Liability of aliens for each other's debts.
A practice, founded on the same principles as reprisal, though rather less violent, was that of attaching the goods or persons of resident foreigners for the debts of their countrymen. This indeed, in England, was not confined to foreigners until the statute of Westminster I. c. 23, which enacts that "no stranger who is of this realm shall be distrained in any town or market for a debt wherein he is neither principal nor surety." Henry III. had previously granted a charter to the burgesses of Lubec, that they should "not be arrested for the debt of any of their countrymen, unless the magistrates of Lubec neglected to compel payment."[h] But by a variety of grants from Edward II. the privileges of English subjects under the statute of Westminster were extended to most foreign nations.[] This unjust responsibility had not been confined to civil cases. One of a company of Italian merchants, the Spini, having killed a man, the officers of justice seized the bodies and effects of all the rest.[k]
Great profits of trade,
and high rate of interest.
Money dealings of the Jews.
If under all these obstacles, whether created by barbarous manners, by national prejudice, or by the fraudulent and arbitrary measures of princes, the merchants of different countries became so opulent as almost to rival the ancient nobility, it must be ascribed to the greatness of their commercial profits. The trading companies possessed either a positive or a virtual monopoly, and held the keys of those eastern regions, for the luxuries of which the progressive refinement of manners produced an increasing demand. It is not easy to determine the average rate of profit;[m] but we know that the interest of money was exceedingly high throughout the middle ages. At Verona, in 1228, it was fixed by law at twelve and a half per cent.; at Modena, in 1270, it seems to have been as high as twenty.[n] The republic of Genoa, towards the end of the fourteenth century, when Italy had grown wealthy, paid only from seven to ten per cent. to her creditors.[o] But in France and England the rate was far more oppressive. An ordinance of Philip the Fair, in 1311, allows twenty per cent. after the first year of the loan.[p] Under Henry III., according to Matthew Paris, the debtor paid ten per cent. every two months;[q] but this is absolutely incredible as a general practice. This was not merely owing to scarcity of money, but to the discouragement which a strange prejudice opposed, to one of the most useful and legitimate branches of commerce. Usury, or lending money for profit, was treated as a crime by the theologians of the middle ages; and though the superstition has been eradicated, some part of the prejudice remains in our legislation. This trade in money, and indeed a great part of inland trade in general, had originally fallen to the Jews, who were noted for their usury so early as the sixth century.[r] For several subsequent ages they continued to employ their capital and industry to the same advantage, with little molestation from the clergy, who always tolerated their avowed and national infidelity, and often with some encouragement from princes. In the twelfth century we find them not only possessed of landed property in Languedoc, and cultivating the studies of medicine and Rabbinical literature in their own academy at Montpelier, under the protection of the count of Toulouse, but invested with civil offices.[] Raymond Roger, viscount of Carcasonne, directs a writ "to his bailiffs, Christian and Jewish."[t] It was one of the conditions imposed by the church on the count of Toulouse, that he should allow no Jews to possess magistracy in his dominions.[] But in Spain they were placed by some of the municipal laws on the footing of Christians, with respect to the composition for their lives, and seem in no other European country to have been so numerous or considerable.[x] The diligence and expertness of this people in all pecuniary dealings recommended them to princes who were solicitous about the improvement of their revenue. We find an article in the general charter of privileges granted by Peter III. of Aragon, in 1283, that no Jew should hold the office of a bayle or judge. And two kings of Castile, Alonzo XI. and Peter the Cruel, incurred much odium by employing Jewish ministers in their treasury. But, in other parts of Europe, their condition had, before that time, begun to change for the worse—partly from the fanatical spirit of the crusades, which prompted the populace to massacre, and partly from the jealousy which their opulence excited. Kings, in order to gain money and popularity at once, abolished the debts due to the children of Israel, except a part which they retained as the price of their bounty. One is at a loss to conceive the process of reasoning in an ordinance of St. Louis, where, "for the salvation of his own soul and those of his ancestors, he releases to all Christians a third part of what was owing by them to Jews."[y] Not content with such edicts, the kings of France sometimes banished the whole nation from their dominions, seizing their effects at the same time; and a season of alternative severity and toleration continued till, under Charles VI., they were finally expelled from the kingdom, where they never afterwards possessed any legal settlement.[z] They were expelled from England under Edward I., and never obtained any legal permission to reside till the time of Cromwell. This decline of the Jews was owing to the transference of their trade in money to other hands. In the early part of the thirteenth century the merchants of Lombardy and of the south of France[a] took up the business of remitting money by bills of exchange,[] and of making profit upon loans. The utility of this was found so great, especially by the Italian clergy, who thus in an easy manner drew the income of their transalpine benefices, that in spite of much obloquy, the Lombard usurers established themselves in every country, and the general progress of commerce wore off the bigotry that had obstructed their reception. A distinction was made between moderate and exorbitant interest; and though the casuists did not acquiesce in this legal regulation, yet it satisfied, even in superstitious times, the consciences of provident traders.[c] The Italian bankers were frequently allowed to farm the customs in England, as a security perhaps for loans which, were not very punctually repaid.[d] In 1345 the Bardi at Florence, the greatest company in Italy, became bankrupt, Edward III. owing them, in principal and interest, 900,000 gold florins. Another, the Peruzzi, failed at the same time, being creditors to Edward for 600,000 florins. The king of Sicily owed 100,000 florins to each of these bankers. Their failure involved, of course, a multitude of Florentine citizens, and was a heavy misfortune to the state.[e]
Banks of Genoa and others.
The earliest bank of deposit, instituted for the accommodation of private merchants, is said to have been that of Barcelona, in 1401.[f] The banks of Venice and Genoa were of a different description. Although the former of these two has the advantage of greater antiquity, having been formed, as we are told, in the twelfth century, yet its early history is not so clear as that of Genoa, nor its political importance so remarkable, however similar might be its origin.[g] During the wars of Genoa in the fourteenth century, she had borrowed large sums of private citizens, to whom the revenues were pledged for repayment. The republic of Florence had set a recent, though not a very encouraging example of a public loan, to defray the expense of her war against Mastino della Scala, in 1336. The chief mercantile firms, as well as individual citizens, furnished money on an assignment of the taxes, receiving fifteen per cent. interest, which appears to have been above the rate of private usury.[h] The state was not unreasonably considered a worse debtor than some of her citizens, for in a few years these loans were consolidated into a general fund, or monte, with some deduction from the capital and a great diminution of interest; so that an original debt of one hundred florins sold only for twenty-five.[] But I have not found that these creditors formed at Florence a corporate body, or took any part, as such, in the affairs of the republic. The case was different at Genoa. As a security, at least, for their interest, the subscribers to public loans were permitted to receive the produce of the taxes by their own collectors, paying the excess into the treasury. The number and distinct classes of these subscribers becoming at length inconvenient, they were formed, about the year 1407, into a single corporation, called the bank of St. George, which was from that time the sole national creditor and mortgagee. The government of this was intrusted to eight protectors. It soon became almost independent of the state. Every senator, on his admission, swore to maintain the privileges of the bank, which were confirmed by the pope, and even by the emperor. The bank interposed its advice in every measure of government, and generally, as is admitted, to the public advantage. It equipped armaments at its own expense, one of which subdued the island of Corsica; and this acquisition, like those of our great Indian corporation, was long subject to a company of merchants, without any interference of the mother country.[k]
Increase of domestic expenditure.
The increasing wealth of Europe, whether derived from internal improvement or foreign commerce, displayed itself in more expensive consumption, and greater refinements of domestic life. But these effects were for a long time very gradual, each generation making a few steps in the progress, which are hardly discernible except by an attentive inquirer. It is not till the latter half of the thirteenth century that an accelerated impulse appears to be given to society. The just government and suppression of disorder under St. Louis, and the peaceful temper of his brother Alfonso, count of Toulouse and Poitou, gave France leisure to avail herself of her admirable fertility. England, that to a soil not greatly inferior to that of France united the inestimable advantage of an insular position, and was invigorated, above all, by her free constitution and the steady industriousness of her people, rose with a pretty uniform motion from the time of Edward I. Italy, though the better days of freedom had passed away in most of her republics, made a rapid transition from simplicity to refinement. "In those times," says a writer about the year 1300, speaking of the age of Frederic II., "the manners of the Italians were rude. A man and his wife ate off the same plate. There was no wooden-handled knives, nor more than one or two drinking cups in a house. Candles of wax or tallow were unknown; a servant held a torch during supper. The clothes of men were of leather unlined: scarcely any gold or silver was seen on their dress. The common people ate flesh but three times a week, and kept their cold meat for supper. Many did not drink wine in summer. A small stock of corn seemed riches. The portions of women were small; their dress, even after marriage, was simple. The pride of men was to be well provided with arms and horses; that of the nobility to have lofty towers, of which all the cities in Italy were full. But now frugality has been changed for sumptuousness; every thing exquisite is sought after in dress; gold, silver, pearls, silks, and rich furs. Foreign wines and rich meats are required. Hence usury, rapine, fraud, tyranny," &c.[m] This passage is supported by other testimonies nearly of the same time. The conquest of Naples by Charles of Anjou in 1266 seems to have been the epoch of increasing luxury throughout Italy. His Provençal knights with their plumed helmets and golden collars, the chariot of his queen covered with blue velvet and sprinkled with lilies of gold, astonished the citizens of Naples.[n] Provence had enjoyed a long tranquillity, the natural source of luxurious magnificence; and Italy, now liberated from the yoke of the empire, soon reaped the same fruit of a condition more easy and peaceful than had been her lot for several ages. Dante speaks of the change of manners at Florence from simplicity and virtue to refinement and dissoluteness, in terms very nearly similar to those quoted above.[o]