The terrible scourge of smallpox cut off one-half, some say one-third of the Indian population of the fur country. This was a severe blow to the prosperity of the fur trade, as the traders largely depended on the Indians as trappers. The determination shown by the Hudson's Bay Company, and the zeal with which they took advantage of an early access to the Northern Indians, were a surprise to the Montreal traders, and we find in the writings of the time, frequent expressions as to the loss of profits produced by the competition in the fur trade.

The leading fur merchants of Montreal determined on a combination of their forces. Chief among the stronger houses were the Frobishers. Joseph Frobisher had returned from his two years' expedition in 1776, "having secured what was in those days counted a competent fortune," and was one of the "characters" of the commercial capital of Canada.

The strongest factor in the combination was probably Simon McTavish, of whom a writer has said "that he may be regarded as the founder of the famous North-West Company." McTavish, born in 1750, was a Highlander of enormous energy and decision of character. While by his forco of will rousing opposition, yet he had excellent business capacity, and it was he who suggested the cessation of rivalries and strife among themselves and the union of their forces by the Canadian traders.

Accordingly the North-West Company was formed 1783-4, its stock being apportioned into sixteen parts, each stockholder supplying in lieu of money a certain proportion of the commodities necessary for trade, and the Committee dividing their profits when the returns were made from the sale of furs. The united firms of Benjamin and Joseph Frobisher and Simon McTavish administered the whole affair for the traders and received a commission as agents.

The brightest prospect lay before the new formed Company, and they had their first gathering at Grand Portage in the spring of 1784. But union did not satisfy all. A viciously-disposed and self-confident trader, Peter Pond, had not been consulted. Pond was an American, who, as we have seen in 1775, accompanied Henry, Cadot, and Frobisher to the far North-West. Two years later he had gone to Lake Athabasca, and forty miles from the lake on Deer River, had built in 1778 the first fort in the far-distant region, which became known as the Fur Emporium of the North-West. Pond had with much skill prepared a great map of the country for presentation to the Empress Catherine of Russia, and at a later stage gave much information to the American commissioners who settled the boundary line under the Treaty of Paris.

Pond was dissatisfied and refused to enter the new Company. Another trader, Peter Pangman, an American also, had been overlooked in the new Company, and he and Pond now came to Montreal, determined to form a strong opposition to the McTavish and Frobisher combination. In this they were successful.

One of the rising merchants of Montreal at this time was John Gregory, a young Englishman. He was united in partnership with Alexander Norman McLeod, an ardent Highlander, who afterwards rose to great distinction as a magnate of the fur trade. Pangman and Pond appealed to the self-interest of Gregory, McLeod & Company, and so, very shortly after his projected union of all the Canadian interests, McTavish saw arise a rival, not so large as his own Company, but in no way to be despised.
To this rival Company also belonged an energetic, strong-willed Scotchman, who afterwards became the celebrated Sir Alexander Mackenzie, his cousin Roderick McKenzie—a notable character, a trader named Ross, and also young Finlay, a son of the pioneer so well known twenty years before in the fur trading and civil history of Canada. Pond signalized himself by soon after deserting to the older Company.

The younger Company acted with great vigour. Leaving McLeod behind to manage the business in Montreal, the other members found themselves in the summer at Grand Portage, where they established a post. They then divided up the country and gave it to the partners and traders. Athabasca was given to Ross; Churchill River to Alexander Mackenzie; the Saskatchewan to Pangman; and the Red River country to the veteran trader Pollock.

The North-West Company entered with great energy upon its occupation of the North-West country. We are able to refer to an unpublished memorial presented by them, in 1784, to Governor Haldimand, which shows very well their hopes and expectations. They claim to have explored and improved the route from Grand Portage to Lake Ouinipique, and they ask the governor to grant them the exclusive privilege of using this route for ten years.

They recite the expeditions made by the Montreal traders from their posts in 1765 up to the time of their memorial. They urge the granting of favours to them on the double ground of their having to oppose the "new adventurers," as they call the Hudson's Bay Company, in the north, and they claim to desire to oppose the encroachments of the United States in the south. They state the value of the property of the Company in the North-West, exclusive of houses and stores, to be 25,303l. 3s. 6d.; the other outfits also sent to the country will not fall far short of this sum. The Company will have at Grand Portage in the following July 50,000l. (original cost) in fur. They further ask the privilege of constructing a small vessel to be built at Detroit and to be taken up Sault Ste. Mario to ply on Lake Superior, and also that in transporting their supplies on the King's ships from Niagara and Detroit to Michilimackinac, they may have the precedence on account of the shortness of their season and great distance interior to be reached.

They state that they have arranged to have a spot selected at Sault Ste. Marie, whither they may have the fort transferred from Michilimackinac, which place had been awarded by the Treaty of Paris to the Americans. They desire another vessel placed on the lakes to carry their furs to Detroit. This indicates a great revival of the fur trade and vigorous plans for its prosecution.

A most interesting statement is also made in the memorial: that on account of Grand Portage itself having been by the Treaty of Paris left on the American side of the boundary on Lake Superior, they had taken steps to find a Canadian route by which the trade could be carried on from Lake Superior to the interior. They state that they had sent off on an expedition a canoe, with provisions only, navigated by six Canadians, under the direction of Mr. Edward Umfreville, who had been eleven years in the service of the Hudson's Bay Company, and who along with his colleague, Mr. Verrance, knew the language of the Indians.

We learn from Umfreville's book that "he succeeded in his expedition much to the satisfaction of the merchants," along the route from Lake Nepigon to Winnipeg River. The route discovered proved almost impracticable for trade, but as it was many years before the terms of the treaty were carried into effect, Grand Portage remained for the time the favourite pathway to the interior.

The conflict of the two Montreal companies almost obscured that with the English traders from Hudson Bay. True, in some districts the competition was peaceful and honourable. The nephew of Simon McTavish, William McGillivray, who afterwards rose to great prominence as a trader, was stationed with one of the rival company, Roderick McKenzie, of whom we have spoken, on the English River. In 1786 they had both succeeded so well in trade that, forming their men into two brigades, they returned together, making the woods resound with the lively French songs of the voyageurs.

The attitude of the traders largely depended, however, on the character of the men. To the Athabasca district the impetuous and intractable Pond was sent by the older Company, on his desertion to it. Here there was the powerful influence of the Hudson's Bay Company to contend against, and the old Company from the Bay long maintained its hold on the Northern Indians. To make a flank movement upon the Hudson's Bay Company he sent Cuthbert Grant and a French trader to Slave Lake, on which they established Fort Resolution, while, pushing on still farther, they reached a point afterwards known as Fort Providence.

The third body to be represented in Athabasca Lake was the small North-West Company by their bourgeois, John Ross. Ross was a peaceable and fair man, but Pond so stirred up strife that the employes of the two Companies were in a perpetual quarrel. In one of these conflicts Ross was unfortunately killed. This added to the evil reputation of Pond, who in 1781 had been charged with the murder of a peaceful trader named Wadin, in the same Athabasca region.

When Roderick Mckenzie heard at Ile à la Crosse of the murder, ho hastened to the meeting of the traders at Grand Portage. This alarming event so affected the traders that the two Companies agreed to unite. The union was effected in 1787, and the business at headquarters in Montreal was now managed by the three houses of McTavish, Frobisher, and Gregory. Alexander Mackenzie was despatched to Athabasca to take the place of the unfortunate trader Ross, and so became acquainted with the region which was to be the scene of his triumphs in discovery.

The union of the North-West fur companies led to extension in some directions. The Assiniboine Valley, in one of the most fertile parts of the country, was more fully occupied. As in the case of the Hudson's Bay Company, the occupation of this valley took place by first coming to Lake Winnipeg and ascending the Swan River (always a fur trader's paradise), until, by a short portage, the Upper Assiniboine was reached.

The oldest fort in this valley belonging to the Nor'-Westers seems to have been built by a trader, Robert Grant, a year or two after 1780. It is declared by trader John McDonnell to have been two short days' march from the junction of the Qu'Appelle and Assiniboine.

Well up the Assiniboine, and not far from the source of the Swan River, stood Fort Alexandria, "surrounded by groves of birch, poplar, and aspen," and said to have been named after Sir Alexander Mackenzie. It was 256 feet in length by 196 feet in breadth; the "houses, stores, &c, being well built, plastered on the inside and outside, and washed over with a white earth, which answers nearly as well as lime for whitewashing."

Connected with this region was the name of a famous trader, Cuthbert Grant, the father of the leader of the half-breeds and Nor'-Westers, of whom we shall speak afterwards. At the mouth of Shell River on the Assiniboine stood a small fort built by Peter Grant in 1794.

When the Nor'-Westers became acquainted with the route down the Assiniboine, they followed it to its mouth, and from that point, where it joined the Red River, descended to Lake Winnipeg and crossed to the Winnipeg River.

In order to do this they established in 1785, as a halting place, Pine Fort, about eighteen miles below the Junction of the Souris and Assiniboine Rivers. At the mouth of the Souris River, and near the site of the Brandon House, already described as built by the Hudson's Bay Company, the North-West Company built in 1795 Assiniboine House. This fort became of great importance as the depot for expeditions to the Mandans of the Missouri River.

The union of the Montreal Companies resulted, as had been expected, in a great expansion of the trade. In 1788 the gross amount of the trade did not exceed 40,000l., but by the energy of the partners it reached before the end of the century more than three times that amount—a remarkable showing.

The route now being fully established, the trade settled down into regular channels. The agents of the Company in Montreal, Messrs. McTavish & Co., found it necessary to order the goods needed from England eighteen months before they could leave Montreal for the West. Arriving in Canada in the summer, they were then made up in packages for the Indian trade. These weighed about ninety pounds each, and were ready to be borne inland in the following spring.

Then being sent to the West, they were taken to the far points in the ensuing winter, where they were exchanged for furs. The furs reached Montreal in the next autumn, when they were stored to harden, and were not to be sold or paid for before the following season. This was forty-two months after the goods were ordered in Canada. This trade was a very heavy one to conduct, inasmuch as allowing a merchant one year's credit, he had still two years to carry the burden after the value of the goods had been considered as cash.

Toward the end of the century a single year's produce was enormous. One such year was represented by 106,000 beavers, 32,000 marten, 11,800 mink, 17,000 musquash, and, counting all together, not less than 184,000 skins.

The agents necessary to carry on this enormous volume of trade were numerous. Sir Alexander Mackenzie informs us that there were employed in the concern, not including officers or partners, 50 clerks, 71 interpreters and clerks, 1,120 canoe-men, and 35 guides.

The magnitude of the operations of this Company may be seen from the foregoing statements. The capital required by the agents of the concern in Montreal, the number of men employed, the vast quantities of goods sent out in bales made up for the western trade, and the enormous store of furs received in exchange, all combined to make the business of the North-West Company an important factor in Canadian life.

Canada was then in her infancy. Upper Canada was not constituted a province until the date of the formation of the North-West Company. Montreal and Quebec, the only places of any importance, were small towns. The absence of manufactures, agriculture, and means of inter-communication or transport, led to the North-West Company being the chief source of money-making in Canada. As the fur merchants became rich from their profits, they bought seigniories, built mansions, and even in some cases purchased estates in the old land.

Simon McTavish may be looked upon as a type. After a most active life, and when he had accumulated a handsome competence, Simon McTavish owned the Seigniory of Terrobonne, receiving in 1802 a grant of 11,500 acres in the township of Chester. He was engaged at the time of his death, which took place in 1804, in erecting a princely mansion at the foot of the Mountain in Montreal. For half a century the ruins of this building were the dread of children, and were known as McTavish's "Haunted House." The fur-trader's tomb may still be recognized by an obelisk enclosed within stone walls, near "Ravenscrag," the residence of the late Sir Hugh Allan, which occupies the site of the old ruin. Surely the glory of the lords of the lakes and the forest has passed away.