Agricultural subsidiary of Hudson's Bay Company.

The Puget Sound Agricultural Company (PSAC), which operated during the mid-nineteenth century as a subsidiary to produce food and supplies for the Hudson’s Bay Company (HBC), was the first example of corporate farming and ranching in the Pacific Northwest. With both of its farms located south of Puget Sound, the British-owned PSAC began having problems after its land fell under US control. The Company then encountered constant encroachment and resentment from American settlers and politicians until it shut down.

Established in 1839, the PSAC operated two large farms: one at Nisqually, near present-day Dupont, and another at Cowlitz Prairie, near present-day Toledo. Nisqually was the larger of the two, with about 167,000 acres of land. An ulterior motive for the HBC was to establish a British presence in the Puget Sound region and bolster British claims to the area. In 1841 the Company made its first effort to settle Nisqually with people from the Red River Colony in Manitoba. However, only thirteen families completed the journey, and most of them drifted away after a few months. This was the only British effort to colonize the Puget Sound area.

Nisqually became mostly a ranch for sheep and cattle, though it did engage in some farming. Its first superintendent was Dr. William F. Tolmie, who managed Nisqually from 1843 to 1859 and was its Chief Factor from 1856 to 1870, though he did not live there after 1859. Tolmie originally hired Canadian, French, and Scottish workers as indentured servants, but soon began to employ Kanakas (people from the Sandwich Islands, near Hawaii) and Native Americans. Nisqually reached its peak production in the mid-1840s, when it had about 5,000 cattle, 9,000 sheep, and several hundred horses. Tolmie made efforts to breed better sheep, but most of the animals at Nisqually were of inferior quality. After Tolmie left Nisqually, his assistant Edward Huggins took charge of the farm’s daily management.

Cowlitz Prairie, which covered about 3,000 acres, harvested most of the Company’s wheat. This farm had more management turnover than Nisqually, but its farming methods remained consistent and reflected a blend of contemporary English farming practices and frontier pragmatism.

After the treaty of 1846, which established the 49th parallel as the border between US and British territory, the PSAC began having problems with American settlers. The treaty mentioned the PSAC specifically and validated the Company’s lands, but stated that PSAC holdings could be sold to the US at a later date. After this treaty, American settlers began to resent the PSAC and felt that they had a right to its land. Many settlers encroached on the Nisqually farm, where they illegally used Company buildings, destroyed fences, stole horses, plowed crops, and killed sheep and cattle. Public opinion supported the settlers, whom local juries were reluctant to convict when the Company filed lawsuits. By 1863, over 1,000 Americans had settled on PSAC land.

The PSAC also came under attack politically after the treaty of 1846. Washington territory’s first governor made repossession of PSAC lands a major issue and brought it to the attention of State Department officials. In Pierce County, beginning in 1852, the PSAC was forced to pay taxes on the Nisqually farm. However, the PSAC became upset because it was the only landowner in the county paying taxes, and in 1859 won a legal challenge to the assessment.

Finally, in 1869, the US negotiated an agreement with the British government to buy all PSAC lands. Soon afterward, livestock and other movable property were transported to Canada. By 1870, when the Company closed its farms, most had already deteriorated because of encroachment by American settlers.

The Puget Sound Agricultural Company never became very profitable during its thirty-year history. The Company did make a profit in most years, but not enough to justify the amount of capital invested. Between 1838 and 1870, stockholders received only seven dividends. Even this meager success, however, exceeded many dismal predictions that had accompanied the Company’s founding. Despite the lack of financial returns, the PSAC succeeded in opening new lands for farming and ranching, played a key role in the region’s economy, and was an important element of the Hudson’s Bay Company. The HBC purchased much of the wheat from the PSAC, most of which went to Russian fur trading posts in Alaska which the HBC supplied in exchange for a 10-year lease on a portion of Russia’s North Pacific coast. Some of the PSAC’s products went to the Hawaiian islands, and American settlers provided another market. The PSAC also tried to sell livestock products overseas, but its sheep and cattle were so inferior that their products could not sell in Britain.