What was the effect of this news upon the minds of the partners? From Thompson's subsequent movements, it is possible to surmise. The attempt to pierce the mountains from the headwaters of the Saskatchewan was for the time being abandoned, and attention was once more transferred to the north. According to the surveys already made by Thompson, the west end of Lesser Slave lake could not be more than fifty or seventy-five miles from the valley of the Peace river, up which Alexander Mackenzie had travelled ten years before. Thither Thompson was sent, with instructions to explore a route across the watershed. From the upper end of Lesser Slave lake, he pushed his way west through a wide valley until he came to the banks of the Smoky river. On the different branches of the Saskatchewan, he had noted the seams of coal exposed along the banks. At Smoky river, the coal beds, ignited by spontaneous combustion, had been burning from beyond the memory of the oldest Indians on the river, and the dark clouds of smoke which they sent forth gave the river its name. Smoky river was a tributary of the Peace. A short journey down stream brought him to the Forks where now stands Peace River Landing. Thompson spent the winters of 1803 and 1804 developing trade from the old posts built by Mackenzie at the Forks of the river, and westward beyond the frontiers of British Columbia. Here, as at the headwaters of the Saskatchewan, he found rivals. No sooner was he settled at the Forks than a party of XY traders from Montreal landed a few yards from the post and made preparations for the erection of a house. Thompson prosecuted his work with his accustomed vigour. In the winter of 1805, when Simon Fraser set forth on the journey that was to make him famous, he found that a base for his exploration of the Fraser river had been soundly established on the Peace by his friend and colleague David Thompson. He honoured him accordingly when he gave the name of Thompson to the greatest tributary of the Fraser river. By the summer of 1804 Thompson was once more back at headquarters, no longer at Grand Portage (for that had been surrendered to the Americans), but at Fort William on Thunder Bay, where the dépôt of the company had now been established. In that year, the trade war with the XY Company had reached an acute stage. The Hudson's Bay Company had also reorganized their enterprises, and between them these rivals had almost succeeded in wresting from the North-Westers the trade of the Muskrat country. Thompson was therefore withdrawn from the fields of his recent activity, his chance of crossing the mountains was indefinitely postponed, and he was sent into the Muskrat country to restore the trade of that region to the Canadians.