AS the price revolution picked up steam in Europe, business was stimulated.
As is the case during times of inflation, landlords and businessmen benefitted.
The real victims of economic forces in this age were the evicted agrarian smallholder and the landless labourer of both town and country.
Other losers included monarchs engaged in wars.
Their need for increased revenues to pay for ordnance, ships and men threw them into the arms of the bankers.
Despite its vast empire, Spain was similarly in need of loans because of its many commitments, and mortgaged its treasure fleet to the Fuggers and others.
Taxes were increased, with the peasants bearing the brunt of the impact, since in many parts of Europe the nobility and Church were exempt from taxation.
The increased economic activity placed strains on the supplies of natural resources, especially wood.
Wood not only was the primary building material for homes, ships and many other products, but in the form of charcoal, it was used to smelt iron, tin, lead and copper. Glass was coming into wider use and charcoal was required in its manufacture.
In colder parts of Europe, wood was used to boil seawater to obtain salt.
It was used in brewing, at a time when beer and ale were commonly consumed in place of water.
In the 16th Century, prices of most commodities rose.
In 1548, a commission was established to investigate the destruction of forests by the Sussex ironworks.
It reported that the problem was so severe that several port cities were threatened with a lack of fuel.
A number of ironworks had to be closed due to the shortages.
As the supply of local wood declined, England started importing wood, in competition with other countries experiencing the same shortfalls.
Fearing the shortages would have an impact on naval construction; Queen Elizabeth prohibited the cutting of wood from Crown forests without special permission.
Price increases, toward the end of the 16th Century, combined with crop failures provided speculators with a means to wealth.
They attempted to corner foodstuffs and other materials; withheld them from the market, and then sell at substantially higher prices.
Despite the decline of some of the Italian city-states in the 16th Century, Genoa thrived, partly because it was best prepared to switch from Mediterranean to Atlantic business.
In this period, Antwerp, with an excellent port on the Scheldt River, had easy access to the North Sea and the Atlantic and rose.
The Low Countries were controlled by Spain.
That country’s monarchs and merchants used Antwerp to help coordinate activities in its empire.
The city was an important centre for the export of English cloth to the continent, and it developed a merchant class to rival that of Lubeck.
By the mid-16th Century, it had emerged as the most active port in northern Europe, an important crossroads, and one of the most international cities on the continent. Much of the trade was managed by consortia of businessmen from several countries whose members borrowed funds from local banks, pool their resources, contract for all of a specific commodity available, and then distribute portions to customers as far away as Russia.
Credit arbitrage was a major business at this time. Merchants with excellent credit histories would be able to borrow funds at eight percent, whereas monarchs with records for default would pay as high as 16 percent.
Merchants would borrow at eight percent and lend at 16 percent, thus realising handsome profits for their willingness to assume risks.
Rates for England soared during its wars with Spain; but those merchants who made loans on the eve of the victory over the Spanish Armada realised major profits when English loans rallied with England’s triumph.
Antwerp became the centre for intelligence gathering, both financial and political.
Spain learned of intrigues at the English court and London found out what Spain intended to do in its worldwide empire.
Despite Spain’s control of the area, Antwerp became host to a lively trade in munitions.
While Spain was preparing its assault on England, Gresham was able to openly purchase gunpowder and other supplies in Antwerp and have them transhipped.
In his messages to the Queen, he spoke of the corruption of the city and the need for bribes.
A Genoese financier assisted in this effort, while at the same time working with the Spaniards.
None of this was new.
While Rome was fighting Carthage in the Punic Wars, the active trade between the two nations actually increased.
The Muslims had been financed by Jacques Coeur and a host of Venetian bankers during the Crusades.
The Bardis of Florence loaned money to both England and France during their 14th and 15th century wars, making the Hundred Years’ War possible.
In the 17th Century, manufacturers and merchants in the city of Suhl sent its famous cannons to the French, Swiss, Venetians, Spanish, Prussians and anyone else willing to pay.
Oliver Cromwell feigned surprise on learning that Dutch firms were selling war supplies to his armies, even while England and Holland were at war.
An Italian financier, Gaspar Ducci, was the best known during the mid-16th Century.
While other merchants tended to specialise in tangible products such as shipments of cloth, pepper, alum and the like, Ducci was more concerned with financial transactions.
He represented several German states and Brussels in Antwerp and had alliances with the Florentines.
He arranged for loans from German banks to the French monarchy at times when they were foes and worked closely with German financiers Alexius Grimel and Hieronymous Seiler.
Ducci lived in a palace and employed a score of bodyguards to protect him against retaliation from those he euchred.
This crew was more like a private army than companions, and they would not stop at murder!
Antwerp’s merchant-speculators were foremost in profiting from the inflation of the times.
One Pauwels van Dale, purchased a large amount of grain in 1565, a particularly poor harvest year and stored it in his warehouse at a time when there was starvation in the city.
A riot and looting erupted when news of his holdings became public.
Similar developments occurred in other cities beset by famine.
Toward the end of the century, almost all of Europe was struck by crime waves caused by hunger and the awareness that the rich were getting richer and the poor poorer.
Such crime continued into the 17th Century.
Dr Michelina Andreucci is a Zimbabwean-Italian researcher, industrial design consultant and is a published author in her field. For views and comments, email: firstname.lastname@example.org