THE

CAMBRIDGE
ECONOMIC HISTORY
OF EUROPE

VOLUME III
ECONOMIC ORGANIZATION AND
POLICIES IN THE MIDDLE AGES

EDITED BY

M. M. POSTAN.
Professor ofEconomic History in the
University of Cambridge

E. E. RICH
Vere Harmsworth Professor of Imperial and Naval
History in the University of Cambridge

AND

EDWARD MILLER
Leaurer in History in the University of Cambridge

·. ___ _
CAMBRIDGE
AT THE UNIVERSITY PRESS
l963 . ;,;··
I
 PUBLISHED BY
THE SYNDICS OF THE CAMBRIDGE UNIVERSITY PRESS
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 ITALIAN PREDOMINANCE 43
CHAPTER-.11
~ally those ofthe ifl!and cities, Siena and Florence, began to direct their
1 affarrsfrom the counnng..:house and to secure permanent representation
The Organization of Trade abroad by means: of partners, factor~ or correspondents. The one-time
trav~ll~r grad~y turned int_? a business administrator, who spent most
I. A General Picture ofhis ~e behind a desk reading reports and giving instructions. How to
From the point ofviewofb~in~s org:u_llzation, the ~ddle Ages pre-. get satisfactory representation in foreign parts w~ perhaps the major
sent no uniform picture either m ttme or~ space. Durmg the so-alled problem of this sedentary type of merchant, and success or failure often
Dark Ages, the manorial economy was dommant and mostlandedestates depended on the selection of efficient and honest representatives. Since
were relatively self-sufficien~. J?cchang~, at any rate, was reduced to a the, merchant no longer went abroad himself, he had to delegate power to
minimwn, and trade, while 1t did not disappear altogether, fell_ to a low someone he could trust and who would attend to his business. .
ebb. What little survived was carried on by group~ of travelling ~er­ _ [Link] of this new system of business organization based on corres~
chants who catered for the rich by selling thep1-luxur1es or who_expl01~d po~dence. and representation abroad· is intimately connected with the
the poor by charging high prices for ~ecessities in times off~e or dis- rapid decline ofthe~ofChampagn~ ~fter IJ?o· There was no longer
tress; A real revival did not occur until the eleventh century With the ces- any need ~or theltalian merchants to ~1s1t th~ fairs after their companies
sation ofthe Norman invasions and the decline offeudal anarchy~ In Italy ~~~ established permanent branches ill Pans, London and Bruges. As
urban life regained vigour; in Flanders it sprang up anew. From these ~nators of th~ new system, theitalians reaped the greatest benefits from
two centres, the movement spread and gamed·mo~entum. The ~ru­ Its success. Du~ ~hefo~nth and fifteenth centuries; they dominated
sades gave it further impetus. La~ merchant colorues were ~tablis4ed ~adeand bankit~.g m theennreare{l from Constantinople and Alexandria
all over the Levant. Soon the Venenans, the Genoese and the l?JSanS ~on­ m the east to Bruges and ~ndo~ in the west. To a large extent, -this
trolled the foreign t~ade of the Byzantine Empire, Methods_ ofbusmess supre~acy rested_ on supen?r b~mess organization, since the military
organization made steady progress; but ~e merc~ants co11~~ed t? be power of thdtalian;repub~cs did not _extend beyond the Alps. In the
pc;:regrin~tors, moVing ·[Link] a~?ut m_ ~ending. ,r~sw~ of W?fit:
They and their servants s_tllla<;coDlp:@c:Jthel[ g()ods_e1$.er bylandor qr,
-~- pr~tecttheir
Lev.·.ant,,hq~e-ver,-~noa;PJSa.·and ~ernce ~a~tained p_owerful_:.•. fle..ets_ to.
colorues as·[Link] therr ~ading mterests; The orily coni.:.
sea. Inthe twelfth and thirteenth cenqmes, the travelling_n:ade ofvvestem pentors: who ~n:ore:odess ~eded ill holding their own: were the
Europe gravitated to the f~s of Champagne, and thetr rhythm regu- · Catalans,. ~ho, at ~ early d:lte~ had adopted Italian business· methods.
lated the corDing and gomg of the merchant caravans from Italy, : · The Flenush ~rym~:traJe:,was c~mplet~ly eliniinated. In England;
Flanders, Germany and all comers of France. . . . _ _hov.:e':er, -the Italians<lidn~tsucceed ill roonng out thenative merchants,
The Italians played an important part, but as yet they did no_t dommat~, bu~ 1t ,IS true that ;~he ~lish iilerch~ts ~d _n_ot yet seriously challenge
although they were spreading their tenta~es and slowly choking offtherr ., It:ilian suprema~. They confined their acttVIUes to the intercoilrse with
rivals. Flemish and English merchants still went as ~ar as· Genoa to fetch \ the LowCo~tnes;' S~via; ~ermany, no~hem Fran~e and Gas-
spices or silks and to sell their cloth. As early as the thirte:n~ century, the ,~ '-,,, ~ny. The Itali~ns also toed to gam a foothold m the Balt_Ic; but they
enterprising Italians, by-passing Flanders, were penetrann~ mto England ~ed. In thenuddle.?fth~fifteenthcentury, sev:eral Florennnes, among
as papal bankers, but the transfer p_roblem for~ed them mto t:he wool o~e~s a Francesco ~ucellai'!f!.d:aGherardo Buen, were doing b-usiness in
trade since the exportation of speoe was forb1dden and English wool Lubea:,.A,[Link]~eyhad,to ~~gleagainst overwhelmilig oddsartd
was~ great demand on the continent. Paris pr~wed to be another a~a~­ _harely$~cceededln e~ out~liVlllg;:theitalian colonyin,Liibeckfailed
tion, and the Italian companies began to establish permanent agen?es m to,grow~ Proba_bly Italian_b~~ m,ethods, althqugh Superior, afforded
the French capital, so favourably situated close to Champagne. !his new no advantages mthe:Balnc regton; where [Link] noditrm withJocal
~t?ms· Moreov:er; :th<t Hanseatic League, one may be sure, WaS on<the
development was only the spearhead of&r greater changes which trans-
formed the entire fabric of medieval trade. ,alert 'and ~~ood rea~y,~"Qt!f~di~monopoly by economic! and politiCal
llistead of travelling to and from the· fairs, the Italian· qterchants,. es- ·means agamstany:.senousencroachment. '·· · ..,,,_ ··. · - --i · · ·:.' .
'_ · !hfoughq1lt •. thedater:Midill~ :.Agi!srthe ~tic cities;,;onderr·the
• Th_e writer wishes to express his appr~on !o the Social Scic;nce Research Coun-
cil for· a gDitt !hat enabled him to collect material for part of this chapter. . ~danceof_Liibeck;:coptrolledthe,BaltiC: trade as'the·Itiiliansdoihinated
m.:the M!;ditetraneaa Ariy.&[Link],;Vian competition ·hac:Hongd)een
44 TECHNICAL INNOVATION
CHARACTER OF MEDIEVAL TRADl! 45
crushed and most cities, including Stockholm, were German settle:-
ments. Business ~ethods in the Baltic were relatively backw~rd as com- in a certain way, was an adventure. It is with good reason-that the ex-
pared with those of the Italians, but they met the needs of a different~­ ~orters of English doth called themselves the Merchant Adventurers
vironment where operations were on a smaller sca_Je, where commodi- smce they bought doth in the hope of fmding cwtomen at the marts of
ties were not high-priced and where mercb~ts still ?-eeded to travel a Br~han~. ~s late as _the sixteenth and seventeenth centuries, mercantilist
great deal more than did the heads ofFlorentme banking-houses. . w~ters lllSISt on this venturing aspect of foreign trade, although some
I tis now an accepted view that theBlackDea_th(1348) ~arked the end. ~mt out that the M:rchant Adventurers do not run great risks, that the
of a long period of demographic and econonuc ~xpans10n and ~e ~ distance to the marts m the Low Countries is short, and that their trade is
ginning of a·downwardsecular tren~ ~ctenzed by .thec:losmg of well9tab~hed. Nevertheless, it sm_netimes happen~d that the English
markets, the recuirence of wars and epiderm~ and _the contrac~on ofthe expected h~ sales, but that the contmental buyers failed to appear. We
volume of trade. Without challenging this VIew, It may be pomted out have mennoned th_at there [Link] to venturing. Most-of them
that no such setback is noticeable with. respect to the Improve~~t of con~l~ arttc_les, such as tapestries, paintings and silks with ar-
business techniques. On the contrary, th~ fourteenth ce?-tury, e~pecially, ~orial bea~gs, which were made to order according to the specifica-
is one of continuous progress, innovation and expenmentatton. The tions <:>f foretgn c~tom~rs. T~us the Medici branch in Bruges had
draft form ofthe bill of exchahge1 for example, although known bef~re tap~tnes_of prescnbed dimensions and on requested subjects made for
Italian prmces. . ·
13 5o, did not come into general t1Se rintil afte~ that date. !he same applies
to marine insurance.· Mercantile book.,.keepmg; too, did not reach full Venturing_also affected the way of t:hinkm.g of medieval merchants.. It
maturity until I400, as [Link] w~ coJ?pare; for ~xample, the acco~t-" lars:ely explains the prevalence ofventure accounting. As a resUlt, it was
books of the Peruzzi company (failed li1IJ43) With tho~e of Franc~ a. ~despread_ custom t~ open a· separ~te account for each shipment. By
Datini(I4Io).1Anotherinnovationintroduceda~[Link]..,.
thisme~od, It was I_>osstble to determme which ventures yidded a profit
cion of partnerships similar to the ~odem holding, co~pany. ~ hes!: and w~ch resulte~ m ~ loss. Undoubtedly, the medieval merchan.t was
example of this is .the Medici_ banking:-ho~ ~o~d~d ~ I 397•_ Itis-~ k~rmterest~d m this type ofinformation: Moreover, in order to di-
that the. foundations ofall these new commercial mstltutt<:>ns were laid m ~de ~4 medieval merchants resorted to an infinite number of com-
the twelfth and thirteenth centuries. Neverthdess, they did no~ fully~ bmanons; and frequently participated in joint ventures with other mer-
velop until later. Perhaps' it could be argued that the se~~ar d~cline wh_ich chants;Thus the [Link], in 1441, had fot salecthree different
setin with the Black Death, by sharpening competttton and r~uang lots ofpepper: _o~e _they were selling for their OWn acco~ another lot
profit-margins, spurred: the ~ercharits to improve,.niethocls, mcrease ~as bemg sold m JOIDt account with the MeditiofVenice [Link] was
efficienCy' and ~;educe costs, With the result that oiily the fittest were a~l~ _ ~ply handle~ on a_ co~on basis for .an outsider;:This may be con-
to survive.2,Perhaps it is significant that no~; not eve~ the-~ sidered as a typical situation; ui [Link] limited to· Florentine :firms. The
bar!k, ever attained the size of the famous Peruzzi and Bardi cornpames, account-books ofi:he· Venetian~drea Barb~cigQ; (141~4.9) contain
which both failed shortly before the Black Death. ·· . :·_. . oth~r exampl~ ofthe same sort. It is safe to assert that this way of doing
busmess was fa~rly general. · ··
[Link] respect, medieval trade differed ~y .fro~ ~ode~ trade. To-
day most goods are sold befo~e they are ~J:'ped. This IS espeCially_true of 1Jre explanation li~s, ofcourse, in the desire to splifrisks, and medieval
heavy· equipment and mac~ery. Medieval trade, however, _Wlth few busmess was_ beset With all sorts ofhazards. The magnitUde ofthe risks is
exceptions involved ventunng. An ~rtment _ofgoods was shipped'?a perhaps another outstanding feature. Shipwrecks were frequent, hut dis-
distan!: place:in_,the expectation thautwould he sold ~t a rem~eratlve aster at sea was not the only~: piracy was an even greater threat.
price and-that the merchant would be able to:~e ?is• return_S. [Link] Even on land, roads were ?fh:timsecure becawe of warfare or robbery.
comniodities demanded. at hon;Ie. 5he same pnnople :·appli~,-~ ·the The:- slowness of c<:>mmum~nons favoured [Link]:dse rumours~
earlier, as,wellas·to the later perioddt r~y:d6eS not,make much·differ- :Vhich were s?me~es [Link] by. [Link]
encewliethergoodsareentrustedtoatr;avelll,ngmerch~~or.s:mton:c?n'­ tn. order to drive pnces up_or do~Drastic price fl~tions_werelikely
signment,~a¢0nespondentwho ha$.theb~denof fin~g;aJma~t_for _ [Link]~-mostcarefulfor~~'smceamarket,;~supplies~,.pllght
them.i:E4¢h.~ctibi4: therefore,dnv',olvcil~.:speculattve,~le~~ttand, : be gl~ th~ next moment·by:the ~expected amval ofa.carg0 ;0 r ~e
,; ,t;Eor~a; h1~cahketch. see Cambd!dm~BUt. ~Jr,i 3'37- f.;, ;; t=:·:•:lliiJ.'')IO md;33J. . s~den'-~el).t of ~e'.detnail<L Enibargoes-md)reprisals·w'ere;·ah~
. Q_i:her:soucce ofuncertamty.~,frequepdy:led. tri spo~thtougldaclc
 EARLY MERCHANT GILDS 47
COMMERCIAL RISKS
impossible to£avoid b "ddsin in the course ofbuymg· and selling?l . . M oreover
of care and to plunder through lack of supervision. Credit risks created tra ding. was ~r t ~n to cle_ric;s becauSe being constantly on the road
another serious problem, because recalcitrant debtors often took advant- was mcompallble. wtth reqmrements of residence. 2 The implication is
age of legal technicalities. and confli~~g juris~ctio~ to .evade their dearly that merchants were always on the·move.
obligations or to delay the course o~JUStlC~. ~estdes, JUdges were often ~ order ~~ p~ot~t ~mselves against high risks, they formed bands
hostile to: foreign claimants and lerue?-t wtth local debtors~ ~ven when and fra~tl~ which, m northern Europe, were called merchant gilds
these were patently lacking in good faith. ~a ru!e, ~~ pnvileges con- sec~ a gild extsted apparently in thetenth century among the merchan~
tained provisions promising prompt and rmpartial justl~, but whether o -~~e~ a town near the mouth of the Rhine, at that time presumabl a
they were always carried out is another ~~tter. M~ IDlght depend on Fnst~ settlement. The monk Alpert, who reports on their activi/es
the political mood of the moment. Conditt~ns vaned from one c<:>Untry constders them as wicked and lawless men, and relates what ts. m - '
to another. :Flemish courts, for example, enjoyed among the Italians an ~· cant £or us, thatlt
. t . ey pooled their resources, shared , their profits ~~ and
enviable reputation for impartiality. As a ·rn:-tter of fact, the ~ruges ~pent part oftlt~tr [Link] in [Link]~tunately, he does not 0
lcheiiins or aldermen went so far as to consult alien merchants on pomts of mto more detail about the opera_tion of this profit-sharing scheme. g
law or merchant custom, namely in difficult cases concerning bills ofex- _From the s?ttutes of another gild, the ftairie or brotherhood of Valene.
change. · · · · ·· ·· ·· ·. crennes, portions of which probably date. back to tlte tenth century
Against these hazards, the medieval m~rchant prc:'tec~ed ~If in also learn ~t
?te menibers did not-stay at home but were constantl; ;;_~
various ways, but chiefly by dividing the nsk or sharing tt ~th others. posed to perils ons~, water, ~dland'" Theyprobably travelled together ' ''

Diversification-was; therefore, the rule rather than: the exceptton. /l..s the marme~ caravans, [Link]-arttcle ofthe statutes fines the member who .:
a:ccotllit..;books-clearly show; merchants rarely specialized in one line of appears In the ranks ~thout armour ap.d bo:w. Once a caravan has left
bnsiness•; they dealt in all kinds of commodities an<ltrie<ho take advant- t~~the statu~ provtde, no ~ne is all~~ed to ~eave but all are to stay to-
age ofall·profit oppbrtunities that nug~t present themselv~. Even bank- g . an~ to gtV~ eadt oth~r aid and ~tance m case. of emergen . If
ing was::hot a:specialfield. Withouta' ~m~ldmo~exceptto~ thtrgreat anyone dies on a JOurney; his compamons are nnder obligation to . ~
theco~se fo~ according~
'•-f

Italiari>companies .combined intemattonal banking_ and fo~e1~' trade. at least three nights and• to bury it, if possible, ;

·.
~

(
Merchants• U:Saally sold wholesale. Although they·did not disdam occa-, i:he wishes of the deceased, . . · · ·. ·. · .·- . ·, i

sionally to retail their wares, they were often barrcil-from t~e·~etail trade . An ~ent picture of the v~ntures~m~ care6r ofa merchant W: those·
·"!·
by the privileges ofthe local gilds. Infringements·ofthese pnvileges r;ave early da:ys ts· afforded- by the life o~St Godric ofFinchale ( ro8o ?-i 170).s
rise to:niunerous conllicts• InBiuges, therewereinstances of'Lombards' B~ sta~·as:abeachcomber, earnmg his first pennies by selfuigjetsam;
'l}
.being -fln~d for:sellingsilk by the elLinLondon, too, violati?n ofthe,We
..
W~th this money he set out as a pedlar ro~ the countryside and then
w~ a pereruual;sourceofgrievance, aro~'S~dy-compl~ts fr?_m ~ _ gomg from mar~et te mar~~t, •Thus he met _andjoined•a cempany ·of .
>i'
. :etty~ •.
. I
mercers and other gilds; :ind made the Italians ·unpopUlar m the ' ,· hkrch~ts and With the~ VlSl~ed ill the shores of the:North Sea. Using
.l
,,
j ~

. earntngs [Link] hishtsmess; h¢ bought his own ship and became L

: . ~Decretum C?ratiani:·c. Qiialitds lucri; Dist s. c.· z_; D~'jioenit~tia. This 6mdn is art
IL. The 7'rq~el,[Link] Tra4e before.}3oo. eplStl~_ofPopei.eotheGreat(44o:-6I}to the-hishop·ofNarbonneU p .u~-..:s · ; ·
.ConCJfiOTUm · llatio. (Fl . ) · · ••.o..u=., aCTOTUm
lections. { .. co · md Vl. '?renee, 176~ • co~ 404)•. It is qu~[Link] all the eaxlieJ; col-
0 ·· · ·: .u~g ~P~:of J?~<?P-~ ~~ (~- ~ent;ury); Regi~Jo. of
"p• ··' f ·canons,)_
l
i"t2.6: !f!iro..n.l. th . . 1. (~~Qrrus ~-- . · flS?~on~, .cotp.J?il~d betW'~ lioi and
1nd! ~~~1;:! ~o~!r~·7;~~~}~~~c~~{tiri5);asw~~~
. Ofthe organization oftrade before:tlte t\ve~celrtmy; no~·m~.if , ·~ c:se ~II!riions; the 'Can:Q,_n Qiiiilil4s lUcri· fowtd "its ·way·•in:t-' •Lc- D ·.;.
anything, isld1ow'n;; Extant sources do _notcontatnmuch [Link];on a-etum ofGtatJai~;compo-St:d·:tbo [Link] ' ... v we. e
titjn ;[Link]··'ublicati . ;.L .. utn4o_~ f . . to ~orne the stand:trd compila.:.
this patticularaspectofeconorniclif~; . ·. > >: <" ·• ,., .• · · · :: · -.•.. , ........... ~- .. 9P.Q~~e·J?.~W;C<;>~.o ..[Link]•19I7 ·: · ., .:>. .
"Mercha:ntsi 'm any:cise;•[Link] assxgned'.plaq:~·the;pattern·.?ffeudal iiJ-!ler ~e:~:~·~ffi~¥~-·~~hfr;. ~eTfCC~~-Pr~;;:~_lllfl!l~~
sdciety~:::aiiq1jheir,adivitie5;; under theinfluence:oflTihmc:kdo~e;~~ vonKiiilifii,mGrossenbiSPapstAleXiliuler IJI(F "b • · ·1···.
• 1 '!1-~~·
···' ;:Hisln;'''r~ fi'~,: rt:t urg, rgos ,.t~.
,., , .. ,
'· a·gee-CJntBr.B»n:. Th't··.,-•d..'biirii>;·;.;L' -- ..
r~AedJ~tll~assomeF,g ~~~~the~:[Link]
. defailett::-"-~ iiNhai."':bf:W3lth8"r
• ---~~•...:~·.....} .
1 ~3 · ".,fsc?~y" .: ~.~b~a'u~~eflybyPiteiili~Wi~-nioid
:Vo~,·f£ih s&flihrciider?·ffiiufinallii um fioo'i
wickedness:illllttno'[Link];tonLaw~•fromiarly;tttneS;.deel:u:.[Link] Htl1ISISUieGeschidrtsblmter, xYI1I (i9I2), 2J9-48\ · .: ;:•;: ,,. _,,.,_. :
diffi61l~tei.·dis~ho:he$tfrom·~~auen:gainiamlitliatit::[Link]-:nearly .
48 THE QUALITIES OF THE MERCHANT
THE COMMENDA AND SOCIETAS MAlliS 49
his own captain. Favoured by good luck, he prospered and acquired Although safety along the roads greatly increased in the course of time,
shares in other vessels; At this point, he probably settled in a port and let the merchants from the Flemish towns, visiting the fairs ofChampagne,
others do the travelling and expose their persons to the fortunes of the still used to trav~l together in armed caravans as late as the end of the
sea. Late in life, he was touched by grace and gave up the pursuit of thirteenth century. The caravan would Set out on a given date under the
wealth in order to become a saintly hermit whose vita a pious biographer command of a 'mayor', preceded by a standard-bearer, armed servants
thought wdl ~orth telling for the edification ofless devout men. and crossbowmen flanking the carts and wagons carrying the precious
Details ofbusiness organization are not given, but we gather from the cloth. In 1285, about twenty-five merchants ofDouaijourneying to-
story that the ownership of ships was ~vided into shares_ and. that me~­ gether had with them thirty-six attendants, all armed, in cas~ ?f need. It
chants were often shipowners and naVIgators as well, a Situatlon dupli- is true that such a military display had become more tradittonal than
cated in. contemporary Mediterranean trade. In . or~er to succeed, a necessary. Single merchants-'-Or ~ere t~ey prof~onal wagoners?-
travelling merchant had to possess a great deal ofphysical endurance and were already going to the French fairs leading a tram offour or five carts
be ready to face many hardships. Although conditions were primitive, with several servants to take care of the teams.
he needed more than brawn: moral $tamina and some intellectual bag- The organization of the fairs of Champagne is, however, a separate
gage were indispensable prerequisi~ to succeSs. A good idea of the subject. On the whole, the docurnentati_on regarding ea~ly m:dieval
knowledge and the. character indispensable for a successful business career trade in northern Europe is scanty and gives us only .fleettng glimpses
is given in the King's Mirror, a Scan~vian treatise on educatio~, prob- of the conduct ofbusiness. To gain more insight, we have to turn south,
ably written in the-early part of the tlmteenth century. The date IS rather to the magnificent series of the Genoese notaries which starts~ I i56 with
late but the author's bits ofadvice are so precious that they constitute a the published cartulary of Giovanni Scriba or John the_ Scnb7. Sev:rai
vad; mecum forany ~nterprising youth. thousand contracts of later notaries have also been published, mcluding
The unknown author of the King's Mirror starts out by stressing the those of Oberto Scriba de Mercato (I I86-:-9Q), Guglielmo Cassinese
obvious facttluta merchant needs a good dose ofbravery and must ex- / (ngo-2), Bonvillano (n98), Giovanni di Guiberto (12oo-n), and Lan-
pect to encounter perils at. sea and in heathen lands. While he shoul~ be k franco (1202-26}. This uriique source material is complemente~ by a
polite and agreeable, he &hould also be waryand not buy any goods With- series ofVenetian acts, which areless numerous but start even earlier; the
out first checking their quality and condition. When abroad, he should first date is I021 and the lastl26I. There are also available the acts of
live wdl an:d go·to the best inns, but not indulge in extravagance.·It is Pietro Scardon (I27I) and Benvenuto di B~ano (IJOI-2), Veneti:m
also advisable to keep awayfrom drink, harlotS, braw~ and_dice, A know- notaries in Crete. Some studies based on this superabundant matenal
ledge offoreign languages, especially French and Lattn, rmg~tbe handy, have already appeared, but much remains to be explored. .: ,~
and he should not neglect the study of law and the observatton o(local From thes«, Genoese and Venetian records, it appears that the two most '·'1
eustom.S~ Somenotion of arithn:i:etidnd a5troriomy the author ofthe typical contracts in overseas trade were the commerula and the societas
King's Mirrorconsider8as fun~ental, sine~ a ~erch~t m~t know how marls-they were called collegantia in Venice, but ~e name has little,· if
to figure and to read the: skies when,navtgattng. It IS des~rable to sell any, importance.l Both contracts were partnership agreements, con-
quickly, at re3:[Link]~le prices,. for a quick turnover is a: stimulus to trade. cluded not for a period of years, but for a single venture or voyage, usu-
If the merchant owrui a ship; he should have ittarred every autunm, keep ally a round trip to the Levant, Africa, Spain or even Provence. There
the tackl!'! and apparel well in order, sail in the spring, and be sure to re"- were also commenda contracts per terram, that is, relating to distant trade
tuni by the ciidofthe sririimei~ s~~ Sho_Uld be'~ough~ in ~ood ships overland, or even to local undertakings, but these were relatively few.
on}y qr irt~~P:t:[Link]. If~~sc:~s£W,he-tru_gh~.~vest ~ ea~s ~-p~e~­ The commenda and the societas marls both involved co-operation be-
shi~, hl1t·h¢,sha,~<JlJ.e extrein~y:car~ 1Il ~~ecttng his as~oCiate$, This tween a travelling partner, called tractator orprocertans, and an investing
poliey [Link]:entually enable him to .discontinue his own Journeys: and partner who stayed on land and was called stans. Iri the case of~ the com-
inst~d f!nance the btisiness veilt1Jr~:[Link]~~er ~en. As profits con~ue memla the venture was :financed entirely by the stans; the travelling part-
be
td' · ile u''''lh ·' [Link] :jll:bet~vestd\rii·h,u5Iness. It would WISer

~~~=~~:t~f~~~~
ner did not supply any capital, but he took the risk ?f embarking upon a
dangerous sea voyage and had to endure all the _discomforts that ~ent
with it. As areward for his labours and his:hardships~ he usually received

B
·• Oii the ori,gins of the conitiletu1a, see Canib. EiOt;; ll#t. u, 26']. ,
.'

1
 PARTNERSHIPS AND PROFITS 51
50 THE COMMENDA AND SOCIETAS MARIS

only one-fourth of the profits; and the inves~g_rartner, who ran only for the Levant might entrust goods in commenda to another about to leave
the risk oflosing his money,_receiv:d the remammg thr:e-fourths. This for Champagne and vice versa. It even happened that a travelling mer-
arrangement may seem ~air, but m the twelfth and thirteenth centur- chant concluded a com~end~ with another sailing on the same ship and :.;
bound for the same destmatwn. Usually travelling charges were deduct-
ies life was cheap and capttal scarce. ... . ed from gross profits and only net profits were distributed, but it also
In the societas maris, profits were shared e_qually by the two pa~ers,
but the tractator supplied one-third of the capital ~d t~e stans, tw<r-thirds. occurred, especially in the case ofa reciprocal commenda, that the contract I'

E ti ·Uy the two contracts were the same, smce m both cases, one- provided that no account should be taken of expenses. There are not,
f~:ili ~f the profits went to the tractator for his labour and three-fo~ conse~tly, two opposed or antagonistic groups of investing and i.;
:;

to the investors of capital. In the societas, however, the tractator recetv:ed travelling partners, or of ~~ploiters and exploited. In a great many cases, : i
an additional fourth, or one-half the p~ofits in~· because he had supplied the tr~to~es were ambitious young men who were willing to take
-third of' the capital. The only difference IS really that the Genoese heavy risks m order to accumulate sufficient capital to join eventually the
one · lied. one contract a commenda andtheothera soc1etas . mans . ... ranks of the stantes. . '··:
notanes ca b · th How the commenda favoured the rise of capable young men is illus-
talian scholars there has raged a fierce controversy a out_ e
Among I ' th . . kind fl d trated by the story of Ansaldo Baialardo.1 When he started on his first
legal character of the commenda; some argue: [Link] ~a o _. oan an
others that it is a partnership, but all th~ ~edievalj~ts, canontsts as well trip,~ I I56, he was still_a minor, since he had to be emancipated by his
·-vili· . · eg:U:d the commenda as a liot partnership agreement and not father m order to enter mto a commenda agreement with an important
_as a. ans, r ·ca1 u1 tha th merchant, Ingo da Volta. Apparently, Ansaldo received from the latter
asaloansubjecttotheusuryprohibition. Thepractl . res_ twa_s . t e
lawfulness of the commenda was never questioned ~y etther J~ts or an amount of £20~ 4-S· Id. Genoese currency, for a coastal voyage to
theologians; in the Middle Ages,_ as everyone agrees, 1t was c~:mstdered a Provence, Montpellier or Catalonia. At the termination of this venture
partnership~ Moreover, legal wnters tend to exaggerate .t~e tmport:m.-ce profits amounting to 74 Genoese pounds were divided as tisual: three~
of their categorieS and they tend to. overloo~ the fact that,. m econo_rmcs, fourtlts or £55 ws. to the stans (Ingo da Volta) arid one-fourth or
partnership agreem~ts and loans are bastcally alternative and mter- £18 IOS. to the tractator (Ansaldo Baialardo). This was a return of more
than 30%.on invested capital. Such a highly satisfactory result probably
changeable forms of mvestment. . . ·
There are diffe~;ent types of commenda. In some cases, .the tractator was ind~ced ~~ ~ Vo~ta to entrust ~other commenda to Ansaldo by rein-
left free to make his returnS as he saw fit o~ deem~d most profi~~le. In vesnng~nntial capttal plus the IilaJOI part ofthe profits or £254 145, I d.

oth ers, h e W
. as- bound to bring ·back certam specified commodities. It
· · f1 · · h
Gen~ m aJ!· In a~dition_, Ansa}do invested £I 8 Ias. Genoese; or the
would be a mistake to consider [Link] as a sort o s ~ep~g partn.~r. w ? earnmgs of his preVIous tnp~ This sum, however, remained outside the
was only interested in getting a return o~.a sp~tiV~ mves:rnent..~ commenila agreemen.t and Ansaldo was consequently entitled to the full .-;;

was certainly true of the numerous cases m whic~ the ~vesting partn_c::rs profit on his o:vn investment. This second voyage was exceptionally
were widows and orphans, priests and_nuns, pub~c offiaals and notanes, profitable and ytelded a total return of £244 Iss. I !d. Genoese, ofwhich
artisans or other persons without busmess expenence. Howc::yer, there £17 ?s. tJ,d. represented the earnings made privately by Ansaldo~ The
were other cases in which the stans was an older me~chan~ who no longer remamder, or· .J;,227 6s. Gelioese, was then divided according to cus-
went overseaS, but who was still actively engaged m b~mess and some-. tomary proporuon: £170 9s. 6d; to the stans and £56 16s. 6d. to the
times undertook the sale of the goods broughtb~c~ by his p~rtner. It also tractatiJr.·
ha ened that an experienced stans acted as adVISer to relatives. or other BecauseAnsaldo managed his affairs so well, Ingo da Volta continued
pe~Fons and helped them with ~heir investm~t. 'Yi~out more inform:.t- t? give him finan~al support,· but this time for a voyage to Syria, Pales-
tion than the abstracts of notanalcontracts gtve, 1t IS dangero~ to make nne and ~gypt. Smce Ansaldo had now accumulated some capital: the
any dogmatic statements: real situations do· not always -[Link].n~t . two par11es; on~ August ii58, concluded a societas mads, in which Ingo
classifications. · . . · · .· · · t, · . da ·Volta supplied £n8 · :r 7s. 4-d...[Link] ·Ansaldo half this, amount, or
.Gen· .- .• ·t · ·asalsOcomrnonforamerchantstartmg:PP,tonatnp- o
. ' ··· · Genoese. Furthermore, Ingo da Volta put up an additional
ln oa, 1 .w ·. •th . ral
conclude a .n:umher of commenda and societas contra:cts W1 . .s~ve . pt:r-
. . ·. .. the terms ofa conimenda agreement which en-
sons allwalksoflife, In other iristances.- hedealtWith·only a~e'.SttmS.
m: titled !lim;,' as 1LisU:!l.- to thr~fourths ofthe profit. The remaining fourth,
Examples ~f reciprOcal commendae are not rare: a merchants~ out . . · -1 C£ Cainb. EcOn~ Nist. 11, 3o6, .
 SEA LOANS 53
52 PARTNERSHIPS AND PROFITS
~egio) to ~hebes in Greece and there to make the best possible returns
instead of going to Ansaldo personally, ·was t? be assigned to the sodetas . (m quo mel1_us potuero). Profi~ _are to be divided equally between the
maris•.By virtue of this arrangement, seven-eigh~ of the profits of the partners, Without fraud or evil mtent. If the venture, because of disaster
commenda went to Ingo da Volta and only one-eighth to Ansaldo. Ac- at s_ea or enemy action, results in a~totalloss, ne~the~ partner will have any
cording to these data, the total invested_in the venture, both societas and cla1~ _on th7 o~Ju:r. If any of the mvested cap1tal1s recovered, each will
commenda combined, amounted approXImately to 4-78 Genoese pounds. par_ttcrpate m It m proportion to his investment. Consequendy, it is
This third venture proved to be profitable, but not quite so profitable plain ~at profits were shared half and half, but that losses were borne
as the second. The sale of the goods brought back by Ansaldo produced two-thirds by the stans and one-third by the procertans. . . ·
760 Genoese pounds, so that there was a total profit of 282 Gen~ese
One o~ the great advantages of the commenda and the societas maris was
pounds. This amount was diV:ide~ betwee~ the commenda and the soaetas .~h:t~ ~e mvestors assumed only limited liability: they could lose their
maris in proportion to the capital mvested m each, so that £r_68 was allo- lUlttal ~vestment, bu~ no more, whereas, in the case of the compagnia,
cated to the first and £II4 to the second. The partners received, conse- or ?rdinary partnership, the partners were held liable to the extent ofall
quently, the following amounts: · i their pr?perty. An?ther_ advantage was iliat any investor could easily
:educe nsks_ by placmg his money in several commendae instead ofstaking
Ingo da Volta It all on a smgle venture. Still another feature of ilie commenda and ilie
t of the commenda profits 147 Genoese pounds
s?cietas maris was that ili~y lent themselves to any number of combina-
t of the societas profits 57
tions :md we~e _u_sually ~olved at the completion of each voyage. The
204 re~ulttng fl~Xlbility exp~ _why the ~o contracts in question were ad-
rmrably swted t? die. conditions prevailing in the twelfth and thirteenth
cen~unes, esp~ally ln overseas trade. They persisted even in ilie later
Ansaldo Baialardo
l . ! of the commenda profits 21 penod, and disappeared only gradually as inore elaborate forms ofbusi-

l t of the societas profits 57 nes_s organization gained ground. The commenda is still discussed by legal
wnters as ~ate_ as ~e seventeenth_ and eighteenth centuries, though this

I
78 may be an mdicatton ofconservattsm on ilie part of the juriSts rather than
of extensive use of ilie contract.
Next to the commenda and the societ~ maris, ilie sea loan was frequendy
In about three years, Ansaldo Baialardo, who had started ~th nothing,
used to finance ove~eas ventures. It diff~red from a straight loan in that
had accumulated a capital of 142 Genoese pounds (£64, his mvestment,
repayment was coi?-tll?-gent upon safe arnval ofa ship (sana eunte nave) or
plus £78, his profit on the last venture). On the ?ther hand, Ingo da,
successful comple~on ofa voyage. The risk ofloss through the fortunes
Volta had nearly trebled his capital in the same p~nod. ofthe sea or ilie actton ofmen-of-war was ilius shifted from the borrower
This unique information about the actual operatlOn oftwelfth-century
to the lender. Pri?r to the days of premium insurance, the sea loan per-
i
1.1 partnerships is taken from data scribbled _on three small scraps of paper
inserted in the cartulary ofJohn the Scnbe. They are regarded as the
earliest examples of medieval mercantile acco~~g. _Although crude,
fori?ed, to a certalll ext;nt; the same function ofprotecting the merchant
agamst loss thro~h shipwreck or piracy. At any rate, in case of misfor-
tune, he was re~ev:ed from any furilier liability which might oilierwise
l't they prove that partnership arrangements made It [Link] ~e
have thrown him mto bankruptcy. The only trouble with the sea loan
I merchants to keep records, not only about accounts payable and receiv-
was that, in order to get protection; the merchant had to borrow at high
able, but also about any elements that would enable them to determine
rates whether or not he needed additional funds. In the twelfth century
profit or loss. . · . . · charges o_f 40 or so% were ~ot unco_mmon for voyages from Italy 0 ;
In Venice, Pisa, Amalfi, Marseilles and the enttre Mediterranean area,
Constanttnople to Alexandria. or [Link]. Thus Romano Mairano a V e-
the commenda and the societas maris, although knoWn. under different
netiari merchant :esiding in Constantinople, borrowed, in 1;67, 88
names, were no less popular than in Genoa. As a ma~erof~act! the earliest
~erpers and prormsed to repay I29 perpers, both principal and interest
example ofa societas, or a collegantia, as it was called m V emce, Is~ cont~act
(mter caput et prode), ~enty. days after ilie safe return oflris ship from a
dated Aqgust 1073, according to whicha tractato~ or procettans bmds ~­
voyage to Egypt. This IS an mcrease ofmore than 45% which, ofcourse,
self to :i stans named Sevasto Orefice to take his cargo on a voyage (zn
 THE CAMBIUM MARITIMUM 55
SEA LOANS
54 had app~rently not received more than £20. The contract, it is true, does
does not represent pure interest only, but also includes a heavy premium not specify_ the amount actually borrowed, but tlte notary, in his register,
for risk. Nevertheless, such high charges absorbed most of the merchant's ~st wrote It doWil and then crossed it out, substituting tlte vague expres-
trading profit. . . . sio~ tantum de tuis d~na~iis. Why? Perhaps because the borrower was a
What distinguishes the sea loan from the commenda IS that the mvestor clenc, Another and SI~ar contract, bea~g the same date, involving the
assumes the sea risk (ad risicum et fortunam Dei, mads et gentium), but does same lender; and relatmg to the s~e ship, states openly how much was
not enter into partnership with the b<?rrower and sha:e v?th him the borrowed by a layman, owner of etghteen loca or shares, instead of four.
business risk. If the ship or the cargo arnves safely at destmat10n, the debt At any ~ate, our example proves first that OWilership of shares ~ mer-
is due in its entirety, regardless of the debtor's success or failure in earning chant vessels. was :vJ~ely diffused and was not confined to classes closely
enough to cover the charges on the loan. . connected wtth shippmg or mercantile interests. Second, it seems to indi-
There are at least three different types of sea loans. In Enghsh they bear cate that th~ sea loan was considered as a dubious contract even before the
different names, but not in French or Italian, which has been a source of promulgation of the decretal Naviganti.
confusion. All three types appear in .the Genoese notarial instruments :Vthough th_e sea lo~ had ~een used since Antiquity, the Genoese no-
from an early date. The first is the ordinaiJ -sea loan or foen~s nauticum, ta~al ~ecords gtve the rmpress10n that after 1250 it suddenly lost its popu-
which was unsecured save for a general lien on the debtors property. !anty mfavour ofanother contract, the cambium maritimum. This decline
One example among many is a co~tract concluded o~ 5 Se_p~ember ~I 55, lS undoubtedly du~. to the impact of the decretal Naviganti, by which
in which the debtors pledge all therr property (bona ptgnon) m secunty of Pope Gregory~· m 1236, formally condemned the sea loan and similar
a sea loan at the rate of 25% granted for a round;..trip voyage from Genoa ~ontrac~ as usunous, even though the lender assumed a risk not present
to Tunis. This type may be older than the <?ther two: It occurs frequently m a stratg~t ~~an.1 It would certainly be a mistake to believe that the
in the cartulary of John the Scribe, but 1t soon gtves way to ~or?er usury pr~~bitlon had no repercussion on business practices. As a matter
variety called in England the respondentia. Upon su~h ~sea loa~, pnncipal of fact, _It influe_nced gre~tly the d~velopment of banking because the
and increment must be paid, even tltough tlte ship Itself penshes, pro- theologtans, while ~rownmg upon discount, did not object to cambium or
vided tlte cargo'be safe. An example is found in a contract of 17 August e::cchange. The decline of the sea loan is another instance of the same sort.
II90, enacted by the Genoese notary Oberto Scriba de Mercato. Ac- ~mce any form ofloan aroused the suspicion of the ecclesiastical authori-
cording to its provisions, a borrower who has re~eived a loan of £ro, tles, ~e mer~?ant found it preferable to shift from the sea loan to the
Genoese currency, obliges himself to repay a like amount plus ten cambtum manttmum.
measures of barley, if a certain vessel or the major part of its ~a~go (vel ~~e ~erence between these two contracts was that the cambium
maiori parte rerum navis) returns safely from a voy~ge to Sardinia. The ':'anttmum mvolved 31! advance of:funds repayable in another, instead of
appearance of this new clause shows that the dra_ftmg of contracts was m the same, ~urr~nqr.· In both cases, of course, the debtor was relieved.
gradually improved by inserting safeguar~ w~ch prevented. debtors f~om any obhganon If the ship or tlte goods failed to reach their destina-
from seizing upon any pretext to evade therr obligatl?ns. . ?on. In the ca~bium maritimum, however, the lender's gain, instead ofbe-
The third type of sea loan is the bottomry lo~. ~t Is usu~lly made m mg expressed m a percentage of the principal, was cleverly concealed in
order to equip a ship or to pay for emergency repat~s m a foretgn po~ and the [Link] of exchange. Incontrovertible evidence is fot1nd in a contract
is secured by the hull, tackle and :apparel. Somenmes the lender lS also dated ~9July II~7, and enacted by tlte Genoese notary,John the Scribe:
given a lien on the frdght at the termination of a voyage. In Genoa, bot- ac;cor~g to which a merchant going to Constantinople acknowledged
tomry loallS could also be secured by part of a ship, as in a co_ntract ~f die receipt ~f £I oo, Genoese currency, and promised to repay the equi-
6 April 1213, according to which a borrower offered as s~cunty all his valent of this amount at the rate of three perpers per pound if a certain
property (omnia bona mea), but especia~y four loca o~s?ares m a company , ~essel safely. made port. However, should this repayment not take place
operating a vessel fully manned and ngged. In addinon, h~ pledged the m Constantinople, then the debtor was bound to pay in Genoa 300 per-
expected income from freight which would be allotted to his four shares. p~rs, ~t 9s. 6d. Genoese for each perper, one month after the safe return of
As usual, fulfilment ofthe contract depended upon the fortunate ou~­ his ship from the Levant. In other words, the debtor, who had borrowed
come of a sea voyage. Although the_contract relates only to a sho~ tnp Ioo Genoese_ pounds before- sailing .for Constantinople, incurred tlte
from Genoa to· Sardinia an:d. return, the rate was prestimably a:s high as 1 Deaetals, m X, v, I9, I!). The authenticity of Naviganti is beyond question.
30%, since the debtor, who promised to repay £26, Genoese currency,
S6 THE-CAMBIUM MAIUTIMUM
INSURANCE LOANS AND FICTITIOUS SALES 57

obligation to give his creditor either 300 perpers at destinati~n or this connection. Another type of contract was the so-called insurance
£r42 ros. Genoese upon completion of the round trip. To explam the loan ~y whi~ a shipowner made an advance to a shipper with the under-
gist of the agreement in another way, the lender,_ who had lent 300 per- standing ~tIt was due,. tog~ther with freight charges, only upon arrival
~f the shipment at destinatiOn. Complete coverage was not achieved,
pers at 6s. sd. Genoese ea~h. expecte~ to be rep:ud at the rate of 9s. 6d.
Genoese and to gain the difference, VlZ. 2s. IOd. Genoese on each perper, smce such ~dvances rarely exceeded 25 or 30% of the cargo's value.
in case of successful completion of the voyage. The figures show a profit The ea~liest known examples of insurance loans date from 1287 and
of exactly 42· 5%· This rate may seem high but, as stated before, It was are foundm deeds drafted by a notary in Palermo. Later, this form ofcon-
normal at that time for a long voyage to the Levant. On the much shorter tract is also encountered in Pisa (13 17). Its rather late appear~ce may be
trip from Genoa to S~~Y· a return o~ 25% was not exceptional. As ~e explained hr ~e fact tha~ insurance loans were usually granted to mer-
presence of this and similar contracts m the cartulary ofJohn the Scz:.be cha_nts rem~g ashore mstead of travelling aboard the same ship with
proves, the cambium maritimum was known lon~ before the promulf?atlon the1~ ~~rchandise, as had been the comm()n practice hitherto.
of the decretal Naviganti and. hence, was not mvented because of 1t and Fictlttpus sales_were also·used for shifting risks. An example is afforded
for the sole purpose of evading the ban against usury. . ?Y a_cunous and mvolved contract entered into by Palaeologus Zaccaria,
In the thirteenth century, agreements become more preose and ela b~r- m his own name and that ofhis father, Benedetto, the famous Genoese
ate. In general, repayment is secured by pledging the goods b?ug~t With admiral_, colonizer and owner ofthe alum mines atPhocea, near Smyrna.I
the proceeds of the loan and registering them ~der the creditor s nan:e According to this contract, concluded on 29 October 1298, Palaeologus
in the ship's cartulary. As a rule, contrac~ als? sttpulate tha~ the loan will so_ld for £J,OOO, Genoese currency, 6 so cantars ofalum, which he had in : ~

be repayable upon safe arrival of a certam ship or_ most of 1ts cargo (sana Aigues-Mortes ready_to be shippe? to Bruges in his own galley. The
tamen eunte dicta nave vel maiore parte rerum). This clause offered better seller, however, r~tamed th~ optlo~ to repurchase this shipment in
protection to the creditor, since it occasionally happened that a ship ran Bruges for 3,360 lt. tur., which he did not need to disburse but could
I!.
aground on entering a harbour, but that the cargo was salvaged before keep as a loan until the galley got back to Genoa, by offering as a guaran-
the hull was broken up by the pounding waves. The loss ofthe s~p. th~, t~e the return cargo bought with the proceeds from the alum. The sea
could not be used by the owners ofthe cargo as a pre~ext to repudiate t~eu nsk was assume~ by the lenders who, upon safe arrival of the galley in
debts. After 12 5o, the Genoese notaries, when drafttng contracts relating Genoa, were entttled to 13s. sd. Genoese for every sou tournois or 3,780
to cambium maritimum, took the precaution of stating explicitly that the Genoese pounds. However, a modifying clause limited the duration of
agreement was concluded nomine venditionis or nomine cambii, ~o doubt the contract to I November 1299, and released the lenders from any
for fear that otherwise it might be invalidated in court as a usurious loan. further commitlnents after this date. In other words, the debt was due not
Besides the cambium moritimum, there existed also a contract called . later than I Novt!¥lber 1299, even if the galley were still under sail. To
cambium quasi nauticum by modem jurists. "for example, according to an put the matter 1n:ore succinctly, Palaeologus borrowed 3,000 Genoese
act of 17 December 1215, a merchant borrowed in Genoa an unspecified pounds and pr~mlSed to repay £3,780 ~thin a year, or sooner,upon the
sum in local currency and pledged as security certain goods which he was safe return ofhis galley from a r01md tnp to Bruges. The charges on the
sending to Champagne. Repayment in mo~ey of Pro~. was to take ~oan were, co~quently. 26% •. which not only represent interest, but
place at the forthcoming fair of Lagny, With the restnctlon that the ~elude a prenuum for nsk. Ifthis figure is at all representative, the rate of
goods travelled at the creditor's risk. In other words, the d_ebt woul~ be mterest must have dropped considerably by the end of the thirteenth
cancelled if they were stolen or, for some other reason, failed to arnve. century.
Perhaps fulfilment of the contract was made depen~ent upon this c_on- . This agreement is a curious mixture of two different contracts. Why
tingency·because the goods were entrusted to a ~d pa~-poss1bly ~~ Palaeologus Zaccaria, in order to raise money, resort first to a fic-
chosen by the creditor-instead ofbeing accompamed by their owner as tttlous sal~ and then to a cam~ium mariti~um? It looks as if he sought to
prote~ himse!f not only-agamst .the perils of the sea but also against a
was usually the case. . .
Premium insurance did not develop prior to 1300, but merchants m drop m the pnce ofalum. The clumsiness of the methods used to achieve
the thirteenth century were searcliing for a solution of the risk problem this p~ose_is due in part to the rigidity of-the formulas used by i:he
and were experimenting with different types. of contracts tha~ wo~d notanes andmpart to the necessity ofcit(;Ul]lventing theusirry prohibition
offer protection. The role of the sea loan has already been mentloned m
1 C£ Camb. EcOn; 'H"tst. u, 336.
 MANAGEMENT OF SHIPPING 59
SHIPPING SHARES
58 table to the theologians.. The medieva1 overlook the fact that, even in the East India trade, a permanent com-
bY: adopting a l~[Link] fordth~tioctors-theologians as well as canonists pany was not created at the beginning. The first voyages were each sep-
mmd ·was legalist:J.c, and t d importance to the legal mould arate ventures, much like the temporary partnerships in the pioneering
and civilians-accorde an exaggera e days of Genoese and Venetian shipping.
in which contracts w:re castl. the same problem~the ownership of
d t divide nsks-a ways l . .
In or er o n1 eli "d d . to shares called partes or oca navts ill 2
ships was co~o Y ~ eV e~ce It even happened that vessels were
Genoa and caratt or sortes illerated b. another. Membership in one, how- It is clear that~ medieval times 'the major direction of a voyage was
ownedbyonegro~pand_~l membership in the other. There has been. a in the hands of the merchants, not of the shipowners, ·one of the char-
ever, was compattbl~ W1 b th aning of the expression loca navts, acteristic differences· between medieval and modem shipping'. 1 Con-
great deal of discussmn a out h e m: a company operating rather than tracts usually provided that the merchants taking passage on a certain
but it seems ~at it ref:_edt~o: i~:ihle hypothesis, a locus represented a vessel had the right to appoint a committee to inspect the ship before sail-
owning a shi~. Accdorh g h P her ofloca bore some relation to the ing and report on its seaworthiness and the state ofits equipment. During
certam . capacltyan , ence th '. t enum
f w Documentary eVl"dence sh ows the trip, they were lodged in the best quarters: the stem cabin under the
tonnage of a :ressel and { siZe ili.:~ c.:er~ as many shares as there w:re captain's. As pilgrims usually were noisy and troublesome, none could be
that, in certam cases at e:c't, could be o erated jointly by the entrre embarked without the merchants' consent. According to the sea laws,
mariners. Apparently, ships t~lybyeachoftheshareholders. the master also had to take a vote among the merchants on board in order
groupofownersorofcharterers,?rser,arathe whole group would be in to change itinerary or to decide upon ports of call. Their agreement was
In [Link] case, a manager af~ciTn or go and would be responsible even required when the safety of the ship made it necessary to jettison
charge ofhiring a cbir:w_anthdo ill ognaill_caterrest of all concerned. In the some of the cargo, although the captain could override their opposition
· th p ill e comm him in case ofextreme peril, after consulting his mate and three mariners.
for operat:[Link] e s .f h locus had to serve as a mariner -
latter case, each owner o a s~re or . xperue to take his place. On the Next to the captain, the scribe was the most important member of the
self or else hire someo~e at f s lwnfhl allot:[Link] ofcargo space, either crew. By the thirteenth century, the management of a galley or a large
other h~nd,_ [Link]& distoi~tt:e Tt:~o a :Uerchant. Of course, some com- merchant vessel required so much paper work .and book-keeping that
by loading lt himse or y oidabfe. For one thing, the. operators had to regulations in Barcelona and Venice prescribed the employment of two
mon expenses were unav d the shi and had to pay his wages from_ the scribes, but in Genoa one was regardeH as sufficient. The scribe was sworn
select a master to c~mman P tarial contracts throw much light to his office and his records had the same value as notarial deeds. One of
common purse. Neither statu~es ~rhlo . Moreover historians up to his main duties w~s to keep the ship's cartulary in which the cargo aboard
on the inner structure ~f medied . s f$l~ in busin~ss proc;edure~ If ·
1
now have been more illtereste m ail bl their study would quickly
was listed, item by item; as in the modern manifest. The merchants were
even required to declare to him the money which they carried in their
' counts were av a e, · . ·
on1y some shiP s~ ac. bl. hi. hhave stirred up so much discussiOn . belts or concealed in their bales. The scribe also tallied and recorded the
so1ve a11 the P uZzling pro ems
fl w c · M eli
. h es so pervasive ill e terranean goods loaded or unloaded, kept the roll of the crew, computed freight
At any rate, ~e syst:m o oca or~ ar ;with the management ofjoint charges: in short, he did all the clerical wotk and was an indispensable
shipping, made lt po~ble to expell~d later on a larger, scale, This ex- business auxiliary. ·
business ventures, at .st on a smb , . on future economic develop- Pirates and corsairs h<!ing a· perennial meriace, medieval vessels sought
perimentation has an 1~portant ~:~es arise in overseas trade? It is protection by navigating in convoy or in company. The Italian republics
ment. Did not the first JOill~ stili~ ~utl. and the English, but their p~o­ tried to increase security along the sea lanes by concluding treaties of
true that they w;~fuiet f~ar with Italian precedents in the [Link] amity and commerce with the powers bordering on the Mediterranean.
rooters were ce y a .. 1 nial ente rises such as the maone of __.-- This was only the first step. Usually, it was accompanied or followed by
and management of collect:[Link] co o p 11 vidci_ a~ong the shareholders attempts to secure· trading privileges, if possible on more favourable
Chios an~ ~e~ta. Was not~ !~iliden:t [Link] Mun reside for many terms than those' granted to t;:ival cities. In the Middle Ages, protectionism
of the Vrrguua. Comp~y' · h . ed to London and became one ·. 1 E. H. Byine, Genoese Shipping in' the Twelfth atu! Thirteenth Centuries (Cambridge,
yearsinLeg~omandPflsthabeEfore r:dt~mpany? Moreover, let us not. Mass., 1930), 36. ·· ' · \ . · · . . . .
of the first directors o e ast . a .
 60 ITALIAN MERCHANT COLONIES
ITALIANS IN BYZANTIUM 6I
was not yet born; the aim of commercial policy was to get preferential
treatment and to strive for control of the carrymg trade. . was eve_n agreed that thewest~rn cons~. in Alexandria should be granted
With this purpose in mind, _the Italian maritim~ cities, especially ten ~udienc_es a year. T~e detaile~ provlSlons of the treaties definitely give
Genoa, Pisa and Venice, put their sea-power at the dispo~ of~~ cru- the rmpresswn that b~mess relaoons were carefully regulated in order to
forestall as far a~ possible_ any causes of conflict or friction that might en-
saders; in exchange_ f~r this aid, th~y ~ecure~ v~uable trading privile~es
and obtained perrrusswn to establish colomes m the ports of Palestme rage the despooc Egyptian sultans and have dire consequences for any
westerners on whom they could lay their hands.
and Syria. In some cases, the grants included o~y a few houses or a str~et
(ruga), but sometimes they extended to a~ entl~e q~rter ofa town. Like In_the early Middle Ages, Amalfi and Venice were subject} at least
the concessions in the Onent and the capitul;toons m the O~oman Em- nommally, to _the Greek emperor and, hence, the merchants hailing from
pire of more recent days, the Itali~_colonies in the_Levant enjoyed extra- these tw~ Italian P?rts needed no special privileges to ply their trade in
territorial rights. They were administered by offiaals sent by ~e mother Constanonople o~ m any part of the Byzantine Empire. This advantage
city, called at fust viscounts and later consuls, whose fimcoons were, was lost ~fter Veruce, around 9 so, had gained its independence and after
ofcourse much more extensive than those ofconsular officers today. The J\rnalfi, I!l.I076, had been conquered by Robert Guiscard, the Norman

I medievai colonial consuls were invested with bo~ administrative and king ofSicily. However, this ruler's invasion ofAlbania caused the Greek
judicial powers and had the rig~t to decide any disputes ~~ol~g. o~y ~mp~ror, ~exius Conmenus, to seek the support of the Venetians and to
their own countrymen.·In certain cases, they even had cnmmal JUnsdic- Issue m their favo~ the Golden Bull of ~082, by which they were granted .I
tion and authority over life and limb. As a rule, the agreements ent~usted complete e~emption from customs ~uties, or !<OIJIJEpKlov, and pennission

I the consuls with the custody of any property left by dec~ed naoon~ls. to have thetr own [Link] and landing steps m the capital. The grant of
Grants usually allowed a colony the ri~ht to have _landing p~ace, mill, 1082 was re~ewed ~ II47 an~ ext~n~ed to ~~islands of Crete and Cy-
prus. The Pt~ans did not receive sunilar pnvileges untilnn, and the
bakery, warehouse, baths and church ~fIts own_. BeSides a floaong popu-
lation of travelling merchants, the Italian colorues had a core of perman- Genoese until IISS; but the concessions which they wrung from the
ent residents made up ofofficials, artisans, brokers, sho~ke~rs, an~ local
Gre~k emperors were less favourable than those granted to the Venetians
tradesmen. Not all the settlers were Latins: the secunty eJYoyed m the and mvolved only a reduction of duties from 10 to 4% instead of com-
foreign concessions also attracted Levantine Jews, Gr~ and. S_Yrians.
ple~e exemp~on. In any case, the excessive privileges granted to the
In Moslem lands, for example in Tunis or Alexandria, condi~ons were ~tlns, espeaally the Venetians; put them in a strong competitive posi-
different and less favourable. The concession usually reduced Itself to. a tion and. enabled them to ~apture ~e Greek carrying trade and to exploit
compound or walled enclosure, call_ed fondaco in Italian and Junduk m econorru~~y the ~yzannne Empire.1 Their overbearing attitude and
Arabic. It ordinarily contained lodgmg quarters, a warehouse, a bake- monopolisoc pra?IC:es w~re bound to create resentment among the
Greeks and to mVIte a hostile reaction
oven, a ba:th-house, a chapel, and a. graveyard,. The gates were closed
The emperors, to~, realized the ~gers resulting :from economic in-
each evening, and residents were locked in for the night. These ~pre~au­
tions were no doubt vexatious but .they afforded some protecoo~ m a filtration and alien political interference. After I 147, Manuel Conmenus
hostile environment where religious fanatiqsm could touch off a not at gra~ually chan~ed from an open-door policy to one of xenophobia. To
·be!pll With, he Issued a decree which required all permanent Venetian
any time. In Tunis, customs duties were catef~y re~~d by ~reaty.
Dealings with native merchants could take pla~e ~Ither Within or Without reSidents to tak~ an oath of allegiance and to become denizens, or
the customs-house; In the first ca~e, the administrators of the custo~ f3ovpyea1ol, obVIously a term borrowed from the occidental languages.
On 12 M~rch I I71, the emperor ordered the arrest ofall the Venetians in
assumed all responsibility for the execution ~fthe. deal. ·~ Alexanqna,
conditions were much the same. Genoese, PISans, Venebans, Catalans, Constanonople; ~y we_re killed in the :fray and only those escaped
Provencals, French and Ragus3ns had sep:u-ate. [Link]. As in who took to the .s~p oftherr countryman Romano Mairano, putting out
Tunis, the customs officers guaranteed payment ~or any sale concl~ded to sea and o~tsailing a <?~ee~ fleet launched in pursuit. Although peace
was re~tored m I 175, this li'lcident started a chain ofevents which culmi-
through a dragoman or licensed broker. The treatles g~erally conta~ed
nated m the Fo_urth Crusade and the establishment of the Latin Empi.t:e
detailed provisions concernirig the rates o~i~port ~uoes and ~Iso sopu-
(I204), a Venetlan protectorate. It ended in I26r; but the Greek restora-
lated thatthe consul could present ~y &ne~@Ces dir~y to. the suit~,
tion resulted only in replacing the Venetians by the Genoese, who now
either in writing or by word of mouth. To leave nothing to chance, tt 1
See Camb. Econ. Hist. u, 99, JII.
 62 ITALIANS IN BYZANTIUM
SLAVE MARKETS AT CAFFA AND TANA
also obtained complete exemption from customs duties. Soon the Greek colony to all the Genoese establishments . h . . 63
emperors adopted the policy ofpitting these two rivals against each other. e~en to those in Trebizond and th C . m t e Byzantme Emprre, and
To no avail: it did not prevent them from reaching a modus vivendi at the different titles the coloru'al o . e . nmeaf .hSave that the officials bore
expense of the Greeks and from dividing the Aegean into spheres of in- • rgaruzanon o t v · d th
was much the same as that ofth G e enenans an e Pisans
fluence. The Venetians kept Candia and Negroponl:; which they had pos- p h e enoese.
er aps a word needs to be said b th
sessed since 1204; but the Genoese Manuele and Benedetto Zaccaria the Crimea and Tana at th tha fut e Genoese colonies ofCaffa in
managed, in 1264. to acquire in fee the alum mines of Phocea and, in markets of the Middle Ageemsout do ~he Dhi~n. They were the great slave
1304, to take possessionofChios. In 1329 the Greeks regained control of 1 d , a ra e In w ch th Chris .
P aye ;t conspicuous part The Gen I fe. nan merchants
I,. this island, but not for long. They lost it again in 1346, and this time irre- til · oese co ony 0 CafE ·£
trievably, to a fleet sent out by Genoa to reconquer its outposts in the
Aegean. With all its major resources and its strategic points in foreign
un 1266, or thereabouts after th tr
given the Genoese free ac~ess to th: a was not ounded
B eahof Nydphaeum (126r) had
organization was much the same th osp orus an the Black Sea. The
hands, the Greek Empire was undoubtedly weakened to the extent that it gions around the Black Se dia~ at of the_ other colonies. In the re-
. th a, con nons were still p · · · d .
was unable to resist the Turkish onslaught. It is not surprising that Byzan- I
on y m e process of being introd d E . rurun~e an com was
tium succumbed; ratherit is a wonder that it lasted so long. calledsommi, were the principalme:eof ven m Tana, mgots of silver,
At first, all the Latin quarters in Constantinople were located in the was still based on the barter ofcl th d linpaym~nt, and farther east trade
city itselfalong the shores of the Golden Hom, each with its own landing Books on economic histo o
.
:m c~n agamstfish, caviare or slaves
ry wntten .ur1t y ye ·
[Link] was only in 1267 that Michael Palaeologus thought it advisable to o nly With commercial treaties tr d 'vii ars ago were concerned 'i

transfer the seat of the Genoese colony to Peta, or Galata, on the other
side of the Golden Hom. For one thing, this transfer eliminated the possi- IS a one-sided approach Ho .
.
~ents, but paid little or no atte~ti~n ~!b eges and ~ol~nial_ establish-
usmess orgaruzation Itself.' This
bility of riotous fights between Latins from neighbouring quarters. agreements and institutionswperve~d·Itdshould_ not be overlooked that these
· OVI e a settmg whi h d 'b
Second, it put an end to the uncomfortable presence of a large body of order1y conduct ofbusm·ess and rr d. d c ma e possi le the
· . auor e somepr t · .
foreigners within the walls and in the immediate vicinity of the imperial tano~, SeiZure or arrest. It is not surprisin that tho ec':Jon ag~t moles-
palace. c~>nsidered any serious violation ofthee! . e It:ilian mantnne cities
After 1267, the Genoese colony was headed by an official called podesta; did not hesitate to use force if th failed t tmt tr~anes as a casus belli and
the Venetian, by a bailus; and the Pisan, by a consul. These officials were
not elected by the lOcal residents, but appointed by the home govern-
role ofthe colonies is important: et
outposts where the Italians
th o tam prompt redress. The
1 y thano er respect: they were usually
. , or at east e merch ts f th
ments. Like the consuls in Syria and Palestine, they were at the same time came Into contact with another world ~ o sou em Europe,
·governors, judges and diploma tic agents. It was their duty to iron out anY _ by religious, political, linguistic and oJ:om bhich they were debarred
difficulties that might arise between their nationals and the Greek auth- · for example, was the place where the mer o stacles. Thus, Alexandria,
orities. Their powers, however, did not extend to treaty making, and allthewayfromlndia Th tl Y. etth_eArabswho brought spices
. . · eset ementsmSyn p £ d h
any important negotiations were conducted by special diplomatic mis- non. Tuniswasthetermm·al· fth a er orme t esamefunc-
. o ecaravanswhi hb h th l
sions. The Genoese podesta held court in Peraand was assisted in his duties myste~ous Palola across the Sahara. As for Caff~ andoug t ego d from
by a staffofclerks, sergeants and notaries. According to the regulation of two pomts where the Italians traded .th th . Tana, they were the
1304, he was bound in certain cases to consult either a large council of ese silk from Mongolian ca 1 d . WI e Russians and bought Chin-
twenty-four or a small council of six~ It is even said that he could not dis- the road to China across th:::;u~vers. Althoug~ Pegolotti asserts that
miss a dragoman without their approvaL One ofthe most important day and by night, the number of th;s:;!hs of Asia :was pe~fectlysafe by
branches ofthe administration was the officium mercantiae, or commercial have been exceedingly small and Itali o took him at his word must
bitreau, which had the difficult task ofco-operating with the Greek cus- transact their business in Catfa or .;::trath anshundo~b~dly preferred to
toms in the detection ·of frauds. The purpose was to prevent goods from and run undue risks In thet.. r 1 . th I . e~ t an to mutate Marco Polo
being falsely entered as Geiioese property in order to pass them duty free. nee ded m . order to deal
· ·thco orues- e talian . mereh ants f(ound all they
Merchants who defrauded the cruitoms in this way exposed them5elves vice about local cust WI .. strangers: resident friends to give them ad-
. oms, Interpreters and b k ak
to severe pelialties infficted by both the Greek and the Genoese authori- notanes to draft deeds and trustw rth . d ro ers to m e contacts,
ties. The jurisdiction of the podesta in Pera·ext:ended ~eyond the local_ should they have ventured outside~ct!.~ty igtes to ser;J-e [Link]. Why
. ~- was prerera e not to take
 THE CAREER OF ROMANO MAIRANO 65
THE CAREER OF ROMANO MAIRANO
text it appears ~hat the ~ord sors refers to cargo or, more precisely, to the -
any chances and to deal in an organized market, and that is exactly what cargo stowed m a de~te amount ofspace. According to the surviving
most. of them did. records, R<:>mano M~ano was partial to the sea loan, but he did notre-
Unlike the other colonies or establishments, Constantinople was not sort exclustve~y to ~-method offinance. Besides the collegantia, he also
an outpost on the fringe ofthe Mediterranean basin, but a trading and dis- used the cam_btUm marzttm_um. In February I 167, for instance, he borrowed
tribution centre located at the most strategic point of the Greek Empire. IOO Byzantme perpers m Constantinople and promised to repay I 34
Instead ofbeingjust a port of call, it was a base of operations for many Saracen perpers at Acre.
Italian travelling merchants of the twelfth and thirteenth centuries. Since In_ II69, after several years of absence, Romano Mairano returned to
the Greek carrying trade had fallen under their control, they had their V ~c<;: and took advantage of this opportunity to conclude with the
headquarters, not in Italy, but in Constantinople, and from there they patn,arch of Gr~do an agre:ment by which he was to farm all the patri-
organized trips either inland (into the Balkans or Asia Minor) or over- arch s revenues m Constantmople for an annuity of £soo, V eronese cur-
seas (to the Black Sea, the islands in the Aegean or even the northern rency. T~e contract w~ to last six years, but was voided after a few
coast of Africa). ~nthsf smce the Ven:ttans, on I2 March II7I, were either massacred or
An excellent example is furnished by the career of Romano Mairano, ven. ro~ C~nstantmople. As we have seen, Mairano managed to eS.:.
on whose ship, as we have seen, a number ofVenetians made good their cape With his ship and ev~ to sav: the lives of many of his countrymen.
escape when their colony, in II7I, was suddenly assaulted by the Greeks. Neve~heless, he l<:>st heavily and It took him years to recover from this
From II 55 to II69, Mairano seems to have resided continuously in Con- blow, tfhe ever did.
stantinople, where he owned a house and from where at first he made Ba~k. in Venice, Mairano did not lose heart, for he was soon bus
short trips to Smyrna and to the ports of Macedonia and Thessaly. As org~g new ven~es. In Ii:73, he went on his own ship to Alel-
these ventures were apparently successful, Mairano used his profits to de- "?-dria ~th_a c~rgo of timber and brought back pepper and alu1n. At that
velop the scope ofhis business and, after u62, to extend his travels to time, his rnnopal financial backer ~as_ the son of the Venetian doge. In
Acre and Alexandria. The records show that, in n67, he organized a II77~ Matrano undertook ~e orgamzat10n ofa trip from Venice to Alex-
voyage from Constantinople to Citro (near Salonika) and Alexandria andria and thence to Bougte and Ceuta, but this venture proved a failure
with two ships of his own, sailing one himself as nauclerius or master and and_ was not_ repeated. From II79 onward, he resumed his voyages to
entrusting the command of the other to a Venetian, -Bartolomeo Zulian; Sy~a, Palest:ne and Egypt. In II84; he built a new ship. During this
This venture was financed in part by eight sea loans amounting to nearly penod, he raiSed needed capital by means ofanew type ofcontract which
900 perpers (July n67). Judging by their names, the lenders, with one mvolved an advance offunds in Venice and the delivery ofso many can-
exception, were Italians rather than Greeks. It also appears from the tars of alum or centers of pepper upon termination of a voyage to the
records that at least four of them, who had advanced a total of 488 per- Levant. A_s usual, the goods travelled at the risk of the buyer. Although
pers, made the same voyage and were repaid principal and interest th~ V enet:ans, after the e:vents of! I 7I, hadre-established commercial re-
(caput et prode) upon arrival in Alexandria (November n67}.The others lano~ wtth th: Byzantme Emprre, Mai:tano did not reappear in Con-
did not receive their due until February and March I I68, after successful stantmop~e until II~9 <?r II90; Not until then do we [Link] con-
completion of the round trip. - tr~cts which show him m Tyre (Syria) taking up money on the eve of a
Apparently, Mairano was a merchant as well as a shipowner and had ~p to Abydos (Dar~elles) and Constantinople. Although by now
an interest in the cargo loaded on his two ships. While in Alexandria, he Sixty rears old, he was still commanding his own ship, but he was about
entered into a collegantia contract with one Domenico Giacobbe, accord- to retire from acti~re leadership. After II92, he apparently remained
ing to which he invested two sortes, worth I 8 perpers and 7 albos, of the ashore ~d placed~ son GioVanni in command ofhis ventures. In Ma
ship commanded by Bartolomeo Zulian, and his partner only one sors, 12oo this ~on was still~giilg his father's business affairs, since aco~
worth half this amount or 9 perpers and 3 · 5 albos. Domenico Giacobbe
la
tta~ of this ~atfremenno~]lim as settlin. · g th.e accounts of a collegantia re-
was apparently travelling on the same ship, since he was expected to trade tmg to a tnp om Vemce to Alex:Uidria. · . . . ,
with these three sortes in Almiro (near Volo, Thessaly) and to render ac- Romano -~air"?-o w~ still ~ve [Link] [Link], but he seems. to
counts to Mairano fifteen days after its arrival in Constantinople. As h~ve been livmg _m straitened rucumstances, ;since a cousin had to lend
usual, profitS were to be divided equal1y between the two partners, but him £so, Venenan currency, pro amore.,· 'without intere5t. Did hisluck
losses were to be shared proportionately to mvestmetit: From the con- F .
 66 ORIGINS OF BANKING
[Link] OF BANKING 67
run out atlast? Did one ofhis ventures end in a disaster involving ~ilion?
In any case, Romano Mairano must have died soon after. 1201: W1 out but ~ type _of activity remained the exception rather than the rule.
· ot· h er than a. daughter Durmg the thirteenth century, not only in Genoa, but also in Marseilles
herrs · who was a nun· Her convent · inhented all off
11 h
his property, including a bundle of business papers which te t e story o exc~ge dealings with_the fairs ofChampagne were mainly in the han~
his career. of Stenese and Place~ttne mercantile companies. In these transactions
they made use of an m_strumen~, called instrumentum ex causa cambii, by
3 w~ch a borrowe~ havmg received an advance in local currency pro-
The twelfth and thirteenth centuries witnessed not only a great_ex- nnsed repaY:ment m another curr~n~ and in another place. By definition,
ansion of trade and industry, but also saw the development ofbankin_g. such a c~mbtum c?ntract necessarily mvolved a credit and an exchange
ft seems likely from a number of references thatthis development had tts trans3;ct1on. !he tnstrumentum e::c causa cambii is undoubtedly the proto-
type o~ the bill of exchange which, as the name indicates, served origin-
· B antine and even in Roman and Greek precedents. The
roots m yz .
trouble is that the incidental mentions gtve
· littl · di · t th
e m catton_ as o e ally to t~plement a ~ambium contract. According to circumstances, the
nature ofthe banking business to which they refer. According to the mer~tile and banking companies were at one time takers, or sellers of
Book ofthe Prefect, which dates from the tentlicen~, bankers ofCon- foretgn exchange, and at another, deliverers, or buyers who made ad-
stantinople were certainly engage~ in money;-c~g; unfortunately, vances on the spot in order to acquire balances abroad.
the text alludes only vaguely to therr other actlvtttes. . . The ordinaty cambium contract differed from the cambium maritimum
The frrst documents to lift the veil are the Genoese ~ota~al records _of in that repayment of the debt w~s unconditional (salvos in terra) and
i
I the twelfth century. According to this source, the designation banchenus ceased to depend upon the safe arnval of a vessel or the major part ofits
was reserved exclusively for money-ch~gers-undoubtedly because cargo. Among many others, a good example ofa cambium is fmnished by
I! they conducted their business seated behind a table (tabula) or hank a co?tract, dated 26 March 1253, according to which Roffredo Braman-
i
(bancum). By 12oo-as the Genoese notaries reveal-_these so,..,called z~ml, the Genoes~ representative of the Sienese Bonsignori firnt, recog-
ji
bankers no longer confined themselves to money-changmg, but had_al- ruzes that a FleiD1Sh mer_chant_from Dixmude has given him £390 in
l·II ready invaded the field of banking proper•. Th~y are sho:wn forn:nng
partnerships, accepting. time· and demand ~epoSl~ extending credit to
Genoese currency, and bmds himself and his partners to furnish in Lon-
don roo marks of I3S. 4d. sterling each not later than fifteen days after
Easter, or on 5 May 1253. According to these figures, the pound sterling
I! customers and even participating directly m b~~ vent~es beyond
the seas. The most useful details, however, are gtven m ~ senes ofs~orn was rated at £5. 17s. od., Genoese currency. Since the Bonsignori com-
pany was a powerful banking-house, it is likely that the main purpose of
i statements collected in 1200 by the Gerioese notary, Gugh~lmo Cassmese,
I in connection with a lawsuit. They prove first of alltha~ tt was common the contract was to transfer funds from Genoa to London or perhaps
among merchants to have?ank ac~ounts and to make payments by book from Gen_oa to Flanders. by way ofLondon. In any case, this is an instance
·!
transfer rather than in spe~e. Not infrequently,the ~ankers grant~d ill_e- of a banking-house ·selling what may be considered the equivalent of a
draft on its branch in London.

.I
II
dit to cUstomers by allowmg them to. over~aw therr accounts. Fin y,
arrangements between banks made tt. possible. to _tran~fer funds even Prior to 1200, we already meet in the Genoese notarial records un-
qu~stionable examples of dry exchange, a spurious exchange contract

I
when the debtor and the creditor had accounts wtth differe~t money-
changers. The exact procedure followed in sue~ settlements ts not clear destgned to conceal a loan at interest. Thus, in a contract dated 9 April
I from the records. At any rate, cheques were notm use; but transfer orders n88, two Frenchmen acknowledged having received from the banker
i were given by word ofmouth and written down by the b~er unde~the B:ltrame Bertal~o an unspecified sum of Genoese ·currency and pro-
~sed t? pay £4 m ~rench ~urrency at the forthcoming May fair ofPro-
I
i
dictation of the customer, so to speak. The BankofVemce remamed
faithful to this way ofdoing business untilii:s _dissolution on the eve ofthe vms, wtth the proVlSo that 1f the debt were not repaid in Champagne it
would he due m Genoa upon the return of the merchants who ·went in
I! nineteenth century, .and its regulations stnctly forbade book-keepers
from entc:;ring any transters in their joun,uls uriless the order came from carav:an to [Link] fair. 1 In the latter case, the four pounds in deniers of
the lips of the depositor or his lawfulattorney. · . ·· · . · Provms were to be converted into -Genoese currency at the rate of 16d.
An English tt:iilslati~Ii. of this c~nttact is available iri Rob~rt S. LOpez iiJid Irving
1
. The. notarial· .records show ·that the::Genoese mo~ey-changers, ··or · ,
bankers, 'cicbsionally made' advances against promises,payable abroad;. W. _Ra~ond (eds), [Link] Trade rn the Meditetranean WorlJ {Records-ofCiViliZation
·Senes, No. sz, New York: Columbia University Press; I9SS), r66.' ' ·
 68 NOTARIES
PARTNERSHIPS 69
Genoese per sou. In other words, the amount due would he .£5 6s. 8d. forty contracts, including seventeen commendae for the Saint-Esprit
Genoese. It may be taken for granted that, from the outset, the _contract- w~ch actually weighed anchor the next day, and ten for the Saint-Gilles:
ing parties had every intention oftaking advantage of th~ proVISo an~ of which also was expected to leave port at any time.
repaying the loan in Gen?a ~tead ofin Cha~[Link]~. Bestdes, speculanve . Although notarial fees were low, it was inconvenient and time-con-
risks were completely eliminated by determmmg m_ advance the !ate of suming to approach a notary for every business transaction of any im-
exchange, so that the contract reduces itself to a str:ughdoan calling for portance. This inconvenience was felt more and more as the volume of
the final payment of £s 6s. 8d. Genoese. . business grew, and as the ius mercatorum gradually recognized the validity
During the thirteenth century, the ~airs of Champagne were the great 9f_inform~l instrume~ts. Ye_t it is not easy to change accepted ways of
international money market and clearmg centre as well as the great mart domg_b~mess,_and the Mediterranean seaports, in particular, were con-
for commodities ofall kinds. Exchange-rates were always quoted on serval:lve ~ therr metho~s. It w:as only gradually that the notary was dis-
the basis of one sou or twelve deniers ofProvins (which were the same as p~~d With save when his s~rvices were absolutely required to give legal
•• 1
the deniers toumois) and in a variable amount of foreign currency. This validity to a contract, as With powers of attorney or protests of bills of
method ofquotation was used both at the fairs and in G~oa?r any other exchange. _In Genoa, even as late as the fifteenth century, insurance con-
Italian centre in regular relations with the Champagne f:Urs,Just as today tracts conl:lnued to re~uir~ the intervention ofa notary, although it was
the exchange is quoted both in London and on the conl:lnento_n the basis ~o longer the custom m PISa and Florence, where the brokers made out
ofthe pound sterling. A rise ofthe rate was fav?urable _to the f:urs ~dun­ Ins~ance policies and circulated them among prospective underwriters
I. 1
favourable to the other places, and the opposite applied to a falling ~x­ until they had collected enough subscriptions to cover the risk. Genoa,
Ij i ,
change. In accordance with medieval practice, interest, as a rule, was ill-
eluded in the price of foreign currency. . .
too, was much slower than Florence in replacing the notarial instrumen-
il
tum ex c~~sa c~mbii by the informal bill of exchange.
n
I·
In comparison with the enormous quantity ofnotanal recor?s still ex-
tant in Genoa. the source material relating to the other Mediterranean
Condinons m the twelfth and thirteenth centuries were such that the
merchant. usually· accompanied his own goods, whether on sea or on
I, ports is much iess abundallt. In Venice, only a few hundred notarial con-
j: land. In this respect, practice began to change around 1250. Nevertheless,
I,. tracts seem to have escaped destruction, although the oldest of them go as late as 128?, a contract states explicitly that a merchant of Palermo,
li farther back than those of Genoa. For Marseilles, the surviving records wh~ ~as received a comme~da invested_ in a cargo ofsalt pork, expects to
J;, are not numerous; they include the register ofthe nota~ GiraudAmalric sellt~ m Genoa and, for this purpose? mtends to go there in person (per-
:;I (1248) and a series of contracts relating to ~o promment ~erch~ts, sonaltter) and to travel on the same ship as the goods entrusted to his care.
i' Etienne Manduel and his son Jean, executed m 1264 forplottmgag:unst In the case ofsea loallS, it is by no means exceptional for the borrower to·
l the count of Provence. Other notarial contracts are eXtant for Amalfi, declare ~at he is ~~ady t~ go ( ~aratus est_ire) on a certain trip and to repay
j Barcelona, Caffa~ Lucca, Palermo, Pera, Pisa;" Ragusa an&:Zara: The
.I the loan if the ship carrymg him and his goods safely reaches port.
r Pisan archives, one of the most important, remainlargely:unexplored,
and the same applies to Barcelona. At any rate, the available·source
As_ a rule, each v?yage was considered as a separate venture. Although
l;i
;11 material shows plainly that business practices were nearly· the same
terminal partllerships extending over several years were not unknown,
su~ ~greements were rare in overseas trade, but more frequent in local
•I•'I throughout the Mediterranean area. · . . ·~ retailin~ and manufacturing. Sometimes one ofthe parmers supplied all
Despite the fact that merchants had ceased long ago to be illiterate, the
~ l;i notary played a cardinal role; he was requested not ~y to draw up
the capital and the other only his labour, as in the case of a partnership
concluded in Genoa on 6 July. I I 56, between an entrepreneur named
q
''I
deeds and testaments, but also to prepare all types ofhusmess·contracts.
His busiest days were on the approach of sailing dates. Th~ the Mar-
Bernardo Porcello and a capitalist named Pevere Lanfranco, who in-
vested 50 Genoesepoun~ and,. in ad~tion, put at the other's disposal a
seilles notary. Giraud Amalric drafted no less than fifty;.seveo: contracts
I
I
j
· on a single day,· 30 March 1248. Fifty ofthem were com~a agreements:
thirty. relating to the,vesselSaint-Esprit, bound for Syna,_anddeven to
place to carry on the busmess. According to the provisions of the con-
~act, the agreement was tolast fiv:~ years and profits were to be divided
m ~e proportion ofone-third to the managing and two-thirds to the in-
the Sa,int-Gilles, saiJing for Sicily~ T~~re ~ere [Link]:\y() {~f!5~J;?~~acts, vestmg partner. Unfortu:nately, the contract does not disclose the nature
l
J both in COI1llecti()n with the @pt;Q.!W'ig dep;trtuJ:e.q,fW,e.§qz'!t~t;~'J:'he of the .business. .. . . , · .
next day, 3 r Mar~ Amalrit was a littleless ru:shed;,but he:$ll'~cted Sinillar·provisions are also found in a\Venetian partnership contract of
70 ITALIAN COMPANIES OVERSEAS
BRANCHES
n6o. According to its provisions, an investor,_Pietr? Memo, went into 71
tine bankers _were following the same policy and the notarial records re-
veal thatthe1r ag~ts dealt actively in exchange with the fairs of Cham-
partnership with Enrico Serzi and entrusted him With £300, Veronese
currency, to start a business. It was understood that profits ~ould b,e
pagne. What aprlies to Genoa applies also to Marseilles: there, too the
divided equally and that the ~ging partner won!d use the_ mvest~r s local repres~ntattves ofthe Placentine banking companies, especiall 'one
own premises as his base ofoperanons and not do busmess outside V eruce
except that he was allowed to visit the regional fairs o_fFerrar~.
Otto Angwsso~a, w_e~e the main exchange dealers. Of course; th/ did
not co~me therr acuv1ty to exchange business but also controlled th~ im-
.
Despite the prevalence ~f the c~mmenda and the soCietas mans, termmal
portatlon ofc!oth ~om _Champagne and even invested in overseas ven-
partnerships also occurred m foretgn trade and perhaps have been unduly tures. As earlier, diversification remained the rule Th d 1;~ f th
neglected by historians. There are quite a few examples among the sur- llin d di · e ecWle o e
trave g t~a e d not_ lead to ~reat~r specialization: on the contrary,
viving Venetian contracts ofthe twel~th century. In one cas:, ~he J;>artner-
the nedw. Italian comparues made It therr policy to branch out in order to
ship was composed ofan uncle and his nephew, the first residing m Con- sprea nsks over a larger area.
stantinople and the second in Thebes (Greece)~ They were to trade to-
In England, the presence ofltalians representing banking-houses is re-
corded as early as 1~20. Although law and custom did not allow alien
gether by shipping goods to each other. All profits were to be shared
equally and the partnership was extensible from yea~ to yea~ ~y way of
merchants to dwell m_~e realm, the Sienese and the Florentines secured
frot;n_He?ry ill p~rrmss10n to stay for three years at a time. Matthew
tacit agreement. Apparently, it had lasU:d for some tune _until it was ter-
minated abruptly in 1171 by the expulswn of the Venenans from Co~­
stantinople and the Byzantine Empire. Because of the losses suffered ~
~aris m his <?hrorucle (I 235-59) is shocked by the thought that they abide
m London like respectable citizens. Being 'Cahorsins' and manifest usur-
this catastrophe, a final settlement between the two partners was still ers, _they ought to be expelled, but far from it, they enjoy instead the pro-
pending in I I 79· . tectton ofthe_Co_urt ofRome and call themselves the Pope's exchangers.
After I300, terminal partnerships· became more and more common,
even in the seaports. This does not mean that tem~orary arrangements
Matth~w Pans gtves I229·as the date of their first appearance, although
disappeared entirely. Since they fitted in so well Wlth the ventm:es~me
t~e eVidence ~hows that from I224 onward safe-conducts and export
licences. were Issued to Florentines. Whatever the exact date, it is certain
that, pnor to 1250, ~e Italians had gained a firm foothold in England.
character of medieval trade, they continued to prosper,· but wtthin a
In Flande~s •. they did not settle until close to IJOO, or even later. As late
framework of more permanent and steady relationships.
as I 322! a pnvilege g~anted to the Venetians gave them only forty days to
sell ~err wares, ~hich suggests that they did not yet have permanent
III. Italian Hegemony in the Fourteenth and Fifteenth estab~hments. _It 1S true that the Venetians, like the Genoese, were con-
Centuries · s~rv~tlve and did not readily adopt the new forms of business organiza-
non Introduced by the Tusc~s _and the Lombards. In any case, later privi-
In establishing continuous business connections, the inland ~~es lhges no longer p~t any re~tncnon on residence. Moreover, other records
(Piacenza, Lucca, Siena and, later, Florence) rather than the coastal Citl~ s ow that the !talians, unli_ke the Hansards, did not constantly come and
(Genoa, Pisa and Venice) took the lead; T~s develo~ment started ~arlY: m go, but somenmes stayed m Brug_es f~r several consecutive years. In the
the thirteenth century, when the Placentme and Sienese comparues, m- fifteen~ cei?-tury, Tommaso Portman, the local manager of the Medici
stead ofhaving roving representatives, began to ~tain niore ?r l~s b~, hved m Flanders for more than four decades almost without inter.;.
permanent factors in Genoa, Marseilles, ~ruges, Pans an~ ev~ m dis- . rupnon, save for occasional trips to Italy. · ·
tant England. Thus Roffredo Bramanzoru, already mennoned ~ co~­ . ·By the cl~se ~fthe thirteent~ century, the Italian mercantile and bank-
nection with the sale of a draft .on London; seems to have res1ded ·m mg com~arues; mstead ?f sending special delegates to each of the Cham-
Genoa around I250 as the agent of the powerfulBonsignori companr, in pag~~ farrs, were o~e~g branch offices in nearby Paris. In 1292, the
which he was also one ofthe partners. Whenever he assumes any obliga- Pans~an ro~ ofthe tad[~ hsts more than twenty companies, including the
tion; he ca±efully states that he contr~ iri his own:rianle and in tl;10se of Bonsignon ~d th': Salimbene of Sie~; the Burrini! the Guadagnabene
his partners (nomine meo et sociorum meorum). The'cdmpany was ~r~dy ,and the Scotn ofP1acenza; the Francesi, the Scali and the Frescob:Udi of
emerging as a separate legal entity. B~t tht; Sie~ese company oftheoB?n- Florence; the ati of:Pistoia and a dozen· .c ____ ·fl
c -· ·· '
' ·M . ,.. . · · . . • :urrns o · esser unport-
A ·m m
. an
· n. .

signori was nohhe only one to have :resident representativ-es; the Platen- .ance. · or:eover; the Italians were among tp.e most heavily taxed:. The
 72 TRANSPORT COMPANIES
PROGRESS IN BUSINESS MANAGEMENT 73
highest quota of all was paid by. C?andolfo degli ~rcelli (Gandoufle
typical contract, date~ 12 July 1248, a wagoner (vetturarius) acknow-.
d'Arcelles), representing the Bumru ~omp~-y: ofPia~enza, w~~ may
ledges that h~ has received two bales of pepper from Rinaldo Braccia-
very likely have been the richest I?an ill Pans ill ~e tlme of Philip the
Fair. The Lombards as a group paid more than ro Yo of the total tax, al- ~orte and Raruero Malano, merchants ofPiacenza, and undertakes to de-
li":er them to partners in Tro~es for the price of£7, currency ofVienne.
.
'·
i though they were only a little more than 1% of the t?tal num?er of tax-
i'
.,
.I It 1S further agreed that the Said bales will be carried thither by pack ani-
payers. Consequently, their average quota was ten tlmes as high as ~at
]':
' of the native burgesses of Paris. Amon~ the la~ter, only a handful of nch mals (and no~ on carts) and that the wagoner will take good care of the
1'
money-changers and drapi~rs, or clothiers, paid a larger assessment than goods as earners are wont to do for merchants (et omnia vobis attendere et
the smaller Italian comparues. . .
compl~r:e que vetturarii tenentur mercatoribus attendere et complere). In another
As for Gandolfo degli Arcelli, there is no doub~ tha_t he resided habitu- . co~tract o~ the same year, a w~g?ner pro~es not to untie and open any
ally in Paris where he died in 1300 and was ?u~ed ill the church of St bales save m an emergency. Similar provlSlons are found in the Genoese
Merri. Apparently he was, or be~~e, the pnncipal partner of the Bur- contracts. Sometimes it was explicitly stipulated whether the goods were
rini company ofPiacenza. I~ actiVIty emb~aced no~ only ~ade and ex- to be ~ent to Cham?agne by way of Provence or through the valley of
change, but also money-lending to persons ill all stations oflife from feu- Maunenn~ (per cammum seu stratam Moriene), that is, over the Mont Cenis
dal lords and prelates to a poor shephe~d. T~e to fo~, Gandolfo p~<r­ pass. Carners were also operating trains of pack mules between Genoa
vided in his will for the restitution of his usunous gains. En~owed With and Rome and between Genoa and Florence. Among their best custom-
unusual business ability, he proved to be irreplaceable, and his company ers were the Placentine and Sienese merchant-bankers. One of them
Giovanni Pagano, called in a notary, the Placentine consul and several
declined rapidly after his death. . . . . .
The fact that by 1300 the Italian mercantile and banl?ng comparu~s merchants to ~tness the fa_ct that two_ ~ales of cloth brought by carrier
maintained branch offices in Paris, Bruges and London IS symptomatic fr?m France did not contain the reqwslte number of pieces. These de-
of a new trend which was bound to spell the doom of the caravan trade tails, how:ver, are adduced only as evidence. The important point to
revolving around the fairs of Champagne. Because of the ~~m~ss of stress here Is that the use ofwagoners and carriers relieved the merchants
Paris, fairs could easily be visited by the partners or factors residing ill ~he from the need of organizing transport. So they were free to turn their
attention to other tasks.
French capital, and there was no longer any need to send someone ynth
the regular caravans. Moreover, now that the roads were better policed, There is still another factor which favoured the rise ofthe Italian com-
it ceased to be necessary for the merchants or their servants to accompany panies wi_t~ branches abroad: the s~eady progress in business manage-
their own goods .which could henceforth be entrusted to comparues of ment. This IS often overlooked, but Is not therefore oflesser importance.
vetturali, or wag~ners, as they were called, even ifthey ?idnot_use wa~ons Merchants had to learn how to do business by correspondence rather
but. actually diove trains of pack ~als. A?out therr role ill medieval · than by personal contact. As paper work increased, it tied them more and
trade little is known, but occasional glimpses ill stray documents leave no more t~ the counting:-house. This development is very difficult to trace,
hut husmess. letters give some indication. A few-very few-from the
doubt about its importance. . ..
An inter-local federation of Tuscan vetturali is already mentioned ill a ~d ofthe thirteenth century have survived. They are models ofbusiness-
Pisan document of 1219. There is also a contract of 1200 between a ~ar­ like procedure, ~a~er-of-fact and to the point, without any of the verbi-
rier and several Placentine merchants concerning the safe transportation age so c~aractenstic of the notarial contracts. Take, for example, the
ofpersons and goods from Genoa to Bobbio, a small town on the route to lett~r wntte~ on 24 March 1291, by the Cerchi company in Florence to
Piacenza. These documents show that vetturali were operating between their agents m _England. After th~ customary greetings, the principals in
Italian dries, but not that they wete engaged in the long.,distance or ~rans­ Florence mention the letters received from London, then deal with ship-
alpine carriage of goods. In this co~ection~ they do not appear m ~e ments of wool and cloth, and go cin to discuss the prospects ofan abund-
notarial records of Genoa and Marseilles until 1250 or thereabouts. This ant [Link]~in England. an~ Scotland. After that comes a long para-
was not a very recent development, however, since their services :were ~aph concernmg th<: pro.~;gotion of a suit or .petition which the Cister-
Cian monastery ofKirkstead (Lincolnshire) wanted to introduce in the
already used extensively by Italian and o~er merchants. ·. , ..
•In Marseilles,.most ofthe wagoners hailed from Dauphine and earned Court ofRome. The letter ends ~ygiving inst~ctions regarding the pay.,.
ment ofa drafto€ £ r .f:S· Sd. sterlingand by quoting the rates ofexchange
fortheforthcommg &irsofBar-sur-A~beandProvins;·Thesame pattern,
goods by pack aniinals or carts to and from the fairs cifChampagne. In a .
 ITALIAN 'sEDENTARY' MERCHANTS ITALIAN COMPANIES 75
74
more or less, was followed in commercial correspondence throughout zation and the financial structure ofthe great Placentine and Sienese com-
the fourteenth and fifteenth centuries. · panies ofthe thirteenth century. These companies were, of course, part-
.Another clue to the advance in business management is furnished ~y nerships, but the word 'company' is correctly applied to them, since it
the high level of technical efficiency achieved in book-kee~ing. SllrVlv- is constantly used in contemporary sources and business documents.
ing fragments of account-books show th~t, by I300, considerable ~ro­ Originally, the companies were family partnerships. Even after admit-
gress had been made in agency_ accountmg. Merchants kept detailed ting_ outsid~rs as ~artners, the ~ucleus was still formed by the founding
records not only of amounts owmg and owed, but also of cash transac- famil_r, which, Without exceptlon, gave its name to the company. Thus
tions and operating results. Judging from the extant !ragments, the_ re- the [Link] company of the Bonsignori, which failed in 1298, had twenty-
cords of the great mercantile and banking ~ompames were certainly three partners, four of whom were sons of the founder, Orlando Bon-
adequate to permit an orderly conduct ofbusme~s. . signori, one a nephew of Orlando and eighteen outsiders .. The outsiders
By eliminating a good deal ~f wasteful travelling, th~ new org~za­ usually accepted the leadership of the family group, but in this case dis-
tion introduced by the Placentme and Tuscan compames was certainly agreement among the partners about policy seems to have been a major
more efficient than the old. It permitted the .merchant to conduct his factor in bringing about the doWllfall ofthe entire concern. Although the
business from his desk without leaving the counting-house. Representa- matter has been debated, it seems that partners, in the thirteenth century,
tion in foreign parts was provided by partners,_ factor~ (employe~s) or assumed joint and unlimited liability. It was not until 1408 that a Floren-
simple correspondents. This novel method of domg busmess gave nse to tine s~atut~ allo:ved the creation of societa in accomandita, or limited part-
a new type of merchant whom Profe~sor N. S. B. Gras has called 'the nerships, ill which dormant partners were liable only to the extent of
sedentary merchant'; and it was especially well adapted to the needs of their investment.
overland trade as population in western Europe gre~, marke~s expanded Since the Italian mercantile and banking companies had branches or
and security increased. No wonder that ~e ~lacen~e and S1enese co~­ correspondents in all the princ;:ipal centres ofwestern Europe, their names
panies reaped great benefits from therr mnovatlon; they well-mgh occur frequently in English as well as continental sources. It may, there-
dominated the trade across the Alps-at least the Genoese records of for~,. be useful; to include a reference list, however incomplete, of the
the thirteenth century definitely give this impression. Superior business maJor compames and merchant dynasties active in the laterMiddleAges:
organization m:ay well explain why a city like Siena, with an unfavoll!-
ASTI: Alfieri, Asinari, da Saliceto, Garetti, Leopardi, Makbaila, Pelleta,
able geographic location, succeed~d for mor~ than half a century ill
Roveri, Scarampi, Solari, Toma. .
playing a major role as a commerc1al and banking cen~e.. .
FLORENCE: Acciaiuoli, Alberti, Albizzi, Altoviti, Antella, Ardinghelli
The change from the old to the new system was certainly very gradual. Bardi,_ Baroncdli, Bondelmoncl, Camhi, Canigiani, Capponi, Cavafcanti:
In the overseas trade, where risks were greater, the old system of tempor- Cetchi, J:?a Raba:tta, Del Bene, Falconieri, Francesi, Fresc6baldi, Giaitfigliazzi,
ary partnerships lingered on. It had not entir~ly disappeared by I 6oo, and Guadagru, Gualterotti (Bardi), Guicciardini, Mannini, Mazzi, Medici, Orlan-
the first joint-stock companies in the colom_al trade were formed f~r a dini, Pazzi, Peruzzi, Pigli, Portinari, Pulci, Rimbertini, Rucellai, Scali, Spini,
single venture and dissolved after its complenon. Even today, s?m~thing Strozzi, Toma:buoni (Tornaquinci).
of the old system remains: in shipping, the voya~e account 1s still the GENOA: Adorno, Balbi, Calvi, Cattaneo, Centurioni, Dalla Volta:, Di Negro,
basic unit for profit or loss computations. But ~v~ m the overland _trade, Doria,_ Embria~, _Fieschi, Gentili, Giustiniani, .Grillo, Grimaldi, Imperiali,
the new form of business organization, despite 1ts advantages, did n?t Le~can, Lomellini, · Mallo11:e, Malocelli, Pallavicini, Pessagno, Piccamiglio,
easily gain the upper hand. In I 3o6, the Alberti company ofFlorence still Spmola, Squarzafico, Usodimare, Vento, Zaccaria.
LUCCA: Amolfini, Balbani, Barca, Bonvisi, Burlamacchi, Calcinclli, Cena-
had several factors who were travelling back and forth betweenItaly and
tni,. Dal Portico; Forteguerra, Guidiccioni; Guinigi, lnterminelli, Mo~cmn,
Champagne to fetch Flemish. c~oth. When the books were close~ on Onesti, Raporidi, Ricciardi, Schiatta, Spada, Spiafame, Trenta, Vinciguerra.
rJanuary 1: 307, three of them, 1t1s sta~ed, were on the road (sul kammtno), ~AN: Anriconi, Borrcimei, Castagniuoli, Da Otsale, Da Fagnano, Del
bringing doth to Florence. Later on, 1t seems that theco~pany no longer Maino, Della Cavalleria, Dugnano, Serrainerio, Vitelli.
[Link] the fairs,but·had permanentrepresentatlves _mFlanders PIACENzA :· Andito, · Anguissola; ·:Arcelli, ·Bagaiotti; Baiamonie, Braccia.,.
and :Brabant. The trend of the times was too powerfulto res1st; one had forte; Burrini, Capponi, Cavessoli, Guadagnaben:e; Leccacorvo,-Negroboni,
t~ followit orlose the race to more ac4ptable compet:i,tors. ·.· · · · , . Pagano; Q!!attrocchi, Rustigaccio, Scotti;- Speroni. ·.· · · ·
. ··[Link], not much is known about the internal orgam:.. l>ISA: Agliata, ·Aiutamicristo, ·Assopardi:· Baccone, Buonconti, BilZZacarini
 ;r, ;~.

DISTRIBUTION OF PROFITS 77
THE PERUZZI
its activities. It was only in I 33I, when the first cracks in the structure be-
(Sismondi}, Carletti, Cinquina, _Del Bagno, Dell' A~nell?, Delle Bra~he, D~l
Mosca, Duodi, Falcone, Gaetaru, Gambacorta, Gatti, Griffi, G_~di, Lagg~, gan to appear,. that the capi~ was inc:eased from £6o,ooo affiorino to
Larifranchi, Martelli, Murcii, Orlandi, Papa, Pedone, Roncroru, Sampanu, £90,~00 affiormo, p~obably m order _to mfuse new blood into a decaying
Scacieri Sciancati, Sciorta, Seccamerenda, Sismondi, Vernagallo.
1
body ,_but to ~o avail,_ as we know, smce the company collapsed in IJ4J.
PISTO~: Ammannati, Cancellari, Chiarenti, Dondori, Fortebraccio, Pancia- An mterestmg detail: one of the partners was 'Messer Domeneddio'
tichi,~artilri,SUxUglianti. ?r the Lo~d Go~ In 1310, He was allotted £2,000 alfiorino for His shar;
PRATO: Datini (Francesco di Marco}. m the capital, Without any corresponding investment, of course. Messer
SIENA: Bonsignori, Caccia~~nt:i, f?U• Folcacchieri, ~aller~, Maffei, !Aala_- D?mynedd!o ~eceived His regular quota of the profits ~hich was set
volti, Marescotti, Piccolonum, Salimbene, Sansedoru, Scotti, Squarcralup1, aside and distnbuted in a:lms to the poor. When the company failed this
Tolomei, Ugolini, Vincenti. . . . . . account s~owed a cr~t balance. the name ofthe poor, the Capi~ di
I:t
VENICE: Badoer, Baldo, Barbaogo, Bembo, Bragadin, Capello, Contarlm,
Orsammichele, a religious fratenuty, not only laid claim to this balance
Dandolo, Garzoni, Lippomani, Loredan, Molin, Morosini, Pisani, Priuli,
b~t c?ntend~d th_at it should be treated as a preferred creditor with first
Soranzo, Ziani, Zorzi. pnonty. This claim ~as a~y granted and the fraternity managed to
Owing to the chance preservation of doc)lffients, and to the studies of get ~old of some chotce pteces of property to the detriment of the other
Professor Armando Sapori; we are much better informed about the struc- creditors. ,
ture of the Florentine companies, especially the Peruzzi, than about those The corpo, or c~~ital, ofth~ Peruzzi company did not represent total in-
of Siena or Piacenza. Next to the Bardi, the Peruzzi company was the ves~ent. In additton to therr shares, partners were encouraged to invest
largest in Florence. It had a continuous existence fro~ I275, or_there- addittonal f~~· sol'!accorpo or fuori del corpo, that is beyond the capital.
abouts, to I343. when it failed because of frozen credits to the kings of 0~ such addi~o~ n;tvestment they received interest at the rate of 8%,
England arid Naples. Between those dates the articles of association were pn~r to any distn~utlon of profits. The company also accepted time de-
renewed several times, namely in 1300, I308, I3IO, IJI2, IJ24,.I33I and posits from other mvestors on similar terms.
I 335. In the interval between two renewals, no tiew partners were ad- IR_the Peruzzi co~p~y, profits were divided among the partners pro-
mitted and none were allowed to withdraw. At each renewal, the· books portionately t~ capital mvestment. It woUld be a mistake, however, to
of the old partnership were closed and a general financi~l statement, or assume that this proced~e was typica! and observed by' all companies.
saldamento generale, was drawn up. The partners then proceeded to a In the case of the Alberti company dunng the early years ofits existence,
division of profits. Usually this division wa~ not final b~t subject to la~er corpo and sopraccorpo were not segregated; they did not exist as separate
adjustments, because the balance was apt to mclude a great manY contm- accounts and there was no stated limit to the capital. From 4 September
gen.t claiins and other items which remained in abeyance. The final I 3~4 to I January Ip3. ~d.t partner fir~t received 8% on his total equity
liqUidation often took several years, as is evident. from the account-:-books - or mvestment. [Link] profits~ if any, were then divided among
-that are extant. •. the partners according to a pre-established quota system:From I304 to
InI 3IO, the corpo, or capital, of the Peruzzi company re~chect a p~ak of 1307, for example, the partners-three brothers-divided these net
£ I49,ooo affiorino or about $400,000 at the pr~sent offict~valuauon of profits equally, that is, to each one-third. ln IJIO, each of the three
$35 per ourice. This is a tremendous amount If one co~Iders that ~e brothers received onlythree-tenthS, and one-tenth went to the son ofone
purchasing power of gold in the Middle Ages was many tunes what It 1s who had been admitted as a partner. This system remained in force until
today. The share of the Peruzzi family in this total amounted to.£ 7_9,000 I3I5, w~en the quo~ were changed again to take care ofmore sons
affiorino and that of the outsiders to £?o,ooo affiorino; It wa~ o~y 1h the brought mto the family business; It was only in I323 that the Alberti
settlement of I3 3I that the latter acqurred control of the InaJOJ:1ty of the companyc?mpletelychangedits sy~tem ofdistributing profits and adopt-
capital by owning £52.500 affiorino out ofa total of £[Link];>~ There- ..ed one similar to that ofth~ Peru:zzt. Acorpo of £25,000 alfiorino was set
ductionof the capital at the time ofthe ren~wal of I JI2 w~ not due to up an~ ~achpartne~:wasassJgned p~~ ?fthisamountandwas expected to
losses, but to the fact that several partners yvithdrew. and, were not re- keep It m the co~pan~:· <m_.~y a:ddittonal funds furnished by a partner,
placed by newcomers. In. IJ24, the q~.pital fell to.a low point of £6o,?oo the coml?any patd 8% ·mterest. If;.onthe othe~d; a partner failed to
affiorino, bu~ there is no evidence that the company, as a resmt•. curt4iled .supply his ~~share ofthecorpo~(he was cJw:g~ 8% on any; deficiency.
1 This list for Pisa I owe to the generosity of David J:lerlihy [Link]·is prep;jring· a study The remamder of .the• [Link], was, th{:n .diVIded by .the partners. ili
of merchants and trade based on the Pisan notarial cartularies and:o~er.~~Ces.. ..
 NEW FORMS OF ORGANIZATION
. ORGANIZATION OF THE MEDICI FIRM 79
proportion to their shares of the corpo. There is little doubt that this out r_eliable and devoted assistants, althou h h .
system was adopted by the Alberti company in order to discourage one [Link] at a time when the cult of the Cmlie made ~racttcally no use of
of its partners from drawing out most ofhis equity. form of organization was no d b y was still great. The same
Consequently, there existed no hard-and-fast rule determining the dis- after 1350, butitisencountered:. ~adopted by ~ost Florentine firms
tribution ofprofits in the Florentine companies. Everything depended on all: the Medici bank. Its purest form m the greatest of them
the agreements made by the partners and incorporated in the articles of This famous banking-ho £ .
association. In the Datini partnerships of the fifteenth century, the divi- Bicci de' Medici, who had =asedo£o:.ded_m 1397 when Giovanni di
sion·of profits was seldom proportionate to investment; the managing partn:rship founded by a distant ~ousin ~~er~tdi~ Ro~e br~ch o_f ~
·partner, who invested little, usually received a more than proportionate established a rival firm in association with b amfth 10 de .Medici,
share of the earnings in reward for his services. It is true that the struc- At first it had onl ffi . mem ers o e Bardi fanilly
ture of the Datini firm and the Medici banking-house, with a separate Durmg the lifetim~ ~~i~va':i
0
br::C
Florence and the_ other in Rome~
partnership for each one of the branches, differed greatly from that ofthe and in [Link] (1401), but the fo~mer ::cfu~~nJ:ned!UNaples(1400)
·earlier companies. , because It was not successful· In th . b ued m 14.26, perhaps
The Peruzzi company-and the same is true ofthe Bardi and the other Geneva, the fairs of which h d ~ sa;e year, ~ ra~ch was created in
companies prior to 13 so-was one legal entity only: it comprised the head- beginning this b h afi acqmre [Link]. In the
' . ranc was manced by an accomand hi h
quarters in Florence and the branches outside the city, those in Italy as transformed in 1437 or 1439 into unlimi d a w_ c was only
well as beyond the Alps. In theory, all the partners residing in Florence assuming henceforth full responsibility Th te parn:ership, the Medici
had a voice in the management, but in practice the business was run by the Medici bank cam h . e great penod ofexpansion of
one of them who inspired confidence and assumed the same function as Bicci (1429' under thee,admo~e:ver,. ?nly faft~r the death of Giovanni di
branches were ~· [Link] o his son c · S .
the president of a modem corporation. Several of the branches were ad- established in B . ( • osrmo. uccessively
ministered by factors who were generally provided with a power of at- Avignon (1446) and Milan (14;~~:s I 1439), Pisa (1442), Lon??n (I446),

~=~f~~P~~::hte~~~:J!he:a~~ie~o 6~~~;h~=;~~t~~!
torney. Incidentally, the word 'factor' had a different meaning in the 1
Middle Ages ·from that which it has today; it did not designate a com-
mission merchant, but always referred to a salaried employee doing Geneva branch was transferred to Ly h
m shsiOn. Ab?ut 1464, the
clerical work for a trading company, a banking-house or a merchant. Louis XI were such a tremendous su~~ wthre ~ e new fa~~s created by
Bran~h managers, being employees, received a salary and occasionally a attract any trade. ess at e older fairS ceased to
bonus, ifthe company had been pleased with their services, but never a In marked contrast to the Peruzzi com th ..
share in the profits. It also happened that a partner was sentabroad to take one unit, but was made u of several pany . e Me?icl firm was not
charge ofcine of the branches. In such a case he received a salary for his legal entities, all wider th~control ofr:h~::ts ~hi~h were separate
services as a factor besides his share in the profits, to which he was en- sembled more or less that of the mod h ldin _ mily. Its structure re-
titled as a partner. portant difference that it was of ern o g _co~any with the im-
This form of organization was rather rigid and its weaknesses showed rathet: than ofcorporations. ' course, a [Link] of partnerships
up when the big three, the Acciaiuoli, the Bardi and the Peruzzi com- At the swnmit ofits prosp · th .
panies, all failed. shortly before the Black Death. After the crash, the in Florence the branch· ' ep~d· he e~tJ.r~ complex included the 'bank'
· • es outs1 e t e aty tha · · I a1
Florentine merchants seem to have evolved a new form of organization and three manufartnri... ,.,. · bli hm
,· ,
· ~ t ls, In llt Y and abroad'
:-_---.u.o esta s ents Within th
which appeared to them to be more flexibleandto offer greater protec- shops and one silk 'sho ';Of course ' . e,wa s: two woollen.
tion from entanglements so that the fall ofone branch would not involve fac~ories or !!Ven worJclops in the ~:ese shops (botteghe) ~ere not
the whole concern. Perhaps this 'expectation was a delusion; This new which put out the materials to be work . ern sense, but establis~ents
set-up occurs already in the Datini firm, which was a. combination of [Link]. In Florence. in the w. 11 ~ddup at home by a succession. of
• , oo enm ustry onlyar ··
autonomous partnerships, one for each branch office, but all controlled s~ch as b eating the wool cardin .· d _. . . • . rew opera!Ions,
by one man who kept the reins [Link] and did not allow the bottega itself;· hlJ. the oth~~s · { dfu
co~_bZ?g, were ~erfonned m the
brancih nian,agers any deviation from'his~instrttctions; Francesco patini .{i,tlishing, were done outs·d' ~,U .· gthspdmnmg,_ wea:vmg, dyeing. and
(t1410)judged others only by their perforinance and knew how to pick · · · , " ·, , ~-e. ·1l~S Il1e. o of productton kn . · ·. th
[Link]-out system, gave rise tO a very cowplic~ted'
1 ·
' ·,·,.~·.tl~[Link],•che
org".,.....
...._,~ on w
 ON OF TilE MEDlCl FIRM
THE L<;>NDON BRANCH 81
O ORGANIZA Tl
8 . he account-books of another and mu~h le~s amble, the partners were to be: the two sons of Cosimo and their first
can best be studied from ~ . industrial records of the histone cousin, Pierfrancesco de' Medici, Giovanni d' AmerigoBenci (the general
famous branch of the familhy' sm~e nnoot true of the other records relating manager of the bank), Gerozzo di Jacopo de' Pigli (a former manager of
. ·L- · diT esamelS d th the London branch) and Simone d'Antonio Nori {the new manager).
Mediouave s~ve : F ents of the correspondence an e
to .their banking b~mess. t ~~ave been used by historians. Recently, Next it was stated tltat the purpose of the contract was to form a 'com-
account-b?oks arh~ ~orentine archives brought to light a crop of pany in order to deal in merchandise and in exchange' in the city ofLon-:-
a systemattc searc. o . artnershi agreements, balance sheets, cor- don. In this context, 'exchange' is SY!lonymous with banking which, at'
new documents, mclu~g P fpll, three libri seareti, or secret ac- that time; consisted chiefly in the negotiation ofbills of exchange. Con-
d most rmportant o a 6 b k sequently, the new partnership was intended to combine trade with
respond ence an ' . the eriod from I397 to I450 without any r~ .
count-books, ~overmg . P he libri segreti were the key bo_oks which banking, a common practice, since the Italian companies carried on di-
In the Florenttne comp~es, lat . t 0 the composition ofcapttal and the versified activities. It was also provided that the agreement would last
contained V1·talin£armanonre fnng th ain office but also ofthe branch es. four years ending on 24 March 1458. AccordinKto article I, the partner-
allocation of profits, not o~ycll e ~es further study we are now much ship was to be styled 'Piero di Cosima de' Medici e Gerozzo de' Pigli e
Although this new materi s rdW:. few years ago' about the internal Compagni di Londra'. The capital of£ I,ooo sterling was to be supplied
better informed than w~ v:ere 0 Y entirely by the senior partners (Medici; Benci and Pigli). Simone Nori
organization of the Mediilibank. only the major branches of the was not expected to invest any money, but he was to give his serVices and
According to data f~r e year 13!5' London; Naples, Palermo and to attend to the management of the company's affairs {article 2). Al-
Peruzzi company (AVlgnon, B~~; others were administered by fac- though he had no money invested, Nori was entitled to one-:eighth of
Paris) were manag~d by paltners, In the case ofthe Medici bank, branch the profits or zs. 6d. in the pound, and the other partners to seven-eighths
tors who were salaned emR. oyees. who instead of receiving a salary, or 17s. 6d. in the pound (article 4). During the duration ofthe agreement,
managers were as a rule juruor Pt~rs . the profits. It does not follow no partner WaS permitted to withdraw either his capital or his share in the
were remunerated by means o a s arethme same footing as the maggiori or profits, except that Nori was given an annual allowance of £15 sterling
· ·partners were on · Th to cover his expenses.
that these managmg . . the Medici family. ~te the oppostte. e .
senior partners bmakelon~mgl to h t these two categories did not have equal The succeeding articles make it abundantly clear thatallthe burdens of
M edic1· recor ds . t a . . . rtners were d efinite1y p1aced m
e 1t c ear · management rested on the shoulders of Nori and that he was strictly
rights and that the.n:anagmg ~~w:~: matters of business policy the
0
accountable to his co-partilers. Under the threat of a ·penalty ·of I oo
a subordinate rosltlOn. Jn ~d l final say. If a junior partner fail~d tO
maggiori or s~or p~rtners ala. e ssible to get rid ofhim by termmat'-
nobles, he was not allowed to grant credit except to merchants or arti-
ficers (article 6); neither was he free to stand surety for others except with
follow instrucnons, lt was w~ys po d ll the survivinu articles special permission of his partners (article 7). In addition, the agreement
1 ·th artn ship agreement, an a · ......:>
ing premature Y e P . e~ h forbade him to do business for himself(article 8), to gamble and to keep
of association granted
not permitted to leave
t th ma iori Ajunior partner also was
ng t td w:s e~ect~d to report to the maggiori
post an In ther words it is clear that the mag-
women at his quarters (article 9), to underwrite insurance (article I 7), to
accept gifts worth more than one pound (article IS), or to leave England
on all the acts ofhis management.. o artilers ocly servants. An analysis without express authorization (article I4). At the end of each year, on
giori were masters an~ the managm~ further illustrate this point. 24 March, he was expected to close the books and to strike the balance
of a Me~ci partnership agree~d:e articles drawn. up in Bruges on 25 which was to be sent to headquarters in Italy; At the termination of the
For this purpose, l~t us tath L don branch. 2 According to the pre- agreement, he promised to come to Florence in order to report in person
March 1454• and relatmgto e on . . . .. indus . in the foilrteenth concerning his management (article 10). He had no power to hire factors
i FOr the [Link]!tion °~ the Flor~:nili:'~~}~:c'- an:f:ttet:~ks oft~e or even office boys (article 12). As. a matter offact, the Medici followed a
to sixteenth ·centunes, see the stUdies, bast a 'of Mediaeval .Terms ofBusmess, Italtan constantpolicy ofdoing this themsel~~- Nori was not supposed to invest
Medici-Tomaquinci,in F~orence Edler, Go~ ry dices,[Link]?nd;de in wool, leador tin-the products ofEngland-more than £3oo at any
Se,.ies,I~~O,..lPOo,(~amb!=ldge,f~sth=.rla=r;: Management and ~non one time (article I5) and he was placed under strict obligation to insure
Rqover, ~a F~or~~e Fliill; 0 , ) · -3 3. . ....
dt
.·. . . ( ·
o£a SiXteenth cen~ ~~m~s ' Spe~~ ::VX. ~94.~ LeWis Einstein. The Italtan all shipments sent to Italy by sea (article 16). ·
··•.Aneaflietootittact.~ednMaY 1 446· 15 ~ Y , , . , ~- While the partnership agreement th~ placed all kinds of restrictions
illiiJiS!anteiin:Engliltuli Stw1ies (New York.I902'), 242-S· .. - . G
82 THE- GENERAL MANAGERS
CAPITAL OF THE MEDICI BANK 83

upon the freedom of the junior or managing Rartner, the_ n:aggiori were the Bold. Sassetti's laxity and faulty judgment were certainly a major
not limited by any such disabilities; not only did the proVISions preserve cause of the do~all of the once powerful bank which was virtually
their entire liberty a~ action, but they a~o ~av~ them the means o~ exer- bankrupt when, m 1494, the Medici rule was overthrown in Florence. A
cising and retaining control. After the liqwdanon of the partnership, the noteworthy ~ct is that Sassetti did not become a partner of the 'bank' in
maggiori were to have the custody of all books, papers and other records, F~orence ~til 1482. As general manager, he was rewarded for hisser-
althoughSimone Nori would have access to them_wh~ever he needed VIces by b7mg kept as a senior partner in the Avignon and Lyons branch-
it. More important still, the Medici kept the exclusive ?-ght to ~e use ?f es. [Link]~s su~ssor w~s Giovambattisi:a di Marco Bracci (1490-4),
the style and the mark of the p_artners_hip and re~~ed ~posseSSion ofIts wh_o ~ned m vam to_ reparr the damage during the short lease on life re-
place ofbusiness orfondaco. Fn:ally, Itw~s exp~otly snpul~ted ~~at they mammg to the Medici bank. One [Link] not forget, however, that the
could terminate the partnership at any nm~ Wlthout N?n s raismg_ ~y bank lasted nearly a century, from 1397 to 1494, a long time for a busi-
objection. In other wordS, it is pl~in ~hat ulumate authonty was vested m ness firm. .·
the senior partners and that the Juruor partner ~a~ expec~ed to manage ~ 1420, th7 capital of the Medici. bank amounted to 24,000 gold
the London branch within the framework of their mstrucnons. flor~, of w~ch I6,~oo flo~ins ":'ere supplied by the Medici and 8,000
flo~s by ll~none de Bardi, therr partner and general manager. This .l
Since the Medici were so involved in politics, they could ~ot de:vote
all their time and their attention to the management of their busu~ess capital was mvested as follows: 10,500 florins in the bank in Florence;
interests. Of necessity, they had to delegate po~er ~n~ to rely ~o~ assist- 6,ooo florins in the branch in Rome; and 7,500 florins in that in Venice.
ance on advisers. According to the records, their prmopal administrator Subsequently the capital was increased from 24,000 to p,ooo florins. By
was called ministro, and it is likely that he performed about t~e same ~~c­ 24 March 1451 (N.S.), when the last of the three extant librisegreti was
tions as those of the general manager in mo~em corpora nons or JOmt- clos_ed and b~ced, the capital of the Medici bank had reached 72,000
[Link] companies. His1Ilain taSk was to supervise the br:mch managers, to flonns, of which 54.000 represented the quota of Cosima de' Medici and
read their reports, to give them instructions, to examme the yearly bal- the r7m~ I8,ooo florins that of his ministro, Giovanni d'Amerigo
ance sheets sent to headquarters by t:he branches ~-d bring all. matters of Benet. To this amount must be added a sum of 3,083 florins di suggello
importance to the attention of whichever Medici w~ the ~ead o~ the and 245. wd. '!ffiorino dueto the heirs ofAntonio di Messer Francesco Salu-
firm. It was also the duty ofthe ministro to preparewnt~en ms_trucnons tati, a partner who died in 1443. Table I indicates how this amount was
for managers who left Florence for their new posts and to mtervieW those allocated. The i:eader will notice that the Rome branch, managed by
who came to Florence to report or to negonate the renewal of partner- R~bert Martt:lli, is not listed. Thi~ is not :!f oversight, for no capit:il wa5
assigned to this branch after the rrud-1420 s because the papal court was a
ship agreements. .· · ··. . ·· .
From 1397 to 1433~ the general managers were _succeSSively two source of funds. AGcording to modem notions, it seems strange that a
brothers, Benedetto and llirione di Lipaccio de' Bardi: They were fol- [Link] have no capital. However, there is no mistake since the
lowed by Giovanni. d'Ainerigo Benci(1435-55}, a very able n:an who Pa~followed the same practice; like the Medici, they state e~plicitly in
had been trained in the Rome and Geneva branches. After hi~ came their catasto or tax reports, from 1427 onward, that their branch in Rome,
Francesco di Baldovitio Itighirami (145 5-:70) and the~ Franc_esco ~ !OIJ?-- because it needs no capital, does not have any. It should be emphasized
maso Sassetti (1470+90); The latter, also, had received his ~rammg_ m that the amo:unt of 75,083 florins does not represent total capital invest-
Geneva. His record as a factor and as a branch manager was so tmpr:ssiV~ mei_It, but only the share of the Medici bank; properly speaking, in the
that he was recalled to Florence in 1458 to help Francesco Inghiramt capital of the various subsidiaries. Consequently, this figure does not in-
whoinhe succeeded after the death ofPiero di Cosima de' ~edici. U:nder clude the amounts invested by other partners. If these are taken into con-
the admiriistration of Lorenzo the Magnificent; who had little apntude ~iderati?n, the total capital investment amowited to nearly8 8,3 oo florills,
for,business; Sassetti becan:i.e all-,powerful, and nothing was done without Florent1ne Clirre:il~, or about $353,200 in gold at the present price of
or against his advice; In the course of the yearS, he became less adaptable $35 an ounce. This figure of 88,300 florins is based on the data found
and failed tdkeep a strong hand over the branch m:n~gers' ~ong ?ther in the libr(J segreto and in partnership agreements; it may be considered
errors~. he •did not. detect ia time the frauds of ~10nett~ de_ Rossi, the accru:ate, butitisnot a b;1lance-sheet totallikelhe sum of75,083 florins
mentioned above. : . · ·. · ·· · ..
manager ofthe Lyons branch. or rest~ To~o'Portmart, the:~a...,
. ged>fthe bianchiri B'ruges, from lending excessive amounts to Charles Capital investn1en~ represented only'.a\fraction ofthe funds with which
 ''l''"1""''""

84 CAPITAL OF THE MEDICI BANK

STAFFS OF ITALIAN FIRMS
I 8s
.......
~ s 0 "" 0 0 0 0 0 0 0 0 the Medici bank operated. Like other merchant-bankers, they accepted
time deposits, or depositi a discrezione, on which they promised to pay, if
I~E
0 \0000
v) .....
.... 0 0 0 0 00
....
5§ '<t-'0 0 0 0.C"''"'l' 00 earned, a return of 8, 10 or even 12%. Although the banker assumed no
~
"" 0
'V>O
11< 0\ ""
~
0000\0
0
r:: ..;..o
0 0 0 0\
V\'V
0 0
0· [:--.. ~ legal obligation to pay interest, he was under pressure to do so if he
~ 11< cit.::
.... di
......
~~ ...or:: co~
0 co wanted to keep his cuStomers. In answer to the upholders of the usury
.... ]
·.~I
1
~ V'\

....""" -
_fj
doctrine, the bankers argued that a return payable at their discretion was
a free gift and that nothing prevented them from making presents.
"E 1i' iJ' ... 'c;ubl:l
~.s Nevertheless, the more rigorous theologians, including San Antonino
~- I
I u 5 "";;
~e s] ~::::t
~ 5 ~ fi'
0.. '""""'() QJ 1;1')
(I 389- I 4 59), archbishop ofFlorence, condemned deposits a discrezione as
~ u 0 ~ 8o..Pg:..:, 'palliate' usury. Despite this attitude ofsome ofthe leading 'Doctors', the
;t g.s
~tl ] '.C):5
t-::8 B q 8
t.""-. ci '<t't.':o 0~ pope himself, not to mention several cardinals, had money on deposit
I~ ;::!
0 1-<t:t::l "-t<t-t\0~['
with the Medici; the balance sheet of the Rome branch, dated 12 July
.1:1
~ ~ I427, includes an item of nearly 1,200 florins standing to the credit of
M ~ ..... 'tl Martin V personally. According to the same balance sheet, Henry
~ g
~i
-d g 0 ""0 0 0 0 0 0 0
.... :...:,

~M I* ui H Q "'
.... o o· o 0\0 0 0 "<to ....""
Beaufort, cardinal ofWinchester, had a credit of 4.000 florins, and the

~~
;:: papal treasury or camera apostolica, far from being in debt, had almost
1~ p::l ""
l~~
..,
11<
""0
'V>O
0\ 00
"<t-000
""0 0 0
" ' """ "V
or--
o
00 00
0
o· o
0
00
0.
.,._
00
q .sB 24.500 florins ofidle money on deposit with the Medici. It is not surpris-
Q.a 00
r;N~oo.. ..; r::'
0
.... ...
,tu u
:.a
ci.,j:
... 0-. H..
.... .... ;,(! l·r;: ing that the Rome branch had been in a position to advance about 30,000
florins ofworking capital to the head office in Florence and about I3,000
ilI ~ :r;o " ..;:.a
~C'J ~

I. ~..g florins to the Medici subsidiary in Venice. Rome, indeed, was the prin-
~ ~ cipal source of funds.
0

·::;~ -B iJ' ·--

g.
'"<:i ~
o u' ... ~~
I ~~~ 1l.
0
d
...
...
·-«
·E() 3 ~ a gbJ:lo·
...
.~ -~ ,~ ·
ll<o
0
Capital investmentis only one method for gauging the size ofa busi-
ij ~~ J 8 u- ... bl:l-... ~ 0 .~
.... u. .....
.s
'til ~:...:, [·E
0 ..
ness concern. The number ofemployees is another yardstick. What was
~ the size of the staff employed by the Italian banking and trading com-
...., 0 0
..:i
"' ....
0 0 ~ ~ \0 0- . 8· 0
0 0

I'
"G -~- ~ -~ :i ~Boo R 8 s% panies? No figures are available for the Bardi company, apparently the
'c;-. -~
I~I -."'<::!
'=I
.~ 8
...
.3 ~ a ,g '--K g $ '--K'--K ~ .
-=~-:s
... "'
PO\
0
largest of the big three which crashed around 1345. In 1336, the Peruzzi
company, the second largest, probably employed between eighty-five
~~ l'J ~- .. and ninety-five fact~rs. The Acciaiuoli company, the smallest of the
0 0 0
:; ...
~~ o'S three, had, in 13 41, sixteen branches with a total offorty-two facto.t;s, not
~ "'
·-~
..:i tl·u tl11
'c;-. '"-,.
...d '" .. 2 '::l a :.a:..:s
u·r;: including the home office in Florence where there were eleven partners

t
)
:..:, ·a·= "E ::?;;.a and an unknown number: of employees (Table IT). The plausibility of
: i~
0 ~
B ·o~
11<:..:,
l'J 1l-B !t 1;l ~ ut.s these figures is confirmed by a reliable estimate concerning the personnel
!Jo .... 't: ~

~
E-<§;; ~~
:::!
~-
~ l:ll:l .,,,.,N '~a 0 0
·:a.~ of the Medici bank. At the time ofPiero di Cosima's death (1469), it in-
rj'l
[l
~
.....
·al'J ;.a .:.a_· ·

bl:):.::l
>;.Ei;.Eifo§~>
b)) .o
"""

'" ·aIa
".
E-<
0-~
"0~
0
]]
0 ::!
<!.:;;; cluded dose to sixty persons of whom fifty were factors and ten, man-
agers and partners (Table ll). In an epoch when large corporations have
:,j . ~ ... "Co
o·a..;.-a... bl:ll'J
j~-
0 ·-
-M ·E
"~~E-<<1)~~"·
.... o· o ......
~d::
~
:.'I
~
~~ri thousands of employees, these figuies may not be impressive, but die
Medici bank was a giant for its time. In Lucca, d~ thdast quarter of
l
8~'"5
'I'
.,,1 -~ ~ the fourteenth century; all firms were required by law to register their
1....
.f'-1

~
0 ·~ .,j
-~

~ .,g.
-=
e.·o..
0 0 '
P::,g..g
a~· ..•' !31l
.. ol
I,S
marks and to list their pait:ners [Link]. According to the business
register for 1372, the largest company in Lucca was that of the Guinigi:
:.~~·13
it had five branches---"'Bntges, Genoa, Naples, Pisa and Veni~and the
d
f'-las ~t>
~ a~ ooo_a E-< ::J
. Cl~ d 0 0 ·s: ~t i·~ -~* ....... staff, including both partners. and factors, numbered [Link] persons,
,Q.
a~~·< ·,:q·~ .3 >' " seven of whom were [Link] of the'f:ulilly. Only :eleV-en Lucch~e

I
ii:Cn
 STAFFS OF ITAUAN FIRMS
PROBLEMS OF CONTROL 87
86
nifi~ance that only one company attained comparable size during the
Table II. Size of Three Major Florentine Companies
penod of stagnatiOn, and even contraction, which extended from the
Acciaiuoli Medici Black Death to the Great Discoveries.
Peruzzi
I336 . I34I I469 Seldom were more than eight factors employed in any one branch. In
Office or Branch Size of Staff
Size of Staff Size of-,-,.__Staff 1469, the Bruges branch of the Medici bank. had a staff of eight persons:
I2
the_bra1_1ch manager (fornn:~so P~rtinari), tJ:e assistant manager (An:-
II
Florence II
5
toruo di Bernardo de. Media, a distant relattve of the maggiori), four
5 3
Avignon No branch fact~r~ an_d two garzom or office boys. Of the four factors, one (Adoardo
Barletta 5 4
No record I No branch Carug1am) was the book-keeper; another (Carlo Cavalcanti), who spoke
Bologna 8
4 2 fluent French, had the more pleasant duty ofselling silks and velvets to the
Bruges No record No branch
Castello di Castro (Sardinia) I court of Burgundy; the third ( Cristofano Spini) took care of the pur-
2 No branch
Chiarenza (Greece) No record
No branch chases of clo~h and wool and the fourth (Tommaso Guidetti) was prob-
4 3
Cyprus 6 No branch ably the ca~hier. In the fifteenth century, London was less important than
Genoa I
7 2 4 Bruges. It 1s, therefore, not surprising that the Medici branch in London
London
Lyons No bt:anch .No bi:anch 8 employed fewer pe~ple than the one in Bruges. When Gerozzo de' Pigli
No record No branch
Majorca 2
8
was sent to London m 1446 to take charge of the Medici branch, he had
I' No branch
Milan No record only three factors to assist him: (1) Angelo Tani, later transferred to
8 5
Naples
.3 I No branch Bruges, who was good at corresp~nd~nce and could replace the manager
Paris 2. No record when absent; (2) Gherardo Carug1aru, who was best suited for the job of
Pisa 7 No branch
Ravenna No branch I book-keeper, and (3) Alessandro Rinuccini, who was fit for the task of
Ncibranch
Rhodes 3 3 ca~hi~r :md for running errands, since he knew English. Only Gerozzo
No record 2 8
Rome .No bi:anch de Ptgli, the branch m~ager, and Angelo Tani, the assistant manager,
1 3
Sicily :.2•· No branch had the power t~ c_omrmt ~e L~:mdon br_anch and to draw or accept bills
Tunis 3
3 No branch 7 of exchange. This mformatlon IS so pteC1Se and detailed that it settles the '
Venice.
ullidentified I3 pro?lem of ~e size and ~e organiza~on of the branches which the great

Total 88
.. 53 6o
Italian banking and trading comparues had established abroad. ·
Fron: a pr~ctical point of view, the legal structure' of the companies
made little difference, and it did not matter much whether the branch
SoURCES: Pern~:ii,' ACIIiando S~pori; StUdi. di storia etonoitiica, 3rd ~d. ~Florence, managers were partiters or simple factors. Beeause of the slowness of
I ), 17.;. 9. Acdaiuoli,Jean Alexandre Buci:on, Nou~elles recherc":s htsto~tques sur _la
955 7 2 .co~munica~<:>ns it was necessary to give them a great deal of freedom.
priftcipaute franfaise de Moree et ses hautes baro~mes la S~tte de la q~~trt~"_le c:otsade (Pans,
a
r 843 ), r; i; 46 n. Medici, Florenee; State Ard:uves, M~diceo:[Link]!ncipato.
Busmess deas10ns could not be postponed two or three months in order
!]'•! to consult head'[Link]. As a mattet'offact, ·the control of agents in dis-
tan~ places remallied ~ne ofthe knotty prob_lems ofmercantile capitalism
i~I firms employed more than six persons; In: t 3?i; the register lists eighty-
until the end of the e1ghteenth century. In the case of the Medici bank,
nine firms and 186 factors or an average of a little more than two factors
one of the. main causes of_its downfall. was probably Sassetti's failure to
I I
,, per f1rm. Thirty merchantS d~clared ~hey had neither partners nor fac-
take drasttc. measures w~e. there ~as still time and to replace branch
f:j
tors~ The figure~ for 13 72are slighdy different, but4o n,ot alter the g~ne~­
managers, l!ke th~ Porttnan b~ot~ers, who were steering a dangerouS
. al picture. IfLticca is at all typical, one m~ysafely conclu~e th~t mdi-
course and mvolvmg the firm m nsky enterprises. Francesco Datini, on
t
II
vidual merchants and small firms predommated and: that large com-
panies employing tenJactors or ni~re were theex~~ptiori. After I 3 no
medieval firm [Link] oftheMedictbank;even rem9te-
so ~e contrary, was Iiot so len,ient and ~d not hesitate to pen angry notes in
his own h:md whenever branch managers bought bills from doubtful
tak~rs.~r, ~any other way, ex.l?o~ed the firm [Link] .. The keynote of
ly approached the: size of.~e:big thr:e; t~eBardi, ~e_Pe~~ an~'~e Datlnl s policy apparendy was: 1t ts ·better to tum down business than to
Acciaiuoli corripanies,[Link]·Florentme: chromder; Gmv~_Vil­
lani called 'the .pillars of Christerio0m~;. •Perhaps it :is•.not ·devoid of sig-
run undue risks;.He steadfasdy refused ~o become involved in loans to
' .
 . ,..~ ..

88 TROUBLES WITH AGENTS

THE MERCHANT's EQUIPMENT 89

princes which so often caused the ruin of the ~edieval banking-ho_uses. deals. l\:fedieval business letters give the impression that principals were .
Co-ordination seems to have been another senous problem. Sassettl also often disappomted because their agents sold their consignments for less
failed to solve this, and the correspondence of the Medici bank un~er- the ~they had expected to get or paid too high a price for local commodi-
administration of Lorenzo the Magnificent is filled with the recnmma- tles. Whether the agents were always to blame is another matter.
tions of the branch managers against each other. Rome and Bruges were The role of commiSsion agent was not without risks, and Francesco
at odds over the alwn monopoly, and Rome complained to h~_dquarters Datini repeated!~ c~utioned his branch managers against opening ac-
-apparendy with good _reaso~-be~use Lyo~ was ~rauung aw~y counts for new prmcxpals who were not ofgood repute. The danger came
working capital by drawmg bills Without makmg eqmvalent rermt- from merchants who, being short of funds, drew on their agents in anti-
cipation of the sale oftheir goods and thus forced them to make advances.
tances. .
In spite of such difficulties, the companies with permanent branches An even more dangerous course was frequendy followed by principals
abroad had a slight advantage over independent merchants, because they who drew on their correspondents and expected them to pay the drafts
possessed at least some authority over their managers in foreign parts. b~ ~eans of r~drafts. T~ practi~e was widespread because of the peculi-
Independent merchants, unfortunately, were entirely .at the mercy of the annes of medieval banking, which rested on exchange and not on dis-
correspondents to whom they sent goods on consignment. Usually there counting. Despite Datini's warnings, the Barcelona branch, in 1400, lost
i was no remedy against agents who were ill-chosen and prov~d to two years' profits because it was held responsible for the payment ofa bill
I be either inefficient or dishonest, The. Venetian merchant, Guglielmo of exchange drawn on Guglielmo Barberi, a principal in Bruges, who
i had financed himself by selling drafts on his agents and telling them to
Q!erini (I4oo---Q8), was especially unlucky in this respect. _A voluminous
bundle of his letters is still preserved in the Venetian arc~~es. Although redraw. The game went on until Barberi became insolvent and the re-
well informed because ofhis m~y connections in the polincal world, he drafts on Bruges were returned with protest.
was unsuccessful as a merchant. One ofhis main shortcomings was pre- The conciuct o[ medieval business certainly presupposed a fairly high
sumably that he dealt with agents whomh~ did ~ot know ve_ry well and degree ?f educatlon. In any case, the surviving business records prove
who either cheated him or mismanaged his affau:s. After loS1Ilg most of conclusxvely that, contrary to the thesis ofWerner Sombart, the mer-
his business capital-fortunatelyhe also owned ~ande~ property-:-he had chants were far from illiterate and knew how to write letters, how to
the wisdom to retrench and spent twelveyears m futile and obsttn~te at- make difficult computations and how to keep books.-Some of them were
tej:Upts to collect outstanding-claims in Flanders, in England and m the even the authors ofchronicles and diaries, which, in the weirds ofProfes-
Levant. l:Q. only one inst:a),lce did he srux:eed, but it was near home ~d sor A .. Sap~ri, 'achieve the dignity ofhistory'.
not in distant lands. An unfaithful agent in Ravenna 'was forced to dis- Where did the merchants acquire their training? The fundamentals, in
gorge what Qgerini claimed as his due. :[Link] so, to win his suit, Q!!erini gr~mmar scho_ol; and professional knowledge, in the counting-house by
had to mru;shal all the p 0 1itiqt). infl~ce at his cUsposal_. The probl~ of bemg apprentlced to a merchant, a clothier or a silk manufacturer. It is
securing satisfactory representation in foreign parts ,ts :)}so well ill~ certainly untrue, as Sombart contends, that economic rationalism was
trated by the career ofanothet Venetian merch;mt,-Anck.~ Barha~g? non-existent, in that there was no planning, no intelligent direction and
(fl. 1418-49). He was more cautious and more_ successfUl than Q!!~, no adequate accounting control. It has also been said by certain writers
but he, too, had his share of troubles with [Link] COJ:'[Link]. His tha.t medieval merchants did not know how to figure and that they made
agent in S~ria, ~berto Doc:to, (ailed to give~- ~a,~sfa~oty se~ce ?Y co~~ess errors, not ~:mly in complicated operations but even in simple
overchargmg him on the pnce ofcotton and ~cnmma~ agams! ~ addinons or subtractlons. Yet very many medieval account-books. 311d
in favour of other principals. In Spain, Barbango used as his co~on a great number of c?mptitations, such as conversions of smns of money
agent Bert01;:cio ZoJ:"zi, .the son-in-:-law, of banker .Frariceseo BalbL As from one currency mto another, have shown that medieval merchants
Barbarigo was one ofBalbi' s proteges; it is not surprising that he recei~ed whl!e they were not mathematicians, were experts in commercialarith~
better treannent from Zorzi, not _only with regard to price,. but als.o With metlc:. ·As a rule, errors. w.~re few or negligible. Medieval businessmen
respect to cargo space,. quality an(:lothe~:ina~tets" In de~g~tliLondon did notignore the rule ofthree and were remarkable in discovering short
and Bruges, Barbarigo tookadvantage of his ~connectton With the Cap-:- cuts to simplify complicated calculations. Refunds granted for the. pay-
pello brothers, whose sister he married. [Link] ties -yv:ere$0strpng; he ment ofa debt before matUrity were not reckoned according to the cur-
got satisfactory-service and bis·[Link] [Link] iri·sevm-al profitable rent method ofcommercial discount, bpt according. to the more refined
 BUSINESS· CORRESPONDENCE
~ . BOOK-KEEPING

and accurate procedure 0

f
r
e discount. An indispensable [Link]
'th lin s' . that is the use of the abacus.
for.a business career was to ~m e hine ' f th Mi'"ddle Ages and was
. . th al ulaung mac e o e
[sterling] per florin of•2ss., Genoese currency. Collections of medieval ·
business letters contain invaluable statistical data about exchange fluc-
91

This deVIce was e ~ c Originally a counter (Fr. comptoir) was a tuations, but this material has been entirely neglected up to now.
found in every [Link]-roCom. . house in-the meaning of business Until lately, it was thought that double-entry book-keeping was not
table used for the aha~. . ountmg- . '
much older than 1340, because this was the date of the earliest known
office, ~s the same ?envano~. -house-according to an inventory of example which is found in the ledgers of the Genoese massari or muni-
A typlc:J [Link] co~tained several desks (deschi), sometimes cipal treasurers. As a result of recent research, it appears probable that
the [Link](I348) r books large tables for displaying and doJlble entry is much older than was commonly assumed and may have
·d d "th [Link] ror , .) .h
proVI ~ Wl h 1 alo originated in Tuscany rather than in Genoa or Lombardy. It now seems
measurmg cloth, s e_ v<?" l
the walls, a large case (armarto Wlt
a stron -box for keeping cash, a couch
pigeon-holes for class~g m~ ink 11s ~fbrass and copper and rniscel-
that double-entry book-keeping makes its first appearance in an account-
book for the years I 296-r 3o 5 kept by Rinieri Fini, the agent ofa Floren-
for napping, a heavy ste~ar recio:e libti segreti were kept in a locked tine banking-house at the fairs of Champagne, and in a similar manu-
laneous other fixtures. fethp nd not in the counting-room or script (1299-1300) once belonging to the [Link] company, a concern of
chest at the home of one o e partners a
Tuscan merchants operating in Languedoc and Provence with head-
fondaco. . .. ds there were two sorts of business let- quarters in Nimes and a branch office in Salon:. It is true that these two
According to the Medio~ecor d dina letters(letteredicompagnia). account-books contain accounts not only for receivables and payables,
ters: private letters (lettere pnvateJ: tod to~ maggiori themselves by the but also for operating results, and that each entry has a cross-reference to
The first were private mes~gilia ef ~ubordinate writing to his superior' the corresponding debit or credit, as the case may be. Still, evidence
br~chmanagers. T:eti:ebeen t~a about the inferio~ position of the based on small fragments can riever be conclusive.,
which confirms b: at . 1 tters deal either with social events-con-
junior p_artners. T_ e pnva;~ es, condolences, etc.-or ~-th im-
These thirteenth-century account~books are still in 'paragraph' form;
after an initial debiteritry in the case of receivables or an initial credit
grarulatwns for brr~ an the conJuct of the business and reqwnng the entry in the case of payables, enough space was left blank to add two or
portant matters rela.~ to e instructions handed to the branch managers three entries and to indicate how the settlement was effected. As. yet, there
approval ofthe maggwnbTfo to the same category as the private le_tters were no accounts current and each transaction was considered separately.
when they left F~orence all ~li . instead of with specific [Link]. It was only gradually that all items concerning the saine per-Son were
and also deal_ Wlth o~er P cyfully mapp,ed out and prescribe. a defin- grouped together so as to form a [Link] account. The ·next step in. this
u uall such mstrucnons are care . d r ll
direction was aecomplished by relegating all debits to the [Link]
. s. Y hichthebranchmanagerisexpecte toro ow......
lte line of [Link] . te the lettere :di· compagnia dealt only With all credits to the rear half of the ledger: This form is encountered in the
In contrast to e etterep:b_va b. · "th information for the book- [Link] ledgers "(1335-43), while the slightly earlier Alberti account-
routine matters. Usually, . ey. eg~ Wl times they contain comments books (13 64-32) are still in paragraph fotm. The new arrangement is also
keeper about dra[land rk::Uilie~o~:-: of political events, since these found in cash books, such as the libro dell' entrata e dell' uscita ('book of in,..
about the sta~e ~ e~. . Itis evident from check marks in the mar- come and outgo') of an unidentified. Sienese company (i277-88). lri,..
might affect usm~ss [Link] di compagnia circulated within .the stead-of wing tWo colul:;nhs, the receipts are recorded in ,the front section
gin of extant coptesth that thhe loyee would take note of the items re- of the cash book and the expenditures in the rear. :Thiit method ofpre,..

The kttae.! :J:~'~:.h:Zrd:err .t,~

. -h use so at eac emp . . . . db . .
:'.=:t.:[Link]~
[Link] exchange toFlorenceon4 October I45Jreports m
sentation made it somewhat awkward to strike the balance and to dose
an account,' because debit: and credit were in different sections_ of the
·ledger; and it was necessary t:O transfer the smaller total of the two to the
Thus a letter sent from Lo.n ~/ Vine ia /3 Bruggia 19 2/3 in 3/4, other section and deduct it from the larger in order to obtain the balance
the last sentence: \er cosh. 36 t ~eans ~at<the [~reign exchan~es were
40 2

Genovda ~2L3J4·bThi.d
quote . m om, ar . ..
;:=.:follows: Florence36 2/3d. [sterling] /pedr
.· lin ]· ··. · d · t Bruges from 19 2 3 ·
;that wa5 either due by, or owed _to,· a correspondent. A more satisfactory
form w-as eventually devised. by 'placfu.g the debit neXt: to . the credit
either on opposite pages or in two cohunn:s on the same page. In :ill
florin.··disugg_ello,yemce40~ /3d~f[.st~r~ g ?~rgr'~ts' and Gerioa 22 3/¥.
2
likelihood, this arrangem(!nt originated in northern .I~aly a11d spread
. to I9 3/.¢. {sterling] per ecu o 24 nenus ,
'from there to other trading centres. By 1366 we find It adopted by
 92 BALANCE SHEETS
COST ACCOUNTING AND DOUBLE ENTRY 93
· Bruges money-changers. Among specialists, it is known as ~e bi-
lateral or 'tabular' form. In Tuscany, books in which the debxt faced Acc?rding to their ltbri segreti, the Medici followed a standard practice
the credit were said to be kept alia veneziana or according to the Vene- ?f settmg _up _rese::ves for bad debts and accrued salaries before proceed-
tian manner. mg to a distnbunon of profits. No doubt the same policy was followed
The adoption of the bilateral form does not necessarily mean that by other firms. Around 1400, the Datini branch in Barcelona set aside
books are in double entry. As a matter offact, form has little importance, a pro~i~n to take care of unpaid taxes. Depreciation on equipment
but there is no double entry unless certain rules are stricdy observed. (massenzze) a~pea~s as· ~arly as 1324. It did not, however, develop into
First ofall, it is necessary that each transaction be recorded tw1ee, once ~n current pr~ctlce, smce_ mvestment in machinery was negligible prior to
the debit and once on the credit side (or section), so that the books will the Industnal Revolunon. In the Farolfi a<:;counts (1299-r 3oo), there is an
balance if correctly kept. Second, there must be a com~l~te set of ac- example of prepaid rent which is correctly handled as a deferred ex-
counts· real as well as nominal, including expense and eqwty accounts. ~se._Because of t~e preval_ence.ofventure_accounting, inventoryvalua-
Third 'the records must lead up to a comprehensive financial statement tlon did not have ill the ¥iddle Ages the rmportance that it has today.
or baiance which shows the assets and liabilities and enables the mer- Usually a separate account was opened for each lot of merchandise and
chant to as~ertain his profit and loss. Theserequirementssee~tohav~ [Link] the book-keeper waited until e_ve~g was sold before transferring the
fulfilled in the case of the Genoese records of the massan or· mumcrpal balan~ to P:I"ofit and loss. This practlce should cause no surprise, since
stewards (1340), but it is extremely doubtful whether thecontemporane: venturmg did not pass away with the travelling trade, but persisted
ous Peruzzi account-books (1335-43) meet the test. As for ~e Albertt drro~hout the fourteenth and fifteenth centuries, albeit in a somewhat 1
modified form. . . · ·
(1304.:..32), ten financial statem~nts covering this period are still e~t.
Their arrangement shows definitely that books were not kept according The origins ofcost accounting can be traced back to the end of the
to the canons of double entry. fourteenth century. A fine example ofjob accounting was discovered in
As stated above, the branches of the Medici bank were ~ected to the me_moriale o~ memorandum book (1395-8) of a Pratese cloth-manu-
send each year a copy of the balance sheet to h_eadquarters m Florence. ~cturmg esta_blishment founded and controlled by Francesco Datini.I In
There is no doubt that this provision was earned- out. ~ ~y case, the It an_ attempt Is ma?e to dete~e the cost o~production as accurately as
assertion that 'the striking of balances was performed ptunarily ~or nar- posSible by allocanng to each piece ofcloth 1ts share ofoverhead and in"-
row book-keeping purposes' .conflicts With easily ascertainable'eVldence. direct costs. It does not follow, however, that the5e reflneinents were in-
Check marks on extant Medici balance sheets show that they . [Link] te~ated into a fully devel?p:d system of double entry. In Florence, es-
scrutinized for ageing accounts _and unco~ectable claims, _a: perenrual pecially, progress along this line was hampered by the complexities of a
threat to the solvency of the medieval b~g and mercantile compan-.- monetary system based on parallel standards of gold and silver with no
ies. Balance sheets were also used for taxation purposeS. ~·Florence, the fixed exchange !atio between the two. The merchants and hankers
reckoned only in·.gold; [Link] ot clothierS used both standards
law required taxpayers to attach t?e b~ance sheets of~err firms to the
portate, or retllrns, filed in connectlon Wlth the·catasto or mcome tax. F~r ~ultaneously: gold in ?uying wool and selling doth and silver in pay-
the catasto of 1427, numerous balances and financial statements. are still mg wages, a custom which greatly complicated their problems in times
of monetary instability. ·
extant in the Florentine archives; they range all the way from b?efstate-
ments submitted by master artisans, in~ud!ng ~uc~ artists as !iliche~ozzo D?ub~~try hook.:.keeping. was undoubtedly an Italian invention.
Michelozzi and Donatello (Donato di Nicolo di Betto de Bardi), to Its cli1fusion ill other Eiiropean countries did not take place until the six-
booklets of several pages in which are listed item by it~~ the ass~ and te~~.century, and was greatly promoted by the publication of Luca
liabilities of the great banking-houses, such as the MediCI, thePazzx, the Pacroli s treatise (1494) and oflater manuals iii Italian as well as in other
Strozzi, the Tomabuoni and others. Balances were also attached to the ~es. These manuals, oneshouldnotforget, aretext-booksfor be-
returns for the catasto in 1433, 14511 and 1458. Later on; the law_':"'as ~ers and, hen~e, do ?ot give a fair picture ofthe more advanced prac-
changed and this practice, which ha~ aro~ed a great deal of oppoSition bces actually achieved·~ the [Link]~g-house. In the opinion of experts,
from the mercantile interests, was disconnnued. . '. . . the: greatest progress· m book-keepillg ·was accomplished during the
perxodfrom 12?0 to 1500~ From then on, accounting made little headway
1 Flor~ce, St:ite Archives: Archivio deTie Riform<\gioni~ [Link] dellatlasse vm,
Fedtirigo Melis, ·!La fom\.aZiorie dei cosci nell'in<l~ i:u»e~ ilia fine del Tr~
1
No. 35:Registro dei traffichi, 1451. · · ' ·
cento', offprint from the joumatEconomia 'c Storia, 1954., fasc. r-ri Uune-Dec;). ·
 I
~
94 MERCHANT MANUALS

until the gr:owth of large-scale enterprise in the'nineteenth century

brought to the fore new problems and ne~ solutio~.
BILLS OF EXCHANGE

post~l service,_ cou.t!ers and the qualities of merchantable commodities.

The ~f?[Link] g1ven in the merchant manuals is purely factual and
95

According to Werner Sombart, the mtroducnon of double -entry descnptlve and one should no~ expect ~o find in them anything that even
I! book-keeping marks the beginning of 'capitalist enterprise' ~d ~e ~ri.,. remotely approaches econonnc analysis. However, Giovanni da Uzzano
rl,,,, urnph of the profit motive as the guiding principle of econonnc acttVlty. ?bs~rves that the money market was subject to seasonal fluctuations and
il
IfSombart's criterion were accepted, capitalism would date back to the mdicat~s whe~ mo~ey in different places was likely to be tight or easy.
thirteenth century, or much earlier than he himself would have been He ad':ses arb1trag1sts never to draw on a place when money is scarce or
willing to admit. . . .. to rennt to a place when it is abundant.
il I The great variety of weights and measures [Link] compbat1es of _According to the merchant manuals, traffic was concentrated in cer-
tJ medieval monetary systems led, in the fourteenth century, to the com- tam places, or trading and banking centres. In the fifteenth century those

·~
[Link] of the first merchant manuals. There ~as little need for s_uch places wer~ Barletta, B?logna, Florence, Genoa, Lucca, Milan, Naples,
guides as long as trade was concentrated at the fans of Champag~e, ~mce ~aler~o, P1s~, Rome, S1ena and Venice in Italy; Barcelona and Valencia
ll their regulations were well known and generally observed. This situa- m Spam; A Vl~non, Montpelli_er an~ Paris in France; Bruges in Flanders;
1
\i tion was greatly altered as the fairs declined and as their place was take~ and London m En~land. Pans declined rapidly after I410 and its place
1}1
f,l
by several focal points, such as Paris, Bruges and London; As a result, 1t was taken by the f~s of Geneva and_ later those of Lyons. Until its cap-
.1~-
became more difficult for the merchant to keep track of the customs. of ture by the Turks m 1453, Constantmople was a banking place for the
i'! the different places of traffic without a manual to give ~ s~cure and Genoese and the Venetians. The Court ofRome was ambulatory and
:1~,~ · up-to-date information. Soon such a manual [Link] mdispensable followed the pope in his trav:els. Becaus_e of the needs of the papal trea-
fixture [Link] self-respecting counting-house. . . ,
',!..! sury, the pope had the reputation ofcreattng monetary stringency where-
:l:l
The most famous of the medieval merchant manuals lS that compiled ever he went.
il~ around I 342 by Francesco di Balduccio Pegolotti, o~e of the m_ost ab_le One of them~ charact~ristics of a piazza, or trading and banking

l
:I·:
factors in the service of the Bardi company. The text lS now available m
an excellent modern edition with an introduction in English. There are
also recent editions of an anonymous Venetian tariff, also of the. four-
centre, was _the eXIstence of an organized money market. In the Middle
Ages, such~ market reste? on the negotiation of bills of exchange. On
nearly all ptazze, the lta~an merchant-bankers were the principal' ex-

I
.I
teenth century, and of the manual attributed· to Lor~nzo C~~rini, fir_st
printed in I48 I. The Pratica della mercatura (I442) of G1<?':'anm di ~toruo
change~deal~rs. In the ~ddle Ages_, a bill ofexchange, as the name
clearly rmp~es, was mainly used to Implement a cambium or exchange

!
~I

:k'1:
;c·~
::£ ~
.da Uzzano exists only in [Link]-century edition. Bes1des the
manuals extant in :print, there are numerous manuscript copies [Link]-
servedin the Italian libraries and archives. After the invention of printing,
booksellers took advantage of the steady demand for merchant manuals,
and the genre continued to flourish throughout. the sixteenth, seven-
contr~ct. Wuh few exceptions, such a contract involved an advance of
funds m one place and its repayment in another place and in another cur-
rency. Beca~e of ~e slowness of communications, there necessarily
elapsed a penod of [Link] between the conclusion of the contract in one
place and its fUlfilment in another. Consequently, the cambium contract
,i~i. teenth and eighteenth centuries. Giovanni Domeni<io Peri's Il negotiante ~ested on an exchange ~nd a credit tr~saction. The two were inseparably
_(i638), Lewes Roberts'.The'Merchants Mappe ofCom~ce(I638),_Ja~ques link~d tog~ther, even m the case ofs1ght drafts~ It further follows that
,., Savary's Le parfait negociant (I675),]acques Le Mome de l'Espme s De medieval bills of exchange were at the same time credit and transfer in-
~
:·~· Koophandel van Amsterdam (I694), Samuel Rica~d's T~aitege~a~ du com- str_uments. In_stead of being discounted, they were bought and sold at a
1: merce (I7oo) and even Malachy Postlethwayt s Umversal Dtc~tonary of pn~e determm~d by the rate of exchange. The merchant manuals ex-
:,I .Commerce (17 5I) are prominent e:Xamples of this typ~ of usefullite~a~ure. plam how fore1gn exchanges were quoted in different places.. Uniess
Sorn,e of these books were so popular that they ran mto several editions. otherwise specifi_ed, bill~ ofexchan_ge were payable at usance. In London,
. . What are .the contents of the medieval merchant manuals? They the usance on bills vaned accor~g to destination from one to three
chiefly contain. practical information about the wages and customs, the months.
weights and measures; the coinage ahd the: monetary systems of the . Table III D:tdicates how, durin~ the fifteenth century, the exchanges
difff\rc:;ntplaces of traffic. The manuals also give_data a~out brok~rage ~ere quoted m London. In the Middle Ages;Loinbard Streetwas a satel-
fees,_ usances Qfbills ofexchange, exchange quotatlons; minttegulattons, lite· of the Bruges bourse and only the Ital.i_an residents dealt extenSively in
96 EXCHANGE QUOTATIONS IN LONDON LOCAL BANKING 97
Table ill. Exchange Quotations in Lombard Street during the transfer and deposit banks which operated on a fractional reserve ratio
Fifteenth Century · :md extended credit to their customers by means ofoverdrafts. As earlier
m ~enoa, ~ransfer orders were usually given by word of mouth, but
Place of
Exchange Quoted High Lciw Usance wntten, ass1gnmen~ w:re occasionally accepted when a depositor was
Payment prevented from gomg m person to the bank. Since deposits were only
Bruges IIi so many deniers sterling per ecu partly covered by cas~ on hand, there ca~ be n<? doubt that the money-
of 24 groats, Flemish currency 22 r8 30 days from date c~gers creat~d fidu?ary money by the1r lending and investing activi-
Florence In so many deniers sterling per tles and that t~s creatl~n ofcr:dit had inflationary effects. The volume of
florin di suggello ·(after 1471, per bank-mon:ym the maJor trading centres was far from negligible. In 1369,
fiorino largo or large florin) 43 38 90 days ftom date
total depos1ts of the Bruges money-changer Collard de Marke exceeded
Genoa In so many deniers sterling per
florin of 25s., Genoese currency 26 20 90 days from date .£s,soo_ gr~at, Flemish, equivalent in bullion to $154,000. This figure is
Venice In so many deniers sterling per 1mpress1ve 1f one remembers that the purchasing power of money was
Venetian ducat of 24 grossi 46 38 90 days from date much larger than it is today, that Collard de Marke was only one of
~tee~ money-changers, and that the city ofBruges had less than so,ooo
SoURCE: Ellibro di mercatantie et usanze de' paesi, Franco Borlandi ed., Turin, 1936. ~b1tants. ?ne great ':l'~ess o~ medieval deposit banks was the pre-
vailing pracnce of making direct mvestments in business ventures un-
exchange with Genoa, Florence or Venice. As for the English merchants, doubtedly th~ ~ause of many failures. The money-changers wer; also
they were ordinarily takers who used the money market mainly to raise accused of drivmg t~wards debasement ~ither by uttering current coins
funds by selling bills payable across the Channel in Bruges or Calais. At above the proclamanon rates or ~y sending bullion to foreign mints. In
first, the exchange, contrary to the practice prevailing today, was quoted orde~ ~o curb these abuses, the c1ty of Barcelona established in 1401 a
in sterling and based on the ecu, the florin or the ducat. Under these cir- muruapal bank, the prototype of the public banks which became so
cumstances, a low exchange was favourable to England and a high rate popular after I_5 so. In ~enoa, a similar institution, the Bank of St George,
unfavourable. It was only towards the end of the fifteenth century that ~as chartered m 14?8 m [Link] that it would be able to stem the steady
the English merchants reversed. this practice and began to quote the ex- nse of t:he gold florm. As this attempt proved a failUre, the bank was dis-
change in shillings and deniers groat, Flemish currency, on the basis of solved m 1444 and ':Iot. r_e~ved ~til I 586. _According to the first balance
the noble of6s.. Sd. st. or one-third ofa pound sterling. This is the method sheet (1409), totalliabilines, chiefly depos1ts, exceeded so,ooo florins or
followed in the Cely papers, a collection of business letters stemming more than $2oo,ooo at ~e present val~tion of $3 5 per ounce.
from a firm of wool merchants. . . In the :fifteenth cen~, the malpractice of the money-changers and
To be sure, interest was concealed in the rate ofexchange, but its pre-: the n_umerous ~ank ~ures caused the public authorities to adopt an in-
sence did not greatly alter the speculative character ofexchange dealings. creasmgly hostile policy. ~~Low <?ountries the dukes of Burgundy,
Whoever chose. to operate in the money market, whether borrower or eage~ to _Prese:ve th~ s_tability of the1r currency, practically abolished .
lender, had to follow the rules of the game and to run the risk ofadverse b~ m therr domm1on by forbidding the money-changers to accept
exchange fluctuations. In this reg::mL the account-books of the Italian depos1ts and to make payments by book-transfer for the merchants. In
merchant-bankers and the treatises ofthe moralists give such decisive and Venic~, a series ofi:>~ptcies at the end ofthe .fifteenth century brought
concordant evidence that there remains no room for any doubt. The the pnvate banks mto disrepute and eventually led to their elimination.
speculative element, in the eyes of the churchmen, justified exchange T~ ~e sedentary merchant of the Middle Ages, news about market
transactions unless they were obviously misused to conceal.a loan at condinons and busmess _pro~ in other places was ofVital importance.
us~ . . . ·. . . , He depended on such iriformanon to make his decisions and his fore-
Whereas international banking was closely tied to foreign exchange, casts. Ofcourse, i~ was1;!?~hisad~~tage not to send any goods to a place
local banking continued the traditions established by the Genoese ban.,. . where they were likely to be a glut on the market. On the other hand he
cherii of the twelfth century arid remained an activity doselyconiiected was on the lookouito benefit from any increase in the demand. One ~an
with money.,.changing. In many centres; indudingf Barcelona, Bruges, understand, for example,the()isappointment ofa Lucchese silk merchant
Pisa and Venice, the offices ofthe' nioney.-changers had· beeome'local' w~seBarcelona corrcipondentsnot~edhim too lateaborita prospective
98 ORGANIZATION OF THE MAILS PREMIUM INSURANCE 99
wedding at the Court of Aragon. According to the merchant manuals, de~oted ~ their attention to the courier service of the princes, but the
the money market, in particular, was sensitive to reports fro~ abroad mail semces of the merchant communities might better repay detailed
and the exchange-rates responded quickly to the trends preva1lmg else- study.
where. The importance of news was so great ~at unscrupulous spe~a­ This is not the place to discuss the polemics that have raged about the
tors sometimes reaped large profits by spreading_f3lse rumours or wlth- origins of premium insurance. In the present state of research, the first
holdmg intelligence received by special mes~en~ers. . unquestionable examples are found in some Palermo notarial contracts
In these circumstances, an efficient orgaruzauon of the ma1ls was an dat~g from 1350 and relating ~o shipments of grain from Sicily to
imperative necessity. In the absence of any public service, the ~erchants TUUls. In one case, the underwnter receives a premium of I 8% and
were forced to take matters into their own hands. Already m I I 8 I, a assumes explicitly all risks arising from an act of God, from men-of.:.war
treaty between Lucca and Pisa pro:ided for _the free passa~e thr~ugh or from ~e perils of the sea. Among the Palermo contracts, there is also
Lucchese territory of the Pisari couners travelling over the v1a frane~gena one covenng no~ the_cargo but the ship itself with all its tackle and ap-
and carrying the scarsella ofthe fairs of Champagne. More than a c~ntury parel. The prermum 1s I4% for a voyage from Palermo to Tunis with
later the existence of a similar service is mentioned by Pegolott1, who ~o or three calls at other Sicilian ports; no deviations are allowed except
eve~ states that the arrival of the Scarsella regulates the maturity of the ·m an emergency.
bills of exchange issued at the fairs and payable in Genoa. Giovanri.i da . Since Palermo was a secondary centre, and since some of the under-
Uzzano in his manual (I442) gives the impression that the piazze, or writers were Genoese, it may safely be assumed that premium insurance
principal trading centres, were all connected by _a _network of re~ular was kno~ prior to 13 50 in Genoa, Pisa and perhaps Venice. In Genoa,
mails. This information is confirmed by the Datmtand other busmess however, msurance contracts continued to be disguised under the form
letters which mention the scarsella so frequently that it must be considered of a mutuum, or gratuitous loan, and later of an emptio venditio, or sales
as a well-established institution. At :first, the wordsi:arsella applied only to contract; This practice may be due to the influence of the decretal Navi-
the mailbag, but this meaning was soon e~[Link]~ed to th~ priva~e mail ser- ganti condemning the sea loan, although the moralists from the start were
vice organized by the merchant commurunes m the chieftrading centres disposed to consider insurance as a contract made valid by the risk in-
of western Europe. . • . . volved. Whereas, in Genoa, insurance contracts were entrusted to notar-
The only document which sheds any light on the orgaruzatlon of ~e m
ies, a different practice prevailed Pisa and Florence where policies were
scarsella is a Florentine statute of I357· It reveals that the scarsella ofAV1- dra~ted hJ: brokers and circulated by them among prospective insurers
gnon was organized under the auspices ofthe mercanzia, or merchant gil~. until the nskhad been completely underwritten.
by a group of merchants having correspondents at the papal court: This Premiums varied a great deal according to ·circumstances and seasons,
group elected bi-monthly two masters of the :car~ella whose ~uty 1t was but they-were·as a rule much lower on galleys than on round ships. In
to hire the fanti or couriers arid .to·collect and distnbute the mail. The Ser- · I454, the rat\! was· only 3% on a cargo shipped from SandWich to Venice
vice was limited to members, and it is not clear whether postal charges on ~oard theVeneti~ galleys; ln,the same year, the premium charged on
were collected by the couriers or by the masters ~fthe scarsella. The let- a shipment ~rom Veruce to Sluys; the seaport ofBruges, by an ordinary
ters were apparently carried in a sealed pouch which was_ opened orily-_at nef was as high as I I%. Some merchants even considered the Venetian
destination. When, in 1382, the scarsella ofBruges was diverted from1ts galleys so safe that they deemed it unnecessary to take out insurance, but
usual route to one crossing Milanese territory, the Lucchese Repti~lic limited their risk by not 'adventuring' more than a certain sum in a single
asked the duke of Milan to let it pass without breaking any seals or m- bottom. -Large s?ipments_·were divided as much as possible among
se~eral galleys. Smce medieval merchants were used to assuming risks,
specting any bags. . ..
According to the Datiniletters, the scarsella ~~the Catalans l~ft Brug~s shipments<were rarely insured for-more than half their value or evenless.
for Barcelona twice a month; and probably carnedalso the mail for Pans . Despite,high premiUms charged by underwriters, the insurance,busi-
and Montpellier. Although Uzzano's manruilstates that the trip was ness was not especially profitable: According to· his records, Bernardo
made in nineteen or twerity days, in fact it usuallytook from tw-enty.., Camhi~ a Florentine underwriter-of the fifteenth century, paid out more
two to twenty-fourdays. Despite· the numeroui references:~ busm,ess. in clain!s· than he received in preiniums. Presumably the busineSs was
records, there is ·almost nothing, on ,tP.e ·[Link]]la ;save one .madequate highly comp_etitive; Another trouble;was that insurance .lent itself easily
article. Historians dealing witli· the; history' ofthe postal· service have to: fraud;' Ships·. were sometimes ·deliperately shipwrecked in order to
IOO GENOESE AND VENETIAN GALLEYS
ITALIANS IN ENGLAND AND FLANDERS IOI
claim insurance for goods that were not even on board. It also_ happened fleet or muda. The galley~we~e expecte~ to navigate in company and to
that shippers rushed to take out insuran_ce after ~ey had recei~ed ~ecret lend each other support, ifattacke~. Freight rates and wages were strictly
intelligence of a disaster. Such frauds still gave_ nse to con:plamts m the re~ulated, and the patronus who failed to comply could get himself into
sixteenth century. It is only much later that their perpetration. was made senous trouble.
more difficult by the organization ofLloyd's. . In good y~ars, Venice sen~ out s~veral fleets: twelve galleys, in two
Although uncommon, overland insurance was not unknown m ~e fleets, to Syna and Alexandria, four to Constantinople, four or five to
fifteenth century. On the other hand, the lack of s~atistics di~ not P<::~t Flanders and Eng_land and two or three to Barbary. The Flanders galleys
the establishment of life insurance on a secure basis. It was still undisttn- us~y wentstra~ght to Sluys or Zeeland and called at Southampton on
guishable from pure wagers. . .
A significant development m the matter ~f I?sur~ce was the building
. . th~ ~ome?m~nd voyage. In the fifteenth century, Florence, after con-
que~g Pisa m 1406, entered into competition with Venice and Genoa
up of uniform customs and rules oflaw. This situatlon was undou_btedly an~ sent_ gall~ys to Fl~ders and the Levant (1422-78). Documents of this
favoured by the diffusion of Italian business methods and practlces all penod likeWise mentlon the Ferrandine galleys of Naples, the Catalan
through the Levant and western Europ~. Even the Bruges court often ~eys of Barcelona and the French galleys of Narbonne. For a short
consulted leading Italian residents regarding the law merchant before de- while ~ere were also the two Burgundian galleys which flew the St
ciding cases involving insurance, b~ of exchange '?r other matters. ~drew s cr'?ss raguly of Burgundy, but were operated by the Medici
Codification of the prevailing rules did not start until 1_484 when the Wlth Flor:nttne cre~s. Even Edward IV, in order to promote distant
Barcelona customs on marine insurance were framed mto a statute, trad:, eqwpl?ed a ship, not a galley, which made trips to Porto Pisano
printed in 1494 together. with the Libra d~l Consolat del_M~r, a c~llec~on and 1S called m m~dieval records 'The nef of the King of England'. This
ofsea laws. This publication exerted great influence on sunilar legislation. was the first dent m Italy's dominant position in the Mediterranean trade.
Although the ~talian merc~ts resided in London, Southampton-
In the field of merchant shipping, the most spectacular development
of the fourteenth and fifteenth centuries was the creation of regular lines theAntona ofltalian and_SpalllSh--re~o_rds-was the favourite port of call
of galleys from Genoa and Venice to the Levant and to the West. In for the g~ey fleets. The!I regular V1Sits brought animation to the town
Venice at least, these galleys were state-owned, ?ut they_ were chartered and gave 1~ a cosmopolitan atmosphere quite exceptional in medieval
to private individuals who operated them _at their own ~1sLThe_ Senat~, England. ~mce Southampton's prosperity depended upon the presence
however, accepted bids only from Venetlan nobles Wlth expenence ~ of the Italians, they were welcomed by the townspeople· and anti-alien
shipping affairs and sufficient financial backing. Aft:r approv~ ?f his feeling, despite occasi'?nal brawls caused by the turbule~t crews of the
appointment by the Senate, the·niaster or patronus receiv~d_penrusSlon to galleys, was far less virulent than in the city ofLondon, where it was
set up his bench(ponere banchum) in th~ ~quare ofSt ~arks m order to en- nurture~ by the rivalry ofthe Staple~, the mercers and the grocers. With
rol his crew. He usually began by hiring a nauclenus o~ mate who was the passmg o~ the galley fleets early m the sixteenth century, Southamp-
trained in navigation. Then came the second mate, the scnvan;the barber- ~on, too_, declined as an outport ofLondon, to regain its prosperity only
surgeon, the chaplain, the bombardiers, the_ archers, the carpenters, the m the nmeteenth century by becoming the tenninus of the great trans-
cooks, the tnimpeters, the helmsmen, the sailors and, finally, the ~owd atlantic liners. ·
ofoarsmen· who in Venice were free men and not galley slaves. It 1S true The Italian colo~es in the Levant have already been mentioned. They
that these ~etches belong~d to the scum of society and were chie~y r~ ~ere ~y established before IJOO. Since their. organization changed
cruited among the Dalmatians and Albanians w~o flocked to Vemce m little d~g the fourteenth and fifteenth centuries, there is no need to re-
quest of a. pittance. A large merchant galley earned a crew of 300 men. ~to the same subject. In Bruges and London, however, Italian colon-
As cargo space was consequently rather limited, the galleys were ~ot I?" were not founded until after 1300 and they never attained either the
suited for· the traitsportation of bulky goods of low value, but carr:ted SlZe or the autonomy of the Settlements in the Levant. These colonies in
spices, silks, wooL doth and other luxury products that could bear high the north were als~ Pla£<:d pnde_~the_ auth?rity of a consul whose duty it
freight charges, . . was to ~ettle any disputes between hi_s ~atlonals, to protect them against
Although the patronus, on board his gall~y, was master afte~ God, he ~y arbitrary ~c~ of the lo~ ~uthontles ancLto g~rd agaiJlst any viola-
was ad:ountable to the Senate .and subordinate to the authonty of the qon of the e?Gsttng tra;de Pr:tweges. The consuls were either elected by
captain,.a govei:nment appointee,who:was in command·ofthe entire the local residents (as m the case of1the Lucchese) or ·appointed by the
102 ITALIANS IN ENGLAND AND FLANDERS
LOCAL TRADE AT TOULOUSE 103
home government (as in the case of the Florentines and -~e Vene?~_s). suspicion. This attitude found its expression in legislation, such as the
Like the gilds, the colonies participated in social and relig1ous [Link] S~atut~s of Employment or the hosting law of 1439. Hostility against
at which attendance was compulsory for the members. To defray ex- aliens m gener~ ~nd exchange-dealers and bankers in particular still
penses, a tax called consolaggio was levied on all exchange and com- pervades the :[Link] of the mercantilists in the sixteenth century. It
modity transactions. In London, toward the [Link] fifteenth century, would b_e a rrustake to overlook the fact that the prejudices of these early
the Florentines were taxed at the rate ofone-twelfthofa penny per pound econ~rrusts ~a~ their roots in the past.
sterling on exchange, a pe~y half-penny p_e~ pound on merch~dise ~his_descnp~on probably gives~ distorted picture ofbusiness organi- •.
and one-eighth per cent on msurance. In [Link], each galley callinl? at zat10~ m _the Middle A~es by stress~g the opt~urn, and neglecting the
Southampton was supposed to contribute a lump sum of_£ro ~t~rling fact that It was not ~p1cal and that 1t was achieved only in a few major
-chargeable to general average. On the galleys_ the cargo, m additJ.?nto cen~es. The trouble IS that the organization oflocal trade has yet to be
paying freight charges, was assessable for ordinary and extraordinary studi~d. N~ne the less, a recent work on Toulouse makes it possible to put
average. . . · · . . _. the p1cture mto better focus.
Both in Bruges and in London, the Italian colony was diVIded mto Toulo~e, in the fourteenth and fifteenth centuries, was a secondary
several 'nations', each headed by its own consul. Nevertheless, they some- c_entre which revolved in the orbit of Barcelona and Montpellier. Be-
times presented a united front when commo~ in~re~ts v;~re at stake. So, side_s, the town had connections with Bordeaux to the west and with
after the anti-alien riot of 1457, all four Italian [Link] m London got Pa~1s to ~e north: Early~ the fifteenth century Toulouse was also in re-
together and signed an agreement by which they threatened to boycott [Link] With the distant farrs of Geneva which, during the troubled reign
the city and to remove their residence to Winchester. T~e threat was not of ~hades VI, had supplanted Paris and risen to the rank of an inter-
carried out, but if it had been it might have caused a senous slump. One [Link] market for comrnodities and a clearing centre for bills of ex-
should not forget that the Italians controlled the ~oney market_and that change on all places.
English merchants depended upon them for credit ~[Link]. . In Toulouse, t~re wer~ no branches of the great Italian companies,
The official register of the consulate reveals that, m r 377, there were m although an occas10nal Italian makes a fleeting appearance in the records.
Bruges about forty-six Lucchese residents, not counting women and ';rhe only ones who left any traces were the Florentines Otto Castellani
children. In the next century, this number dropped to twelve, no doubt who was fo~ s?me time collec~or of the king' s revenue, and his partner:
because of the decline of the Lucchese silk industry. According to the Jacopo Medicr, who_ engaged m money-changing. The latter is possibly
chronicle ofN. Despars, in 1468 about I 75 Italian merchants walked in a the same as Jacopo di Bernardo d' Alamanno de' Medici a distant co win
parade at the celebration of the marriage of Charles the Bold and Mar- of the historic Medici, who was living in Florence in 1~98 when he was
garet ofYork, sister of Edward IV. This number comp~ised 103 Genoese chosen gonfaloniere. By various and sundry means, including magic
and Milanese, 40 Venetians; 12 Lucchese and 22 [Link]; these figures ~pells, this Castellani_is said to have caused the downfall ofJacques Co::ur
are plausible and probably not far from the truth. · . .. . . . m order to succeed him as argentier or minister offmance. Castellani him-
The Italian colony in London was smaller than the one_ m: Bru~es. It IS selfcame to a bad en? and died in prison where he was held on charges of
doubtful if it ever exceeded roo members. Apart from s1ze, an Import- sorceryandfra~d. His partner,JacopoMedici, in 1459, obtained a pardon
ant difference is that the Italians were welcomed in Bruges, but that they for murder, perJury, usury ;md other crimes committed at the instigation
were hated mLondon. The explanation is no doubt that, in Flanders, they of Castellani.
did not compete with the natives, since the Flemish carrying ~rade had For the most part, the trade ofToulouse was in the hands oflocal mer-
been eliminated long ago. In London, on the contrary; the Italians were chants who were no more specializedthan the Italian companies, but who
in keen competition with the English merchants, for each ofth~t:Wo rival too_k ad':an~e of ~y bargain offering profit opportunities. One of the
groups sought to exclude the other from the wool and the sptce trades. mam [Link] m which they dealt was fine cloth from Flanders, Brabant,
Moreover, pamphleteers accused the.'Lombards'[Link] destruc- Normandy and England. It was worn by the upper classes in preference
tion of the realm by carrying out England's valuable wool in·ex~hange to the cruder product of the local industry. English cloth was imported
for apes, tritik;ets, sweet wines, velvets arid other sU:[Link]~es; Fin~y, the by way ofBorde~ux and brought to Toulouse by merchants fr~m Beam,
.English traderS resented being dependent upon Italian eaplra,hnd VIewed who exchatJ,ged ~~for woad growri abundantly in the Garonile valley.
the exchange bl1Siness-which they did not understand_:.with profound Among the Flerrush woollens, those ~f Courtrai and Wetvicq were the
104 LOCAL TRADE AT TOULOUSE BALTIC AND MEDITERRANEAN TRADE CONTRASTED 105
most popular, but the demand fell drastically after 1400, while the ~heir factors. UsuallY_ they had ceased to accompany their own goods and ·
English textiles gained ground. On the other h~d, Norman cloth, es- mstead used the semces of wagoners or mule-drivers who were chiefly
pecially that of Montivilliers and Rouen, retained a steady market Basques.
throughout the period from 1350 to 1450. To fetch these luxury goods, A fe~ merchants, favoured either by good luck or by superior busi-
the merchants ofToulouse maintained factors in Paris or sometimes went ness abilitY_, founded unglamorous dynasties of country squires, such as
themselves on trips to Flanders or [Link] silks and merceries the Ysalgwer. On the whole, the picture is far from rosy. Trade wa.s re-
were chiefly bought at the fairs ofPezenas and Montagnac, near Mont- peatedly disturbed by wars, epidemics and dearths. In 1442, a fire 'des-
pellier. The Toulouse merchants_ either ':isited the fairs themselves or s~t troyed half the town. The whole century from 1350 to 1450 was one of
their factors. Apparently, the f:urs ofPezenas and Montagnac played m stagnation, if not of economic decline.
~outhem France the same role of regional distribution centres as the fairs
of Antwerp and Bergen-op-Zoom in the Low Countries. They ~ttrac~ed
the merchants from the hinterland who came there to sell [Link] native
commodities and to buy supplies of spices and other exotic products.
IV. The Organization of the Hanseatic and English
According to an Italian manual, extant only in manuscript form, Tou- Trade
louse exported cheap local woollens and found an outlet for the~ at the The Medi~rr~ean and the Baltic trades during the Middle Ages had
fairs ofPezenas and Montagnac, while importing at the same time the har~y anything m common, save for one striking analogy: both were
fine and high-priced cloth mentioned above. . . dommated by the merchants of a single nation, the Italians in one case
Not only was diversification the rule, but there eXISted no clear dis- and ~e Germans in ~e other. The grip of the Hanseatic League on the
tinction between wholesalers and retailers. The Toulouse drapers sold by Baltic trade was even ttghter than the control of the Italian cities over the
the ell as well as by the piece. According to the inventory ?fa ~eceased Mediter~anean area. Moreover, the Italian city-states were sometimes
mercer, his shop contained a wide assortment ofgoods: Italian silks, bro- deadly nvals, whereas the Hanseatic towns were united in one powerful
cades and velvets; Dutch linens and other fabrics; a variety of liturgical league.
vestments (copes and chasubles), all ready.;.made; seat and bed covers; In the Mediterranean, Italian sea-power was far from negligible and
caps, purses, decorated belts, mirrors, rosaries and ~ets ofall-sorts. . w~s _actually used to back ?P eco~omic demands or to defend existing i.
The book-keeping of the Toulouse merchants did not reach a high pnvileges. Beyond the Str:uts ofG1braltar, however, the Italian republics
level, but was probably adequate for their purpose. Dou~le entry was no ~onger had any power, and their economic hegemony rested ex-
entirely unknown, but records were more or less systematically kept. If cluslv~ly on superior business organization. They had to maintain them-
the account-books· of the Brothers Bonis in Montauban (1345-65) are selves by pea~ful means and could not, as did the Hanseatic League on
at all representative, the merchants of southern France used a_l~dger for· several ~~~:ms,_ resort to boycott, blockade or privateering. Thus the
receivables and payables as well a:s other books. ~e only sumvtilg frag- Hanseatic attes, m 1358, ordered their merchants to withdraw from
ment of mercantile book-keeping in Toulouse 1S represe~ted by four Bruges and not to trade with Flanders until they had obtained a satis-
folios which show that the mercer Jean Lapeyte (tiW) kept some kind factory settlement oftheir grievances. Trade relations were again broken
of perpetual inventory ofhis stock of textile wares. offbetween 1436 and 143 8. This rupture was followed by a blockade of
Because ofthe chronic shortage ofcurrency, barter arrangements were Holl~d (1438-41), which proved to be a boomerang and harmed the
common and credit was ubiquitous; The money-<hangers accepted de- W endish towns more than it did their enemies. In a clash with England
posits, but it does not seem that pa~ents werefrequen~ymade by trans- from 1469 ~o 14?4• th: Hansea~c League engaged successfully in naval
fer in bank. There was no orgamzed money market m Toulouse, and warfare. It lS du_nng this camp:ugn that a Danzig privateer captured one
bills of exchange were used only· to a limited ~en.t. T~e •m~ney.:.;. of_the Burgundiangall~ys which had on board Memling' sLastjudgment,
changers did, however, sell drafts payable at the netghbourmg [Link] of p:unted for Angelo ~am, _the Bru~~s manager of the Medici bank. At any
Pezenas and Montagnac and even ma:de arrangements for the !tansfer of rate, the League obta:l?-ed fto~ Edward IV the restoration ofits old privi-
funds to Rome orAvignon. · , • . . , .· , · · •· leges. and succeede~ m halttng for many years the penetration of the
Since the T oulowe merchants did not opetate'Wlth correspondents m English merchai:tts 1llto the Baltic. As these cases show the consistent
other places, the}/were still forced to ttavebi greadlea!·i5r tdsendo~t policy of the League, and especially ofLiibeck and the Wendish towns,
I
 HANSEATIC MERCHANTS AND PARTNERSHIPS 107
106 HANSEATIC MERCHANTS AND PARTNERSHIPS

was to preserve its control over the Baltic trade against any intruders .. In ~tock of goods by _a servant (Knecht or Diener), a fellow-merchant, or an
the absence of superior business techniques, this monopoly was mam- innk~eper, according to the instructions of a principal who assumed all
the nsks ~f the venture. It made no difference whether the agent travelled
tained ·by force if necessary.
A characteristic of the Mediterranean area was the great number of along w~th the goods or whether they were shipped without being ac-
focal points from which _trade ra~ated in all dir_es;_tions, but the Baltic comparued. The agent was apparently entitled to a commission or a fixed
region presented quite a different ptcture. Hanseatlc trade extende~ along remuneration, but it does not seem that he shared in either the profit or
a single axis with its centre in Liibeck and two arms: one stretching out the los~. ~ the fifteenth cen~, _it happened frequent! y that an agent was
west to Bruges and London and the other, east to Riga and far-aw~y co~rrusswned_ by several prmopals. The Wederlegginge (High German
Novgorod. Only one important 0~-shoot branc?ed off to Berge~ m W1der;leg~ng_), like the Sendeve, was a contract limited to a single venture.
Norway. This situation was not Wlthout a constd_erable repercusswn Usually, 1t mvolved two parmers: one who supplied the funds and the
upon business organization. It ~nabled the Hanse~tlc merchants to get other who conducted the business and usually went on a trip abrbad.
along with less elaborate machinery than the Italians. In general, con- However, there are examples of both investing money in equal or un-
ditions were more primitive in northern than in southern and western equal amounts. The managing partner usually dealt in his own name
Europe. Urban life was not as well developed: ev~n th: largest towns, without revealing the name of his associate. With regard to the division
like Cologne for example, had barely 40,000 inllabtt~ts, whereas of pmfits, there existed, apparently, no fixed rules such as there were in
several Italian cities, including Genoa, Florence, and Vemce, had more Genoa. The law ofLiibeck, in the sixteenth century, stipulates that man-
than so,ooo. In the north, too, the value of trade was small in comparison ~ging partllers with no investment are to share in the profit [Link] and not
with the south, and the principal products of the area; with the pos~i?le m the loss. But theyare not entitled to any reward for their trouble. This
exception of furs, were relatively low-priced and bulky c~mmodit1es. rule may have been alate innovation. In southern Germany, the Weder-
These factors explain to a large extent the great struc~al differenc: be- legginge was also known, but under the name of Furlegung.
tween Hanseatic and Italian trade. It is not surpnsmg that busmess By far the most typical institution of the Hanseatic trade was neither
methods were less advanced in the Baltic region and still forced the mer- the Sendeve nor the Wederlegginge, but the so-called gegenseitige Ferfz-
chant or his factors to be constantly on the road. · gesellschaft, or mutual agency partnership. It was usually an informal ar-
Large companies with many branches; sue? as th<;>se of the B~r~ o_r the rangement whereby a partner in one place and a partller in a different
Medici, were entirely unknownmHanseattc terntory. The mdivtdual place,, let us say one in Lubeck and the other in Riga, agreed to act as each
merchant trading on his own was still in the centre of the stage. To ?e other s agents and to sell reciprocal consignments at a common profit.
sure, partnerships did exist, b,ut they were ~~re orless temporary ~ssooa­ Such an arrangement was not necessarily temporary, but could last for
tions .in which two or three merchants Jomed forces for a specific and years on -end. It was well adapted to the needs of the Hanseatic trade
limited ·p\lfpose. ·Some of these contracts were occasional pa~erships which, as already mentioned, moved along a single axis; Such a Fern-
formed for a· single venture only, btit others were oflonger durat1on and gesells_chaft had neither its own capital nor its own style. The agreement
might even continue year after year. All. these contrac~s had the common remamed concealed to outsiders, since each partner acted in his own
feature of being well sUited to the persistently colomal character of the nam~. As th~re was no central book-keeping, each kept his records ac-
,cocording to his own system, a practice which led to many disputes when
Hanseatic trade. .
Prior to 1300, the expansion of German commerce along the Baltic accounts failed to agree. Neither parmer had any aiithority over the
coast was an important aspect of the great movement which led the Ger- other and distance prevented frequent consultation. ·There were no
~J mans to colonize the Slavic lands beyond the Elbe. In the fourteenth and mea_ns of control, and the arrangement rested to a large extent, ifnot ex-
fifteenth centuries, such towns as Riga, Dorpat or Stockholm were still clustvely; on confidence and business integrity. These drawbacks were so
German settlementS ruled by merchant families which maintained close serious that_they became a frequent source oflit:lgatimi, especially since
connections With their ancestral:homeland. · theHailseat1C merchants had the bad habit ofletting years go by Without
·Among. the occasionalpartnershipsthe most typical were th: S~nd~ve s~ttling: ac~f>tmts~ With their [Link] methods of book~keeping,
an:d ·the Wederlegginge or societa.s vera. The f-ormer hail .some sunilanty discrepanoes and: ertors were bound to occur and lead to all sorts ofdiffi-
with ~the t:-ominenda, but was not quite .the sam,e; Perhaps tt came .closer to culties~ In one late iruitance (I 507...:.2 3), involving a merchant r~siding iii
~eing,an ;[Link]<<t cQntra_ct, since itinv9lved,the purc~[Link] the:sale of a Reval and another in Liibeck, no settlenjent was made for sixteen years;
 i:

·~.
HANSEATIC BOOK-KEEPING 109
il,i 108 HANSARDS AT BRUGES

Representation abroad could also be secured ~y sending factors_ or by . The situation of the Hanseatic merchants in this respect was quite ·
'.il
~w:! ·. ~
l.l using commission agents. Reciprocal agency wtthout profit-sharmg, as different: they were not permanent residents. The records, Flemish as
iH ~
in the case ofthe Ferngesellschaft; was also common. Some merchants ~ell ~s ~rman, show clearly that they were constantly coming and go-
used Lieger or resident factors. '!he most promin~t of the~e was the
'1\j mg, nding back and forth between Bruges and their home towns.
rl Lieger or permanent representative of t~e T~utoruc Order m Bruges. In contrast to the Italians, most Hanseatic merchants stayed at the inns
'l!l
( <; ~ Those who had no satisfactory connections m other places· had to go or hostels and, in transacting their business, relied a great deal on their
:{1 hosts,, who often also acted as their brokers. Confidence in the broker-
h: i abroad themselves, since it was not customary to place orders by cor-
~eeper was ~o ~eat that the Hansards entrusted him with their money
I:!J,i
i1(1 respondence or to buy goods without previous inspectio~.
,r, How prevalent travelling still was is revealed by the wtdespread use. of lllStead of p~acmg It on deposit with one of the money-changers. Thus
It,. such expressions as Bergenfohrer, Flandernfahrer or Englandfahrer, w~ch the Hanseatic League created a stir because the city of:Bruges, which was
designated merchants tra~g wi~ ~[Link], Flanders or England. Smce
\;·, bound by treaty to guarantee bank deposits, refused to make good any
iil Fahrer in German means traveller , It IS clear that these merchants were ~osses suffered by Gell?an mercha~ts b~~e ofabsconding or bankrupt
;I· innkeepers. Seldom did the Easterlings live mBruges with wife and chil.,.
l;lj so called because they were constantly journeying to these places.. ·
Historians of the Hause insist a great deal· on the fact that, durmg the dren but there are exceptions,_such as Hildebrand Veckinchusen (t1426);
I.[l fourteenth and fifteenth centuries, Hanseatic trade tended to become who rented a_larg~ house which he occupied with his family from 1402
lj~'
more sedentary because of the growth of business by correspondence to 1417. As his busmess was not prospering, he sent his wife and children
tlj back to Lubeck where the cost ofliving was much lower than in Flanders.
{Schriftlichkeit), so that merchants were enabled to direct their affairs
t·
from the counting-room (Scrivekamere). Such a trend undoubtedly ex- y
The ~se of Hild:brand eckinchusen is exceptional in other respects.
II isted but it was carried mnch farther by the Italians.
He tned to establish busmess connections with Italy as well as with the
l In order to illustrate. this point, let us take the situation in _Bruges, Baltic. Unfortunately, his [Link] awry, probably because he had to
rely too much on agents over whom he had no control The more
which lends itself admirably to comparison, since both ~e Italians ~d
,lr

·.~· the Bansards, or Easterlings, had establishments there. Smce the Itali~
companies had permanent branches, their branch man~ers ·and ~err
rudimentary forms of business organization did not permit the German
.merc~t to dele~te power witho~t giving up control. In all likelihood,
f..,
factors were also permanent residents. If they were mamed, ~ey ~Ived ':'eckinchusen ~ed because he rmscalculated risks, engaged in specula-
I in Bruges with wife and children. For_ex~ple,Tommaso Pornnan, the tiv<: ventures [Link]. b~rrowed funds and overreached himself by under-
;I taking too many projects at once. Even while residing in B~es, he was
local manager of the Medici bank, resided m Flanders for more than half

III' a century from the time that he canie there as a young office boy (1439) constantly called abroad and forced to neglect one thing in order to take
ca~~ of another. As Veckinchusen's [Link], the methods pre-
until he withdrew from business in 1496. In 1470, at the age offorty-one,
vailin~ among the Hanseatic merchants not only entailed.a great deal of
he brought his young wife to Bruges, where he reared his familY:· Cer- ·
travelling back and forth, but put strictlimitations on the size ofthe finn.
tainly, Portinari visited Italy from time to time for co~erences Wl~ the
I maggiori or senior partners and for vacations with relatives ~d ~ends; 0~ th~ backwardness of Hanseatic techniques,the state of the book-
keep~ 1s as ~ood an example as any. Double-entry book-keeping, an
but while retaining a great attachment to ~e coun~ of his birth, he
\'f'
II became thoroughly assimilated into the Flet:rUsh envrronment: He was a I~an mvention, was not adopted by the Hanseatic merchants until the
member of the council of the duke of Burgundy. He certainly knew siXteenth ~entury. Prior to 1500, their systein ofbook-keeping left much
French and perhaps even a smattering of Flemish. Of course, _the Medici to be desrred. Payments due and owed were [Link] way still
~ used by small shopkeepers: there were no real accounts but debit or
employees and the other Italians did not stay in :Sruges wtth?ut ever
credit items were. simply crossed out. w:hen paid.. Qc~ionally, some
I

l passing through the city gates: they r~~e on busmess to CalaiS, made
trips to the anchorages in Zeeland and VISited regularly the marts of Ant- space was left blank to take care ·Of instalment payments. Because of the
. werp ·and Bergen-op-Zoom. These. short trips in ~e neighbourhood, prevalence ofagency and Ferngesellschajte,J,.it was [Link] ~keep
however, did not alter the fact that most of the Italian merchants were record of :mY amounts collected-nr paid for principals or paft1l~(s. This
permanent residents. The same was ~ue in Lo~do~: that is why the host- was done m a ha_Phazard manner by [Link] account for,each
ing law of 1439 was a piece of reacnonary legislation that was bound to lot of merchandise and recording rect!ipts [Link] sales on the-P.n~ hand and
end, as it did, in a <;omplete fiasco. ·. · ·· : charges-:on the other. Between the two I . . is, the .me~,..
sets of records, that .
 .,
I

IIO TECHNICAL BACKWARDNESS

HANSEATIC ESTABLISHMENTS OVERSEAS III
chandise accounts and the personal accounts, there was little co-ordina- Avignon, the papal delegates in Cracow used the services of travelling
tion, if any, with the result that_the bo~ks gave ~o comprehensi~e view merchants who frequented Bruges, and invested in commodities the
of the fmancial state of the busmess Without gomg to the considerable funds to be transferred. It normally took a year to remit money from
trouble of taking an inventory. There were also no automatic checks Cracow to Bruges. From there to Avignon, the Italian merchant-
which facilitated the detection of any errors or o@ssions. As long as the bankers. mad~ the transfer by remittance in a few days. In .general,
business was small, this system was more or less adequate and fulfilled its Hanseanc busmess methods were backward as compared with those of
purpose, but it broke down when the structur~ bec_am~ com.f:llicated. In the Italians. ~rior to !500, th~re was a lag of at least a century between
the opinion of an expert, the late Gunnar MickWltz, meffioent b?ok- the ~o. I~ 1s o~y m the siXteenth century that the Hanseatic mer- ·
keeping, with the resulting confusion, may well have been a contnbut- chan~ begm to rmprove their practices and to bring them up· to the
ing factor to the downfall ofHildebrand V eckinchusen. . same level.
Insurance is another technique which, although known to the Italians Fro'? an early date, the name 'hanse' was given to associations of
prior to qoo, was not adopted by the Hanseatic merchants ~til the six- travelling merchants frequenting a foreign country. Thus the Flemish
teenth century. The first known example is a,n insur~ce policy of I_5 3 I 'hans~' ofLondon was~ association of merchants hailing from different
relating to a shipment from Lubeck to Arnemuiden m Zee~d. It _gr~es Fle~sh towns and making regular trips to England. Members paid dues
the names of forty-four underwriters, but the overwhelming maJonty which were als? called hansa. The purpose of such associations was, of
are southerners with only one Flemish name and one south Germ:m ho_use co:n:se, to I:roV1d7 collective protection in foreign lands, to secure trade
(theWelsers). Not a single north ~rman nain:e ~p_pears ?n the list, Risks pnvileges, If possible, and to watch over the strict observance of those
were reduced by using small ships and by diVIding shipments a~ong already in effect.
several bottoms. Although the Hanseatic cogs were seaworthy, the mner <?riginally, the German 'hanse' was an organization of the same type,
route from Hamburg to Bruges was preferred to the outer route!. es- whi~h grouped together the German merchants frequenting Vis by on
pecially during the bad season. This :irtner route went almost entlr~ly t?e ISland of Gotland (teutonici Gotlandiam Jrequentantes). Similar associa-
through protected waters: it followed the coast of the North Sea behind tl?ns. were later fo~ded in London, Bruges and Novgorod. In the be-
the Frisian Islands, then: entered the· Zuider Zee and reached Bruges gmnmg the Hanseatlc League was, therefore, not· a league of cities. It
through the waterways of Holland and Zeeland. . gradually grew out of merchant corporations and it never became a
East of the Rhine, there were no banking centres and no orgaruzed political federation, but always remained a loose alliance •of German
money markets. One should not exaggerate and jump to the conclusion towns for the defe~ce ~fconurton ec??-omic interests and exclusive privi-
that no use was made of credit instruments, brit there were no regular leges. The express10n German hanse Itselfwas not used until I 358, when
dealers in commercial pap~t, like the·Italian~erchant-bankers, a situa- the dele~ate~ of the German towns assembledinLiibeck to adopt a com-
tion which seriotisly hampered. the international transfer of funds. The mon policy m response to a!leg~d violation of the privileges enjoyed by
formalized version qfthe bill of exchange was ifuknown, but it was re- the German merchants trading m Flanders. In later years, those reunions
placed by informal bills obligatory and mandates to pay _which nearly were held regularly, and ·the Hanseatic League was thus transformed
fulfilled the same purpose.· Overkopen, or payment by assi~eht, was from a merchant gild into a confederation of towns.
fairly common, but settlements in commodities were also qlilte com- In the fourteenth and fifteenth centuries, the four major establish-
mon. Despite the ~carcity of currency; Hanseatic merchants were·com- ~e?ts ([Cont?.re) w_ere St Peter's Court (Peterhof}in Novgorod, the
pelled, oftener than their Italian counterparts, to settle debts _abroad by Bndge (B11,1cke) m ·Bergen, the Steelyard (Stahlhof) in London and
shipment of specie, the _least efficient method of ~ansferrmg funds. the 'German ~erchant' in Bruges. There were also smaller outposts:
There are several instances-in the accotillt-book c:)fVIcko van Geldersen Stockholm,VISby andHull. The German towns in the dominionsofthe
(:!367-92); a Hai:nburg draper; who wed his servants ~d. frtendsto,send Teutonic Order, stich as Danzig, Dorpat, Konigsberg, Reval and ~ga;
gold and silver coins to Bruges in order to buy FlemiSh doth;'~ other were actually members ofthe League and not outside trading posts. Mbst
cases, the account-book shows him buying [Link]:on. funds 'placed n?rth Germanand~estphaliantowns belonged to the League, and so
on deposit: With molie'y-changersot intlkeepers. Ano~er illustration of did Cologne. It also mcluded Dutch towns east ofthe Zuider Zee such as
the difficulties coilliected with the transfer of funds 1S affotdedc hy: the Deventer, Groningen, Kampen arid Zwolle. ' . : ..• _ ' . ; _ .
troubles of:th~ pli:pal [Link] in· Poland;; In .order to send funds to .. ;Among the four major establishmeli~; the one in Novgorodwas per.,.
\ '
II2 HANSEATIC ESTABLISHMENTS OVERSEAS HANSEATIC ESTABLISHMENTS OVERSEAS II3

haps the most precarious because it was l~catedin ~totally alien e~wir?n­ merchants gradually learned how to delegate power and how to conduct
ment among a sometimes hostile population. In this respect, the situation business from a distance.
somewhat resembled that of the Italian fondachi in Egypt or Tunis. Like For the Hanse, London, although not yet a world metropolis, was far
them, the StPeter's Court, established before 1200, was also surrounded more important than the fish market on the shore ofBergenfjord. Most
by a wall, a useful precaution against any surprise attack ~y ~ riot~us probably the merchants of Cologne were the first Germans to trade with
Russian mob. Within the walls there was a church of the Latin nte, With England. Their presence is already recorded in the early Middle Ages. At
vaults used as warehouses, living quarters for the merchants and the cus- any rate, they formed a gild, since a privilege issued by Henry III in 1260
tomary bath-house. When the vaults were filled, the merchants piled_ up mentions agildehalle possessed by the 'merchants of Almain'. It was not
their goods in the church itselfs? that it was ?ecessary to pass_a regulation without difficulty that the merchants from Lubeck and other towns
forbidding the storing of anything on the high altar. Each rught the gate gained admittance to this already established fraternity. It even seems
was closed and no Russian was allowed to remain inside. that, early in the fourteenth century, there existed, for a while, two separ-
No German merchant resided permanently in Novgorod. The Russian ate organizatiolis.
traders arrived with two caravans, one in slpDlller and the other in In London, the Hansards had their headquarters in the Steelyard, a
winter, and departed together after a few weeks' stay. Between cara- compound bordering on the Thames and including a wharf, a mess hall,
vans, [Link]. ~the storehouses and living quarters. In it the Hansards lived an almost col-
fifteenth century, fewer and fewer merchants made the seasonal tnp to legiate life under the control of their own alderman and a committee of
Novgorod, preferring to send their factors; To facilitate business with twelve. The members of this committee were elected by the residents;
the Russians, the Court provided an interpreter. Most exchange was on a one-third by each of the following sectors : (1) the Rhinelanders inCluding
barter basis, although the goods may have been priced. Sad experience the merchants ofDinant in present-day Belgium, (2) the merchants from
had taught the Germans that it was dangerous to extend any credit to the the Westphalian, Saxon and Wendish towns, (3) the Prussians and the
Russians. The general impression is that conditions in Novgorod were German Baits. As elsewhere, the German colony was subject to the juris-
rather primitive and that business was conducted according to a certain diction of the aldermen in civil and commercial matters. In addition to
ritual from which it Vias not advisable to deviate in the least. the ~rman aldermen, the members of the Steelyard were required to
In Bergen, conditions were less strained than in N ovgorod. N everthe- appomt an alderman ofLondon as an assessor. His functions were to sit in
less, there also the German merchants lived in a special quarter called as a: judge, on certain cases and to act as a go-betWeen in any negotiation~
Deutsche Briicke, but it was not a fortified enclosure that could, ifneces- or dealings with the authorities of the city. According to tradition, the
sary, withstand a regular siege. This quarter'fomied a unit with its own guard ofBishopsgate, giving access to London Bridge, was entrusted to
wharf, warehouses and lodgings. the merchants of the Steelyard; it was at the same time a burden and a
After 1388, the Genruin colony in Bergen was ruled by aldermen privilege, but the Hansards valued it enough to have their right con-
assisted by a council. They had jurisdiction in civil matters, not only firmed at the Peace of Utrecht (1474).
over the merchants hut also over the German resident: craftsmen. Like the Italians, the Germans were envied by the merchants of the
Criminal cases, however, were reserved for the NorW-egian authorities. city, and the friction grew worse during the late fourteenth and fifteenth
Women were not tolerated on the Briicke, but this rule eliminated one centuries as the English tried to penetrate into the Baltic and to wrest con-. i
problem only to create another, since it encouraged gambling, drinking trol ofthis trade from the Hanseatic League. One justified source ofcom- !
and rough play, :ind it was difficult to maintain discipline among wiiuly plaint was that the Hansards, by virtue of antiquated privileges, paid
bachelors. lower customs duties than either the Englishmen themselves or other
The trade with Bergen was almost exClusively in the hands of the aliens. However· great the pressure put on the English government to
Wendish towns: Liibeck, Wismar and Rostock. Stoddish was the princi- repeal the privileges of the Hanse, they were not definitely lost until the
pal article of trade, like herring at Scania. In ~~ course Of time, the reign ofElizabeth I, after a-temporary suspension from 1468 to 1474 dur-
Briicke ofBergen became more and more a trammg school for young ing the war between England and tlie Wendish and Prussian towns.
apprentices who were sent there by their masters to gain pr~ctical e~­ In contrast to the conditions existing in N [Link], Bergen and Lon-
perience .. In the sixteenth century, fa~().~·s:formed ~the ~~aJonty· of·~e don, the Hanseatic merchants' in ·Bruges were not confined to certain
colony; [Link] trend was already in 'eVIaence earlier, as the:tfanseatic quarters hut lived in town; TheH:insa1House; a magnificent structure
I .
 II4 HANSEATIC MERCHANTS IN BRUGES SOUTH GERMAN COMPANIES 115
.I
~
)J with a lofty tower and lovely gothic windows, which was ~ot erected but he rented his cellar to store the merchant's goods and was usually
:j until 1470 upon property donated by the town, was not a restdence hall, privy to all contracts. If nec;essary, he stood surety for his guests or col-
~!
'j
but a club which also contained cellars for the storage of goods, and lected their outstanding claims after they had left town. His integrity
offices for the aldermen. When later the Hansa House in Antwerp was was of the greatest importance in taking advantage of the best obtainable
'1 built to accommodate guests, it proved difficuktg rent all the chambers, price. The Italians, of course, also used the services of the brokers, but
11
.j as most of the merchants preferred to stay in town instead ofbeing put up probably not to the same extent as the German merchants. In Bruges, the
I
i in barracks. broker-innkeepers belonged to the upper strata of society immediately
'!
In Bruges, the· Hanseatic mer~hants felt ~ore at hom~ than in ~y below the poorterij or the rich rentiers who did not belong to any craft.
other foreign country. For one thing, they did not need an mterpreter m The only region which escaped either Italian or Hanseatic control was
[Link] converse with the natives. In the Middle Ages, Low German southern Germany. International trade in this area was geared mainly to
was much closer to Flemish than it is today owing to the influence ofHigh Venice and Milan, although, after 1420, the fairs of Geneva emerged as
German which has become the literary language and is taught in the an important connection with other parts of Europe.
schools. '1n Bruges, also; there was not the s~me antagonism as in Lon- One of the main characteristics of the south German trade is the exis-
don. Merchant strangers were welcomed by the municipal government tence of some very large companies,· such as the Great. Company of
and the townspeople. Since the Flemish carrying trade had died long ago, Ravens burg (Grosse Ravensburger Gesellschajt), which lasted for 150 years
they .knew very well that they depen~ed upon. the foreigners t? bring (1380-I530) and is said to have equalled in size the major Italian com-
prosperity, and upon the Hanse especially. fo~ rmports of Pr~s1an and panies. These large business units were exceptions, however, and it is
Polish grain. It is true that there were some mctden~ :and oc~ston~l out- doubtful whether their organization excelled that of the Italians. One of
bursts, but there was nothing like the chronic hostility which p01soned the difficulties is that no articles of association for any of these south Ger-
the atmosphere. of London. . . . man companies have survived. In any case, the Great Company of
The Hanseatic colony in Bruges was administered by a board of slX Ravens burg had, in 1497, thirty-eight parmers. Of course, they did not
aldermen or elders, two for each of the three sectors, the Rhenish, the all have an equal voice in the management. Most probably the real power
Westphalian-Wendish and the~Prussian-B~tic; Afte~ I472 the n~ber was vested in a small committee of three, one of whom was the treasurer
ofaldermen was reduced from S1X to [Link] an adVlSory commltteeof and chief accountant. General financial statements were not drawn up
twelve. The task of the aldermen was threefold: (I) to watch over the every year, but at irregular intervals. Sometimes three, four or more years
preservation of the all-important trade privileges; (2) to ~nforce the were allowed to elapse before the books were closed and profits were de-
staple rules and (3) to judge any suits bro_u~ht by one Hanseatic me_rchant termined. Certainly, double-entry book-keeping was not in use, since it
against another. In Bruges,. as m other Cltl~s, these cases were outstde the was still unknown to the Fuggers in the sixteenth century. Accounts were
jurisdiction of the local courts. The sta~le mclude~ wool, wax, furs, cop- more systematically kept, however; than was customary in northern
per, grain and a few other products ~hie~, acc~rding t~ treaty, could not Germany. The Great Company of Ravensburg was not any more
be brought to the Swyn in Hanseatic ships wtthoutbemg unloaded and specialized than the Italian or Hanseatic firms. As everywhere. in the
offered for sale in Bruges. Besides stapelgud, or staple _goo~, [Link] Middle Ages, diversification was the rule. Persol1llel was a major prob-
-other goods called ventegud to whic~ the sta~le r~gulations ~d not apply. lem, and the correspondence suggests that the behaviour of factors and
Such goods were allowed to. pass m trans1t V?thout any mterference. apprentices gave plenty of worry to the leaders of the Ravensburg com-
These staple agreements gave Bruges a constderable advantage over pany.
neighbouring rival towns, in p:u?cular, ~twerp. Of course, the staple This general picture finds confirmation in the recently published
rules did not apply to goods· shipped direcdy to England or Scodand account-book (1383-1407) of Matthaus and Wilhelm Runtinger, a
without touching the Swyn. · . ;; . · . . . . · Regertsburg parmership. Its connections extended from Venice; Austria
As previously ~enti~ned; the ~eati~ merchants m Bruges trans- and Bohemia in the ea:st to Frankfurt-on-Main and the Low Cowi-
;acted .most; 0f therr busmess through the:[Link]~epe:t:s :who ~lso, acted a~ tries in the west. The partnership's activities were, as usual, very diversi-
brokd:s. According to thehistorianRudolfHa.J?ke; the Flerm~h h~steler fied. From a technical point of view; its bo<?k-keeping is on a relatively
was -.the most, important perso~ge :wh?tn a ·~erchan~ W;tS.~ely:to ;en-: highli.:vel, :but does not meet the cations ofdouble entry. . . . ~ '
.c0unter· on' a: trip ~0 Bruges. N:t;t only did:the · hosteler. proVide lo_dgmg, In o'rder to nla'intain their controf~fthe overseas trade, .the Venetians
II6 ENGLISH COMMERCIAL TECHNIQUES PECULIARITIES OF ENGLISH TRADE II7

subjected the south German merchants who. visited Venice to strict holders, but chartered to one master who assumed command and respon-
supervision. They could not stay where they WIShed, but were forced to sibility for actual operatioa
a
take room at the Fondaco dei Tedeschi, a special hostelry maintained by . ~contrast_ to Italy, where the civilians developed a body of doctrine
designed to differentiate between the partnership and other forms ofcon-
the Venetian Republic and managed by a superintendent accountable to
the Senate. The visitors were allowed to import only the products of tract, clear legal and terminological distinctions failed to emerge in
their own region-and not any English or Flemish cloth, for example- England, probably because of the pragmatic character of English law. In
and to purchase spices and luxuries brought by the Venetians from over- most eases, the only remedies available at common law were the action
seas. To prevent any evasion of the regulations, all business had to be of de1bt and the action of account, by which a creditor could sue a deb-
transacted through sworn brokers and interpreters. This draconian sys- tor for not rendering account of the money or the goods entrusted to the
tem was not without compensation for the Germans, since no Venetian latter's care. Wi~ reference to mutual partnerships, the English law did,
was allowed to compete with them in their own territory. In other words however, recogruze at an early date that merchants trading together
the trade between Venice and south Germany was entirely in German were jointly and severally liable for common debts.
hands, and any infringement of this monopoly was severely punished. In the fifteenth century, the English may have known about marine
On the organization of English trade, a number of studies, among insurance, but they found no need to insure on short cross-Channel trips.
others those of E. M. Carus-Wilson, M. M. Postan, Eileen Power; L. F. Double-entry book-ke~ping was probably introduced prior to 1543, the
Salzman and George Unwin, are available and easily accessible in any date ofHug~ Oldcastle s te~-J:>ook, the first on the art of book-keeping
college or university library of the English-speaking world. Since it is after the Italian maru1er; but It IS doubtful whether the English had made
impossible to do full justice to the subject~ a few paragraphs, the ens~­ any effort before r 500 to master this art, although it was assiduously prac-
ing remarks are merely intended to [Link] for purposes of compan- tised in the counting-houses of Lombard Street. Around 1450, the
son certain peculiar aspects of the English trade, English merchants were beginning to make extensive use of the bill of
Since no account-books have survived for this period, with the excep- e~change, whether in the form of a draft or a promise to pay; but they
tion of the memorandum book of Gilbert Maghfeld, one must rely for still preferred bonds or obligations and more informal bills of debt
information concerning the internal organization of the English finn on which, beyo~d the seas, CU:~ated from hand to hand without formality.
the Cely and Stonor business correspondence and on casual referen~s In England Itself, the position of the bearer was still Uilcertain at com-
in official documents and court records. There were some substantial mon law, althoug~ the mercantile courts were more willing to provide
English merchants doing a large volume of business, but they operated a re~edy. The Itahan merchant-bankers adapted themselves to English
with only a few factors and apprentices. . . practice, and the ledger of the firm Filippo Borromeo & Co. in London
Partnerships were fairly common, but there eXISted no firms w1~a (1436-9) shows that [Link] madeadvances on bills obligatory payable to a
network of branches even remotely comparable to the great Florentme certain person 'or the bearer thereof', which was contrary to Italian
companies. English merchants frequently 'committed' goods to servants, usage. ,
factors or other merchants to be sold either on a commission basis or ~he Enl?lish trade owes its originality less to the retarded ~doption of
according to a profit-sharing s;heme. It a~ happene~ ~at invest?rs Italian ?usmess pro:edures ~to a ~et of unique institutions, which pro-:
'entrusted' money to someone to merchandise thereWith and to g1ve tected Jt very effectively agamst the mroads of foreign competition. This
them 'a parte of the encrece'. Such a_ contract, of cours_e; resembled the was especially true of the export trade, which was to a large extent con-
Italian deposito a discrezione an~ the difference between 1t and~ loan was trolled by native merchants, whereas the Italians seem to have retained
sometimes hard to draw. English merchants concluded occasiOnal part- the~ hold on the importation of spices, m~rceries and other products.
nerships in which they bought 'certain merchandize' in conunoa These Therr control was, however, by no means absolute; and the London
arrangements, consequently, applied to a single venture, but they were mercers and grocers frequented Bruges in order to replenish .their stocks.
frequently renewed: no sooner was one liquidated _than the same ~artners Nevertheless, by and large, the export and the import trades were in
embarked .on another. In England,· there also eXIsted partnerships of a di~erent hands. Thi~ situation still prevailed in the sixteenth century,
more permaneritnature in which the partners operated tpgether 'on joint With the result that, m the money market, the English merchants were
stock'. The Cely brothers after their fa,ther' s dea~ fo,rmetl s.~ch'a p~rtner­ usually ~7rs or sellers ofbills_in Lombard Street, but deliverers or buy-
ship. As elsewhere in Europe, vessekwere often owned by [Link] share- ers of bills m the Low Countnes, wh~re, after collecting the proceeds of
n8 ENGLISH TRADING COMPANIES

their exports, they had funds to transmit to London. The Cely papers
(I475-88) give evidence to the same effect: theyare full of complaints
about the harm done to the Staplers, or wool exporters, by the rise ofthe
English noble. This was quite natural; since they had money coming to
them on the continent, the rising exchange was disadvantageous to
them because they received less in English currency for the same amount
of Flemish money.
Besides the divorce of import and export trade, an important char-
acteristic of English commerce during the fourteenth and fifteenth cen-
turies was that it was confined to the Channel and the Bay of Biscay.
Consequently, only short distances were involved. Although one of the
two trading companies called itself the Merchant Adventurers, the ad-
venture, if any, was not very great. Moreover, the current of trade fol-
lowed well-known channels, so that an experienced merchant did not
run undue risks.
Another distinctive feature of English trade was that it was strictly
regulated by the trading companies. Although each member traded on
his own, he had to comply with the regulations which tended to lessen
considerably the degree ofcompetition by price-fixing, quotas and allot-
ment of shipping space. In the fifteenth century, the trading companies
were two: the Fellowship of the Staple and the Merchant Adventurers.
They specialized respectively in the exportation ofwool and ofcloth, the
two principal articles of export. As the exports of wool were steadily
falling and those of manufactured cloths steadily rising, the Merchant
Adventurers were inevitably gaining grotind to the detriment of the
Company of the Staple. · .
To complete the sketch, it should be added that;for fiscal and political
reasons, the trading companies received the strong s,upport of the English
government. Home staples for wool tended to cut out the English from
the carrying trade, but staples abroad had the opposite effect of eliminat-
ing the foreigner and of placing the carryirig trade under the exclusive
control of the Staple Company.
Although the means were different, the English goverilment in its
economic policy pursued more or less the same objective as the Italian re-
publics or the Hanseatic League. In the Middle Ages, the aim was always
to gain control of the carrying trade [Link] secrirean:d retain a privileged
position. According to circumstai:LEes, this airii was achieved by superior
business organization, by force or by a combination ofboth.