The religious, political and economic life of late medieval Europe was highly monetized. The revenues remitted to the curia at Avignon during the pontificate of John XXII (1316-34), for example, almost averaged 230,000 Florentine gold florins per year, similar amounts were paid to the cardinals, litigation was expensive, and when the papacy was based in Rome pilgrims brought considerable sums of money. Crusading activities likewise involved enormous expenditure, as did the Hundred Years War whether on ransoms, protection money (appatissements) or wages paid to mercenaries, of whom the most famous fought in the Great Companies operating in France and Spain during the fourteenth century. A memorable description of the profits made by freebooters in the Great Companies was given by the Bascot de Mauleon to the chronicler Jean Froissart in an interview in 1388.
If a map of the main financial centres cannot do justice to such religious and military aspects, the traditional focus of attention on outstanding families of financiers, such as the Frescobaldi, Bardi, Peruzzi, Medici and Fugger, or even individuals like William de la Pole or Jacques Coeur, also obscures others whose total contributions were of greater value. In aggregate the lesser markets and fairs, as well as rural monetary transactions of all kinds were of enormous significance to economic life, the sale of cereals, livestock, cloth, and wine or malt being essential features of small market-towns and villages. For every urban market in Leicestershire and Nottinghamshire, for example, there were six village markets.
As for the prominent financiers, their activities usually combined different functions. The Medici, for example, acted as papal bankers, and others burned their fingers by over-investing in the ventures of princes, from the Florentine companies of the Bardi, Peruzzi and Acciauoli, involved in loans to fourteenth-century rulers in Naples and England, to the sixteenth-century Fuggers who financed Charles V of Spain.
The most prominent entrepreneurs in the financial markets of western Europe were the Italians, particularly the Florentines and Genoese.
They were usually both merchants and bankers, and their success owed much to advanced commercial techniques. These allowed them to organize their affairs from a home base and use 'partnerships' or 'correspondents' abroad. Insurance and accounting became specialized activities. Double-entry book-keeping was increasingly used as were different kinds of account books, for example to keep track of an individual's investments (including everything from trade to marriage contracts and dowries), or to maintain balances between a home company and branches abroad. Permanent banking centres were scattered throughout western Europe, but international banking was also catered for at the great international fairs, those of Champagne in the thirteenth century, and of Geneva, Medina del Campo and Lyon later on. Payments were normally made by bills of exchange, using the services of Italian or south German bankers. They involved the advance of funds at one financial or banking centre and the paying out of the amount involved at another centre, almost invariably in another currency. Exchange rates fluctuated. In theory, therefore, it was possible for a bill to be dishonoured at its destination and then to be rechanged back to its place of origin at a different exchange rate and at a profit. This gave rise to the practice of dry exchange, that is using bills of exchange as a pretext or cover for usury.
Frequently great financial and banking dynasties eventually reneged on their entrepreneurial background. This may have been partly due to a guilt complex about an incompatibility between their activities and religious values. The Peruzzi even opened up an account in their books on behalf of 'Messer Dommeneddio' ('Mr God'), the profits being given to the poor, and the account being the only one to show a credit balance when their company failed. More generally it was a drive for political power and respectability. The Medici ruled Florence, became popes (Leo X and Clement VII), and even married royalty (Catherine de Medici, queen of France).
A. MacKay
World History
