Factory (trading post)

Factory was the common name during the medieval and early modern eras for an entrepôt – which was an early form of free-trade zone or transshipment point. At a factory, local inhabitants could interact with foreign merchants, often known as factors.[1] A factory could serve simultaneously as a market, warehouse, customs house, and defense post; it also supported navigation and exploration, often acting as a headquarters or de facto government for local communities.

The factory system had its origins in medieval Flanders, where it evolved from establishments for foreign merchants during inter-European trade into overseas institutions between European trade with Asia and Africa.[2] The factories established by European states in Africa, Asia and the Americas from the 15th century onward also tended to be official political dependencies of those states. These have been seen, in retrospect, as the precursors of colonial expansion.

The etymology of factory has its origins in the Greek pandocheion (pandοxeίο) from which the Arabic funduq and Latin transliteration fondaco evolved from during the late antiquity period.[3][4] The Latin factorium means 'place of doers, makers' (Portuguese: feitoria; Dutch: factorij; French: factorerie, comptoir).

Hanseatic kontor origins (c.1300s)

European colonialism traces its roots from the classical era, when Phoenicians, Greeks and Romans established colonies of settlement around the Mediterranean, but ancient Greek and Phoenician emporia (ἐμπόρῐᾰ) also operated, specialising trade in (for example) grain, slaves and luxury goods with hinterland peoples. Originally, factories were organizations of European merchants from a state, meeting in a foreign place. These organizations sought to defend their common interests, mainly economic (as well as organized insurance and protection), enabling the maintenance of diplomatic and trade relations within the foreign country where they were set.[5]

The factories were established from 1356 onwards in the main trading centers, usually ports or central hubs that prospered under the influence of the Hanseatic League and its guilds and its kontors (larger trading-posts).[6] The Hanseatic cities had their own law system and furnished their own protection and mutual aid. Because foreigners were not allowed to buy land in these cities, merchants clustered around factories, like the Portuguese in their Bruges factory: the factor(s) and the officers rented the housing and warehouses, arbitrated trade, and even managed insurance funds, working both as an association and an embassy, even administering justice within the merchant community.

Portuguese feitorias (c. 1400s)

During the territorial and economic expansion of the Age of Discovery, the factory was adapted by the Portuguese and spread throughout from West Africa to Southeast Asia.[9] The Portuguese feitorias were mostly fortified trading posts settled in coastal areas, built to centralize and thus dominate the local trade of products with the Portuguese kingdom (and thence to Europe). They served simultaneously as market, warehouse, support to the navigation and customs and were governed by a feitor ("factor") responsible for managing the trade, buying and trading products on behalf of the king and collecting taxes (usually twenty percent).

The first Portuguese feitoria overseas was established by Henry the Navigator in 1445 on the island of Arguin, off the coast of Mauritania. It was built to attract Muslim traders and monopolize the business in the routes traveled in North Africa. It served as a model for a chain of African feitorias, Elmina Castle being the most notorious.

Between the 15th and 16th centuries, a chain of about 50 Portuguese forts either housed or protected feitorias along the coasts of West and East Africa, the Indian Ocean, China, Japan, and South America. The main factories of the Portuguese East Indies, were in Goa, Malacca, Ormuz, Ternate, Macao, and the richest possession of Bassein that went on to become the financial centre of India as

Dutch factorij (c. 1600s)

Other European powers began to establish factories in the 17th century along the trade routes explored by Portugal and Spain, first the Dutch and then the English. They went on to establish in conquered Portuguese feitorias and further enclaves, as they explored the coasts of Africa, Arabia, India, and South East Asia in search of the source of the lucrative spice trade.

Factories were then established by chartered companies such as the Dutch East India Company (VOC), founded in 1602, and the Dutch West India Company (WIC), founded in 1621. These factories provided for the exchange of products among European companies, local populations, and the colonies that often started as a factory with warehouses. Usually these factories had larger warehouses to fit the products resulting from the increasing agricultural development of colonies, which were boosted in the New World by the Atlantic slave trade.

In these factories, the products were checked, weighed, and packaged to prepare for the long sea voyage. In particular, spices, cocoa, tea, tobacco, coffee, sugar, porcelain, and fur were well protected against the salty sea air and against deterioration. The factor was present as the representative of the trading partners in all matters, reporting to the headquarters and being responsible for the products’ logistics (proper storage and shipping). Information took a long time to reach the company headquarters, and this was dependent on an absolute trust.

British factories (c. 1600s-1700s)

As English traders began taking an active role in the global market (particularly towards Eastern products), they were required to pursue colonial policies in order to compete with the likes of Spain, Portugal, Holland, and France. This struggle for commercial and colonial dominance would continue throughout the sixteenth and eighteenth centuries. In Europe, English factories were set up in Venice and Hamburg, where eventually the traders displaced those of the Hanse and Italy.[12]

Overseas, the English East India Company (EIC) made direct Eastern connections, and the company resold Eastern products such as spices, indigo, textiles, and silks to other European countries for great profit.[13] In 1616, the EIC landed its first factory in the town of Surat in Mughal India, consisting of a trading post, warehouse, and residence. This was followed by another in Isfahan, Iran in 1617. In the seventeenth century, the company shifted its focus to the exports of tea, silk, and porcelain from China in exchange for silver, Bengal cotton, and eventually opium. Initial attempts to set up longterm factories in Thailand, Malaysia, and Japan were unsuccessful; stations in Taiwan and China fared better.[14]

French comptoirs (c.1600s-1800s)

In the 1800s, the French established three fortified trading posts in the Gulf of Guinea as an extension of the colonial policy of the "points of support" system. This was meant to increase trade and bolster French naval power in West Africa against the British, who was the main competitor. These posts would allow for better organisation and stability for commercial activity, serve as supply stations for the navy, and promote trade in goods such as gold, ivory, dye woods, pepper, and palm oil. The three sites were Garroway, Grand-Bassam, and Gabon, chosen for their anchorage, waterways, and harbour.[16]

The design of these comptoirs was mainly for commercial and naval support. It consisted of a rectangular, palisaded enclosure with small bastions at the corners with light artillery, a central wooden blockhouse with defensive openings, and four surrounding buildings: one for commerce, and the others for housing soldiers and storage.[16]

United States factories (1796-1822)

The United States government sanctioned a factory system from 1796 to 1822, with factories scattered through the mostly unsettled portion of the country. The factories were part of the United States' continuation of a process originally used by the French and Spanish to officially license the fur trade in Upper Louisiana, and serve to oust private and British competition.[17] They were frequently called "forts" and often had numerous unofficial names. Legislation was often passed calling for military garrisons at the fort, but their major purpose was a trading post, obtaining furs as cheaply as possible and transporting them to cities where they could be processed and turned into useful or luxurious items for sale at a profit.

Officially, the factories were also intended to protect Native Americans from exploitation through special legislation, the Indian Intercourse Acts. In practice, numerous Indigenous people conceded extensive territory in exchange for the trading posts, as happened in the Treaty of Fort Clark in which the Osage Nation ceded most of Missouri at Fort Clark.

A blacksmith was usually assigned to a factory, to repair utensils and build or maintain plows. The factories frequently also had some sort of gristmill operation associated with them in order to produce flour.

See also

• Caravanserai
• Consulado de mercaderes
• Kontor
• Thirteen Factories

Sources

• Curtin, Philip D. Cross-Cultural Trade in World History. of Studies in Comparative World History. Cambridge: Cambridge University Press, 1984. https://doi.org/10.1017/CBO9780511661198.
• Nichols, David Andrew. Engines of Diplomacy: Indian Trading Factories and the Negotiation of American Empire. University of North Carolina Press, 2016. http://www.jstor.org/stable/10.5149/9781469626901_nichols.
• Rubin, Isaac Ilych, Donald Filtzer, and Catherine Colliot-Thélène. “Merchant Capital and Mercantilist Policy in England in the 16th and 17th Centuries.” In History of Economic Thought, 1st ed. Pluto Press, 1989. https://doi.org/10.2307/j.ctt18mbd43.6.
• Schnapper, Bernard. “La Politique Des « points d’appui » et La Fondation Des Comptoirs Fortifiés Dans Le Golfe de Guinée (1837-1843).” Revue Historique 225, no. 1 (1961): 99–120. http://www.jstor.org/stable/40949431.
• Tracy, James D., ed. (1991). The Political Economy of Merchant Empires: State Power and World Trade, 1350–1750. Studies in Comparative Early Modern History. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511665288. ISBN 978-0-521-41046-5 .
• Wubs-Mrozewicz, Justyna. “Rules of Inclusion, Rules of Exclusion: The Hanseatic Kontor in Bergen in the Late Middle Ages and Its Normative Boundaries.” German History 29, no. 1 (2011): 1–22. https://doi.org/10.1093/gerhis/ghq145.

External links

• Wisconsinhistory.org definition
• Chicago History