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DOI 10.15826/qr.2019.2.394
УДК 94(470)"1918/1922"+94(571.66+94(98)+339.56.055
FAR EASTERN PROMISES: THE FAILED EXPEDITION
OF THE HUDSON’S BAY COMPANY IN KAMCHATKA
AND EASTERN SIBERIA 19191925*
Robrecht Declercq
Research Foundation Flanders (FWO),
Ghent University,
Ghent, Belgium
is article is devoted to the attempt of the Hudson’s Bay Company (HBC) to
create a new fur trading empire in Eastern Siberia and Kamchatka during and aer
the Civil War (1919–1925). It was one of the most controversial and substantial
attempts by a foreign company to do business in Soviet Russia, and therefore is a
unique case study for understanding the relationship between the young USSR
and foreign business. e Kamchatka expedition is oen understood as a case
of the HBC’s naïve and poor judgment of the political risks involved. However,
this article argues for a broader understanding of the expedition, one that takes
into account specic business strategies, geo-economic Arctic developments, and
the historical conditions in which trade in the area had unfolded in the decades
leading up to the First World War. Concerning the last point, American traders
based in Nome and Alaska had successfully traded in the Kamchatka area and set
up a system in which they provided supplies to native and Russian communities
in the Far East in return for furs (either by barter or for legal tender). Importantly,
the system made inhabitants of the area dependent upon these supplies. e
HBC’s endeavor in Kamchatka was an attempt to take over and continue these
lucrative operations, but it also suited its expansionist business strategy elsewhere.
From the early twentieth century, the HBC had been setting up new trade posts
in the Canadian Arctic in a response to suocating competition in mainland
Canada. As such, the Kamchatka operation seemed like a logical extension of this
expansionist strategy. In addition, doing business in the high north led private
business to form specic expectations: state presence in the area was feeble,
regardless of its political allegiance. e article, then, explores the fortunes of the
company in Siberia. It shows that the company easily adapted to local conditions
by successfully contracting local middlemen. It also shows that the diculties of
operating in the area were not only caused by underestimation of the political
risks, but also because the company suered from enormous logistical problems:
*Сitation: Declercq, R. (2019). Far Eastern Promises: e Failed Expedition of the
Hudson’s Bay Company in Kamchatka and Eastern Siberia (1919–1925). In Quaestio
Rossica. Vol. 7, № 2. P. 571–586. DOI 10.15826/qr.2019.2.394.
Цитирование: Declercq R.Far Eastern Promises : e Failed Expedition of the Hudson’s
Bay Company in Kamchatka and Eastern Siberia (1919–1925) // Quaestio Rossica. Vol. 7.
2019. № 2. Р. 571–586. DOI 10.15826/qr.2019.2.394.
© Declercq R., 2019
Quaestio Rossica · Vol. 7 · 2019 · №2, p.571–586
Problema voluminis
572
it also had trouble adapting to the environmental circumstances, despite its
experience in remote territories. e eventual restoration of territorial integrity
initially brought about cooperation between the USSR and the HBC, illustrating
that the USSR was aware of the pressing need to supply the area, even though
such a policy was at odds with the state monopoly on trade. e cooperation
ended with the withdrawal of the HBC, as it considered trade conditions too
unpredictable.
Keywords: Russian civil war; fur trade; Kamchatka; trade monopoly; Soviet
foreign trade; Arctic; business and war.
Статья посвящена попытке Компании Гудзонова залива (КГЗ) создать но-
вую империю поторговле пушниной вВосточной Сибири инаКамчатке
вовремя ипосле Гражданской войны (1919–1925). Это была одна изсамых
серьезных ипротиворечивых попыток иностранных компаний вести дела
всоветской России, и,всвязи сэтим, она представляет большой интерес,
так как проливает свет на отношения молодого советского государства
ииностранных предпринимателей. Камчатская экспедиция часто тракту-
ется как пример наивного инеглубокого представления КГЗ овозможных
политических рисках. Однако автор статьи настаивает наболее широком
взгляде наэкспедицию с учетом специфики ведения дел, геоэкономиче-
ских особенностей Арктики иисторических событий, вкоторых развива-
лась торговля врегионе вдесятилетия, предшествующие Первой мировой
войне. Американские торговцы из Нома и Аляски успешно вели дела
наКамчатке. Им удалось создать систему, благодаря которой они обменива-
ли товары, необходимые коренному ирусскому населению Дальнего Восто-
ка, намеха (попринципу бартера или завалюту). Важно отметить, что эта
система сделала местных
жителей зависимыми отиностранных поставок.
КГЗ хотела перенять этот опыт наКамчатке, так как подобное взаимодей-
ствие представлялось чрезвычайно выгодным, и,кроме прочего, вписыва-
лось встратегии экспансии компании. Снаступлением XX в. КГЗ начала
создавать новые торговые посты наканадских арктических территориях
вкачестве альтернативы таковым вконтинентальной Канаде, где конку-
ренция была слишком высока. Торговое освоение Камчатки вэтой связи
выглядело логичным врамках дальнейшей экспансии компании. Кроме
того, ведение дел наДальнем Севере привело кформированию участных
предпринимателей особых ожиданий, связанных сэтой территорией: го-
сударственное присутствие там было минимальным, несмотря на поли-
тическую лояльность региона власти. Настоящая статья посвящена дея-
тельности компании вСибири. Показано, что КГЗ легко адаптировалась
врегионе, наняв местных посредников, асложности ведения дел там были
связаны не только с недооцениванием политических рисков, но также
стем, что компания испытывала серьезные логистические проблемы всу-
ровом дальневосточном климате, несмотря наимеющийся опыт торговли
на Севере. Восстановление территориальной целостности первоначаль-
но привело ксотрудничеству СССР и КГЗ, что свидетельствовало опо-
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
573
нимании СССР необходимости обеспечения региона товарами, однако
такая политика шла вразрез сгосударственной монополией наторговлю.
Сотрудничество закончилось уходом КГЗ изСССР, так как компания счи-
тала условия торговли непредсказуемыми.
Ключевые слова: Гражданская война вРоссии; торговля пушниной; Камчат-
ка; торговая монополия; международная торговля СССР; Арктика; пред-
принимательство ивойна.
War has vast consequences for international business. It seals o foreign
markets and supplies, but can also sometimes provide unexpected oppor-
tunities. is was particularly the case of the First World War and Russia.
By the end of the nineteenth century, Russia had become one of the most
attractive outlets for international businesses. Between 1880 and 1913,
over 50 % of all capital invested in industrial corporations was of foreign
origin [Dunning, Lundan, p. 172]. French, German and Belgian business-
es gained a strong foothold, and many trading businesses organised the
export of Russian raw materials abroad. e war drastically changed the
conditions for international business in Russia. First, German businesses
lost their assets, since such was considered to be property belonging to the
citizens of an enemy state. In 1917, the Bolshevik Revolution threatened
the presence and activities of all foreign enterprises. Nonetheless, many
businesses still considered the revolution and its chaotic aermath to be
an opportunity. is was especially the case in regions east of the Urals,
outside Soviet control during the Civil War. Indeed, the Allied military
occupation of the eastern area of Siberia was predicated upon the hope
of re-establishing trade interests and obtaining concessions with regards
to Siberia’s mineral wealth. Such motives undergirded British business in
particular: its ineectiveness in establishing a strong trade interest in this
part of the world before the war constituted a painful lacuna [Davenport-
Hines, Jones, p. 80]. While these economic aspirations in post-revolu-
tionary Russia would remain a pipe dream, several attempts to set up new
business empires did take place. One of the most important, controversial
and long-standing ventures was the Hudson’s Bay Company’s Kamchatka
expedition, a fruitless but serious attempt to control the furs of Eastern
Siberia and the Kamchatka Peninsula during the Civil War and aer. e
venture started in 1919 and ended in 1924, when the HBC, the largest fur
trading company in the world, ocially decided to withdraw. In this lim-
ited time, however, the company managed to set up a trading operation of
considerable magnitude, based on supplying the area with foodstus and
consumables in return for the fur wealth of Kamchatka. is article is de-
voted to this Kamchatka venture in an eort to better understand how in-
ternational businesses functioned during the post-revolutionary war and
their motivations for taking advantage of this chaos. Equally, I consider
how the USSR nally came to manage business intrusion in those parts of
the country that were remote and dicult to control.
Problema voluminis
574
e historical literature on the HBC Kamchatka expedition in the 1920s
remains limited and has somewhat indulged in the benet of hindsight. Most
explanations point, correctly, to the company’s poor assessment of the very
risky political situation [Dalton, 2006]. Bockstoce talks of the “optimistic”
and even “naïve” assumption of the HBC that the territorial power of the
Soviet Union would not extend to the remoter parts of the Asian coast
and Kamchatka as the company’s main rationale [Bockstoce, p. 126]. Such
explanations are rather problematic, as they are prone to condemning, rather
than explaining, the attempts of foreign companies to operate in the Soviet
Union during the Civil War. In contrast, this article is built on the argument
that the Kamchatka asco needs to be understood in terms wider than the
political risks; it also has to be set against the canvas of shis in the global
fur trade in general and the HBC’s renewed business strategies in particular.
Gradually losing its monopoly over the trade in mainland Canada
throughout the 19th century, one of the HBC’s main eorts to maintain
its leading position in the global fur trade was to seek new frontier territory
in which it could establish trade activities. e HBC therefore turned to
new frontier territories in the high north, such as the Canadian Arctic
[Declercq]. e stage of expansion was both the Eastern Arctic (north
of the Hudson Bay towards Ban Island) and the Western Arctic (towards
the Beaufort Sea) [Newman, p. 246]. As such, a reinvigorated wave
of expansion based on fur trading took place during the early twentieth
century. is expansion led to new connections, especially between Alaska
and the Chukotski Peninsula, but there were also growing links between
Siberia and Canada in the years leading to the war, based upon Russia’s
desire to populate Siberia and the economic development of Canada’s
territories on the Pacic. Such connections and visions of future trade
relations were of fundamental importance, as Black has argued, to Canada’s
policy of intervention during the Civil War [Black, p. 26–27].
In stressing the economic foundation behind Canada’s military
intervention, it becomes clear that the interest of the HBC in Siberia was
not an isolated case of shortsightedness; instead, it unfolded in a context
in which other stakeholders saw the potential of transpacic trade and
investments in post-revolutionary Russia, regardless of the conict’s
political outcome. As such, the hypothesis of this paper is that the brief
expedition in Kamchatka should be read on a longer and larger temporal
and spatial canvas as part of a renewed wave of expansion in the fur trade
that relied on growing economic interconnections between North America
and the Russian Far East before the First World War. is is not to deny
that the HBC did indeed painfully underestimate the political risks, but
one should also stipulate that the Kamchatka venture was part and parcel
of the HBC’s aspirations to establish a new fur trade empire with a center
of gravity closer to the recently explored Arctic areas of the globe. As part
of this strategy, the company was willing to take risks and adopt long-
term perspectives when developing new trade territory. ese factors, it is
hypothesized, blinded the HBC to the many obvious political risks involved.
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
575
Signaling opportunities (1916–1921)
e HBC’s interest in doing business in Russia’s Far East began long
before the October Revolution in 1917. e initial expression of interest
in Siberia was strongly connected to the desire of the British authorities to
strengthen their feeble presence in the area at the expense of the Germans. It
was the Foreign Oce that took an interest in the sequestration of German
businesses during the war, especially the Kunst & Albers trading house
in Vladivostok. e Kunst and Albers merchant house, founded by two
Hamburg traders in 1864, was a major stronghold of German commerce in
the Russian Far East, being the market leader in wholesaling and retailing
in the area. In the fur trade, however, the Vladivostok company played only
a minor role. e commercial intelligence service of the Foreign Oce
stressed the similarity in organizational structure to the HBC: “the Kunst &
Albers concern resembles very closely in the Far East the trading operations
of the Hudson’s bay Company in Canada, possessing large distribution
depots and retail stores at the chief centers of population in Eastern Siberia”
[TNA. BH 1/2215. A 12FTMISC/250. F. 2–3].
e only reason the Russian government was attracted to the take-over
was the ability of the HBC to continue trading operations, which illustrates
the “extreme state of dependency of the Siberian population” on supplies
shipped in from abroad [Murby, р. 73]. However, the HBC’s logistics,
eet, and organizational structure were at that time strongly tied to the
war eort (especially in terms of provisioning the Allies and organizing
their supplies), meaning that it was unable to “attend to an extension of
this magnitude in Russia” [TNA. BH 1/2215. A 12FTMISC/250. F. 4–5].
Even though the HBC refused to take over the Kunst & Albers concern,
its interest in Russia during the war expanded. It ran a shipping business
in Arkhangel’sk from 1915 to 1919. In 1919, the HBC also participated
in the Siberian Supply Company, which was designed to sell goods from
the British government in Siberia [Black, p. 14].
e fur trade tted the scheme of British and Canadian ocials
to expand their commercial presence in the area, as buying furs in remoter
areas typically went along with delivering supplies, such as foodstus,
ammunition and alcohol: “It struck me that if the Hudson’s Bay Company
could come in and start fur trading it would supply an additional means of
exchange which would be very valuable. Firstly, the Company if it followed
the usual lines, would no doubt get rid of a lot of goods by the direct process
of barter of furs. en, so far as it required money for local expenditure,
it would supply an additional fund for the purchase of Canadian or
British goods” [TNA. BH 1/3452. A.93/12. F. 12]. Still, the HBC remained
remarkably hesitant to carry the burden of such an operation entirely on
its own: “the organization of the fur trade in Canada is unique, and we do
not know whether we will be tted to engage in competition for a business
which has developed upon such entirely dierent lines.” [TNA. BH 1/2603.
A5/129. F. 223]. Instead, the board chose a safer route to the fur wealth
of the Far East.
Problema voluminis
576
In 1919, the HBC entered a joint venture set up between a trader by
the name of Count Berg and Sale & Frazar, a British and American trading
and engineering rm that operated in Japan [Shavit, p. 174]. e HBC
became the main shareholder with 60 % of the shares. e partnership was
informally known as the Trio Account, but it was ocially registered as the
Kamchatka Fur Trade Company. At this stage, the HBC was not directly
involved in local commercial activities, and trading goods were purchased
principally from the warehouses of Sale & Frazar in Tokyo. While it was
dicult to establish new trade posts owing to distrust towards foreigners,
the Kamchatka Fur Trade Company primarily operated with local Russian
traders and sta scattered over 15 trading posts to secure furs.
It was already during the Trio Account that the trade partners,
in particular Count Berg, asked for greater involvement from the HBC.
For instance, shipments in 1920 were brought in by Japanese steamers,
with representatives who knew too little of the fur trade [TNA. BH
1/2633. A 92/17/21. F. 26]. Count Berg asked whether a HBC ship could
be deployed in the area, along with experts in grading and valuing
Kamchatka furs. By this point, however, the HBC had already been
seriously contemplating a larger, more direct role in the Siberian trade.
e motivation for this was not simply exploiting the power vacuum.
It was also taken from a specic business point of view that was tied
to the historical development of the fur trade in North America in
recent decades. When the HBC board contemplated in 1920 the dicult
matter of how deeply the company should be involved in the Siberian
trade, HBC traders stressed that the opening of a direct Siberian coastal
trade constituted a logical extension of existing HBC operations
in the Canadian Western Arctic. Provisions to these northern areas were
primarily procured in Vancouver and Nome in Alaska. Much of the trade
in the area had already organized in a transpacic fashion for decades, with
American traders like Hibbard & Swenson operating from Seattle since
1902, bartering and trading along the Siberian coast. In Nome, Alaska,
local traders were similarly enthusiastic about accelerating the exploitation
of the Alaskan and Siberian Arctic during the Civil War [Hunt, ch. 6].
With its Western Arctic operations expanding, the HBC could
participate in this protable trade and compete with the Alaskan-based
traders. Norman Freakley, a HBC captain active in the Western Arctic,
saw that HBC ships could easily serve both Herschel Island and parts
of the Siberian coast. He therefore recommended a more direct approach
and “to set up regular trade posts along the Siberian coast, similar to
these existing on the Hudson Straits” [TNA. BH 1/2623. A 92/17/6. F. 78].
Freakley emphasized that fur trading operations could prot because
of the chaos in the area: “owing to the unsettled state of the country”, supplies
were urgently needed [Ibid.]. In addition, the fortunes of competitors were
evaluated, in particularly the loss of a schooner by Hibbart & Swenson,
a trading company with a strong presence in the area: this was seen as an
extra opportunity that worked to the advantage of the HBC.
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
577
Indeed, from such a geo-economic perspective, setting up trade activities
in Siberia does seem more like a ‘natural’ extension of intensifying trade
activities in the transpacic north rather than the exploitation of a windfall
opportunity. Moreover, one should not underestimate the extent to which
Arctic exploitation and exploration was the subject of wishful thinking at the
time. Arctic space, remote, barely explored and sparsely inhabited, was very
much seen by contemporaries as open and vacant land, the last blank space
on Earth where formal sovereignty was oen not carved in stone. is applied
to the Russian Far East as well. For instance, the sovereignty of Wrangell
Island in the Chuckchi Sea was disputed, as American expeditions tried
to lay claim to it. In terms of the wider Chuckchi Peninsula, north of Anadyr,
the HBC noted that the presence of American traders operating from Nome
(Alaska) was much stronger than any formal Russian presence and that
Russian authority in the region “was so slight” [TNA. BH 1/2634. A 92/17/25.
F. 179–184]. In large parts of the area where the HBC wanted to trade, Russian
authority was indeed insignicant, leaving much leeway to individual traders.
As such, the HBC’s entry into the fur trade in Siberia involved many other
factors besides a simple misjudgment of the political risks. In large parts of the
territory, government interference was largely absent, regardless of who was in
power. e company highly favored such “free”, frontier-like conditions: they
also underlay the expansion into the Canadian Arctic, where state interference
was virtually absent as well [Declercq].
Setting up shop (1921–1923)
At the beginning of 1921, the Kamchatka Fur Company was dissolved
when Count Berg and Sale and Frazar withdrew. At this point, the HBC took
the unfortunate decision to continue alone, however, at this moment such
seemed like a logical continuation of its previous eorts. In organizing the
trade on its own account, the HBC continued to service the basic system
of trade posts used by the Trio Account. Amongst company administrators,
there was mounting condence that their investments were eventually going
to pay o: a number of new settlements and posts were integrated into the
system. By 1923, the company commanded a network of over 25 trade posts,
extending from Port Ayan on the south-western coast of the Okhotsk Sea
to Cape North in the Russian Arctic. is covered a coastline of over 3,500
miles, connected to inland transport routes (rivers, tracks) totaling over 700
miles [TNA. BH 1/2702. A 92/30/1. F. 161]. Trade posts were situated on both
sides of the Kamchatka Peninsula, on the Sea of Okhotsk and a long stretch
on the Bering Sea, opposite Alaska towards the Bering Strait. In Olyutorsky
district, the port town of Anadyr gured as the headquarters of the HBC’s
operations. Even further north along the Chutchi Sea, a post was established
at the Chukotsk River. Further south, signicant posts were situated at the
mouth of the Uka and Kamchatka rivers [TNA. BH 1/2628. A 92/8/1. F. 46].
e HBC’s main site in the southern area was the port of Petropavolvsk,
strategically situated almost at the southern end of the peninsula [Ibid. F. 44].
Problema voluminis
578
Next to the peninsula itself, the HBC called at ports on Eastern Siberia’s
coastline along the Sea of Okhotsk, like Chukotsk and Ayan.
e trade infrastructure varied considerably. Some settlements did have
substantial warehouse infrastructure to safely store supplies and furs for sale.
is was the case in Okhotsk, a proper town with government buildings,
a wireless station and substantial log houses situated on the Siberian
mainland. In other places, by now mostly abandoned, new infrastructure
was created by the company itself. is was the case in the port of Ayan,
where a new storage area was established. While Ayan was already remote
and hard to service, some places, especially on the peninsula itself, lacked
warehouse and port infrastructure. A telling example is Olyutorka, where
the HBC’s Russian representative Arteymno had made most of the material
available and had created a store out of “dunnage, earth and corrugated
iron” [TNA. BH 1/2628. A 92/8/1. F. 15].
e lack of knowledge about local markets previously holding the
company back from direct operations in the area was solved in two ways.
First of all, the HBC hired the Dutch trader Anton Hoogendijk to manage
the Kamchatka expedition: he was given a large degree of autonomy.
Hoogendijk, a Russian-speaking go-between based in Arkhangel’sk with
whom the company had been in business during the war, established the
majority of posts on the coast of Kamchatka that bordered the Bering Sea:
ships could easily reach this area from the port in Vancouver. Secondly,
while the trading posts in Canada were controlled by their own sta
(so-called post managers), the HBC in the Russian Far East continued
to outsource control over posts to local traders, just like under the Trio
Account. One of the main trading partners was the Russian trade rm the
Karie Brothers, with an operating base in Anadyr. e Karie brothers
were granted extensive credit of $ 150,000 in order to conduct the fur trade
on behalf of the company [Ibid. F. 42].
Besides the Russian go-betweens, however, the way in which trade
functioned resembled the way the HBC operated in Canada. Hunters and
trappers, chiey natives, brought the furs to HBC stores, from where these
fur suppliers received provisions such as foodstus, weapons, ammunition
and alcohol [Ray, p. 2]. e Russian middlemen assumed the function
of “storekeepers”, drawing in furs and distributing HBC supplies shipped
in during the ice-free season across these vast regions [Ibid. F. 21]. is
is how the fur trade historically worked on frontiers, especially in North
America. e trading of furs for supplies was also the basis of the trade
on the remote Kamchatka Peninsula established by American traders in
the late 19th century. It made local people, natives or settlers, dependent
on the post for supplies and foreign suppliers [Yarzuktkina, р. 377]. is
supply function was key to the trade in the remote parts of Kamchatka
and Eastern Siberia, and made goods like furs a valuable exchange
commodity to the traders who supplied the area. Marchenko, a Russian
representative of the HBC, noted that “the need of all kinds of goods by
the people is great. ey need everything, but have no means of buying
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
579
the goods. If anyone has any fur he tries not to trade it for merchandise
and usually is hiding all he has for fear he will be relieved of it”
[Ibid. F. 35]. As such, the need for supplies in exchange for furs formed
the basis of trading in this era.
Command of the seasons: force majeure
and political instability
While the operation made general sense in terms of the customary
principles of fur trading, and those of the HBC in particular, in practice the
HBC was confronted with numerous complications. To service the remote
Russian posts and to bring the furs back, the HBC deployed one of its most
important vessels, the Baychimo, in the Kamchatka area. In addition, a
number of smaller trade vessels, mostly from Japan, were chartered to call
at other trade posts. Nature, however, did not cooperate: it became clear
that the scale which the HBC intended for its Siberian business was far
too ambitious. In 1922, Anton Hoogendijk painted a negative picture of
the Kamchatka expedition in his report to the company’s governor and
committee. Particularly harsh conditions during the summer had troubled
supply ships. e summer ice melted relatively late and had coincided
with hostile weather conditions such as heavy gales and fog, which made
it impossible to provide all trade stations with the necessary provisions and
caused considerable delay. ese were harshest summer conditions since
the Russo-Japanese War. In one trade post in Okhotsk, the ice disappeared
ve weeks later than usual. e port of Ola was only cleared of ice
on 30 June, whereas it could normally be reached in the rst week of June
[Ibid. F. 50]. Due to icy conditions, the Baychimo was unable to call at some
of the northernmost posts of the Chukotsk Peninsula, like North Cape and
Pylgin, on the turf of the Karie Brothers [Ibid. F. 13]. To make matters
worse, the Baychimo sustained heavy damage when it got stuck in shallow
waters.
ese kind of logistical problems were commonplace in the region:
confronted with the unusual summer conditions, Hoogendijk had to admit
that the company had started on a “too extensive programme, without
sucient preparation in advance” [Ibid. F. 64]. e logistical problems
of other companies added to the chaos. In the summer of 1921, a crew
of Japanese shermen was not retrieved from Kamchatka in time, and
so was le without food and suitable clothing for the winter. e crew
raided the HBC post at Khadirka, allegedly murdering ve company
employees. Before a Japanese warship picked them up, the shermen also
attacked a Russian rescue party. e raid caused considerable damage
to the operation, with a loss amounting to $ 9,500 [TNA. BH 1/2702.
A 92/28/2. F. 4–5]. In addition, the HBC feared an essential loss of “prestige
in the area”, and therefore threw all its energy, and its connections with the
Foreign Oce, into getting the Japanese government to repay the damages.
Problems also stemmed from working with chartered vessels. During the
Problema voluminis
580
summer of 1922, HBC agents were confronted with the mutinying crew of
the Koyo Maru. Under threat of violence, they were forced to give the sailors
a 60 % increase to their pay. e diculties of organizing the logistics of
expansion were not an issue solely conned to Kamchatka. In supplying the
Western Arctic, such forms of cooperation also created problems, which is
one reason why the HBC ordered the construction of a new schooner for
its Western Arctic operations in Canada.
Next to the logistical problems and the violence, competition was
another disturbing factor, in particular from the American rms who had
a strong foothold in the area. e Seattle-based fur trader Olaf Swenson,
who was already active in Siberia before World War I, operated with some
schooners in the area, and also had contractors disturbing the trade in the
HBC district of the Kamchatka River [TNA. BH 1/2629. A 92/8/6. F. 9].
In addition to Swenson, two American rms, Wulfsohn & Co and Seidenverg
& Wittenberg, a Russian company and a Japanese trading business were
active in the seas of the Far East [TNA. BH 1/2628. A 92/8/1. F. 24]. ere
was an intricate link between competition and the ability to procure
supplies in the region. A multitude of suppliers undermined the model, as
it increased the ability of local traders to source supplies and sell to multiple
channels. In 1921, the HBC trade post and small settlement of Tigil could
drive prices up due to the activities of Swenson in the area. e following
year, the HBC was unable to call at the post due to fog and coal shortage,
which again put Swenson in a strong position. In Bolshetersk, hunters went
to sell their furs directly in Petropavlovsk, which drove up prices for sable
skins [Ibid. F. 67]. Hoogendijk mentioned the high prices for sable, driven
up by competition, as one of the largest risks to future trading operations.
e HBC had particularly underestimated the competition from Swenson,
whose long-standing interest in the area was bolstered in 1922 by fresh
capital. e HBC came to the conclusion that the peninsula was not large
enough for both concerns to operate. In the autumn of 1922, contacts
were established between the two companies in order to make future
arrangements for the exploitation of Kamchatka.
Other than setting the conditions for calling at remote trade posts,
nature also inuenced levels of competition. e entry of the HBC
coalesced with declining yields of sable hunting in the Kamchatka
Peninsula, which added to the intensity of competition. Further north
in the Chukotsk Peninsula, a particularly harsh winter meant that the
natives were preoccupied with saving their reindeer herds rather than
hunting white foxes [Ibid. F. 13].
Another fundamental misjudgment was political. e Far East was the
scene of various struggles between the Whites and the Reds, the outcomes of
which were oen hard to follow. For instance, merchants in Anadyr, unable
to cope with communist ideas about economic organization, killed the
members of the rst Soviet Revkom in January 1919: they established their
own local governing organ whilst also pretending to form a cooperative to
the Kamchatka Revkom [Gray, р. 90]. In August of the same year, however,
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
581
the Soviets reconquered Anadyr, but it did not seem to aect the Karie
Brothers [Nutall, p. 87]. Between 1920 and 1922, the territory in which the
company operated was formally under the control of the Far East Republic
(FER), a Soviet puppet state designed to act as a buer between occupied
territory and the USSR, which but temporally ended the eort to restore its
territorial integrity [Wood, p. 187]. e situation remained however chaotic,
with dierent factions struggling for power. Settlements under revolutionary
control, certainly in the remoter parts, were oen based on tiny and primitive
party cells with little or no central oversight [Cannon, p. 21]. Equally, White
warlords could not guarantee ideal trading conditions. Trade reports in 1922
describe the Whites in the Okhotsk area as nothing more than freebooters
and the White general as a “brigand”. Indeed, the company’s expeditions were
provided with extra money to bribe local ocials.
Despite the grim political and economic prospects, the Dutch leader of
the expedition Hoogendijk followed an ambitious course of action. During
the summer of 1922, HBC agents on board the supply ships established
new posts on the Kamchatka Peninsula, in Ayan, Uka and further north.
Again, this all depended upon nding local Russian partners with the
right qualications. For Uka, the HBC hired a trader called Ofshaniko.
Ofshaniko had been in the service of Tchurin & Co for twelve years:
this was a trading company active in Pacic seal hunting. Given his
experience in the fur trade and contacts with the local population,
this gure was considered a major future asset: “He has considerable
inuence among the native population in his district and it is therefore
good business and competitors from outside will be handicapped as long
as he remains in the service of the company” [TNA. BH 1/2628. A 92/8/1.
F. 24]. In addition to the new posts, Hoogendijk also renewed and
improved existing agreements during that summer with local traders.
is was the case for the most important partner, the Karie Brothers
from Anadyr, whom Hoogendijk tried to tie more closely to the HBC
by oering a 10-year exclusivity contract (with an exit penalty of
$ 25,000) [Ibid. F. 20]. e renewed contract also relieved some
of the HBC’s obligations that were hard to maintain, foremost
the provision of some of the northernmost posts.
From expedition to asco (1923–1925)
Not long aer the HBC had established a new trade post in the summer
of 1922, the Japanese gave up Vladivostok in October. In December 1922,
the Far East Republic was incorporated into the USSR, and White control
over the Kamchatka coastline nally came to an end. How did the HBC
perceive the end of the Civil War in favor of the Soviets? e company
was well aware of the state’s hostility towards foreign business, but they
nonetheless hoped to strike a deal with the Soviets and continue business.
Hoogendijk reported that a regime change would probably not alter much
in the immediate future, expressing “the hope that a Government monopoly
Problema voluminis
582
of trade will not be declared aer arrival of the Company’s vessel with fresh
supplies next year” [TNA. BH 1/2629. A92/8/1. F. 69].
Indeed, the need for supplies in the area seemed to have been a major
incentive for the Soviet government to continue trading in the area. e regime
change did not alter the needs of the remote settlements and communities.
A few months aer the end of the Civil War, Hoogendijk managed to strike
a deal with the Soviet authorities, which Moscow ratied on 28 March 1923,
for the “joint exploitation” of the fur wealth in Kamchatka and the Chukotsk-
Anadirsk region. In contrast, other trading companies, like Swenson (who
operated aer 1922 without Hibbard), were less fortunate and saw their
possessions conscated by the Soviet authorities [Swenson, р. 163]. Olaf
Swenson was even briey arrested in Vladivostok. e HBC was allowed to
trade furs during the ice-free season of 1923, calling at a series of trade posts
along the peninsula. In return, the company promised to ship in supplies to
the value of $ 350,000 [TNA. BH 1/2629. A 92/8/3. F. 19]. Prots made on fur
sales had to be shared, however, between the HBC and the Commissariat of
Foreign Trade (NKVNT). In addition, the local Vneshtorg issued a 10 % tax
on the total value of the furs collected. It may seem strange that the company
continued operations at this point. However, the joint monopoly on furs was,
from a company point of view, perhaps not so undesirable, as competition
had been identied as one of the major risks to trade in the area, as had
corruption under the White authorities. At least cooperation with the Soviet
state now put the HBC in the seemingly comfortable position of monopoly
supplier and buyer in the area.
ings turned out dierently, however. To begin with, the company
agreed to ship in more supplies during the summer of 1923 (worth $ 119,478
in addition to the agreed-upon supplies worth $ 350,000) in order to meet the
wants of the local population. With this, the company hoped that the Soviet
government would recognize its good intentions [TNA. BH 1/2629. A 92/8/4.
F. 14]. However, in terms of taxation, things went wrong. According to the
agreement, the HBC would pay 10 % on the selling price, which amounted
to $ 48,500. However, the HBC refused to pay, as it was faced with other,
unexpected tax claims. A surprise demand for 61,300 gold rubles was made
by the customs house in Chita in November 1923. Other customs houses
issued similar duties, like the one in Petropavlovsk. e HBC made ocial
complaints to the Commissariat of Foreign Aairs in London, expressing
that it “was losing faith in the protection of its legal rights in the territory
of Soviet Russia” [TNA. BH 1/2735. A 92/78/1. F. 8]. Still, the company did
not intend on giving up. During the winter of 1923–24, preparations were
made for another summer shipment, again stressing the well-being of the
local population: “the company is willing to continue the large and dicult
undertaking already commenced to develop the economic welfare of the
inhabitants in the Far East” [Ibid. F. 9].
e joint operation with the Soviet authorities never turned into a
workable solution for the HBC. Despite the attractive trade monopoly,
the HBC seriously underestimated the hostile attitude towards foreign
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
583
intruders. In April 1924, local governments further stirred up hostility
towards the largest international fur business with a press campaign against
the foreign monopoly, and not much later company assets were arrested in
Petropavlovsk and other posts. e NKVNT refused to assist the company
in its problems with local authorities [TNA. BH 1/2629. A 92/8/7. F. 105].
In a last attempt to save the Kamchatka concession in 1924, the HBC
tried to involve ARCOS, the Soviet trade agency in London, in a deal with
Vneshtorg so as to provide more security for the HBC’s operations. ARCOS,
however, refused to assist the HBC: “the board of directors of Arcos, are
opposed to undertaking any obligations or responsibilities in this matter,
and intimated that they have considerable business… which is conducted
with far less trouble” [Ibid. F. 11].
Faced by renewed hostility and legal uncertainties, the HBC telegraphed
Anton Hoogendijk in May 1924, urging him to end the Kamchatka
expedition as soon as possible. e telegram stated: “in view of constant
claims making business utterly impossible have decided not to risk any
more money in Kamchatka even though we should lose greatly through
this attitude” [TNA. BH 1/2702. A 92/28/2. F. 10]. In July 1924, the HBC’s
Russian business had come to a complete standstill and the Kamchatka
business went into liquidation. e last shadowy prospect of doing business
in Siberia was now gone, and the company counted its losses. Contrary
to high expectations and despite substantial investments, the Kamchatka
adventure resulted in a substantial loss for the HBC. By November 1924,
the company had invested the considerable sum of $ 735,327.07 in the
stores, infrastructure and supplies of its Kamchatka operation. e HBC’s
gamble for a fur empire in the Far East had turned out badly.
However, private trading in remote Kamchatka was by no means
discontinued entirely. e HBC had correctly guessed that the Soviet
government would continue to need a foreign trading partner in order
to provide for local communities. Somewhat surprisingly, it was Olaf
Swenson, the HBC’s Swedish-American competitor, who negotiated a new
deal, re-entering the area in 1925. Swenson’s vessels shipped in American
merchandise in accordance with Moscow’s specications on a cost-plus
basis in exchange for an assigned quota of furs (also on a cost-plus basis).
He recalled later in his well-known memoires Northwest of the World that
“in spite of the nancial ruin, and the months of initial diculty, Ihave
no complaint to make against the Soviet government” [Swenson, p. 171].
Swenson would continue to operate along the Siberian coast until 1930.
Only then did the USSR take over the supply system entirely.
* * *
e new fur empire in Russia’s Far East was linked to a set of broader
issues, foremost business strategies and overarching geopolitical
considerations, and thus did not only derive from a naïve understanding of
the political risks. At an earlier stage, there was also considerable pressure
Problema voluminis
584
from the British and, to a lesser extent, Canadian political interests in the
area that accompanied their military presence, although this connection
had disappeared by the time the HBC’s presence surged aer 1921.
At the beginning of the twentieth century, the HBC had again embraced
a strategy of geographical expansion, which started with the extension
of trade posts towards the Canadian North: this was done in an attempt
to avoid the heavy competition in the fur trade present elsewhere in the
country. e Kamchatka expedition was part of such an expansive strategy,
complementary to the new trading activities in the Western Arctic. With its
new geographical ambitions in Canada and abroad, the HBC again tapped
into the old empire-building mission it had once had as a chartered company.
In particular, operating in unclaimed (sub)Arctic spaces was predicated on
a kind of wishful thinking from the traders and companies, who hoped to
gain the liberty of being able to operate without government interference.
e HBC jealously observed how American traders operated in the area
without much Russian state interference, while also noting how easily they
could establish a business monopoly in the high north. e connection
between the race to the north in Canada and far eastern expansion is of
seminal importance in understanding the risks the company took.
Second, connections across the Bering Strait, those between Alaska
and Siberia and Siberia and Canada, were of growing importance from the
second half of the nineteenth century. American traders from Nome were
virtually the sole supplies of communities in Kamchatka, which they did
in exchange for the territory’s fur wealth. e exchange of furs for supplies
was a central component of the historical fur trade, and had furnished the
foundation for trade in the Kamchatka region for decades. Indeed, the HBC
had estimated correctly that the need for a (foreign) supplier would not
disappear, regardless of the political allegiance of the Kamchatka Peninsula.
is primary argument, used extensively by the HBC both internally and
externally, also formed the basis for the negotiations between the USSR and
the HBC once White control over the area had come to an end. It even oered
the prospect of a trade monopoly under Soviet auspices. is assessment
proved correct, even though it came with legal uncertainty and it was not
the HBC who ultimately beneted: the American competitor Swenson was
granted the right to trade in the area once the HBC had abandoned it.
In the end, the closure of the HBC’s trade in the area was largely
a political decision. e USSR aimed to control foreign trade in its
territory and heavily taxed the operations of the HBC, deliberately or not.
e USSR remained largely hostile towards foreign business operating on
its soil: but it was perhaps harder to tolerate the HBC, which had been an
imperial driving force, in contested territory, than a smaller American
trade rm solely devoted to trading in the Far East. However, following
from the broader framework of the article, the HBC’s failure and heavy
losses were not only the result of the struggle between the USSR and the
company itself, but also derived from the internal business strategies. On
the level of trade competition, the HBC had seriously underestimated
R. Declercq e Failed Expedition of the Hudson Bay Company in Kamchatka
585
the historical capacity of American traders to continue operations in
Kamchatka in 1921 and 1922. e HBC had underestimated an important
last element as well, namely the whims of nature. While supplying
remote territories was the company’s bread and butter, there are strong
indications that the HBC faced enormous diculties in providing the
area with supplies and monopolizing the fur trade in Kamchatka: doing
so seemed to overstretch the abilities of the HBC. As such, a broader
perspective reveals that doing business in post-revolutionary Siberia
was driven by a number of interlocking rationales, business strategies,
geographical connections, demands and supplies that would continue
to apply, it was believed, in a radically dierent political context.
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A 92/8/1. F. 13, 15, 20–21, 24, 33–35, 42, 44, 46, 50, 64, 67; BH 1/2629. A 92/8/1. F. 69;
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A 92/28/2. F. 10; A 92/30/1. F. 4–5, 161; BH 1/2735. A 92/78/1. F. 8–9; BH 1/3452. A 93/12. F. 12.
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Problema voluminis
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References
Black, J. L. (2013). Great Expectations: Revisiting Canadian Economic Footprints
in Siberia, 1890s-1921. In The J. of Siberian Studies. No. 3, pp. 1–27.
Bockstoce, J. R. (2018). White Fox and Icy Seas in the Western Arctic: The Fur Trade,
Transportation and Change in the Early Twentieth Century. N. Haven, Yale Univ. Press.
326 p.
Dalton, A. (2006). Baychimo: Arctic Ghost Ship. Surrey, Heritage House. 251 p.
Davenport-Hines, R. P. T., Jones, G. (2006). British Business in Asia since 1860.
Cambridge, Cambridge Univ. Press. 301 p.
Declercq, R (in print). Natural Born Merchants. The Hudson Bay Company, Science
and Canada’s Final Fur Frontiers. In Business History.
Dunning, J., Lundan, S. (2008). Multinational Enterprises and the Global Economy.
Cheltenham, Edward Elgar. 920 p.
Gray, P. (2005). The Predicament of Chukotka’s Indigenous Movement: Post-Soviet
Activism in the Russian Far North. Cambridge, Cambridge Univ. Press. 245 p.
Hunt, W (1976). Alaska: A Bicentennial History. N. Y., Norton. 200 p.
McCannon, J. (1998). Red Arctic: Polar Exploration and the Myth of the North in the
Soviet Union, 1932–1939. N. Y., Oxford Univ. Press. 234 p.
Murby, R. (1969). Canada’s Siberian Policy 1918–1919. Thesis Master of Arts Slavonic
Studies. Vancouver, S. n. 125 p.
Newman, P. (1992). Merchant Princes. Toronto, Penguin. 685 p.
Nuttal, M. (Ed.). (2004). Encyclopedia of the Arctic. 3 Vols. N. Y., Routledge. Vol. 1.
695 p.
Ray, A. (1984). Periodic Shortages, Native Welfare, and the Hudson’s Bay Company
1670–1930. In Krech, S. (Ed.). The Subarctic Fur Trade: Native Social and Economic
Adaptations. Vancouver, Univ. of British Colombia, pp. 1–21.
Shavit, D. (1990). The United States in Asia: A Historical Dictionary. N. Y., Greenwood.
620 p.
Swenson, O (1944). Northwest of the World. L., Hale. 221 p.
TNA. BH 1/2215. A 12FTMISC/250. F. 2–5; BH 1/2603. A 5/129. F. 223; BH 1/2628.
A 92/8/1. F. 13, 15, 20–21, 24, 33–35, 42, 44, 46, 50, 64, 67; BH 1/2629. A 92/8/1. F. 69;
A 92/8/3. F. 19; A 92/8/4. F. 14; A 92/8/6. F. 9; A 92/8/7. F. 11, 105; BH 1/2623. A 92/17/6,
F. 78; BH 1/2633. A 92/17/21. F. 26; BH 1/2634. A 92/17/25 F. 179–184; BH 1/2702. A 92/28/2.
F. 10; A 92/30/1. F. 4–5, 161; BH 1/2735. A 92/78/1. F. 8–9; BH 1/3452. A 93/12. F. 12.
Wood, A. (2011). Russia’s Frozen Frontier: A History of Siberia and the Russian Far
East 1581–1991. London, Bloomsbury. 272 p.
Yarzutkina, A. (2014). Trade on the Icy Coasts: The Management of American Traders
in the Settlements of Chukotka Native Inhabitants. In Terra Sebus: Acta Musei Sabesiensis.
Special Iss., pp. 361–381.
e article was submitted on 21.12.2018
