Part 96 (2/2)

We have seen that business in the Middle Ages was chiefly of a retail character and was conducted in markets and fairs. The artisan who manufactured the goods he sold and the peddler who carried his goods about from place to place were the leading types of medieval traders. Little wholesale business existed, and the merchant prince who owned warehouses and large stocks of goods was an exceptional figure.

LACK OF MONEY

One reason for the small scale of business enterprise is found in the inadequate supply of money. From the beginning of the Christian era to the twelfth century there seems to have been a steady decrease in the amount of specie in circulation, partly because so much moved to the Orient in payment for luxuries, and partly because the few mines in western Europe went out of use during the period of the invasions. The scarcity of money, as has been shown, [17] helped directly to build up the feudal system, since salaries, wages, and rents could be paid only in personal services or in produce. The money supply increased during the latter part of the Middle Ages, but it did not become sufficient for the needs of business till the discovery of the New World enabled the Spaniards to tap the wealth of the silver mines in Mexico and Peru. [18]

FAULTS OF MEDIEVAL CURRENCY

Medieval currency was not only small in amount but also faulty in character. Many great n.o.bles enjoyed the privilege of keeping a mint and issuing coins. Since this feudal money pa.s.sed at its full value only in the locality where it was minted, a merchant had to be constantly changing his money, as he went from one fief to another, and always at a loss.

Kings and n.o.bles for their own profit would often debase the currency by putting silver into the gold coins and copper into the silver coins. Every debas.e.m.e.nt, as it left the coins with less pure metal, lowered their purchasing power and so raised prices unexpectedly. Even in countries like England, where debas.e.m.e.nt was exceptional, much counterfeit money circulated, to the constant impediment of trade.

”USURY” LAWS

The prejudice against ”usury,” as any lending of money at interest was called, made another hindrance to business enterprise. It seemed wrong for a person to receive interest, since he lost nothing by the loan of his money. Numerous Church laws condemned the receipt of interest as unchristian. If, however, the lender could show that he had suffered any loss, or had been prevented from making any gain, through not having his money, he might charge something for its use. In time people began to distinguish between interest moderate in amount and an excessive charge for the use of money. The latter alone was henceforth prohibited as usurious. Most modern states still have usury laws which fix the legal rate of interest.

THE JEWS AS MONEY LENDERS

The business of money lending, denied to Christians, fell into the hands of the Jews. In nearly all European countries popular prejudice forbade the Jews to engage in agriculture, while the guild regulations barred them from industry. They turned to trade and finance for a livelihood and became the chief capitalists of medieval times. But the law gave the Jews no protection, and kings and n.o.bles constantly extorted large sums from them. The persecutions of the Jews date from the era of the crusades, when it was as easy to excite fanatical hatred against them as against the Moslems. Edward I drove the Jews from England and Ferdinand and Isabella expelled them from Spain. They are still excluded from the Spanish peninsula, and in Russia and Austria they are not granted all the privileges which Christians enjoy.

ITALIAN BANKING

The Jews were least persecuted in the commercial cities of northern Italy.

Florence, Genoa, and Venice in the thirteenth century were the money centers of Europe. The banking companies in these cities received deposits and then loaned the money to foreign governments and great n.o.bles. It was the Florentine bankers, for instance, who provided the English king, Edward III, with the funds to carry on his wars against France. The Italian banking houses had branches in the princ.i.p.al cities of Europe.

[19] It became possible, therefore, to introduce the use of bills of exchange as a means of balancing debts between countries, without the necessity of sending the actual money. This system of international credit was doubly important at a time when so many risks attended the transportation of the precious metals. Another Florentine invention was bookkeeping by double-entry. [20]

197. ITALIAN CITIES

THE CITY REPUBLICS

The cities of northern Italy owed their prosperity, as we have learned, to the commerce with the Orient. It was this which gave them the means and the strength to keep up a long struggle for freedom against the German emperors.[21] The end of the struggle, at the middle of the thirteenth century, saw all North Italy divided into the dominions of various independent cities. Among them were Milan, Pisa, Florence, Genoa, and Venice.

MILAN

Milan, a city of Roman origin, lay in the fertile valley of the Po, at a point where the trade routes through several Alpine pa.s.ses converged.

Milan early rose to importance, and it still remains the commercial metropolis of Italy. Manufacturing also flourished there. Milanese armor was once celebrated throughout Europe. The city is rich in works of art, the best known being the cathedral, which, after St. Peter's at Rome and the cathedral of Seville, is the largest church in Europe. Though the Milanese were able to throw off the imperial authority, their government fell into the hands of the local n.o.bles, who ruled as despots. Almost all the Italian cities, except Venice, lost their freedom in this manner.

PISA

Pisa, like Milan, was an old Roman city which profited by the disorders of the barbarian invasions to a.s.sert its independence. The situation of Pisa on the Arno River, seven miles from the sea, made it a maritime state, and the Pisan navy gained distinction in warfare against the Moslems in the Mediterranean. The Pisans joined in the First Crusade and showed their valor at the capture of Jerusalem. They profited greatly by the crusading movement and soon possessed banks, warehouses, and trading privileges in every eastern port. But Pisa had bitter rivals in Florence and Genoa, and the conflicts with these two cities finally brought about the destruction of its power.

[Ill.u.s.tration: BAPTISTERY, CATHEDRAL, AND ”LEANING TOWER” OF PISA These three buildings in the piazza of Pisa form one of the most interesting architectural groups in Italy. The baptistery, completed in 1278 A.D., is a circular structure, 100 feet in diameter and covered with a high dome. The cathedral was consecrated in 1118 A.D. The finest part of the building is the west front with its four open arcades. The campanile, or bell tower, reaches a height of 179 feet. Owing to the sinking of the foundations, it leans from the perpendicular to a striking extent (now about 161/2 feet).]

FLORENCE

Florence, Pisa's neighbor on the Arno, was renowned for manufactures. The fine wool, silk cloths, golden brocades, jewelry, and metal work of Florence were imported into all European countries. The craft guilds were very strong there, and even the neighboring n.o.bles, who wished to become citizens, had first to enroll themselves in some guild. It was from banking, however, that Florence gained most wealth. In the fifteenth century the city contained eighty great banking houses, in addition to numerous branches outside of Italy. With their commercial spirit the Florentines combined a remarkable taste for art and literature. Their city, whose population never exceeded seventy thousand, gave birth to some of the most ill.u.s.trious poets, prose writers, architects, sculptors, and painters of medieval times. It was the Athens of Italy. [22]

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