Money and the pursuit of wealth: Part 31

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…tragedy of mixing religion, politics and commerce

By Dr Michelina Andreucci 

A FRENCHMAN, by the name of Jacques Coeur, who was born in 1395, was one of the leading bankers of the first half of the 15th Century. 

The son of a Bruges merchant in the cloth trade, Coeur began his career on a mission to the Levant in 1427, where he sold cloth then used the proceeds to purchase luxury goods to bring home for sale, and more importantly, to establish contacts with other merchants and bankers in the area. 

Coeur earned a fortune by trading with the port cities of the eastern Mediterranean, taking away a great deal of business from the Italian merchants.  

He started to make loans to local rulers, and in 1436 was asked by French King Charles II to become master of the royal mint and was given the task of creating a new national currency. 

Coeur rose rapidly in the government, but his eye was always on the Mediterranean trade. 

He won major concessions for the French in this regard, and in 1440, he became the paymaster of the royal household. 

For the rest of his career Jacques Coeur combined commerce, banking and politics. 

He had warehouses and agents in Tours, Marseilles, Paris and other French cities, and he even got favour from the Vatican. 

In 1446, the Pope gave him permission to trade with the Saracens and in the process, he won special concessions in Turkey for the French. 

At the same time, he gained permission to work silver, copper and lead mines near Lyons. 

Coeur provided the funds that enabled King Charles to fight his wars, and it was his wealth that also enabled the French to expel the English from Normandy.

Coeur was now one of the wealthiest and most powerful men in France. 

It was said that there was no business transaction in France that excluded him from a share. 

In 1450, however, his enemies asserted that he had poisoned the King’s mistress, had sent

Christians as slaves to the Turks and kidnapped free men for service in his galleys. 

The King ordered his arrest and the seizure of his fortune. 

Coeur was obliged to repent, to do public penance and pay an enormous fine. 

In 1455, he managed to escape and go to Rome, where he was embraced by Pope Nicholas V, who was attempting to organise an expedition against the Turks and needed his help, and Coeur obliged.

Meanwhile, the rise of indigenous bankers and merchants that followed the failures of the Bardi and Peruzzi banks in Florence did not mean that city was finished as a financial centre. 

The greatest of the Florentine banks, the Medici, made its appearance in the late 14th and early 15th centuries, when Giovanni de Medici made his fortune in commerce and then originated the bank. 

Giovanni retired in 1420 and died in 1429, and leadership of the family business fell to one named Cosimo, whose inheritance included silk and woollen factories, farms and trading outposts that ranged from Scotland to Syria, as well as the largest bank in Florence.

Having learnt lessons from the mistakes of the Bardi and Peruzzi, the Medici prohibited branch managers from lending to princes and obliged them to concentrate on commercial transactions. 

Each bank was organised as a separate entity so that the failure of one would not affect the others. 

They would start new enterprises as limited partnerships, which meant that only the original capital was at risk. 

If all proceeded according to plan, the Medici would invite outside investors into the project. The Medici placed their reliance more on junior partners than on agents, and tended to prefer local partners who would contribute services and expertise, while the family provided the needed capital.  

Cosimo managed all of this business because he seemed to possess an extraordinary ability to locate precisely the right individuals for tasks he wanted done.

Cosimo became the dominant force in Florentine politics and a member of the Died, a war council of 10 members, but he usually acted behind the scenes. 

With all of this, Cosimo was a favourite banker for the papacy and an important patron of the arts during the time of the Renaissance—but not for long. 

In 1433, he was arrested and banished to Venice, perhaps because he was planning a coup. 

In any case, he seemed to have been aware of the situation ahead of time, and liquidated some of his holdings to take into exile. 

However, he was recalled the following year, whereupon he took virtual control of the government. He banished those who opposed him and taxed other enemies until they collapsed financially. 

So great was his power that, in addition to being the wealthiest man of his period, he was the most influential individual in all of Italy, not just Florence.  He died in 1464 and was succeeded as head of the family business by his only surviving son, Piero, who himself died five years later. 

After his death, two of Cosimo’s nephews, Lorenzo the Magnificent and Giuliano, then took over their uncle’saffairs.  

Sadly, the nephews were more concerned with church affairs, politics and art than with commerce. 

They entrusted the business to Francesco Sasseti, who was not a strong or sophisticated individual by any means and the bank soon began to decline. 

France invaded Italy in 1494 and on November 17, King Charles VIII entered Florence. 

He confiscated all the property belonging to the Medici. Virtually bankrupt, the Medici bank was finally closed down.  

The family businesses survived, however, and the Medici family remained a significant force in politics and the Church into the 18th 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: linamanucci@gmail.com

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