Factory (trading post)

• 1. Introduction

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  The factory, in the medieval and early modern world, was not a building where goods were manufactured. It was a trading post, a place where local people could deal with foreign merchants, who were often called factors. One post could serve as a market, a warehouse, a customs house and a defense post all at once. Some also supported navigation and exploration, and some acted as a headquarters or even a de facto government for nearby communities. The word itself traveled a long road. The Greek pandocheion gave rise to the Arabic funduq and the Latin transliteration fondaco in late antiquity. The Latin factorium means place of doers, makers. From it came the Portuguese feitoria, the Dutch factorij, and the French factorerie and comptoir. Later observers have seen the posts that European states built in Africa, Asia and the Americas from the 15th century onward as precursors of colonial expansion. How did an arrangement for visiting merchants turn into a network of fortified outposts? Who ran these places, who profited from them, and who lived with the consequences?

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• 2. Merchant Quarters of the Hansa

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  Phoenician and Greek merchants ran emporia around the Mediterranean, trading in goods such as grain, slaves and luxury goods with the peoples of the interior. The medieval factory worked differently. It began as an organization of merchants from one state, meeting in a foreign place to defend their shared economic interests. Those interests included insurance and protection. The arrangement also let the merchants keep diplomatic and trade relations running inside the host country.

  From 1356 onward, factories were established in the main trading centers, usually ports or central hubs that prospered under the Hanseatic League. The League had guilds and larger trading posts called kontors. Its cities had their own law system and supplied their own protection and mutual aid.

  Foreigners were not allowed to buy land in these cities, so merchants clustered around the factories instead. The Portuguese factory in Bruges shows how this worked. Its factor and officers rented the housing and warehouses, arbitrated trade and managed insurance funds. The factory acted as both an association and an embassy, and it even administered justice within the merchant community.

  The League's four major kontors stood in Bruges, London, Bergen in Norway and Novgorod in Russia. The Bruges kontor later moved to Antwerp. Smaller factories, some Hanseatic and some not, appeared in English towns such as King's Lynn, Ipswich and Great Yarmouth. In Italy, the Fondaco dei Tedeschi played the same role. Even the Hansa's own host cities, Bruges and Antwerp, later tried to take over its trade monopoly by inviting foreign merchants to join in.

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• 3. Portuguese Feitorias

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  In 1445, Henry the Navigator established the first Portuguese feitoria overseas, on the island of Arguin off the coast of Mauritania. It was built to attract Muslim traders and to monopolize business on the routes traveled across North Africa. Arguin became the model for a chain of African feitorias, of which Elmina Castle is the most notorious.

  Between the 15th and 16th centuries, about 50 Portuguese forts either housed or protected feitorias. They lined the coasts of West and East Africa, the Indian Ocean, China, Japan and South America. Most were fortified posts on the coast, built to centralize local trade and steer it toward the Portuguese kingdom and then Europe. Each was governed by a feitor, or factor. He bought and traded products on behalf of the king and collected taxes, usually twenty percent.

  Goa, Malacca, Ormuz, Ternate and Macao headed the list of main factories in the Portuguese East Indies. Bassein was the richest possession of all. It went on to become the financial center of India under the name Bombay, now Mumbai. Trade centered on gold and slaves on the coast of Guinea, spices in the Indian Ocean, and sugar cane in the New World.

  Triangular routes linked the territories, such as the circuit of Goa, Macau and Nagasaki. Ships carried sugar, pepper, coconut, timber, horses, grain, feathers from exotic Indonesian birds, precious stones, silks and porcelain. In the Indian Ocean, a ship licensing system called the cartazes enforced and increased this trade. Goods flowed to the main outpost in Goa, then to Portugal, where they were traded in the Casa da Índia. That institution also managed exports to India. Some goods were re-exported to the Royal Portuguese Factory in Antwerp, which distributed them to the rest of Europe.

  Easily supplied and defended by sea, the factories worked as independent colonial bases. They offered safety to the Portuguese and at times to the territories around them, against constant rivalries and piracy. With them, Portugal dominated trade in the Atlantic and Indian oceans and built a vast empire from scarce human and territorial resources. Over time, some feitorias were licensed to private entrepreneurs. That produced conflict between abusive private interests and local populations, as happened in the Maldives.

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• 4. Dutch Chartered Companies

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  The Dutch East India Company, known as the VOC, was founded in 1602. The Dutch West India Company, the WIC, followed in 1621. Both chartered companies ran factories. In the 17th century the Dutch, and then the English, pushed along trade routes that Portugal and Spain had explored, searching for the source of the lucrative spice trade. They took over some conquered Portuguese feitorias and added further enclaves along the coasts of Africa, Arabia, India and Southeast Asia. Dejima in Japan, Cape Town in South Africa, Fort Orange in New Netherland and Mokha in Yemen all appear among the Dutch sites.

  These factories handled exchange among European companies, local populations and colonies. Many colonies began life as a factory with warehouses. The warehouses grew larger over time to hold the products of increasing agricultural development in the colonies. In the New World, that development was boosted by the Atlantic slave trade.

  Inside the walls, goods were checked, weighed and packaged for the long sea voyage. Spices, cocoa, tea, tobacco, coffee, sugar, porcelain and fur all needed protection against the salty sea air and against spoilage. The factor represented the trading partners in every matter. He reported to headquarters and answered for the proper storage and shipping of the goods. News took a long time to reach the company, so the whole arrangement depended on absolute trust.

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• 5. English East India Company

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  In 1616, the English East India Company landed its first factory in the town of Surat in Mughal India. It consisted of a trading post, a warehouse and a residence. Another factory followed in Isfahan, Iran, in 1617. English traders had been pushed toward colonial policies by the need to compete with Spain, Portugal, Holland and France. Closer to home, English factories were set up in Venice and Hamburg, where the traders eventually displaced those of the Hanse and Italy.

  The company resold Eastern products such as spices, indigo, textiles and silks to other European countries, and the profits were great. In the seventeenth century, it shifted its focus to exports of tea, silk and porcelain from China. In exchange it sent out silver, Bengal cotton and eventually opium. Early attempts at long-term factories in Thailand, Malaysia and Japan were unsuccessful. Stations in Taiwan and China fared better. The company's other overseas posts included Canton, Bengkulu in Indonesia, Hirado in Japan and the island of Saint Helena.

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• 6. York Factory

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  Europeans began trading with Native peoples in North America during the 16th century. Colonists set up factories on Native American territory, where they were also called trading posts. These posts often had a strategic role, and some operated as forts that protected colonists and their allies from competing European countries and from hostile Indigenous groups.

  The Hudson's Bay Company set up several such posts, among them Rupert House in 1668, Moose Fort in 1673 and Fort Albany in 1679. York Factory became the best known. It was headquarters of the company for a long time. For a while it was the de facto government in Rupert's Land and other parts of North America, before permanently governed settled colonies existed. It controlled the fur trade across much of British-controlled North America for several centuries and carried out early exploration. Its traders and trappers forged early relationships with Indigenous peoples in Canada. The network of posts it spawned became the nucleus for later official authority in many areas of Western Canada and the United States.

  The model had a weakness. At least at first, York Factory depended on people with furs coming to its location on the shore of Hudson Bay. The French at Montreal did the opposite. They built an extensive system of inland posts and sent traders to live among Indigenous people.

  War between France and England broke out in the 1680s, and each side regularly sent expeditions to raid the other's fur trading posts. In March 1686, the French sent a raiding party under Chevalier des Troyes more than 1,300 km to capture the company's posts along James Bay. In 1697, Pierre Le Moyne d'Iberville, now commanding those captured posts, defeated three ships of the Royal Navy in the Battle of the Bay. He was on his way to capture York Factory by a ruse. The post changed hands several times over the next decade. The 1713 Treaty of Utrecht finally granted it to the Hudson's Bay Company permanently, which rebuilt it as a brick star fort at the mouth of the nearby Hayes River, its present location.

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• 7. French Points of Support

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  In the 1800s, the French established three fortified trading posts in the Gulf of Guinea. They were part of a colonial policy known as the points of support system. The aim was to increase trade and to bolster French naval power in West Africa against the British, who were the main competitor. The posts also served as supply stations for the navy. They promoted trade in gold, ivory, dye woods, pepper and palm oil. The three sites were Garroway, Grand-Bassam and Gabon, chosen for their anchorage, waterways and harbor.

  The design of these comptoirs served commerce and naval support. Each was a rectangular, palisaded enclosure with small bastions at the corners, armed with light artillery. A central wooden blockhouse had defensive openings. Four surrounding buildings held one for commerce, with the others housing soldiers and storage. French comptoirs also stood at Gorée and Saint-Louis in Senegal, at Port Louis in Mauritius, and at Surat and Masulipatam in India.

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• 8. The American Factory System

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  From 1796 to 1822, the United States government sanctioned its own factory system, with factories scattered through the mostly unsettled portion of the country. It continued a process the French and Spanish had used to officially license the fur trade in Upper Louisiana. It also served to oust private and British competition. The factories were frequently called forts and often had numerous unofficial names. Legislation often called for military garrisons, but their major purpose was trade. They obtained furs as cheaply as possible and shipped them to cities, where the furs were processed into useful or luxurious items and sold at a profit.

  Officially, the factories were also meant to protect Native Americans from exploitation, under special legislation called the Indian Intercourse Acts. In practice, numerous Indigenous people conceded extensive territory in exchange for the trading posts. The Treaty of Fort Clark is an example. Under it, the Osage Nation ceded most of Missouri at Fort Clark.

  A blacksmith was usually assigned to each factory to repair utensils and to build or maintain plows. Many factories also had a gristmill to produce flour. The posts were organized under the Superintendent of Indian Trade and sited near the Creek, Cherokee and Choctaw peoples, among others. Fort Edwards and Fort Spadre Bluffs, the last two on the list, both opened in 1818 and closed in 1822, the year the whole system ended.

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