Trade, Banking, and the Merchant Class
The international trade of c. 1300 was, in the literal sense, medieval. A Florentine banker writing to his factor in Bruges for a price on a bale of English wool could expect the letter to take a fortnight by mounted courier, the answer another, and the answer to the answer another. The great fairs of Champagne — Lagny, Bar-sur-Aube, Provins, Troyes, Reims, and a sixth town whose identity was disputed — were the pivot on which north and south turned each year between roughly 1180 and 1320. Yet within this slow-moving world, instruments of credit were being refined with a speed that would not be matched until the seventeenth century. The three articles in this section treat, respectively, the leagues and fairs that structured long-distance trade, the German Hanseatic League that dominated the Baltic, and the Italian banking houses — Bardi, Peruzzi, Acciaiuoli, Datini, Frescobaldi, and Medici — that built the instruments of modern finance.
The Architecture of Long-Distance Trade
Long-distance trade in 1300 was carried by a small set of identifiable routes and instruments. English and Spanish wool, Flemish and Italian cloth, alum from Phocaea and the Tolfa, alum and cotton from Cyprus, pepper and spices from Alexandria and Beirut, copper and wax from Hungary, furs and wax from Novgorod, salt from the Salins-du-Dauphiné and Setúbal: these were the commodities that animated the customs accounts of Southampton and Pisa, the ledgers of the ricordanze, and the bills of lading preserved in Florentine and Genoese archives. The Champagne fairs, at their twelfth-century peak, hosted the great Italian banking houses — the Astesi, the Bonsignore, the Ricciardi of Lucca — and the bill of exchange, perfected in these fairs in the 1190s, allowed a merchant to deposit florins in Florence and draw the equivalent in livres parisis at Troyes six weeks later, at a known rate and with a known discount. The work of Raymond de Roover, particularly his studies of the Medici account books, remains the foundation for any serious treatment of these instruments, and David Abulafia’s later work on the western Mediterranean and the Atlantic has reframed the geography of the medieval trading world, putting Genoa and Venice in conversation with Barcelona, Valencia, Marseille, and the Atlantic entrepôts. The full mechanics of this system are set out in the article on the Champagne fairs and medieval long-distance trade.
The Hanse and the Baltic Trading Zone
The Hanseatic League was, at its late medieval height, a confederation of perhaps 70 cities — from Riga, Reval, and Dorpat in the east, to Dortmund, Cologne, and Bruges in the west, with Hamburg and Lübeck at its political centre. The League’s reach rested on a network of Kontore, or foreign trading posts, at Novgorod (the Peterhof), at Bergen, and at Bruges (the Hanse House on the east side of the city’s main canal). Hanse merchants exported furs, wax, honey, hemp, copper, iron, timber, tar, potash, and grain from the Slavic hinterland of the eastern Baltic; they imported English broadcloth, Flemish linen, French wine and salt, and the spices and silks re-shipped by the Italians from Venice and Genoa. The League’s privileges, hard won against the Danish kings in the wars of the 1360s, were codified in the Treaty of Stralsund of 1370; its later decline from the 1460s onward has been variously blamed on the rise of the English Merchant Adventurers, the new Dutch fluit ships, and the resurgent Danish and Swedish crowns after the Union of Kalmar. The work of Philippe Dollinger and the more recent scholarship of Nils Jörn and Stuart Jenks have refined our picture of what “Hanseatic” actually meant in any given year. The history of the League, from its Lübeck foundation of 1163 to its final diets in the 1660s, is set out in the article on the Hanseatic League in the late Middle Ages.
Italian Banking and the New Geometry of Credit
The collapse of the Bardi and the Peruzzi in 1343 — the two largest Florentine banking houses, which had between them lent some 1.3 million gold florins to Edward III of England, much of it unrecoverable after Crécy and the default of the Crown — was the most spectacular banking failure of the Middle Ages. From the ashes, a new generation of firms rose: the Alberti, the Acciaiuoli, the Pazzi, the Strozzi, and eventually the Medici, whose bank, founded in 1397, was by 1450 the largest in Europe, with branches in Florence, Rome, Venice, Milan, Geneva, Lyon, Bruges, London, and Avignon. The Medici innovation was less the bill of exchange, which de Roover traced to the late twelfth century, than the technique of branch accounting — transferring funds between branches by an internal bill, paying no exchange commission, and effectively running an early form of intra-bank transfer. Francesco Datini of Prato, whose archive at the Archivio di Stato in Prato runs to roughly 150,000 letters and 600 account books, has left a uniquely detailed business archive of a late medieval merchant. The historiographical debate over the “modernity” of the late medieval Italian banks — whether they were truly “capitalist” in the sense of employing advanced financial instruments, or simply larger and more durable than their predecessors — has been conducted, with varying degrees of heat, by de Roover, by John H. Munro, and, more recently, by Thomas Kuehn and Richard Goldthwaite. The full story is told in the article on the rise of banking in Renaissance Italy.
What this section covers
- The Hanseatic League in the late Middle Ages
- The Champagne fairs and medieval long-distance trade
- The rise of banking in Renaissance Italy