The Fur Trade Wars
In 1801, the North West Company (NWC) trader Alexander Mackenzie formed the XY Company to compete with the NWC; competition for furs increased in intensity. Liquor became an important part of the trade as rivalries grew. The intense competition brought the XY Company and the NWC together as a strong force against the HBC.
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The HBC built Nottingham House near Fort Chipewyan on Lake Athabasca in 1802. The HBC traders suffered near starvation as the NWC had such strong control in the area. The HBC traders retreated east, but returned in 1804 to 1806 when they found that they were harassed by NWC traders and attained few furs.
In 1815, the HBC employee John Clarke built Fort Wedderton on Potato Island close to a NWC fort. The competition between the companies allowed the First Nations traders to secure very beneficial deals, which cost both companies profits. The two companies merged under the HBC name in 1821.
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George Simpson was in charge of Fort Wedderton before the merger of the NWC and HBC. Simpson became the governor of northern operation of the HBC and he moved the operations from Fort Chipewyan to Fort Gary that was on the Red River. He changed the trading routes, reduced the number of employees and closed posts until only Fort Dunvegan and Fort Vermilion were left open in 1822.
The long term effect of the fur trade was seen by 1830 when the large herds of bison were gone. Elk, moose, and bear replaced the bison as the source of food in the fur trade.
By the 1860s, there were many changes in the fur trade under the HBC monopoly. Among the changes was the increasing role played by prospectors who had arrived in the Peace country looking for gold. Many of these prospectors turned to the fur trade to earn a living.