
There is no company edict against the fur trader engaging the law in a game of penny ante, but he’ll go a long way to find such romantic trappings as a dog team or an express canoe brigade. Today the lonely outposts are linked by bush pilots who soar in on skis and pontoons.
The typical Hudson’s Bay post consists of three gleaming white buildings—house, warehouse and store. Sometimes there is an Indian house, a crude, windowless shack, completely bare except for an old stove. Here the Indian is welcome to stay the night, rent free, when he comes to the post to swap his muskrat skins for a new sewing machine for his squaw.
More often than not, the post manager’s only neighbors are Indians or Eskimos. In many places the Indians cannot speak English and the post manager has to learn the Indian lingo. The more independent Eskimos virtually insist on the white man mastering the native tongue.
Relations between the Bay man and the natives are friendly, but intimacy is not encouraged. Economically and socially, the Indian has been kept in the same position he was thrust into when the first Bay man came to make a profit out of his hunting skill.
Some posts are flanked by an Indian Affairs nursing station, and at others there are weather* bureaus. Occasionally there is a priest or a Mountie for company.
The fur trader’s life is still one of isolation and loneliness but the Bay provides him with a multitude of civilization’s comforts. Even in the barren Arctic he has electricity, hot and cold running water and indoor plumbing in the company house.
Many a home-hunting city dweller would be grateful for a house such as the Bay provides for the post manager and his family. The standard house has three or four bedrooms, combination living and dining room and fully modern kitchen. The experimental house the Bay built in Winnipeg before constructing one in the wilds cost $12,000.
The house is completely furnished by the company with everything from soupspoons to nutcrackers, 2,700 items in all. When a chesterfield at a post on Baffin Island shows signs of wear, the company’s huge Canso flying boat zooms in from Winnipeg and disgorges a new one. And the post manager’s wife needn’t worry that it will clash with her drapes or rug. The home furnisher in Winnipeg knows the color of every pair of drapes and of every rug from Pond Inlet, on Baffin Island, to Tuktuk in the Western Arctic.
“War and Peace” at Every Post
The company provides each post with a standard library, running from “Anthony Adverse” to “War and Peace,” and adds three books to it each year. Fifty or more pocket books are sent to each post with the yearly supplies.
The company concerns itself with every personal problem of its outpost employees—from pregnancies to the offspring’s education.
Housing, furnishings, light, fuel and food — which is ordered in huge amounts once or twice a year—are provided at a fraction of cost. The post manager pays $25 a month each for himself and his wife and an additional $4 to $15 for each child, depending on the child’s age, which, naturally, regulates his capacity to devour company groceries.
The company prefers to have married men on its isolated posts but provides domestic help for its bachelor managers. Today it frowns on the old Arctic custom, still prevalent 10 years ago, of the post manager taking to himself a native wife on a strictly casual basis.
Post children are supplied with correspondence - school courses until they reach 10 whem the company kicks in vrith a contribution toward educating them in the city. It checks up on the
vitamin and calory consumption of its families and makes sure that even the Arctic trader is on a perfectly balanced diet.
Every post has a large medical chest, including some dental and surgical instruments. Free medical advice is available.
The post manager is encouraged to grow some of his own food. The company hired botanists to study gardening in the Arctic and promotes an annual gardening competition among the posts.
The post manager stands a good chance of saving a good part of his salary. Roy and Sheila Allen, who run the post at Grassy Narrows, Northern Ontario, figure it costs them only $10 a month for extras above the $50 they pay for food and housing. This summer they blew themselves to a nonbush vacation in Vancouver.
The Wives Gossip in Morse
Some wives take to life among the Indians and Eskimos like a drunk takes to H.B.C. Best Procurable, and some don’t. Sheila took to it. She was a bride of a few weeks when Roy brought her to Grassy Narrows, a four-acre island in an isolated lake.
I met her last May when she had been there 10 months and she was happy and contented though she hadn’t set foot off the island since November. She and her husband and a young clerk are its sole inhabitants and you can stroll completely around it in five minutes.
The Allens are host to more paleface visitors than most post people. Grassy Narrows is in the heart of fish and game country which attracts flocks of wealthy American tourists. Even in winter Americans fly overhead taking pot shots at wolves prowling on the frozen lakes.
In all the North there is probably no woman more attuned to the life than Jo Harvey whose husband Jim manages Osnaburgh House, another lakefronting post in Northern Ontario. Her family association with the fur trade goes back almost a century and a half. Her great-grandfather was a Hudson’s Bay fur trader and she herself was born at Moose Factory, a post that dates back to the very beginning of the company in the 17th century.
She has her own team of Eskimo sled dogs, she’s an accomplished angler, one of the fastest women with a Morse key in all the north, and as a marksman she could whip Annie Oakley.
During the long, weary winters post wives master the Morse code and swap northern gossip and recipes. Every post has radiotelegraph or telephone equipment as well as a radio set for program listening, designed by the company’s own radio laboratory. In the Arctic, reception is terrific; New Zealand and London come roaring in.
At spring breakup, after they have traded their winter fur catch and before they turn to their summer pursuits of berry picking or fishing, the Indians hang around the company store, loafing and pulling on tailormade cigarettes. The Indians at Grassy Narrow go for snuff in a big way. Men, women and children are addicts.
The Indian has adopted the white man’s dress, but he’s no Beau Brummell. His coat seldom matches his pants and, for that matter, the patches on his pants and coat never match either. He invariably wears rubbers over his moccasins and the peaked cap is the vogue.
The ancient company still makes more barter than cash deals with the natives but the bartering is now done with the greenback rather than the beaver skin as the basic standard. When an Eskimo brings in his catch of white fox he is told its value in dollars and he then knows he may have that many dollars worth of grub or ammunition. If he wishes, he may have cash. “But,” as one Bay man put it, “there’s nowhere else he can spend it.”
The Eskimo and Indian trappers, as well as the Adventurers themselves, are completely at the mercy of the bewildering caprices of fashion. The native may return to a post in the spring laden down with furs he has traveled hundreds of miles to catch only to find a new trend in fashion has rendered them virtually worthless. This is a quirk of the paleface world the native can’t fathom.
In lean years the company grubstakes the natives. In some regions the bigger the bill he is allowed to run up the better the Indian feels. The best hunter is given the most credit and to be deeply in the hole increases his prestige.
The natives’ tastes and needs vary tremendously from region to region and the company is obliged to cater to the local whims and dictates.
Violins on James Bay
The Indians on James Bay go wild over cowboy records and those at Lac Seul are just as crazy about Coke, chocolate bars and airplane joy riding. When they’re in the chips, which is not often, they think little of blowing $30 on a flip to the town of Hudson 18 air miles away. At treaty time, when they are given a small government handout, the Indians wedge themselves into the company store and indulge in an orgy of chocolate bar munching and Coke guzzling.
The James Bay Indian, who once smoked nothing but heavy black Irish twist, now prefers tailor-made cigarettes and rollings, but he still likes to play the violin. The old Scottish servants of the company’s early days on Hudson Bay taught the natives how to saw out a tune.
The Indian and Eskimo are eligible for the family allowance and throughout the North the company helps the government distribute it. The native is not given his baby bonus in cash but draws it in kind. Every post stocks plenty of Pablum for the local papooses.
The company still carries a supply of beads (made in Czechoslovakia) but they’re not the fast-moving item they once were. The Indian has lost most of his handicraft skill and, in some regions, even buys his moccasins from the company post. Some of these are made on the machines of the Casey Jones Company in Winnipeg, others are bought from one tribe of Indians and sold to another.
The company purchases surplus moccasins from British Columbia Indians and retails them to the native on James Bay. Wolverine pelts are bought in British Columbia and sold to Eskimos who use the fur to trim their parkas, and deerskin bought from Eskimos at Chesterfield Inlet is sold to the natives of Baffin Land.
The Bay’s most primitive customers are the Bathurst Inlet Eskimos who visit the company post only once a year to buy tea, tobacco and some ammunition. A few of them still hunt with a bow made from musk ox bones.
The company has never tried to sell an icebox to the Eskimo but recently it did try to sell aluminum canoes to the Indian. They hit the market with a tremendous thud. A few braves tried them out and reported the con-
traptions made a devil of a racket in choppy water. “No sale,” they advised the post managers.
The problem the company faces in moving thousands of tons of supplies and building materials over the vast Northland is monumental.
Fifty tons of materials are needed to build a complete post and nine times out of 10 every nail has to be flown in. When the post site is on a river that does not provide sufficient landing room for the company’s giant Canso, supplies are ferried in by the small Norsemen aircraft. The company’s three planes carry about a million pounds of cargo a year as well as flying district managers, cost accountants and the top brass from one end of the country to the other.
Its fleet of polar ships sails close to 60,000 miles a year distributing 9,000 tons of supplies from Ungava Bay in the Eastern Arctic to the Beaufort Sea in the Western Arctic.
From early September to late July two polar ships, the Fort Ross and the Nigalik, plow through the ice-strewn sea distributing supplies and picking up furs in a risky race against freezeup. This summer, a new all-wooden ship, the Fort Hearne, sailed from Quebec through the Panama Canal to join the company fleet in the Western Arctic.
Queen of the H.B.C. fleet is the Prince Rupert, another new ship. The Rupert, successor to the famed Nascopie, is an all-steel vessel of 1,020 tons. She winters in Halifax and in June heads
Yesterday’s Hero — The George Young Story
What’s happened to Canada’s greatest swimming champion?
He’s hidden in a $50 a week job in Philadelphia. Why?
Read Robert Thomas Allen’s article in Sept. 1 Maclean's, on sale
north for Hudson Bay. From July until freezeup in October she works the Bay, reloading several times at Churchill. A pair of company schooners, the Fort Charles and Fort Severn, work out of Churchill and Moosonee on James Bay, and Newfoundland sealers are chartered to supply Baffin Island.
The ultimate goal of all this northern activity is to pour a stream of furs into the company’s auction houses in London and New York. The company’s auctions, held in London since 1672 and more recently in New York (by Lampson, Fraser & Huth, a wholly owned subsidiary), are world renowned. A third auction house is being built in Montreal and fur sales will be held there beginning in January.
A big seller at the London and New York auctions is Persian lamb from South and Southwest Africa. Years ago the company pioneered lamb ranching in Africa. Today so many Persian lambs are raised that their fur provides that area with a major export product.
In spite of its pre-eminence in the fur business, you can’t count on buying a fur coat with the hammer-pricked initials H.B.C. on the inside of the skins when you shop at a Hudson’s Bay store. The company buys its coats on the open market, as does any other retailer.
Besides its far-flung chain of posts, the company also operates eight raw fur collecting depots throughout Canada where it purchases pelts from trappers and ranchers. The Winnipeg
depot even contracts for the skins of captive animals declared surplus by the city zoo.
When the company first set up shop on Hudson’s Bay in the 17th century, it began to tap the richest beaver country in the world. More than two hundred years of indiscriminate slaughter virtually wiped out the beaver in large areas of the North. In a moment of enlightened self-interest, the company eventually began to replenish the Bay region. Today it maintains six beaver preserves around James Bay, comprising 46.000 square miles.
The company is also trying to restock the James Bay preserves with marten.
At its Bird’s Hill ranch outside Winnipeg, Superintendent Bill Douglas raises a variety of foxes, mink, fisher, marten and even the odd lynx. Here Douglas will mate a Greenland blue fox with an Arctic white fox in the hope of developing an exotic new fur that will set Paris on her ears. But what happens? The baby foxes will be either all blue or all white, or several will be white and several blue. None will be spotted.
Blankets and liquor are no longer staple items of the fur trade as they once were, but the company is still renowned for both. The Indian can’t afford Bay blankets and the government forbids him to touch anyone’s liquor. Luckily, the American tourist goes wild over both. A subsidiary, the Hudson’s Bay Company, Inc., peddles the company hootch in 28 states of the
Union and sells stacks of the famous H.B.C. point blankets. The blankets are made in Britain.
The company operates a huge wholesale concern, with a cluster of satellites, throughout Canada. Hundreds of stores through the West stock its Fort Garry tea and coffee. The coffee is roasted in the Bay’s own plants in Vancouver and Winnipeg. Hudson’s Bay liquor, which the firm has bottled in Canada, Scotland, the West Indies and France, and its point blankets are also handled by its own wholesale outlets.
Oil Brought More Wealth
When oil was discovered in Alberta it meant more money in the Hudson’s Bay Company kitty. The firm owns oil and mineral rights to 4,500,000 acres of prairie land. It had sold 2,500,000 acres of its holdings when, about 1910, it tumbled to the idea of holding back oil rights.
The company does not work the oil rights itself but has formed a partnership with the U. S. Consolidated Oil Company and the pair is raising derricks in the name of the Hudson’s Bay Oil and Gas Company.
The Rupert’s Land Trading Company, another Hudson’s Bay offshoot, has the deeds to some strange and highly valuable properties in its vaults. It holds the titles to all the Bay stores, to a 72-suite apartment house in Regina, Gorge Vale golf course in Victoria and the Prince Rupert links
in Edmonton, as well as 400,000 acres of land in the prairie provinces.
Playing the prairie land booms recklessly, the company made millions. In 1903 it. turned over 350,000 acres at more than $5 an acre and 400,000 acres were sold in 1918 at better than $15. At one sale in Edmonton in 1912 the company sold $5 millions worth of property. The remaining 400,000 acres are being sold at the rate of 100,000 a year and the Bay figures to be out of the land business by 1953 or ’54.
Eagerness to cash in on the early land booms boomeranged on the Bay. When it came to build a modern department store in Winnipeg in 1926 it had to pay $1 million for a site. And the land it paid the cash for had been its own under the original charter and had been given it a second time in the settlement of 1869.
The company’s transformation from a fur trade giant into a department store giant was a natural. As brassy boom towns sprang up around the company forts these were gradually transformed into general stores, and out of these eventually sprang today’s department stores.
And the Wealth Went Out
As big as it is in the department store field, the Bay should have been bigger. But, under Lord Strathcona, who was governor from 1899 to 1914, the Bay squandered the natural lead it held over its rivals.
Strathcona neglected both the fur trade and merchandising fields to play the land boom and to fashion His own career in politics and the Canadian Pacific. It was he who extended the CPR to the Pacific Coast, though Hollywood has recently given the credit to Randolph Scott.
But Strathcona did all right. When he died in 1914 he was worth more than $20 millions. But the company was in bad shape on the merchandising front.
The late Douglas McKay, in his book, “The Honourable Company,” put it this way: “'Hiere was a growing resentment against the company s long record of having taken wealth from the country while contributing not even the impressive buildings which boards of trade in ambitious cities regard as ‘a stake in the community.’ ”
Today the Bay’s department stores are impressive enough. You can ride the escalators through a maze of departments that will sell you anything from a pair of eyeglasses to a ton of coal. You can have your portrait Piken, your hair set or your shoes shined. The Winnipeg store bakes its own bread, makes its own ice cream and pasteurizes its own milk. It stores 20,000 fur coats each year, does the city’s biggest domestic coal business and will furnish any abode from a house to a hotel.
On a counter in the tiny post store at Windigo in the Ontario wilds a placard attracts the Indians to a counter piled high with an assortment of odds and ends. On the placard post manager Ross Finch has scrawled a few symbols of the Cree sign language. The symbols mean: “Little Cash—Cheap.”
In Vancouver and Winnipeg the Bay gets across the same message to the natives in huge type splashed across full-page newspaper ads and the assortment of odds and ends fills an entire bargain basement.
The Governor and Company of Adventurers of England trading into Hudson’s Bay have turned supersalesmen. ★
This is the first of two articles on the Hudson's Bay Company. The second will appear in the next issue of Maclean's.