New France - Fur Trade

Fur Trade

According to the staples thesis, the economic development of New France was marked by the emergence of successive economies based on staple commodities, each of which dictated the political and cultural settings of the time. During the 16th and early 17th centuries New France’s economy was heavily centered on its Atlantic fisheries. This would change in the later half of the 17th and 18th centuries as French settlement penetrated further into the continental interior. Here French economic interests would shift and concentrate itself on the development of the North American fur trade. It would soon become the new staple good that would strengthen and drive New France’s economy, in particular that of Montreal, for the next century.

The trading post of “Ville-Marie”, established on the current island of Montreal, quickly became the economic hub for the French fur trade. It achieved this in great part due to its particular location along the St. Lawrence River. From here a new economy emerged, one of size and density that provided increased economic opportunities for the inhabitants of New France. In December of 1627 the Company of New France was recognized and given commercial rights to the gathering and export of furs from French territories. By trading with native populations and securing the main markets its power grew steadily for the next decade. As a result it was able to set specific price points for furs and other valuable goods, often doing so to protect its economic hegemony over other trading partners and other areas of the economy.

The fur trade itself was based on a commodity of small bulk but yet high value. Because of this it managed to attract increased attention and/or input capital that would otherwise be intended for other areas of the economy. The Montreal area witnessed a stagnant agricultural sector; it remained for the most part subsistence orientated with little or no trade purposes outside of the French colony. This was a prime example of the handicapping effect the fur trade had on its neighbouring areas of the economy.

Nonetheless, by the beginning of the 1700s the economic prosperity the fur trade stimulated slowly transformed Montreal. Economically, it was no longer a town of small traders or of fur fairs but rather a city of merchants and of bright lights. The primary sector of the fur trade, the act of acquiring and the selling of the furs, quickly promoted the growth of complementary second and tertiary sectors of the economy. For instance a small number of tanneries was established in Montreal as well as a larger number of inns, taverns and markets that would support the growing number of inhabitants whose livelihood depended on the fur trade. Already by 1683 there were well over 140 families and there may have been as many as 900 people living in Montreal.

The founding of the Compagnie des Indes in 1718 once again highlighted the economic importance of the fur trade. This merchant association, like its predecessor the Compagnie des Cent Associes, regulated the fur trade to the best of its abilities imposing price points, supporting government sale taxes and combating black market practices. However by the middle half of the 17th century the fur trade was in a slow decline.

The natural overabundance of furs had passed and it could no longer meet market demand. This eventually resulted in the repeal of the 25 percent sales tax that had previously aimed at curbing the administrative costs New France had accumulated. In addition, dwindling supply increased black market trading. A greater number of natives and fur traders began circumnavigating Montreal and New France altogether; many began trading with either British or Dutch merchants to the south.

By the end of French rule in New France in 1763, the fur trade had significantly lost its importance as the key stable good that supported much of New France’s economy for more than the last century. Even so, it did serve as the fundamental force behind the establishment and vast growth of Montreal and the French colony.