Letter from Vilhjalmur Stefansson to George Jennings, 30 August 1921

^ Jennings ^

August 30th, 1921.

Dear George:

This is with reference to our conversation when I was about to take the train in Missoula.

The Stefansson Exploration and Development Company, Ltd., is incorporated with an authorized capital of $100,000., under the laws of the Provinces of British Columbia. The Company has through the act of incorporation varied powers which enable it to engage in almost any kind of business activity. From the business point of view, our present purpose is to secure a fifty years' lease of one of the islands to the north of Canada. After the lease is secured we expect to stock this island with reindeer.

I have already promoted successfully a similar company, known as the Hudson’s Bay Reindeer Company, with offices at 205 Main street, Winnipeg. That company is being financed entirely by the old Hudson’s Bay Company. We are spending about half a million dollars this year in bringing the reindeer from Norway into Baffin Island. All of us who are concerned take the success of that enterprise as a foregone conclusion, a thing which hs shown best by the fact that the Hudson’s Bay Company have refused to allow me to buy any more shares in the Hudson's Bay Reindeer Company than the number I was entitled to buy at per by my original agreement with them. While that company, we all feel sure, will certainly become a success, I shall unfortunately profit very little by it because my own lack of capital compelled me to surrender most of the material advantages to the Hudson’s Bay Company. One of the reasons for the incorporation of the Stefansson Exploration and Development Company, Ltd., was that I wanted to develop the same idea in another part of Canada in such a way that I myself and possibly my friends might secure a large part of the profit instead of having it go to a company already rich, as in the case of the Hudson’s Bay Company.

One of the things I have made up my mind to is that I want to keep control personally of the stock of the Stefansson Exploration and Development Company. In other words, the total amount of money which we will allow to be put into the company by others than myself will never be more than forty-nine per cent of the total capitalization. There are several reasons for this, but one is that if the Board of Directors gets into the hands of men not thoroughly familiar with the climate and resources of the North, they are liable to embark on a policy which, no matter how sensible for places like California or even Montana, might not do at all up there. Ahother reason is that I never want to ask anyone to take the major share of the risk and, as the stockholders in this |company will be chiefly friends of mine, I want to put in more than a dollar of my own money

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for every dollar they put in, so that in case there should be a loss, which I do not fear, I shall at least be the heaviest loser.

All the money I shall be able to put into the Company this year will be between six and seven thousand dollars. In addition to that, Mr. Maurer (who was married, you remember, in Missoula) has put in one thousand dollars and his family may possibly put in some more. Out of the remaining three men who sailed from Seattle on September 18th, Mr. Crawford has put in $500. and will put in another thousand, and Mr. Knight is having his wages due him from the Company turned into shares in the Company as fast as they become due. Mr. Jafet Lindeberg, a mining man in Seattle, is furnishing the ship for use this year for payment by two thousand dollars worth of shares in the Company. If the ship is lost, we agreed to give him five thousand dollars worth of shares in addition.

The amount of money we already have is about enough to pay for the outfit and initial expenses this year. But there is nothing left over for emergencies nor to pay my expenses on a trip I must make to England to try to secure from the British Government the lease of the island we want. The reasons I intend to present in urging that we get the lease are partly political and diplomatic (relating chiefly to relations with Japan and Russia) and these are of a nature which cannot be successfully presented by a letter. The need of making this trip brings about an additional expense of about two thousand dollars.

I believe that as soon as the lease is secured the shares of the Company will be worth a great deal more than face value. However, there is no intention even then on my part to sell any more than I absolutely have to, for if shares are worth more than face value to others they certainly are worth no less to me.

I am going to appeal to another friend for the other thousand I want. Can you help me with one thousand?

What I would like to have you do is to buy one thousand dollars worth of shares at par. The Stefansson Exploration and Development Company will agree to buy the shares back on November 1st, 1922, for ten per cent above their face value ($1100.) in case you at that time prefer to have the money rather than the shares. If you prefer to have my personal guarantee rather than that of the Company, it would be all the same to me. I have no idea the Company will have any difficulty in redeeming its promises, but if they should have I would be equally concerned to protect my friends against loss through the Company as if the money had been a personal loan to me.

You will notice that I have not mentioned the name of the island which we intend to lease. That is the part which is confidential because international complications might arise if it were known that Great Britain intends to claim this island. I would like to have you keep confidential the whole matter of our intention to lease any island. Apart from that, there is nothing secret about the enterprises of the Company.

The four men, Crawford, Maurer, Knight, and Galle, who sailed from Seattle August 18th, should be arriving about now in Nome, Alaska. They will

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take there the small gasoline schooner Orion and proceed to their destination. Next winter they will occupy themselves in trapping foxes, hunting polar bears, and in the spring in killing walrus. These activities in themselves should yield a handsome profit on this year's investment. However, my main purpose in sending them was to have them resident there, so as to constitute British occupation of the territory. This will give me a chance to say to the British Government that but for my occupation of the island it might next year have fallen into the hands of either Japan or Russia and that they should, therefor, in gratitude to me give me a lease on the island. I have no doubt this argument will work, for Sir Auckland Geddes, the British Ambassador, has already told me that it seems to him reasonable and that he knows the temper of the present British Government is such that they will be ready to recognize the validity of exactly that kind of argument.

Dr. George Jennings, Northern Pacific Hospital, Missoula, Montana.

P.S. Please give me your reply by night letter, collect, addressed to me at the Harvard Club, New York. I will then make arrangements by telegram with the Vancouver office so that the transaction shall be legal. I am not much up on business procedure and have already had some trouble with the laws of Vancouver ^British Columbia^ because I handed cash personally over to some wholesale hardware and grocery people in Seattle in buying supplies for the expedition, where I should have transmitted the money to Vancouver and had the Vancouver office buy the supplies.