Canadian Institution: Hudson's Bay Co.

MERCHANT PRINCES: COMPANY OF ADVENTURERS, VOLUME III, By Peter C. Newman, Viking, 502 pp., $25

DEEP in Canada's north, amid ice floes, polar bear, and Arctic fox, live the Inuit who long hunted these animals for their pelts. And for three centuries, alongside at frigid, lonely outposts were the Hudson's Bay Company's one-man stores, trading guns and supplies for the valuable furs.

It was a difficult, poor-paying job that somehow elicited tremendous loyalty from the fur-trading "Bay Men," whose lives are so engagingly and intelligently recorded in "Merchant Princes," the third in a three-volume history of the company by Peter Newman, one of Canada's best-known journalists and authors. This is a book about a company, but it is not a "business" book by any means.

Anyone who has pored over a map of Canada and its remoter northern climes and wondered why places like Moose Factory, Repulse Bay, Port Harrison, or Inuvik exist will discover why from Newman's portrait of culture clash, self-serving corporate benevolence, and the personalities who created and maintained one of the world's greatest corporate empires.

Today, the 320-year-old Hudson's Bay Company - which once ruled 1/12th of the earth's land surface - is still humming along, a Canadian institution and the Western Hemisphere's oldest company. Newman has made the company his vehicle for explaining and exploring an intriguing chunk of Canada's history and territory - which the company pioneered, jealously guarded, and ruled for generations with a mixture of harshness and quasi-benevolence. "The Hudson's Bay Company is permanently woven into the marrow and

the dreams of this country," Newman writes. "Its geography became Canada, its history the new nation's dowry. More important, the Company's frontier presence spawned the country's founding ethic."

Tracing the growing and shifting lines of corporate power, nearly a third of the book is devoted to the career of Donald "Labrador" Smith, who started with the company as an apprentice clerk. Through dogged determination and single-minded self-centeredness, he became "Governor," or head, of the company.

It also propelled him into the heart of the stuffy, class-laden, British corporate culture of the company's London office and its board of ultraconservative businessmen. Far from striking an adulatory tone, the book evenhandedly points out the company's many shortcomings, including its board's apathy and the missed opportunities that might have made the company a dominant force today, instead of a predominantly historical one. For all its undeniable force, it made remarkably little money.

"The Hudson's Bay Company was confronted by so many dazzling business opportunities it refused to exploit that it's a miracle it didn't founder out of a sense of corporate shame. Here was a company that dominated the world's fur trade for most of three hundred years yet never made a single fur coat."

But the book is also an exploration of Canada's less-understood cultures, with chapters on the company's long, complex relationship with the Inuit. Newman goes to great lengths to explain the dimensions of what might appear only as exploitation by the white man. At one point, for example, he describes the barter for pelts as a transaction "with each side slyly certain it was exploiting the other. The Inuit wondered why the white men wanted the perfectly useless fox and polar bear pelts. The Bay men, on t he other hand, knew only too well what these 'worthless' furs were fetching on the London market."

Research combined with crafted, fluid prose are the strength and beauty of the book. More than 1,000 interviews, plus extended quotes, lend a tapestry of detail to an authoritative portrait of the period and the individuals caught up in the company and Canada's wild landscape. The curiosity and tragedy of the story revolve around the power and greatness of the institution and its simultaneous inability to capitalize on its advantages.