The country being thus depopulated, the traders and their friends from Canada, who, from various causes already mentioned, were very much reduced in number, became confined to two parties, who began seriously to think of making permanent establishments on the Missinipi river, and at Athabasca; for which purpose, in 1781-2, they selected their best canoe-men, being ignorant that the small-pox penetrated that way. The most expeditious party got only in time to the Portage la Loche, or Mithy-Ouinigam, which divides the waters of the Missinipi from those that fall into the Elk river, to despatch one canoe strong-handed, and light-loaded, to that country; but, on their arrival there, they found, in every direction, the ravages of the small-pox; so that, from the great diminution of the natives, they returned in the spring with no more than seven packages of beaver. The strong woods and mountainous countries afforded a refuge to those who fled from the contagion of the plains; but they were so alarmed at the surrounding destruction, that they avoided the traders, and were dispirited from hunting, except for their subsistence. The traders, however, who returned into the country in the year 1782-3, found the inhabitants in some sort of tranquillity, and more numerous than they had reason to expect, so that their success was proportionably better.
During the winter of 1783-4, the merchants of Canada, engaged in this trade, formed a junction of interests, under the name of the North-West Company, and divided it into sixteen shares, without depositing any capital; each party furnishing a proportion or quota of such articles as were necessary to carry on the trade: the respective parties agreeing to satisfy the friends they had in the country, who were not provided for, according to this agreement, out of the proportions which they held. The management of the whole was accordingly entrusted to Messrs. Benjamin and Joseph Frobisher, and Mr. Simon M'Tavish, two distinct houses, who had the greatest interest and influence in the country, and for which they were to receive a stipulated commission in all transactions.
In the spring, two of those gentlemen went to the Grande Portage with their credentials, which were confirmed and ratified by all the parties having an option, except Mr. Peter Pond, who was not satisfied with the share allotted him. Accordingly he, and another gentleman, Mr. Peter Pangman, who had a right to be a partner, but for whom no provision had been made, came to Canada, with a determination to return to the country, if they could find any persons to join them, and give their scheme a proper support.