Perhaps, as you have been researching your male ancestors, you have come across some that were factors or commission merchants. Have you wondered what these people did for a living? Are there modern equivalents for these jobs? We will take a look at this obscure occupation in this week’s post.
During the nineteenth and early twentieth century, farming was the predominant occupation of our rural ancestors. But farmers needed to sell their products if they were going to have enough money to buy anything. Of course, on a small scale, they could sell their own crops or livestock, but for large-scale farmers or Southern planters, knowing the best places to sell, how to ship products that needed to be more widely distributed, and what the prevailing best prices were took expertise and time. Hence, the growth of factors.
For a fee, usually around two and a half percent, factors “found the best market for selling a customer’s goods and also made arrangements for storage, shipping, export duties, and so on.” (Norris, p. 23) In the American South, where so much acreage was devoted to cotton, rice, sugar, and tobacco, factors also extended credit to planters.
Commission merchants, usually with business contacts in large cities, could deal in high volume and bulk shipping. “They often branched into other fields of business, such as auctioneering, real estate, or acting as agents for steamboat companies.” (Norris, p. 23) They were originally buyers of merchandise for store owners, and factors were sellers of goods for planters or farmers, but over time, the terms became used interchangeably and the two jobs merged.
As you investigate the business practices of your ancestors, look for factors’ warehouses, ads in newspapers, forwarding merchants (those who made sure an incoming shipment got from one location to another; for instance, from a wagon to a steamboat), commission houses, and letters sent to and from business owners to factors.
The need for factors/commission merchants diminished as the twentieth century brought modern communication, transportation, and technology into the lives of even the most rural Americans. No longer did you need an intermediary when you could get on the telephone or send a telegram yourself. Large companies, like Sears Roebuck and Montgomery Ward, began selling a wide variety of merchandise via catalog, and stores routinely offered items that used to have to be special-ordered. By the 1930s, it was rare to find an ad for a commission merchant. By that time, some merchants had become wholesalers or retailers. Today, commodities sellers or those who work on commission are modern equivalents of factors or commission merchants.
(Commission merchant advertisement: Dally Dock and Grain Company, Seattle, Early Advertising of the West Collection, University of Washington, public domain. From https://commons.wikimedia.org/wiki/File:SWR_Dally,_Shipping_ and_Commission_Merchant_%281904%29_%28ADVERT_460%29.jpeg)
Additional Resources
“Factor (agent),” Wikipedia, 2022. https://en.wikipedia.org/wiki/Factor_(agent)
“Factors,” by David A. Norris, Encyclopedia of North Carolina, 2006. https://www.ncpedia.org/factors
“What the Heck was a Commission Merchant?” by David A. Norris, Family Chronicle, May/June 2007, pgs. 23 and 24.
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