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Factory was the common name during themedieval andearly modern eras for anentrepôt – which was essentially an early form offree-trade zone ortransshipment point. At a factory, local inhabitants could interact with foreign merchants, often known asfactors.[1] First established in Europe, factories eventually spread to many other parts of the world. The origin of the wordfactory is from Latin factorium 'place of doers, makers' (Portuguese:feitoria;Dutch:factorij;French:factorerie,comptoir).
The factories established by European states inAfrica,Asia and theAmericas from the15th century onward also tended to be official politicaldependencies of those states. These have been seen, in retrospect, as the precursors ofcolonial expansion.
A factory could serve simultaneously asmarket,warehouse,customs, defense and support tonavigation andexploration, headquarters orde facto government of local communities.
InNorth America, Europeans began totrade with Natives during the 16th century. Colonists created factories, also known astrading posts, at which furs could be traded, inNative American territory.
Although Europeancolonialism traces its roots from theclassical era, whenPhoenicians,Greeks andRomans establishedcolonies of settlement around theMediterranean – "factories" were a unique institution born inmedieval Europe.
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 state where they were set.
The factories were established from 1356 onwards in the main trading centers, usually ports or central hubs that have prospered under the influence of theHanseatic League and itsguilds andkontors. The Hanseatic cities had their own law system and furnished their own protection and mutual aid. The Hanseatic League maintained factories, among others, in England (Boston,King's Lynn), Norway (Tønsberg), and Finland (Åbo). Later, cities likeBruges andAntwerp actively tried to take over the monopoly of trade from the Hansa, inviting foreign merchants to join in.
Because foreigners were not allowed to buy land in these cities, merchants joined around factories, like the Portuguese in their Bruges factory: the factor(s) and his 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.[2]
During the territorial and economic expansion of theAge of Discovery, the factory was adapted by thePortuguese and spread throughout from West Africa to Southeast Asia.[3] The Portuguesefeitorias 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 asmarket,warehouse, support to thenavigation andcustoms and were governed by afeitor ("factor") responsible for managing the trade, buying and trading products on behalf of the king and collecting taxes (usually 20%).
The first Portuguesefeitoria overseas was established byHenry the Navigator in 1445 on the island ofArguin, 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 Africanfeitorias,Elmina Castle being the most notorious.
Between the 15th and 16th centuries, a chain of about 50Portuguese forts either housed or protectedfeitorias along the coasts of West and East Africa, the Indian Ocean, China, Japan, and South America. The main factories of thePortuguese East Indies, were inGoa,Malacca,Ormuz,Ternate,Macao, and the richest possession ofBassein that went on to become the financial centre of India asBombay (Mumbai). They were mainly driven by the trade of gold and slaves on thecoast of Guinea, spices in the Indian Ocean, and sugar cane in the New World. They were also used for localtriangular trade between several territories, like Goa-Macau-Nagasaki, trading products such as sugar, pepper, coconut, timber, horses, grain, feathers from exotic Indonesian birds, precious stones, silks and porcelain from the East, among many other products. In the Indian Ocean, the trade in Portuguese factories was enforced and increased by a merchant ship licensing system: thecartazes.[4]
From thefeitorias, the products went to the main outpost in Goa, then to Portugal where they were traded in theCasa da Índia, which also managed exports to India.[5] There they were sold, or re-exported to the Royal Portuguese Factory inAntwerp, where they were distributed to the rest of Europe.
Easily supplied and defended by sea, the factories worked as independent colonial bases. They provided safety, both for the Portuguese, and at times for the territories in which they were built, protecting against constant rivalries and piracy. They allowed Portugal to dominate trade in the Atlantic and Indian oceans,establishing a vast empire with scarce human and territorial resources. Over time, thefeitorias were sometimes licensed to private entrepreneurs, giving rise to some conflict between abusive private interests and local populations, such as in theMaldives.
Other European powers began to establish factories in the 17th century along the trade routes explored by Portugal and Spain, first theDutch and then theEnglish. They went on to establish in conquered Portuguesefeitorias and further enclaves, as they explored the coasts of Africa, Arabia, India, and South East Asia in search of the source of the lucrativespice trade.
Factories were then established bychartered companies such as theDutch East India Company (VOC), founded in 1602, and theDutch 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 theNew World by theAtlantic 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, andfur 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.
Some Dutch factories were located inCape Town in modern-day South Africa,Mocha in Yemen,Calicut and theCoromandel Coast in southern India,Colombo in Sri Lanka,Ambon in Indonesia,Fort Zeelandia in Taiwan,Canton in southern China,Dejima island in Japan (the only legal point of trade between Japan and the outside world during theEdo Period), andFort Orange in modern-dayUpstate New York in the United States.
The American factories often played a strategic role as well, sometimes operating as forts, providing a degree of protection for colonists and their allies from hostileIndigenous people and from colonists and fur traders of other European countries.
York Factory was founded by thecharteredHudson's Bay Company in 1697. It was headquarters of the company for a long time, and was once thede facto government inRupert's Land and other parts of North America, prior to establishment of permanently-governed settled colonies. York factory controlled thefur trade throughout much of British-controlled North America for several centuries and undertook early exploration. Its traders and trappers forged early relationships withIndigenous peoples in Canada. The network of trading posts that it spawned formed the nucleus for later official authority in many areas of Western Canada and the United States. But at least initially it depended on those with furs to come to its location on the shore of Hudson Bay.
York Factory's initial coastal factory model contrasted with the system of the French at Montreal, who established an extensive system of inland posts and sent traders to live amongIndigenous people. When war broke out between France and England in the 1680s, the two nations regularly sent expeditions to raid and capture each other's fur trading posts. In March 1686, the French sent a raiding party under Chevalier des Troyes over 1,300 km (810 mi) to capture the company's posts alongJames Bay. In 1697,Pierre Le Moyne d'Iberville, commander of the company's captured posts, defeated three ships of the Royal Navy in theBattle of the Bay on his way tocapture York Factory by a ruse. York Factory changed hands several times in the next decade and was finally granted to he HBC permanently in the 1713Treaty of Utrecht. After the treaty, the Hudson Bay Company rebuiltYork Factory as a brickstar fort at the mouth of the nearbyHayes River, its present location.
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 officially intended to protectNative Americans from exploitation through special legislation, theIndian Intercourse Acts. However, in practice, numerousIndigenous people conceded extensive territory in exchange for the trading posts, as happened in theTreaty of Fort Clark in which theOsage Nation ceded most ofMissouri atFort Clark.
Ablacksmith 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, to produce flour.
The factories were part of the United States' continuation of a process originally used by theFrench and then by theSpanish, to officially license thefur trade inUpper Louisiana.
Factories were frequently called "forts" and often had numerous unofficial names. Legislation was often passed calling for militarygarrisons 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.
In Canada, theHudson's Bay Company established several factories,[6] including:
In the United States factories under theSuperintendent of Indian Trade:[7]
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