Middlemen in English Business 355 



sometimes instructed his factor to buy up to a certain amount, and 

 inclosed a "closed end" bill of exchange on a banker.^ The limited 

 commission bound the factor to buy or sell at or within specified 

 prices, or not at all.- The absolute commission was more common 

 and convenient, and increasingly so as commercial honor and worth 

 grew. 



The chief functions of the factor were stated in the definition of 

 the term: he cared for the commercial interests of his principal in the 

 port where he resided. The sale of the cargoes consigned to him and 

 the purchase of return cargoes were his prime business; but scarcely 

 less important were the accessory business of insurance, exchange, 

 packing and lading, paying customs, etc., collecting debts due his 

 principal, securing and maintaining the favor of foreign princes and 

 mercantile houses, and the various other business attendant upon 

 foreign negotiation. His functions differed somewhat with the 

 place in which he acted, for instance, at Havana, the sole business 

 of the South Sea factors was to sell slaves and make returns of the 

 ready money received, while at Panama and Porto Bello they had 

 also the care for the collection of debts.^ A factor was free to serve 

 several merchants principals simultaneously, in which case the risk of 

 his actions was joint.'* By means of factors the merchants were en- 

 abled to negotiate with the whole world without leaving their stores 

 or accounts; by correspondence they learned the relative dearth and 

 abundance of goods in its different parts, and by correspondence the 

 principal directed a consignment of goods from one of his factors to 

 another.^ The settled residence of the factor in the section in which 

 he operated was a distinct advantage over the supercargo system; he 

 had opportunity for furthering his principal's interests without inter- 

 ruption; his residence gave him credit and clientele as well as better 

 insight into the needs of the people and methods of deaUng with 

 them; and in many places he was able to effect political changes in 

 his district highly beneficial to his business.^ 



The pay of a factor was called commission or factorage and was a 

 fjercentum allowance on the selling and cost prices of the goods sold 



' Savary, Par. Neg., 286. 



- Hatton, Mer. Mag., 204. 



'"Inquiry into Misconduct," o2. 



^ Molloy, De Jure, 422; see also Postlethwayt, Diet., s. v. Factor, for the legal 

 relations between factor and principal. 



'■> Savary, Par. Neg„ II, 250. 



" A good instance is Sir Dudley North's activities while at Constantinople; see 

 Bourne, Eng. Mer., 224; North, Lives, II, 375 et seq. 



