Far Eastern Promises: The Failed Expedition of the Hudson’s Bay Company in Kamchatka and Eastern Siberia (1919–1925)

Abstract

This 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 after 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. The Kamchatka expedition is often 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 specific 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. The 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 suffocating 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 specific expectations: state presence in the area was feeble, regardless of its political allegiance. The 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 difficulties of operating in the area were not only caused by underestimation of the political risks, but also because the company suffered from enormous logistical problems: it also had trouble adapting to the environmental circumstances, despite its experience in remote territories. The 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. The cooperation ended with the withdrawal of the HBC, as it considered trade conditions too unpredictable.