A trading post , trading station , or trading house , also known as a factory in European and colonial contexts, is an establishment or settlement where goods and services could be traded.
71-426: Typically the location of the trading post allows people from one geographic area to trade in goods produced in another area. In some examples, local inhabitants can use a trading post to exchange local products for goods they wished to acquire. A trading post can be either a single building or an entire town. Trading posts have been established in a range of areas, including relatively remote ones, but most often near
142-438: A comparative advantage (perceived or real) in the production of some trade-able goods – including the production of scarce or limited natural resources elsewhere. For example, different regions' sizes may encourage mass production . In such circumstances, trading at market price between locations can benefit both locations. Different types of traders may specialize in trading different kinds of goods; for example,
213-433: A few circumstances tariffs might be beneficial to the host country; but never for the world at large. The Great Depression was a major economic recession that ran from 1929 to the late 1930s. During this period, there was a great drop in trade and other economic indicators. The lack of free trade was considered by many as a principal cause of the depression causing stagnation and inflation. Only during World War II did
284-519: A few servants to attend to the French. When the Frenchmen learned that this was the case, they decided to feign interest in a few of the guns available at the trading post, which they turned back onto the servants. They ordered for all things valuable, leaving with £500 of goods and £300 in beaver pelts. A good portion of Fur, Fortune, and Empire focuses on the journey of John Jacob Astor, who founded
355-402: A large amount of land because of their efficient systems for spreading information, goods, and other supplies across large distances. Goods specifically were vital to fueling outposts in distant territories, like northern Africa and western Asia. Trading posts played a large part in managing these goods, where they were going, and when. Some goods exchanged at these trading posts and other parts of
426-688: A large group of unrelated people. The resources provided may be financial (e.g. granting a loan ), or they may consist of goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment. Credit is extended by a creditor , also known as a lender , to a debtor , also known as a borrower . The term "credit" was first used in English in the 1520s. The term came "from Middle French crédit (15c.) "belief, trust," from Italian credito, from Latin creditum "a loan, thing entrusted to another," from past participle of credere "to trust, entrust, believe". The commercial meaning of "credit" "was
497-512: A medium of credit or exchange, such as money. Though some economists characterize barter (i.e. trading things without the use of money ) as an early form of trade, money was invented before written history began. Consequently, any story of how money first developed is mostly based on conjecture and logical inference. Letters of credit , paper money , and non-physical money have greatly simplified and promoted trade as buying can be separated from selling , or earning . Trade between two traders
568-636: A near-collapse of the trade network in the western world. Trade, however, continued to flourish among the kingdoms of Africa, the Middle East, India, China, and Southeast Asia. Some trade did occur in the west. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of
639-574: A payment, commonly denoted in basis points (one basis point is 1/100 of a percent ) of the notional amount to be referenced, while the protection buyer pays this premium and in the case of default of the underlying (a loan, bond or other receivable), delivers this receivable to the protection seller and receives from the seller the paramount (that is, is made whole). There are many types of credit, including but not limited to bank credit, commerce , consumer credit, investment credit , international credit , and public credit . In commercial trade ,
710-463: A positive relationship between how well-connected a coastal location was and the local prevalence of archaeological sites from the Iron Age. This suggests that a location's trade potential was an important determinant of human settlements. The complaint tablet to Ea-nāṣir , dated 1750 BCE, documents the tribulations of a copper merchant at the time. From the beginning of Greek civilization until
781-577: A trapper, offered Kenneth McKenzie to serve as this contact and get the AFC into negotiations with the Blackfoot. The talks were successful, and McKenzie was able to build a trading post in Blackfoot territory, adjacent to the Missouri and Marias Rivers, naming it Fort McKenzie. Noochuloghoyet Trading Post was an American trading post established in the last 19th century, located in central Alaska adjacent to
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#1732779512257852-412: A woman to buy a house without a male co-signer. In the past, even when not explicitly barred from them, people of color were often unable to get credit to buy a house in white neighborhoods. Bank-issued credit makes up the largest proportion of credit in existence. The traditional view of banks as intermediaries between savers and borrowers is incorrect. Modern banking is about credit creation. Credit
923-432: Is also known as laissez-faire policy. This kind of policy does not necessarily imply because a country will then abandon all control and taxation of imports and exports. Free trade advanced further in the late 20th century and early 2000s: Credit (finance) Credit (from Latin verb credit , meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein
994-436: Is called bilateral trade , while trade involving more than two traders is called multilateral trade . In one modern view, trade exists due to specialization and the division of labor , a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trade for other products and needs. Trade exists between regions because different regions may have
1065-575: Is deeply bound up in trade, as a system of clay tokens used for accounting – found in Upper Euphrates valley in Syria dated to the 10th millennium BCE – is one of the earliest versions of writing. Ebla was a prominent trading center during the third millennia BCE, with a network reaching into Anatolia and north Mesopotamia. Materials used for creating jewelry were traded with Egypt since 3000 BCE. Long-range trade routes first appeared in
1136-536: Is derived from the Latin commercium , from cum "together" and merx , "merchandise." Trade originated from human communication in prehistoric times. Prehistoric peoples exchanged goods and services with each other in a gift economy before the innovation of modern-day currency. Peter Watson dates the history of long-distance commerce to c. 150,000 years ago. In the Mediterranean region,
1207-560: Is immaterial - the banking license affords banks to create credit - what matters is that a bank's total assets are greater than its total liabilities and that it is holding sufficient liquid assets - such as cash - to meet its obligations to its debtors. If it fails to do this it risks bankruptcy or banking license withdrawal. There are two main forms of private credit created by banks; unsecured (non-collateralized) credit such as consumer credit cards and small unsecured loans, and secured (collateralized) credit, typically secured against
1278-407: Is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds. The purest form is the credit default swap market, which is essentially a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk – the protection seller takes the risk of default of the credit in return for
1349-455: Is made up of two parts, the credit ( money ) and its corresponding debt , which requires repayment with interest . The majority (97% as of December 2013 ) of the money in the UK economy is created as credit. When a bank issues credit (i.e. makes a loan), it writes a negative entry in to the liabilities column of its balance sheet, and an equivalent positive figure on the assets column; the asset being
1420-744: The Bengal Sultanate was a major trading nation in the world and often referred to by Europeans as the wealthiest country with which to trade. In the 16th and 17th centuries, the Portuguese gained an economic advantage in the Kingdom of Kongo due to different philosophies of trade. Whereas Portuguese traders concentrated on the accumulation of capital, in Kongo spiritual meaning was attached to many objects of trade. According to economic historian Toby Green , in Kongo "giving more than receiving
1491-684: The Great Depression of the 1930s. Trade openness increased substantially again from the 1950s onward (albeit with a slowdown during the oil crisis of the 1970s ). Economists and economic historians contend that current levels of trade openness are the highest they have ever been. Trade is from Middle English trade ("path, course of conduct"), introduced into English by Hanseatic merchants, from Middle Low German trade ("track, course"), from Old Saxon trada ("spoor, track"), from Proto-Germanic *tradō ("track, way"), and cognate with Old English tredan ("to tread"). Commerce
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#17327795122571562-703: The Venetian Republic and the Republic of Genoa were major trade centers. They dominated trade in the Mediterranean and the Black Sea, having the monopoly between Europe and the Near East for centuries. From the 8th to the 11th century, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Kyivan Rus' . The Hanseatic League
1633-490: The market (which consists both of individuals and other companies) at the lowest production cost . A system of international trade has helped to develop the world economy but, in combination with bilateral or multilateral agreements to lower tariffs or to achieve free trade , has sometimes harmed third-world markets for local products. Free trade is a policy by which a government does not discriminate against imports or exports by applying tariffs or subsidies. This policy
1704-401: The spice trade and grain trade have both historically been important in the development of a global, international economy. Retail trade consists of the sale of goods or merchandise from a very fixed location (such as a department store , boutique , or kiosk ), online or by mail , in small or individual lots for direct consumption or use by the purchaser. Wholesale trade is
1775-405: The terms of trade through maintaining tariffs , and that the response to this might be reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following reciprocal , rather than completely free, trade policies. This
1846-715: The 3rd millennium BCE, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley . The Phoenicians were noted sea traders, traveling across the Mediterranean Sea , and as far north as Britain for sources of tin to manufacture bronze . For this purpose they established trade colonies the Greeks called emporia . Along the coast of the Mediterranean, researchers have found
1917-519: The APR calculation is to promote "truth in lending", to give potential borrowers a clear measure of the true cost of borrowing and to allow a comparison to be made between competing products. The APR is derived from the pattern of advances and repayments made during the agreement. Optional charges are usually not included in the APR calculation. Interest rates on loans to consumers, whether mortgages or credit cards are most commonly determined with reference to
1988-673: The American Fur Company (AFC). One of the great feats achieved by the AFC was the establishment of a trading post in the native Blackfoot tribe's territory, located in modern-day Montana along the Rocky Mountains. The Blackfoot tribe had killed many Americans and, up to this point, only traded with the Hudson Bay Company. In order to erect a trading post in Blackfoot territory, they would need an inside contact to establish contact on their behalf. Jacob Berger,
2059-811: The Atlantic and the Pacific Oceans. In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations . It criticized Mercantilism , and argued that economic specialization could benefit nations just as much as firms. Since the division of labour was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive . Smith said that he considered all rationalizations of import and export controls "dupery", which hurt
2130-560: The Caribbean. During the Middle Ages , commerce developed in Europe by trading luxury goods at trade fairs. Wealth became converted into movable wealth or capital . Banking systems developed where money on account was transferred across national boundaries. Hand to hand markets became a feature of town life and were regulated by town authorities. Western Europe established a complex and expansive trade network with cargo ships being
2201-741: The Near East. The first true maritime trade network in the Indian Ocean was by the Austronesian peoples of Island Southeast Asia . Initiated by the indigenous peoples of Taiwan and the Philippines , the Maritime Jade Road was an extensive trading network connecting multiple areas in Southeast and East Asia. Its primary products were made of jade mined from Taiwan by Taiwanese indigenous peoples and processed mostly in
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2272-575: The Philippines by indigenous Filipinos, especially in Batanes , Luzon , and Palawan . Some were also processed in Vietnam , while the peoples of Malaysia , Brunei , Singapore , Thailand , Indonesia , and Cambodia also participated in the massive trading network. The maritime road is one of the most extensive sea-based trade networks of a single geological material in the prehistoric world. It
2343-724: The Roman trade system were precious stones, fabrics , ivory , and wine . There is also evidence that they traded cattle at the Empúries trading post, established in the 6th century BCE, on the Iberian Peninsula. A trading house was typically strategically stocked with goods that the Native Americans would trade furs for; some of these goods included clothing, blankets, and corn. Eric Jay Dolin's Fur, Fortune, and Empire provides some historical context on events and
2414-476: The Stone Age by excavations in 1901. The first clear archaeological evidence of trade in manufactured goods is found in south west Asia. Archaeological evidence of obsidian use provides data on how this material was increasingly the preferred choice rather than chert from the late Mesolithic to Neolithic, requiring exchange as deposits of obsidian are rare in the Mediterranean region. Obsidian provided
2485-489: The Yukon River. This was an important trading post for the fur trade, though it has historically gone by different names and the level of involvement varied greatly while active. Trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market . Traders generally negotiate through
2556-451: The absence of immediate payment". Common forms of consumer credit include credit cards , store cards, motor vehicle finance, personal loans ( installment loans ), consumer lines of credit , payday loans , retail loans (retail installment loans) and mortgages . This is a broad definition of consumer credit and corresponds with the Bank of England's definition of "Lending to individuals". Given
2627-479: The agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade. The European Union became the world's largest exporter of manufactured goods and services, the biggest export market for around 80 countries. Today, trade is merely a subset within a complex system of companies which try to maximize their profits by offering products and services to
2698-404: The bank uses the sale of the collateral to reduce its liabilities. Examples of secured credit include consumer mortgages used to buy houses, boats, etc., and PCP (personal contract plan) credit agreements for automobile purchases. Movements of financial capital are normally dependent on either credit or equity transfers. The global credit market is three times the size of global equity. Credit
2769-404: The cardholder a certain annual fee and chose their billing methods while each participating company was charged a percentage of total billings. This led to the creating of credit cards on behalf of banks around the world. Some other first bank-issued credit cards include Bank of America 's Bank Americard in 1958 and American Express ' American Express Card also in 1958. These worked similarly to
2840-561: The company-issued credit cards; however, they expanded purchasing power to almost any service and they allowed a consumer to accumulate revolving credit . Revolving credit was a means to pay off a balance at a later date while incurring a finance charge for the balance. Until the Equal Credit Opportunity Act in 1974, women in America were given credit cards under stricter terms, or not at all. It could be hard for
2911-410: The doctrine still considered the most counterintuitive in economics : The ascendancy of free trade was primarily based on national advantage in the mid 19th century. That is, the calculation made was whether it was in any particular country's self-interest to open its borders to imports. John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate
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2982-695: The earliest contact between cultures involved members of the species Homo sapiens , principally using the Danube river, at a time beginning 35,000–30,000 BP . There is evidence of the exchange of obsidian and flint during the Stone Age . Trade in obsidian is believed to have taken place in New Guinea from 17,000 BCE. The earliest use of obsidian in the Near East dates to the Lower and Middle paleolithic. Robert Carr Bosanquet investigated trade in
3053-533: The east–west trade route known as the Silk Road after the 4th century CE up to the 8th century CE, with Suyab and Talas ranking among their main centers in the north. They were the main caravan merchants of Central Asia. From the Middle Ages, the maritime republics , in particular Venice , Pisa and Genoa , played a key role in trade along the Mediterranean. From the 11th to the late 15th centuries,
3124-556: The fall of the Roman Empire in the 5th century, a financially lucrative trade brought valuable spice to Europe from the far east, including India and China. Roman commerce allowed its empire to flourish and endure. The latter Roman Republic and the Pax Romana of the Roman empire produced a stable and secure transportation network that enabled the shipment of trade goods without fear of significant piracy , as Rome had become
3195-550: The first millennium AD. It continued up to historic times, later becoming the Maritime Silk Road. The emergence of exchange networks in the Pre-Columbian societies of and near to Mexico are known to have occurred within recent years before and after 1500 BCE. Trade networks reached north to Oasisamerica . There is evidence of established maritime trade with the cultures of northwestern South America and
3266-417: The item being purchased with the money (house, boat, car, etc.). To reduce their exposure to the risk of not getting their money back (credit default ), banks will tend to issue large credit sums to those deemed credit-worthy, and also to require collateral ; something of equivalent value to the loan, which will be passed to the bank if the debtor fails to meet the repayment terms of the loan. In this instance,
3337-428: The lender as an integral part of the credit agreement. Other costs, such as those for credit insurance , may be optional; the borrower chooses whether or not they are included as part of the agreement. Interest and other charges are presented in a variety of different ways, but under many legislative regimes lenders are required to quote all mandatory charges in the form of an annual percentage rate (APR). The goal of
3408-419: The loan repayment income stream (plus interest) from a credit-worthy individual. When the debt is fully repaid, the credit and debt are canceled, and the money disappears from the economy. Meanwhile, the debtor receives a positive cash balance (which is used to purchase something like a house), but also an equivalent negative liability to be repaid to the bank over the duration. Most of the credit created goes into
3479-406: The main carrier of goods; Cogs and Hulks are two examples of such cargo ships. Many ports would develop their own extensive trade networks. The English port city of Bristol traded with peoples from what is modern day Iceland, all along the western coast of France, and down to what is now Spain. During the Middle Ages, Central Asia was the economic center of the world. The Sogdians dominated
3550-601: The material cultures of India and China. Indonesians , in particular were trading in spices (mainly cinnamon and cassia ) with East Africa using catamaran and outrigger boats and sailing with the help of the Westerlies in the Indian Ocean. This trade network expanded to reach as far as Africa and the Arabian Peninsula , resulting in the Austronesian colonization of Madagascar by the first half of
3621-461: The material to make cutting utensils or tools, although since other more easily obtainable materials were available, use was exclusive to the higher status of the tribe using "the rich man's flint". Obsidian has held its value relative to flint. Early traders traded Obsidian at distances of 900 kilometres within the Mediterranean region. Trade in the Mediterranean during the Neolithic of Europe
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#17327795122573692-463: The movement of gold and other resources sent out by Muslim traders on the Trans-Saharan trading network. Beginning in the 16th century, European merchants would purchase gold, spices, cloth, timber and slaves from West African states as part of the triangular trade . This was often in exchange for cloth , iron , or cowrie shells which were used locally as currency. Founded in 1352,
3763-516: The ocean, a river, or another natural resource . Major towns in the Hanseatic League were known as kontors , a form of trading posts. Charax Spasinu was a trading post between the Roman and Parthian Empires. Manhattan and Singapore were both established as trading posts, by Dutchman Peter Minuit and Englishman Stamford Raffles respectively, and later developed into major settlements. The Roman Empire could control such
3834-483: The original one in English (creditor is [from] mid-15c.)" The derivative expression " credit union " was first used in 1881 in American English; the expression " credit rating " was first used in 1958. Credit cards became most prominent during the 1900s. Larger companies began creating chains with other companies and used a credit card as a way to make payments to any of these companies. The companies charged
3905-684: The origins of trading posts in North America. One of the first examples given is that of the Kennebec Trading House, established in 1628 by the Plymouth colonists. The next event from Dolin's book features early conflicts between the French and Plymouth colonists. This occurs in 1631 when the French go to the Plymouth Penobscot trading post. With the masters and most of the crew gone to get supplies, this left only
3976-413: The purchase of land and property, creating inflation in those markets, which is a major driver of the economic cycle . When a bank creates credit, it effectively owes the money to itself . If a bank issues too much bad credit (those debtors who are unable to pay it back), the bank will become insolvent ; having more liabilities than assets. That the bank never had the money to lend in the first place
4047-866: The recession end in the United States. Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement , intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy : the International Monetary Fund and the International Bank for Reconstruction and Development (later divided into the World Bank $ Bank for International Settlements). These organizations became operational in 1946 after enough countries ratified
4118-422: The second party does not reimburse the first party immediately (thereby generating a debt ), but promises either to repay or return those resources (or other materials of equal value) at a later date. The resources provided by the first party can be either property, fulfillment of promises, or performances. In other words, credit is a method of making reciprocity formal, legally enforceable, and extensible to
4189-496: The size and nature of the mortgage market, many observers classify mortgage lending as a separate category of personal borrowing, and consequently, residential mortgages are excluded from some definitions of consumer credit, such as the one adopted by the U.S. Federal Reserve . The cost of credit is the additional amount, over and above the amount borrowed, that the borrower has to pay. It includes interest , arrangement fees and any other charges. Some costs are mandatory, required by
4260-468: The sole effective sea power in the Mediterranean with the conquest of Egypt and the near east. In ancient Greece Hermes was the god of trade (commerce) and weights and measures. In ancient Rome, Mercurius was the god of merchants, whose festival was celebrated by traders on the 25th day of the fifth month. The concept of free trade was an antithesis to the will and economic direction of
4331-428: The sovereigns of the ancient Greek states. Free trade between states was stifled by the need for strict internal controls (via taxation) to maintain security within the treasury of the sovereign, which nevertheless enabled the maintenance of a modicum of civility within the structures of functional community life. The fall of the Roman empire and the succeeding Dark Ages brought instability to Western Europe and
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#17327795122574402-458: The term " trade credit " refers to the approval of delayed payment for purchased goods. Credit is sometimes not granted to a buyer who has financial instability or difficulty. Companies frequently offer trade credit to their customers as part of terms of a purchase agreement. Organizations that offer credit to their customers frequently employ a credit manager . Consumer credit can be defined as "money, goods or services provided to an individual in
4473-555: The trading nation as a whole for the benefit of specific industries. In 1799, the Dutch East India Company , formerly the world's largest company, became bankrupt , partly due to the rise of competitive free trade. In 1817, David Ricardo , James Mill and Robert Torrens showed that free trade would benefit the industrially weak as well as the strong, in the famous theory of comparative advantage . In Principles of Political Economy and Taxation Ricardo advanced
4544-448: The traffic in goods that are sold as merchandise to retailers , industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services. Historically, openness to free trade substantially increased in some areas from 1815 until the outbreak of World War I in 1914. Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during
4615-682: Was a symbol of spiritual and political power and privilege." In the 16th century, the Seventeen Provinces were the center of free trade, imposing no exchange controls , and advocating the free movement of goods. Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. The Spanish Empire developed regular trade links across both
4686-623: Was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic , between the 13th and 17th centuries. Portuguese explorer Vasco da Gama pioneered the European spice trade in 1498 when he reached Calicut after sailing around the Cape of Good Hope at the southern tip of the African continent. Prior to this, the flow of spice into Europe from India
4757-570: Was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery in Europe. Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold . From 1070 onward, kingdoms in West Africa became significant members of global trade . This came initially through
4828-416: Was followed within a few years by the infant industry scenario developed by Mill promoting the theory that the government had the duty to protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialize and out-compete English exporters. Milton Friedman later continued this vein of thought, showing that in
4899-498: Was greatest in this material. Networks were in existence at around 12,000 BCE Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990. Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology. The Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade of lapis lazuli . The material
4970-692: Was in existence for at least 3,000 years, where its peak production was from 2000 BCE to 500 CE, older than the Silk Road in mainland Eurasia and the later Maritime Silk Road . The Maritime Jade Road began to wane during its final centuries from 500 CE until 1000 CE. The entire period of the network was a golden age for the diverse societies of the region. Sea-faring Southeast Asians also established trade routes with Southern India and Sri Lanka as early as 1500 BC, ushering an exchange of material culture (like catamarans , outrigger boats , sewn-plank boats, and paan) and cultigens (like coconuts , sandalwood , bananas , and sugarcane ); as well as connecting
5041-560: Was most largely traded during the Kassite period of Babylonia beginning 1595 BCE. Adam Smith traces the origins of commerce to the very start of transactions in prehistoric times. Apart from traditional self-sufficiency , trading became a principal faculty for prehistoric people, who bartered what they had for goods and services from each other. Anthropologists have found no evidence of barter systems that did not exist alongside systems of credit. The earliest evidence of writing in
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