Hudson's Bay Company (1670): Fur Trade Empire in North America

The Hudson’s Bay Company was founded on 2 May 1670, when King Charles II granted a royal charter to a group of investors led by his cousin Prince Rupert. The charter gave them a trading monopoly over Rupert’s Land, the vast region whose rivers drain into Hudson Bay. For two centuries the company was the dominant European power across much of what is now Canada, built on trade in beaver furs with Indigenous peoples.

Origins: two French traders and the Nonsuch

The idea came from New France. Pierre-Esprit Radisson and his brother-in-law Médard Chouart des Groseilliers had traded far west of the Great Lakes and learned from Cree informants that the richest fur country lay north, towards a great salt bay. When the authorities in Quebec fined them and seized their furs for trading without a licence, the two men looked for backers elsewhere.

In 1665 they reached England, where the restoration of Charles II had brought a court eager for new ventures. Prince Rupert and other courtiers and merchants financed a trial voyage. In June 1668 two small ships set out; the Eaglet, carrying Radisson, turned back, but the ketch Nonsuch, with Groseilliers aboard, reached James Bay, the southern arm of Hudson Bay. Its crew wintered at the mouth of the Rupert River, built a post called Charles Fort and returned to London in October 1669 with a valuable cargo of furs.

The bay itself had been known to Europeans since Henry Hudson’s final voyage of 1610–1611, but no one had yet turned it into a trade route.

The charter of 1670

The charter of 2 May 1670 created “The Governor and Company of Adventurers of England trading into Hudson’s Bay”. It named eighteen original investors, among them Prince Rupert as first governor, and granted them the sole right to trade in the region. It also made the company the “true and absolute lords and proprietors” of the land, with powers to make laws, build forts and keep order.

Rupert’s Land, named after the prince, was defined as all territory draining into Hudson Bay. Nobody in London knew how large that was. It later proved to cover around 3.9 million square kilometres, roughly a third or more of modern Canada, stretching from Labrador to the Rocky Mountains. The Indigenous nations who lived there, including the Cree, Ojibwe, Assiniboine, Dene and Inuit, were not consulted.

How the trade worked

The company built its trading posts, known as factories because they were run by chief traders called factors, at the mouths of rivers on the bay. Early posts included Rupert House (on the site of Charles Fort), Moose Factory, Fort Albany and, from 1684, York Factory on the Hayes River, which became the main depot. Fort Churchill followed in 1717, later replaced by the stone Prince of Wales Fort.

For about a century the company mostly stayed by the coast, a policy critics mocked as “sleeping by the frozen sea”. Indigenous traders, above all Cree middlemen, brought furs down the rivers by canoe each summer and exchanged them for European goods: guns, metal kettles, knives, cloth, blankets, beads and tobacco. Prices were set in “made beaver”, the value of one prime processed beaver pelt. A gun might cost around ten to fourteen made beaver and a kettle one or two per pound of weight, according to the company’s “standard of trade”, though in practice factors often traded on less generous terms and kept the difference, known as the “overplus”.

Beaver was the key product because its underfur made the finest felt for hats, then in great demand across Europe. Ships sailed from London each spring, collected furs and returned before the bay froze. The trade depended heavily on Indigenous knowledge, food supplies and labour, and on the “Home Guard” Cree communities that lived near the posts.

Rivalry with France

The company’s arrival threatened the French fur trade based on the St Lawrence, and the two powers fought for the bay for more than forty years. In 1686 a French overland force under the Chevalier de Troyes and Pierre Le Moyne d’Iberville captured Moose Factory, Rupert House and Fort Albany. Iberville took York Factory in 1694, and in September 1697 he won a naval battle on Hudson Bay, sinking one English ship and capturing another, before taking York Factory again.

For years the company held only one or two posts. Peace came with the Treaty of Utrecht in 1713, which returned the whole bay to Britain. Conflict revived during the American War of Independence, when a French squadron under La Pérouse captured Prince of Wales Fort and York Factory in 1782.

Expansion and competition inland

From the late 18th century the company had to move inland. Its servants had made early journeys of exploration, such as Henry Kelsey’s to the prairies in 1690–1692, Anthony Henday’s towards the Rockies in 1754–1755 and Samuel Hearne’s to the Arctic coast in 1770–1772. In 1774 Hearne founded Cumberland House in present-day Saskatchewan, the company’s first permanent inland post.

The spur was competition from Montreal traders, especially the North West Company, formed in the late 1770s and 1780s. The rivalry grew violent, notably at the Battle of Seven Oaks near the Red River Colony in 1816. In 1821 the two companies merged under the Hudson’s Bay name, creating a monopoly that reached across the continent to the Pacific.

Key people

• Prince Rupert of the Rhine (1619–1682), cousin of Charles II and the company’s first governor.
• Charles II, who granted the charter.
• Pierre-Esprit Radisson and Médard Chouart des Groseilliers, the French traders who proposed the venture; both later changed sides more than once.
• Pierre Le Moyne d’Iberville, the Canadian-born French commander who repeatedly captured company posts.

Legacy

In 1869 the company surrendered Rupert’s Land to the Crown, and in 1870 it was transferred to the new Dominion of Canada in return for £300,000 and land grants. The transfer, made without the consent of the Métis and First Nations living there, helped trigger the Red River Resistance led by Louis Riel.

The company survived as a business, becoming one of Canada’s best-known department store chains. Its famous striped point blankets, traded from around 1780, became a national symbol. In 2025, after financial difficulties, the company sought creditor protection and closed its stores. Its archives, preserved in Winnipeg, are among the richest records of the North American fur trade and of Indigenous history. The company’s long presence also left place names, family lineages and mixed Indigenous and European communities across the north, while historians continue to debate how far its monopoly protected or exploited the peoples on whom its trade depended.

Timeline

• 1665: Radisson and Groseilliers arrive in England.
• 1668, June: The Nonsuch sails for Hudson Bay.
• 1670, 2 May: Charles II grants the royal charter.
• 1684: York Factory is founded on the Hayes River.
• 1686: A French expedition captures three posts on James Bay.
• 1697, September: Iberville wins a naval battle on Hudson Bay.
• 1713: The Treaty of Utrecht returns the bay to Britain.
• 1774: Cumberland House becomes the first inland post.
• 1821: Merger with the North West Company.
• 1870: Rupert’s Land is transferred to Canada.

Why it matters

The Hudson’s Bay Company shaped the economy, borders and peoples of northern North America for two centuries. Its trade transformed Indigenous economies and its claims laid the territorial basis for western and northern Canada, making it one of the longest-lived commercial enterprises in the world.