North West Company - Forced Merger

Forced Merger

By 1810 another crisis hit the fur industry, brought on by the over-harvesting of animals, the beaver in particular. The destruction of the North West Company post at Sault Ste. Marie by the Americans during the War of 1812 was a serious blow during an already difficult time. All these events only intensified competition, and when Thomas Douglas convinced his fellow shareholders in the Hudson's Bay Company to grant him the Selkirk Concession it marked another in a series of events that would lead to the demise of the North West Company. The Pemmican Proclamation, the ensuing Battle of Seven Oaks in 1816, and its violence, resulted in Lord Selkirk arresting William McGillivray and several North West Company proprietors, seizing their outpost property in Fort William and charging them with responsibility for the deaths of twenty-one people at Seven Oaks. Although this matter was resolved by the authorities in Montreal, over the next few years some of the wealthiest and most capable partners began to leave the company, fearful of its future viability. The form of nepotism within the company too had changed, from the strict values of Simon McTavish to something that now was harming the business in both its costs and morale of others.

By 1820, the company was issuing coinage, each coin representing the value of one beaver pelt. However, the continued existence of the North West Company was in great doubt, and shareholders had no choice but to agree to a merger with their hated rival after Henry Bathurst, the Secretary of State for War and the Colonies, ordered the companies to cease hostilities. In July 1821, under more pressure from the British government, which passed new regulations governing the fur trade in British North America, a merger agreement was signed with the Hudson's Bay Company, whereby the North West Company name disappeared after more than forty years in existence. At the time of the merger, the amalgamated company consisted of 97 trading posts that had belonged to the North West Company and 76 that belonged to the Hudson's Bay Company. George Simpson (1787–1860), the Hudson's Bay Company Governor-in-Chief of Rupert's Land who became the Canadian head of the northern division of the greatly enlarged business, made his headquarters in the Montreal suburb of Lachine.