In November 1510, a Dutch ship set off from Danzig with 200 tons of Hungarian copper belonging to Fugger. The ship was sailing in the waters near the Hel Peninsula when a crew from another boat boarded and grabbed the cargo. The attack was the work of the Hanseatic League, the most powerful commercial organization on earth. It controlled the Baltic and North Seas and challenged anyone who dared sail its waters. The league’s attack on Fugger sparked a long struggle that revealed Fugger at his strategic best and his willingness to take on all comers. To fight the Hansa, he employed tactical feints, high-level diplomacy and an abundance of tenacity. He was relentless. By the time the dust settled, the Age of the Hansa, when merchant adventurers ruled the seas and negotiated business deals with their fists, had given way to what historian Richard Ehrenberg calls the Age of Fugger, when men behind desks conquered the world. Several factors conspired against the Hansa, but it was Fugger, undeterred by the enormity of the task, who gave the league the final push toward destruction.
The German cities of Lübeck, Hamburg, Bremen and Cologne created the league for profits and protection. They were small compared to Venice. None could afford to secure an entire coastline on their own. They pooled resources and gave each other trading privileges. Danzig and Bruges joined the group, as did every port city in northern Germany. London, far away on the Thames, let the Hansa set up a walled compound near London Bridge complete with warehouses, barracks and a beer garden that competed with local taverns with its Hamburg ale and Rhenish wine. Hansa law influenced English maritime law. The coinage of the Hansa towns, the Easterling, inspired the English word “sterling” and the word hansa inspired the name of the German airline Lufthansa.
At its peak, ninety cities belonged to the league. It was so powerful that even kings could not control it. With its unofficial capital in Lübeck, at the confluence of the North and Baltic Seas, the Hansa protected its monopoly by force. When the king of Sweden imprisoned German merchants for getting too uppity, the Hansa captured the Swedish fleet. When Norway became too cozy with English traders, the Hansa sent pirates to sack Bergen, took over the city’s port and built a compound like the one in London. Discipline was paramount. The Bergen Hansa organized itself in small groups with “husbonds”—householders—to keep order and make sure Hanseatics observed the celibacy requirement. When the Hansa set its sights on the fishing grounds off Scania, it defeated Denmark and won a monopoly on herring. This mattered because herring formed a staple of European diets. “Days of fish” covered the church calendar. Without herring from the Danish Sound, Europe would have starved. The Hansa celebrated the victory over Denmark by adopting three dried fish as a symbol.
Hansa merchants had to be tough. To weed out weak recruits and build team spirit, Hansa captains dragged job applicants through smoking chimneys or tossed them into the sea and beat them when they surfaced. They stretched others on altars and whipped them to near death with wooden rods. This was Hansa boot camp and it highlighted the military nature of the organization. The Hansa was harsher on outsiders. Foreign merchants, including merchants from southern Germany, could save money by shipping on non-Hansa ships. But they risked having their cargo sunk or hijacked. In 1399, the Hansa sent Nuremberg a warning when it hauled copper to Flanders without the league: “If this practice should continue, you and yours would thereby suffer loss for which we would be very sorry.” Others never got a warning. They just saw their ships destroyed.
Fugger kept his activities in Hansa country secret. He had to because the league was sure to retaliate if it knew what he was doing. He was too big a threat to ignore. The Hansa could dictate prices to fur trappers and fishermen. They had nowhere to sell but the nearest port. It was different with Fugger. Demand for silver and copper made him such an attractive business partner that he could try to play the Hansa towns off each other. Some towns might even prefer to leave the league if that was what it took to buy his metal. But the time wasn’t right to go to war. The Hansa was still too powerful, so Fugger worked through front men. The ruse worked for years. As far as the Hansa knew, Fugger’s only activity up north involved the church and money transfers. Little did it know that in one year alone, 1503, forty-one transports with Hungarian copper—Fugger copper—traveled from Danzig to Antwerp. The Hansa attacked him once it woke to his activities.
The fact that Fugger even considered challenging the Hansa spoke to his gall and the organization’s waning power. The decline began in 1425, when the herring mysteriously left the Danish Sound for another spawning ground off the coast of Holland, where the Hansa had less influence. Then the Zwin River in Flanders silted up, spelling doom for the Hansa stronghold of Bruges and enabling the rise of independently minded Antwerp. In Russia, Ivan III, the father of Ivan the Terrible, had grown weary of the Hansa. On the same day in 1494 that the Fugger brothers accepted Jacob as a partner, Ivan expelled the league from Novgorod where the Hansa had been supreme. Novgorod continued selling to Hansa merchants, but it was now free to sell its furs and wax to others, including Fugger.
After the Hansa confiscated his copper, Fugger responded with a furious diplomatic assault that indicated his high regard for the northern trade route and his inflated belief, at least for now, in his own ability to dictate European economic policy from an office in Augsburg. Through Zink, he urged Pope Julius to retaliate, arguing that the Hansa’s war mongering had disrupted Fugger’s ability to collect and send money to Rome. Julius had excommunicated Venice in a recent dispute. Maybe he could do the same to Lübeck? Fugger then told Maximilian that the Hansa restricted his ability to lend. Unless Fugger could sell his metal up north, he would have no money to bankroll the emperor. How about an empirewide boycott of Hansa products?
The Hansa hadn’t reached the top by bowing to authority and it had powerful friends just like Fugger. Sure enough, the pope took no action against the league and Maximilian gave only a halfhearted effort. He ordered the confiscation of Hansa goods but never enforced the order. Even in Augsburg, merchants continued to buy and sell from the Hansa. As far as they were concerned, this was Fugger’s problem, not theirs.
The Hansa fought back with everything it had. Northern Germany was as much a part of the empire as southern Germany and Lübeck itself was an imperial city. It had access to the imperial legal system and representation at imperial diets. In a note to the imperial prosecutor in Nuremberg, it argued that Fugger was a dangerous monopolist and cited a rise in pepper prices and his control of Tyrolean silver as evidence. Maximilian led Fugger’s defense. He shot off a letter to Nuremberg and argued that Fugger’s activities were “valid, reasonable, honest and not monopolistic.” Without directly answering the monopoly charge, he noted that Fugger risked his own money and that he deserved his profits because a bad bet could ruin him. Maximilian further argued that the critics had their facts wrong. They were confusing Jacob Fugger with all the other Fuggers who were out there doing business. Fugger had several uncles, cousins and nephews. Jacob Fugger himself only did a portion of the business attributed to him. Maximilian’s final defense addressed Fugger’s control of Tyrolean mining. Perhaps assuming that no one would dare challenge him, he denied that Fugger sold any Tyrolean ore and falsely claimed the crown used all the ore itself: “From these mines there is no trade with anyone on earth.”
The Hansa kept up the attack. There was an imperial diet coming up in Cologne, and the Hansa worked with the prosecutor’s office to demand the diet investigate Fugger and draft laws to cut down big business. This was becoming too hot for Fugger. Even if Maximilian vetoed the legislation, an investigation could damage him with inflammatory accusations and unwanted publicity. He needed to wrap this up. He settled the issue like he ultimately settled all issues—that is, with money. To quiet the Hansa, he paid Lübeck to repurchase the stolen copper. Nobody called it a bribe, but that was what it was. Lübeck dropped the charges.
Fugger let the Hansa win the day, but he continued the war by exploiting tensions within the group. His contemporary Machiavelli advised one to fight strong opponents by splitting them: “A captain ought to endeavor with every art to divide the forces of the enemy.” Fugger never met Machiavelli, but he instinctively knew the concept. Danzig was the biggest city in the league and all the grain from the rich Polish heartland shipped through the city. With the help of Polish princes who hated the Hansa, Fugger struck a deal with Danzig to move goods freely through its port. The Estonian cities of Riga and Dorpat quickly followed. Russia was their most important trading partner. Without Fugger metal to sell to Russia, Danzig would run away with their business. Even Hamburg, a founding member of the league, gave Fugger privileges. The Hansa still existed in name after that but only Lübeck kept up the fight. It rejoiced in 1513 when pirates seized a pair of Fugger ships with three hundred tons of copper. But it no longer mattered. Herring, silt and Ivan III had enfeebled the Hansa. Fugger broke its back. Years later, Fugger invested in a Spanish trade voyage to the Indonesian Spice Islands and sent ships from Danzig to Spain to start the journey. Maximilian’s successor, the emperor Charles V, warned Lübeck not to interfere with their passage. Leave the ships alone or else.
Among the many services Fugger performed for Maximilian was saving Maximilian from himself. Self-interest, not loyalty, motivated him. He wanted to kept his client in the game and create new possibilities to soak him for more money and favors. One such episode came in 1511 when fever struck Pope Julius. The pope was almost seventy. As the illness dragged on, death seemed near. This gave Maximilian an idea. He would elegantly solve the imperial coronation question by getting himself elected pope. By being both pope and emperor, he could lift the emperor’s crown to his own head and, with it, the power, he believed, to command all Christendom.
In a letter to his daughter Margaret, now regent of the Netherlands, Maximilian outlined the scheme. He would persuade the sick pope to name him heir apparent “so that on his death we may be assured of having the papacy and of becoming celibate and afterward a saint so that, after my death, you will be constrained to adore me, whence I shall gain much glory.” He mourned he would never “see a naked woman again” but rejoiced that he would die as a holy man. He signed the letter, “Your good father, the future pope.”
It was a crackpot idea. France, Venice and the other powers would never let Maximilian be both emperor and pope. To be sure, the emperor had limited power and the secular authority of the papacy stopped at Rome and the papal states. But if nothing else, the emperor-pope might try to grab all of Italy. Then there was the spiritual authority of the papacy. Who knows what mischief Maximilian could stir up with that?
Maximilian ignored the challenges. Rehearsing his campaign themes with Margaret, he promised to set a better example than the lascivious Alexander, who hosted prostitutes in the Vatican and famously held a massive orgy, and the bellicose Julius, who wore armor and led troops in battle. They deserved the whip for their unchristian behavior, Maximilian said. He assumed if he raised enough money, he could bribe the cardinals and the job would be his. Wasn’t money the way bishops got their jobs? Hadn’t Julius himself, partly with Fugger money, paid off the cardinals to secure his own election? Maximilian estimated a cost of 300,000 ducats. He sent Liechtenstein to Fugger, telling him to do whatever it took. “Though the Fugger deny thee more than once, still shalt thou try yet again,” he told him.
Liechtenstein might have been getting tired of this. It was always the same with Maximilian. The emperor dreamed up an adventure and Liechtenstein had to find a way to pay for it. Maximilian had already promised the next several years of mining output as well as revenues from a salt mine and other stray assets to Fugger. And he had already sold Fugger enough cities to make Fugger one of the biggest landlords in southern Germany. With almost nothing left to pledge, Liechtenstein offered the untouchables: the tax receipts of several Habsburg territories and the family’s crown jewels. Short of offering Fugger the cities of Vienna and Innsbruck, Liechtenstein had nothing left in his bag. The jewels may have been worth more than the tax receipts. Over the years, the Habsburgs had acquired the jeweled crown of Hungary, a diamond-studded robe of Charles the Bold and other valuables that it kept in a collection of locked chests. Liechtenstein told Fugger they could be his.
Liechtenstein threw in a bonus. If Maximilian became pope, he would make Fugger papal treasurer. Fugger was already the Vatican’s lead banker. But treasurer was a plum assignment because it came with a considerable fringe benefit: A monopoly on the alum mines outside Rome. The textile industry needed alum to make pigments. Rome had almost all the alum in Europe. Agostino Chigi, the papal treasurer under Julius, built Rome’s largest fortune on alum. Taken together—the tax receipts, the crown jewels and the alum contract—Liechtenstein was making Fugger a fantastic offer. Fugger must have been tempted. But he understood the politics and refused to commit. As he hesitated, Julius recovered. Maximilian had moved on to other projects by the time Julius died the next year.
When Fugger reached his fifties, he started thinking about his living arrangements. He had been born into a wealthy family. Even as a young man living in his mother’s house on Jew Hill, he looked like a person of means. He wore the gold beret and fur collars that tested the sumptuary laws. He traveled in a coach. He entered the Gentlemen’s Drinking Room without a guard stopping him at the door. The distance between him and the rest of society became more apparent as he grew richer. He traveled with an entourage and held celebrations that awed with their extravagance. But he and his wife had no place of their own. They lived in the handsome, half-timbered house on the Wine Market that belonged to his mother-in-law. He stayed there because he liked it. If nothing else, it saved him from property taxes. Fugger may also have been thinking about appearances. Fugger was the pulse of the firm Ulrich Fugger & Brothers. He was the one with pull in Innsbruck and Rome, but it was Ulrich’s name that was still on the door. It wouldn’t look right to live in a bigger house than his older brother.
But after Ulrich died, Fugger had nothing holding him back. Fugger bought the house where he was living, along with two neighboring buildings, and demolished them. In their place, he erected a massive four-story building with arches along the ground floor, iron bars over the windows and Burgkmair murals to enliven the exterior. The Fugger Palace, as it came to be called, was the biggest house in the city and occupied a footprint that rivaled the Augsburg Cathedral. It served as a residence, a warehouse and the headquarters of Europe’s largest business.
The palace had its own chapel, a stable for horses and a convenience that stunned visitors: running water. “There are fountains, even inside the rooms, with water conveyed by a device,” wrote a visitor. While neighboring buildings had drab roofs made of slate, Fugger had expensive copper from his own mines. While others covered their windows with oiled parchment, he had glass from his trading partners in Venice. And in an age when keeping warm in the winter was almost impossible, he had heat—glorious heat from fireplaces and ovens—in almost every room. A fleet of servants kept them burning. The highlight was the Damenhof, a courtyard with a fountain in the middle and columns on the sides. It was the first Renaissance structure north of the Alps. With its tiles, arches and frescoes, it could have been in Florence. Clemens Sender, the Augsburg chronicler, claimed Fugger opened a portion of the house to beggars. There was no doubt a need. Poverty was everywhere. But there was no mistaking that the purpose of the building was commercial. Wagons full of merchandise shuttled through carriage doors nearly as wide as the city gates.
A half century later, two guests of Fugger’s grandnephew Markus gave detailed accounts. “At the Fuggers, the meal took place in a hall in which one saw more gold than color,” wrote the butler of a visiting duke. “The marble floor was slippery like glass. A table filling the hall was laid with Venetian glass altogether worth more than a ton of gold. Mr. Fugger showed my master over the house which is so large that the Roman Emperor would have found room therein for his whole court.” The French humanist Michel de Montaigne was even more enthused. “We were permitted to see two rooms in their palace,” he wrote, “one of them large, high, and with marble floors, the other one filled with old and modern medallions, with a small cabinet in the back. These are the most magnificent rooms I have ever seen.”
As Fugger stood inside and looked out the windows, he may have felt a twinge of satisfaction. He lived in the grandest house in a city that had become the financial capital of Europe thanks to him. He could see market stalls where the people of Augsburg, nestled far away from anything in the Swabian countryside, could find brocade from France, pepper from India and silks from China, all of which he had a hand in importing. He could peer down at those less fortunate; the drunken soldiers who taunted with swords; and the craftsmen, monks and beggars who shared the street with pigs, goats and chickens. Parades marched under him on festival days. To his right, Fugger could consider the spires of St. Ulrich and Afra, a Gothic masterpiece where three centuries later Mozart performed. To his left, he could see an even taller structure, the Perlach Tower, the clock tower whose height declared that businessmen, not the church, controlled the city.
And the people on the streets could look back at him and question why Fugger had so much and they had so little.
As the year 1512 drew to a close, Fugger gathered his family around him. Christmas was a happy time in Augsburg where people celebrated with feasts, music and mystery plays based on the lives of saints. But Fugger wasn’t interested in holiday cheer. He had business on his mind. His brother Ulrich had died three years earlier and his brother George had already been dead for six years. Fugger himself had no children, but his brothers had large families. As the relatives came together just after Christmas Day, Fugger informed them he wanted to bring his nephews into the family enterprise. The way he did it reveals Fugger as a bully. Like the many plutocrats who followed in his footsteps, he put aside considerations of fairness in pursuit of gain.
He started down the road ten years earlier when he rewrote the original partnership agreement he had with his brothers. That agreement, from 1494, allowed heirs to take the place of any brother who died. The heirs would have the right to cash out or, if they stayed, have a role in decision making. Fugger forced a change in 1502. He prohibited the heirs from liquidating. He also stripped them of any say in the business. All the power stayed with whichever brother died last. Fugger was the youngest, so he was the one most likely to be the last one standing. Sure enough, he outlasted George and Ulrich. With Ulrich’s death, he took complete control. But by 1512, his brothers’ sons were growing up and Fugger saw a need to bring them in and plan for succession.
Fugger informed the gathering that the firm would henceforth be called “Jacob Fugger & Nephews.” But they shouldn’t be fooled. Fugger would keep power solely in his own hands. He showed them the new partnership agreement. It was filled with references to “I” and “my trade.” The nephews were powerless. “They shall do nothing but what I command and give them permission to do,” the document said. “If I direct one of them to do something, and afterward recall it to myself, they shall not dispute it.” It ordered the nephews to always be honest with him, disclose to him every expense and conduct Fugger’s business “in complete secrecy and to tell no one.” It prohibited them from engaging in any business on their own and from signing anything without his consent. It gave Fugger the right to dismiss any of them, for any reason, at any time. The nephews and the others still had a claim on the money—Fugger didn’t steal it from them—but it had to stay invested.
The most extraordinary part of the agreement allowed Fugger to arbitrarily change the terms without having to consult anyone: “In case I alter one or more of the above points or articles, and do it differently, or add anything which concerns this business . . . it shall be strictly adhered to by my nephews and their heirs.” Fugger closed the proceedings by presenting a Bible. He made everyone lay their hands on the Bible and swear to honor the new contract.