The Department Store that was Once a Country
The Department Store that was Once a Country
You’re reading my newsletter, Terra Nullius, on the weird and interesting intricacies of the countries and places that make up our world. It currently goes out to over 1,000 people every week. You can subscribe by clicking below:
Before even attempting to begin this article, I need you to understand how large 4 million square kilometres is. If it helps, that’s the size of about half of the USA, or around seven of France. If, as many newspapers believe, you can only quantify size through the medium of football pitches, it’s around 560 million of them.
With that number in mind, imagine that it is entirely administered by your local supermarket. The Tesco Express down the road that does meal deals for £3.50 and doesn’t clean their fridges very well in charge of an area roughly the size of Western Europe. Except, you don’t need to imagine it. It happened. And the store that did it is currently doing a flash sale on living room furniture. But before we discuss sofas, let’s go back a few centuries and discuss hats.
At the turn of the 17th Century, felt hats were all the rage and felt hats are made of beaver skin. At the time, this relied on Russia’s long-established fur trade. But as demand grew, quality dropped significantly as the native European beaver population began to be hunted out of existence. Within decades, it was very difficult for merchants to find high quality felt from Russia, and customers in England were complaining that they were having to wear felt made from rabbit instead.
But around the same time, irregular and rare shipments began to arrive from the European colonies in North America where beaver – mostly trapped by French settlers and Indigenous Americans – was still plentiful and of very good quality. In 1669, the ship Nonsuch dropped anchor in the Thames with a large shipment of some of the highest quality furs London had ever seen, selling them immediately for £1,233 (equivalent to around £1 million in 2022). The Nonsuch had led an expedition invested in by some of London’s richest merchants and sponsored by Prince Rupert, a first cousin of King Charles II. It had done its trapping in Hudson’s Bay in the north of what is now Canada. The purpose of the expedition was to demonstrate that the issues with fur supply could be solved if its trapping in North America could be optimised, leaving behind the slow and traditional approach of the French and First Nation trappers.
This was not the first time Prince Rupert had seen to make money from exploiting colonised lands, having poured large amounts of his wealth into the slave trade from West Africa and sitting on the board of the Royal African Company. With this financial success made from trading in human lives, he turned his interest to North America and helped put together the syndicate that sent the Nonsuch to Hudson's Bay. In 1670, his cousin King Charles II granted the syndicate a royal charter to form the Hudson’s Bay Company, giving the company a monopoly over ‘Prince Rupert’s Land’ made up of the land drained by rivers and streams flowing into Hudson’s Bay – or 3,861,400 square kilometres.
In short order, the company had established trading posts throughout its monopoly, known as factories (as each was controlled by a company official known as a factor). The only thing that mattered to these factories and its parent company was beaver. Nothing could stand in the way of ensuring the safe passage of furs and pelts to Europe. By 1690, the demand in England for hats and caps was five million per year – or one per person. Hundreds of thousands more would be exported onwards from England to Europe such was the demand for the well-known quality of the Hudson Bay beaver. For example in 1756, Portuguese customers spent more than £20 million in today’s money on English beaver felt hats.
As Prince Rupert’s Land was largely still wilderness, besides company staff it was inhabited only by European and First Nations trappers and as a result there was only a barter economy, to both subjugate indigenous residents and prevent private wealth. There were standardised prices throughout Prince Rupert’s Land and instead of a normal currency, the company instead pegged everything against the unit of 1MB (1 Made Beaver). For three made beaver pelts, you could be given one clay pot in exchange at a company store, or for 10 you could get a gun. Private trading was outlawed and all beaver pelts that left Prince Rupert’s Land traveled through the warehouses and accounts of the Hudson’s Bay Company.
By the end of the 18th Century, the company had long outstretched its original borders, controlling what is now the Northwest Territories of Canada as well as what is now Oregon and it even had a presence in the Pacific Ocean.
The company’s only focus was to trade fur. It did not want to be a government, but it became one, eventually issuing its own money and running what was practically a navy on the lakes and rivers of North America. In the early years this was not controversial, as only the coasts of the continent had been occupied by colonial settlers and the inhospitable interiors were left to the company, and it liked it that way. It was so terrified of settlement that the Company spent almost two centuries spreading falsehoods that their lands were completely barren and impossible to live in.
But by the 1830s and 1840s, the company had to compete with settlers on the Oregon Trail moving across North America. At first, any attempts to settle were crushed as the company would simply not allow them to trade in their stores. But over time, the eventual number of settlers moving through company land eventually broke their stranglehold, forcing the company out of the USA in 1846. The monopoly in Canada evaporated shortly after in 1849. By then, private trade in furs was beginning to challenge the company’s authority, mostly led by members of the Metis People. These are Indigenous Canadians who have mixed European-First Nations origins. The Metis made up most of the trappers supplying the Hudson’s Bay Company and them taking trade into their own hands, along with a decimated supply of beaver, undermined the Company’s monopoly.
The propaganda spread by the company that their land was horrible and deadly also began to be challenged. It took a military expedition and a Parliamentary inquiry for the Hudson’s Bay Company to finally admit that for centuries it had been lying that its land was inhospitable and that in fact it was one of the great prairies of America with some of the continent’s most promising agricultural land. The psyop was over.
All of these challenges coincided with the emergence of Canada as a national entity and the establishment of its borders. With the fur trade drying up, the company was in financial crisis and in 1863 the majority of shares were acquired by the International Financial Society. As a result, the Company’s shares were offered for purchase by the public, marketed on the idea that now the truth was out, the Company’s land would be perfect for agriculture and mining. In 1867, three British provinces in North America confederated and formed The Dominion of Canada. The new country was bordered by the Hudson’s Bay Company to its west and the United States to its south, placing the financially struggling Company in a very advantageous position.
In 1869, the United States offered the Company $10,000,000 for its land. If it had gone through, it would have meant that the USA would today control the vast majority of what instead became Canada. Under political pressure from Britain, this very generous offer was rejected and the Company agreed to cease to be a geographical entity, transferring all of its land to the British Government.
On June 23 1870, Britain approved the deal and transferred Prince Rupert’s Land and the North-Western Territories to the Dominion of Canada. In return, the British government distributed £300,000 (£30 million today) to the Company’s shareholders as compensation.
But the story of the Hudson’s Bay Company doesn’t end there. Remember the stores across Canada where three beavers got you a pot? Those became department stores, and remain so today where you can still buy pots, but for real money. It runs a website called The Bay, the one offering a flash sale on sofas, but the brick and mortar shops still bear the original name of the Hudson’s Bay Company. Even now on their website, you can buy a Hudson’s Bay point blanket with the same design as you would have found in one of the company’s factories in 1779.
The stores have struggled over the years, particularly during the COVID-19 pandemic but the Hudson’s Bay Company is still going strong with around 30,000 employees and almost CA$10 billion in revenue. In 2020 it ceased to be a public company and is now in private hands. There is, however, still the odd relic of its past hiding among its balance sheets, its CEO today is known as the Governor, a role that has existed in the company since 1670 when the Governor was Prince Rupert.
It doesn’t own 3.9 million square kilometres of land anymore though, it instead controls 3.7 million square metres of commercial real estate.
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The company "subjugated" indigenous peoples by discouraging settlement by Europeans? As for the company's monopoly being shattered by the Metis, that never actually happened. The Metis were able to trade directly into the U.S, but only diverted part of the company's trade. It was the decline in the demand for furs that led the company to sell out in return for judiciously chosen land grants; a decline that also led to Russia selling Alaska in 1867.