Merchant Princes.

by PETER C. NEWMAN.

COMPANY OF ADVENTURES.

PROLOGUE.

To be a Bay man was like belonging to a religious order that now only bottles brandy but had once touched the hand of G.o.d.

THE PRIORY AT THE DON BOIS in Ess.e.x, northeast of London at the far side of Epping Forest, is more than six centuries old, and feels it. It was, until the lands of the Roman Catholic Church were taken over by the state, occupied by a devout brotherhood of Benedictine monks. Its floors slope towards lopsided windows set three feet deep in stone alcoves; carpets are worn thin from generations of pacing; the air seems stale and heavy, though the visitor senses not so much decay as the weight of history.

The onl~ functioning monument to the priory's original purpose is a crypt, below the main vestibule, that leads into an underground pa.s.sageway connecting the building to the nearby abbey. Every Sunday morning the priory's owner still makes the subterranean journey to read the lesson for local parishioners. The priorys furnishings are a decorator's nightmare of crossed Zulu swords, narwhal tusks, abandoned harps, boulle cabinets, overstuffed sofas (which Queen Victoria might have envied), George Chinnery canvases of early trading sequences in Canton, Shanghai and Hong Kong, plus the obligatory hunting scenes (hounds, foxes, splashes of blood) that decorate almost every upper-cla.s.s Englishman's hearth.

This is the home of Sir William "Tony 11 Keswick, the Hudson's Bay Company's last merchant adventurer.

An imposing presence, Keswick (p.r.o.nounced Kezzick) turns out to be more than six feet tall, with a ruddy complexion and the commanding air of an Imperial Army brigadier, which lie was. He appears to be the ideal British aristocrat-a cross between a Puncb cover and a bulldog. Although he is eighty-four and his periwinkle eyes have grown watery, he retains an aura of authority.*

"Look here," Sir William exclaims by way of introduction, showing me his pa.s.sport, "I'm the only Englishman who officially lists his occupation as 'Merchant Adventurer.' Gets me into awful trouble crossing borders, particularly in the Orient. 'Merchant' is easy; that means someone prepared to lay his hands on anything. But 'Adventurer'-the customs people have trouble with that. Still, I love being an adventurer-the romance of it, to risk everything, to make things go."

Three decades (1943-72) a director of the Hudson's Bay Company and for nearly thirteen years its Governor, Keswick regards his t.i.t-ne with the Canadian trading giant as the highlight of a crowded and audacious life. "I adored the HBC," he sighs. "I'd have done anything for the Company, within reason-or without reason. It was a wonderfully romantic concern, and its people would have cut off their hands to help. We British are fanatically romantic about our history. The magnificent Prince Rupert was the Company's first governor, our great Duke of Marlborough the third. The

I keep trying to forget the briefing b) a mutual friend that while Sir Wil liam is indeed a distinguished merchant adventurer, he is also a very careful man. So careful, I was told, that he has b.u.t.tons on the flies of his trousers-just in case the zipper sticks.

second-the Duke of York-gave it up only to become King of England. I've seen the minute book in which the Duke apologizes for not being at the next board meeting because he has just taken on the throne. I mean, that's absolutely honey to a Briton. You'd pay a dollar more for your twenty -dollar share if you could get that thrown in-even if it has no practical merit!"

Keswick's claim to being a merchant adventurer is not entirely based on his time with the HBC. In 1886, his Scottish grandfather took over the firm founded by Dr William Jardine, who with his partner, James Matheson, had in 1832 established Jardine, Matheson, the company of piratical Far Eastern traders and opium dealers that became the far Pacific's most princely hong, and later the model forJames Clavell's n.o.ble House and Taipan. The Keswichs have run it ever since, and Sir William himself was a director and chairman of Matheson's, the London affiliate, for thirty-two years.

WETALK INTO THE AYFFRNOON, and several cups of tea have grown cold between us when Keswick starts rambling on about his great heroes-Hannibal, the Carthaginian general whose army used elephants to cross the Alps, and Sir Edward Peac.o.c.k, the Canadianborn financial Merlin with whom he sat on the board of the t4BC-then briefly switches to his favourite villains: Moses and Cromwell. "They were such negative boysalways telling us not to do things."

*Not only a romantic but a nuschicvous romantic, Sir XNilliam named hi,, middle son John Chippendale Keswick because the boy was conceived in ~i Chippendale bed. The husband of Lady Sarah Ramsay and a successful merchant adventurer in his own right (he is chairman of l4ambros Bank), the vounger Keswick is still known as Chip.

I bring the conversation around to the Hudson's Bay Company and remind him that I have come to see The Chair. No outsider has ever seen it.

Keswick hesitates, then motions me to follow. We climb to a small room on the priory's top floor. St.u.r.dy and slightly oversized with a straigiit back, The Chair has a large upholstered seat. We stand very still, looking at it and at one another. On The Chair's seat, Keswick has reproduced in perfect needlepoint the Governor's Flag of the Hudson's Bay Company, with its intricate design that includes a fox, four beavers and twin elk rearing up on their hind legs. I can't resist looking at the former Governor's hands. They are ham-like, his fingers so thick that he cannot close them in repose; the joints are swollen and bent by arthritis. Embroidering that seat must have been excruciatingly awkward and required angelic patience, ~1 quality not usually a.s.sociated with merchant adventurers.

Keswick breaks the silence. "I'd never done anything like this before, but found gros-point needlework very soothing," he says. "One can think while working, with no ulterior motive ... I used to do it after hunting, have tea, then come up here ... Took me a year ... Soothing, what?"

We both know he's fibbing. There are easier hobbies to soothe the soul But not the soul of this Governor of the Hudson's Bay Company, one of its greatest, who was so upset about leaving his post (because he chose not to preside over the Company's departure from England) that he spent most of a year st.i.tching this chair, working out his sorrow and his frustration. "I was and am in love with the old Company," he admits, as he leads me downstairs. "I don't know why one is so sentimental, really."

We part. "You're talking to a fanatical son of a gun," he shrugs.

Xiv

I would never have guessed.

Keswick turns away, and says to n.o.body in particular: "Takes a h.e.l.l of a lot of killing, the Hudson's Bay and shuts the door firmly behind me.

TIIEMEMORY OF THAF BRITTLE AFrFRN00N atTheydon Priory stuck with me during the writing of this third and final volume of my Hudson's Bay history.

Tony Keswick's enduring pa.s.sion for the Company was by no means unique.

Some of its bachelor officers willed it their savings; one woman executive confided to me that she loved the HBC more than either of her husbands.

Even the gruniblers, fed tip with their long, slow lives in some dreary posting, would vo,~N that thev were d.a.m.n well going to "retire early"-after only thirty-eight years in the service.

, Fhe one emotion the IiBC never engendered was neutrality. In Canadas North, many Inuit and Indians insisted its initials should really stand for the Hungry Belly Company, while their women denounced it as the h.o.r.n.y Boys'Club. No one touched by the Hudson's Bay Company's Darwinian will to survive remained una~-fected. To be a Bay man was like belonging to a religious order that now only bottles brandy-but had once touched the hand of G.o.d.

BY 1870, "IFIENTHIS VOLUME BEGINS, the IIBCs feudal empire was starting to unravel, its halcyon days buried with Sir George Simpson, the Company's great instrument of thrust and thunder, who had served as its viceroy from 1821 to 1860. It was under his Napoleonic direction, exercised from the belly of a birchbark canoe, that the I IBC reached its apogee, spreading its mandate across a private empire that encompa.s.sed a twelfth of

the earth's land surface.* In 1870, the Company's landholdings were sold to the newly confederated Dominion of Canada for Y,300,000 plus t.i.tle to seven million acres, its trading monopoly having been disrupted by the influx of settlers eager to till the rich soils of the Canadian plains. Following a brief interregnum, the HBC came under the spell of Donald Alexander Smith, the acquisitive Labrador fur trader who settled the first Riel Rebellion and eventually rose not only to preside over the FIBC, the Bank of Montreal and Royal Trust but also became the dominant financier of the Canadian Pacific Railway and the man who hammered in its last spike. Having lost one empire, the Hudson's Bay Company moved to consolidate another, establishing its dominant influence over Canada's Arctic, organizing the trade in fox pelts, and eventually manning more than two hundred posts in the Canadian North. In western Canada, the retail trade was channelled into half a dozen downtown department stores that eventually became the nucleus of a mammoth merchandising operation, currently composed of 540 outlets with 38 million square feet of s.p.a.ce, selling goods worth $5 billion a year. There were other ventures, too, such as the HBCs entry into merchant shipping during the First World War, when nearly three hundred vessels flew the Company's flag, running the gauntlet with essential food supplies and ammunition to France and Tsarist Russia, a third of them sunk by torpedoes en route.

Between 1920 and 1970, when the Company's charter was finally transferred to Canada, turf wars raged between the HBCs patrician British Governors and the Canadian Committee's Winnipeg-based Good Old Boys. At times the internal struggle was more important

For a chronicle of Simpsons reign, see Caesars of the Wilderness, Chapters 9, 10, 14.

Xvi

to these memo-warriors than trying to modernize the Company, but the HBC did expand into oil as well as urban real estate. It captured control of such significant retail chains as Zellers, Fields and Simpsons. In 1979, Kenneth Thomson purchased three-quarters of HBCs issued shares-more than anyone else had ever held-for $641 million cash.

The second half of this book deals with the HBCs boardroom politics, as vicious and fascinating an endgame as was ever played out in the wild fur country. Under its new owner, the Bay lost more money than it had netted in the three previous centuries and came very close to foundering. The drama of that downfall and subsequent resurrection, revealed here for the first time, concludes the HBC story and this book. This volume's final section features the first intimate profiles of Lord Thomson-Canada's wealthiest individual-and his son and heir, David, who easily rank among the world's, not just Canada's, most fascinating capitalists.

IN THE ACKNOWLEDGEMENTS that follow the main text, I have briefly touched on some of the research trails I followed to complete this book-mainly in the stillness of the Canadian Arctic and the buzz of the City, London's financial district, where the Company was born. I particularly remember being at Moose Factory, near the bottom of James Bay. First scouted in 1671 by Pierre Radisson, it seemed to be populated by ghosts. I spent most of my time in the Company cemetery, walking among the tombstones and the crosses, twisted into crazy angles by the permafrost. It was beginning to snow a little and as I stood in front of a tilted marker that proclaimed, "Sacred to the Memory of Peter McKenzie of a.s.synt Scotland, a Chief Trader in the Service of the Honourable Company," I sensed the spiritual presence Xvii

of the fur traders who had lived and died here. I felt them silently staring at me, their faces like those haunting slashes of pigment Vincent van Gogh used to portray the Borinage miners: flat eyes, prominent cheekbones, looks that betraved not a glimmer of duplicity but deep accu- sation. T~ey were dead men from a dead culture, their deeds and misdeeds long ago consigned to the dustbin where Canadians store their history.

They were dead men, but thev wanted to know why their lives had prompted so little attention, why their names had been ignored even in that crowded corner of obscurity reserved for Canada's heroes. They had, after all, done everything that was expected of them and more. But the phantoms quickly vanished, and I walked back through a gathering snowstorm to the Hudson's Bay store. There I spotted a twenty-dollar bill, with a note attached to it: "This is to cover the cost of 2 knives stolen from your store 13 years ago."

That night I joined a burr of Bay men, trading yarns. They were drinking to remember the good old days, then drinking some more to forget them.

These were the men who would gladly have sold the Bay blankets off their beds to maintain the Company's reputation.They missed the fur trade because it had been less a business than a way of life, an escape from the restrictive codes of civilization. Now it was finished, and so were they.

Somebody mentioned George Simpson McTavish, an HBC Factor who had spent forty years at the Company's most isolated posts. To break his seclusion, he had domesticated a mouse and discussed in great earnestness each day's events with the friendly rodent. McTavish always travelled with a loaded pistol, not as a defence against attack, but to shoot himself in case he broke a leg on the trail and couldn't get back to his post. That's lonely. Nothing ever happened to McTavish, except that the mouse died, but I couldn't get him out Xviii

of my mind, trekking across some screaming), stretch of wilderness, wondering when he might have to put the gun in his mouth.

Canada's back country, where the original HBc held sway, was populated by many such "ordinary" men and women. They spent tiieir lives in that obscure killingground of the soul the poet Al Purdy called "north of summer."

Concealment of emotion was their chief article of faith-and n.o.body ever waved goodbye.

Thinking and writing about these "ordinary men" I had grown to admire so much, my memory twigged to a line in Shakespeare's Henry 1,~ after the battle of Agincourt, when the King requests a list of the English dead.

"Edward the Duke of York, the Earl of Suffolk, Sir Richard Ketly, Davy Gain, Esquire; none else of name," replies the King's herald.

"None else of name "-history's most devastating epitaph-yet it fits most ofthe hard cases who lived and died here, on the margin ofthe known world, in the service of the Company of Adventurers.

Defining the gravitational pull of that benighted Company has been my obsession over the past decade. In the pages that follow, I have tried to explain that fatal attraction-to chronicle how the Company's quirky behaviour played such an essential role in determining Canada's history, geography and national character.

PART I.

LABRADOR SMITH.

CHAPTER 1.

THE MAN WHO.

BECAME A COUNTRY.

""o I ' s Smith? What is Smith?...

Hzhy, Smitb is not a name, but an occupation!"

-Thomas Wilson

IF THEY REMEMBER HIM ATALL, most Canadians retain only a vague folk memory of Donald Alexander Smith as the centrepiece of their country's most famous historical photograph. He is that bearded gentleman in the stovepipe hat awkwardly hammering home the last spike of the Canadian Pacific Railway at Cralgellachie, a hastily erected caboose-town in Eagle Pa.s.s of the Monashee Mountains on November 7, 1885.

But from there the fuzzy public memory ends.

He had, after all, been neither head of the CPR (that was George Stephen) nor the railways builder (William Van Horne), and the reason for his prominence during that improvised ceremony was as mysterious at the time as it appears in retrospect. Typically, he said not a word at this most memorable of his life's occasions; he Just bashed in that big nail.

Although he spent considerable energy cultivating the myth of being an eniginatic presence in crowded landscapes of his own choosing (or even making), in retrospect, there was nothing very profound or mystical

3.

4 LABRADOR SMITH.

about Smith-or the faith he worshipped: his own pocketbook. The inst.i.tution he served during an astounding seventy-five-year a.s.sociation was the Hudson's Bay Company, which he transformed from a haphazardly linked collection of wilderness outposts into a profitable commercial enterprise.

In terms of modern Canadian history, Smith was there at the creation. His roster of accomplishments, self-serving as they ma~ have been, distinguishes him as a giant among the decision-makers who transformed Canada from colony to nation. Preferring to dominate events from behind the scenes rather than directly confront rivals, Smith staged a dazzling sequence of commercial and political toups d'itat that made him the richest and most powerful Canadian of his day. He became the role model for his peers. Smith won every available public honour, including two university chancellorships, the close confidence of four Canadian prime ministers (each of whom he betrayed), the friendship of two British monarchs, a knighthood and a barony for which he chose the tongue-paralyzing t.i.tle: "Baron Strathcona and Mount Royal, of Glencoe, co. Argyll, and of Mount Roval, Quebec, Canada."

No one felt neutral about Smith. "As a Canadian," proclaimed the Very Reverend Daniel M. Gordon, viceChancellor of Queen's University, "I am grateful to G.o.d for the large service He has enabled Lord Strathcona to render for Canada." In contrast WT.R. Preston, then chief Liberal organizer for Ontario and a close observer of his methods, wrote: "The Smith syndicate was entirely responsible for using [the] Canadian Parliament for the most improper purposes that ever became operative among a free people."

Smith's catlike career enjoyed endless reincarnations. Each move irrevocablv led to another opening, with THE MAN WHO BECAME A COUNTRY 5.

Smith propelling himself from one opportunity to the next without a touch of diffidence or back-ward glance:

The last of the great historic,il figures a.s.sociated with governance of the FIBC, Smith spent most of three mindnumbing decades as one of the Company's Labrador fur traders before being anointed last Chief Commissioner, first Land Commissioner, and, for a tense quarter of a cen- tury, London-based Governor. The first apprentice -clerk to attain such exalted rank, Smith turned out to be an indifferent administrator, but he (lid move the Company away from its genesis in bartering aninial pelts to real estate, transportation and the beginnings of retailing. He thus ensured the HB(,,, survival after the Company lost its trading monopoly when the Dominion of Canada purchased the original land grants in 1870.

Smith was fully as significant a figure in the HBC's history -as that great Caesar of the Wilderness, Sir George Simpson, who had governed the operating arm of the Company during four adventurous decades from his express birchbark canoe.

For forty-two ' years a director of the Bank of IVIontreal, as well as its second-largest shareholder, and for seventeen years its president, Smith turned the Bank into Canada's most profitable and North America's safest financial insti tution. At the same time, he treated the Montreal as a private financing instrument for his various ventures Canadian history's fattest piggy bank.