“With usura,”
wrote Ezra Pound,
“… hath no man a house of good stone
each block cut smooth and well fitting
that design might cover their face.”
By usura, Pound meant usury, or the lending of money at an interest. Not just an exorbitantly high rate of interest, as in the modern usage of the word usury, but any interest at all. He goes on:
“with usura
hath no man a painted paradise on his church wall….
no picture is made to endure nor to live with
but it is made to sell and sell quickly
with usura, sin against nature.”
In the 1920s Pound had come to believe, as many still do, that international banking was a source of great evil. He used the Italian word usura because it was in Italy that the story had begun. During the thirteenth and fourteenth centuries, a web of credit was spun out across Europe, northward to London, east as far as Constantinople, west to Barcelona, south to Naples and Cyprus. At the heart of this dark web of usura lay Florence. But in the same period, and above all in the century that followed, the Tuscan city also produced some of the finest painting and architecture the world has ever seen. Never had stone blocks been cut more smoothly, never were finer paradises painted on church walls. In the Medici family in particular, the two phenomena—modern banking, matchless art—were intimately linked and even mutually sustaining. Pound, it seems, got it wrong. With usura we have the Renaissance, no less.
This book is a brief reflection on the Medici of the fifteenth century—their bank; their politics; their marriages, slaves, and mistresses; the conspiracies they survived; the houses they built and the artists they patronized. The attempt throughout will be to suggest how much their story has to tell us about the way we experience the relationship between high culture and credit cards today, how far it informs our continuing suspicions with regard to international finance and its dealings with religion and politics.
The story is complicated. There are five generations to consider. It’s important to get the main names and dates and the overall trajectory of the thing firmly in the head from the start.
The bank is founded in 1397 and collapses in 1494. Alas, there will be no centenary party. Giovanni di Bicci de’ Medici starts it. That is: Giovanni, son of Bicci (inexplicable nickname for Averardo), of the Medici family. Born in 1360, Giovanni is responsible for the bank’s initial expansion and for establishing a particular Medici style. He keeps his head sensibly down among his flourishing account books before departing this life in 1429. “Stay out of the public eye,” he tells his children on his deathbed.
Cosimo di Giovanni de’ Medici eventually disobeys that order, which is why he will later be reverently known as Cosimo Pater Patriae, Father of His Country. His dates are 1389 to 1464, thus making him the longest lived of our five wealthy men. Having survived brief imprisonment and exile, Cosimo takes the Medici bank to its maximum extension and profitability and moves decisively into politics to the point of more or less running the Florentine Republic. He is a friend to philosophers, architects, and painters; a patron of the arts; and benefactor of major public works. At his death the bank has already entered a decline from which it will never recover.
Piero di Cosimo de’ Medici came to be known as Piero il Gottoso, or Piero the Gouty. Many male members of the Medici family suffered from gout, a hereditary form of arthritis involving painful and ultimately chronic inflammation of the joints. If Piero was the one singled out for the unhappy nickname, it was simply because he didn’t outlive his father long enough to be known for much else. To Piero, however, goes the merit, or blame, of establishing a principle of succession where no succession should have been. Piero was head of the Medici bank by hereditary right, but there was no constitutional reason why he should have taken over from Cosimo as key man in the Florentine state. Frail, bedridden, and bad-tempered, he was nevertheless more determined and effective than his republican enemies. Born in 1416, Piero ran the show for just five years, from 1464 to 1469, before handing over the vast family fortune more or less intact to eldest son Lorenzo in 1469.
Lorenzo was to be known as Il Magnifico. So much for keeping out of the public eye. Just twenty when thrust into the limelight, he puts his eggs in other baskets than finance and commerce, allowing the family bank to slide into now-irretrievable decline. Like his father and grandfather, Lorenzo survives a major conspiracy and shows great skills of political manipulation. Unlike them, he aspires to the aristocracy, writes poetry (good poetry), and barely seeks to disguise a vocation for dictatorship. In 1492, aged forty-three, unable, due to the gout, to visit his portly mistress, Lorenzo finally succumbs to a variety of ailments.
Last of the five, Piero di Lorenzo would all too soon be known as Piero the Fatuous. His father’s artistic achievements and pretensions to nobility proved less transferable as assets than the vast monetary wealth left by his great-grandfather, now drastically diminished. Born in 1472, Piero possessed but one talent, a flair for the game of Florentine football, as a result of which his two years as head of the family were an unhappy parody of his father’s more effective maneuverings. He fled Florence, perhaps unnecessarily, as French troops approached the city in 1494. The family wealth was confiscated, the bank collapsed, and ten years later Piero confirmed his incompetence, or perhaps just bad luck, when he drowned crossing the Garigliano, a river north of Naples.
The trajectory, then, is clear enough. One hundred years. Five generations. A vertiginous rise of fortune—first economic, then political—in the hands of two most able administrators. A brief hinge period presided over by a grumpy, middle-aged man in bed. Then two and a half decades of political ascendancy predicated on a wealth that is rapidly disappearing. Followed by sudden and complete collapse. To which we might add that despite their different characters, our five Medici have certain traits in common beyond the gout. They were all ugly, Il Magnifico spectacularly so. And they were avid collectors: of sacred relics and ceremonial armor, of manuscripts, of jewels, of cameos. The collecting habit, with its impulse toward control, order, and possession, is akin to the spheres of both banking and art.
WHEN WE THINK of the period that has come to be known as the Renaissance, we think above all of the fifteenth and early sixteenth centuries; we think of the great art and architecture produced then, from Brunelleschi to Michelangelo; and we are aware of the Medici insofar as they had a relation to that art and those artists. Hence we think of them, and above all of Cosimo and Lorenzo, as living in the heyday of early modern times, before which, with the forward-looking exceptions of Dante, Giotto, and Boccaccio, all is darkness. Thus the myth. Yet there is a sense in which the men we are talking about, and particularly Giovanni di Bicci and Cosimo, must have seen themselves rather as coming afterward, of living in the aftermath of something, not the beginning of a golden age.
As bankers they came after the innovations that had given the Italians a virtual monopoly on European finance: after the invention of double-entry bookkeeping, after the advent of the bill of exchange, the letter of credit, and the deposit account. The Medici invented nothing in banking practice, unless perhaps we are to think of the relation between their parent company and subsidiaries as an early form of holding. What’s more, all the Medici would have been very aware of coming after banks far larger than their own. The Bardi and Peruzzi banks of the thirteenth and fourteenth centuries had amassed fortunes that the Medici would never equal. Both collapsed in the 1340s, when Edward III of England reneged on huge debts. Giovanni di Bicci de’ Medici was in partnership with various men of the Bardi family, employed others, and married his son Cosimo to a Bardi girl. Memories of past glory and a sense of the precariousness of banking wealth must often have been on his mind.
Then, as citizens of Florence, the Medici came after all the upheavals that had made their republic what it was: after the slow collapse of feudal law as the Holy Roman Empire turned its attention northward and lost its grip on a rapidly fragmenting Italy; after the transfer of power, amid endless upheavals, from hereditary lords based in the country to the wealthy classes of the cities; after the formation of a Florentine state with a republican constitution; after the war against papal Rome when the city’s government seized and sold Church property until the people rebelled in a frenzy of religious feeling that eventually turned political in the revolt of 1378. This was the so-called ribellione dei ciompi, when the city’s poor woolworkers tried to oust the mercantile classes as they, the merchants, had ousted the nobles a century before.
“The men left in the government,” wrote the sixteenth-century historian Francesco Guicciardini of this revolt, “were mostly plebs, men of the crowd rather than nobles, with Messer Giorgio Scali and Messer Tommaso Strozzi at their head, and with popular support they governed three years in which time they did many ugly things, most of all when, for no crime actually committed, but just to be rid of their enemies, they cut off the heads of Piero di Filippo degli Albizzi, once the most renowned citizen of Florence, and likewise of Messer Donato Barbadori and of many other innocents, until in the end, as is the custom, when the people couldn’t put up with it any more, they deserted Messer Giorgio and cut his head off; Messer Tommaso saved his life by fleeing the town and was banned from returning in perpetuity, he and his descendants, and Messer Benedetto degli Alberti, who was one of the first to support them, was sent into exile.”
One sentence, two changes of regime, various executions. “Come è usanza,” says Guicciardini—“as is the custom.” Silvestro de’ Medici, the most prominent member of the Medici family and recent head of the Florentine government, had sided with the woolworkers. The family fell into disgrace. Giovanni di Bicci, eighteen at the time, would have seen every reason for keeping his head down, if the alternative was to have it cut off.
But perhaps most of all, the Medici bank came after the great plague of 1348 that wiped out a third of the population of Europe. In 1338, Florence numbered 95,000 inhabitants; in 1427, there were 40,000, which was still about the same as the population of London at the time. “They fell ill daily in their thousands,” wrote Boccaccio. “Many dropped dead in the open streets…. Such was the multitude of corpses that there was not sufficient consecrated ground for them to be buried in.” When it was over, it must have been as if the city had been emptied, the earth lightened of a teeming load. In any event, the rapid growth in trade and population that had characterized the twelfth and thirteenth centuries was now definitely over. Would the world ever be so full and prosperous again? A long period of consolidation and recovery had begun, though often it seemed that no sooner were things returning to normal than the sickness struck once more. In 1363 it carried off Giovanni di Bicci’s father when our future banker was still no more than a toddler. “The shops scarce open their doors,” wrote Lapo Mazzei in the year 1400, “the judges have left their bench; the seat of government is empty; no man is seen in the courts.” People were dying again.
But what was possible for judges and politicians was unforgivable in a young bank clerk. In 1420, despite being a member of the family, Cambio d’Antonio de’ Medici was fired for leaving his cashier’s post in central Florence to flee yet another bout of the epidemic. Back in 1402, Giovanni di Bicci had been one of the judges who chose which artist would design the bronzes on the doors to the Church of San Giovanni Battista, the Baptistery, the city’s oldest church in one of the central piazzas, opposite the still-unfinished duomo. The bronzes were commissioned as a votive offering to beg God to spare the city from these endless visitations of the plague. The winning design, by Lorenzo Ghiberti, showed Abraham’s sacrifice of his son Isaac.
SO THE MEDICI bankers lived in the aftermath of remarkable innovations and great upheavals. “The people were tired,” says Guicciardini of the years when Giovanni di Bicci was a young man, “and happy to rest.” But we can also think of the Medici as coming before. For looking back, after the bank was gone, from the turmoil of the sixteenth century, it would seem to historians that Cosimo and Lorenzo de’ Medici had belonged to a more self-assured, in some ways even innocent, age. No sooner had Piero the Fatuous fled than Italy was overrun by the French, and then by the Spanish, with the Germans and Swiss doing their best to cash in and complicate matters. It was not unusual for a dozen armies to be on the move across the peninsula, plundering at will. The Medici bank thus came before the sacking of Rome (1527), before the sieges of Naples (1527–28) and Florence (1529–30), before the cruel and suffocating inflexibility of the Counter-Reformation, before Italy lost any practical independence for more than three hundred years. Hence, despite the many wars and occasional torture, the murders and corruption, the interminable vote-rigging and tax evasion that will have to be chronicled in this book, we might nevertheless think of fifteenth-century Florence, the ninety-seven years of the Medici bank, as a quiet parenthesis in the troubled transition from medieval to modern worlds. A time in which usury and art could flourish.
THE PLAGUE KILLED rapidly, but Averardo, or Bicci de’ Medici, Giovanni di Bicci’s father, had made a will. His wife’s dowry of 800 florins (gold) was returned to her. Before his five sons could be considered, a sum of 50 lire di piccioli (silver) was set aside for restitution to any lender in whose regard Averardo may have committed the sin of usury. It was a standard formula. The notorious Paduan usurer, Reginaldo degli Scrovegni, had made a much larger restitution some sixty years earlier, and his son Arrigo, to expiate his father’s sin and clear the family name, had commissioned Giotto to fresco the Arena Chapel in Padua. One of the frescoes showed sinners burning in hell. The relationship between usury and art is already more ambiguous than Pound would have us believe.
Indeed, as they approached their deathbeds, it seemed that usury was not just a, but the sin on the minds of wealthy men. Their illegitimate children, the sex they had enjoyed with child slaves from North Africa or the Slavic countries, their greed, gluttony, and general intemperance worried them far less. Or perhaps it was just that usury, unlike other sins, could only, according to Church law, be expiated through full restitution of what was sinfully gained. This was difficult if you’d spent the money. The sin loomed large, too, in the minds of those who had never had the wealth to practice it. In the opening story of Boccaccio’s Decameron, two usurers are terrified that their dying guest, a great and unrepentant sinner, will be refused burial and that because of their profession the local people will chase them out of town or even lynch them, in which case they too will be left unburied. The Lateran Church Council of 1179 denied Christian burial to usurers and the General Church Council of Lyon confirmed the ruling in 1274. “Their bodies should be buried in ditches, together with dogs and cattle,” wrote Fra Filippo degli Agazzari. In Piacenza in 1478, when a torrential rainstorm followed the church burial of a usurer, the townsfolk dug up the corpse, paraded it in the streets, performed a mock hanging, then plunged it into the Po.
Why? Why was a transaction that isn’t remotely considered a sin or crime today thought so heinous? Especially when other deals—trading in slaves, for example—were not considered sins at all. Is it simply because St. Luke said, “Give, without hoping for gain”? The history books pass rapidly over the matter, or they dwell on those usurers who fleeced the poor with exorbitant rates. But this will not do. When Cosimo de’ Medici paid for the restoration of the Monastery of San Marco in return for a papal bull clearing him of all his sins, it certainly wasn’t because he had been charging high interest rates to the poor. Cosimo would never have dreamed of dealing with anyone whose credit was not solid, unless perhaps that man were prince or pope.
So before beginning at the beginning—with the moment, that is, in the fall of 1397 when Giovanni di Bicci, together with two partners, registers his bank with the regulating authority in Florence, the so-called Arte di Cambio, or Exchangers’ Guild—we must get a grasp of the entirely different mental world in which the man lived, particularly as far as money was concerned, and above all of the profound contradiction between routine banking practices and moral law.
The Exchangers’ Guild. “You made a terrible mistake when you joined,” one Florentine merchant’s partner told him. “Nobody will ever think of you as an honest trader again.” Even before the invention of money, there was always something disturbing about the notion of exchange, the idea that one desired thing could always be acquired by the surrender of another. Sulking in his tent, refusing any form of payment for the girl taken from him by Agamemnon so that the king could return another girl to her powerful father without himself losing pleasure or prestige, the hero Achilles makes the famous remark: “Fat sheep and oxen you can steal; cooking pots and golden-maned horses you can buy; but once it has left the circle of his teeth, the life of a man can be neither replaced, nor stolen, nor bought.”
There must be a limit to it, Achilles says. There must be something so sacred as not to be subject to the “art of exchange.” But two thousand years later, it was still quite common to buy a girl, or a reduction of one’s time in purgatory, or a mercenary army, or a bishopric, or a holy relic, or even a town and all the people in it. Of one pope on his deathbed it was said that he couldn’t take the sacraments because, “by God he’d sold them!”
It is King Agamemnon who rules the mad round of exchanges that begins the Iliad, and it is the king whose head, in centuries to come, would always appear on coinage. Divinely appointed, the monarch sanctions and governs the practice of exchange, which is to say the economic relationships among the subjects he rules. The process was much speeded up now, of course, for money enables us to sell to one person, store our wealth, then buy from another. We don’t have to cast about for that unlikely individual who has exactly what we want and wants exactly what we have. All the same, as long as money is made up of a precious metal that has value in itself as a commodity, then nothing fundamental has changed. We sweat to produce, as God told us we must when He threw us out of paradise; we sell our wares for a certain weight of gold or silver or copper, then use that, or part of it, to buy what someone else has sweated to produce. True, some perverse parallels arise: We can now compare the unit cost of a whore with that of a flask of wine, or a copied manuscript, or a prayer for the dead. But everything is still more or less in order and everyone in his place.
Usury alters things. With interest rates, money is no longer a simple and stable metal commodity that just happens to have been chosen as a means of exchange. Projected through time, it multiplies, and this without any toil on the part of the usurer. Everything becomes more fluid. A man can borrow money, buy a loom, sell his wool at a high price, change his station in life. Another man can borrow money, buy the first man’s wool, ship it abroad, and sell it at an even higher price. He moves up the social scale. Or if he is unlucky, or foolish, he is ruined. Meanwhile, the usurer, the banker, grows richer and richer. We can’t even know how rich, because money can be moved and hidden, and gains on financial transactions are hard to trace. It’s pointless to count his sheep and cattle or to measure how much land he owns. Who will make him pay his tithe? Who will make him pay his taxes? Who will persuade him to pay some attention to his soul when life has become so interesting? Things are getting out of hand.
Contro natura! thunders the Church—against nature. Usury is unnatural and God punishes it with the plague, warns the preacher Bernardino of Feltre. To defend themselves from the plague, the merchants of Florence pay for an expensive bronze door showing one of the strangest exchanges ever made, or at least proposed: Abraham’s sacrifice of Isaac. Ghiberti’s doors were so beautiful they were “fit to be the gates of paradise,” said Michelangelo. And he was gay. Contro natura, thunders the Church. In Dante’s hell, sodomites and usurers are punished in the same place, the third ditch of the seventh circle where flakes of burning ash sift for all eternity on an unnatural landscape of scorching sand. The sodomites are forced to exist (how can we say live?) in an unnatural perpetual motion. The usurers are forced to sit unnaturally still, as they did at their accounts. Only their hands move rapidly and unnaturally, as once they moved counting coins or writing bills that have no currency beyond the grave. Their faces are disfigured. Grief bursts from the eyes they ruined over their registers. Unaided by Giotto’s frescoes, Reginaldo degli Scrovegni is down there: “He twisted his mouth and stuck out his tongue like an ox that licks its nose.” Contro natura!
The other inmates of that infernal ditch are the blasphemers. It is unnatural to curse your creator. None of these three sins is considered such today. If a man, today, negotiates a mortgage with a client in the afternoon, has sex with his male lover in the evening, and blurts out, “Christ Almighty,” when the alarm starts him from sleep in the morning, we have no difficulty thinking of him as a decent bloke. Or not in the West. In an Islamic state, all three actions are punishable. For the Koran will no more permit the lending of money at an interest than it will allow Salman Rushdie to deride the name of Muhammad, or two consenting males to make love. Usury makes money “copulate,” said the theologians, quoting Aristotle. Which is unnatural.
If you still find this hard to grasp, you’re in good company. “Go back a little way,” Dante’s pilgrim poet begs his guide Virgil as they hurry through hell, “to where you told me that usury offends God’s goodness, and untie that knot for me.” He can’t quite see it. Summarizing Thomas Aquinas, Virgil explains that “nature takes its course from heavenly intellect,” and that “human toil, as far as it is able, follows nature, as the pupil does his master, so that it is God’s grandchild, as it were.” In short, God creates work to complete man’s nature. Refusing work, the usurer rejects nature, rejects the way God has chosen for him, insults God’s grandchild.
Crucially, then, we must imagine a mind that believes that moral codes are based not on the well-being or otherwise of our fellow man—the poor are not mentioned here—but on metaphysics. The distance between believing that lending at an interest is always a sin, because unnatural, to the modern notion that interest rates are quite normal, but iniquitous when so high that they push a Third World country into poverty, might be one way of measuring the distance between fourteenth-century man and ourselves. That said, however, and granted the good faith of Aquinas and Dante, the sheer violence of the Church’s hostility to usury makes it hard to believe that priests and pope didn’t have some urgent, worldly interest in the matter. One’s “toil,” after all, in the medieval world, meant one’s station in life—miller, knight, butcher, peasant—which was largely fixed from birth. To refuse one’s station was to refuse the fixed order of society in which the Church had a considerable investment, and to throw the world into turmoil.
TURMOIL. “IN OUR change-loving Italy,” wrote Enea Silvio Piccolomini, later Pope Pius II, “where nothing stands firm, and where no ancient dynasty exists, a servant can easily become a king.” Politically, at the time of Giovanni di Bicci’s birth in 1360, the peninsula was on the edge of chaos and had been for some long time. Basically, the twenty or more tiny states of central and northern Italy were kept in a constant ferment of revolution and usurpation by the two opposing and interminably disruptive poles of the Papal States to the south and the Holy Roman Empire to the north, each claiming to be the rightful inheritor of the Roman Empire but neither able to impose its claim. Cities declared independence. Mercenary adventurers carved out little kingdoms for themselves, then went to pope or emperor, or pope and emperor, to buy a piece of parchment conferring legitimacy: “As legal over-lords of Rimini, or Cremona, or Bologna, we grant you the right to rule there.” This in return, of course, for a sum of money, or a share of the taxes. Nobody was impressed. Least of all the next adventurer.
In the country, the nobles’ feudal rights depended on recognition of the Holy Roman Emperor as ultimate feudal overlord, so they supported him (the Ghibellines); in the cities, the middle classes, who sought to free themselves from the nobles, tended to side with the pope (the Guelfs). Often it was hard to tell who controlled or legitimately taxed a given territory. Factions abounded. In the cities, the more powerful families built towers to defend themselves against each other. In 1200, Florence had about a hundred such constructions, many more than one hundred and fifty feet high. Even today, Florence doesn’t seem large enough for a hundred towers. People threaded the narrow streets between armed camps. Crossing the river Arno at different points meant passing from one family’s territory to another. Weapons abounded. The murder rate was frightening. Meanwhile, amid the confusion and in the absence of any recognized authority, two factors came powerfully to the fore: individual charisma and money. “No trace is here visible,” writes the great historian Jakob Burckhardt, “of that half religious loyalty by which the legitimate princes of the West were supported; personal popularity is the nearest approach we can find to it. Talent and calculation were the only means of advancement.”
But what were talent and calculation without cash? The usurer, the banker, is more dangerous, more powerful, when the traditional structures of society have given way. There is nothing now to obstruct the progress of money. There is nothing more solid and reliable now than the golden florin of Florence, on which, in defiance of ancient hierarchies, no sovereign’s head is stamped, just the name Florentia on one side and the lily, emblem of the city, on the other. With no king on his coins, the banker is more or less obliged to be a kingmaker himself. He funds this or that side, or is plundered by them. He either controls the fiscal system or he is taxed out of business. Needless to say, the literature of the time was full of attacks on the “lowborn pleb who rises from the depths to great prosperity.” Could anyone be more callous, wicked, and proud? “A couple of lengths of red cloth,” said the wry Cosimo de’ Medici, “and you have your nobleman.”
HERE IS A little poem written in the first half of the fourteenth century:
Money makes a man visible
Money makes him seem knowledgeable
Money shows what he buys and bought
Money gives him women to enjoy
Money keeps his soul in heaven
Money makes a nobody noble
Money brings his enemy down to earth
Without money a man seems stuck
Since it turns the world and fortune’s wheel
And, if you want, it’ll send you to paradise.
I reckon the man wise who hoards it up:
Since more than any virtue money
Will ward off melancholy.
Yes, it’s a scandal. But nobody is more excited than the person who has discovered a scandal. We sense the poet’s horrified enthusiasm. With money you can change your social position, you can have women and go to heaven. We must condemn this delirium, but actually we are thriving on it. This is the contradiction behind so much mental activity in the West. We love money and what we imagine it can do and buy, and at the same time we are haunted by a fear as old as Achilles: surely there must be some value that is beyond buying and selling, something beyond the art of exchange. Oh, but not something, please, that tells us that money is altogether evil, that the plague that took away my child is God’s punishment for my financial transactions.
Behind all this tension lies the conundrum of a religion that began by calling the Christian out of the world to live a life of poverty while waiting for the imminent Second Coming—“Blessed are the poor for they shall inherit the earth”—but then later and rather confusingly, when the Second Coming never came, became the religion of the establishment and the rich, of people entirely in and of the world. What could this lead to but hypocrisy? Or art?
“It is easier for a camel to pass through the eye of a needle than for the rich man to enter the kingdom of God.” Everybody knows that. Yet who was richer than prince and cardinal? Traini’s Last Judgment in Pisa shows the well-dressed merchants drawing back in dismay as ugly demons cart off the affluent damned. Those men wanted to go to heaven, but they didn’t want to stop doing business, if only because, as the humanist Leon Battista Alberti explained, a poor man can never “find it easy to acquire honour and fame.” Such is the divided consciousness of the banker in the fourteenth and fifteenth centuries, such the contradiction that over the years will encourage the cultivation of less disturbing nonmonetary values—in philosophy, aesthetics, and love.
WE KNOW THE men from their tax assessments. They were obliged to list their incomes and possessions. Spared that annoyance, the women leave only the value of their dowries. Giovanni di Bicci was not a pleb made good. The Medici had appeared often enough on the parchments that recorded the names of the so-called priors of the city, the nine men who formed the government. But he wasn’t wealthy either. He and his four brothers had to share the 800 florins their mother left at her death. Assessed for tax, Giovanni was found liable for a contribution of only 12 florins. But a distant cousin had to pay 220, a very substantial sum. Vieri di Cambio de’ Medici ran a bank. However distant, family tended to employ family. Both Giovanni and his elder brother Francesco were taken on, and in 1385, when his own marriage brought a dowry of 1,500 florins, Giovanni was able to invest and, moving south, become a partner—the executive partner, in fact—in the Rome branch of Vieri’s bank. The other things we know about Giovanni’s wife are that she was called Piccarda Bueri and that she bore her husband two sons, Cosimo and Lorenzo. But she didn’t live with him in Rome.
Rome was a political and economic anomaly. The people of Greenland sold whalebone in Bruges and had the money sent to Rome. The people of Poland shipped furs to Bruges, sold them, and had the money sent to Rome. Or, rather, to the Curia, the pope. The Church demanded its tributes from all over Christendom. While other states collected taxes only from their own citizens and often with great difficulty, Rome was drawing in money from all over Europe. On taking up his benefice, a cardinal, bishop, or abbot was forced to pay the equivalent of the first year’s income to Rome. Otherwise, he couldn’t take up his lucrative appointment. Money arrived from Scandinavia, from Iceland, from poverty-stricken Scotland. Delayed payment was punishable with excommunication. Don’t pay and you go to hell. Announcing an extraordinary jubilee, a papal messenger informs the people of Gand in Flanders that if, during a certain period, they come to mass and leave a generous offering for the war against the Infidel, they will be granted a plenary indulgence. Straight to heaven, no purgatory. The people cough up. Who wouldn’t? The messenger counts out the money, coin by coin, with an Italian banker, in Bruges. It is always an Italian banker. Where there is an Italian community, there is a chance of a bank. Where there is no Italian community, there is no bank. In any event, the money is sent to Rome.
One says, “the money is sent,” but in fact it was paid out on order to the Curia in Rome, either by a branch of the same bank that had received the money abroad or by a trusted correspondent bank. Actually to travel on horseback or by foot across Europe with money was dangerous. “Beware of rivers in flood,” one messenger is warned. “Go armed and in company.” So a pilgrim, or priest, or choirmaster traveling to Rome goes first to his nearest bank, in London, Bruges, Cologne, Avignon—except for Constantinople, there are no banks east of the Rhine—buys a letter of credit, travels to Rome, and cashes it on arrival. A little is lost on the exchange rate, a little is paid in bank services, but he cannot be robbed. More than any other organization, it is the Church, then, that, despite its condemnation of many banking practices, needs and stimulates the growth of the international bank. Because the Church is the largest international economic entity. It will be hard for the pope to send to hell the people who collect his taxes and make his grandiose projects possible.
And more than any other organization, it is the Church that aggravates the difficulties of balancing the cash flow around Europe. For how can the banks in Rome continue to pay out Church tributes collected elsewhere if they don’t take in any cash? There is already a trade imbalance between Italy and northern Europe. London and Flanders are buying silks, spices, and alum from and through Italy in considerable quantities, but all they have to offer in return are raw English wool, some wall hangings, some Dutch linen. However many of these things they send, it never seems to amount to the value of what they want to buy. Already, then, more money has to be brought into Italy, in coin, than sent out of it. The Rome anomaly makes the situation worse; the papal court is sucking in huge quantities of cash and not sending any back. What arrives in Rome is spent mainly on luxury goods—heavy brocades, silks, artwork, and silverware—and these don’t come from Northern Europe.
As far as possible, the bankers, who are also merchants, get around the problem with triangular movements. Florence buys raw wool from the English Cotswolds. The Florentine banks in London can pay the sheep farmers with the money they have taken in for papal tributes. Florence cleans and weaves the wool and sends finished cloth for sale in Rome, where the local branch of the same Florentine banks can now recover some of the cash previously paid out on behalf of their London branches. There are similar triangles through Venice and Barcelona. But the problem is complicated and sometimes gold or silver has to be sent directly to Rome, hidden in a bale of wool perhaps. Or the Germans send ingots from their silver mines under armed guard. It is not very convenient. Fortunately, there were also the so-called discretionary deposits.
In his twelve years working in his cousin’s business in Rome, Giovanni di Bicci must have learned everything he needed to know to set up a major bank. He learned how important it was for a bank to have its own branches in the major business centers and how to mix financial and commercial transactions across different countries to keep his capital at work. But most of all, he would have learned how important was the difference between the spirit of the law and its application. When the Church asked for loans from a bank, for example, the bank could not ask for interest in return, because usury was a sin. So in its role as trading company, it would increase the price of the goods it sold to the Church to the tune of the interest it felt it deserved from the loans it had made. All the same, when a bishop, or a cardinal, or the pope himself had money to put in a bank and wanted to play investor rather than borrower, he was eager to get something in return. Though it must not be called an interest. And this, as we shall see, was the discretionary deposit.
There were those priests who denounced sin and screamed foul and promised damnation. And there were those who studied canon law to find the loopholes in it. One suspects an underlying complicity between the two groups, the fundamentalists and the compromisers, as between any permanent enemies. They need each other to become themselves. In any event, both sides put a lot of pressure on words, on the way in which a transaction can be described. So discretionary deposits involve discretion in two senses. The name of the deposit holder is kept secret, hence the arrangement is discreet. The holder’s return on the money he deposits is at the discretion of the banker, and thus is a gift and not a contracted interest rate at all, even if it can usually be expected to work out in the region of 8 to 12 percent per annum. Since the banks do not enter into a contractual obligation to make this gift, for that would be usury, and since, on rare occasions when they are losing money, they will not make it, some theologians decide that the arrangement is not usury since there is no certain gain. Others, notably Archbishop (later Saint) Antonino of Florence, consider that since the deposit is made in the hope of gain—for the gift is certainly discussed—then this is “mental usury”; the intention is there and the absence of a contract makes no difference. It is a mortal sin.
Despite the secrecy, we know of many famous holders of discretionary deposits. One was Henry Beaufort, bishop of Winchester, half brother of Henry IV. Was his soul at risk? Cardinal Hermann Dwerg, close friend of Pope Martin V, is said to have lived in “a spirit of evangelical poverty,” while keeping 4,000 Roman florins in a discretionary deposit and accepting Cosimo de’ Medici’s annual gifts. Perhaps the cardinal really did live a frugal life. Perhaps he gave generously to the poor.
Occasionally, arguments would develop when a “gift” rashly promised was not forthcoming. The government of Florence, which of course abhorred usury, considered the habit of giving gifts in return for deposits “laudable” and ruled that promises of gifts must be honored. “Contracts were written in obscure and ambiguous language,” writes the historian Raymond de Roover, “and so became fertile ground for expensive litigation.” The anxiety over mortal sin thus affected not only the actual nature of the financial services offered but also the banking trade’s attitude toward language. A transaction would always be recorded, but its true nature was often camouflaged. What matters, the bankers appreciated, is that you must not be manifestly in the wrong. Obviously, if a bank failed to produce its gift, the clerical customer took his cash elsewhere.
But why would a cardinal in Rome put his money in a bank that—quite apart from the problem of usury—might, and often did, fail? Why not invest it, sin-free, in property, which was rapidly increasing its value in the city and immediately surrounding countryside, or again in jewels? Alas, it was illegal to transfer the Church’s wealth, which included your cardinal’s salary, into the private sector. A new pope was within his rights to confiscate the properties of those who had become rich under his predecessor. Land was visible and vulnerable. The papacy changed hands eleven times in the fifteenth century, not counting the periods when there were two or even three popes. “Sell all that you hath and follow me,” Christ said, but the rich clerics were eager to leave their wealth to their families, their brothers or nephews or bastard children. Given the availability of new credit tools, money had the advantage that it could be deposited secretly and, in the event of trouble, withdrawn in a foreign city.
So, together with the effects of usury, which dislodged a man from his station in life, something else quite unnatural was happening: A person’s wealth was no longer tied to the local community. The actual coinage paid into the bank in Rome by members of Pope Martin V’s family might be quickly paid out in the same place against letters of credit, or tributes collected abroad. Meanwhile, in Avignon, Cologne, or Bruges, the Italian banker who had sold those letters of credit, or collected the tributes, could invest the money in a shipment of almonds from Barcelona, or alum from Turkey, which could then be sold on to London. The Church’s wealth circulated for fear of a new pope, who, unlike a new king or duke, would come from a different family and very likely a different city than his predecessor, bringing an agenda and an entourage all his own.
Giovanni di Bicci must capitalize on that circulation, on the particular turbulence that seems to occur when money meets metaphysics. In 1393 his elder cousin Vieri de’ Medici retired, and Giovanni bought out the Rome branch of the bank. But why, four years later, did he move back to Florence to make the decisive gesture of forming his own bank? And why did Florence become the headquarters of that bank, though it would never begin to equal the profits generated in Rome?
As with the cardinals and their discretionary gifts, the answer has to do with family. How is it, asks an anonymous Genoese writer of the early fourteenth century, that a man will do everything “to acquire power, possessions, lands and goods for the sake of his children, thereby condemning himself to eternal damnation?” It is an interesting question. Just as it’s intriguing in the Divina commedia how many of Dante’s damned seem more concerned with the honor of their family name back in Florence than their eternal torment in hell. Leon Battista Alberti answers the question in Della famiglia, written in the 1430s. Since the family is the social unit par excellence, Alberti says, any attitude or investment that benefits your family or serves to increase its honor is acceptable, for this is the determining purpose of life.
In short—though Alberti would never have put it like this—if making money has become an addiction, nevertheless family allows you to think of your moneymaking as a means to an end. Family offers a value, a reason for living at once more noble than mere accumulation, and more immediate than the pleasures of paradise. And while wealth in money terms might now be cut free from place, family could not. The Medici family was deeply rooted in Florence. There was property and a network of old alliances. If Giovanni had left his wife and children back in Florence when he went to Rome, it was because he himself always meant to return. Doing so, he would cease to be at the outpost of a network and place himself firmly at its center. He would once again exercise his political rights as a Florentine citizen and become a full and feared member of society, something that could never have happened in Rome. The injunction, “keep away from the public eye,” did not necessarily mean, “deny yourself political power.” In fact, one might keep out of the public eye precisely in order to accumulate power. Added to which, unlike the Romans, the Tuscans had a long tradition in running international banks, which were the key to making money, from Rome.
Giovanni di Bicci de’ Medici, as portrayed by Bronzino. The founder of the bank, Giovanni warned his children to “stay out of the public eye,” as if he had already appreciated the dangers of mixing politics and finance.