It should come as no surprise that in the course of almost 340 years
Prince Rupert, engraving by
R. Dunkarton (after portrait by
Sir Peter Lely),
1813 HBCA P-173.
The Original Owners
Although publicly held, the number of shareholders was relatively small. Shares were passed down through families. Stock transfers, if any, were noted in the ledgers of the Company’s London offices; printed certificates were not issued until 1863. During his time with
Thomas Douglas, 5th Earl of
Selkirk © Public Domain
Library and Archives
In 1807 Jean Wedderburn, sister of sugar trader Andrew Wedderburn, married Thomas Douglas, 5th Earl of Selkirk. For some years Selkirk had been involved with a number of schemes to resettle destitute Scots and Irish on lands in Canada. Interested in Red River as early as 1802 he was told by the British government that, as part of Rupert’s Land, the area was unavailable. By 1808, however, the loss of free markets in Europe due to the Napoleonic Wars had seriously reduced the value of
He introduced Andrew Wedderburn into the Company that same year. Wedderburn joined the governing Committee in 1809. From 1839 - 1856, under his adopted name Colvile, he would serve as
In June 1811 Selkirk signed an agreement with
The problem was that the colony lands straddled the long-established route of the Nor’ Westers to the Athabaska. Selkirk’s Scots emigrants unwittingly wandered into ground zero in a contest for supremacy that would last a decade, cost many lives, ruin the NWC, destroy Selkirk’s personal fortune, and hasten his early death. With the merger of the two fur trade rivals in 1821 the region settled down. But by 1869 the tensions that grew between the competing interests of agriculture and the fur trade, not to mention the political aspirations of the Métis population that arose at Red River, would change
The International Financial Society
The next major shift in ownership occurred in 1863. A group calling itself the International Financial Society orchestrated a de facto takeover of
Reality, however, intervened.
Confederation changed all that. Section 146 of the British North America Act in 1867 created a mechanism to allow for the future annexation of Rupert’s Land, the North West Territories and British Columbia (as the two Pacific colonies were known after 1866) to the new Canadian nation. This led to final negotiations between Britain,
The first page of the Deed of Surrender. The National Archives of the UK, ref.CO42/694
The schedule from the Deed of Surrender. The National Archives of the UK, ref.CO42/694
The Deed was a liberating document for all concerned. Britain was freed from most of its North American colonial encumbrances. HBC was freed from its role as de facto colonial administrator – a role that it had assumed reluctantly and one which, it can be argued, had diverted it from its core business. Canada meanwhile was freed both from British interference in its affairs and
With a large and keenly motivated pool of owners,
Donald Smith (Lord Strathcona) at
North West River, ca 1860
William Hind/Library and Archives
Canada, Acc. No. 1988-245-1
In 1914, 93 year-old
During the 20 years that Smith’s work for
This sideline led to him becoming a Director of the Bank of Montreal and the creation of the Royal Trust Company, which he served as its first President. Smith grew increasingly rich and used his wealth – not to mention his access to generous lines of credit with the Bank – to buy up more
Smith used his position to influence the direction of
In 1906, with Land Department sales making large profits, Smith announced that
The Shareholders’ Revolt
At the outbreak of WWI France contracted
Meanwhile the war delayed much of the retail expansion resulting from the Burbidge Report of 1910. When that series of projects concluded with the opening of the new Winnipeg store in 1926, the retail business seemed headed for a golden age. And then the Depression struck. The new stores were not yet profitable and had massive carrying costs.
In 1928 Nordon accused the Board of mismanagement. Between 1920 – 1925 it had approved land sales which cost almost as much in taxes as they realized in revenue, a fact he characterized as a waste of potential future assets. He also complained that earnings for 1927, with an ROI of only 2.2% in a not-so-bad year, were pitiful. The Board ignored the criticism; with only 740 shares, Nordon was too small to worry about. It was a serious miscalculation.
Nordon mobilized others, including Captain Victor Alexander Cazalet, who, with 40,5000 shares, was the largest shareholder. The group criticized
Governor General Roland Michener
signing the new Canadian Charter of
the Hudson's Bay Company, 1970
The Board was aghast – even the Canadian members. Things came to a head when then Governor Tony Keswick appointed Lord Cobbold, retiring Governor of the Bank of England, to the Board. Historian Peter C. Newman characterized the appointment as “the naming of yet another distinguished non-executive director with little knowledge of Canada and less of retailing to a board already top-heavy with such creatures.”
Both Benson and Heyworth resigned but time would vindicate them. Resisting change meant that it would take another decade for the Company to move to Canada, thereby delaying its entry into the lucrative suburban shopping mall market.
By 1965 the time had come. Punishing new tax regulations affecting British overseas trading companies made the decision a no-brainer. The new taxes on foreign earned dividends would take some £800,000 from Canadian and British shareholders. Company documents reveal that in the preceding 20 years
Canadianization was more than just a change of residence. It meant that a company held by the British for 300 years quickly became Canadian owned. In 1968 the Company had 30,000 common shareholders, of whom 85% were UK residents, 11% Canadian, and 4% other. No single shareholder owned more than 10%. In 1972 nearly 50% of shareholders were Canadians. By 1974 the number had risen to 54.5%
Ken Thomson acquired
Thomson needed an outlet for the huge profits being generated by his company’s investments in North Sea oil.
By 1987 the bulk of non-retail assets were gone. Gone too were the Simpsons-Sears catalogue business, sold for $211 million to Sears in 1983, as well as the Wholesale, Fur Trade and Northern Stores Departments, which had carried the
In 2003 U.S. businessman Jerry Zucker disclosed that he had begun to accumulate
“As the company's largest shareholder for more than two years, we are aware of the tremendous opportunities available to
The deal was finalized March 2006, and Zucker took the company private, delisting it and thereby ending nearly 336 years as a public entity. Canadians, always sensitive about their national identity, particularly as contrasted with Americans, were understandably wary. But those who fulminated about the “loss” of Canadian ownership exhibited a lack of understanding of the Company’s history. The Canadian ownership they purported to mourn was not quite 36 years old. Interestingly, many Britons continue to mourn their loss of
Far more significant, historically speaking, was the transition to private status. For a company which was established at the beginning of the era of modern business, the change from a public to a private entity changed how business is done. Paradoxically, private status liberated
With the untimely death of Jerry Zucker in April 2008,
And what’s next? Well, as is so often the case with history, perhaps a case of “what goes around, comes around.” In September 2009 Governor Richard Baker announced that
As for its Canadianness, the Company continues to confine its business to Canada, to operate nationally, to be a major employer of Canadians, to serve Canadians, and, as we have seen so dramatically during the recent Vancouver Winter Olympics, to reinforce Canadians’ vision of themselves and their country. What’s more Canadian than that, eh?