An Introduction to the History of Western Europe

by James Harvey Robinson

Idea of a 'just' price.

95. A word must be said of the numerous and almost incredible obstacles in the way of commerce in the Middle Ages. There was very little of that freedom which we now regard as essential to successful business. Our wholesale dealers would have been considered an abomination in the Middle Ages. Those who bought up a quantity of a commodity in order to sell it at a high rate were called by the ugly name of forestallers. It was universally believed that everything had a "just" price, which was merely enough to cover the cost of the materials used in its manufacture and remunerate the maker for the work he had put upon it. It was considered outrageous to sell a thing for more than the just price, no matter how anxious the purchaser might be to obtain it. Every manufacturer was required to keep a shop in which he offered at retail all that he made. Those who lived near a town were permitted to sell their products in the market place within the walls on condition that they sold directly to the consumers. They might not dispose of their whole stock to one dealer, for fear that if he had all there was of a commodity he might raise the price above a just one.

Payment of interest on money forbidden.

Akin to these prejudices against wholesale trade was that against interest. Money was believed to be a dead and sterile thing, and no one had a right to demand any return for lending it. Interest was wicked, since it was exacted by those who took advantage of the embarrassments of others. Usury, as the taking of even the most moderate and reasonable rate of interest was then called, was strenuously forbidden by the laws of the Church. We find church councils ordering that impenitent usurers should be refused Christian burial and have their wills annulled. So money-lending, necessary to all great commercial and industrial undertakings, was left to the Jews, from whom Christian conduct was not expected.

The Jews as money-lenders.

This ill-starred people played a most important part in the economic development of Europe, but they were terribly maltreated by the Christians, who held them guilty of the supreme crime of putting Christ to death. The active persecution of the Jews did not, however, become common before the thirteenth century, when they first began to be required to wear a peculiar cap, or badge, which made them easily recognized and exposed them to constant insult. Later they were sometimes shut up in a particular quarter of the city, called the Jewry. Since they were excluded from the guilds, they not unnaturally turned to the business of money-lending, which no Christian might practice. Undoubtedly their occupation had much to do in causing their unpopularity. The kings permitted them to make loans, often at a most exorbitant rate; Philip Augustus allowed them to exact forty-six per cent, but reserved the right to extort their gains from them when the royal treasury was empty. In England the usual rate was a penny a pound for each week.

The 'Lombards' as bankers.

In the thirteenth century the Italians—"Lombards"—began to go into a sort of banking business and greatly extended the employment of bills of exchange. They lent for nothing, but exacted damages for all delay in repayment. This appeared reasonable and right even to those who condemned ordinary interest. Capitalists, moreover, could contribute money towards an enterprise and share the profits as long as no interest was exacted. In these and other ways the obstacles offered by the prejudice against interest were much reduced, and large commercial companies came into existence, especially in Italy.

Tolls, duties, and other annoyances to which merchants were subjected on land.

96. Another serious disadvantage which the mediæval merchant had to face was the payment of an infinite number of tolls and duties which were exacted by the lords through whose domains his way passed. Not only were duties exacted on the highways, bridges, and at the fords, but those barons who were so fortunate as to have castles on a navigable river blocked the stream in such a way that the merchant could not bring his vessel through without a payment for the privilege. The charges were usually small, but the way in which they were exacted and the repeated delays must have been a serious source of irritation and loss to the merchants. For example, a certain monastery lying between Paris and the sea required that those hastening to town with fresh fish should stop and let the monks pick out what they thought worth three pence, with little regard to the condition in which they left the goods. When a boat laden with wine passed up the Seine to Paris, the agent of the lord of Poissy could have three casks broached, and, after trying them all, he could take a measure from the one he liked best. At the markets all sorts of dues had to be paid, such, for example, as payments for using the lord's scales or his measuring rod. Besides this, the great variety of coinage which existed in feudal Europe caused infinite perplexity and delay.