by Tim Parks
But what were talent and calculation without cash? The usurer, the banker, is more dangerous, more powerful, when the traditional structures of society have given way. There is nothing now to obstruct the progress of money. There is nothing more solid and reliable now than the golden florin of Florence, on which, in defiance of ancient hierarchies, no sovereign’s head is stamped, just the name Florentia on one side and the lily, emblem of the city, on the other. With no king on his coins, the banker is more or less obliged to be a kingmaker himself. He funds this or that side, or is plundered by them. He either controls the fiscal system or he is taxed out of business. Needless to say, the literature of the time was full of attacks on the “lowborn pleb who rises from the depths to great prosperity.” Could anyone be more callous, wicked, and proud? “A couple of lengths of red cloth,” said the wry Cosimo de’ Medici, “and you have your nobleman.”
HERE IS A little poem written in the first half of the fourteenth century:
Money makes a man visible
Money makes him seem knowledgeable
Money hides every sin
Money shows what he buys and bought
Money gives him women to enjoy
Money keeps his soul in heaven
Money makes a nobody noble
Money brings his enemy down to earth
Without money a man seems stuck
Since it turns the world and fortune’s wheel
And, if you want, it’ll send you to paradise.
I reckon the man wise who hoards it up:
Since more than any virtue money
Will ward off melancholy.
Yes, it’s a scandal. But nobody is more excited than the person who has discovered a scandal. We sense the poet’s horrified enthusiasm. With money you can change your social position, you can have women and go to heaven. We must condemn this delirium, but actually we are thriving on it. This is the contradiction behind so much mental activity in the West. We love money and what we imagine it can do and buy, and at the same time we are haunted by a fear as old as Achilles: surely there must be some value that is beyond buying and selling, something beyond the art of exchange. Oh, but not something, please, that tells us that money is altogether evil, that the plague that took away my child is God’s punishment for my financial transactions.
Behind all this tension lies the conundrum of a religion that began by calling the Christian out of the world to live a life of poverty while waiting for the imminent Second Coming—“Blessed are the poor for they shall inherit the earth”—but then later and rather confusingly, when the Second Coming never came, became the religion of the establishment and the rich, of people entirely in and of the world. What could this lead to but hypocrisy? Or art?
“It is easier for a camel to pass through the eye of a needle than for the rich man to enter the kingdom of God.” Everybody knows that. Yet who was richer than prince and cardinal? Traini’s Last Judgment in Pisa shows the well-dressed merchants drawing back in dismay as ugly demons cart off the affluent damned. Those men wanted to go to heaven, but they didn’t want to stop doing business, if only because, as the humanist Leon Battista Alberti explained, a poor man can never “find it easy to acquire honour and fame.” Such is the divided consciousness of the banker in the fourteenth and fifteenth centuries, such the contradiction that over the years will encourage the cultivation of less disturbing nonmonetary values—in philosophy, aesthetics, and love.
WE KNOW THE men from their tax assessments. They were obliged to list their incomes and possessions. Spared that annoyance, the women leave only the value of their dowries. Giovanni di Bicci was not a pleb made good. The Medici had appeared often enough on the parchments that recorded the names of the so-called priors of the city, the nine men who formed the government. But he wasn’t wealthy either. He and his four brothers had to share the 800 florins their mother left at her death. Assessed for tax, Giovanni was found liable for a contribution of only 12 florins. But a distant cousin had to pay 220, a very substantial sum. Vieri di Cambio de’ Medici ran a bank. However distant, family tended to employ family. Both Giovanni and his elder brother Francesco were taken on, and in 1385, when his own marriage brought a dowry of 1,500 florins, Giovanni was able to invest and, moving south, become a partner—the executive partner, in fact—in the Rome branch of Vieri’s bank. The other things we know about Giovanni’s wife are that she was called Piccarda Bueri and that she bore her husband two sons, Cosimo and Lorenzo. But she didn’t live with him in Rome.
Rome was a political and economic anomaly. The people of Greenland sold whalebone in Bruges and had the money sent to Rome. The people of Poland shipped furs to Bruges, sold them, and had the money sent to Rome. Or, rather, to the Curia, the pope. The Church demanded its tributes from all over Christendom. While other states collected taxes only from their own citizens and often with great difficulty, Rome was drawing in money from all over Europe. On taking up his benefice, a cardinal, bishop, or abbot was forced to pay the equivalent of the first year’s income to Rome. Otherwise, he couldn’t take up his lucrative appointment. Money arrived from Scandinavia, from Iceland, from poverty-stricken Scotland. Delayed payment was punishable with excommunication. Don’t pay and you go to hell. Announcing an extraordinary jubilee, a papal messenger informs the people of Gand in Flanders that if, during a certain period, they come to mass and leave a generous offering for the war against the Infidel, they will be granted a plenary indulgence. Straight to heaven, no purgatory. The people cough up. Who wouldn’t? The messenger counts out the money, coin by coin, with an Italian banker, in Bruges. It is always an Italian banker. Where there is an Italian community, there is a chance of a bank. Where there is no Italian community, there is no bank. In any event, the money is sent to Rome.
One says, “the money is sent,” but in fact it was paid out on order to the Curia in Rome, either by a branch of the same bank that had received the money abroad or by a trusted correspondent bank. Actually to travel on horseback or by foot across Europe with money was dangerous. “Beware of rivers in flood,” one messenger is warned. “Go armed and in company.” So a pilgrim, or priest, or choirmaster traveling to Rome goes first to his nearest bank, in London, Bruges, Cologne, Avignon—except for Constantinople, there are no banks east of the Rhine—buys a letter of credit, travels to Rome, and cashes it on arrival. A little is lost on the exchange rate, a little is paid in bank services, but he cannot be robbed. More than any other organization, it is the Church, then, that, despite its condemnation of many banking practices, needs and stimulates the growth of the international bank. Because the Church is the largest international economic entity. It will be hard for the pope to send to hell the people who collect his taxes and make his grandiose projects possible.
And more than any other organization, it is the Church that aggravates the difficulties of balancing the cash flow around Europe. For how can the banks in Rome continue to pay out Church tributes collected elsewhere if they don’t take in any cash? There is already a trade imbalance between Italy and northern Europe. London and Flanders are buying silks, spices, and alum from and through Italy in considerable quantities, but all they have to offer in return are raw English wool, some wall hangings, some Dutch linen. However many of these things they send, it never seems to amount to the value of what they want to buy. Already, then, more money has to be brought into Italy, in coin, than sent out of it. The Rome anomaly makes the situation worse; the papal court is sucking in huge quantities of cash and not sending any back. What arrives in Rome is spent mainly on luxury goods—heavy brocades, silks, artwork, and silverware—and these don’t come from Northern Europe.
As far as possible, the bankers, who are also merchants, get around the problem with triangular movements. Florence buys raw wool from the English Cotswolds. The Florentine banks in London can pay the sheep farmers with the money they have taken in for papal tributes. Florence cleans and weaves the wool and sends finished cloth for sale in Rome, where the local br
anch of the same Florentine banks can now recover some of the cash previously paid out on behalf of their London branches. There are similar triangles through Venice and Barcelona. But the problem is complicated and sometimes gold or silver has to be sent directly to Rome, hidden in a bale of wool perhaps. Or the Germans send ingots from their silver mines under armed guard. It is not very convenient. Fortunately, there were also the so-called discretionary deposits.
In his twelve years working in his cousin’s business in Rome, Giovanni di Bicci must have learned everything he needed to know to set up a major bank. He learned how important it was for a bank to have its own branches in the major business centers and how to mix financial and commercial transactions across different countries to keep his capital at work. But most of all, he would have learned how important was the difference between the spirit of the law and its application. When the Church asked for loans from a bank, for example, the bank could not ask for interest in return, because usury was a sin. So in its role as trading company, it would increase the price of the goods it sold to the Church to the tune of the interest it felt it deserved from the loans it had made. All the same, when a bishop, or a cardinal, or the pope himself had money to put in a bank and wanted to play investor rather than borrower, he was eager to get something in return. Though it must not be called an interest. And this, as we shall see, was the discretionary deposit.
There were those priests who denounced sin and screamed foul and promised damnation. And there were those who studied canon law to find the loopholes in it. One suspects an underlying complicity between the two groups, the fundamentalists and the compromisers, as between any permanent enemies. They need each other to become themselves. In any event, both sides put a lot of pressure on words, on the way in which a transaction can be described. So discretionary deposits involve discretion in two senses. The name of the deposit holder is kept secret, hence the arrangement is discreet. The holder’s return on the money he deposits is at the discretion of the banker, and thus is a gift and not a contracted interest rate at all, even if it can usually be expected to work out in the region of 8 to 12 percent per annum. Since the banks do not enter into a contractual obligation to make this gift, for that would be usury, and since, on rare occasions when they are losing money, they will not make it, some theologians decide that the arrangement is not usury since there is no certain gain. Others, notably Archbishop (later Saint) Antonino of Florence, consider that since the deposit is made in the hope of gain—for the gift is certainly discussed—then this is “mental usury”; the intention is there and the absence of a contract makes no difference. It is a mortal sin.
Despite the secrecy, we know of many famous holders of discretionary deposits. One was Henry Beaufort, bishop of Winchester, half brother of Henry IV. Was his soul at risk? Cardinal Hermann Dwerg, close friend of Pope Martin V, is said to have lived in “a spirit of evangelical poverty,” while keeping 4,000 Roman florins in a discretionary deposit and accepting Cosimo de’ Medici’s annual gifts. Perhaps the cardinal really did live a frugal life. Perhaps he gave generously to the poor.
Occasionally, arguments would develop when a “gift” rashly promised was not forthcoming. The government of Florence, which of course abhorred usury, considered the habit of giving gifts in return for deposits “laudable” and ruled that promises of gifts must be honored. “Contracts were written in obscure and ambiguous language,” writes the historian Raymond de Roover, “and so became fertile ground for expensive litigation.” The anxiety over mortal sin thus affected not only the actual nature of the financial services offered but also the banking trade’s attitude toward language. A transaction would always be recorded, but its true nature was often camouflaged. What matters, the bankers appreciated, is that you must not be manifestly in the wrong. Obviously, if a bank failed to produce its gift, the clerical customer took his cash elsewhere.
But why would a cardinal in Rome put his money in a bank that—quite apart from the problem of usury—might, and often did, fail? Why not invest it, sin-free, in property, which was rapidly increasing its value in the city and immediately surrounding countryside, or again in jewels? Alas, it was illegal to transfer the Church’s wealth, which included your cardinal’s salary, into the private sector. A new pope was within his rights to confiscate the properties of those who had become rich under his predecessor. Land was visible and vulnerable. The papacy changed hands eleven times in the fifteenth century, not counting the periods when there were two or even three popes. “Sell all that you hath and follow me,” Christ said, but the rich clerics were eager to leave their wealth to their families, their brothers or nephews or bastard children. Given the availability of new credit tools, money had the advantage that it could be deposited secretly and, in the event of trouble, withdrawn in a foreign city.
So, together with the effects of usury, which dislodged a man from his station in life, something else quite unnatural was happening: A person’s wealth was no longer tied to the local community. The actual coinage paid into the bank in Rome by members of Pope Martin V’s family might be quickly paid out in the same place against letters of credit, or tributes collected abroad. Meanwhile, in Avignon, Cologne, or Bruges, the Italian banker who had sold those letters of credit, or collected the tributes, could invest the money in a shipment of almonds from Barcelona, or alum from Turkey, which could then be sold on to London. The Church’s wealth circulated for fear of a new pope, who, unlike a new king or duke, would come from a different family and very likely a different city than his predecessor, bringing an agenda and an entourage all his own.
Giovanni di Bicci must capitalize on that circulation, on the particular turbulence that seems to occur when money meets metaphysics. In 1393 his elder cousin Vieri de’ Medici retired, and Giovanni bought out the Rome branch of the bank. But why, four years later, did he move back to Florence to make the decisive gesture of forming his own bank? And why did Florence become the headquarters of that bank, though it would never begin to equal the profits generated in Rome?
As with the cardinals and their discretionary gifts, the answer has to do with family. How is it, asks an anonymous Genoese writer of the early fourteenth century, that a man will do everything “to acquire power, possessions, lands and goods for the sake of his children, thereby condemning himself to eternal damnation?” It is an interesting question. Just as it’s intriguing in the Divina commedia how many of Dante’s damned seem more concerned with the honor of their family name back in Florence than their eternal torment in hell. Leon Battista Alberti answers the question in Della famiglia, written in the 1430s. Since the family is the social unit par excellence, Alberti says, any attitude or investment that benefits your family or serves to increase its honor is acceptable, for this is the determining purpose of life.
In short—though Alberti would never have put it like this—if making money has become an addiction, nevertheless family allows you to think of your moneymaking as a means to an end. Family offers a value, a reason for living at once more noble than mere accumulation, and more immediate than the pleasures of paradise. And while wealth in money terms might now be cut free from place, family could not. The Medici family was deeply rooted in Florence. There was property and a network of old alliances. If Giovanni had left his wife and children back in Florence when he went to Rome, it was because he himself always meant to return. Doing so, he would cease to be at the outpost of a network and place himself firmly at its center. He would once again exercise his political rights as a Florentine citizen and become a full and feared member of society, something that could never have happened in Rome. The injunction, “keep away from the public eye,” did not necessarily mean, “deny yourself political power.” In fact, one might keep out of the public eye precisely in order to accumulate power. Added to which, unlike the Romans, the Tuscans had a long tradition in running international banks, which were the key to making money, from Rome.
Giovanni di Bicci de’ Medici, as portrayed by Bronz
ino. The founder of the bank, Giovanni warned his children to “stay out of the public eye,” as if he had already appreciated the dangers of mixing politics and finance.
2
The Art of Exchange
“Bank,” Italian banco (later banca): a bench, table, or board, something to write on, to count over, to divide two people engaged in a transaction. That was all the furniture you needed. For some people a bank was just a tavola, a table. The Medici have their table in via Porta Rossa, they would say. Some things passed above board, and some below.
Since the bankers often did business together, they set up these tables in the same neighborhood—Orsanmichele, around what is now the Mercato Nuovo. There were about seventy all told. Halfway between Ponte Vecchio and the still-unfinished duomo, under shaded porticoes, or behind the massive doors of the palazzi, the moneymen stood or sat, wrapped in their long red gowns, bags of coins at their sides.
Above the table, on a green cloth, lay the big official ledger. The Exchangers’ Guild rules that every transaction must be written down. The banker has ink-stained fingers. “In the name of God and of profit!” the book begins. Or: “In the name of the Holy Trinity and of all the saints and angels of Paradise.” Every angle was covered.
The written check existed but was not the norm. Too risky. Every transaction must be ordered orally by the client in person and written down in his presence, with Roman numerals, in careful columns, because these are more difficult to alter. No sooner does money project itself through time and space than it generates vast quantities of writing. It becomes a thing of the mind, fluid and fickle. Write it down!
