Fugger spent the first half of his career making money. He spent the second fighting to keep it.
In the first phase, he had his greatest commercial victories. He won the silver contracts for Tyrol, created a mining giant in Hungary and put together a distribution network to sell his output to a diverse group of customers across the continent. He invested the profits from Tyrol and Hungary in new opportunities. In doing so, he created a formidable cash-generation machine that, year in and year out, added to his net worth. This was all he ever wanted. He never aspired to stitch his fiefdoms together and become duke of Swabia. He didn’t even want to be the mayor of Augsburg. The Medici desire to turn wealth into political power was not in Fugger’s makeup. Nor did he want to slow down. By all indications, he was happiest when striking deals or scrutinizing his ledgers. Nothing gave him greater joy than the chores required to make him richer.
Fugger would have liked the rest of his life to proceed in the same, linear way. In general terms, it did. He added to his fortune every year and he went from being merely rich to becoming the richest man on earth. But he also spent much of this period warding off attacks from a resentful general public and those who claimed to be its champions. He fought these opponents with the same vigor as he used against his commercial rivals. There was no hesitation and no ambivalence even when blood was spilled. He had a remarkable conviction in the justness of his actions. That’s just how it was with Fugger. The way he saw it, God put him on earth to make money. He let nothing block what he perceived as God’s will.
Fugger was now a different person from the dare-devil entrepreneur in his thirties who risked everything on a loan to Duke Sigmund, became perilously ill-liquid to sew up a long-term mining contract and traveled on horseback to supervise operations and make sure his contrarian bet on Hungary paid off. Now in his fifties, he was locking in at least some gains by diversifying into low-yielding real estate investments. But that was only a change in style. There was nothing—getting older, being married for twenty-five years, the loss of his brothers—that bumped him off the course of making money. The biggest change was, whether he liked it or not, that he had become a statesman as much as a businessman. The scale of his business and sweep of his activities inevitably entangled him in the big events of the day and made him a player in political affairs. As much as he may have enjoyed playing the game at the highest level, and though he claimed to sleep well at night, the requirements of managing the largest commercial enterprise in Europe must have been a terrible strain. Creditors, customers and suppliers demanded his attention. Kings and bishops from all over Europe sought his money. Only the emperor had more interests to juggle. The Augsburg artist Jörg Breu the Elder painted Fugger about this time. He looked frail and his gaze points to the heavens. It’s easy to read this as Fugger feeling a sense of mortality, that this master of beating the odds knew he could not beat everything.
It was during this second phase of his career that he made his mark on history. When Thomas Carlyle put forth his great man theory, he created categories for kings, prophets and poets but none for businessmen. Why should he? They are enablers. Businessmen find the money for others to pursue greatness. They don’t change the world. Fugger may not have passed Carlyle’s test, but he changed the world enough to become the most influential businessman in history. No Rockefeller or Rothschild had more influence on the political events of his time.
His greatest contributions involved the Habsburgs. As we shall see, the first came in 1514, when he forced Maximilian to create the Austro-Hungarian Empire, a political entity that lasted four hundred years and played a prominent role in European history until its last breath in World War I. The second came in 1519 when Fugger bankrolled the teenage king Charles V and kept German-speaking Europe in the family’s hands, putting the Habsburg empire—an empire that strode across much of the globe—on firm footing.
The frustrating thing about Fugger is that his achievements—both commercial and political—occurred so long ago that they seem to have little bearing on modern life. Fugger’s destruction of the copper cartel and the kick he gave the Hanseatic League only matter today because of the lessons they teach. The importance of understanding the vulnerabilities of competitors and the motivations of customers; the benefits of being indispensable; the need to stay firm in the face of attack: These are lessons that apply in any age. As for the political achievements, they still mattered at the time of Napoleon and even Bismarck and Woodrow Wilson, but less so today. The European Union links Spain and Germany, not a royal family. Spain has lost its hold on Latin America and Austria has lost its hold on Hungary. The Habsburg influence on these places remains, most significantly in the fact that nearly 400 million Latin Americans speak Spanish, but the lines on a map that Fugger helped draw have been erased.
Another of Fugger’s feats changed the world in a highly relevant way. This was his role in overturning the church’s ban on usury—the charging of interest on loaned money. To the extent we can thank any single individual for our ability to borrow money to buy a house, lease a car or earn interest on our savings, we can thank Fugger.
The anti-Fugger movement that began with the Hansa protests expanded in proportion to Fugger’s growing visibility. Fugger didn’t hide his wealth. Just as the coat of arms gave him credibility, the wagons of gold he displayed in Constance attracted customers in an age when word of mouth defined public relations. But fame also brought scrutiny and vilification. In 1513, Fugger’s success caught the attention of a group of Nuremberg intellectuals. Outraged by his wealth and methods, they seized on the church’s usury ban to attack him with the larger agenda of ending what we now call capitalism. A cleric named Bernard Adelmann, who hated Fugger for blocking his bid to become bishop of Augsburg, led the group. The humanist scholar Willibald Pirckheimer joined him. Pirckheimer was a friend of Dürer’s and a scholar of such distinction that Erasmus called him “the chief glory of Germany.” It now seems inevitable that as trade and technology developed, feudalism with its lords, serfs and self-sufficient manor farms would give way to a market-based model—that is, an economy that divided resources based on what a person could pay rather than what he needed. Fugger argued this was best for all concerned. Free markets created jobs and growth lifted all boats. But the intellectuals in Fugger’s time weren’t buying it. They only saw clever men like Fugger grabbing all they could.
The only formal obstacle to Fugger was the church or, put more broadly, Christianity. Jesus had repeatedly condemned the rich. Fugger could dismiss a vague swipe like “You cannot serve both God and money.” He could not dismiss “Lend and expect nothing in return” (Luke 6:35) because Rome had enshrined the comment with a ban on usury. Dictionaries define usury as the charging of unconscionably high interest rates. The church took the words of Jesus literally. It considered any demand for interest, regardless of the rate, as usurious. It condemned anyone who charged interest as a usurer. It threatened usurers with everything in its arsenal short of execution: excommunication, the withholding of absolution and the denial of Christian burial. Any one of these made the offender a social untouchable. The harshness of the punishments reminded Christians that the Lord would take action even if the church did not. God was all-knowing. He would spot usurers and send them to burn.
Fugger had no fear of excommunication. If the church excommunicated him, it would have to excommunicate all the other Christian moneylenders. This was inconceivable; there were too many of them. Nor did he fear damnation as a usurer. One of Fugger’s strengths was an absolute conviction in everything he did. And nothing seemed fairer to him than receiving compensation for the risks he took. To him, Jesus did not literally mean “lend and expect nothing in return.” The savior was simply issuing a blanket call for charity.
But Fugger couldn’t ignore the usury ban. He had to take it seriously because his depositors took it seriously. Every time a depositor gave money to Fugger, they, like bankers, expected to earn interest. They took their 5 percent but felt dirty afterward. The Nurembergers circulated pamphlets about usury after the Diet of Cologne in hopes of putting a chill on bank deposits and destroying Fugger’s fund-gathering machine. The attack hit Fugger where he lived. Unless he could raise money, he could not satisfy client demand for loans. And unless he could make loans, his business would shrink and his influence would vanish. As the attacks grew, Fugger decided it was no longer enough for the church to look the other way. He wanted the church to expressly legalize interest. He wanted Rome to say, Forget about what Jesus said. He didn’t really mean it. He didn’t mean interest was criminal in every case. If done right, charging interest conformed with Christian values. Fugger may have been the only one strong enough to join the fight. The battle he was about to lead held the transition from the feudal to the modern economy in the balance.
The usury debate went back centuries. Aristotle started it. He said it was fair to charge someone for a cow because a cow produced milk. But money was sterile. It produced nothing. Therefore it was unfair to charge someone for money. Aristotle’s argument sounds more like a rationalization for an emotional reaction than a reasoned argument. He hated debt and the power it had to destroy. He called money lending a “sordid profession” and likened lenders to pimps.
No one cared about the usury debate in the Dark Ages when commercial activity was just a trickle in the stream. But as trade came to life in the eleventh century and lending began to power it, the victims of usurious practices multiplied. The church attacked the perpetrators for what it said was their own good. Their souls were on the line. The church had to save them. The Second Lateran Council, of 1139, condemned usury but stopped short of calling it a crime. Pope Urban III went further. He referenced Luke 6:35 and declared usury a mortal sin in 1187. Yet lending continued to grow, funding commerce while bankrupting more borrowers. In the Divine Comedy, an outraged Dante went further than Aristotle. Likening lenders to pimps wasn’t strong enough. Dante likened them to sodomites. Thomas Aquinas, the great theologian, overlooked the commercial benefits. It made perfect sense to him to trade money for wheat or a horse. The buyer got something of fair value in return. But why should a person pay back more money than he borrowed? That was an unbalanced and therefore unjust transaction. Aquinas called for stricter enforcement of church law and was so incensed with the whole thing that he went further than Aristotle and Dante. He likened usurers to murderers. The people, or at least some of them, saw it the same way. In 1310, a council in Mainz forced cemeteries to exhume recently interred usurers. The decomposing bodies came up smelling foul and covered with leeches, worms, spiders and other supposedly demonic helpers. Their condition “proved” the deceased had sinned. The next year, Pope Clement V, spurred by Aquinas, reiterated the usury ban and overturned secular laws that legalized it. The church’s enforcement arm got busy. Diocesan courts—there were hundreds of them—averaged about three prosecutions a year in the fourteenth century. Even more cases settled out of court.
The prosecutions only succeeded in shuffling the participants. Christians were sidelined and Jews filled the void. The church had a complicated relationship with Jews that expressed itself commercially by forbidding them from agriculture and the trades while letting them loan money. On the one hand, the church kept Jews from competing with Christians for “good” jobs. On the other, it let them monopolize a profession that could be even more lucrative. As long as people other than Christians made loans, the church said nothing. Nor did it take action against the flip side of the transaction; Christians were still free to borrow all they wanted. The approach was contradictory, but it let Rome fulfill its mandate of saving souls. Besides, who cared if a Jewish peddler came to a village and loaned a few pennies to a farmer? What was the harm in that?
But by the fifteenth century, lending was no longer about pennies and farmers. The economy was booming and lending had become big business. Envious of the Jewish monopoly, Christians snuck back in and became the biggest lenders of all. Rich Venetians and Florentines paid lip service to the usury rules—and eased their guilt—by calling interest by other names: penalties, processing fees, gifts, loss charges. It didn’t matter what they called it as long as they didn’t call it interest. Another ruse was to disguise interest with complicated currency transactions. But the results were the same: They gave out money expecting to get more money back. They could call it what they liked, but the “more back” was interest. The most famous bankers were the Medici. Other Italians were just as active. The Italians loaned to each other, loaned to their sovereigns and crossed the channel to loan to the English kings. They loaned to popes, cardinals and bishops. They loaned as if the usury ban didn’t exist.
Change came in Germany a century later. Anxious to catch the Italians and lured by interest rates as high as 43 percent, German cities cleared the field of incumbents. Augsburg expelled its Jews in 1438 and used the gravestones from the Jewish cemetery to build a new city hall. A textile trader named Hans Meuthing became the first Augsburger to try finance on a major scale. He made a large loan to Archduke Sigmund of Tyrol, which was backed, just like Fugger’s later loan to the duke, by the output of the Schwaz silver mine. Others jumped in, replacing Jewish lenders on transactions, large and small. The German satirist Sebastian Brant noted the development in his best-selling Ship of Fools (1494): “You borrow ten, eleven’s due. They’re more usurious than the Jew. Their business now the Jews may lose, for it is done by Christian Jews.” Fugger took lending further than anyone, but even he, like the Italians, used dodges to mask interest. He took silver instead of cash for the Tyrolean activities, making the loan repayments look more like purchases than loans.
The Nuremberg circle smartly targeted moneylending as a way to contain Fugger and the new economy he was helping to create. They knew there was no quicker way to stop him than by turning off the cash spigot. Nuremberg is ninety miles northeast of Augsburg. Like Augsburg, it was a commercial city that reported to no one but the emperor. Nuremberg had Dürer and produced pocket-watch inventor Peter Henlein and globe inventor Martin Behaim. But Augsburg had Fugger, as well as Welser and Hochstetter, and was trouncing Nuremberg at the capitalist game. Nuremberg eyed it with envy. Civic rivalry might partly explain why Nuremberg school principal Anton Kress, shortly after Fugger paid the Hansa to leave him alone, wrote an essay condemning usury. Using words Fugger had heard before, Kress called moneylending unbrotherly and unchristian. Adelmann joined in and claimed that he had personally heard Fugger brag that “he had the pope and the emperor in his pocket.” At Adelmann’s urging, Pirckheimer fired a shot at Fugger by translating Plutarch’s condemnation of usury from Greek into Latin. “Wretched usurers,” Plutarch wrote, “preying on some poor and gnawing them . . . to the very bones.” In case anyone missed the point, he cited Homer, comparing borrowers to vulnerable Greek gods and usurers to vultures “piercing into their entrails with sharp beaks.”
Pirckheimer’s translation, only a few pages long, might seem like more of a slap than an upper cut. He was merely translating an obscure text from a language no one spoke into one that only a few spoke. But in the sixteenth century his translation was a blast from a blow horn. Intellectuals and other opinion makers worshiped everything ancient and welcomed any form of mental stimulation in a world with too little to read. They were soon buzzing about it. Fugger had to respond. With his support, Augsburg schoolmaster Sebastian Illsung wrote a defense of lending by focusing on the narrow subject of the Augsburg Contract—the legal agreement Fugger signed with depositors that promised them 5 percent. Illsung argued the contract was valid if the lender, like the borrower, risked bankruptcy. Then a young theologian named Johannes Eck caught Fugger’s eye by echoing Illsung’s arguments in a university lecture. Fugger asked Eck to write a dissertation on the Augsburg Contract and enter a debate—a public showdown with scholars as judges—to validate it.
Fugger was taking a risk. The Augsburg Contract may or may not have been legal under church law. But it was in wide use and Fugger needed it to raise money. If Eck lost the debate and the judges declared the contract usurious, Fugger’s depositors would refuse to give him money. This would be lethal. It was one thing to operate in a gray area. It was another to engage in a practice specifically ruled heretical. Fugger must have felt extremely confident because he sought nothing short of a Scopes trial, a winner-take-all smackdown pitting dogma against modernity, but with money instead of monkeys at the center. He had at least one precedent on his side. After theologians squared off over the subject of annuities—the interest-earning pension schemes that cities sold to raise money—the pope had sanctioned them. Maybe Pope Leo, who had replaced the “Warrior Pope” Julius II earlier that year, would do the same with the Augsburg Contract. There was also the fact that Leo was a member of the Medici banking family. Legalization would serve his personal interests. Even better was that Leo himself was a borrower of Fugger’s. It goes without saying that Leo would be favorably inclined towards someone who gave him money.
Eck taught at the University of Ingolstadt. He later became notorious for reporting Luther’s heresies to Rome and prompting his excommunication. He could advance his career if he won but faced ridicule if he lost. When Eck finished his paper, he submitted it to the university and asked it to host the contest. Universities usually approved such requests automatically, particularly when they came from one of their own. But the Nurembergers feared Eck would win. They pressured the school to refuse. After Adelmann accused Eck of being a Fugger stooge, the bishop with jurisdiction over Ingolstadt killed the contest. Other German universities refused, too. The topic was too hot. None wanted to be part of a discussion of potentially heretical views.
Fugger refused to quit and when Eck drafted a letter asking Leo to force Ingolstadt to hold the debate, Fugger signed it. After getting no word, Fugger and Eck turned to Italy where, thanks to Venice and Florence, the universities were open-minded about lending. They found a willing participant in the University of Bologna, Europe’s oldest university and among its most prestigious. Thomas Becket, Erasmus, Copernicus and Mirandola had studied there. On his way to Bologna, Eck passed through Augsburg. Fugger assigned him a translator and other assistants. Another Augsburger, the Dominican priest Johannes Fabri, made his own way to Bologna to argue the other side. For all we know, Fugger may have picked Fabri. It was a way of fixing the outcome. But Fabri appears to have been his own man.
On July 12, 1515, Eck and Fabri met at St. Petronius, the city’s mammoth fourteenth-century basilica. The doors opened at four in the afternoon. Eager for a good show, students and professors came to watch and walked past an enormous painting of a hideous, two-mouthed Lucifer—a reminder of what awaited heretics—as they took their seats in the pews. Organizers engineered these things to entertain. They allowed heckling and encouraged cheering. Eck and Fabri went at it for five hours. Eck avoided scriptural references and focused on intent. Only evil intentions could make a transaction usurious, he declared. A lender committed usury if he aimed to harm the borrower. But he acted legally if he had a legitimate business interest. When his turn came, Fabri rehashed the old arguments; Aristotle, Aquinas and the rest. Eck thought he crushed Fabri. Three professors in the audience agreed with him. But the judges saw merits on both sides. They refused to call a winner and the contest ended in an unsatisfying draw.
Fugger might have been disappointed, but he could take comfort. The judges had refused to call the Augsburg Contract heretical. Eck and Fabri had presented a cut-and-dried case of charging interest on loaned money, and had given the judges a perfect chance to confirm Luke 6:35. But the judges refused to make a call, a call that could have put Fugger out of business. That was tacit approval. What’s more, Fugger’s letter to Pope Leo had gotten through and made an impact. Leo ignored the question about debate venues but, in a decree issued that same year, Leo went to the heart of the matter and signed a papal bull that, in direct contradiction of Aristotle and other ancient commentators, acknowledged the legitimacy of charging interest. “Usury means nothing else than gain or profit drawn from such a thing that is by its nature sterile, a profit that is acquired without labor, cost or risk.” It didn’t matter that money wasn’t like a cow and provided no milk. Labor, cost and risk were enough to make it unsterile and make interest charges lawful. This was a thunderclap. Usury was a sin. But what defined usury? According to the new doctrine of the church, usury was no longer strictly about what Jesus said about charging interest. It was about charging interest without labor, cost or risk. And what loan didn’t involve one of the three? As long as a loan passed that easy test, the lender was off the hook. Fugger’s lobbying had paid off in spectacular fashion. He and others were now free to charge borrowers and pay depositors interest with the full blessing of the church. Leo’s decree, issued in conjunction with the Fifth Lateran Council, was a breakthrough for capitalism. Debt financing accelerated. The modern economy was under way.
Fugger and Eck stayed in touch after the debate, and, as we will see, Fugger later tried to bring him to Augsburg as a preacher. Eck also earned a spot in history by going to Rome and successfully persuading the pope to excommunicate Luther and issue the warrant for his arrest—an arrest that, had it been carried out, would have resulted in Luther recanting or burning at the stake. Contemporaries whispered that Eck went to Rome under orders from Fugger. Hard evidence is lacking, but the record shows that Fugger was an early opponent of Luther and wanted to protect the papacy and his business in Rome. He often dispatched Eck to do his dirty work.
After the usury debate, Fugger found himself under assault again, only this time in Hungary. Fugger had succeeded in Hungary because he had it to himself. Other German merchants thought Fugger a fool when he bought his first Hungarian copper mine. They said if the Hungarian nationalists didn’t get him, the Turks would. For them, Hungary—where the Transylvanian count Dracula impaled Turks a generation earlier and displayed their heads on pikes—was too savage and unpredictable for investment. But the skeptics had been wrong for twenty years, and Fugger made a fortune mining Hungarian copper and exporting it around the world. What he didn’t export in raw form, he turned into weapons for sale to princes and popes.
Fugger owned several mines in Hungarian territory. His biggest was in Neusohl in Slovakia, 130 miles northeast of Bratislava. None of the Hungarian mines was individually as productive as Schwaz. But together they produced 1.5 million florins’ worth of profits over the years Fugger owned them. And that was just from copper. Fugger might have made just as much from silver but those figures are lost. More profits came from the guns cast in his Hungarian foundries. The money gave him a critical source of funds to loan Maximilian and others. Over his career, Fugger made more money in Hungary than on any other investment.
The outlook darkened in Hungary in 1514, when the Turks stepped up their attacks. They were looting more towns than ever and capturing girls to sell as slaves. To stop the Turks, Hungary appointed a Romanian warrior, Gyorgy Dozsa, to raise a peasant army and fight back. The Turks terrified the peasants and Dozsa easily found recruits. Once he had an army, he forgot the Turks and turned his forces on the Hungarian nobility and aimed to make himself king. The peasants hated the nobles even more than they hated the Turks. They jumped at the opportunity to attack the rich. In an early victory, Dozsa captured the fortress of Cenad and gave Dracula a nod by impaling the bishop. It looked as if Dozsa would overrun the country.
From Augsburg, Fugger tried to protect his Hungarian assets. He ordered Zink to bribe Hungarian priests to calm the peasants. He sent gifts to the Hungarian elite to win their favor. But he could only do so much. Help finally arrived when John Zapolya, Hungary’s largest landowner, raised a force. He captured Dozsa and used him as a grisly example of what happened to rebels. Reflecting the sadistic practices of the age, he staged a torturous enthronement ceremony where he forced Dozsa to sit on a red-hot iron, wear a smoldering crown and hold a molten scepter. Then he burned Dozsa at the stake and gave his supporters a choice between death or eating alive their leader, then writhing in the flames. “Dogs,” screamed Dozsa as they ripped off his charred flesh and consumed him.
Zapolya had won, but Hungary remained volatile. With the Turks on the loose and the peasants looking for a fight, Fugger’s investments remained at risk. Division among the Hungarian nobility complicated matters and a war between rival noble factions loomed along with everything else. Fugger needed a permanent peace. The Hungarian royal family agreed. For years, it had been talking to Maximilian about a marriage alliance that would make the Habsburgs their protectors. But Maximilian was too busy in Italy to give it his focus. Now, with his treasure threatened, Fugger did something new. He gave Maximilian an ultimatum: Either strike a deal with Hungary or forget about more loans. Fugger had never before tried to manipulate Maximilian so overtly. In the past, if Fugger liked one of Maximilian’s schemes, such as the phony imperial coronation, he was generous. If he objected to a project, such as Maximilian’s papal venture, he delayed until the request went away. But he never initiated anything. He did this time. There was too much on the line to sit it out.
The threat worked. To appease Fugger, Maximilian sent an ambassador to Hungary to negotiate a marriage alliance—an alliance that promised the eventual handover of Hungary to the Habsburgs. No matter that the Hungarian people might object to Habsburg rule. No matter that it meant redrawing the map of Europe by creating the giant political tinderbox known as the Austro-Hungarian Empire. Fugger needed a Habsburg seizure of Hungary to protect his holdings.
To discuss details, Maximilian agreed to see King Ladislaus of Hungary and his older brother Sigismund, the king of Poland. The monarchs originally planned to meet in Lübeck because Lübeck was near Poland and Poland played a key role. Like kids trading baseball cards, Maximilian planned to give Sigismund the imperial possession of Prussia, home of the Germanic religious order of the Teutonic-Knights, in exchange for Hungary.
Fugger hated the idea of a Lübeck meeting because the Hansa were there. Concerned the Hansa would slander him while the kings were in town, he encouraged Vienna as an alternative. Besides, he wanted to attend and Vienna was an easy boat ride down the Danube. They accommodated him. In 1815, exactly three hundred years later, the great European powers met in the same city to engineer a peace treaty that won decades of European tranquility and made famous the term “balance of powers.” The meeting was called the Congress of Vienna. It was more like the second Congress of Vienna. The first occurred when the three kings—Maximilian, Ladislaus and Sigismund—met in the city to consider the future of Hungary and, as a consequence, Fugger’s copper mines.
The outcome hinged on personal chemistry and, to Fugger’s delight, Maximilian and Sigismund liked each other. Maximilian called Sigismund a great prince and Sigismund invited him to hunt in Poland. They struck a deal that gave Fugger as much as he could hope. Hungary would immediately become an Austrian puppet and the Habsburgs would formally take over Hungary after Ladislaus’s line died out. Poland would get Prussia and, as a sweetener, Maximilian promised not to ally with Russia, which was then at war with Poland. The kings sealed the accord with plans for not one but two marriages. Maximilian’s grandson Ferdinand would marry Anne, the daughter of Ladislaus, and Maximilian’s granddaughter Mary would marry Louis, Ladislaus’s son.
Weddings are expensive—especially double weddings between royal families. Fugger gave Maximilian what he needed to pay for it. In a letter written in Augsburg to the Tyrolean council, Maximilian explained in achingly honest terms why he had to put himself—and thus the state—further in debt:
We cannot do this [the Hungarian takeover] unless the loan from the Fuggers is carried through. For without this we cannot go on, but will have to drop all the above dealings with both kings and abandon the plan for our children and theirs, and cancel all arrangements, and it will probably bring about the disadvantages and injuries suggested above if we finally abandon our meeting with them. If we knew any other method of finance, we would have been only too glad to spare you this, but we know of no other way.
After settling the financing, Fugger and 10,000 other wedding guests descended on Vienna. Fugger, like Charles the Bold when he went to Switzerland, brought his jewelry. The Habsburgs wanted to dress like Burgundians and needed Fugger’s stones to create the illusion of family riches. Maximilian had nowhere near the means of his dapper father-in-law Charles, but he could look like him for a day thanks to Fugger. With Fugger in the pews at St. Stephen’s, Maximilian’s organist played a thundering Te Deum and Hungarian musicians played battle marches. Maximilian’s secretary took offense with the military posturing of the Hungarians and dismissed them as “horse eaters.”
The fine print of the marriage contract highlighted the complexity—if not the grotesque absurdity—of sixteenth-century royal weddings. Prince Ferdinand was too young to marry Anne, but their marriage was vital to the deal. To keep it on track, Maximilian, a widower, married her by proxy and agreed to take her as his wife if Ferdinand died before coming of age. Maximilian was fifty-five—exactly five times her age—and looked older because of the ravages of a puzzling disease new to Europe: syphilis. Cortez brought it back from the New World in 1504 and soon Maximilian, Erasmus and others had what they called the “French disease.” The disease so ravaged Cesare Borgia that he took to wearing a mask in public. Luther complained about outbreaks at monasteries. Fearing death at any moment, Maximilian traveled with his casket just in case. “Ask God for my health,” Maximilian told Anne at the altar. He put a crown on her head and declared her a queen of the empire. Louis and Mary wed in the undercard. Fugger saw the value of his Hungarian investment grow more secure with every vow.
While in Vienna, Fugger fished for business. Instead of awarding new depositors with toasters, he gave out diamonds, rubies and sapphires. He gave necklaces to the ladies and gold rings to the men. The gifts were a cost of doing business. His records show that he spent 9,496 florins, 18 shillings and 5 Rhenish hellers on the Vienna trip, including travel expenses. The effort paid off when George Szathmary, the archbishop of Gran, one of the richest men in Hungary, moved his accounts to Fugger.
From the standpoint of Hausmachtpolitik, the congress was a victory for all. For King Ladislaus, too weak to keep his family on the Hungarian throne without help, the agreement kept him in power and won a friend in the fight against the Turks. King Sigismund of Poland saved himself from a two-front war with the empire and Russia. Maximilian, by keeping Anne in Vienna until she married his grandson, attached Hungary as a satellite of Austria.
The Roman poet Ovid described the Trojan War hero Protesilaos as more deserving of love than war. Matthias Corvinus, the Hungarian king who had taken Vienna from Emperor Frederick, reworked Ovid’s words and applied them to the Habsburgs. Bella gerant alii, tu felix Austria nube (Others wage war but you happy Austria wed). The words became a family motto. Fugger had now played a role in four Habsburg weddings. He and his brothers had dressed Frederick for the meeting with Charles the Bold that led to the marriage of Maximilian and Mary of Burgundy, and gave the Habsburgs the Low Countries. Later, Fugger’s loans puffed up Maximilian and made his son Philip a more attractive suitor for Joanna of Castile—the wedding that gave Spain to the Habsburgs. Now Fugger’s prodding brought about a double wedding and Habsburg control of Hungary.
The Habsburg triumph in Vienna was equally Fugger’s triumph. Hungary might never completely embrace Fugger, but at least he had won more support from on high. He must have felt like a hero as he hobnobbed with the rich and powerful in Vienna. His efforts had united two kingdoms and stiffened the front lines of Christendom against the Turks. With his jewels glittering on Habsburg necks, he may have spotted guests admiring his diamonds and overheard them talking about what he and his money could accomplish.
After the wedding, Fugger struck a deal with Maximilian that points to a factor behind Fugger’s rise: Capitalism was moving faster than society’s ability to contain it. While commerce was barreling ahead, democratic institutions that could have curbed the excesses were evolving more slowly, allowing well-connected men like Fugger to have their way regardless of other considerations. After returning from Vienna, Fugger gave the emperor 100,000 florins for a lease on a smelting operation. It was a straightforward transaction except for one thing: Maximilian had already awarded the smelter to Hochstetter, Germany’s pioneer of retail banking.
The Tyrolean council, the group of nobles who advised Maximilian in Innsbruck, was outraged when it heard about the deal. It complained that the cancellation of the Hochstetter contract would bring “disadvantage, expletives and ridicule.” With Maximilian already dangerously stretched, the council wanted him to stay on good terms with Hochstetter, save face with other lenders and reduce his dependency on Fugger. Maximilian, when asking permission to borrow for the double wedding, pleaded with the council to let him have his way. “Do not leave us in such need,” he wrote. “Our well-being is at stake.” His request was nothing but a polite way of giving an order. In that instance, the council did as told.
The council had always played the role of rubber stamp in the belief that a strong ruler was better than a weak one. Sigmund’s debt-financed pursuit of sex and luxury had left the duchy vulnerable whereas Maximilian’s aggressive foreign policy had made it a powerhouse. The nobles only had one card to play if they objected. They could take up arms and try to oust Maximilian. But they still believed in him. And Hochstetter’s smelter was hardly worth a rebellion. They gave up the fight and gave the smelter to Fugger.
Fugger was back in the Fugger Palace when a group of Maximilian’s advisors showed up at the door. A fresh crisis had compelled the emperor to ask for more money. While Fugger and Maximilian were dancing in Vienna, Louis XII of France had died and his cousin Francis I, now king, had taken an army into Italy and reclaimed Milan from the Swiss. Francis chased women, drank hard and had a reckless streak that once nearly killed him during an aggressive game of tag. Machiavelli had called the Swiss the best fighters on earth. By defeating them, Francis made his reputation while destroying that of the Swiss. Invincible no more, Switzerland adopted a position of political neutrality maintained to the present day. The loss of Milan also set the stage for Fugger’s final loan to Maximilian. The discussions over the deal offer a window into Fugger’s negotiating tactics.
After the seizure of Milan, Maximilian wanted to race to the city and oust Francis. He sent the men to Augsburg to find the money to pay for the campaign. Fugger told the visitors that he had no interest, but that he would see them as a courtesy. As they got down to business, Fugger offered one excuse after another: Maximilian was already too deeply in debt, his collateral was thin and, in an objection that might have raised eyebrows among the negotiators, Fugger called the very idea of lending offensive because it was usurious. Even when Maximilian offered additional copper contracts, Fugger waved them off. He said he already had more copper than he needed. He added that he felt old and tired. He told the negotiators that he could die at any time and might not outlive the war. Besides, he told them, he had no children. He was thinking about selling his assets and unwinding the enterprise.
Liechtenstein, after years of faithful service to the emperor and his banker, had died before the Congress of Vienna. In his place came a new crop of advisors unfamiliar with Fugger and his negotiating tactics. They had never heard Fugger’s vow to make money “as long as he could.” They failed to appreciate that they were watching a rerun from the time of the Common Penny when Fugger, after complaining that lending was too much trouble, turned around and pursued lending with more vigor than before. Liechtenstein would have recognized the signs. The complaint about fatigue was code for wanting more collateral. The threat of liquidation was a demand for a higher interest rate. Maybe Fugger really was tired. But too tired to make money? Never.
Fugger also had doubts about the Milan campaign. Fugger thought it foolish to take on the French after what they had accomplished in Milan against the fearsome Swiss. He questioned whether Maximilian and his mercenaries were up to the task. Maximilian’s men recorded Fugger’s words. Fugger, they wrote, called the emperor’s plan for a direct attack “strange and difficult to accept.” When Maximilian offered a revised plan, Fugger called it “even worse.”
Fugger’s ears perked up only after Henry VIII of England took an interest. The French victory had stung Henry. It rankled him that foreign ambassadors hailed Francis as a military genius. Henry longed for a great victory of his own but he had yet to do anything significant in his six years on the throne. Anxious to prove himself and reverse French gains, Henry sent aides to the continent with an offer to fund a Habsburg attack. They made two stops. One was Innsbruck, to inform Maximilian. The other was Augsburg, to see Fugger. Henry feared the emperor would attack Venice instead of Francis if he gave him money directly so he handed it to Fugger instead. Fugger handled such matters professionally and Henry could trust Fugger to dole out the money as instructed. Henry transferred 100,000 crowns to Fugger’s Antwerp branch and Fugger paid the bills for war from there.
Fugger also put up his own money. Maximilian paid him back with a favor. He let Fugger and the abused Hochstetter create a variation of the old copper syndicate. Fugger sabotaged the first syndicate twenty years earlier because he wanted to crush his competitors. This time Fugger was committed to the arrangement because he could control it. By joining with his only competitor in the copper trade, he could inflate prices.
When spring arrived, Maximilian marched into Italy at the head of 30,000 troops under the banner of the Habsburg eagle. It was the largest army he ever commanded and the one he had always wanted to command. He hoped it prefigured the one he wanted, one day, to march on Jerusalem. The French and Venetians were then laying siege to Brescia. Maximilian chased them back to their camps. With his superior manpower, he seemed poised for victory. The English looked forward to defeating the French and earning a return on its 100,000-crown investment. Then Maximilian, a man normally eager to fight, inexplicably gave up. The English were infuriated and suspected French bribes. Maximilian blamed an inability to feed his army, the coming of winter and inferior cavalry. The reasons made no difference to Fugger. He collected his commission from Henry and moved on.