A History of Inventions, Discoveries, and Origins, Volume 2 (of 2)

by Johann Beckmann

In the year 1494, Bernardinus, a short time before his death, assisted to establish a lending-house at Montagnana, in the Venetian territories[29], and to improve that at Brescia, which was likely to decay, because the servants had not fixed salaries[30]. The same year another Franciscan established the lending-house at Modena.

In the year 1506 Pope Julius II. confirmed the lending-house at Bologna. That of Trivigi was established in 1509; and in 1512, Elizabeth of the family of Gonzaga, as widow of duke Guido Ubaldus, established the first lending-house in the duchy of Urbino at Gubbio, and procured permission for it to coin money[31].

The historical account I have here given, displays in the strongest light the great force of prejudice, and particularly of the prejudice of ecclesiastics. Notwithstanding the manifest advantages with which lending-houses were attended, and though a great part of them had been already sanctioned by the infallible court of Rome, many, but chiefly Dominicans, exclaimed against these institutions, which they did not call montes pietatis, but impietatis. No opposition gave the Minorites so much uneasiness as that of the Dominican Thomas de Vio, who afterwards became celebrated as a cardinal under the name of Cajetanus. This monk, while he taught at Pavia in 1498, wrote a treatise De Monte Pietatis[32], in which he inveighed bitterly against taking pledges and interest, even though the latter was destined for the maintenance of the servants. The popes, he said, had confirmed lending-houses in general, but not every regulation that might be introduced into them, and had only given their express approbation of them so far as they were consistent with the laws of the church. These words, he added, had been wickedly left out in the bulls which had been printed; but he had heard them, and read them, in the confirmation of the lending-house at Mantua. I indeed find that these words are not in the copy of that bull given in Wadding, which is said to have been taken from the original; nor in the still older confirmation of the lending-house at Savona. But even were they to be found there, this would not justify Cajetan’s opposition, as the pope in both these bulls recommended the plan of the lending-house at Perugia to be adopted, of which receiving interest formed a part. Bernardinus de Bustis[33], a Minorite, took up the cause in opposition to Cajetan, and, according to Wadding’s account, with rather too much vehemence. Among his antagonists were Barrianus and Franc. Papafava, a jurist of Padua[34]. As this dispute was revived with a great deal of warmth in the beginning of the sixteenth century, it was at length terminated by Pope Leo X., who in the tenth sitting of the council of the Lateran declared by a particular bull that lending-houses were legal and useful; that all doubts to the contrary were sinful, and that those who wrote against them should be placed in a state of excommunication[35]. The whole assembly, except one archbishop, voted in favour of this determination; and it appears from a decree of the council of Trent, that it also acknowledged their legality, and confirmed them[36]. Notwithstanding this decision, there were still writers who sometimes condemned them; and who did not consider all the decrees, at least the above one of the Lateran council, as agreeable to justice. Among these was Dominicus de Soto, a Dominican. All opposition, however, in the course of time subsided, and in the year 1565, Charles Borromeo, the pope’s legate at the council of Milan, ordered all governments and ecclesiastics to assist in establishing lending-houses[37].

Of the lending-houses established after this period in Italy, I shall mention those only of Rome and Naples. It is very remarkable that the pope’s capital should have been without an institution of this kind till the year 1539, and that it should have been formed by the exertions of Giovanni Calvo, a Franciscan. Paul III., in his bull of confirmation, ordered that Calvo’s successors in rank and employment should always have the inspection of it, because the Franciscans had taken the greatest pains to endeavour to root out usury[38].

The lending-house at Naples was first established in 1539 or 1540. Two rich citizens, Aurelio Paparo, and Leonardo or Nardo di Palma, redeemed all the pledges which were at that time in the hands of the Jews, and offered to deliver them to the owners without interest, provided they would return the money which had been advanced on them. More opulent persons soon followed their example; many bequeathed large sums for this benevolent purpose; and Toledo, the viceroy, who drove the Jews from the kingdom, supported it by every method possible. This lending-house, which has indeed undergone many variations, is the largest in Europe; and it contains such an immense number of different articles, many of them exceedingly valuable, that it may be considered as a repository of the most important part of the moveables of the whole nation. About the year 1563, another establishment of the like kind was formed under the title of banco de’ poveri. At first this bank advanced money without interest, only to relieve confined debtors; afterwards, as its capital increased, it lent upon pledges, but not above the sum of five ducats without interest. For larger sums the usual interest was demanded[39].

At what time the first lending-house was established at Venice I have not been able to learn[40]. This State seems to have long tolerated the Jews; it endeavoured to moderate the hatred conceived against these people, and gave orders to Bernardinus to forbear preaching against them[41]. It appears to me in general, that the principal commercial cities of Italy were the latest to avail themselves of this invention; because they knew that to regulate interest by law, where trade was flourishing, would be ineffectual or useless; or because the rich Jew merchants found means to prevent it.

The name mons pietatis, of which no satisfactory explanation has been as yet given, came with the invention from Italy, and is equally old, if not older. Funds of money formed by the contributions of different persons, for some end specified, were long before called montes. In the first centuries of the Christian æra, free gifts were collected and preserved in churches by ecclesiastics, partly for the purpose of defraying the expense of divine service, and partly to relieve the poor. Such capitals, which were considered as ecclesiastical funds, were by Prudentius, in the beginning of the fifth century, called montes annonæ and arca numinis[42]. Tertullian calls them deposita pietatis[43]; and hence has been formed montes pietatis. At any rate I am of opinion that the inventor chose and adopted this name in order to give his institution a sacred or religious appearance, and to procure it more approbation and support.

I find however that those banks employed in Italy, during the thirteenth and fourteenth centuries, to borrow money in the name of States, for which the public revenues were mortgaged and interest paid, were also called montes[44]. In this sense the word is used by Italian historians of much later times; and those are greatly mistaken, who, with Ascian and many others, consider all these montes as real lending-houses. These loan-banks or montes received various names, sometimes from the princes who established them, sometimes from the use to which the money borrowed was applied, and sometimes from the objects which were mortgaged. Of this kind were the mons fidei, or loan opened by Pope Clement VII. in the year 1526, for defending his capital[45]; the mons aluminarius, under Pope Pius IV., for which the pontifical alum-works were pledged; the mons religionis, under Pius V., for carrying on the war against the Turks; and the montes farinæ, carnium, vini, &c., when the duties upon these articles were pledged as a security. To facilitate these loans, every condition that could induce people to advance money was thought of. Sometimes high interest was given, if the subscribers agreed that it should cease, and the capital fall to the bank after their death; and sometimes low interest was given, but the security was heritable and could be transferred at pleasure. The former were called montes vacabiles, and the latter montes non vacabiles. Sometimes the State engaged to pay back the capital at the end of a certain period, such for example as nine years, as was the case in regard to the mons novennalis, under Paul IV.; or it reserved to itself the option of returning the money at such a period as it might think proper, and sometimes the capital was sunk and the interest made perpetual. The first kind were called montes redimibiles, and the second irredimibiles[46]. One can here clearly discover the origin of life-rents, annuities, tontines, and government securities; but the further illustration of this subject I shall leave to those who may wish to employ their talents on a history of national debts. I have introduced these remarks, merely to rectify a mistake which has become almost general, and which occasioned some difficulties to me in this research; and I shall only observe further, that the popes gave to their loans, in order to raise their sinking credit, many of those spiritual advantages which they conferred on the montes pietatis. This error therefore was more easily propagated, as both were called montes; and hence it has happened that Ascianus and others assert that many lending-houses were misapplied by the popes in order to raise public loans.

From the instances here adduced, one may see that the first lending-houses were sanctioned by the pontiffs, because they only could determine to the Catholics in what cases it was lawful for them to receive interest. This circumstance seems to have rendered the establishment of them out of Italy difficult. At any rate the Protestants were at first averse to imitate an institution which originated at the court of Rome, and which, according to the prevailing prejudice of the times, it alone could approve; and from the same consideration they would not adopt the reformation which had been made in the calendar.

The first mention of a lending-house in Germany, which I have as yet met with, is to be found in the permission granted by the emperor Maximilian I. to the citizens of Nuremberg, in the year 1498, to drive the Jews from the city, and to establish an exchange-bank. The permission further stated, “That they should provide for their bank proper managers, clerks, and other persons to conduct it according to their pleasure, or as necessity might require; that such of their fellow-citizens as were not able to carry on their trades, callings, and occupations without borrowing and without pledging their effects, should, on demand, according to their trade and circumstances, receive money, for which pledges, caution and security should be taken; that at the time of payment a certain sum should be exacted by way of interest; that the clerks and conductors of the bank should receive salaries for their service from the interest; and that if any surplus remained it should be employed for the common use of the city of Nuremberg, like any other public fund.”