Formation
After the conquest of Canada by the British, which was formalized by the Treaty of Paris in 1763, the French traders from Montreal and the coureurs de bois were gradually supplanted, more or less, in the fur trade by Scotsmen. Many of these new traders allied themselves with the French already in the country, and vigorous partnerships sprang up. The Montreal men contested control of the trade in the North with the Hudson's Bay Company, and they extended trade to the West rapidly and efficiently. There were, however, too many conflicting interests in the fields, and the competition not only took all profit out of the trade but also led to bloodshed.
The Montreal merchants who supplied the traders and the traders themselves sought to do away with some of the evils by forming in 1779 a company of sorts; this was later renewed, then abandoned. A new effort was made when a number of Montreal merchants under the leadership of Simon McTavish made an agreement in the winter of 1783–84 that created a company called the North West Company. There was some dissension, and the firm of Gregory and McLeod put up strong opposition. It was not until 1787 that a stable combination was reached. The stockholders were the trading companies of Montreal (which had many interests besides the fur trade and retained their separate existence) and the “wintering partners,” the men who did all the actual trading for fur with the Native Americans.
Competition with the Hudson's Bay Company
The traders were, for the most part, active and aggressive, and they made much more headway than the Hudson's Bay Company men. The Northwesters, as they were called, broke new territory for the trade in the West and did not hesitate to try to take the trade even in the vicinity of Hudson Bay. The older company was stirred into some action, and there was an increasingly sharp rivalry. This was not serious, however, until after the Hudson's Bay Company became dominated by Lord Selkirk.
The younger company, meanwhile, was split by dissension, brought on chiefly by the hostility between two important figures in the company, McTavish and Sir Alexander Mackenzie. Mackenzie became (1802) the chief figure in a rival company created c.1798 and usually called the XY Company. This opposition disappeared after the death of McTavish in 1804; Mackenzie's men were reunited with the Northwesters.
To the North West Company is due some of the glory of Mackenzie's earlier voyages to the Arctic (1789) and Pacific (1792–93) oceans. The geographer David Thompson was in the company's employ when he did most of his valuable work, and other explorers, such as Alexander Henry, the younger, were Northwesters.
The company pushed its business into the territory of the United States and met with little opposition except from John Jacob Astor. The Southwest Company, established in 1811, was practically, although not actually, a combination of Astor and North West Company interests; this association was disrupted by the War of 1812. On the Pacific Northwest coast, which was largely explored by Northwesters, Astor was also a rival, but the American post, Astoria (see Astoria 3), was sold to the North West Company during the War of 1812 by Astor employees sympathetic to the British; however, it helped establish a U.S. claim to the Pacific Northwest.
Merger
After 1810 the rivalry between the North West Company and Hudson's Bay Company grew in intensity and became a problem for the British government. The conflict over the Red River Settlement led to virtual warfare between the companies, and the final solution was the union of the two companies in 1821. The name of the older company was kept and there was no longer a North West Company. In the united company, however, the personnel was predominantly of the Northwestern stamp, and the spirit of the company was that of the vigorous North West Company.