Medici Money

by Tim Parks

  He was accused of using torture. Girolamo Machiavelli, along with two like minds, was “tormented for days before being exiled.” Re-arrested for failing to stay in his assigned place of exile, Girolamo died in prison “from illness or torture.”

  Palazzo Medici, the house that Cosimo built. Inside, there are two spacious courtyards; outside, the palazzo could be defended against all comers.

  He was accused of directing Florentine foreign policy for his own personal gain. In 1450, he switched the city’s support from the old ally Venice to the old enemy Milan, revolutionizing the system of alliances throughout Italy. Francesco Sforza, erstwhile condottiere, now duke of Milan, was one of the largest clients of the Medici bank.

  He was accused of subverting and manipulating the democratic process, of rule by intimidation, of crushing all opposition to his authority, of running a narrow oligarchy, of shamefully elevating “base new men” who would always do his bidding. One Medici wool-factory foreman eventually became gonfaloniere della giustizia, head of the government.

  He was accused above all—and this accusation contained and explained all the others—of seeking to become a prince, of attempting to transform Florence from a republic to a hereditary monarchy. Why else would a man build a house “by comparison with which the Roman Coliseum will appear to disadvantage”? Aging now, with the sagging cheeks and baggy eyes we see in all the paintings, Cosimo did not trouble to defend himself. He knew he was widely loved, by many adored. The popular poet Anselmo Calderoni addressed him thus:

  Oh light of all earthly folk

  Bright mirror of every merchant,

  True friend to all good works,

  Honour of famous Florentines,

  Kind help to all in need,

  Succour of orphans and widows,

  Strong shield of Tuscan borders!

  Marco Parenti, son-in-law of the exiled Palla Strozzi, was implacably opposed to Cosimo and determined to bring his exiled in-laws back. On the banker’s death in 1464, however, he was obliged to remark on Cosimo’s modesty in deciding against a state funeral. He also acknowledged his enemy’s part in bringing peace and some prosperity to the city. People were grateful. “And nevertheless,” writes Parenti, “on his death everyone rejoiced; such is the love of and desire for liberty.”

  Some time after the funeral, the government of the town chose to reward the dead Cosimo with the title of Pater Patriae, Father of His Country. Who is simultaneously loved and resented if not a father? However benevolently, the paternal figure holds us in check. Only the security he brings can reconcile us to waiting for his demise. Cosimo’s achievement was to make his Florentine family wait thirty years, and then some.

  TO HAVE A proper understanding of Cosimo’s management of the Medici bank, one must study the 600 densely detailed pages of Raymond de Roover’s The Rise and Decline of the Medici Bank. To gain a thorough grasp of the way Cosimo ran Florence while apparently retaining the role of an ordinary citizen, one must settle down for at least a week with the 450 pages and labyrinthine complications of Nicolai Rubinstein’s The Government of Florence Under the Medici. To have just some inkling of the ambiguity of Cosimo’s relationships with the Christian faith and humanism, the contradictory impulses driving his commissions of so many buildings and works of art, one must tackle Dale Kent’s exhaustive and quite exhausting Cosimo de’ Medici and the Florentine Renaissance.

  These books rarely communicate with each other. Sometimes you might be reading about three different, equally remarkable careers. Yet whichever side of Cosimo you are looking at, you are always aware of this fatherly man’s special genius for holding things in check. What exactly? The destructive energies generated by the collision of irreconcilable forces: faction and community, Milan and Naples, commercial appetite and Christian morals, the love of liberty and the need for order. To hold the fort—the bank, the family, the state—in the midst of chaos, you must reconcile the irreconcilable. How? The language rebels. In the short term, is the answer, with the aid of considerable sums of money, a genius for ad hoc solutions, and the utmost discretion. Only a banker could have done it. When the money runs out, or is used without tact, your time is up.

  In 1442, in his early fifties, Cosimo was the main supporter behind the formation of a new religious confraternity: the Good Men of San Martino. The idea was to help the “shamed” poor, those who had fallen on hard times but were too proud to ask for charity. The Good Men went around the town asking for donations, after which they brought relief and preserved anonymity. Fifty percent of monies collected were registered as coming from the Medici bank. The contribution is entered in the bank’s books under the heading: God’s Account.

  The arrangement is emblematic of the way Cosimo works. A largesse with political implications is hidden behind a religious organization and the name of a commercial company. The amount of money felt to be coming from oneself is doubled by also having donations collected from others. The sense of guilt arising from sinful lending operations and constant tax evasion is attenuated. The danger of economic unrest in the town is reduced. By not asking for recognition or imposing yourself as benefactor, you actually attract even greater recognition. Most crucial of all to the scheme’s success, however, was a genuine charitable impulse. “The poor man is never able to do good works,” Cosimo wrote thoughtfully to his cousin Averardo. The poor get to heaven, wrote Archbishop Antonino, by bearing their tribulations with fortitude, the rich by giving generously to the poor. Such is the providence of social inequality. A Christmas or Easter handout of wine and meat distributed by the Good Men of San Martino cost Cosimo 500 florins, three bank managers’ annual salaries.

  BUT SUCH SUMS were nothing compared to the cost of that greatest irreconcilable of them all: How could an international merchant bank function when most European trade was going only one way—from the Mediterranean northward—a situation exacerbated by the fact that Rome was drawing huge sums toward itself in Church tributes without even giving anything in return? Had the pope, the Curia, been based in Paris or Bruges or London, how easy everything would have been! Italy could have sent silk and spices north, then used at least part of the income in situ to pay its dues to the Church. Not too much cash need have been moved. But the opposite was the case. The Italian bank had to recover not only the payment for products sent north but also the papal dues that it was responsible for collecting. This in a world where to move money in coin was extremely dangerous. Much of the territorial expansion of the Medici bank was undertaken to deal with this chronic imbalance. The upheavals that led to the bank’s eventual collapse stemmed in large part from the growing desperation of the measures used.

  In 1429 it was decided that the Rome branch would operate without capital. Deposits from clergy, together with what coin did arrive, would be sufficient. Other monies due to the Curia from abroad would provide the capital for other branches. This move freed up perhaps twenty or thirty thousand florins. Not a solution.

  Inevitably, the debt of the bank’s northern operations toward its Rome branch grew. They couldn’t find ways to send the monies they owed. This was not too worrying when the operation in question was another Medici branch, but it was dangerous when the organization holding the money was an independent agent operating on the bank’s behalf. In the first decade of the century, the Medici had established relations with such agents in London and Bruges. These were other Italian banks that collected papal dues and sold luxury merchandise for the Medici bank. They were under instructions to seek out quality wool to send back to Italy (and the Medici factories) in order to balance the flow and make the return trip worthwhile for the galleys that had brought Italian products north. The banks thus aimed to create the trade that they had come into being to assist and exploit.

  But there was a problem. The English now wanted to work all their wool themselves and imposed severe export restrictions and exorbitant duties. The flow did not balance and never would. In 1427, Ubertino de’ Bardi in London and Gualterot
to de’ Bardi in Bruges owed the Medici bank the huge sum of 22,000 florins, most of it due to the Rome branch. Those Bardi! Did their slowness in paying really have to do with problems finding merchandise or letters of credit going south? After all, holding someone else’s cash interest-free is always convenient. Was there some connivance, perhaps, between Ubertino de’ Bardi, a free agent in London, and his brother Bartolomeo de’ Bardi, the Medici director in Rome? Not to mention the Medici’s general manager, Ilarione di Lippaccio de’ Bardi, in Florence. This couldn’t go on. At some point, the Medici bank would have to form its own branches in both Bruges and London, if only to invest the income that couldn’t easily find its way back to Italy.

  ON RETURNING TO Florence from exile in 1434, Cosimo cut all the Bardi family out of his extensive operations. A clean sweep. What had they done in his absence? We don’t know. The richest Bardi, related by marriage to Palla Strozzi and working for Cosimo’s cousin Averardo’s bank, was exiled. The man was dangerous. Averardo himself had died in exile. Bringing families together in complex relationships might make for strength, but it could also create the conditions for conspiracy and betrayal. Here was another balance that would have to be struck and restruck, year in and year out. What Cosimo’s Bardi wife thought about it, we do not know.

  The Portinari family now took the place of the Bardi. Running the Venice branch, Giovanni Portinari was one of the most important men in the organization. Still nervous about the political situation in Florence, Cosimo had shifted much of the home bank’s capital to Venice. In 1431, Giovanni’s brother, Folco, running the Florence branch, had died, leaving seven children. Cosimo took three boys into his own family: Pigello aged ten, Accerito aged four, and Tommaso aged three. All would eventually hold key positions in the Medici bank.

  Was this what Cosimo, who only had two children of his own—two legitimate children—planned? That the Portinari boys, brought up in his home, would be more indebted to him, better servants of the bank than any Bardi could be? If so, it was an error. Nothing is less certain than the gratitude of those who have seen us in the role of father, those who have sensed, perhaps, that the real sons are being preferred. There was some question as to whether the Portinari boys had received all the money they should have when their real father died. Folco had had considerable investments in the Medici bank.

  Meantime, it was another Portinari, Bernardo, son of Giovanni in Venice and older cousin of the boys in Cosimo’s care, who set out for Bruges and London in 1436 to look into the ever-present problem of the trade balance. Traveling through the Alps on horseback, Giovanni goes first to the Medici branch that Giovanni Benci has set up in Geneva. With Paris in chaos thanks to the interminable Anglo-French War, Geneva is a big success. Merchants come to its four annual trade fairs from all over Western Europe; the town is thus an important sorting house for much of Europe’s currency. Everybody needs credit; exchange deals abound. Merchandise from the north can be brought at least halfway to Italy, turned into cash, and then sent on by messenger. The city even coined a new currency for all international dealings at the fairs: the golden mark, first hint at the euro perhaps.

  After Geneva, Bernardo rode on to Basle, where Cosimo had set up another branch—not to trade, but simply to service the cardinals and bishops meeting there in acrimonious general council since 1431. Papal authority was the matter in dispute. By 1436, the Church was once again on the brink of schism. Pope Eugenius, still living in Florence, had abandoned proceedings. The Holy Father’s banker needed to have a sense of who would gain the upper hand, though of course he would never shrink from taking deposits from both sides.

  Traveling on to Bruges and London, Bernardo’s brief is to get the local agents to speed up their sale of goods sent by the bank and, even more important, the return of money to Italy. He has special powers of attorney to have particularly recalcitrant debtors taken to court and imprisoned. The sad truth is that your debtor priest in Basle is a safer bet than your merchant debtor in London. Threatened with excommunication through Cosimo’s papal connections, a bishop must pay up. His livelihood and identity are at stake. But there were merchants who took no more notice of a bull of excommunication than a condottiere would of this or that count’s title to some citadel or town. “If only he was a priest,” comments one Medici accountant, preparing to write off a bad debt, “there might be some chance.”

  But the real reason for Bernardo Portinari’s trip north was to see if conditions were favorable for opening Medici branches in Bruges and London. Were the local merchants solvent? Were the judges fair to foreigners? What was the level of anti-Italian sentiment in the English wool trade? Considerable. Would the king waive the wool-export monopoly run by the English Merchants of the Staple if the Medici bank lent him ready cash? If lent cash, would the king pay it back? Was the Anglo-French War threatening trade between London and Bruges? How long was the king likely to be king anyway?

  Bernardo Portinari’s father died while he was away. He returned to Italy, gave a positive report, then went back to England with a papal bull regarding the appointment of the bishop of Ely and the collection of 2,347 Flanders grossi (about 9,000 florins), much of which was dispatched to Geneva hidden in a bale of cloth. Risky stuff. But profitable. In 1439, a Bruges branch was opened with a secondary office in London. The initial capital was a mere 6,000 florins, all provided by the branch in Rome. In 1446, London became a branch in its own right, with capital of £2,500. At this point, the Medici bank has eight branches of its own and agents in at least eleven other banking centers.

  FROM THE GREEN-CLOTH–COVERED table in via Porta Rossa, from the palatial rooms of his great house, now home to the Medici holding, from his private prayer cell in the Monastery of San Marco, Cosimo’s mind reaches out across Europe. He has no phone, no e-mail. The letters arrive regularly, bringing last week’s exchange rates, coded secrets, the latest politics and war news. Replies are dictated, copies made. The director in Rome is complaining about the director in London. I won’t accept second-rate cloth as payment! I want cash. The duke of Burgundy is again defying the French. The coin arriving from Geneva is no longer current and will have to be re-minted. Aren’t my managers spending too much time retrieving money from each other? That boy you sent us, Bruges objects, he can’t even read or write! Why won’t the women of Flanders buy Florentine silks? Our sales rep is so handsome, speaks French so well! You were told not to underwrite insurance on shipping, Cosimo reminds London. The ship was sunk before the premium was paid! Perhaps the theologians are right in complaining how exchange deals in Geneva always run from one fair to the next. It amounts to a loan with interest. But what can a banker do? What can I do to pay less tax? The balance sheet must show only half of the capital invested, Cosimo instructs the director of the Venice branch. And then there was Lubeck. Will the Hanseatic League never let us into Eastern Europe?

  Cosimo has Giovanni Benci beside him now as general director of the Medici holding. They work together among the tapestries and sculptures of Cosimo’s house. Benci had made quite extraordinary profits in Geneva. He is astute and gifted and devout. Pondering the accounts together by the light of an open window, do the two men occasionally exchange a snigger over the slave girls, the days in Rome? Are they in agreement with the general Florentine complaint that it’s getting hard to distinguish an honest girl from a prostitute? Do they discuss their contributions to religious institutions, exchange the names of favorite artists—Donatello, Lippi—discuss the latest translations of Cicero, the seductive ideas of the humanists? Why aren’t the Florentine whores happy to wear bells on their heads? Why can’t the Western and Eastern churches agree about the nature of the Trinity? Does the preacher Bernardino di Siena really believe, as he has been claiming in his sermons, that Jews take delight in pissing in consecrated communion cups? Cosimo is now an important figure in the religious confraternity dedicated to the Magi. Contessina fusses over what cloaks he should wear when he rides down the city streets to reenact the thr
ee kings’ adoration of the Holy Child.

  Together, Giovanni Benci and Cosimo open a Medici branch in Ancona in 1436. This Adriatic port was important for exporting cloth to the East and importing grain from Puglia, farther down the coast. But could that justify the huge capital investment of around 13,000 florins, far larger than the Medici investment in the more important commercial centers of Venice and Bruges? Florence was at war. Once again the Italian scenario was fantastically complicated: a succession dispute down in Naples between the Angevin and Aragon families; the two condottieri, Francesco Sforza and Niccolò Piccinino, at each other’s throats in the Papal States; the pope marooned in Florence, afraid of going back to Rome, worried about developments in Basle, casting about for allies; Duke Filippo Visconti in Milan, with Piccinino in his pay, seeking to capitalize on the turmoil in every area, sending expeditions to Genoa, Bologna, Naples. And now Rinaldo degli Albizzi has left his place of exile and is begging Visconti to attack Florence and restore his family’s faction to power. Undaunted, the incorrigible Florentines are once again launching an assault on Lucca and calling on the Venetians to help them out when it comes to the crunch with Milan. We would, if the Mantuans hadn’t switched sides, the Venetians reply. In the midst of this confusion, Cosimo made a long-term decision to back the great soldier Sforza. The money down in Ancona was not to finance trade at all. Or not exclusively. Ancona was in Sforza’s sphere of operation. It was the Medici bank’s first serious move into funding military operations that were not specifically to do with Florence. Why?

  In Milan, the fat, mad, aging Visconti had no legitimate off-spring, just one bastard daughter, Bianca. Sforza wanted her for his wife, together with the Milanese dukedom. He wouldn’t fight against Visconti while that marriage was in the cards. Or not north of the Po, in Visconti’s sphere of influence (he later changed his mind). At the same time, the combination Sforza–Visconti, should the condottiere fight with the duke, was the one feasible alliance capable of inflicting decisive military defeat on Florence. The duke had tied Sforza’s hands with the tease of his daughter, constantly promising that the marriage was about to take place, then inventing reasons for delay. Cosimo responded by tying the condottiere with his cash. Sforza could hardly fight for Visconti and the Albizzi if his army was fed and clothed by the Medici.