Traders and merchants based in Quebec and the Thirteen Colonies had been successfully advancing the fur trade in the Great Lakes region since the mid-1760s, largely through the assistance of privately-owned commercial vessels to ship trade merchandise to western posts and retrieve bales of peltries to be sold for handsome profits. The trade had only recently transitioned from the old French structure to a modified system under British management, and was gaining momentum and efficiency. But all that changed with the onset of the American Revolution in 1775. The British government at Quebec responded to the war threat with plans to prevent American incursions into the Great Lakes region and ensure that weapons, ammunition, and provisions were not smuggled to the American side through the fur trade network. To that end, Governor Guy Carleton (1724-1808) outlawed the use of private vessels on the Great Lakes in the spring of 1777.
According to Governor Carleton’s 1777 announcement, vessels taken into the King’s service would be armed and manned by the Crown, be the exclusive carrier of troops and stores for the war effort, and maintain absolute control over the Great Lakes. The service was also the official conveyor of United Empire Loyalists relocating to British territory in the Province of Quebec. The fleet of King’s Ships of the Provincial Marine would be on constant military patrol between British garrisons at Carleton Island and Fort Niagara on Lake Ontario (employing Snow Seneca, Ship Limnade, and Sloop Caldwell), Fort Little Niagara, Fort Schlosser, Fort Erie, and Detroit on Lake Erie (employing Schooner Faith, Snow Rebecca, Schooner Hope, Brig Gage, Schooner Dunmore, Sloop Felicity, and Sloop Wyandot), and Detroit and Mackinac Island on Lake Huron (employing Sloop Felicity, Sloop Wyandot, Sloop Welcome, and Sloop Angelica).
The fur trade was at the heart of the young Canadian economy. Prior to Carleton’s 1777 orders, traders and merchants had their merchandise and peltries shipped over the Great Lakes on private vessels, many of which were owned and operated by the traders and merchants themselves. The new regulations dealt a serious blow to the fur trade when all private vessels on the lakes were effectively taken out of service and purchased or leased by the Crown for the exclusive use of the Provincial Marine. Traders, merchants, and agents were assured of services for the transport of their goods on board the King’s Ships, provided there was sufficient room available and military manoeuvres were not impacted.
The Provincial Marine thus became the sole means of transporting commercial goods on the Great Lakes. When merchandise and peltries were consigned for transport aboard the King’s Ships, promissory freight notes were issued to confirm the nature of the cargo and formalise a commitment to pay freight charges at some later date to Provincial Marine officials at Detroit, Carleton Island, or Quebec. Private transport of goods between Montreal and Carleton Island along the Saint Lawrence River was still permitted, but only in canoes and flat-bottomed cargo boats or bateaux.
Under the British system for managing the fur trade, the transport of trade merchandise to western depots was heavily regulated, and required a license from the governor (of which there was only a limited number issued each year). Ownership, origin, and destination of cargo was heavily scrutinized along the way by garrison commandants and ship masters, who had the authority to seize unauthorized shipments and prohibited goods. Strict supervision ensured that American traders were entirely excluded from the trade.
By the summer of 1778, Frederick Haldimand (1718-1791) had been installed as the new Governor of Quebec, and wasted no time in refining the organisation of the Provincial Marine. According to his General Orders and Regulations for the Better Government of His Majesty’s Armed Vessels Employed on the Different Lakes, issued on 1 July 1778, the fleet of vessels on the Great Lakes was divided into geographic commands: Lake Ontario constituted its own jurisdiction, and Lake Erie and the three upper Great Lakes (being lakes Huron, Superior and Michigan) constituted another, each with its own senior naval officer. In addition to organisational details for manning and operating the King’s Ships, Haldimand’s directive required that the British Articles of War be read on board each vessel at least once every month, to maintain order and discipline. Unfortunately, the chain of command between land- and lake-based officials was poorly defined, and led to quarrels that impacted the ability of the Provincial Marine to assist with the army’s land operations and properly fulfill commercial shipping obligations to those in the fur trade.
At the height of the war in 1779, during a period of particular difficulty for the fur trade, nine trading partnerships strategically combined their assets and resources to form the first consortium that would become the North West Company. The 16-share syndicate, composed of leading traders and merchants operating out of Montreal and Mackinac Island, eventually developed into the principal fur trade concern in Canada in opposition to the Hudson’s Bay Company. Another similar 16-share agreement was made in 1783, which was expanded to a 20-share agreement in 1787. A few of the traders included in the North West Company agreements are represented on promissory freight notes as the shippers and receivers of merchandise and peltries carried by the Provincial Marine, most notably George McBeath and Normand McLeod who were among the first British traders in the Great Lakes region after the British conquest
Forced to conform with the regulations for shipping their merchandise and peltries only on the King’s Ships, traders, merchants, and agents were at the mercy of the fleet’s management, staff, schedules, and performance, the weather and sailing conditions, and the physical state of the vessels. The lack of suitable storage facilities for goods held at garrisons added to the impact on trade, and other serious problems were numerous and widespread. Trade merchandise and peltries were delayed at transfer points for extended periods of time, damaged through improper storage, sodden by transport aboard leaky vessels, lost and misplaced through incompetence, and ransacked by unscrupulous military staff. Delays were particularly injurious to the trade, owing to the inherently tight trade cycle of shipping goods (which were usually obtained on credit from merchant-outfitters) to the interior and receiving furs the following year for sale at Montreal. Goods sometimes lay for months at Carleton Island, Fort Niagara, and Fort Erie, and were sometimes delayed so long that they could not be sent until the following season. Disruptions in the cycle equated to monetary losses through higher interest payments, damage to credit ratings, and strained relations with outfitters and investors. Petitions and Memorials complaining of unfair treatment and exorbitant freight charges were drawn up by traders, merchants, and agents, and sent to the governor and council at Quebec, but were largely ignored.
In the end, a large proportion of freight notes were not voluntarily settled: traders and merchants were summoned to court and sued for full or partial payment, whereas others were pardoned on the basis that negligence by the Provincial Marine caused financial losses that exceeded freight charges.