In 1798, troubles arising among the partners, the seceding party formed a rival firm popularly known as the “X.Y.” from those initials following the W. in N.W. Company.[2] Jealous and rancourous friction arose again and the two companies were amalgamated in 1804 into one firm called the North West Company. It became a powerful body, purely Canadian and with exclusive privileges. Sir Alexander Mackenzie was its moving spirit and his cousin Roderick became one of the chief agents.
Meanwhile the great North West Company by 1806 had spread over the continent from the Great Lakes to the remote side of the Rocky Mountains and had established a trading post at Columbia River. By 1812 it had fifty agents, seventy interpreters and over one thousand one hundred voyageurs. Thus when the partners, mostly Scotchmen, met at Fort William they were surrounded by retainers and they acted like barons of old, the story of their feasting and lavishness lighting up the tale of the otherwise dreary days--the old north west days--and when they met at their famous Beaver Club in Montreal they added considerable magnificence to the social life of the city.
Meanwhile another rival to the North West Company was arising in the person of the founder of the Astor family. John Jacob Astor, born in the honest little village of Waldorf, near Heidelberg, on the banks of the Rhine, arrived in America in a ship bound for Baltimore in the month of January, 1783. In 1784 he settled in New York and soon turned his attention exclusively to the fur trade. The peltry trade not being regularly organized in the United States, he determined to go to Canada, the seat of the main supply. Accordingly he made annual visits to Montreal and thence shipped furs to London, as trade was not allowed otherwise than directly with the old country.
In 1794 or 1795 a treaty with Great Britain lifted the trade restrictions and a direct commercial intercourse was established with the United States. Mr. Astor then made a contract with the North West Company and he was now enabled to ship furs direct from Montreal to the United States for the home supply. In 1809 he obtained a charter from the legislature of New York state incorporating a company under the name of “The American Fur Company.” In 1811 he bought out the Anglo-Canadian Company, the “Mackinaw,” whose headquarters were at Michillimackinac, and merging it into the American Fur Company, called it the “South West Company,” or the “Pacific Fur Company,” as it afterwards became known. He associated with himself, as his agents several of those who had hitherto served the North West Company of Montreal, among these being Alexander McKay, who had accompanied Sir Alexander Mackenzie in 1789 and 1793, Duncan McDougal and Donald Mackenzie. He planned headquarters at the north of the Columbia River. Accordingly the expedition was sent out in duplicate to the mouth of the Columbia River, one-half going on a six-months’ voyage around Cape Horn in a sailing vessel, the Iroquois, the other marching overland or canoeing on lakes and rivers in eighteen months from Montreal via the Mississippi and the Missouri, to the mouth of the Columbia River.