It is difficult for you to imagine a world without money. In a modern city one cannot possibly live without money. All day long you carry a pocket full of small discs of metal to “pay your way.” You need a nickel for the street-car, a dollar for a dinner, three cents for an evening paper. But many people of the early Middle Ages never saw a piece of coined money from the time they were born to the day of their death. The gold and silver of Greece and Rome lay buried beneath the ruins of their cities. The world of the migrations, which had succeeded the Empire, was an agricultural world. Every farmer raised enough grain and enough sheep and enough cows for his own use.
THE CASTLE AND THE CITY
The mediæval knight was a country squire and was rarely forced to pay for materials in money. His estates produced everything that he and his family ate and drank and wore on their backs. The bricks for his house were made along the banks of the nearest river. Wood for the rafters of the hall was cut from the baronial forest. The few articles that had to come from abroad were paid for in goods—in honey—in eggs—in fagots.
But the Crusades upset the routine of the old agricultural life in a very drastic fashion. Suppose that the Duke of Hildesheim was going to the Holy Land. He must travel thousands of miles and he must pay his passage and his hotel-bills. At home he could pay with products of his farm. But he could not well take a hundred dozen eggs and a cart-load of hams with him to satisfy the greed of the shipping agent of Venice or the inn-keeper of the Brenner Pass. These gentlemen insisted upon cash. His Lordship therefore was obliged to take a small quantity of gold with him upon his voyage. Where could he find this gold? He could borrow it from the Lombards, the descendants of the old Longobards, who had turned professional money-lenders, who seated behind their exchange-table (commonly known as “banco” or bank) were glad to let his Grace have a few hundred gold pieces in exchange for a mortgage upon his estates, that they might be repaid in case His Lordship should die at the hands of the Turks.
That was dangerous business for the borrower. In the end, the Lombards invariably owned the estates and the Knight became a bankrupt, who hired himself out as a fighting man to a more powerful and more careful neighbour.
His Grace could also go to that part of the town where the Jews were forced to live. There he could borrow money at a rate of fifty or sixty percent. interest. That, too, was bad business. But was there a way out? Some of the people of the little city which surrounded the castle were said to have money. They had known the young lord all his life. His father and their fathers had been good friends. They would not be unreasonable in their demands. Very well. His Lordship’s clerk, a monk who could write and keep accounts, sent a note to the best known merchants and asked for a small loan. The townspeople met in the work-room of the jeweller who made chalices for the nearby churches and discussed this demand. They could not well refuse. It would serve no purpose to ask for “interest.” In the first place, it was against the religious principles of most people to take interest and in the second place, it would never be paid except in agricultural products and of these the people had enough and to spare.