Indignation of the Wintering Partners—Distrust and Misgivings Arise—Proposals of Governor Dallas for the Compensation of the Wintering Partners in Exchange for their Abrogation of Deed Poll—Threatened Deadlock—Position of those in Authority Rendered Untenable—Failure of Duke of Newcastle's Proposals for Surrender of Territorial Rights—The Russo-American Alaskan Treaty—The Hon. W. McDougall's Resolutions—Deputation Goes to England—Sir Stafford Northcote becomes Governor—Opinion of Lord Granville as to the Position of Affairs—Lack of Military System Company's Weakness—Cession now Inevitable—Terms Suggested by Lord Granville Accepted—First Riel Rebellion—Wolseley at Fort Garry.

All this had taken place in London. The sale had been negotiated between financiers. Not a word of what was impending had crossed the Atlantic to the hunting-grounds of the North-West—to the body of men who were, as much as the Governor, the Committee and the sleeping partners, members of the Great Company. Yet their voice had never been heard, nor their consent to the transaction obtained. By the Deed Poll it was provided that the profits of the fur-trade (less interest on capital employed) were to be divided into one hundred parts, sixty parts going to the stockholders and forty to the "wintering partners." What would the "wintering partners" say to this brilliant "game of chess" which had been played with the stockholders for interests which were jointly theirs?

Indignation of the Wintering Partners.

No sooner had the papers been signed, and the million and a half sterling paid over, than misgivings seem to have seized the minds of those directly interested. Yet, on their behalf, it was urged that the Company's posts and hunting grounds still remained. That the factors and traders would be as well off under the new rÉgime as the old—that the mere change of one body of shareholders for another could affect them nothing—that, in fact, they would really benefit by having men of newer ideas and a more progressive spirit.

The news, once in the newspapers, travelled fast, and in a few weeks at the less distant posts, and in a few months at the more remote ones, the rumour ran that the Company had sold out—that the London partners had betrayed the real workers in the wilderness.

A large number of the Company's chief factors and traders had, it appeared, addressed a memorial to the Company in London, when first the rumour of a sale had reached them. They declared that they had been informed that no transfer was probable, but if it took place it would not be without previous consultation. They now learned for the first time from the newspapers that these arrangements had been made. An influential member of the new Company predicted that a general resignation of the officers from Labrador to Sitka would ensue, followed by a confederation amongst themselves, in order to carry on the fur-trade in competition with the Company. They had, they said, "the skill, the will, and the capital to do it."

It was said that the appearance of Mr. Lampson's name as Deputy Governor of the new Company had heightened the first feeling of distrust, for this gentleman and his commercial connections had long been the Company's great rivals in the fur marts, carrying on a vigorous competition at all accessible points.[123]

Governor Dallas's Suggestions.

Governor Dallas, almost immediately upon his arrival in Montreal, caused a circular to be issued, addressed to all the factors, completely refuting all these charges and innuendoes. Many conferences took place between Dallas and Watkin as to the working of the Company in the fur territories on the new basis. Dallas kept the Governor and Committee in London fully advised of the state of affairs, accompanied by proposals as to the compensation to be allowed the aggrieved wintering partners. An interesting object, which it was desired to accomplish at this time, was an exchange of boundary between the Company and the United States, so as to permit Superior City being brought into British territory by means of a fair payment and exchange of land. The negotiations looking to this end, although at one time promising, proved a failure.

It was believed that the first measure necessary towards the re-organization of the Hudson's Bay service would be the abolition or modification of the Deed Poll, under which the trade was then conducted. The wintering partners (chief factors and chief traders) had certain vested rights, and these could not be interfered with without compensation.[124]

One mode suggested by Governor Dallas of removing the difficulty was to ascertain the value of a retired interest, and bestow a money compensation to each officer on his entering into an agreement to consent to the abrogation of the Deed Poll. As regarded the shares held in retirement, some of the interests had nearly run out and none of the parties had any voice in the business. The value of a (one-eighty-fifth) share was ascertained to be (on the average of the previous thirteen "outfits") about £408, at which rate a chief factor's retired interest would amount to £3,264, and a chief trader's to £1,632. Adding the customary year's furlough on retiring, a factor's retired allowance would be £4,080, and a trader's £2,040. On such a scale of commutation it would cost the Company £114,500 to buy out its officers.

As a set-off to this outlay Governor Dallas suggested a substantial reduction in salaries. Under the then existing organization the pay of officers in the service was £2,000 to the Governor-in-Chief, £16,000 amongst sixteen chief factors, £14,000 to thirty-five chief traders, and £10,000 to the clerks, a total officers' pay-roll of £38,000. He proposed to cut this down as follows:

But Sir Edmund and his colleagues thought otherwise. The wintering partners were not yet to reap any profit from the sale of the Company's assets. The Deed Poll remained in full force until 1871, when they were paid £107,055 out of the money received from Canada for Rupert's Land and the North-West.

Threatened Deadlock in Red River Settlement.

In 1863 the Company's government had almost come to a deadlock in the Red River settlement. Two cases had just occurred of prisoners having been forcibly rescued from gaol; and they, with about thirty to fifty others implicated in the riots, continued at large, fostering discontent. The only paper published, the notorious Nor'-Wester, was in the hands of the Company's bitterest enemies.[125] The position of those in authority was so disagreeable that it was with great difficulty that Governor Dallas persuaded the magistrates to continue their duties. Governor McTavish, who was in charge of Assiniboine, resigned, and others were prepared to follow his example, including the Governor-in-Chief himself. Fortunately the open malcontents were few in number and the volunteer force was sufficient to protect the gaol and support law and order, were it not for the unwise zeal of the Company's partisans who were ready to engage in a free fight with the agitators. This, beyond question, would have led to a repetition of the Semple tragedy of 1816. It may be noted that the Company's unpopularity in the Red River country, according to Governor Dallas, "arose entirely from the system, not from the faults of its administrators."

The agitation against the Company still continued, but slowly. It seemed difficult for the parties interested in the abolition of the Company's rights to agree upon a single scheme which would be permanently satisfactory, and not too costly. Sir Edmund Head expressed himself in favour of a complete sale of rights and ownership to the Imperial authorities. But this scheme was, as has been seen, beset with almost insuperable difficulties. In November, 1863, Sir Edmund suggested that an equal division be made of the territory fit for settlement between the Company and the Crown, with inclusion of specified tracts in the share of the former; secondly, that the Company construct the road and telegraph; thirdly, that the Crown purchase such of the Company's premises as should be required for military use, and to pay the Company a net third of all future revenue from gold and silver.

In his Speech from the Throne, on the 19th February, 1864, Lord Monk, the Governor-General of Canada, alluded to the matter, which was beginning to engross the public mind.

"The condition," said he, "of the vast region lying on the north-west of the settled portions of the Province is daily becoming a question of great interest. I have considered it advisable to open a correspondence with the Imperial Government, with a view to arrive at a precise definition of the geographical boundaries of Canada in that direction. Such a definition of boundary is a desirable preliminary to further proceedings with respect to the vast tracts of land in that quarter belonging to Canada, but not yet brought under the action of our political and municipal system."

It was hoped by many that the Company could be induced to sell out its rights to the Imperial Government, and out of the territory to carve out a new Crown Colony.

In the course of the ensuing debate on the address, the Honourable William McDougall, Minister of Crown Lands, who was officially concerned in the matter, stated that "the Government of Canada had reached a conclusion upon the advisability of determining whether the Red River territory belonged to Canada or to some other country." The consequence was that a correspondence had been opened with the Imperial Government upon the subject. Mr. McDougall thereupon announced his individual view of the case as being that "Canada was entitled to claim as a portion of its soil all that part of the North-West territory that could be proved to have been in possession of the French at the time of the cession of Canada to the British."

It was not at all likely that the Duke of Newcastle would share such a view, or that he would entirely acquiesce with the suggestion of Sir Edmund Head on behalf of the Company. Under date of the 11th of March, and 5th of April, 1864, he formulated the appended proposals:—

The surrender of Territorial Rights.

These proposals were carefully considered by Sir Edmund Head and his colleagues, and it was decided at a meeting on the 13th of April to accept them, subject to certain alterations. It was urged that the amount of payments within fifty years should either not be limited or else placed at the sum of £1,000,000 sterling, instead of a quarter of that sum. The Company also suggested that a grant be made to it of five thousand acres of wild land for every fifty thousand acres sold by the Crown.

In the meantime the Duke of Newcastle had been succeeded in the Colonial Secretaryship by Mr. Cardwell, who on the 6th of June wrote to say that he could not entertain the amendments of the Company. For several months nothing was done, but in December the Honourable Adventurers again met and again showed their desire for an amicable and reasonable arrangement. They offered to accept £1,000,000 for the territory which they then defined, and which was substantially in extent the whole region granted them in the Charter of Charles II. In 1865 the Hon. George Brown went to England to come to terms over the proposed transfer, but without success.

America purchases Alaska.

The charter of the Russian Company was about to expire. It had underlet to the Hudson's Bay Company all its franchise on the mainland between 54° 40' and Mount St Elias; and now it was proposed that an American Company, holding direct from the Russian Government, should be substituted, and it seemed to the Americans a good opportunity to organize a fur-trading company to trade between the States and the Russian possessions in America. But before the matter could mature, the American and Russian Governments interposed with a treaty, by which Alaska was ceded to the States for $7,200,000 in gold. Few treaties have ever been carried out in so simple a manner. Russia was glad to be rid of her possessions in North America. The sum of $7,000,000 was originally agreed upon; but when it was understood that a fur company and an ice company enjoyed monopolies under the existing government, it was decided to extinguish these for the additional sum.

On 1st July, 1867, the Confederation of the scattered British Provinces of North America was made an accomplished fact, amidst general rejoicings. On the 4th of December, Mr. McDougall, who was now Minister of Public Works for the new Dominion of Canada, brought in, at the first session of Parliament, a series of resolutions directly relating to the acquisition of Rupert's Land and the Great North-West:—

Deputation goes to England.

In the following year a delegation to arrange the terms for the acquisition by Canada of Rupert's Land and the North-West Territory arrived in England. It consisted of Sir George Étienne Cartier and Mr. William McDougall. On presenting themselves at the Colonial Office they were invited by the Duke of Buckingham and Chandos, then Secretary of State for the Colonies, to visit him at Stowe "for the purpose of discussing freely and fully the numerous and difficult questions involved in the transfer of these great territories to Canada." To the Duke's country-seat the delegates accordingly went. Here, one of the first things the Duke communicated to them was that the Company being lords-proprietors were to be treated as such, and not as parties having a defective title and fit subjects for that "spoliation" previously deplored by Cartier.[126] There can be no manner of doubt that, taking this view, the Company's demands were most reasonable. But the Canadian delegates were not content to take this view. There had been so much irresponsible hue-and-cry about the weakness of the Company's title, that they doubtless felt themselves privileged to hold out for better terms. While negotiations were thus pending in London, the Duke of Buckingham quitted office with his colleagues, and was succeeded by Earl Granville. Almost at the same time the Earl of Kimberley, the Company's Governor, resigned, and was replaced by Sir Stafford Northcote. In January, 1869, the new Colonial Secretary transmitted to the delegates the reply of the Company, declining their counter-proposals, and inviting them to communicate to him any observations they might desire to offer further on the situation.

"We felt reluctant," to quote the language of the delegates, "as representatives of Canada, to engage in a controversy with the Company concerning matters of fact, as well as questions of law and policy, while the negotiation with it was being carried on by the Imperial Government in its own name and of its own authority."

Canada exerts pressure on the Company.

Nevertheless, these scruples were soon overcome. They accepted Lord Granville's invitation, and on the 8th February stated at length their views upon the various points raised by the Governor of the Company, which views clearly demonstrated that the Dominion was by no means prepared to deal with the Honourable Adventurers in a spirit of generosity or even of equity. Lord Granville now came forward with plans of his own, but these were not agreeable to Sir George Cartier and Mr. McDougall. While the negotiations were in progress the Company lodged an indignant complaint against the Canadian Government for undertaking the construction of a road between the Lake of the Woods and the Red River settlement without first having procured its consent. Stormy meetings of the Honourable Adventurers were held; it seemed impossible to resist the pressure which was being brought to bear. Had the old governor and committee been in existence it is possible this pressure would have been longer withstood. The delegates returned to Canada, but they had succeeded in no slight measure in impressing upon the Imperial Government their peculiar views. On the 9th of March, Lord Granville employed the following language to the Governor of the Company:

"At present the very foundations of the Company's title are not undisputed. The boundaries of its territory are open to questions of which it is impossible to ignore the importance. Its legal rights, whatever these may be, are liable to be invaded without law by a mass of Canadian and American settlers, whose occupation of the country on any terms it will be little able to resist; while it can hardly be alleged that the terms of the charter, or its internal constitution, are such as to qualify it under all these disadvantages for maintaining order and performing the internal and external duties of government."

Lack of Military system Company's weakness.

There was the Company's weakness. No sovereign in Europe had a clearer right to his or her dominions, perhaps no rule was wiser or more beneficent, but the one powerful, indispensable adjunct to sovereign authority it lacked—a military system.[127] With a standing army the Company's rights would have been secure—but it was a king without soldiers. It required ten thousand drilled men to defend its frontiers—it was too late in the day to organize such a force, it could only submit gracefully to its envious and powerful neighbours. Cession was perhaps inevitable; the terms which Lord Granville now proposed it decided to accept.

Cession to Canadian Government.

On such terms did the Canadian Government acquire this vast territory of two million three hundred thousand square miles. In that portion designated the Fertile Belt, comprising three hundred million acres, there were agricultural lands believed to be capable of yielding support to twenty-five million people.

Filled with high hopes as to the future of the country they had thus acquired, the Canadian Government was confronted by the necessity of providing it with a suitable form of government to replace that of the Company. Little did the public men who had interested themselves in the negotiations ponder on the difficulties of the task. Apparently they undertook it with a light heart. During the session of 1869 an Act was passed at Ottawa providing a provisional form of government in the territory, and in October of the same year the Hon. William McDougall received the appointment of Lieutenant-Governor. But before he set out on his duties surveying parties had been busy in the Red River settlement, laying out townships and instituting an extended series of surveys.

Forlorn case of the MÉtis.

In order to be in the place of his government when by the Queen's Proclamation it should become a portion of the Dominion of Canada, McDougall, in the month of November, found himself at the frontier of his Province. But the transfer was not to be consummated without bloodshed. A portion of the little community of Red River raised its voice in vehement protest against the arrangements made between the Government of Canada and the Company. These malcontents, chiefly French half-breeds, headed by Louis Riel, expelled the Governor appointed by the Dominion and planned a resistance to all authority emanating from the same source. They assembled in large numbers, and, after fortifying portions of the road between Pembina and Fort Garry, had taken possession of the latter post. Upon consideration of the case of these wild and ignorant MÉtis, it is difficult to withhold from them sympathy. Settled government, forms of law, state duty, exactions of citizenship, the sacrifices and burdens of urban civilization—of these he knew but dimly, and held them in a vague horror. He knew that men lived and ground out their lives in cities afar off, and that by means of their wealth they possessed power; that they had cast envious eyes on the hunting-grounds of the Indian and his half-brother the MÉtis; that they sought to wrest him from his lands and mark it off into town lots, people his beloved prairies and exterminate his race. They must mean him ill or they would not work in such a silent, stealthy fashion to dispossess him and drive him farther west into unfamiliar fastnesses. There were fifteen thousand souls in the country bordering on Red River, and the majority objected, not without reason, that such an arrangement as had just been carried out should be done without their consent or having been consulted. Was it wonderful that the half-breed, resenting this march of civilization which would trample him and his possessions to atoms, should arise, seize his rude weapons, and prepare for war?

It is true the insurrection of 1869-70 could have been averted. It would have been easy, through an agent of tact and eloquence, to have dispelled the illusions which had taken possession of the MÉtis, and to have restored confidence as to the policy of Canada. But was it the Hudson's Bay Company's duty to enlighten the aggrieved inhabitants? The Company who had been bullied and badgered and threatened with confiscation unless it agreed to a renunciation of its rights? Was it the fault of the Company that several thousand wild MÉtis children of the wilderness, passionately attached to the old order of things, were in their hearts loyal to the Company, which fed and clothed and administered law to them?[128]

The insurgents, growing bolder, had taken possession of Fort Garry, where a council of half-breeds was held and the inhabitants called upon to send delegates to a national convention. The English colonists accepted the invitation, but were soon made aware that Riel and his supporters were resolved on more desperate measures than they could themselves countenance. The authority of the Company had been observed; but it was now disregarded; the books and records of the Council of Assiniboia were seized, and on the 1st December a "Bill of Rights" was passed by the "Provisional Government." This act of open rebellion caused the secession of the English; insurgency was now rampant and many of the inhabitants found themselves incarcerated in gaol. Then followed the illegal infliction of capital punishment upon Thomas Scott, a young Orangeman, and the despatch of Colonel (now Lord) Wolseley to the seat of trouble. Leaving Toronto on the 25th of May, 1870, Wolseley and his force, after a long and arduous journey, arrived at Fort Garry on the 24th of August. But the rebellion was already over, and the chief instigator and his companions had fled.

For many years the Company's officers in charge of the various districts in Rupert's Land had annually met in Council for the regulation and discussion of affairs of the fur-trade in general. Regarding themselves as true partners of the Company, they naturally looked to share with the shareholders in the sum agreed to be paid by Canada for its territory.

Turbulent meetings at Hudson's Bay House.

In July, just one month before the entrance of the future hero of Tel-el-Kebir and the British troops into Fort Garry, a last meeting of the council of officers of the Honourable Hudson's Bay Company was held at the post known as Norway House. It was presided over by Fort Garry's Governor, Mr. Donald Alexander Smith,[129] a servant since boyhood of the Company. At this meeting it was decided to represent the claims of the officers to the partners in England. To this end Mr. Smith was unanimously appointed their representative, he undertaking the task of presenting their claims. The London shareholders were by no means immediately acquiescent. But although Sir Stafford Northcote presided over some turbulent meetings in Fenchurch Street, the claims of the "wintering partners" were ultimately recognized in the only manner possible. Out of the £300,000 paid by the Dominion, the sum of £107,000 was divided amongst the officers for the relinquishment of their claims.

The Governor of the Company, in his report to the shareholders in November, stated that "since the holding of the General Court on the 28th June, the Committee have been engaged in proceeding with the re-organization of the fur-trade, and have entered into an agreement with the Chief Factors and Chief Traders for revoking the Deed Poll of 1834, and settling claims arising under it upon the terms sanctioned by the proprietors at the last General Court. They have also prepared the draft of a new Deed Poll adopted to the altered circumstances of the trade."

A new era had thus begun in the history of the Honourable Company of Merchants-Adventurers trading into Hudson's Bay.