Factory (Kuthi) an early modern commercial term implying an establishment for traders doing business as agents or merchants of a joint stock company in a foreign country. The term is the evolved form of the Portuguese word feitoria. In the early period of overseas trade and commerce, the various East India companies established their respective settlements and trading stations in various maritime ports of Asia. They called these business establishments 'factories'. The chief of a factory was variously called factor, chief, factory chiefs, factory agent. In Bengal, the local people called it kuthi', mukam, etc. The Portuguese, Dutch, French, Ostends, Danes and English East India companies began direct maritime business with Bengal from the early seventeenth century. Headed by a factor, a factory had some other personnel such as chief merchant, junior merchant, writer, a minister and a surgeon.
On behalf of their respective companies, the factors obtained permissions from the Mughal government for settlement right and erecting structures for business purposes. The Mughal government encouraged foreigners to participate in Bengal foreign trade as importers and exporters. Bengali merchants were averse to undertake direct overseas trade for cultural reasons. They tried to sell their goods to the foreign factories locally and many of them also became their local banians or commission agents. Most of the Europeans had established their factory settlements in and around Calcutta along the Hugli River. In establishing business network, leading foreign companies had established sub-factories in the important business centres in the countryside.
In the transfer of political power from the Mughals to the East India Company, various factory chiefs had played crucial role. For example, the Chief of Kashimbazar Factory, William Watt organised a plot with jagat seth to depose sirajuddaulah and install mir zafar instead in the Masnad as Nawab of Bengal. The plot led to the battle of palashi and subsequent establishment of company rule in Bengal.
The British parliament abolished the monopoly right of the east india company in 1813 and allowed the British private traders to come to India and compete in the local market and also hold land as proprietors and leaseholders. Many of the free traders began to speculate on land control and introduce commercial crops like indigo, tobacco and jute. To manage their affairs, they set up factories on their estates. Most familiar to contemporary people were the indigo factories set up by the indigo planters. With the beginning of the Crown's rule from 1858, the European factories of all types were abolished.
The factory records give the information of its business transactions, market places and market conditions, export products, local banians, and so on. In view of their importance for commercial and maritime history of the company period, the British Library published in many volumes the select factory records from 1595 to 1858. [Sirajul Islam]