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Speaker 1: Jacob.

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Speaker 2: Robert Smith.

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Speaker 1: We get letters. Emails.

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Speaker 2: Businesshistoryatpushkin.fm. Email us.

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Speaker 1: I wish they were letters. And when these come from

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Speaker 1: Canadian listeners, they almost always say the same thing. Please,

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Speaker 1: please do a story on the Hudson's Bay Company.

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Speaker 2: Robert Smith, on behalf of our American listeners, what is

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Speaker 2: the Hudson's Bay Company?

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Speaker 1: Now, I am a Canadian, so I know this. This

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Speaker 1: is the business that started in fur trading and ended

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Speaker 1: up as the largest department store in Canada. As a Canadian,

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Speaker 1: I shopped there when I was a kid. It's a

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Speaker 1: big deal. It's like Sears or JCPenney's. But as I

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Speaker 1: did this story, I realized that the Hudson's Bay Company

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Speaker 1: is Canada's origin story. Americans, you have your 1776 Declaration,

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Speaker 1: George Washington, whatever, very dramatic. Canada has the Hudson's Bay Company.

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Speaker 1: It is a company that became an empire that became

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Speaker 1: a nation. I'm Robert Smith.

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Speaker 2: I'm Jacob Goldstein, and this is Business History, a show

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Speaker 2: about the history of business in Canada.

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Speaker 1: We use business empire as a metaphor. Ooh, they have

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Speaker 1: a business empire. But the Hudson's Bay Company had a

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Speaker 1: real empire. It had monopoly over this vast region. At

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Speaker 1: one point, the company controlled trade routes from the Arctic

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Speaker 1: to Hawaii. Yes. From the Atlantic Ocean to the territory

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Speaker 1: that would become Oregon, Washington, Idaho.

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Speaker 2: Give me one more.

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Speaker 1: It started cities. Winnipeg, Edmonton, Victoria. It's the capital of

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Speaker 1: British Columbia. It had its own currency, its own laws.

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Speaker 1: It was a company that waged a war, a seven-year

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Speaker 1: shooting war with a business competitor. And it lasted amazingly

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Speaker 1: until just last year, 2025. There were still Hudson Bay

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Speaker 1: department stores all over Canada. And then they went out

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Speaker 1: of business. They had a big 80% off sale and

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Speaker 1: they disappeared. But there wouldn't be Canada without it.

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Speaker 2: Before we get into the show, a quick request for

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Speaker 2: our listeners. Please tell a friend about the show and

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Speaker 2: or follow us on social media. We're at businesshistorypod on

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Speaker 2: Instagram and on TikTok. And thanks to the listeners who

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Speaker 2: wrote in suggesting an episode on the Hudson's Bay Company.

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Speaker 2: Aaron Wilson, Patrick Bowman, Jamil Koja, and Ross, no last name,

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Speaker 2: all wrote to us at businesshistoryatbushkin.fm. And you can write

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Speaker 2: to us, too. Thank you.

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Speaker 1: On with the show. The place... the entire continent of

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Speaker 1: North America, and the date is the mid-1600s. At this point,

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Speaker 1: European settlement has barely touched the vast continent. There are

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Speaker 1: English colonies from Virginia up to New England, the French

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Speaker 1: control what will become known as Quebec, and north of that,

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Speaker 1: there are British colonies in Newfoundland. It's kind of a

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Speaker 1: French sandwich with British bread. Croque-mouchure. Of course, the interior

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Speaker 1: of North America... was the land of hundreds of indigenous

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Speaker 1: tribes at this point, First Nations, we call them in Canada,

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Speaker 1: and they had long trading routes and complicated economies of

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Speaker 1: their own. But the Europeans were interested in another inhabitant

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Speaker 1: of the continent, and that is the beaver. It's beautiful fur.

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Speaker 1: And I guess there's something distinctive about the beaver fur.

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Speaker 1: Everyone always talked about beaver hats, and I pictured these

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Speaker 1: furry hats, but that's not the way it works. There's

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Speaker 1: a soft under fur of a beaver and it has

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Speaker 1: little barbs on each hair, which means you can mat

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Speaker 1: it and make felt. And it's waterproof. It's warm, lasts forever.

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Speaker 1: And in the 1600s, people loved a felt hat made

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Speaker 1: of beaver fur. It was the highest of fashions. And

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Speaker 1: it's a little weird when you think about what North

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Speaker 1: America will become, what it will eventually produce, the riches.

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Speaker 1: It was the beaver that drove the economics for hundreds

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Speaker 1: of years. This is the fashion.

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Speaker 2: You're going to talk about Astor? You say the beaver

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Speaker 2: in America. I think of John Jacob Astor, who became

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Speaker 2: the richest man in America, on the beaver business.

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Speaker 1: We are going to focus on Canada, but John Jacob

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Speaker 1: Astor will arrive at an inopportune time. The early beaver

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Speaker 1: trappers in North America in the mid-1600s were French, and

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Speaker 1: they would travel up the St. Lawrence River And they

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Speaker 1: traded with indigenous tribes there. And it wasn't totally organized.

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Speaker 1: It was just what you could carry in a few

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Speaker 1: canoes in terms of Western items. And then you would

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Speaker 1: bring back the furs. But two Frenchmen had a bigger idea.

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Speaker 1: They had a plan. Their names were Medard de Grosier

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Speaker 1: and Pierre-Esprit Radisson. Radisson?

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Speaker 2: Pierre-Esprit Radisson. Radisson.

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Speaker 1: It's like also an English thing, yeah.

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Speaker 2: Radisson.

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Speaker 1: Radisson. They had spent decades living in the wilds of

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Speaker 1: New France, as it was called, and Grosier could speak

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Speaker 1: native languages, even fought alongside the Huron people against the Iroquois.

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Speaker 1: Radisson had come to New France as a teenager, and

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Speaker 1: he had this remarkable story. We could do a whole

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Speaker 1: episode right on him. He was kidnapped and adopted into

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Speaker 1: a Mohawk family. He fought alongside them, and then he

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Speaker 1: betrayed him, then he was captured. It was a whole thing.

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Speaker 1: So both of these guys knew about as much about

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Speaker 1: North America as any European did at the time. And

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Speaker 1: they loved the wilderness. They loved the freedom of the

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Speaker 1: new world. Radisson would tell people about his life in

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Speaker 1: the forests and rivers.

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Speaker 2: Here, I got a quote for you. We were Caesars,

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Speaker 2: being nobody to contradict us. Meaning they were the emperors.

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Speaker 2: They could do whatever they wanted. Nobody was the boss

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Speaker 2: of them.

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Speaker 1: I should say here there are a bunch of great

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Speaker 1: books about the early fur economy. Adventure books about fur trappers.

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Speaker 1: And I got many of the stories in this episode

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Speaker 1: from the excellent book called The Company by Stephen R. Bowne. So, 1660.

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Speaker 1: Radisson and Grosier traveled far into the continent along the St.

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Speaker 1: Lawrence River. They get to the shores of Lake Superior.

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Speaker 1: And because they spoke native languages, they were able to

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Speaker 1: get a little business intelligence. There was a tribe called

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Speaker 1: the Cree that had the biggest... most beautiful beaver pelts

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Speaker 1: they had ever seen. And the Cree told them something remarkable.

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Speaker 1: The rivers in this region, they said, all flow north.

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Speaker 1: And they flow into an enormous saltwater bay. It would

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Speaker 1: turn out to be Hudson's Bay. European ships had sailed

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Speaker 1: into it years before, but hadn't really done anything about

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Speaker 1: the discovery, at least the discovery to European sailors. And

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Speaker 1: that gave the two Frenchmen an idea. Why are they

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Speaker 1: paddling thousands of miles into the interior, getting furs and

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Speaker 1: taking them back out again, when you could bring European

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Speaker 1: ships into this northern bay? And the Cree and the

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Speaker 1: other natives could bring the furs down the rivers to them.

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Speaker 1: They called it the Grand Scheme.

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Speaker 2: That sounds great in English. Yeah. And usually those things

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Speaker 2: lose something in translation, but I love the grand scheme.

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Speaker 2: I want a grand scheme.

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Speaker 1: Yeah. And this is an early version really of a

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Speaker 1: department store, kind of like we talked about in the

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Speaker 1: Wanamaker show. They would centralize the product in one place.

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Speaker 1: They would have one big supply chain and all their

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Speaker 1: customers would come to them.

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Speaker 2: Or like a big warehouse in a way, right? A

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Speaker 2: big trading warehouse out in Staten Island. Yeah.

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Speaker 1: But it's Costco and it's on Hudson's Bay. What they

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Speaker 1: were dreaming about... involved the kind of scale you couldn't

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Speaker 1: fit into a canoe.

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Speaker 2: Sure. A ship. A ship is much bigger than a canoe.

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Speaker 1: So they return back to New France along the St.

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Speaker 1: Lawrence River. Their canoes are filled with beaver pelts and

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Speaker 1: their grand scheme, and they expect everyone to get super

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Speaker 1: excited about this. But no, the governor of New France

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Speaker 1: fines them for trading without a colonial license.

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Speaker 2: Bureaucrat!

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Speaker 1: He threw Grosier briefly in jail. He confiscated some of

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Speaker 1: their pelts. Radisson later wrote about the French governor.

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Speaker 2: So here, I guess he's writing about the confiscation of

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Speaker 2: the pelts, right? These super valuable pelts. Radisson writes of

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Speaker 2: the governor, the bugger did grease his chops that he

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Speaker 2: might the better maintain his coach and horses at Paris.

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Speaker 1: Greedy. But it wasn't just greed. The French were struggling

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Speaker 1: to maintain their settlements on the St. Lawrence River. And

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Speaker 1: they didn't want some plan, some ocean-based plan that would

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Speaker 1: cut the river out of the beaver trade.

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Speaker 2: Huh.

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Speaker 1: Uh-huh.

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Speaker 2: So this is like an incumbent. This is like an

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Speaker 2: incumbent fighting an innovation.

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Speaker 1: Yeah. They didn't want the productivity gain. They wanted the

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Speaker 1: jobs of the fur traders coming down the river.

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Speaker 2: Yeah, yeah.

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Speaker 1: So fine. The two trappers think, we are going to

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Speaker 1: take the grand scheme to someone who does not treat

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Speaker 1: us like dirt.

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Speaker 2: To someone who's not an incumbent, who doesn't have a

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Speaker 2: vested interest in the status quo.

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Speaker 1: To the king of England, who already had settlements in Canada, but...

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Speaker 1: did not have a big fur trade and might like

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Speaker 1: this plan. Turned out to be excellent timing. 1665, England

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Speaker 1: had a new king, King Charles II. England had just

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Speaker 1: made it through the age of the Puritan Oliver Cromwell,

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Speaker 1: who apparently hated fun. Cromwell and his fellow Puritans abolished

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Speaker 1: Christmas celebrations, they closed the theaters, they cracked down on

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Speaker 1: pubs and dancing and music. So King Charles II eventually

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Speaker 1: returns to the throne and gets rid of all of

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Speaker 1: these restrictions.

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Speaker 2: It's the restoration. It's a party. It's a party in England.

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Speaker 2: Non-stop party.

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Speaker 1: Charles is living large. He's restoring the palaces. He has

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Speaker 1: lots of hangers on. And the king needs more money.

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Speaker 1: So let's just say he is open to business propositions

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Speaker 1: at the time.

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Speaker 2: I think the king always needs more money. The king

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Speaker 2: always needs more money.

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Speaker 1: Here come two French fur traders with a proposition.

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Speaker 2: A grand scheme, one might say.

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Speaker 1: A grand scheme. I love this description of what Radisson

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Speaker 1: and Grosier looked like when they arrived in England. Here's

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Speaker 1: a description from around the time of Radisson.

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Speaker 2: His black hair just touched with gray hair. like mine

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Speaker 2: used to be, hung in a wild profusion about his

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Speaker 2: bare neck and shoulders. A huge scar wrought by the

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Speaker 2: tomahawk of an Indian disfigured his left cheek, and his

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Speaker 2: leather belt was sheathed a long knife. Perfect for the restoration.

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Speaker 2: They're going to love this guy at court.

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Speaker 1: They loved him. They were a big hit. They loved

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Speaker 1: these guys. They were a huge hit in court. They,

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Speaker 1: in fact, gave them a pension so that they could

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Speaker 1: just hang around court and tell stories.

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Speaker 2: This is why the king needs more money, because he's

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Speaker 2: just paying people to hang around to tell stories. Not

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Speaker 2: that there's anything wrong with getting paid to hang around

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Speaker 2: to tell stories.

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Speaker 1: And it's more than the story. The king likes the

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Speaker 1: business plan. English ships sailing for Hudson's Bay. It could

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Speaker 1: turn a profit, and it could piss off France.

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Speaker 2: Dig it to the French.

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Speaker 1: And it also fit this current theory that everyone had

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Speaker 1: of how a country gets really rich, and that's mercantilism.

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Speaker 1: We haven't talked about it yet on the show.

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Speaker 2: Have we not? It was like the dominant economic theory

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Speaker 2: for a long time. And the basic idea, well, the

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Speaker 2: really basic idea was the way you get rich is

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Speaker 2: by piling up gold and silver in your country. And

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Speaker 2: the way you do that is essentially you run a

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Speaker 2: trade surplus. You export more valuable things than you import.

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Speaker 2: And what that meant in terms of colonies in the

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Speaker 2: new world was you want to have colonies that are

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Speaker 2: sending raw goods to the home country. So lumber is

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Speaker 2: Or or beaver pelts. And then in the home country,

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Speaker 2: you're doing the value add. You're turning the lumber into

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Speaker 2: ships or you're turning the beaver pelts into hats. This

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Speaker 2: is mercantilism, which, by the way, turned out to be

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Speaker 2: not a great economic idea. As first David Hume and

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Speaker 2: then Adam Smith would point out. But this is like

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Speaker 2: 100 years later. Right. This is in the 1700s that

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Speaker 2: they realized, like. oh, if you pile up gold in

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Speaker 2: your country, you'll just have inflation and the gold will

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Speaker 2: tend to flow back out. And what you actually care

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Speaker 2: about is maximizing output and focusing on gold is going

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Speaker 2: to lead you down the wrong path. But they don't

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Speaker 2: know that yet in the 1600s.

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Speaker 1: Thank you very much, Professor. This is what was going

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Speaker 1: on in the American colonies at the time. And of course,

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Speaker 1: making the American colonists eventually very mad. And this was

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Speaker 1: the idea behind this fur trade. So with the king's backing...

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Speaker 1: His cousin, Prince Rupert, started to pull together investors to

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Speaker 1: start a company and launch the first expedition. The name

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Speaker 1: of the syndicate was, you're going to love this, the

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Speaker 1: Governor and Company of Adventurers of England trading into Hudson's Bay.

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Speaker 2: Amazing that we get from that to national-led in 200 years,

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Speaker 2: you know? Like, they used to be great.

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Speaker 1: They used to be adventurers.

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Speaker 2: This is the golden era of company names.

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Speaker 1: So these investors financed a test run, right? An MVP,

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Speaker 1: a minimum viable product. It took years to make this work.

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Speaker 1: They had a ship called the Nonesuch, because of course

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Speaker 1: they did. The Nonesuch that made it to Hudson's Bay,

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Speaker 1: filled with trading goods. They spent a long, very cold

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Speaker 1: winter on the bay. And then in the spring, it worked.

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Speaker 1: First Nations peoples arrived to trade their beaver furs for

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Speaker 1: muskets and hatchets and And in 1669, the ship sails

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Speaker 1: back to England filled with enough furs for hundreds of hats.

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Speaker 1: They are not welcomed by crowds or parades because it

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Speaker 1: was all kept a secret. This is business intelligence. They're

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Speaker 1: in stealth mode. They don't want anyone else. They don't

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Speaker 1: want anyone else doing the grand scheme because like once

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Speaker 1: you see it, it's pretty obvious. 1670, King Charles signs

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Speaker 1: a charter that gives the Company of Adventurers royal approval

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Speaker 1: for a monopoly. And the charter was a doozy. It's

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Speaker 1: pretty complicated language, so I translated it into modern English.

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Speaker 1: Why don't you give it to us, Jacob?

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Speaker 2: To encourage the company to carry out its enterprise, the

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Speaker 2: Crown grants it exclusive rights of commerce throughout Hudson Bay

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Speaker 2: and the rivers, lakes, bays, and waterways connected to it.

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Speaker 2: The grant includes surrounding lands not already possessed by English

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Speaker 2: subjects or subjects of another Christian ruler.

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Speaker 1: So two things of note there. Number one, they have

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Speaker 1: control over lands not possessed by English subjects or subjects

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Speaker 1: of another Christian ruler. So in other words.

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Speaker 2: They don't care about the Indians, but they're not saying

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Speaker 2: take land from France.

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Speaker 1: Yeah, exactly right. The other thing is nobody at this point,

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Speaker 1: especially King Charles, has any grasp of the geography of Canada.

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Speaker 1: No one has an idea of how big. It's the

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Speaker 1: second biggest country in the world behind Russia. What if

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Speaker 1: you don't count the ice? Yeah. This land under the ice,

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Speaker 1: this is so big. Because when you say all the

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Speaker 1: rivers that drain into Hudson's Bay, you're talking 40% of Canada,

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Speaker 1: millions of square miles. And nobody knows at this point

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Speaker 1: how big this grant is. And this gives them a

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Speaker 1: monopoly in all those areas. And it lets the company

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Speaker 1: in perpetuity control the lands and minister justice. England will

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Speaker 1: be able to levy duties on the trade. But the

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Speaker 1: king himself gets a very strange kickback, Jacob.

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Speaker 2: The company is required to render an annual payment of

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Speaker 2: two elk and two black beavers whenever the monarch or

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Speaker 2: the monarch's successors enter the territory. Symbolic.

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Speaker 1: It's a symbolic thing. Is there a particular history here?

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Speaker 1: It's a symbolic thing that says that these are the

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Speaker 1: king's lands. And so by symbolizing that whenever the king arrives,

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Speaker 1: goes back to the old days, you have to give

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Speaker 1: him gifts. And these are the gifts. And the kings

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Speaker 1: and queens of England occasionally would collect this when they

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Speaker 1: traveled to Canada later on. Queen Elizabeth II received two

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Speaker 1: living beavers, which she donated to the zoo. Wow.

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Speaker 2: Well, let me mention here, so this is a chartered company.

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Speaker 2: The king has just granted a charter to this company.

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Speaker 2: And we talked about this recently on the show about

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Speaker 2: the history of the company. This is the era, the

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Speaker 2: 1600s are the great era of the chartered company where

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Speaker 2: a king will give a private company a monopoly on

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Speaker 2: trading to some part of the world. And so by

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Speaker 2: this point, The English East India Company and the Dutch

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Speaker 2: East India Company are already giant things in the world.

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Speaker 2: Not only private companies, but they have armies. And they

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Speaker 2: are this weird, interesting kind of imperialist corporate hybrid that

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Speaker 2: are key to the world history in this period. And

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Speaker 2: I guess that's what we're going to see here.

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Speaker 1: Private investors are making money. But the kings and queens,

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Speaker 1: as the case may be, whoever gave the charter... have

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Speaker 1: power over these lands. So it's a good trade. It's

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Speaker 1: a good trade.

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Speaker 2: And the private investors are doing work that we associate

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Speaker 2: with the state. Military conquest, that sort of thing.

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Speaker 1: Yes. So few pages of parchment and the largest monopoly

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Speaker 1: in the Western Hemisphere is created. Now they just had to,

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Speaker 1: you know, actually make it work.

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Speaker 2: Execution. Now it's a matter of execution.

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Speaker 1: Grossier and Radisson are now employees of the new joint

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Speaker 1: stock limited liability company, and their dozen or so very

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Speaker 1: rich investors. And they lead the company's expeditions back into

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Speaker 1: the wilderness. And it took years to establish this. Lots

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Speaker 1: of failed expeditions, ships crushed by the ice, men starving

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Speaker 1: in long winters. But eventually, they made it work. By 1664,

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Speaker 1: the company was profitable enough to pay out a 50%

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Speaker 1: dividend to the investors.

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Speaker 2: 50%?

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Speaker 1: Five-oh?

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Speaker 2: 50%.

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Speaker 1: Now, it had been Like a dozen years.

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Speaker 2: That's if you annualize it.

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Speaker 1: But they were happy to get any money back, sending

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Speaker 1: ships out in the unknown.

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Speaker 2: You still got your equity.

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Speaker 1: Here's how the trade worked. The Hudson's Bay Company would

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Speaker 1: load up their ships in June when it was warm

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Speaker 1: enough to get through the ice. They would sail over

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Speaker 1: Quebec into Hudson's Bay. Their holds were filled with manufactured goods.

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Speaker 1: So we're talking muskets, knives, axes, brass kettles, pots and pans, clothing, mirrors. Tobacco.

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Speaker 1: Sewing needles. Huge. Huge. And they would drop off these

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Speaker 1: goods at forts. They called them factories because there was

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Speaker 1: a company manager called the factor. You don't hear so

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Speaker 1: much about factors anymore. They're kind of like jobbers.

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Speaker 2: Kind of like jobbers, right?

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Speaker 1: The factors ran the factories. That's where they lived. And

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Speaker 1: there would be this core group of employees who would

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Speaker 1: stay all winter. And then in the spring, the tribes,

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Speaker 1: primarily the Cree, would arrive in canoes filled with beaver pelts.

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Speaker 1: And they'd have a big party. They would trade for

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Speaker 1: manufactured goods. And then the resupply ship would come and

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Speaker 1: they'd take all the furs back.

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Speaker 2: Robert, did you tell me you spent a summer on

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Speaker 2: Hudson's Bay at something, something, something factory?

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Speaker 1: Yes. I lived for a summer in Moose Factory.

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Speaker 2: Incredible.

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Speaker 1: Along the Moose River. It was technically in James Bay,

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Speaker 1: which is a sort of offshoot of Hudson's Bay. And

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Speaker 1: my dad was a temporary doctor there. So he was

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Speaker 1: doing doctor things. And I was just a kid, like

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Speaker 1: 10 years old. It was an amazing experience. You felt

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Speaker 1: so remote. You could only get there on a seaplane

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Speaker 1: or a boat. And, you know, it's a pretty flat

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Speaker 1: island and you look out into the sort of flat

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Speaker 1: Hudson's Bay and it really feels like you are in

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Speaker 1: the middle of nowhere.

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Speaker 2: Was it fun? Was it bleak?

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Speaker 1: It was fun because I was a kid. I got

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Speaker 1: to like tool around and we'd go to these Cree events.

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Speaker 1: In fact, you're going to love this.

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Speaker 2: Oh, you brought a prop.

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Speaker 1: A Cree woman taught me how to carve soapstone. Look

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Speaker 1: at this.

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Speaker 2: Is this from what you carved as a child?

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Speaker 1: As a 10-year-old, I know.

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Speaker 2: It's kind of like a profile?

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Speaker 1: Yeah, it's kind of like a little guy. It's a

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Speaker 1: little guy carved out of soapstone.

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Speaker 2: Incredible. I don't think I have anything from when I

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Speaker 2: was 10 years old.

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Speaker 1: I will note that That the thing I remember most

380
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Speaker 1: is the mosquitoes. There were so many mosquitoes. You would

381
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Speaker 1: come in and not only were you bitten, but like

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Speaker 1: your hair was filled with living mosquitoes. Well, you could

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Speaker 1: have spent a winter there. That wouldn't have been a problem. Yeah,

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Speaker 1: it's hard to imagine what the place would be like

385
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Speaker 1: in the winter. In the 1600s!

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Speaker 2: Apparently, temperatures were recorded at 50 degrees below zero Fahrenheit.

387
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Speaker 1: Early company employees described the mercury on the thermometers freezing.

388
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Speaker 1: I didn't even know that was possible.

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Speaker 2: I don't know what the freezing point is of mercury.

390
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Speaker 1: 12-foot snowdrifts hail the size of a musket ball.

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Speaker 2: That I can believe. Smaller than a golf ball.

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Speaker 1: Yeah. And there are Grosier and Radisson, Caesars of their

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Speaker 1: new empire, setting up trading networks, still traveling out on

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Speaker 1: the rivers. Radisson described his difficult life, although I think

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Speaker 1: he secretly loved it.

396
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Speaker 2: To have the belly empty, the weariness in the bones,

397
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Speaker 2: and drowsiness of the body by the bad weather that

398
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Speaker 2: ye are to suffer, having nothing to keep ye from

399
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Speaker 2: such calamity. I think they call that type 2 fun now.

400
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Speaker 2: The fun that's not fun while you're having it.

401
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Speaker 1: But afterwards, perhaps. For the Cree tribe, who lived around

402
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Speaker 1: the area of these factories... The arrival of the company

403
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Speaker 1: was transformative, I will say. Until the company arrived, all

404
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Speaker 1: the fur trade was down through Montreal and Quebec. And

405
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Speaker 1: so the Cree were actually pretty far from the trading action.

406
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Speaker 1: They would get European goods, but afterward passed through a

407
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Speaker 1: ton of middlemen. So the goods were pretty expensive. Now

408
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Speaker 1: they are first in line.

409
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Speaker 2: Getting them straight from the factory!

410
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Speaker 1: Straight from the boat! So they were getting a great

411
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Speaker 1: deal on products. And then, of course... The Cree would

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Speaker 1: take those products, mark them up, and trade them to

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Speaker 1: other tribes. And the Cree now had more guns, and

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Speaker 1: so their power starts to rise in the region because

415
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Speaker 1: they are close to the factories. One fascinating thing here

416
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Speaker 1: is the Cree would wear their beaver pelts all winter

417
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Speaker 1: because it was so cold, obviously, right? But by the

418
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Speaker 1: end of the season, the fur on these coats was

419
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Speaker 1: all matted down because they'd worn them day and night.

420
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Speaker 2: Mm-hmm.

421
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Speaker 1: But matted down fur ended up being the most valuable

422
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Speaker 1: kind of fur that you could sell. It made the

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Speaker 1: processing easier back in England or something. And so the

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Speaker 1: Cree would essentially sell their used clothing every spring. And

425
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Speaker 1: they would marvel how their ratty clothes that they might

426
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Speaker 1: have just thrown away for a new one the next winter.

427
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Speaker 1: Would get them knives and guns and sewing needles. Look, obviously, a.

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Speaker 2: Lot of bad things happened when the Europeans came to

429
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Speaker 2: North America. But in this narrow instance, this is an

430
00:22:52,030 --> 00:22:54,330
Speaker 2: example of trade making everyone better off. Here is a

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Speaker 2: thing that one group of people does not value and

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Speaker 2: they're able to sell it to another group of people

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Speaker 2: that values it more highly.

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Speaker 1: The Cree would travel around to other tribes who didn't

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Speaker 1: know this particular angle and scam so they could offer

436
00:23:06,630 --> 00:23:09,780
Speaker 1: low prices for their used clothing and then sell them

437
00:23:10,480 --> 00:23:11,580
Speaker 1: to the Hudson's Bay Company.

438
00:23:11,600 --> 00:23:13,720
Speaker 2: It's like the people who go to the suburbs of

439
00:23:13,820 --> 00:23:16,500
Speaker 2: Dallas to buy used clothes and then come and sell

440
00:23:16,520 --> 00:23:18,920
Speaker 2: them at huge markups in Williamsburg.

441
00:23:19,440 --> 00:23:22,830
Speaker 1: Yeah, exactly right. And I will say, we're used to

442
00:23:22,869 --> 00:23:26,230
Speaker 1: these stories of brutality from colonists arriving on native land.

443
00:23:26,730 --> 00:23:29,189
Speaker 1: And that is coming in this story, including sickness that

444
00:23:29,230 --> 00:23:32,190
Speaker 1: will devastate the native population. But I have to say,

445
00:23:32,450 --> 00:23:35,609
Speaker 1: at the very beginning, for the most part, the Hudson's

446
00:23:35,650 --> 00:23:41,500
Speaker 1: Bay Company conducted a non-destructive business relationship with the Cree

447
00:23:42,080 --> 00:23:44,860
Speaker 1: because they were not colonists. They didn't want to take

448
00:23:44,900 --> 00:23:47,619
Speaker 1: over large parts of land. They were not missionaries. They

449
00:23:47,680 --> 00:23:51,550
Speaker 1: negotiated with the Cree. They didn't just set prices. And

450
00:23:51,730 --> 00:23:54,970
Speaker 1: economists later studying this whole situation found that the Cree

451
00:23:55,310 --> 00:23:58,889
Speaker 1: actually had a lot of market power. They could effectively

452
00:23:59,010 --> 00:24:01,370
Speaker 1: negotiate the price of the beaver furs. They could ask

453
00:24:01,410 --> 00:24:04,359
Speaker 1: for different goods to come on the ships and They

454
00:24:04,380 --> 00:24:06,020
Speaker 1: could demand a certain quality of goods.

455
00:24:06,400 --> 00:24:09,390
Speaker 2: You could imagine in the same way that the English

456
00:24:09,630 --> 00:24:13,370
Speaker 2: wanted to keep this scheme a secret, the Cree would

457
00:24:13,410 --> 00:24:16,209
Speaker 2: have the same incentive, right? They would want to be

458
00:24:16,250 --> 00:24:21,090
Speaker 2: the exclusive indigenous tribe trading with the British.

459
00:24:21,350 --> 00:24:25,430
Speaker 1: Yeah. And another thing going for the Cree and the

460
00:24:25,490 --> 00:24:27,859
Speaker 1: company was that a lot of the men in the

461
00:24:27,900 --> 00:24:31,370
Speaker 1: company weren't just visiting. Like, they lived there. They were

462
00:24:31,440 --> 00:24:36,310
Speaker 1: marrying Cree women. They were having children with the Cree. So,

463
00:24:36,570 --> 00:24:40,790
Speaker 1: you know, it was something where they were often dealing

464
00:24:40,869 --> 00:24:42,370
Speaker 1: with their in-laws and relatives.

465
00:24:42,490 --> 00:24:46,189
Speaker 2: Well, and even, I mean, family, you know, business is

466
00:24:46,270 --> 00:24:49,970
Speaker 2: a whole thing. Even beyond that, if you're staying in

467
00:24:50,010 --> 00:24:52,729
Speaker 2: the same place and you're trading with the same people

468
00:24:53,530 --> 00:24:56,170
Speaker 2: season after season, year after year. We've talked about this before.

469
00:24:56,230 --> 00:24:59,170
Speaker 2: This is a repeated game. And so even if you're

470
00:24:59,260 --> 00:25:02,820
Speaker 2: just trying to maximize your economic outcome, it's in your

471
00:25:02,900 --> 00:25:05,520
Speaker 2: interest to deal with people fairly if you're going to

472
00:25:05,560 --> 00:25:07,439
Speaker 2: be trading with them again and again. It's not like

473
00:25:07,460 --> 00:25:08,639
Speaker 2: you're just going to see them once and you want

474
00:25:08,660 --> 00:25:09,879
Speaker 2: to get all the money you can out of them.

475
00:25:10,320 --> 00:25:12,460
Speaker 2: You want to build a relationship so that you can

476
00:25:12,540 --> 00:25:13,900
Speaker 2: trade with them in the long run.

477
00:25:14,140 --> 00:25:16,380
Speaker 1: I just want to be clear, this is the early

478
00:25:16,540 --> 00:25:19,699
Speaker 1: part of the trading system. Obviously, terrible things are going

479
00:25:19,740 --> 00:25:22,699
Speaker 1: to happen, and we'll get to that. But for the moment,

480
00:25:22,840 --> 00:25:25,879
Speaker 1: people were pretty happy with this trade. But you know

481
00:25:25,920 --> 00:25:26,980
Speaker 1: who wasn't happy, Jacob?

482
00:25:28,119 --> 00:25:29,990
Speaker 2: The French. The French.

483
00:25:30,330 --> 00:25:32,310
Speaker 1: They wake up one morning and they're like, wait a

484
00:25:32,470 --> 00:25:35,669
Speaker 1: minute here. We have American colonies to our south and

485
00:25:35,730 --> 00:25:38,450
Speaker 1: now we have the British taking away our fur trade.

486
00:25:40,050 --> 00:25:43,010
Speaker 1: They decide that they are going to strike back in

487
00:25:43,050 --> 00:25:45,690
Speaker 1: a set of conflicts, great power conflicts that will go

488
00:25:45,830 --> 00:25:48,190
Speaker 1: on in one form or another for 100 years.

489
00:25:48,510 --> 00:25:49,710
Speaker 2: Are they going to have their own company?

490
00:25:50,350 --> 00:25:56,870
Speaker 1: When our program continues. And we are back telling not

491
00:25:56,910 --> 00:26:00,379
Speaker 1: just a business story, Jacob, but also a political story

492
00:26:00,420 --> 00:26:04,820
Speaker 1: at this point. For the French, having English settlements, English

493
00:26:04,880 --> 00:26:08,419
Speaker 1: business in the interior of North America might give the

494
00:26:08,540 --> 00:26:12,370
Speaker 1: English the rights to call it English land. And this

495
00:26:12,450 --> 00:26:15,150
Speaker 1: is what they wanted to avoid. They did not want

496
00:26:15,190 --> 00:26:17,940
Speaker 1: this to happen. So the French start to try everything

497
00:26:17,960 --> 00:26:21,330
Speaker 1: they can to disrupt the Hudson's Bay Company. They send

498
00:26:21,550 --> 00:26:25,030
Speaker 1: armed men through the woods to attack the Hudson's Bay settlements,

499
00:26:25,390 --> 00:26:29,930
Speaker 1: which is pretty easy because these are basically salesmen, bureaucrats

500
00:26:30,210 --> 00:26:33,570
Speaker 1: in these places. They actually take control over Hudson's Bay

501
00:26:33,790 --> 00:26:38,490
Speaker 1: for a while. They bribe our heroes, Grosier and Radisson,

502
00:26:38,540 --> 00:26:42,780
Speaker 1: with 400 gold coins to defect. And they take the money. Oh,

503
00:26:42,800 --> 00:26:43,619
Speaker 1: they take the money.

504
00:26:43,660 --> 00:26:45,300
Speaker 2: Somehow I didn't think they were going to take the money.

505
00:26:46,310 --> 00:26:49,370
Speaker 1: Then, at least Radisson defects back to England. The man

506
00:26:49,410 --> 00:26:52,639
Speaker 1: just hated bosses. Yeah. He hated having a boss.

507
00:26:52,660 --> 00:26:53,300
Speaker 2: He was a pirate.

508
00:26:53,500 --> 00:26:55,220
Speaker 1: Everyone drove him nuts.

509
00:26:55,320 --> 00:26:59,160
Speaker 2: Yeah. I wonder if he looked longingly at the days

510
00:26:59,180 --> 00:27:01,800
Speaker 2: when it was just him and the canoe. I bet

511
00:27:01,840 --> 00:27:02,160
Speaker 2: he did.

512
00:27:02,180 --> 00:27:06,470
Speaker 1: Yeah. So all of these battles and intrigues between the

513
00:27:06,550 --> 00:27:08,250
Speaker 1: English and the French go back and forth, back and

514
00:27:08,270 --> 00:27:12,250
Speaker 1: forth for decades until the Seven Years' War between England

515
00:27:12,270 --> 00:27:16,560
Speaker 1: and France. It is settled in 1763 AD. France loses

516
00:27:17,140 --> 00:27:20,480
Speaker 1: and England gets all of the French possessions in North America.

517
00:27:20,980 --> 00:27:22,840
Speaker 1: Is that the French and Indian War?

518
00:27:22,900 --> 00:27:24,260
Speaker 2: Is that what we in the United States call the

519
00:27:24,320 --> 00:27:25,160
Speaker 2: French and Indian War?

520
00:27:25,240 --> 00:27:28,840
Speaker 1: The French and Indian War was the North American part

521
00:27:28,940 --> 00:27:34,410
Speaker 1: of this global conflict. So France loses. England gets essentially

522
00:27:34,690 --> 00:27:38,590
Speaker 1: control over what is Canada. Hudson's Bay Company, they just

523
00:27:38,690 --> 00:27:46,640
Speaker 1: continue making money. Unmolested by the French government. But there

524
00:27:46,680 --> 00:27:51,340
Speaker 1: are still French fur traders who live in Quebec, speak French.

525
00:27:51,560 --> 00:27:55,359
Speaker 1: They're now British citizens, but they're culturally French. They're still around.

526
00:27:55,380 --> 00:27:58,790
Speaker 1: They're still angry. And they are willing to destroy the

527
00:27:58,850 --> 00:28:03,490
Speaker 1: Hudson's Bay Company, not through guns, but through business competition

528
00:28:03,510 --> 00:28:06,790
Speaker 1: for the beaver. I should say here, because we've sort

529
00:28:06,810 --> 00:28:10,129
Speaker 1: of skipped forward in time, that Radisson ended up retiring

530
00:28:10,210 --> 00:28:13,659
Speaker 1: back in Europe and Grosier stayed in Canada. And at

531
00:28:13,700 --> 00:28:16,320
Speaker 1: the time, they never really got the credit they probably

532
00:28:16,340 --> 00:28:19,960
Speaker 1: deserved for the grand scheme. The company cut their pensions.

533
00:28:19,980 --> 00:28:24,109
Speaker 1: Seems petty. And Radisson at some point tried to beg

534
00:28:24,140 --> 00:28:27,109
Speaker 1: the company for a job as a London warehouse keeper.

535
00:28:27,130 --> 00:28:31,550
Speaker 1: And the company said no. Hated the bosses to the

536
00:28:31,590 --> 00:28:32,030
Speaker 1: very end.

537
00:28:33,790 --> 00:28:36,060
Speaker 2: I bet he was a nightmare as an employee, though.

538
00:28:36,200 --> 00:28:38,120
Speaker 2: In defense of the company, I wouldn't hire that guy.

539
00:28:38,140 --> 00:28:41,760
Speaker 1: I mean, he had defected. Yeah, I bet. So the

540
00:28:41,800 --> 00:28:45,160
Speaker 1: company at this point is bigger than any man or

541
00:28:45,240 --> 00:28:47,850
Speaker 1: any investor for that matter. It is a bureaucracy and

542
00:28:47,870 --> 00:28:50,690
Speaker 1: they had a profitable enterprise and they did not like change.

543
00:28:51,170 --> 00:28:54,070
Speaker 1: They were not adventurous. They were not trying to find the.

544
00:28:54,080 --> 00:28:54,760
Speaker 2: Despite the name?

545
00:28:54,780 --> 00:28:57,370
Speaker 1: They were not trying to find the Northwest Passage. They

546
00:28:57,380 --> 00:29:00,430
Speaker 1: were not trying to expand settlements into camp.

547
00:29:00,450 --> 00:29:01,650
Speaker 2: They got a good thing going.

548
00:29:01,850 --> 00:29:03,190
Speaker 1: They got a good thing. Same trade.

549
00:29:03,230 --> 00:29:05,990
Speaker 2: Founders are gone. Same forts. They're gone from the founder

550
00:29:06,030 --> 00:29:08,930
Speaker 2: culture to the management culture. The cowboys are gone. And

551
00:29:09,110 --> 00:29:10,850
Speaker 2: you know what that makes you? And boring middle managers

552
00:29:10,930 --> 00:29:11,130
Speaker 2: are there.

553
00:29:11,150 --> 00:29:15,120
Speaker 1: That makes you a sitting duck for competition. 1779, a

554
00:29:15,410 --> 00:29:17,940
Speaker 1: bunch of French Canadians, again, they're now British citizens, a

555
00:29:18,740 --> 00:29:21,540
Speaker 1: bunch of French Canadians and a ragtag group of of

556
00:29:21,620 --> 00:29:22,880
Speaker 1: Scotsmen and Americans.

557
00:29:22,900 --> 00:29:25,740
Speaker 2: Oh, it's a ragtag group. The Hudson's Bay Company, better

558
00:29:25,800 --> 00:29:26,300
Speaker 2: look out.

559
00:29:26,580 --> 00:29:31,350
Speaker 1: Formed a business rival called the Northwest Company. Are they

560
00:29:31,370 --> 00:29:34,530
Speaker 1: looking for the Northwest Passage? No, but I think they

561
00:29:34,570 --> 00:29:37,710
Speaker 1: have dreams of heading out into the Northwest to trap Beaver.

562
00:29:38,470 --> 00:29:40,620
Speaker 1: They did not need a charter. They did not have

563
00:29:40,640 --> 00:29:44,630
Speaker 1: a monopoly. In fact, they were more of an association. Oh,

564
00:29:44,670 --> 00:29:48,570
Speaker 1: a real startup kind of vibe. They don't need a

565
00:29:48,590 --> 00:29:51,670
Speaker 1: piece of paper from the King's City Hall. No, because

566
00:29:51,810 --> 00:29:55,090
Speaker 1: their plan was to hustle harder and to steal the

567
00:29:55,130 --> 00:29:59,750
Speaker 1: fur trade back from those lazy MFers up in Hudson's Bay.

568
00:30:00,110 --> 00:30:01,670
Speaker 2: Okay, let's go. All right.

569
00:30:02,270 --> 00:30:05,350
Speaker 1: So their system of fur trading was the exact opposite

570
00:30:05,370 --> 00:30:08,600
Speaker 1: of Hudson's Bay. Hudson's, remember... brought all their goods to

571
00:30:08,620 --> 00:30:11,140
Speaker 1: a single port. They waited for indigenous hunters to bring

572
00:30:11,200 --> 00:30:11,980
Speaker 1: them health.

573
00:30:12,010 --> 00:30:12,660
Speaker 2: Centralized.

574
00:30:12,850 --> 00:30:15,930
Speaker 1: Centralized. Run from London. Everyone's on a salary. There are

575
00:30:15,950 --> 00:30:18,710
Speaker 1: almost like 500 men running the forts. They're not the

576
00:30:18,750 --> 00:30:23,150
Speaker 1: hardiest of men. The Northwest Company for traders were called

577
00:30:23,170 --> 00:30:29,440
Speaker 1: the Voyageurs because they were door-to-door salesmen with knives. They

578
00:30:29,460 --> 00:30:32,440
Speaker 1: would get in their canoes and voyage up the rivers,

579
00:30:32,580 --> 00:30:35,400
Speaker 1: across the Great Lakes. They would pull their trading goods

580
00:30:35,640 --> 00:30:40,040
Speaker 1: over mountains in their canoes, portages, They were usually short

581
00:30:40,620 --> 00:30:42,500
Speaker 1: so they could fit in the boats and, of course,

582
00:30:42,600 --> 00:30:45,700
Speaker 1: incredibly strong and muscular so that they could row all day.

583
00:30:45,720 --> 00:30:50,120
Speaker 1: And they would trade to the people. They wouldn't wait

584
00:30:50,680 --> 00:30:53,480
Speaker 1: for the people to go up to Hudson's Bay. They

585
00:30:53,540 --> 00:30:56,220
Speaker 1: would find them and make the trade early. Now, let

586
00:30:56,240 --> 00:30:57,280
Speaker 1: me ask you a question.

587
00:30:57,900 --> 00:31:00,080
Speaker 2: When you talked about the origin story of the Hudson's

588
00:31:00,120 --> 00:31:03,120
Speaker 2: Bay Company, what you're describing now is sort of what

589
00:31:03,160 --> 00:31:06,130
Speaker 2: the status quo was before. And we were talking about

590
00:31:06,150 --> 00:31:09,290
Speaker 2: the Hudson's Bay Company as this efficiency gain, this productivity

591
00:31:09,330 --> 00:31:11,530
Speaker 2: gain that, you know, you could just bring it all

592
00:31:11,570 --> 00:31:13,229
Speaker 2: on the ship and then it's going to be cheaper.

593
00:31:13,930 --> 00:31:16,560
Speaker 2: Why are these guys going back to that old model? Like,

594
00:31:16,640 --> 00:31:17,580
Speaker 2: why do they have a shot?

595
00:31:18,380 --> 00:31:22,920
Speaker 1: Because they feel that the profits made by the Hudson's

596
00:31:22,940 --> 00:31:25,620
Speaker 1: Bay Company are their opportunity because they can.

597
00:31:25,560 --> 00:31:27,739
Speaker 2: Be cheaper, more nimble. So the Hudson's Bay Company has

598
00:31:27,770 --> 00:31:30,450
Speaker 2: gotten kind of fat and lazy, maybe too many middlemen,

599
00:31:30,510 --> 00:31:32,370
Speaker 2: overpaid bureaucrats, that kind of thing.

600
00:31:33,360 --> 00:31:35,920
Speaker 1: And the Voyageurs were anything but fat and lazy. In fact,

601
00:31:36,120 --> 00:31:40,300
Speaker 1: one 70-year-old French-Canadian trader described his life. This is from

602
00:31:40,340 --> 00:31:41,440
Speaker 1: Bowne's book, The Company.

603
00:31:42,140 --> 00:31:45,260
Speaker 2: So this old Voyageur looking back on his life, he says,

604
00:31:46,040 --> 00:31:49,160
Speaker 2: no portage was ever too long for me. 50 songs

605
00:31:49,240 --> 00:31:52,760
Speaker 2: I could sing. I've saved the lives of 10 Voyageurs,

606
00:31:53,060 --> 00:31:56,700
Speaker 2: have had 12 wives and six running dogs. I spent

607
00:31:56,740 --> 00:31:58,940
Speaker 2: all my money in pleasure. Were I young again, I

608
00:31:59,400 --> 00:32:02,330
Speaker 2: should spend my life the same way over. There is

609
00:32:02,390 --> 00:32:06,890
Speaker 2: no life so happy as a voyageur life. I know

610
00:32:06,930 --> 00:32:09,100
Speaker 2: he was a British subject, but that sounds so French

611
00:32:09,120 --> 00:32:09,240
Speaker 2: to me.

612
00:32:09,420 --> 00:32:13,180
Speaker 1: So French. It was said that they would eat 10

613
00:32:13,180 --> 00:32:15,900
Speaker 1: pounds of meat a day. And a lot of it

614
00:32:16,210 --> 00:32:18,930
Speaker 1: was in the form of something called pemmican.

615
00:32:18,950 --> 00:32:20,030
Speaker 2: A pemmican.

616
00:32:20,470 --> 00:32:21,660
Speaker 1: Pemmican, this is a combination.

617
00:32:21,680 --> 00:32:22,440
Speaker 2: A pemmican bar.

618
00:32:22,580 --> 00:32:25,480
Speaker 1: Yeah, and this is a combination of dried buffalo meat, fat,

619
00:32:25,560 --> 00:32:27,380
Speaker 1: and berries. Have you had this?

620
00:32:27,960 --> 00:32:30,600
Speaker 2: There is a thing called a pemmican bar that I've had,

621
00:32:30,680 --> 00:32:31,960
Speaker 2: but it was in a wrapper.

622
00:32:33,760 --> 00:32:36,220
Speaker 1: You have not had the authentic buffalo one.

623
00:32:36,240 --> 00:32:37,620
Speaker 2: I don't know if I would have lived to tell

624
00:32:37,660 --> 00:32:40,380
Speaker 2: the tale if I'd had authentic pemmican.

625
00:32:40,460 --> 00:32:42,480
Speaker 1: Well, there is a description of what it tasted like.

626
00:32:43,030 --> 00:32:45,710
Speaker 1: I couldn't resist putting it in. It's from H.M. Robinson's book,

627
00:32:46,070 --> 00:32:48,390
Speaker 1: The Great Fur Land. Jacob?

628
00:32:49,370 --> 00:32:53,450
Speaker 2: Take the scrapings from the driest outside corner of a

629
00:32:53,550 --> 00:32:57,489
Speaker 2: very stale piece of cold roast beef. Add it to

630
00:32:57,550 --> 00:33:01,130
Speaker 2: lumps of rancid fat. Then garnish all with long human

631
00:33:01,170 --> 00:33:04,070
Speaker 2: hairs and short hairs of dogs and oxen. And you

632
00:33:04,110 --> 00:33:06,630
Speaker 2: have a fair imitation of common pemmican. I love it.

633
00:33:06,650 --> 00:33:08,830
Speaker 1: You get the long hairs and the short hairs.

634
00:33:08,850 --> 00:33:10,550
Speaker 2: It's good writing. That is good writing.

635
00:33:10,570 --> 00:33:15,250
Speaker 1: Yeah, yeah, yeah. The Voyagers loved it. They loved it.

636
00:33:15,370 --> 00:33:16,290
Speaker 1: Loved it.

637
00:33:16,310 --> 00:33:20,370
Speaker 2: You know what makes food taste really good? Working all day.

638
00:33:20,750 --> 00:33:22,210
Speaker 1: Rowing 12 hours a day.

639
00:33:22,310 --> 00:33:24,920
Speaker 2: Paddling. You keep saying rowing. Have you seen a canoe?

640
00:33:25,060 --> 00:33:25,860
Speaker 2: You don't row a canoe.

641
00:33:27,140 --> 00:33:29,180
Speaker 1: I guess technically. I don't spend a lot of time

642
00:33:29,200 --> 00:33:33,720
Speaker 1: in the water. You're more of a walker. So the

643
00:33:33,760 --> 00:33:37,700
Speaker 1: Northwest Company would arrive early in the spring, just as

644
00:33:37,740 --> 00:33:40,190
Speaker 1: the snow was melting, to the tribes that usually were

645
00:33:40,230 --> 00:33:43,410
Speaker 1: setting out to Hudson's Bay. And they would take the

646
00:33:43,450 --> 00:33:46,450
Speaker 1: very best pelts. They would offer them a great deal.

647
00:33:46,830 --> 00:33:49,450
Speaker 1: They could get them for cheaper because, eh, I wanted

648
00:33:49,470 --> 00:33:51,110
Speaker 1: to row all the way up to Hudson's Bay. Here's

649
00:33:51,170 --> 00:33:57,580
Speaker 1: someone offering money. Yeah, paddle. Sorry, I keep saying row. Anyway,

650
00:33:57,600 --> 00:34:00,780
Speaker 1: paddle all the way up to Hudson's Bay. Now, I

651
00:34:00,820 --> 00:34:04,660
Speaker 1: should say here, at first, you know, in business history

652
00:34:05,180 --> 00:34:07,640
Speaker 1: podcast tradition, you might want to cheer for the plucky

653
00:34:07,790 --> 00:34:13,630
Speaker 1: upstart company with the beefy singing voyagers. But their business model,

654
00:34:13,730 --> 00:34:18,270
Speaker 1: I want to say, created some terrible, terrible incentives for

655
00:34:18,780 --> 00:34:22,070
Speaker 1: They did not have the same standards of behavior demanded

656
00:34:22,090 --> 00:34:26,629
Speaker 1: of the Hudson's Bay Company employees. Its senior traders could

657
00:34:26,690 --> 00:34:30,609
Speaker 1: become partners and get a share of the profits, which

658
00:34:30,670 --> 00:34:35,029
Speaker 1: was an incentive for these traders to move fast, think short-term,

659
00:34:35,530 --> 00:34:37,270
Speaker 1: and compete aggressively.

660
00:34:37,590 --> 00:34:40,490
Speaker 2: Well, and also, I mean, I was talking before about

661
00:34:40,570 --> 00:34:43,750
Speaker 2: how the Hudson's Bay Company was in this repeated game.

662
00:34:43,770 --> 00:34:45,690
Speaker 2: They would trade with the same people every year in

663
00:34:45,710 --> 00:34:48,560
Speaker 2: the same place, and that creates an incentive to treat

664
00:34:48,600 --> 00:34:51,859
Speaker 2: your counterparty well. Just out of greed alone, you should

665
00:34:52,140 --> 00:34:56,560
Speaker 2: treat them decently. Whereas if you were a voyeur traveling

666
00:34:56,739 --> 00:34:58,859
Speaker 2: across the land, you were only going to see these

667
00:34:58,910 --> 00:35:02,109
Speaker 2: people once and you have no economic incentive to treat

668
00:35:02,130 --> 00:35:04,770
Speaker 2: them decently because you're not going to trade with them again.

669
00:35:05,090 --> 00:35:06,510
Speaker 2: It's a one-time game. Yeah.

670
00:35:06,570 --> 00:35:08,930
Speaker 1: Some they would come back to, but oftentimes they would

671
00:35:08,969 --> 00:35:11,010
Speaker 1: come in and take all the beaver from an area.

672
00:35:11,330 --> 00:35:14,490
Speaker 1: This is called beavering out the region. And the next

673
00:35:14,530 --> 00:35:16,020
Speaker 1: season they would just go to a different area.

674
00:35:16,040 --> 00:35:16,920
Speaker 2: So this is trapping.

675
00:35:17,200 --> 00:35:17,719
Speaker 1: Yes.

676
00:35:17,739 --> 00:35:20,260
Speaker 2: They are trapping their own beavers and trapping too many.

677
00:35:20,440 --> 00:35:24,640
Speaker 1: They even pushed the introduction of steel leg traps so

678
00:35:24,660 --> 00:35:28,310
Speaker 1: they can do it all more efficiently. And another problem

679
00:35:28,330 --> 00:35:32,430
Speaker 1: with the Northwest Company, they would bring alcohol to trade

680
00:35:32,489 --> 00:35:36,919
Speaker 1: to the native tribes. So they would offer drinks for free.

681
00:35:37,020 --> 00:35:39,320
Speaker 1: They would get the natives drunk, then use the brandy.

682
00:35:39,780 --> 00:35:42,219
Speaker 1: to get the furs for cheap. At one point, it

683
00:35:42,239 --> 00:35:45,610
Speaker 1: was estimated that one third of the cargo in the

684
00:35:45,650 --> 00:35:49,069
Speaker 1: canoes was alcohol. This is what they were doing. And

685
00:35:49,210 --> 00:35:52,910
Speaker 1: because they were creating these long variable trade routes, European

686
00:35:52,969 --> 00:35:56,390
Speaker 1: diseases like smallpox would make it to isolated tribes and

687
00:35:56,410 --> 00:36:00,920
Speaker 1: just destroy whole communities. And the Voyagers, I have to say,

688
00:36:00,940 --> 00:36:06,259
Speaker 1: this won't surprise you, were not beyond a little corporate sabotage. So,

689
00:36:06,810 --> 00:36:09,820
Speaker 1: They would use violence and threats against people who traded

690
00:36:09,840 --> 00:36:12,819
Speaker 1: with Hudson's Bay. They would destroy fishing nets, burn down

691
00:36:12,880 --> 00:36:16,880
Speaker 1: rival forts. Business models. Business models matter.

692
00:36:17,040 --> 00:36:21,239
Speaker 2: Incentives. Incentives matter. Yeah. They had bad economic incentives, and

693
00:36:21,280 --> 00:36:22,510
Speaker 2: they behaved very badly.

694
00:36:23,370 --> 00:36:27,730
Speaker 1: So because they behaved badly, that meant they needed new territory,

695
00:36:27,810 --> 00:36:30,770
Speaker 1: new trading partners. And the men of the Northwest Company

696
00:36:30,890 --> 00:36:33,860
Speaker 1: pushed onward deeper. They're just sort of burning through. And

697
00:36:34,000 --> 00:36:37,730
Speaker 1: deeper into North America. Yeah. Now, on the other side,

698
00:36:37,910 --> 00:36:40,130
Speaker 1: all of this is starting to hurt the profits of

699
00:36:40,170 --> 00:36:44,810
Speaker 1: the Hudson's Bay Company. The stock price was plunging back

700
00:36:44,870 --> 00:36:47,730
Speaker 1: in London. And as we noted in the banana show,

701
00:36:48,150 --> 00:36:52,180
Speaker 1: when your competitor is playing dirty, sadly, you have an

702
00:36:52,219 --> 00:36:55,640
Speaker 1: incentive to start playing dirty too. So the Hudson's Bay

703
00:36:55,700 --> 00:37:00,379
Speaker 1: Company was going to have to actually leave Hudson's Bay.

704
00:37:01,320 --> 00:37:02,739
Speaker 2: Oh, leave, like expand.

705
00:37:02,900 --> 00:37:07,020
Speaker 1: Expand. Go into the country. Okay. Their first huge mistake

706
00:37:07,239 --> 00:37:10,549
Speaker 1: was to start a settlement that would eventually become the

707
00:37:10,570 --> 00:37:13,830
Speaker 1: Canadian city of Winnipeg. This is far from Hudson's Bay.

708
00:37:14,310 --> 00:37:16,770
Speaker 1: And it's, in fact, smack dab in the middle of

709
00:37:16,810 --> 00:37:23,020
Speaker 1: the Northwest Company's trading routes. It's 1812. Governor Miles McDonald

710
00:37:23,080 --> 00:37:26,840
Speaker 1: arrives with settlers on land claimed by the Hudson's Bay Company.

711
00:37:27,180 --> 00:37:30,460
Speaker 1: It's called Red River. And they proceed to build fences

712
00:37:30,580 --> 00:37:37,790
Speaker 1: and shacks. And winter comes and they suffer. crops dying, starvation.

713
00:37:37,810 --> 00:37:40,850
Speaker 1: You have to remember the Hudson's Bay Company did not

714
00:37:40,969 --> 00:37:44,730
Speaker 1: have a lot of experience actually being in the wilderness.

715
00:37:44,790 --> 00:37:48,029
Speaker 1: They were alongside the wilderness, but they did not know

716
00:37:48,090 --> 00:37:52,770
Speaker 1: how to do this. And so in desperation, in 1814,

717
00:37:52,770 --> 00:37:56,380
Speaker 1: Governor McDonald issues something that would be known as the

718
00:37:56,489 --> 00:37:58,160
Speaker 1: Pemmican Proclamation.

719
00:37:58,340 --> 00:38:00,080
Speaker 2: Pemmican, like the disgusting snack.

720
00:38:00,980 --> 00:38:04,970
Speaker 1: The disgusting snack. that they needed to survive. So McDonald's

721
00:38:05,010 --> 00:38:08,540
Speaker 1: says in his proclamation that no one in this valley

722
00:38:08,620 --> 00:38:14,580
Speaker 1: can export any pemmican. The settlers need every clumpy, hair-covered,

723
00:38:15,110 --> 00:38:17,310
Speaker 1: fat nugget to survive.

724
00:38:17,469 --> 00:38:18,589
Speaker 2: Export restrictions.

725
00:38:19,530 --> 00:38:22,110
Speaker 1: This is not only a big overreach from the Hudson's

726
00:38:22,130 --> 00:38:26,239
Speaker 1: Bay Company, but it's also terrible economics because pemmican wasn't

727
00:38:26,340 --> 00:38:29,200
Speaker 1: just a resource that you would find laying on the ground.

728
00:38:29,280 --> 00:38:32,620
Speaker 1: It was a manufactured product and it was manufactured by

729
00:38:32,640 --> 00:38:36,380
Speaker 1: this group called the Metis. The Metis were descendants of

730
00:38:36,520 --> 00:38:40,060
Speaker 1: Europeans and native tribes, but they had their own culture

731
00:38:40,280 --> 00:38:40,980
Speaker 1: and identity.

732
00:38:41,000 --> 00:38:42,719
Speaker 2: Like a mestizo, like a mix. Yeah.

733
00:38:42,780 --> 00:38:46,299
Speaker 1: It's, it's based, it's based on the same, same language. Um,

734
00:38:47,219 --> 00:38:50,800
Speaker 1: but they lived in this valley and they would manufacture pemmican.

735
00:38:51,030 --> 00:38:53,090
Speaker 1: They would mix the bison fat and the berries and

736
00:38:53,230 --> 00:38:55,070
Speaker 1: little hair on top and they would cook it and

737
00:38:55,090 --> 00:38:56,710
Speaker 1: they would sell it to the Northwest company.

738
00:38:57,260 --> 00:38:57,640
Speaker 2: Uh-huh.

739
00:38:58,380 --> 00:39:01,240
Speaker 1: The Hudson Bay Company had gone more than 100 years

740
00:39:01,340 --> 00:39:04,370
Speaker 1: without proclaiming how the tribes should live their lives, and

741
00:39:04,450 --> 00:39:07,710
Speaker 1: now they were outlawing their livelihood.

742
00:39:07,730 --> 00:39:07,969
Speaker 2: Uh-huh.

743
00:39:08,630 --> 00:39:14,129
Speaker 1: And it turned out to be an absolute disaster. There

744
00:39:14,150 --> 00:39:16,670
Speaker 1: was a confrontation with the Metis that left more than

745
00:39:16,670 --> 00:39:21,250
Speaker 1: 20 people dead. Hudson's Bay seized the Northwest Company fort.

746
00:39:21,630 --> 00:39:25,739
Speaker 1: Armed groups fought over supplies. And it basically erupted into

747
00:39:25,780 --> 00:39:30,640
Speaker 1: this guerrilla war that stretched out over 4,000 miles. wherever

748
00:39:30,680 --> 00:39:34,350
Speaker 1: there was Hudson's Bay people and the Northwest Company. They

749
00:39:34,370 --> 00:39:38,630
Speaker 1: would have these skirmishes. So the Hudson's Bay Company seized

750
00:39:38,690 --> 00:39:43,330
Speaker 1: a Northwest Company fort. Arms Group starts fighting over supplies

751
00:39:43,450 --> 00:39:47,280
Speaker 1: because the Northwest Company is like, you're in our trading area.

752
00:39:47,340 --> 00:39:52,680
Speaker 1: We need this pemmican to row, paddle, to paddle all

753
00:39:52,739 --> 00:39:57,820
Speaker 1: day long. And it turns into this guerrilla corporate war

754
00:39:58,120 --> 00:40:02,089
Speaker 1: fought across 4,000 miles. The pemmican war. The pemmican war.

755
00:40:02,590 --> 00:40:06,640
Speaker 1: Waged by companies for seven years. For seven years, it's

756
00:40:06,660 --> 00:40:09,359
Speaker 1: pretty much open season. And at this point, they're just

757
00:40:09,420 --> 00:40:12,799
Speaker 1: fighting because they're fighting. They're fighting because the Hudson's Bay

758
00:40:12,840 --> 00:40:15,989
Speaker 1: Company is trying to expand into the continent, and the

759
00:40:16,030 --> 00:40:18,189
Speaker 1: Northwest Company has it. It's all revenge, and, you know,

760
00:40:18,510 --> 00:40:19,670
Speaker 1: they take it all personally.

761
00:40:19,690 --> 00:40:23,450
Speaker 2: But these are both private companies. They are corporations, and

762
00:40:23,469 --> 00:40:25,230
Speaker 2: they're fighting, like, with guns?

763
00:40:26,530 --> 00:40:28,930
Speaker 1: When they should be focused on profits? Yes. So I

764
00:40:29,730 --> 00:40:32,230
Speaker 1: don't need to tell you, Jacob, this was terrible for

765
00:40:32,250 --> 00:40:36,029
Speaker 1: the bottom line. The fur trade dwindled. The Hudson's Bay

766
00:40:36,090 --> 00:40:39,049
Speaker 1: Company was forced to borrow 100,000 pounds from the Bank

767
00:40:39,090 --> 00:40:43,970
Speaker 1: of England. The Northwest Company apparently had no real cash

768
00:40:44,050 --> 00:40:46,290
Speaker 1: reserves because they were sort of an association. They had

769
00:40:46,330 --> 00:40:49,129
Speaker 1: no way to borrow. So they started to not pay

770
00:40:49,170 --> 00:40:53,330
Speaker 1: their employees in the interior. So it was hurting everyone.

771
00:40:54,730 --> 00:40:59,049
Speaker 1: As this is happening, there is another terrible piece of luck.

772
00:41:00,270 --> 00:41:04,060
Speaker 1: Around this time, a Northwest Company trader and mapmaker had

773
00:41:04,180 --> 00:41:08,040
Speaker 1: finally found a good route over the Rocky Mountains, which

774
00:41:08,100 --> 00:41:10,200
Speaker 1: was what everyone had been looking for for a long time.

775
00:41:10,219 --> 00:41:13,040
Speaker 1: His name was David Thompson, and he found the source

776
00:41:13,080 --> 00:41:15,900
Speaker 1: of the Columbia River, around where British Columbia is now,

777
00:41:16,300 --> 00:41:18,080
Speaker 1: and followed it down to the ocean. So this would

778
00:41:18,100 --> 00:41:22,580
Speaker 1: be down through Washington State, Oregon, today. He's thinking that

779
00:41:22,620 --> 00:41:25,200
Speaker 1: this could be a new route, a new territory for

780
00:41:25,219 --> 00:41:29,360
Speaker 1: the Northwest Company. He's almost to the ocean, at the

781
00:41:29,460 --> 00:41:32,040
Speaker 1: mouth of the river, where he hopes to put a

782
00:41:32,160 --> 00:41:35,549
Speaker 1: new fort for the Northwest Company and for Britain, and

783
00:41:35,570 --> 00:41:39,589
Speaker 1: he sees a boat with an American flag. And then

784
00:41:39,630 --> 00:41:42,730
Speaker 1: he sees the cabin. There is already a settlement at

785
00:41:42,770 --> 00:41:44,770
Speaker 1: the mouth of the Columbia River, and it is named

786
00:41:45,390 --> 00:41:47,180
Speaker 1: Fort Astoria.

787
00:41:47,739 --> 00:41:50,100
Speaker 2: John Jacob Astor. His name was my name too.

788
00:41:50,600 --> 00:41:56,190
Speaker 1: John Jacob Astor and his company had Already made it

789
00:41:56,390 --> 00:41:59,310
Speaker 1: around one of the capes.

790
00:41:59,489 --> 00:42:00,930
Speaker 2: South of the Pacific, South America.

791
00:42:01,330 --> 00:42:03,890
Speaker 1: And made it around and started a fort. And John

792
00:42:03,910 --> 00:42:06,649
Speaker 1: Jacob Astor in the fur business is like, oh, yeah,

793
00:42:06,950 --> 00:42:09,290
Speaker 1: this is our land now. This is where I'm going

794
00:42:09,330 --> 00:42:11,730
Speaker 1: to expand. And we didn't talk a lot about him,

795
00:42:11,790 --> 00:42:16,400
Speaker 1: but he had built up a fur empire himself out

796
00:42:16,420 --> 00:42:18,860
Speaker 1: of New York City. He was sort of a middleman

797
00:42:19,020 --> 00:42:19,960
Speaker 1: for the whole business.

798
00:42:20,440 --> 00:42:22,839
Speaker 2: And then went long New York real estate. Classic good move.

799
00:42:22,980 --> 00:42:28,250
Speaker 1: Classic good move. into Hudson's Bay Company. So this freaks

800
00:42:28,430 --> 00:42:33,770
Speaker 1: out the British government because when they see this, they're like,

801
00:42:33,950 --> 00:42:36,210
Speaker 1: wait a minute, like what are the Americans doing? The

802
00:42:36,230 --> 00:42:39,230
Speaker 1: Americans are going to move up the Pacific coast and

803
00:42:39,290 --> 00:42:42,590
Speaker 1: take over all this land while we're fighting this long,

804
00:42:42,730 --> 00:42:47,350
Speaker 1: weird Pemmican war. So British government had had enough of

805
00:42:47,370 --> 00:42:52,489
Speaker 1: the chaos in 1821. They decide that Canada needs a

806
00:42:52,590 --> 00:42:56,200
Speaker 1: united front. against the United States. And they forced the

807
00:42:56,239 --> 00:43:00,200
Speaker 1: merger of the Northwest Company and the Hudson's Bay Company.

808
00:43:00,860 --> 00:43:03,800
Speaker 1: Still hate each other, but they are now one company.

809
00:43:04,260 --> 00:43:05,940
Speaker 1: One company of adventurers.

810
00:43:06,420 --> 00:43:11,410
Speaker 2: This reminds me of the U.S. government forcing Sam Zimuri

811
00:43:11,469 --> 00:43:14,830
Speaker 2: to merge his banana company with United Fruit. Same thing.

812
00:43:15,010 --> 00:43:15,870
Speaker 1: It's foreign policy.

813
00:43:15,890 --> 00:43:20,110
Speaker 2: Stop fighting. Don't start wars. Just have a merger.

814
00:43:21,290 --> 00:43:27,890
Speaker 1: It's the company versus manifest destiny after the break. And

815
00:43:27,910 --> 00:43:31,810
Speaker 1: we're back from the break and into the story. The

816
00:43:31,850 --> 00:43:34,620
Speaker 1: new company was known as the Hudson's Bay Company. They

817
00:43:34,640 --> 00:43:36,600
Speaker 1: got to keep the name. And they got a new

818
00:43:36,660 --> 00:43:41,520
Speaker 1: charter in 1821. This time Britain is not playing around.

819
00:43:41,540 --> 00:43:44,319
Speaker 1: They give the company even more territory over which they

820
00:43:44,340 --> 00:43:48,799
Speaker 1: have control, including the Pacific Northwest. They're hopeful there. And

821
00:43:48,840 --> 00:43:51,239
Speaker 1: it's not just the waterways now. It's all the way

822
00:43:51,280 --> 00:43:54,640
Speaker 1: to the Arctic. It's well into Oregon territory, which has

823
00:43:54,660 --> 00:43:56,380
Speaker 1: become Oregon, Washington, Idaho.

824
00:43:56,400 --> 00:44:00,640
Speaker 2: It's still a private company controlling half of North America

825
00:44:00,660 --> 00:44:01,140
Speaker 2: or whatever.

826
00:44:01,480 --> 00:44:06,700
Speaker 1: But it's now a weapon of foreign policy because they

827
00:44:06,820 --> 00:44:09,580
Speaker 1: know that if you control the land and you have

828
00:44:09,640 --> 00:44:12,320
Speaker 1: forts and trading, you may be able to call it

829
00:44:12,360 --> 00:44:15,890
Speaker 1: your land. But Britain is bracing for the day when

830
00:44:15,910 --> 00:44:20,680
Speaker 1: the United States is going to try... to claim this land. Now,

831
00:44:20,880 --> 00:44:24,299
Speaker 1: the investors in the company, who own the company, they

832
00:44:24,320 --> 00:44:27,120
Speaker 1: do what always happens after a merger. They want to

833
00:44:27,160 --> 00:44:30,100
Speaker 1: shake things up. They send in this young executive named

834
00:44:30,280 --> 00:44:33,860
Speaker 1: George Simpson. He actually arrived slightly before the merger, but

835
00:44:33,880 --> 00:44:36,360
Speaker 1: this was all part of the plan. Simpson is not

836
00:44:36,600 --> 00:44:40,160
Speaker 1: a fur trader. He doesn't eat pemmican. He doesn't sing

837
00:44:40,420 --> 00:44:42,380
Speaker 1: while he paddles.

838
00:44:43,000 --> 00:44:43,439
Speaker 2: Very good.

839
00:44:44,100 --> 00:44:47,540
Speaker 1: Doesn't have a knife. He's a London man about town.

840
00:44:47,580 --> 00:44:50,600
Speaker 1: He's a young up-and-comer, big customer of the coffee shops,

841
00:44:50,640 --> 00:44:53,440
Speaker 1: which we've talked about. He'd been in the sugar business,

842
00:44:53,480 --> 00:44:55,040
Speaker 1: and they're like, oh, yeah, he just knows how to

843
00:44:55,080 --> 00:44:58,340
Speaker 1: manage big organizations. So he gets to go to Canada

844
00:44:58,489 --> 00:45:04,950
Speaker 1: and clean up the mess. He is a classic reorg guy.

845
00:45:05,190 --> 00:45:09,450
Speaker 1: So the first thing Simpson does is fire people. He

846
00:45:09,530 --> 00:45:12,859
Speaker 1: notes that the company is filled with worn-out men. Of course,

847
00:45:12,880 --> 00:45:14,440
Speaker 1: it was the company that wore them out, but sure.

848
00:45:15,060 --> 00:45:18,890
Speaker 1: filled with worn-out men. There's 96 forts, some right next

849
00:45:18,930 --> 00:45:20,990
Speaker 1: to each other. So he closes a bunch of forts,

850
00:45:21,910 --> 00:45:25,130
Speaker 1: moves the payroll in half, costs synergies.

851
00:45:25,770 --> 00:45:26,810
Speaker 2: Fort synergy?

852
00:45:27,030 --> 00:45:30,069
Speaker 1: We would call it in business school. The next thing

853
00:45:30,110 --> 00:45:32,440
Speaker 1: Simpson does is go on a listening tour. So he

854
00:45:32,480 --> 00:45:36,320
Speaker 1: goes out to the forts. He gets an executive canoe.

855
00:45:36,340 --> 00:45:40,500
Speaker 1: I don't know what that means. Somebody to paddle for him? Oh,

856
00:45:40,520 --> 00:45:42,759
Speaker 1: of course, of course. He's not doing the paddling. And

857
00:45:42,780 --> 00:45:46,000
Speaker 1: he hits the rivers of Canada. And you're going to

858
00:45:46,020 --> 00:45:47,860
Speaker 1: think I'm making this up, but this is absolutely true.

859
00:45:48,550 --> 00:45:51,150
Speaker 1: He loved, when he was out on the rivers, to

860
00:45:51,210 --> 00:45:55,330
Speaker 1: get up very early. He would take an ice bath. Now,

861
00:45:56,030 --> 00:45:58,790
Speaker 1: of course, that's the only kind of bath there is.

862
00:45:59,110 --> 00:45:59,490
Speaker 2: A.k.a.

863
00:45:59,590 --> 00:46:02,859
Speaker 1: A bath. A bath. In the rivers of Canada, it's

864
00:46:02,960 --> 00:46:06,319
Speaker 1: always an ice bath. And he would journal a lot. Like,

865
00:46:06,360 --> 00:46:12,790
Speaker 1: this is the modern striver corporate guy. And he doesn't

866
00:46:12,810 --> 00:46:16,009
Speaker 1: give the outposts any warning that he's coming. He wants

867
00:46:16,050 --> 00:46:18,670
Speaker 1: to show up and see who's working and who isn't

868
00:46:18,730 --> 00:46:21,209
Speaker 1: and how it's going on. He reminded me of Jack

869
00:46:21,250 --> 00:46:24,049
Speaker 1: Welch from GE a little bit.

870
00:46:24,170 --> 00:46:26,770
Speaker 2: Yes, the neutron bomb had not been invented yet. Perhaps

871
00:46:26,790 --> 00:46:27,790
Speaker 2: they called him a hatchet man.

872
00:46:28,050 --> 00:46:32,700
Speaker 1: The hatchet man. Bravo. He was full of himself. He

873
00:46:32,719 --> 00:46:35,140
Speaker 1: was a big jerk to his workers, but he was

874
00:46:35,160 --> 00:46:38,029
Speaker 1: also like A jerk to his friends? When they went

875
00:46:38,090 --> 00:46:42,110
Speaker 1: back to look at his journal, he described everyone he

876
00:46:42,170 --> 00:46:48,250
Speaker 1: worked with at Hudson's Bay in really unflattering terms. Here's

877
00:46:48,270 --> 00:46:50,049
Speaker 1: how he described one of his employees. This is from

878
00:46:50,070 --> 00:46:50,490
Speaker 1: his journal.

879
00:46:50,989 --> 00:46:54,960
Speaker 2: He called this guy he worked with a frothy, trifling,

880
00:46:55,080 --> 00:46:59,299
Speaker 2: conceited man who would starve in any other country and

881
00:46:59,420 --> 00:47:04,200
Speaker 2: is perfectly useless here. This is perfect at something.

882
00:47:06,969 --> 00:47:09,270
Speaker 1: And this will come as no surprise, but George Simpson

883
00:47:09,370 --> 00:47:12,650
Speaker 1: also starts cutting all the costs he can. So he

884
00:47:13,090 --> 00:47:14,970
Speaker 1: changes the menus at the fort.

885
00:47:15,530 --> 00:47:17,360
Speaker 2: More fish. Stop eating so much pemmican.

886
00:47:17,430 --> 00:47:19,640
Speaker 1: Less meat. Yeah, yeah, yeah. He says people need to

887
00:47:19,700 --> 00:47:22,840
Speaker 1: stop using sauces and pickles. He goes on a rant

888
00:47:23,140 --> 00:47:25,580
Speaker 1: about how much mustard his employees are using.

889
00:47:25,600 --> 00:47:28,100
Speaker 2: It sounds like anti-French at some level.

890
00:47:29,300 --> 00:47:33,990
Speaker 1: All the moutarde? Cut it. So he's a control freak.

891
00:47:34,650 --> 00:47:38,410
Speaker 1: And from a profit perspective, this is exactly what the

892
00:47:38,489 --> 00:47:42,830
Speaker 1: company needed. He has complete market power. He got the

893
00:47:42,890 --> 00:47:46,550
Speaker 1: yearly dividend, which is paid back to investors, over 10%

894
00:47:46,550 --> 00:47:49,509
Speaker 1: a year. And no one questioned him after that. They

895
00:47:49,530 --> 00:47:50,629
Speaker 1: were like, you got this.

896
00:47:50,870 --> 00:47:52,710
Speaker 2: It's always kind of a bummer when the guy who's

897
00:47:52,750 --> 00:47:55,820
Speaker 2: like a jerk is good at business. I'm always happy

898
00:47:55,860 --> 00:47:57,920
Speaker 2: when it's the other way, but it does happen.

899
00:47:59,000 --> 00:48:02,879
Speaker 1: Well, it's not going to last forever. were long because

900
00:48:03,140 --> 00:48:05,610
Speaker 1: no matter how efficiently the company is running at this point,

901
00:48:06,030 --> 00:48:09,590
Speaker 1: the facts on the ground are moving against all of

902
00:48:09,730 --> 00:48:12,750
Speaker 1: fur trading. They were the masters of the wilderness, but

903
00:48:12,790 --> 00:48:16,150
Speaker 1: the wilderness is disappearing and the beaver along with it.

904
00:48:17,110 --> 00:48:21,290
Speaker 1: The first wave of settlers started really after the American

905
00:48:21,370 --> 00:48:24,450
Speaker 1: bank panic of 1837. Well, that was a big one.

906
00:48:24,640 --> 00:48:26,420
Speaker 1: That was a big one. A lot of people lost

907
00:48:26,460 --> 00:48:27,799
Speaker 1: their farms and they're like, we're going west.

908
00:48:27,820 --> 00:48:28,100
Speaker 2: This is the.

909
00:48:29,580 --> 00:48:33,569
Speaker 1: Oregon Trail that we talk about. In 1858, gold was

910
00:48:33,610 --> 00:48:37,270
Speaker 1: discovered in British Columbia. The miners pour into the region.

911
00:48:38,860 --> 00:48:42,169
Speaker 1: And George Simpson... He tries everything he can to make

912
00:48:42,230 --> 00:48:45,490
Speaker 1: life difficult for farmers and miners coming west.

913
00:48:45,610 --> 00:48:48,680
Speaker 2: He doesn't want them messing up his beaver business. Yeah, yeah.

914
00:48:48,739 --> 00:48:50,820
Speaker 1: And he has control. And, you know, once there's enough

915
00:48:51,440 --> 00:48:53,960
Speaker 1: real people there, they're going to take control of the

916
00:48:54,000 --> 00:48:57,380
Speaker 1: land because they live there at all times. So he

917
00:48:57,420 --> 00:49:00,320
Speaker 1: said to his forts, you can't help out starving settlers

918
00:49:00,340 --> 00:49:03,880
Speaker 1: with supplies. He even came up with a plan to

919
00:49:04,120 --> 00:49:06,820
Speaker 1: eradicate the beaver in this big section around the Snake

920
00:49:06,890 --> 00:49:09,330
Speaker 1: River so there wouldn't be an incentive for anyone to

921
00:49:09,390 --> 00:49:12,800
Speaker 1: move there. He was a terrible man. But you cannot

922
00:49:12,880 --> 00:49:17,570
Speaker 1: hold back Manifest Destiny. An editorial around the time in

923
00:49:17,590 --> 00:49:21,500
Speaker 1: the Toronto Globe expressed what became a popular frustration with

924
00:49:21,520 --> 00:49:21,960
Speaker 1: the company.

925
00:49:23,000 --> 00:49:28,759
Speaker 2: The editorial wrote, it's unpardonable that civilization should be excluded

926
00:49:28,800 --> 00:49:32,010
Speaker 2: from half a continent on at best, but a doubtful

927
00:49:32,090 --> 00:49:35,250
Speaker 2: right of ownership for the benefit of 232 shareholders.

928
00:49:35,270 --> 00:49:35,450
Speaker 1: Is it?

929
00:49:39,530 --> 00:49:40,910
Speaker 2: I don't know what to make of the fact that

930
00:49:40,969 --> 00:49:44,370
Speaker 2: my response is, were there really only 232 shareholders?

931
00:49:44,510 --> 00:49:46,510
Speaker 1: Apparently at the time. I mean, only the very rich

932
00:49:46,610 --> 00:49:48,509
Speaker 1: are going to own part of this company. It's not

933
00:49:48,550 --> 00:49:52,049
Speaker 1: like there's full trading of penny stocks. It's not the

934
00:49:52,070 --> 00:49:56,310
Speaker 1: Bank of England. Yeah. In the end, it was geopolitics

935
00:49:56,390 --> 00:49:59,840
Speaker 1: that eventually ended the Hudson's Bay Company's total control of

936
00:49:59,880 --> 00:50:05,480
Speaker 1: the region. In 1867, Russia sells Alaska to the United States.

937
00:50:05,560 --> 00:50:06,440
Speaker 2: Seaward's Folly!

938
00:50:07,680 --> 00:50:10,000
Speaker 1: Britain had already started to worry that Americans would want

939
00:50:10,100 --> 00:50:14,040
Speaker 1: everything on the Pacific West Coast. And now the Americans

940
00:50:14,080 --> 00:50:16,640
Speaker 1: have Alaska. They're pushing up into Oregon and Washington.

941
00:50:16,660 --> 00:50:18,940
Speaker 2: That's why they called it British Columbia. They're like, surely

942
00:50:18,980 --> 00:50:20,819
Speaker 2: if we name it British Columbia.

943
00:50:20,940 --> 00:50:24,609
Speaker 1: No one will be able to set foot here. So

944
00:50:24,650 --> 00:50:28,110
Speaker 1: the same year as Russia sold Alaska to the United States,

945
00:50:29,030 --> 00:50:32,850
Speaker 1: Britain and some colonial leaders in Canada created the Nation

946
00:50:32,890 --> 00:50:36,339
Speaker 1: of Canada. Technically, I think it's a confederation to make

947
00:50:36,380 --> 00:50:36,960
Speaker 1: a dominion.

948
00:50:37,120 --> 00:50:40,100
Speaker 2: Dominion. I always heard people. Is there a dominion day?

949
00:50:40,180 --> 00:50:40,700
Speaker 2: Is that right?

950
00:50:40,719 --> 00:50:43,859
Speaker 1: There is a dominion day or there was. Hudson's Bay

951
00:50:43,900 --> 00:50:47,319
Speaker 1: Company would give up their charter and their vast land

952
00:50:47,360 --> 00:50:50,709
Speaker 1: holdings to the new nation a few years later.

953
00:50:50,730 --> 00:50:52,410
Speaker 2: I mean, in a way, it sounds like their land

954
00:50:52,430 --> 00:50:54,350
Speaker 2: holdings would become Canada.

955
00:50:54,550 --> 00:50:55,450
Speaker 1: They did become Canada.

956
00:50:55,469 --> 00:50:55,629
Speaker 2: Yeah.

957
00:50:56,989 --> 00:50:59,890
Speaker 1: They did get, the company was like, well, you have

958
00:50:59,930 --> 00:51:03,150
Speaker 1: to compensate us. I mean, we're controlling this whole region.

959
00:51:03,430 --> 00:51:06,690
Speaker 1: So they got 300,000 pounds. They got to keep their

960
00:51:06,790 --> 00:51:11,730
Speaker 1: forts and some good farmland. You know, a substantial amount

961
00:51:11,770 --> 00:51:15,880
Speaker 1: of real estate in the new West. The empire of

962
00:51:15,940 --> 00:51:20,600
Speaker 1: Hudson's Bay Company was over, but the business was not.

963
00:51:21,180 --> 00:51:23,860
Speaker 1: It was the late 1800s. Settlers are pouring into the West.

964
00:51:25,020 --> 00:51:28,420
Speaker 1: And the Hudson's Bay Company has everything a settler could want.

965
00:51:29,080 --> 00:51:32,220
Speaker 1: They had good farming land, which they sold to settlers.

966
00:51:33,190 --> 00:51:35,930
Speaker 1: They had the goods to help them build and survive.

967
00:51:35,969 --> 00:51:39,650
Speaker 1: So they start to provide products to not only settlers,

968
00:51:39,710 --> 00:51:42,229
Speaker 1: but to gold miners. They're making a ton of money.

969
00:51:42,570 --> 00:51:46,600
Speaker 1: And these forts scattered across the West become cities. The

970
00:51:46,640 --> 00:51:50,380
Speaker 1: land under the forts eventually become huge department stores.

971
00:51:51,060 --> 00:51:53,279
Speaker 2: This is the era of the department store. We talked

972
00:51:53,300 --> 00:51:56,800
Speaker 2: about that in the Wanamaker show, 1860s, 70s. The department

973
00:51:56,820 --> 00:51:59,359
Speaker 2: store is sort of being invented at this moment. This

974
00:51:59,440 --> 00:52:01,420
Speaker 2: store that sells all kinds of things.

975
00:52:01,660 --> 00:52:06,200
Speaker 1: And Hudson's Bay has like a 200-year start. So they

976
00:52:06,239 --> 00:52:08,820
Speaker 1: were first with this. And they had the logistics routes.

977
00:52:08,860 --> 00:52:11,230
Speaker 1: They had everything. When I was growing up in Canada,

978
00:52:11,590 --> 00:52:13,790
Speaker 1: we'd go to The Bay. They had shortened the name

979
00:52:13,850 --> 00:52:19,250
Speaker 1: to The Bay to make it cooler for back-to-school shopping. Now,

980
00:52:19,969 --> 00:52:24,689
Speaker 1: this would last through my childhood up until last year.

981
00:52:24,710 --> 00:52:28,489
Speaker 1: The Hudson's Bay Company had faced the wilderness. They had

982
00:52:28,570 --> 00:52:32,050
Speaker 1: fought off the French. They defeated the Nor'westers. They built

983
00:52:32,430 --> 00:52:36,260
Speaker 1: this nation. You know what they were no match for?

984
00:52:36,280 --> 00:52:41,340
Speaker 1: The internet, the decline of malls, a lot of private

985
00:52:41,420 --> 00:52:47,110
Speaker 1: equity hijinks. And they finally closed last year. And I

986
00:52:47,150 --> 00:52:49,590
Speaker 1: watched all these videos. It was really sad. People came

987
00:52:49,650 --> 00:52:53,170
Speaker 1: into the stores to buy up their signs and old

988
00:52:53,250 --> 00:52:56,379
Speaker 1: mannequins and whatever, whatever they had left over. The last canoe,

989
00:52:56,390 --> 00:53:01,380
Speaker 1: the last paddle. Everyone just wanted to take home a

990
00:53:01,580 --> 00:53:03,760
Speaker 1: little bit of the history of Canada.

991
00:53:05,160 --> 00:53:07,919
Speaker 2: Listeners, is there another Canada show that we should do?

992
00:53:08,460 --> 00:53:09,020
Speaker 1: Tim Hortons.

993
00:53:09,280 --> 00:53:14,770
Speaker 2: Tim Hortons. Oil Sands? Mounties?

994
00:53:14,810 --> 00:53:18,200
Speaker 1: Mounties. Now you're just listing off anything you can think

995
00:53:18,239 --> 00:53:18,900
Speaker 1: of that's Canadian.

996
00:53:20,020 --> 00:53:26,410
Speaker 2: Email us at businesshistoryatpushkin.fm. You can find us on Instagram

997
00:53:27,170 --> 00:53:32,270
Speaker 2: and on TikTok at businesshistorypod. I'm on Instagram. I'm on

998
00:53:32,530 --> 00:53:35,930
Speaker 2: ex-FKA Twitter. So are you.

999
00:53:35,950 --> 00:53:37,490
Speaker 1: At Radiosmith.

1000
00:53:38,110 --> 00:53:44,150
Speaker 2: Today's show was produced by Gabriel Hunter-Cheng. Our engineer is

1001
00:53:44,190 --> 00:53:49,500
Speaker 2: Sarah Bruguier. Our showrunner and editor is Jake Harper. My

1002
00:53:49,540 --> 00:53:50,560
Speaker 2: name is Jacob Goldstein.

1003
00:53:50,980 --> 00:53:54,710
Speaker 1: And I'm Robert Smith, Canadian and American too. Sorry.

1004
00:53:55,570 --> 00:53:56,230
Speaker 2: Thanks for listening.