354 Tradesman and Merchant — Commercial Population 



Factor. A factor is a merchant's agent, residing abroad, consti- 

 tuted by letter of attorney, to transact the business of purchasing, 

 seUing, transporting, and exchanging, that shall be committed to his 

 care by his principal. A factor differs from a supercargo in the fact 

 that he is resident abroad, whereas the supercargo comes and goes, 

 travelling wath cargoes. He differs from a servant in the particulars 

 that he is made by merchants' letters, receives a percentage factorage, 

 is answerable for acts ultra vires of his commission, may act for se\ - 

 eral principals simultaneously, is under the bond, and is responsible 

 personally for goods in his trust, whereas a servant acts without letters 

 of attorney, is paid a salary or wages, serves one master unless directed 

 to serve others by this one, and is more irresponsible, his credit being 

 merged in his master's.^ Nor are they the same as broker s-of -mer- 

 chandise, or "courtiers de marchandises," as the French call them. 

 The broker is a local man who facilitates exchange i.e.,, contrives, 

 proposes, makes, and concludes bargains between merchants and 

 merchants, etc. His profession is indispensable to trade and com- 

 merce; he studies the mutual wants of merchants and eases their 

 barter. He, like the factor, recei\^es a percentage commission. - 

 But he lacks the foreign residence, the financial responsibility, the 

 consignee and other qualities characterizing the factor. Brokers 

 were usually licensed and limited in number;^ no such restraint was 

 put on factors, and it generally happened that factors employed 

 brokers themselves in their buying and selling in the cities abroad.^ 

 The factor acted on authority of a letter of attorney, a commission.'^ 

 This determined his rights, powers, and duties. These commissions 

 were either absolute or limited. The former as early as 1682 gener- 

 ally contained these words: "Dispose, do, and deal therein as if it 

 were your own;" which words excused the factor from responsibilit>' 

 if the transaction turned out a loss, the presumption being that he 

 did it for the best and according to his discretion.*' The merchant 



^ For definition, see the following authorities: Hatton, Mer. Mag., 204; Posllc- 

 thwayt, Diet. s. v. Factor; Beawes, Lex. Mer. Red., 43; Schonberg, II, 237-8. 



-The business and classifications of brokers are outlined in: Postlethwaj^t, Diet. 

 s. V. Exchange Broker; Savary, Par. Neg., II, 293-4; Hatton, Mer. Mag., 208; 

 Ricard, I, 71; SchmoUer, Grundriss, II, 35; Schoenberg, II, 237-8. 



3 10 Ric. II, Cap. 1; 8 and 9 Wm. Ill, Cap. 32; 3 Geo. II, Cap. 3. 



■* See an instance in Davidson, 402, where the factor was to deduct the broker's 

 commission from his o\\'n factorage. 



^ See copy of a commission in use during the eighteenth century, in Postlethwa\l, 

 Diet., s. V. Factor. 



«Molloy, de Jure, 421. 



