Founded in 1779, the North West Company was a major force in the fur trade from the 1780s to 1821. Managed primarily by Highland Scots who migrated to Montréal after 1760, or came as Loyalists escaping the American Revolution, it also drew heavily on French-Canadian labour and experience. The name first described Montréal traders who in 1776 pooled resources to reduce competition among themselves and to resist inland advances of the Hudson’s Bay Company.

History

Beginnings: 1779-1787

Originally, the company’s 16 shares were held by nine partnerships, including business leaders Simon McTavish, Isaac Todd and James McGill. A 1780 reorganization joined McTavish, the Frobisher brothers, the McGills and the Ellices, with Peter Pond as their agent in the Athabasca country.

Pond's inland encounter with opposition trader Jean-Étienne Waddens and Wadden’s murder in March 1782, along with increased American and Hudson’s Bay Company (HBC) competition, clarified the need for a more unified, formal and permanent organization. For this reason, in the winter of 1783-84, the North West Company (NWC) became an enduring multiple partnership controlled by the Frobishers and Simon McTavish, with annual trade valued at about £100,000.

A powerful rival remained, however. Gregory, McLeod and Co backed John Ross and other traders not included in the NWC, and intense rivalry ensued from 1784-87. Pond was again linked with murder this time of Ross in Athabasca. As was the case previously, coalition was the answer, and in mid-1787 the Nor’Westers and Gregory, McLeod and Co amalgamated. Dominated by the Montréal firm of McTavish, Frobisher, and Co, dynamic entrepreneurs thus came together men such as the McGillivrays and, from the ranks of their former rivals, Roderick McKenzie and Alexander Mackenzie.

Expansion: 1790s

While McTavish and Frobisher handled Montréal affairs, Alexander Mackenzie led inland expansion. The Athabasca trade was reorganized with a new base, Fort Chipewyan on Lake Athabasca. A far-flung system of canoe brigades, provisioned by pemmican from the plains, furnished transport and brought out up to 20,000 Made Beaver annually. It also gave Mackenzie the support needed to explore the Mackenzie River to its mouth in 1789.

During 1790-91, McTavish attempted unsuccessfully to have Britain end the HBC monopoly. Later efforts to lease transit rights from the HBC through its depots on Hudson Bay were rebuffed as well. The only remaining option was to intensify direct rivalry with the "English," who were extending their own network of inland posts. Through the 1790s the Nor'Westers prevailed. Their control of over two-thirds of the Canadian fur trade by 1795 was complemented by Mackenzie's reaching the Pacific overland in July 1793. Potential rivals in Montréal were muted by a 1792 agreement to co-operate.

In 1794, Jay’s Treaty settled the boundary between US and British territory, challenging the Montréalers' access to Detroit, Lake Michigan, the depot of Grand Portage on Lake Superior and the southwest trade beyond. Reorganization in 1795 accommodated Montréal interests who, displaced from the south, sought a place in the northern trade. But NWC winterers, notably Alexander Mackenzie, were offended by their standing in the company. In 1797, Forsyth, Richardson, and Co, which had remained outside the 1795 agreement, began to back the winterers, and in 1798 formed the New North West or XY Company. Joined by Alexander Mackenzie in 1800 (after his NWC commitment ended), the XY Co opposed the NWC from the Great Lakes to Athabasca. Simon McTavish's death, however, enabled reconciliation and the merger of the firms in November 1804.

Confrontation: Early 1800s

Meanwhile, NWC-HBC confrontations increased. NWC acquisition of Québec's King’s Posts extended the company's activities as far as Lake Mistassini, inland from Hudson Bay. From 1803 to 1806, the Nor'Westers maintained a base on James Bay, and although this enterprise proved unprofitable, rivalry intensified elsewhere. In exploration, the NWC kept the upper hand, with Duncan McGillivray, David Thompson and Simon Fraser crossing the Rocky Mountains and the latter two reaching the Pacific.

When Thompson reached the Columbia River mouth in July 1811, he encountered a new post which had been erected by the American John Jacob Astor's Pacific Fur Company. Isolated from its source of support by the War of 1812, Astoria was sold to the Nor'Westers in October 1813. It was returned to the Americans by the Treaty of Ghent. Two new NWC western trade districts proved profitable for some years, but hopes to develop a China trade and a liaison with the East India Co. bore little fruit.

One factor limiting such developments was a deteriorating situation east of the Rockies. The HBC posed trade challenges and, with the earl of Selkirk, was planning an agricultural colony in an area pivotal to the Nor'Westers' transportation and provisioning networks. NWC attempts to block the plan by buying up HBC stock in London and by discouraging prospective colonists in Scotland failed.

The stage was thus set for a series of bitter and costly clashes at Red River Colony, Fort William and elsewhere. The Seven Oaks Incident, 19 June 1816, was the worst event in a conflict neither side could win. From 1815 to 1819, repeated clashes and seizures of men and goods in Athabasca exacerbated bad feeling. In June 1819, seven NWC partners and numerous men were seized by a HBC force under William Williams, the new governor in chief of Rupert’s Land, at the Grand Rapid of the Saskatchewan River. Both the prestige of the Nor'Westers and their business that year were thus impaired, despite successes in impeding the inland activities of HBC officers John Clarke and Colin Robertson.

Coalition: 1821

By 1820, strong forces were building towards a resolution of the conflict. NWC partners, concerned about their future, varied in their support for William McGillivray's aggressive measures against the HBC. Splits between the Wintering Partners and the Montréal agents deepened. Their partnership agreement would expire in 1821, and clearly its terms would need radical revision. Britain was drawn into the broader NWC-HBC struggle, as each company lobbied for official support. The Colonial Office wished the restoration of peace and a settlement of the serious territorial and legal issues which reached beyond the conflict and were aggravated by it.

In 1821, a parliamentary Act granted exclusive trade to the HBC and to William and Simon McGillivray and Edward Ellice of the NWC, in an effort to placate all parties by devising coalition, not amalgamation. A Deed Poll designated 53 field officers, 32 NWC and 21 HBC, as shareholding chief factors and chief traders, under the charge of HBC governors William Williams and George Simpson, the latter a newcomer. The name, charter and privileges of the old HBC provided a foundation for the new firm, while the Nor'Westers' skills and experience contributed a scope and dynamism that served the company well.