DISCUSSION PAPERS IN ECONOMICS

Working Paper No. 01-10

Agents of Their Own Desires:

Indian Consumers and the Hudson's Bay Company
1700-1770

Ann M. Carlos
Department of Economics, University of Colorado at Boulder
Boulder, Colorado

Frank D. Lewis
Department of Economics, Queen’s University
Kingston, Ontario

September 2001

Center for Economic Analysis

Department of Economics

University of Colorado at Boulder

Boulder, Colorado 80309

© 2001 Ann M. Carlos, Frank D. Lewis

 Agents of their Own Desires:
Indian Consumers and the Hudson’s Bay Company
1700-1770

Ann M. Carlos
Department of Economics
University of Colorado
Boulder
CO 80309

Frank D. Lewis
Department of Economics
Queen’s University
Kingston, Ontario

September 2001

An earlier version of this paper was presented at the Business History Conference, Miami, 2001. The
authors thank Michael Smith for his many helpful comments and suggestions.
 2

Introduction

The purchase of a commodity is the result of a coincidence of wants. Someone desires a

commodity and someone provides the commodity. Yet behind this seemingly simple process lies a

complex fabric premised primarily on an understanding of who is the consumer and what are his or her

needs, as well as the ability to produce the necessary items. Such understanding, in turn, requires

learning and knowledge especially in a new environment.

During the eighteenth-century, families from the Friesenland to the Tidewater of the

Chesapeake were accumulating goods. Personal and household diaries, firm and probate records,

document the increased variety and range of commodities held by households; among them oak chests,

pottery, cotton and mirrors, along with new groceries items, such as sugar, tobacco, and rum. 1

Concomitant with this widening in the range of consumer goods available was an increase in British and

European overseas trade. Indeed, it was this long-distance exchange that allowed Europeans and

colonists alike to enjoy many of the new products that became important components of their

consumption baskets. But the success of these long-distance trades required, in turn, the successful

exchange of goods between European traders and their indigenous overseas counterparts.

In 1670, the Hudson’s Bay Company was given a charter to trade for furs in the hinterlands of

Hudson Bay. Although a fur trade in North America was not new, there was a French trade through

Montreal and a Dutch and then English trade through Albany and New York, this particular English

Company was a new venture in a new area. The fur trade reflects the growth in the European hatting

and felting industries and the commensurate growth in the demand for beaver pelts. Although beaver

were harvested in many parts of North America, the highest quality pelts came from the drainage basin
 3

of Hudson Bay. Here, however, only Native Americans hunted, trapped and then traded the furs

making them the primary agents in a market where furs were bartered for European commodities.

The English managers who represented the Hudson’s Bay Company came as traders not as

colonists. Their assignment was to entice Native traders to exchange pelts and furs for European

commodities. Although in this process of exchange Indians gained access to goods, both producer and

consumer, that had previously been unknown to them, the existence of a different technology did not

make that technology automatically superior and the Indians dependent. The Hudson’s Bay Company

had to learn what these Native traders wanted to consume. The role of English as trader provides an

interesting counterbalance to the role of English as colonist. Ownership of land was not an issue and

neither was war. As the Hudson’s Bay Company quickly realized, war disrupted the flow of furs. As a

result, the traders sought to use their influence for peace even to the extent of setting up separate posts

for long-standing enemies.2

The detailed and, in many ways, unique set of accounting and trade records that is part of the

Hudson's Bay Company records provides a unique window on this period of early contact. Native

traders came down to trade at the posts and this interaction between those who were supplying goods

for the trade and those who were buying those commodities provides us with insight into the cultural

choices being made. The trade data show that the patterns of consumption changed significantly over

the course of the period examined here with a decline in the share of guns and other producer-related

objects and a rise in the share of what might be termed non-subsistence related commodities, luxuries

or amenities. In addition, the correspondence between the post managers and the London office show

that the Hudson’s Bay Company was committed to learning about its consumers and to supplying
 4

goods that were in demand while also experimenting with goods that might have a latent demand. “To

please the Indians” became the Company slogan. These same records document that native traders

were very careful and demanding consumers who influenced the quality and range of the goods

supplied.

Quality became the defining issue. In this world where neither side was in a position to coerce

the other, the question for the British traders was whether the Native traders would voluntarily choose

to buy the European technology. Commodities were offered by the Company and often rejected

because the quality of European commodities was not satisfactory. The letters from the head office in

London document an anxiety over the quality and the nature of the goods provided. This paper argues

that quality significantly affected the nature of the goods traded and defined the role of Native traders in

this relationship. In particular, as long as the Hudson’s Bay Company faced a bilateral monopoly

situation, the Company sought to increase the physical quality of the goods offered to Indian traders.

When the French entered the market in the late 1730s, Company attitudes towards quality

enhancements changed. Now the Company increased the price it paid for furs. In both situations,

however, Indian consumers were defining the trade and benefitting from the exchange.

The next section of the paper provides a short history of the Company and the data sources

used. This is followed by a discussion of the range of goods purchased over the period discussed here.

The following sections describe the ways in which the Company sought to understand the nature of

Indian demand and the role played by the quality dimension.

 5

Hudson’s Bay Company and Its Records

A British North American commercial fur trade grew from the interaction between Indians and

European fishermen with French traders gradually spreading along the St. Lawrence and Ottawa Rivers

seeking sources of furs in the hinterland. It was in this environment of a gradually expanding French

trade that the Hudson’s Bay Company was formed. On receipt of its charter in 1670, the Company

quickly established several posts around James Bay: Rupert’s House on the eastern side in 1671,

followed in quick succession by Fort Albany on the Albany River and Moose Factory on the Moose

and Abitibi Rivers (see Figure 1). Both of the latter posts were rudimentary structures; nevertheless,

the Company was seen as a competitor to the French trade. The reaction was swift. In 1686 the

French captured Fort Albany and Rupert’s House, although they were returned in 1693.

Despite the conflict and uncertainty, the English Company continued to expand its trading area

around the Bay. 1684 Port Nelson, later renamed York Factory, was built on the Nelson River. A

settlement was built even farther north on the Churchill River in 1689. But even these areas were not

physically secure. It was only with the Treaty of Utrecht in 1713 that the threat of military conquest

was ended and the drainage basin of Hudson Bay declared English. However, the economic rivalry

continued until the end of French rule in 1763. Our analysis here focuses on the trade through York

Factory to the Treaty of Paris in 1763.

York Factory, located on Hudson Bay at the mouth of the Nelson River, was the largest of the

Hudson's Bay Company's main trading posts. From 1713 to 1738, York Factory faced little

competition, but beginning in the mid-1730s, French traders began to move into the hinterland of York

Factory and to intercept Indian groups on their journey to the Bayside post. As a result, some Indians
 6

traded with the French and others proceeded down to York Factory. 3 This competition continued until

the end of the French and Indian wars in 1763. That the Hudson’s Bay Company only faced French

competition during the second half of the period allows us to examine the ways in which competition

changed Company actions regarding the determination of quality.4

During the eighteenth century, York Factory served a hinterland of nearly one million square

kilometers controlled by Algonquian-speaking Cree bands allies: the Siouan-speaking Assiniboine and

the Algonquian-speaking Ojibwa.(Figure 1) . Native population estimates for this period are, of

course, rough, and are likely downward biased. For the three main groups that occupied the York

Factory trading hinterland they are: Western Cree - 4,500; Plains Assiniboine - 2,700; and Northern

Ojibwa - 1,400. Existing estimates, however, are drawn from reports mainly for the latter part of the

eighteenth century and, in the case of the Ojibwa, the early nineteenth century. Because smallpox

apparently was not as severe a problem as further south, Arthur Ray, the preeminent historian of this

region, suggests that Indian population may have been somewhat higher than the numbers given above

during the period of our study.5 The size of the trading groups coming down to the Bay could vary

from a few traders to larger groups. Decisions concerning who would come down to trade were made

at the household or community level, with the Company only able to exert pressure through moral

suasion and the goods provided once native traders had come down to the post6.

European Commodities Purchased by Native Traders

The Company's method of accounting and its trading practices, although described elsewhere,

are worth summarizing.7 The unit of account used by the Company at all its posts was the Made

Beaver and all values were expressed in that unit. One Made Beaver was the price of a prime beaver
 7

skin, either parchment or coat.8 The use of a prime beaver skin as the unit of account shows the

importance of the beaver for the Company but it should also be recognized that the Company choose a

unit that was understood by its trading partners.9 The Official Standard or the list price gave the

official rate of exchange for trade goods and furs expressed in Made Beaver.10 The Official

Standard was used essentially for accounting purposes and as a guide to Company factors. Post

factors were permitted, indeed encouraged, to trade at more favorable rates both to cover the gifts

required by the ceremonial nature of the trade and to generate additional income for the Company. As

a result, the actual trading of furs for goods took place at a rate which has been referred to as the post

factor's Comparative Standard, which typically exchanged European goods at prices higher than the

official list price.11 The difference between these two rates was called the Overplus and all factors had

to provide a very close accounting of this number.12

To illustrate, in 1730 the total Official value of all European goods received in trade by Native

traders was 31,834MB. While the Official price of pelts sold by Native traders was valued at

47,656MB.13 The difference of 15,822MB was reported in the Company accounts as the Overplus.

So in 1730,York Factory's Comparative Standard exceeded the Official Standard on many of the

goods traded.14 However, offsetting the Overplus were Expenses incurred by the factors in the form

of gifts presented to Native traders during the ceremonies that preceded the actual trading. In 1730,

the total value of all gifts given during these ceremonies came to 1,900MB. Overall, Indian traders

received 33,734MB (31,834+1,900) worth of European trade goods in exchange for 47,656MB worth

of furs. Taking 100 to represent the Official price of furs, it follows that in 1730 the price of furs at

York Factory was 70.8. This price index is purely a method to estimate how the price received by
 8

Native traders changed over time and the fact that it is less than 100 does not indicate that the Indians

were being cheated.15 The price remained relatively stable around 70 until the advent of French

competition in the mid 1730s, when the price started to rise and reached 115 in the early 1750s.16

The accounting practices of the Hudson’s Bay Company were such that although we do not

know exactly what European good was purchased for each specific pelt, we do know the exact

number of furs traded in each year and the exact numbers of each type of European commodity that

were purchased in that year.17 Interestingly, the head office did ask in 1715 that its post factors

document what items were purchased with which pelts. The factors responded that the volume of trade

during the season was so great that they could not do so, but they also pointed out that the “Indians all

in a hurry” and they did not want to make them uneasy by protracting the trading process.18

Indian traders purchased a wide variety of goods, a list of which is given in Table 1. The goods

range over metal products, cloth, beads, clothing items, alcohol and tobacco. If we were to count each

different size as a separate commodity, there would be roughly sixty to seventy different commodities

being traded.19 There are, of course, a number of different ways in which we could group these

commodities. One set of broad categories would be producer goods, household goods, alcohol and

tobacco, and other luxury or amenity type items. Such a listing of the European commodities

purchased at York Factory is given in Appendix 1 for five-year intervals from 1716 to 1770.20 An

alternative categorization would be to think about those goods that complemented subsistence activities

which would include those in the producer and household categories and those that were superfluous to

that activity such as many of the consumption and amenity items.

 9

We have defined producer goods as those mainly used for hunting game and small furs. The

producer-goods category was dominated by guns and related supplies which, in terms of value,

accounted for 70 to 80 percent. Prior to 1720, more than 60 percent of Native income from the fur

trade was spent on producer goods. However, during the 1720s and through to the 1730s, the share

fell to between 40 and 50 percent; and starting in the early 1740s and continuing to 1770, the producer

goods share declined to about 30 percent. (See Figure 2 and Appendix 1) Guns clearly came to play a

less important role in demand. This change in consumption over the period did not merely reflect the

gun as a durable item. The quantity of powder and shot also declined. Indeed as is discussed below,

guns were not at all durable and they played little part in the harvesting and preparing of beaver, martin

or small furs for the trade. High quality pelts were destroyed if full of buckshot holes.21

There is, of course, the possibility of overlap between categories. Knives (producer) and

needles (luxury) could as easily be placed in the household goods category. Here we used mainly those

commodities most directly used for food and clothing.22 In value, kettles and blankets dominated this

class, with awls and fire steels being minor items. Over the period, the share of household goods in

expenditures declined from about 10 percent to just over 5 percent. The decline in the producer and

household goods shares in Native expenditure was offset by an increase in the share of expenditure on

what we term luxury, amenity, or non-subsistence related items. To further indicate the nature of

expenditure on these items we have combined these goods into three broad sub-categories: alcohol and

related items, tobacco and related items, and other luxuries which includes beads, cloth, jewelry, and

vermillion among a long list of goods.

 10

For much of the period, the most important luxury good purchased by Indians was tobacco.

There were a few large year-to-year fluctuations, but for the most part, consumption as a share of total

expenditure remained in the 15-20 percent range.23 At the same time there was a steady increase in the

share of expenditure on alcohol, albeit from a very low level.24 In fact, in the early period no alcohol

was received in trade, and until 1730 alcohol remained a relatively minor item, with a share of about 5

percent.25 With rising fur prices, especially after 1738, the share of expenditures on alcohol increased,

equaling or surpassing tobacco from 1750 to the end of the period.26 This increase in tobacco and

alcohol mirrors the same phenomenon noted by Carole Shammas: “Probably the most striking

development in consumer buying during the early modern period was the mass adoption by the English

and the colonials of certain non-European groceries” such as tobacco, tea, sugar, and rum. 27

The issue of alcohol consumption has been presented in the literature as a negative factor in the

social life of Native Americans. In the absence of more extensive trade data, it is difficult to compare

the role of alcohol in the Hudson's Bay hinterland with its role in other areas. The literature on the

American trade intimates that vast quantities were traded and that some Native groups were so

addicted that they would trade furs only for alcohol. Daniel Usner writes, for example, that the "English

government in Pensacola attempted to restrict Indian traders to fifteen gallons every three months,

which was considered a necessary amount for their purchase of food from Indian villagers;" while in

1772 several Choctaw chiefs complained that rum "pours in upon our nation like a great Sea from

Mobille and from all the Plantations and Settlements round about."28 Braund also comments on the

harmful effects of alcohol in the southern deerskin trade.29

 11

In 1740, before there was much French trade in the area, Indian traders received from the

Hudson's Bay Company a total of 458 gallons of alcohol. This amount, notwithstanding the comments

of some contemporaries and later historians, would have been hardly sufficient for five two-ounce

drinks per person per year for all Indians living in the York Factory hinterland or 0.05 gallons per

person. 30 At its peak, and allowing for alcohol received from the French, consumption per person was

perhaps double this estimate. Even allowing that only 5 percent of the Indian population was involved

in actual trade, the number of drinks per person among this restricted group may have risen at most

from 100 to 200 over the period.31 By comparison, McCusker provides estimates of annual per

capita across a range of groups from 1600-1800. Only gin consumption in England in the mid-1650s

at 0.02 gallons per capita is lower than our estimate for the Hudson’s Bay hinterland. In the 1740s,

consumption had risen to 1.40 gallons per capita, while the ration for British soldiers in the Caribbean in

the 1760s-1770s was 22.75 gallons per capita.32 “Even the sick poor in St. Bartholomew’s hospital

were entitled to three pints of beer a day, as well as an unspecified amount of ale.”33

In a more modern comparison, in 1925, the Canadian population 20 and older consumed 60

two-ounce drinks in the form of spirits; including beer and wine increases the total ethanol equivalent to

160 drinks.34 In 1998, the corresponding values were 120 drinks for spirits alone and the equivalent of

435 drinks with beer and wine added. The total amount of alcohol purchased by Indians could

therefore have sustained, by today's standard, no more than light drinking over the course of a year,

four two-ounce drinks per week at most.35

Although brandy (in this case, a grain based alcohol) was consumed, it was by no means the

only commodity consumed, and for much of the period brandy was dwarfed by other goods that have
 12

received much less prominence. Certainly alcohol was a major component of the gift-giving

ceremonies, accounting for 20 to 30 percent of these costs: however, inspection of the accounts

suggests that Indian traders incorporated the alcohol received in the gift stage with the amount that was

traded for in the trading stage.36 Until the late 1740s, alcohol amounted to less than 10 percent of the

total value of goods received, and was in most years less than half the trade in tobacco, a good that has

received far less attention. 37

Fine Brazil tobacco made up between 15 and 20 percent of Native expenditure throughout the

period. In terms of value, the consumption of tobacco was more than double that of alcohol until the

1740s. The type of tobacco being sold to the Indians was the most expensive available. Brazil roll was

shipped from Brazil to Lisbon, where it was sent on to London for re-export to the Bay. Some

indication of the importance tobacco can be found in the instructions to the post factors. The annual

letter in 1714 from the Company's head office to Governor Knight of York Factory included a price list

at which he could sell commodities to the British employees at the post. It contained explicit

instructions not to sell Brazil tobacco to Company employees unless "any is so damaged that the

Indians wont buy."38

Many other items among the wide variety of luxury goods increased in expenditure share; the

most important of these by far being cloth. Purchases of cloth, in fact, exceeded alcohol through much

of the period. Overall, the share of expenditure on these "other luxuries," increased from about 15

percent in the early years, to almost 30 percent by the end of the period.39 The luxury goods category

contain many of the same commodities we find in the probate inventories in Europe and in Colonial
 13

America during the period: beads, buttons, handkerchiefs, hats, lace, mirrors, rings, trunks, earrings,

and medals.

The breakdown of commodities shown above documents a remarkable transformation in the

consumption basket of those trading at York Factory from 1716-1770. As Kathryn Braund has noted

in the context of a more southerly trade: "The improved tools meant that traditional tasks were

completed faster and better" as "metal replaced stone, bone, and shell."40 Interestingly, the superiority

of the European iron technology to its bone, stone or shell counterpart has generally been taken as a

given. Yet the changes in the consumption patterns evident in the York Factory data forces us to ask

questions about what the quality of the European goods being presented for purchase. Did the mere

existence of a European technology mean that it was automatically better? To what extent did Native

American traders voluntarily choose the European technology? The trade data show that changes were

occurring. The correspondence between the post factors and the head office document the nature of

the perceived superiority or indeed, the lack of same, of many of the European goods and shows that

Native Americans were very active participants in determining the commodities purchased by their

furs.41

Language

A feature of the long distance trades which receives very little comment is that the buyers and

sellers of commodities often spoke completely different languages. Often we may assume that

unspoken gestures or a basic pidgin were sufficient for a barter trade to take place. For simple

exchanges this may be the case. However, the range of goods sold by the Hudson’s Bay Company

and purchased by Native traders speaks of a complex market relationship evolving over the seventy
 14

years examined here. In the case of the Hudson’s Bay Company trade, the Company managers

presumably spoke early modern English and Native Americans coming to York Factory were

Algonquian Cree speakers. As languages go, English morphology is relatively simple especially in

comparison to Native American languages which are very complex.42 So, in the repeated transactions

that were to occur how communication would take place is an interesting question.

The Hudson’s Bay Company entered the fur trade with the intention of being a repeat actor and

despite the early wars with France, it build posts around the coast line of Hudson Bay - Fort Albany,

York Factory and Fort Churchill. The Company hired salaried managers to act on its behalf and in

other work we have argued that through the use of positive incentives such as efficiency wages and

gratuities, the Company did an effective job in reducing the level of opportunism by its managers.

Indeed, the Company sought to create a social system in which the managers and workers were made

to feel part of a family. To this end, the London Directors indentured boys from Christ’s Hospital

London who were educated in writing and arithmetic to be apprentice managers and by the middle of

the eighteenth century it was from this group that many of the Company’s major post factors or

managers came.43

In the general letter of 1689 sent to the post factors, the Company directors expressed their

views of these apprentices:

[T]hey all write faire hands and Cast accompts, and being young will easily attaine the Lingua

and bee trained up in our service and if you think such Ladds may be useful in a few years to

send up with the Indians wee have thoughts yearely or every other year to take the like or a

greater number from the said Hospital. (Carlos and Nicholas, p.873)
 15

What is interesting about this letter, written during a time of instability around Hudson Bay, is the fact

that the Company Directors in London clearly recognized a need to have managers who could

communicate with their customers. They were sending over fourteen year old boys who would not only

learn the trade but who would also learn the language. In this, the Company saw the responsibility for

communication as lying with itself rather than with those Native Americans coming down to trade. Of

course, if we think of the trade as a series of repeated interactions between the same post managers but

often different Native traders, the Company had a greater incentive to invest in these communication

skills.

The incentive to invest does not necessarily imply that the investment was successful. But it

would appear that it, in fact, was. One of these Christ Church boys was Henry Kelsey, apprenticed in

1684. Kelsey was to become a distinguished explorer and trader. By 1700, Kelsey had not only

mastered Cree but also prepared a Cree dictionary which he sent back to London. E.E. Rich, the pre-

eminent historian of the Hudson’s Bay Company, argues that Kelsey, due to his knowledge of Cree

and his interest in expanding the Company’s ability to communicate with Native traders, had much to

do with the loyalty of the Cree to the English during this period . For its part, by 1702 the Company

had multiple copies of Kelsey’s dictionary printed up and sent back to the Bay. 44

Kelsey was also involved in the organized teaching of Cree. Rich argues that this was done so

that Company officials would be able to travel in the interior, he fails to articulate that the purpose of

traveling into the interior was to increase the number of Indians coming down to trade at the Bay

posts.45 Indeed, by the 1720s when the Company does seem to be somewhat more constrained in its

exploration of the interior, all traders continued to learn Cree. By 1750, when the French were moving
 16

west of Lake Superior and the Company had built Flamborough House up the Hayes River from York

Factory, Cree was the language of the trade. Rich describes the new master of Flamborough House,

Samuel Skrimshire, as “an unsteady man, lazy and unfit for forwarding any business, ... but ... he was

competent in the Cree tongue.” 46 When the French chose a route to the Rockies through

Saskatchewan rather than Missouri, this occurred in part because of ease of canoe travel and in part

because the voyageurs could use Cree the whole way. 47

The Company’s involvement with language continued throughout the century. Andrew Graham

who became a factor in the 1760s continued a tradition started by Kelsey. His Observations on

Hudson’s Bay contains dictionaries of a variety of Indian languages. Though here as with Kelsey’s

dictionary, these are essentially written phonetically for European use. It was not until the 1840s, that a

proper Cree Syllabary was invented by James Evans, a Wesleyan missionary working at Norway

House in the York Factory hinterland.48

The Quality Dimension

The existence of a commercial fur trade provided the possibility of a shift from bone, stone and

wood to metal-based products. Native traders now had access to metal products such as pewter and

brass pots, knives, scrapers, ice chisels and guns. But the trade did more than just present these groups

with an iron age technology, it also meant access to textiles, blankets, lace, thimbles, mirrors, alcohol

and tobacco. There is often the unspoken assumption that the mere existence of these commodities

implied that Native traders would want to have them. At its most extreme this would mean that the

worst quality European commodities would be sufficient in order to acquire furs; a beads and baubles

trade in which Native traders were powerless and naive.

 17

One of the most striking features of the letters written from the post factors to the head office in

London and from the directors to their post managers on Hudson Bay is the instrumental role played by

native traders in determining both the quality of the commodities traded and the actual commodities sent

in trade. Indian traders were not willing to accept just any commodity that the Company chose to send

over to the posts, despite the fact that they had made a few hundred mile journey down to the Bay.

From very early in the trade, the head office continuously asked whether the commodities sent

were satisfactory. In its letter of 1680, the directors ordered Governor Nixon to:

send us home by every return of our Ships all such goods as are either defective or not

acceptable to the Natives and to inform us wherein they are deficient And also to direct us

exactly as you can of what form, quality & conditions every sort of good is demanded there for

the best satisfaction of the Indians, And wee will do our utmost that you shall be supplied with

every species of Commodity in perfection.49

During the first decades of the trade given the large role played by metal products, the London

committee explicitly asked its managers to let them know about the performance of such goods. In its

letters, the directors expressed concern and even anxiety over the quality of the metal products that

were being sent to the Bay posts. As early as 1697, the Directors wanted to know “if any failure in any

of the guns and whose they were and any other commodity.”50 Two years later the official letter to the

Bay expressed the same desire to know about the quality of the guns sent: “And hope these guns will

prove good, or which pray advice, and note the name and make of those that proves otherwise.”

(1699) .51 In 1717, the Company wrote that:

 18

we notice what you write as to the guns sent you last year that they were not so good as those

you carried with you and are apt to believe what you write too true, but hope those we now

send you will prove otherwise for we have taken particular care therein and to encourage the

gunsmiths have advanced the price with them 3/- a gun more than we paid them for those you

carried with you.

Yet despite these assurances, the head office was still writing in 1724 that “we have taken care

to send you this year good guns if not better than ever were sent into the country....” Nine years later,

the official letter to the factories noted that “we have taken particular care about the hatchets and cloth

this year and doubt not but both will prove to the Indians’ satisfaction as well as everything we have

sent ...”(1733) Yet five years later, the directors again wrote that “we observe that the powder, cloth,

knives and hatchets proved bad and that the natives are very curious in choosing goods especially the

iron work” ... “we shall take care to have all the hatchets viewed and those with any breaks or flaws

thrown out.”(1738)

Although the assurances made by the head office take on a rhetorical bent when seen year after

year, there was, in fact, a serious underlying problem that took many years to understand. We now

know that the properties of metal in temperate climates and in extreme conditions are not the same.

These differences were, in part, worked out in the Canadian trade. Metal products are prone to severe

structural weaknesses under freezing conditions.52 Water that gets into any crack can cause frost

wedging. As a result guns could burst when fired and hatchets break. The Indians very quickly

realized that these sorts of flaws led to problems and were very choosy about the metal products that

they purchased.53 Indeed, although the head office often asked about the type of handles and the color
 19

of the wood, the post factors wrote back that “I have never knowd the Indians stand much upon the

handles so the blades were but good”...“I very seldom see that there is any manner of notice taken as

ye colour of ye stocks so the lock and barrell is good and well stocked and sett of some for light

colourd others for Dark its as their fancy deads.”54

In 1730, Thomas Macklish, chief factor at York Factory laid out the problem very succinctly:

We have sent home samples of several goods as is most taken with the natives ... and earnestly

entreat your honours that all hatchets sent may be clear of cracks and flaws, for the natives will

not trade them unless they are necessitated, for whatever crack is in the eye of the hatchet, and

come to strike upon the said hatchet in winter time, it surely breaks to pieces and is of no

further use to the Indians, for the extremity of the frost tries all ironwork, which we daily find by

experience at the factory. 55

As a response, the London committee pursued two strategies. The first was to try and make

the vendors understand what was happening to their products in the northern climate. The second was

to have some of these metal products made at the Bay posts. However, even here there was a

problem in terms of the quality of the bar iron sent out. In 1728, Macklish asked the Company to send

out good iron so that the smith could make ice chisels and scrapers without cracks and flaws.56

Given the preoccupation that can occur with metal products, it is important to note that

concern over quality applied equally to all the other goods supplied in trade. This is made very clear in

1739 when the chief factor at York Factory responded to the head office letter of the previous year to

explain the “Indians dislike of particular goods, their refusal and the reason for the same, to the best of

our knowledge.” James Isham lists nineteen items. For example:

 20

1. Beads large pearl, the Indians dislikes for the colour, both large and heavy, the shape not
being for the use they put them to ... so being few or none traded ... I send them home.
2. Kettles they complain of, for their being small for the weight, of a very bad shape, the
handles hanging over the side too far, the ears too weak. The kettles they like is of a round high
shape, light, strong ears, and the handles to lap just upon the side of the kettle.
4. Powder they complain is of an ashy colour, very weak and foul, and of too large a grain;
they finding when they put a little in their hand, it rubs to dust very soon, which is all the reason
of dislike I can give for it.
5. Blankets, is only their complaint of being too short by six or nine inches, they answering very
well in shape, make and colour.
7. Buttons is very weak shanked and quickly breaks; though size, shape and make, answers
extraordinary well.
9. Fire steels is very faulty, gives but little fire, and full large.
14. Knives are noways pleasing to the natives, they being [having] very bad blades and worse
handles, especially jack knives.
16. Twine is their complaint of being very weak and uneven, being as thick as packthread in
some places and as thin as thread in other places, and of a small size.
18. Rings is too wide, the generality of the female sex having small fingers.

Isham goes on to note that he had “sent home samples of the most part which is pleasing to Indians, and

most conducive to your honours’ interest.” This letter is very interesting because it shows the broad

concern about quality of all the products sent out to the Bay and also the fact that Native traders would

not buy what they did not like or saw as inferior. The definition of inferior is interesting because here

we have a situation where although the specific technology, i.e. iron, is superior, the actual products

such as hatchets or guns might not be.

Competition from the French

The correspondence to and from the Hudson’s Bay Company posts and the head office in

London during the decades to the mid 1730s documents the both the anxiety over quality as expressed

by the Company and the power of those coming down to trade. This anxiety over the quality of English

goods being sent to the Bay was compounded when French traders moved into the York Factory

hinterland. As Arthur Ray has well documented, Native traders were very quick to take advantage of
 21

this new situation.57 The influence of French encroachment was beginning to be felt as early as 1728,

when the factor at York factory wrote to London that “Never was any man so upbraided with our

Powder, Kettles and Hatchets, than we have been this summer by all the Natives, Especially by those

that border near the French.”58 By the end of the 1730s, when French traders had set up posts within

the drainage basin of York Factory (see Figure 1), the directors wrote in 1737:

We are informed that the powder, cloth, knives and hatchets [sent out from England] are not so

acceptable to the Indians as the same sort of commodities as are sent from France, and

therefore order that you make a strict observation wherein the difference consists between

our’s and theirs and send us your reasons both from yourselves and what you learn from the

Indians why the one is preferable to the other ...and send samples.

Two years later the directors wrote that they “received the two pieces of cloth and the sample of other

knives you sent us which you say are French, the worst piece is very course and loose and narrow and

not near so good or broad as what we have formerly and do now send, and therefore we do expect

you will write us the reasons why the Indians like the French better than ours which you have omitted to

do...”59

Competition, however, wrought changes in the structure of the trade with Indian traders able to

play English off against French. The result of this was a change in the prices paid for furs at the Bay

posts. The price index rose from roughly 70 to a high of 115.60 On the Indian side, this increase in

income generated by the fur trade is in part responsible for the shift in expenditures towards more

luxury goods.61 On the Company side, competition further increased the directors’ anxiety about the

quality dimension of English versus French goods. However, this anxiety which in the past had
 22

translated into attempts to discover how the goods could be made more pleasing to the Native

consumers, now began to change.

In 1740, the directors were still writing about the quality of their commodities in a language

similar to that of the previous decades. For example: “We have taken very great care about the cloth

for it is thick and strong of good wool and spinning full breadth and well dyed, much better then the

french cloth, we do not doubt but it will be very pleasing to the Indians.”62 However, by the end of the

decade the tone of the letters began to change. Now fault lay not just with the products but also with

the users:

Upon examining strictly into the complaints made of the guns we find it is chiefly the Indians

own faults by not putting dry and proper woods in when they charge them and by firing them

when the muzzle is stopped with snow which will burst the best gun that can be made, but as to

the flaws we have given such strict orders that we hope you will hear no further complaints in

that head, but if upon the armourers examining the guns now first any are found so defective as

to be unsaleable send them home.63

In 1752, the directors upon receiving four guns sent back to London were of the opinion that “we think

its very extraordinary after having wrote you so fully last year on that head, the defects that you

condemn them for are only fire flaws” which always happens. In the following year, the factors were

told that “on no account send home any whose only defects are a few small fire flaws” arguing that

these fire flaws were not “any real defect by a mark of their hardness”, yet it was exactly these same

fire flaws that had been at issue from the beginning.64

 23

These same changes in attitude can be found not just for guns but also in other commodities

traded. Among the luxury goods, beads were a very important trade item. Although often denigrated

as merely beads, they had to be the correct color, size and shape or they would not be purchased. In

fact, they could come from as far afield as Venice or China. In 1718, the general letter noted that “as

to ye large purple and small white beads, there are none to be had in England, but hope another year to

furnish you with both.” The care with beads extended over to buttons with the Company asking in

1720 if the “coat and waistcoat buttons, whether solid or hollow, pewter or other metal” are in the

proper sizes. In 1724, Governor Macklish wrote that “a good quantity of unsizable white Beads sent 3

years ago by reason your Honours could not procure at that time those that were sizable as I am

informed. Be pleased to order their home for they will never be traded here.”65

Concern about beads continues through the whole period and in the 1750s, the directors sent

out new sorts of beads. Their names are evocative - white barley corn, red flower black barley corn,

round white with double flowers in read and green, and new sorts of China beads. These beads were

expensive. In 1752, the letters to the Bay note that “from their scarcity are at an excessive high price”,

which translated into a price of six made beaver per pound. In comparison, a blanket cost 7 made

beaver. Yet by 1762, the directors wrote that

the large long beads returned are so triviall a quantity we think it very strange they could not be

traded by mixing a very few at a time among the others, which would very speedily have

exhausted them, and ought to be the constant practice in trading with the Natives, in order to

get rid of every article from which they are about to withdraw their regard, and if not adhered

to will from the fickle disposition of the Indians constantly leave a large quantity of various
 24

kinds of useless goods in the Factory. One thing certain to be depended on is that as we never

buy any goods but what we intend to be the best of their kinds, so neither will we, unless

misled, purchase any species, but what shall be most agreeable to the Natives for trade.66

This letter documents quite clearly the large shift that has occurred in the head office approach

to the conduct of the trade. Whereas in the decades up to and into the 1740, the London committee

wanted to know what was wrong with the commodities sent out; to know ‘how the Indians’ liked them;

to have the post factors mediate this information. By the 1760s, attitudes had changed. Now Indians

rather than having consumer choice were deemed ‘fickle’ and the post managers agents loyalty was

questioned. This shift occurs with French competition and the resulting decline in Hudson’s Bay market

share and in profitability.67 In essence, prior to competition, the Company could afford to allow

commodities to change along the quality dimension with inventories of low demand commodities

building up at the posts or being sent back to London after a number of years. With the increase in the

prices paid for furs, the Company could no longer allow European goods to sit unsold on the factory

shelves. But rather than assume that the commodities sent out were inherently flawed or inferior, the

consumers and the post factors become the source of the problem. Ironically, despite this change in

attitude, native traders could not be forced to buy undesirable goods and, with the French presence,

Indian traders could at any time take their custom elsewhere.

New commodities

The quality dimension as discussed in the preceding section argues that through their actions

Native American traders were able to enhance the quality of European trade goods. They were able to

buy guns, hatchets, cloth, kettles, knives and twine better suited to their environment and needs. At the
 25

same time, the existence of the Company depended on the number of furs brought down to trade. So

in addition to trying to ensure that the goods sent over were pleasing to the Indians, the Company also

sought to find “new” commodities that would entice more Indians to the Bay posts or have the existing

traders bring more furs. These “new” goods also served a dual purpose in that the Company would sell

them only for specific pelts, such as martin, which might be high demand on the London market.

The first evidence of such an attempt comes in 1697 when the Directors write and ask the

factors “if you could persuade the Indians to weare our Sheepe Skins drest with the wooll which maybe

usefull to keepe them ware wee could supply you yearely at a reasonable price.68 Two years later the

London committee wrote that they “were sorry the Indians will not approve our Sheepe Skins.” But

this did not stop the attempt. In 1702, factors were requested to try to get Indians to wear Cloth to

lessen the quantity of coat beaver brought to the posts. But this too failed.69

In 1712, the directors sent out brass handcuffs, or bracelets, which were to be traded be

traded for martins only and at four martins per pair. These handcuffs never sold. However, this was

not because the Indians did not use them; rather that they made them themselves. When requested in

1728 by the London committee to buy back old kettles from the Indians, the chief factor at York

Factory wrote home that they could not do so because the Indians “always converted them into fine

handcuffs and pouches which is of greater value with them then twice the price of the kettles.”70

Twenty years later, the Company was still pursuing this strategy of testing new goods. In

commenting on the trade goods sent, the head office wrote “you will find by the Invoice a dozen silk

handkerchiefs and one doz of trunks which we send you by way of trial to see how Indians like them
 26

and would have you rate them ... the handkerchiefs at one and a half beaver each and the trunks at two

beaver each.”71 With the movement of French traders into the region, the directors wrote:

Having received great encouragement from York Fort to send them a quantity of brass collars

which being represented to us as very pleasing to the natives and much to our interest by

encouraging the Indians to leave the French, from whom they have some of the most inferior

sort made of iron, we have thought it necessary to send you a dozen of two sizes finely polished

to try and make an experiment how far you can improve the trade in them with the natives to

our advantage ... and have settled the standard at four beaver per collar.”72

Brass collars were not liked and two years later, in 1741, the factories were told that “since the brass

collars are not esteemed by the Indians according to their value we desire you would dispose of them in

the best manner you can.” Despite the experience with the brass collars in 1743, the Company sent

out earrings, which were as unsuccessful.73

What should be recognized is that there was a whole range of these luxury-type items

(Appendix 1) which did sell and which grew as a share of Indian expenditure. These items which

include beads, combs, magnifying glasses, looking glasses or mirrors, sashes, scissors, thimbles and

shoes mirror the inventories of European and colonialist households alike. No argument is being made

here that these groups all used these commodities in the same way, but they raise further questions

about the nature of the Company’s perception of Native Americans as consumers and questions about

the meaning of consumption in a given society.

 27

Conclusions

The Hudson’s Bay Company came to British North America as trader rather than as colonist.

The very existence of the Company depended on the cooperation of Native Americans who voluntarily

chose to bring furs and pelts down to the Bay posts to exchange for European commodities. The

documentary evidence provided by the account books show that not only did native traders purchased

a very wide range of goods, but also and perhaps more importantly that the share of luxury goods rose

over the decades examined here, while the share of metal goods including guns and kettles declined.

Underlying these changes in expenditure shares are a number of issues that have been relatively

neglected in the literature. Although metal technology was superior to the bone, stone and shell that

Indians had been using prior to contact, the fact that metal goods were available does not make them

naturally superior. The correspondence between Hudson’s Bay Company factors documents the

problems associated with using a metal technology in the severe climatic conditions of the Northern

colonies. Native traders were not willing to buy a gun because it was a gun. They would only buy

those commodities that they believed were capable of withstanding the extremes of the winter weather.

Many guns, hatchets, kettles, and knives were sent back to London deemed inferior. Quality also

extended into items such as beads, cloth, rings, blankets. Here the commodities had to have the

attributes that native traders found pleasing. If too large, too small, the wrong color, those commodities

would also be shipped back to London or languish on the Factory floor for years.

This interaction documents very clearly that Native groups were not dependent on European

commodities or European technology. They bought what they wanted and left the rest. It was Native

traders who set the terms for the exchanges first by receiving higher quality items for any given fur and,
 28

then with French competition, by receiving higher prices for furs traded. In a voluntary exchange such

as that between British and Indians as traders, the exchange requires that each are satisfied. This is the

nature of the relationship during the eighteenth century in the hinterlands of Hudson bay. Perhaps the

differential role of European as trader and as colonist plays out into the longer term pattern of conflict

and peace in the various British North American settlements.

 29

Endnotes
1. Shammas, "Changes in Consumption."

2. The Hudson’s Bay Company set up Fort Churchill as the main trading post for the Athabascan-
speaking groups who were long-standing enemies of the Algonquian-speaking Cree bands to the south.

3. Despite the great distances involved, Indian traders received information from those trading at
Fort Albany or Moose Factory. In fact, company factors oftentimes asked Indians who had come in to
trade to carry letters between the posts.

4. Although there had been a french presence at the bottom of the Bay from the beginning, it was
only with the sharp increases in European prices during the 1730s that the French were able move
further inland and change the prices paid for furs. See Carlos and Lewis 1999.

5. These estimates are inferred from Ray, Indians, p. 105, 111.

6. Once down at the Bay, company factors sought to induce return by making some Indians
trading chiefs and presenting them with uniform coats and hats. The success of this strategy has been
questioned as presents were a normal part of Indian relations. Finding new goods, as discussed later,
was another strategy to induce more furs and return visits.

7. Ray and Freeman, Give Us Good Measure, were perhaps the first to provide a clear
description of Hudson's Bay Company accounting practices.

8. Parchment beaver were pelts from freshly-caught animals; coat beaver were pelts that had been
worn for some time by the Indians. See Carlos and Lewis, "Indians."

9. The use of a commodity standard was not unusual in itself. Gold and silver were, after all, also
commodities. In parts of the Royal African Company trade, iron bars were used as the standard.

10. The use of the Official Standard and the fact that it was changed only infrequently has led
some such as Karl Polanyi and Abraham Rotstein to suggest that the Canadian trade was tightly
administered from London. Polanyi, "Economy;" and Rotstein, "Trade."

11. Ray and Freeman an excellent account of method by which furs were priced relative to
European goods. Ray and Freeman, Give Us Good Measure, chs. 6 and 7.

12. The construction of the accounts was one of the main ways in which the head office could audit
the activities of their post factors and ensure that they were not cheating the company. For further
discussion of this issue, see Carlos and Nicholas, 1990.

13. The Official price of prime beaver pelts (coat or parchment) was 1MB, smaller or inferior
beaver pelts were 1/2MB, marten were 1/3MB, and all other furs were assigned prices based on the
size of the pelt and their desirability.
 30

14. The Comparative Standard by item was not generally recorded. Goods amenable to division
such gun powder or cloth may have been more affected, but there appears to have been no systematic
relation between the type of good (producer, household, luxury good - as described in Table 1), and
the size of the markup. It seems, then, and Ray and Freeman have also made this point, that although
the markups varied by year, the relative prices of European goods stayed much the same. See Ray and
Freeman, Give Us Good Measure, pp. 268-70.

15. The Company had other costs that had to be covered including salaries, head office expenses,
tariffs and transportation. To date, there have been no estimates of the total costs of operating the
trade. The fact that the index is less than 100 should carry no normative connotations. It is purely an
accounting device.

16. As we show in other work, an index price of 70 was such that it maintained the stock of
beaver around its maximum sustained yield and protected the stock from over-exploitation, something
which occurred when the index rose.(Carlos and Lewis, 1993)

17. This level of detail is available for each post in each year. To date, we have used this material
to model formally the response of Native households to the higher prices at the posts. See Carlos and
Lewis, 2001.

18. HBC MG 20 A11/114 General Letters Inward 17th September 1716. Native groups had to
make the long voyage back up the Nelson river to their camps and did not want to stay at the
Bay longer than necessary.

19. Braund, Deerskins, p. 130 for a list of goods for the southern trade. The two lists are quite
similar. This should not be too surprising when one considers that households in Europe and in the
colonies had many similar items.

20. The annual series is available from the authors. The commodities purchased prior to 1716 are
available in the records, but the war years make this period not representative of the consumption
demands of Indian traders.

21. Probably too much attention has been paid to the gun. As Bellesiles documents quite clearly in
Arming America: The Origins of a National Gun Culture, guns in this period were notoriously
unreliable.

22. Given the data provided, the interested reader can always just move the categories around.

23. For tobacco, in particular, European wars posed a serious problem. War disrupted the supply
routes. This means that our measure of expenditure is probably a lower bound on what would have
been purchased if the supply of tobacco was unfettered.

24. An increase in alcohol consumption is also identified by Ray and Freeman, “Give Us Good
Measure”.
 31

25. For the years before 1720, Figure 4 assumes a small volume of brandy was received as gifts.
What is very important to ask is just how important alcohol and other European goods were relative to
total Native consumption. Even if alcohol made up fifteen percent of total expenditure in fur trading
activities, because fur trading activities probably made up no more than twenty percent of all activity,
then alcohol probably accounted for no more than five percent of the total consumption basket. For
more discussion of this issue, see Carlos and Lewis, 2001.

26. Shammas describes a similar increase in alcohol consumption in mid-eighteenth- century

England. Note that it was only after 1738 that the French became a significant presence in the York
Factory hinterland. Shammas, "Changes."

27. Shammas, “Changes” p. 178.

28. Usner, "Frontier Exchange," p. 178. See also Mancall, Deadly Medicine.

29. Braund, Deerskins, ch. 7.

30. The population of the York Factory hinterland is estimated at about 8,600, implying
consumption per person of 0.06 gallons. There are 160 fluid ounces in one Imperial gallon.

31. For a more extended discussion of alcohol consumption in this region see Paludetto, "Native
Alcoholism."

32. McCusker, “The Business of Distilling”, Table 8.1, p. 202.

33. Picard, Restoration England, p. 157.

34. Segal, "Analysis," pp. 28-29.

35. It seems likely that most drinking was concentrated over the summer months, which would
have allowed perhaps 20 drinks per week over a 10-week interval. There are also reports of very
short periods of binge drinking. Also the trade data do not suggest that furs were only being traded for
alcohol.

36. An important insight of consumer theory is that rational consumers will base decisions on the
relative prices of goods at the margin. According to this principle, Native consumption of brandy
depended solely on the cost of brandy in trade (4MB per gallon at the official rate) and was unaffected
by the quantity received as gifts. Inspection of the Company accounts suggests Native behavior in fact
conformed to this notion of rationality. Note, for example, that from 1720 to 1725 alcohol received as
gifts fell 50%, from 518MB to 254MB; whereas total alcohol consumption increased only slightly from
1,017MB to 1,041MB (Appendices 1 and 2; alcohol includes brandy and strong water).

37. An exception is Wimmer, "To Encourage a Trade," who recognizes the importance of this
product.
 32

38. This and the following references to the Head Office letters are from the Hudson's Bay
Company's, London Correspondence Outward. Note: to the extent that tobacco was made available
to the servants it was English (Virginia) roll tobacco.

39. How important was alcohol and the other European goods relative to total Native
consumption is necessarily a matter of speculation, but we can suggest orders of magnitude. In western
Europe, prior to 1700, typical households allocated about 80% of their income to food; and in late
eighteenth-century Philadelphia the minimal maintenance of identured servants was roughly 80% of their
total compensation. See Cipolla, Before the Industrial Revolution, p. 30; Grubb, "Auction," p. 588.
Assuming that at least 80% of Native income went to supplying subsistence, the European luxury
goods could have accounted for no more than 20%, likely less since Natives produced some luxuries
directly. Since at its peak, alcohol was about 25% of European luxury good consumption, alcohol
could have comprised no more than 5% the total Native consumption basket, and was generally much
less than this. Tobacco's share might have been 5% throughout the period, while estimates for other
luxury goods are: cloth and gartering - 2-3%, beads - 0.2%, vermillion -0.2%, other items less.

40. Braund, Deerskins, p. 130.

41. Ray, “Indians as Consumers” has also examined this question. As Ray correctly points out,
even though iron was considered a superior technology to bone and wood, it was not nearly as easy to
fix a broken metal implement. At issue is not just a crude comparison of two technologies, but how that
new technology would conform to the needs of those using it.

42. Pinker, The Language Instinct, p. 120.

43. See Carlos and Nicholas, “Agency Problems” for a more complete discussion.

44. Rich, Hudson’s Bay Company, p. 373-4. This dictionary was phonetic and created for
English speakers. Nonetheless, it represents a level of commitment to the trade.

45. Rich, Hudson’s Bay, p. 390.

46. Rich, Hudson’s Bay, p. 585.

47. Rich, Hudson’s Bay, p. 523.

48. Cree Syllabary. See www.omniglot.dabsol.co.uk/language/writing/cree Evans Cree syllabary

is still in use today. A Cherokee syllabary was created in 1821 much the same time as Evans was
working on his Ojibwa syllabary. However, the Cherokee syllabary was a Latin-based script. . Evans
had tried to produce a Latin-based orthography for Ojibwa in 1820 and failed. The syllabaries he
created were partly based on Pitman shorthand.

49. Quote taken from Ray, “Indians as Consumers”, p. 258.

 33

50. Hudson’s Bay Company Records, London Correspondence Outward - Official. All quotations
taken from this same source unless otherwise noted.

51. A related issue but one not addressed here, is that the London directors also used this
information to impose quality controls over its suppliers.

52. The impact of freezing even on the most superior technology was evident in the explosion of the
Challenger space shuttle.

53. See Ray, “Indians as Consumers” for discussion of this point.

54. Hudson’s Bay Company Records, General Letters Inward, Letter from James Knight, 1716.

55. General Letters Inward.

56. The York Factory daily post journal for 1742 notes that one of the major activities of the smith
during the winter was to make scrapers and bayonets for the trade.(HBC MG 20 B 1M156)

57. See Ray and Freeman, ‘Give Us Good Measure’; also Ray, “Indians as Consumers”
documents the Hudson’s Bay Company’s long preoccupation with French goods.

58. General Letters Inward.

59. London Correspondence Outward - Official.

60. This increase in the price of furs increased income earned by the fur trade but also increased the
harvesting of furs by Native Americans. (Carlos and Lewis, 1993,1999).

61. See Carlos and Lewis “Trade, Consumption and the Native Economy (2001)”.

62. London Correspondence Outward.

63. London Correspondence Outward, 1749.

64. London Correspondence Outward.

65. London Correspondence Outward.

66. London Correspondence Outward. Emphasis added.

67. See Carlos and Lewis, 1999.

68. The purpose here was to try and reduce the amount of coat beaver that was being brought to
the posts. Coat beaver were pelts worn by the Indians for a number of seasons and whose price in
London was declining. See Carlos and Lewis 1999.
 34

69. London Correspondence Outward. Over time, blankets did come to be used as shawls worn
over other items of clothing.

70. London Correspondence Inward.

71. London Correspondence Outward, 1732.

72. London Correspondence Outward, 1739.

73. London Correspondence Outward.

 35

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