Factor (agent)
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A factor is a type of trader who receives and sells goods on commission, called factorage. A factor is a mercantile fiduciary transacting business in his own name and not disclosing his principal. A factor differs from a commission
merchant A merchant is a person who trades in commodities produced by other people, especially one who trades with foreign countries. Historically, a merchant is anyone who is involved in business or trade. Merchants have operated for as long as indust ...
in that a factor takes possession of goods (or documents of title representing goods, such as a bill of lading) on
consignment Consignment involves selling one's personal goods (clothing, furniture, etc.) through a third-party vendor such as a consignment store or online thrift store. The owner of the goods pays the third-party a portion of the sale for facilitating t ...
, but a commission merchant sells goods not in his possession on the basis of samples. Most modern factor business is in the textile field, but factors are also used to a great extent in the shoe, furniture, hardware, and other industries, and the trade areas in which factors operate have increased. In the United Kingdom, most factors fall within the definition of a mercantile agent under the
Factors Act 1889 Factor, a Latin word meaning "who/which acts", may refer to: Commerce * Factor (agent), a person who acts for, notably a mercantile and colonial agent * Factor (Scotland), a person or firm managing a Scottish estate * Factors of production, su ...
and therefore have the powers of such. A factor has a possessory lien over the consigned goods that covers any claims against the principal arising out of the factor's activity. A debt factor, whether a person or firm (
factoring company Factoring can refer to the following: * Factoring (finance), a form of commercial finance * Factorization, a mathematical concept * Decomposition (computer science) * A rule in resolution theorem proving, see Resolution (logic)#Factoring See a ...
), accepts as assignee book debts ( accounts receivable) as security for short-term loans; this is known as factoring. The term derives from the Latin for "doer, maker", from ''facit'', "he/she/it does/makes". Historically, a factor had his seat at a sort of trading post known as a factory.


History

Before the 20th century, factors were mercantile intermediaries whose main functions were warehousing and selling consigned goods, accounting to principals for the proceeds, guaranteeing buyers' credit, and sometimes making cash advances to principals prior to the actual sale of the goods. Their services were of particular value in foreign trade, and factors became important figures in the great period of colonial exploration and development.


Mercantile factors

A relatively large mercantile company could have a hierarchy including several grades of factor. The British East India Company hierarchy ranked "factors" between "writers" (junior clerks) and "junior merchants". In the Hudson's Bay Company, as restructured after merging with the
North West Company The North West Company was a fur trading business headquartered in Montreal from 1779 to 1821. It competed with increasing success against the Hudson's Bay Company in what is present-day Western Canada and Northwestern Ontario. With great weal ...
in 1821, commissioned officers included the ranks of chief trader and chief factor, who all shared the profits of the company during the monopoly years.Galbraith, John S. (1957). ''Hudson's Bay Company As an Imperial Factor 1821–1869''. Berkeley and Los Angeles: University of California Press. Retrieved 13 April 2022 In the deed poll under which the HBC was governed, there were 25 chief factors and 28 chief traders. Chief factors usually held high administrative positions. The Dutch East India Company and the British East India Company based factors all over Asia. In 18th- and early 19th-century China and Japan, trade was limited to small ghettoes: the Dutch Factory on Dejima, an island off Nagasaki, and the Thirteen Factories and Shamian Island areas of
Canton Canton may refer to: Administrative division terminology * Canton (administrative division), territorial/administrative division in some countries, notably Switzerland * Township (Canada), known as ''canton'' in Canadian French Arts and ent ...
.


Colonial factors

In territories without any other regular authorities, especially if in need of defence, the company could mandate its factor to perform the functions of a governor, theoretically under authority of a higher echelon, including command of a small garrison. For example, Banten, on the Indonesian island of Java, was from 1603 to 1682 a trading post established by the East India Company and run by a series of chief factors. The term and its compounds are also used to render equivalent positions in other languages, such as: *Chief factor for the Dutch ''oppercommies'', for instance of the
Dutch West India Company The Dutch West India Company ( nl, Geoctrooieerde Westindische Compagnie, ''WIC'' or ''GWC''; ; en, Chartered West India Company) was a chartered company of Dutch merchants as well as foreign investors. Among its founders was Willem Usselincx ( ...
on the Slave Coast of West Africa. *Chief factor for the Dutch '' opperhoofd'' (literally 'supreme head'; but also used for a Tribal Chief, as a Sachem of American Indians), e.g. in the Dutch factory on Dejima, mentioned above.


Judicial factor

In Scottish law, a judicial factor is a kind of trustee appointed by the
Court of Session The Court of Session is the supreme civil court of Scotland and constitutes part of the College of Justice; the supreme criminal court of Scotland is the High Court of Justiciary. The Court of Session sits in Parliament House in Edinburgh ...
to administer an estate, for a ward (called a pupil) until a
guardian Guardian usually refers to: * Legal guardian, a person with the authority and duty to care for the interests of another * ''The Guardian'', a British daily newspaper (The) Guardian(s) may also refer to: Places * Guardian, West Virginia, Unite ...
(called a tutor) can be appointed (''factor loco tutoris''), for a person who is ''incapax'', or for a partnership that is unable to function.


Notable factors

* Alexander Grant Dallas (1816-07-25 – 1882-01-03) was a Chief Factor who became superintendent of the west-of-the- Rockies portion of the Hudson's Bay Company and the Governor of Rupert's Land.


See also

* Beaver Club * Cotton factor, a broker or commission merchant * Moose Factory * York Factory *
Comprador A comprador or compradore () is a "person who acts as an agent for foreign organizations engaged in investment, trade, or economic or political exploitation". A comprador is a Indigenous peoples, native manager for a European business house in East ...


References


Secondary sources

*


External links


WorldStatesmen, for Vietnam; see also under other countries
{{Authority control Gubernatorial titles Hudson's Bay Company Fur trade Agency law History of international trade Sales occupations