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Home -> Orville Marcellus Powers -> Commerce and Finance -> Chapter IV

Commerce and Finance - Chapter IV

1. Chapter I

2. Chapter II

3. Chapter III

4. Chapter IV

5. Chapter V

6. Chapter VI

7. Chapter VII

8. Chapter VIII

9. Chapter IX

10. Chapter X

11. Chapter XI

12. Chapter XII

13. Chapter XIII

14. Chapter XIV

15. Chapter XV

16. Chapter XVI

17. Chapter XVII

18. Chapter XVIII

19. Chapter XIX

20. Chapter XX

21. Chapter XXI

22. Chapter XXII

23. Chapter XXIII

24. Chapter XXIV

25. Chapter XXV

26. Chapter XXVI

27. Chapter XXVII

28. Chapter XXVIII

29. Chapter XXIX

30. Chapter XXX

31. Chapter XXXI

32. Chapter XXXII

33. Chapter XXXIII

34. Chapter XXXIV

35. Chapter XXXV

36. Chapter XXXVI

37. Chapter XXXVII

38. Chapter XXXVIII

39. Chapter XXXIX

40. Chapter XL

41. Chapter XLI

42. Chapter XLII

43. Chapter XLIII

44. Chapter XLIV

45. Chapter XLV

46. Chapter XLVI

47. Chapter XLVII

48. Chapter XLVIII

49. Chapter XLVIX

50. Chapter L

51. Chapter LI

52. Chapter LII

Medieval Commerce Continued.

Decline Of Venice; Commerce Of Genoa, Florence And
Pisa Effect Of Discovery Of America.

Besides Venice there were several Italian cities which
achieved great renown in commerce, art and learning during
the middle ages. These were Genoa, Florence, Pisa and Milan.
They followed Venetian methods to a consider-
a ^ e degree an d seemed possessed in a measure of
the Venetian character for commerce and finance.
Rivalries sprang up and wars between Venice and these cities
were frequent and bitter. Genoa was an inveterate enemy of
Venice and their conflicts at times remind one of the Punic Wars
waged between Rome and Carthage. Venice may be said to have
reached the period of its greatest wealth and power about the
fourteenth century. Then, by gradual steps, the original, demo-
cratic constitution of the Republic was changed into an oppres-
sive, hereditary aristocracy and the power of the state vested in a
few noble families. Venice was governed with dictatorial power;
a state Inquisition with subterranean dungeons and racks was
established, and every act of the people was watched, every word
listened to. Along with this, luxury and wealth had brought
corruption in office, and the moral tone of the people declined,
thus sowing the seeds of national weakness and decay. Two
other circumstances contributed directly and powerfully to the
decline of Venice. The first of these was the continued successes
of the Turks in the East, by which Venice was robbed of the
commercial advantages which she had so long and profitably
enjoyed, together with the loss of the island of Crete, one of her
richest colonies; and the other was the discovery of the sea route

to India by way of the Cape of Good Hope. These diverted a
considerable portion of the commerce of Western Europe from its
former channels through the Mediterranean, and thus reduced
the commerce of Venice accordingly.

Genoa was the proud rival of Venice. Founded by the
Romans before the Christian era, Genoa flourished as a com-
mercial emporium from the beginning. It had a spacious har-
bor, from which it sent timber, wool and earthenware to other
parts of Italy in exchange for wine and oil. After the fall of
the Roman Empire, Genoa set up a republican form of govern-
ment and in the tenth century built a navy with
which it began to reach out for a share of the
Mediterranean commerce. It established a pros-
perous trade with Sicily, the north coast of Africa, and the
southern coast of France. The islands of Corsica and Capraja
became Genoese colonies, and an overland trade was established
with Flanders and Germany. Like the other Italian cities
Genoa profited by the Crusades, for in return for the help ren-
dered by it to the crusaders the republic was granted a strip of
Phoenician territory and various privileges of trade in Syria,
which gave it a valuable portion of eastern trade, and enabled
the republic to eventually get a firm foothold in Greece and Asia
Minor. With a flourishing commerce, the harbor of Genoa was
constantly filled with a forest of masts; her commercial ex-
changes were only second to the Rialto of Venice in size and
importance and her marble palaces gave evidence of her increas-
ing wealth. The growth of Genoese commerce and influence
aroused the jealousies of the other republics of northern Italy,
especially Venice and Pisa, and they sought by every means in
their power to limit her ambition. From the eleventh to the
end of the fourteenth century Genoa was almost constantly at
war with Venice, thus wasting the possibilities of both republics
in domestic broils and interminable rivalries. They first came
into serious conflict when the merchants of Genoa attempted

to obtain a share of the trade of the Grecian Archipelago and
Black Sea Ports. Finally in the latter part of the thirteenth
century the Genoese triumphed over the Venetian fleet, and in
the treaty of peace which followed Venice surrendered to Genoa
her commerce in the Black Sea, and her colonies and agencies
which had been planted there.

Genoa possessed but few industries of her own, her commerce
consisting chiefly of the exchange of the productions of the
East with those of the West, taking chiefly cloths and pottery

from France and linen and leather from Germany
industries to tne east an Bringing from the Black Sea and

other eastern ports fine cloths, spices, silks and
ivory. However, near the close of the twelfth century, the
Genoese had plundered two Moorish cities in Spain, from which
they derived the art of silk manufacture, and so successful did
the industry prove, that silk became a staple manufacture
among all the Lombard republics, and the cultivation of mul-
berry trees was enforced by their laws. Woolen goods were also
manufactured by the Genoese to a considerable extent.

Usury, or lending money on interest, was regarded as a crime
by the theologians of the middle ages. This strange prejudice
against one of the most useful and legitimate branches of busi-
Genoese ness continued for hundreds of years, and although

Finance and finally eradicated, had its effect upon legislation

in modern times. The trade in money, and indeed
a large part of the inland trade in general of the Italian cities,
had fallen into the hands of the Jews, who were noted for
their usury. They were not molested by the clergy, being re-
garded as infidels, and they had no conscientious scruples them-
selves against usury, since the Jewish law permitted them to
charge usury against Gentiles.* The rates of interest were ten
to fifteen per cent, per annum. At Verona in 1228 the rate

*Unto a stranger thou mayest lend upon usury. But unto thy brother
thou shalt not lend upon usury. Deut. XXIII.

was fixed by law at twelve and one-half per cent; at Modena
in 1270 it seems to have been as high as twenty per cent., and
in France and England still more oppressive. The republic of
Genoa, towards the end of the fourteenth century when it had
grown wealthy, paid from seven to ten per cent, on its outstanding
obligations. The high rate of interest generally during this
period was owing partly to risks, business being hazardous on
account of inefficient laws, and also to the fact that profits in
business were very large. The Venetian merchants are said to
have cleared never less than forty per cent, profit on their com-
mercial transactions, and since Genoa and the other Italian cities
exercised monopolies we may safely assume that their profits were
enormous. In the last part of the thirteenth century the bank-
ers in the Italian cities and those of the south of France took up
the business of remitting money by means of bills of exchange,
and charging interest on loans. A distinction was then made
between moderate and exorbitant interest, and the utility of
negotiable bills of exchange was so great that gradually the
prejudice against usury (interest) wore away, and the Lombard
usurers established themselves in every country.

Having finally been robbed of its Black Sea commerce by the '
Turks, and later defeated by the superior power of its old enemy
the Venetians in other parts of the Mediterranean, the Genoese
turned their attention in another direction, hoping
thereby to retrieve their fortunes. There were
among Genoese sailors some who were acquainted
with the globular form of the earth, having acquired this knowl-
edge from the Mohammedan astronomers, and these men orig-
inated the attempt to reach India by sailing to the west. Great-
est and best among them, seeking the welfare of his city and
hoping that the riches of India might thus be secured, was
Christopher Columbus, the son of a wool comber. He had
studied the ordinary branches of arithmetic, drawing and paint-
ing, and is said to have acquired a singularly beautiful hand-

writing. After attending the university for a short time, he
went to sea when fourteen years of age, and for many years was
engaged in the Syrian trade and in that of other ports, later turn-
ing his attention to the construction of charts for sale, and the
deeper study of geography and navigation.

The result of Columbus' discovery was to draw the attention
of Europe to the westward and dispel the mystery of the open
sea. Migration set in towards the western coast of Europe, and
Decline of ^ e sea rou te to India diverted commerce in other
Genoese channels. Genoa became subject to Milan, and
although it again grew prosperous, it never re-
gained its former commercial importance.

Only second in importance to the republics of Venice and
Genoa was the city of Pisa, situated in a plain between the Appe-
nines on the east and the Tuscan Sea on the west. The founding
of the city, like that of Genoa, dates back to the Eoman Empire,
and like all other Italian cities, Pisa suffered from the barbarian
conquest; but like them, too, she secured her independence, set
up a republican form of government, and rapidly sprang forward
to a foremost place among the maritime states of Italy. In the
eleventh century Pisa acquired the islands of Sardinia, Corsica
and Elba, besides adding many important districts along the
coast to its territory, with all of which it carried on a prosperous
commerce. The crusades poured fresh wealth into the lap of
Pisa, and in return for its help in transporting the armament to
Palestine, Pisa was given extensive privileges and became one
of the channels through which the produce of the east flowed
in upon the ruder nations of western Europe. Pisa reached the
zenith of its power at about the end of the eleventh century. Its
prosperity was marked by public edifices which stand as monu-
ments to Pisan greatness to this day. Pisa was the first Italian
city which took pride in architecture, and its leaning tower and
cathedral are examples of skill and beauty. It was in this
cathedral that the illustrious philosopher, Galileo, watched the


swinging of the chandelier, and observing that its vibrations,
large and small, were made in equal times, "left the house of
God, his prayers unsaid, but the pendulum clock invented."
The Pisans are also credited with being the first
to c dify and promulgate a system of maritime
law suited to the extensive Mediterranean com-
merce, defining the rights of neutral and belligerent vessels,
and thus laying the foundation for a portion, at least, of the in-
ternational law of modern times. In the course of time Pisa
succumbed to the wars and competition of rival cities. Genoa
was its most bitter enemy, and in one fatal battle off the Island of
Meloria, in 1284, the entire Pisan navy was destroyed. Torn by
dissensions, and stripped of her commerce and colonies, Pisa
was finally sold in 1406 to Florence for 400,000 florins, and be-
came a port for the commerce of that city.

Situated above Pisa, on the River Arno, and being without
shipping facilities, the success and commercial importance of
Florence were achieved in the direction of manufacturing,
finance, literature and art, rather than maritime
Florence trade. Her weavers and goldsmiths were famed all

over Europe for their fine products, and her silk
and woolen cloths and articles of jewelry were exported to all
the principal cities of the western world. Like the other Italian
cities, Florence was vexed and retarded by internal revolutions
and external strifes. In the latter part of the thirteenth century
a republican form of government was established, which con-
tinued in modified forms for several hundred years. Notwith-
standing the wars and strifes in which Florence engaged in
common with her sister republics, her growth in wealth and
population continued without abatement, until at one time she
was not only the capital of Tuscany, but the chief city of all

In the fifteenth century the great family of Medici, Floren-
tine bankers, succeeded in obtaining control of the government

of Florence and changing it from a republic to an hereditary
aristocracy, but while this was a blow to popular government,
yet the remarkable character of the Medicis and their vigorous
and enlightened rule were by no means discouraging to the com-
mercial and artistic progress of the city. Indeed it was under the
Florence under Medicis that Florence achieved its greatest glory,
the House of This celebrated family of bankers was founded
by Giovanni de Medici, a merchant and after-
wards a banker, about the middle of the fifteenth century, but
the greatest of the family were Cosmos and Lorenzo, sons of
Giovanni. The latter, surnamed the "Magnificent," so gov-
erned Florence that all Europe was filled with his fame. Eichest
of Italians that he was, he lavished his wealth on palaces,
churches, hospitals and libraries. He made Florence the seat
of every art and science and a seminary for all Europe. His
court was ornamented with artists, poets and writers. Learned
men from Greece and other portions of the East, who were
flying from the sword of the Turks, taught the Greek language
and literature in Florence; and under his rule, sculpture, paint-
ing and music began to unfold their choicest blossoms. Florence
was called "The Athens of the West," and to this period of its
history we are indebted for the names of Michaelangelo the
sculptor, Dante the poet, Machiavelli the statesman, and Amerigo
Vespucci, the discoverer of our western hemisphere.

The banking houses of Florence were the largest and wealth-
iest of Europe, and through them nearly every great loan made
by the kings of central and western Europe to carry on their
wars was negotiated. The houses of Bardi, Pitti,
Medici and Peruzzi were the leaders in the finan-
cial world during the thirteenth and fourteenth
centuries, and are said to have been "The pillars which sustained
a great part of the commerce of Christendom." The customs of
England were farmed to the Bardi in 1329 as a security for
loans, and they probably had excellent bargains. In 1345 the

Bardi and the Peruzzi failed. Edward III of England owed the
Bardi 900,000 gold florins and the Peruzzi 600,000 florins, which
he was unable to pay on account of his wars with France. The
king of Sicily also owed each of these houses 100,000 florins
which he was unable to pay. On the other hand the Bardi had
deposits belonging to citizens and merchants to the amount of
550,000 florins, and the Peruzzi were carrying deposits to the
amount of 350,000 florins in gold. Unable to collect from the
kings the bankers were equally unable to pay their depositors.
The failure of these two banks caused great distress to the city
and injury to its commercial interests.

Milan, the ancient capital of Cisalpine Gaul, and the favorite
residence of the Gothic kings, is the fifth of the Italian cities
which achieved commercial distinction in the middle ages.
Without a seaport, she acquired her greatness by
Milan 161 agriculture and manufacture rather than through

maritime commerce. Situated in a beautiful plain
of fertile land through which coursed a tributary of the River Po,
the Milanese early turned their attention to agriculture and the
industrial arts. The invasion of the Huns in 899 caused the
Milanese to wall in and fortify the city, and thus later it became
independent of the feudal barons of northern Italy, and set up
its own republican form of government. After the peace of
Constance in 1184, Milan grew apace both in population and
material wealth. Manufactures flourished extensively, the lead-
ing industry being the making of armor.

During her struggles with the Emperor Frederick of Ger-
many (Frederick Red-Beard) for the preservation of Milanese
independence, a powerful fraternity called the Umiliati was
formed, which later became instrumental in developing the wool
trade and subsequently gave the first impetus to the production
of silk. From this period also date the irrigation works which
render the plain about Milan a productive garden to this day.
In the thirteenth century Milan was greatly retarded in her de-


velopment by the turmoils of the Guelphs and the Ghibelines,
the partisans of first one and then the other obtaining control

of the government. In the fourteenth century the
Control great family of Giovanni Galeazzo, one of the
Visconti, became sole lord of Milan, and inaug-
urated a remarkable career, resembling in many respects those
of the Medicis in Florence. It was under him that the Cathedral
of Milan was begun in 1386. It is built of marble from the
quarries which Visconti gave for the purpose. The work upon
this wonderful building was continued through several cen-
turies, and finally finished under Napoleon in 1805. After many
vicissitudes and strifes, Milan, in 1500, passed under control
alternately of France and Spain, and finally became a part of the
Kingdom of Italy. Owing to its agricultural and manufacturing
interests, it suffered less than the maritime cities of Italy by the
discovery of the Cape route to India.

Gradually the seat of commercial empire shifted from the
Italian cities to other parts of Europe, north and west. The,
inventions and discoveries incident to the general intellectual
Change of awakening which set in about the fifteenth cen-
commerciai tury, the invention of the art of printing, the
mariner's compass, the use of gunpowder, im-
provements in shipbuilding and in methods of finance, com-
merce, and law, worked changes in the established channels of
trade and developed new centers of commerce. We are now to
leave the Mediterranean Sea, upon, whose shores was grouped
the ancient and medieval commerce and civilization of the
world, and betake ourselves to other parts of Europe.

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