FACTORY SYSTEM, The. Definition. — The word factory seems to have been first used in its modern sense about 1792. Previous to this time a factor had been an agent, and all compound derivatives of this word had carried with them the idea of agentship. But with the new system of industry introduced by the Industrial Revolution (q.v.) the term seems to have been used as an abbreviation of manu factory, and in the first factory act in England in 1802 was used interchangeably with mills to designate cotton manufacturing establishments. To-day the term factory covers any establish ment, with its buildings and equipment, used for the manufacture of goods. The legal defini tion varies widely in different States, but is usually based upon the number of workers; thus an extreme definition of factory is °any place where two or more persons are engaged in working for hire or reward in any handi craft." As a description this is a poor defini tion, for it leaves out of account the essential characteristics of the system. Better is C. D. Wright's definition, "a factory is an establish ment where several workmen are Collected for the purpose of obtaining greater and cheaper conveniences for labor than they could procure individually at their houses; for producing re sults by their combined efforts which they could not accomplish separately; and for pre venting the loss occasioned by carrying articles from place to place during the several processes necessary to complete their manufacture.' Not merely has the definition of the term broadened, but the scope of the factory sys tem has widened also. Applied originally only to the textile industry, it has gradually been extended to other branches of manufacturing, until to-day it dominates the manufacture of agricultural implements, automobiles, boots and shoes, carriages and wagons, clothing, fire-arms, metallic goods of all sorts, musical instru ments, rubber goods, slaughtering and meat packing, wooden goods, watches, etc. Most of the people employed in the mechanical indus tries of this country to-day are working under the factory system. Indeed the principles which govern the factory system in the concentration and division of labor, the use of non-human power and of labor-saving machinery, have also been applied to other fields of economic activity such as agriculture, fishing, forestry, mining, transportation, and even personal and profes sional service. There can be no doubt there
fore as to the importance of so universal a system.
Domestic We shall perhaps bet ter understanji the factory system if we con trast it with the system under which industry was organized, at least in England, just before its introduction. This was the domestic system. According to this manufacturing— which was then truly emaking by hand" (manus-facere)— was carried on by small masters in their own houses, with the help perhaps of a journeyman and an apprentice or two. Such a master al most always owned the implements or tools of manufacture. In some cases the raw material was the property of a middleman who simply hired the domestic worker to work it up into finished goods, while he distributed the raw material to the homes of the workers and col lected the completed product. The essential feature of the system, however, to which it owed its name, was the fact that manufac turing was carried on in his own house by the domestic worker, who usually also owned a plot of ground which he cultivated as a by industry.
Factory this was entirely changed by the introduction of the factory sys tem. The first series of changes that may be noted was the transfer of the industry from the home to the factory, the change in owner ship of the implements of production from the artisan to the capitalist employer, and the change in the power that drove the machines from the muscles of the workers to the force of falling water, and later of expanding steam. A second characteristic of the factory system was the enlargement of the business unit. The textile industry was affected less than mining and fhe metallurgical industries; but transporta tion showed the greatest development along these lines. To-day, however, large-scale pro duction is a common characteristic of almost all factory industries. As a result of these changes capital has become increasingly im portant in modern industry until our present system of industrial organization is often called a system rather than a factory system.