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Wednesday 18 March 2020 14.00 - 16.00
A-3 ECO04a Creditors, Debtors, and Early Financial Markets (c. 1300-1800) I
P.N. van Eyckhof 1, 003C
Network: Economic History Chair: Jaco Zuijderduijn
Organizers: Elise Dermineur, Jaco Zuijderduijn Discussant: Elise Dermineur
David Carvajal : How Castilian Creditors & Debtors Managed their Relations? Confidence and Security (15th-16th Century)
The arithmetic that today dominates financial operations and the constant search for the maximization of the expected profit does not ensure healthy economic growth and, even less, the necessary social cohesion to face a complex and changing world. The arithmetic of credit combined economic and social aspects from the past ... (Show more)
The arithmetic that today dominates financial operations and the constant search for the maximization of the expected profit does not ensure healthy economic growth and, even less, the necessary social cohesion to face a complex and changing world. The arithmetic of credit combined economic and social aspects from the past have disappeared today, dehumanizing an economic relationship based on mutual aid. This paper examines how credit and debt relations boosted economic exchange and social cohesion in a context of economic, political, social and cultural change in the Iberian Peninsula. The hypothesis we put forward defends that, in Castile, the relationship between creditors and debtors was based on a double system of guarantees: on the one hand, the legal and juridical guarantees that allowed creditors to preserve their rights and, on the other, the social guarantees that punished debtors unable to pay their debts and rewarded creditors. In spite of the moral and doctrinal limitations regarding operations such as loans, legal security and confidence boosted financial exchanges and the Castilian markets. The sources that support this work are judicial lawsuits for unpaid debts and, in particular, the declarations of creditors, debtors and witnesses in which it is possible to observe how the role of the two mentioned mechanisms and how the debt had an important social component in the 15th and 16th centuries. (Show less)

Giuseppe De Luca, Marcella Lorenzini : Credit, Public Debt and Social Stability in Spanish Milan (XVIth C.)
During the Spanish dominion the Duchy of Milan was very rich of capitals which were the results of an intense and lively economic activity boosted also by the crucial geopolitial role that Lombardy played in the Euroepan control stratgey of the Habsburg. Thusly new financial instruments emerged that proved critical ... (Show more)
During the Spanish dominion the Duchy of Milan was very rich of capitals which were the results of an intense and lively economic activity boosted also by the crucial geopolitial role that Lombardy played in the Euroepan control stratgey of the Habsburg. Thusly new financial instruments emerged that proved critical in revolutionizing the financial system. This paper aims to explore the emerging and the refinement of such a system that was mainly shaped in order to meet the growing government expenses. New public bonds were then created which replaced the old compulsory credits. These new securities were deviced in a way that made them very attractive for investors, small and large: they were freely subscribed, the interest rate was guaranteed by a fixed fiscal source, there was no set time for the return of capital, they were marketable, and could be inherited and exempt from confiscation and taxes. They represented persuasive elements for a large number of people - craftsmen, merchants, bankers, professionals, nobles, religious institutions, and women - who saw the purchase of revenues as safe, regular, nontaxable income. The incoming and outgoing credit circuits were spread throughout the city, but also tied it to the most important economic centers of the continent and Madrid. Credit and debt relations, which criss-crossed the local society and the immediate countryside, acted as a binding agent. They were one of the leading vehicles for the social transmission of values, and the construction of individual reputation and reliability. Meanwhile, loans from private individuals to the State by way of investment in public debt, ensured involvement and integration of investors in the strategies of the Duchy of Milan and the Hispanic Monarchy, thus guaranteeing political stability (quietud) in the Duchy throughout the seventeenth century, whereas in all the other Spanish dominions there were social riots against the foreign domninators. (Show less)

David Kusman, Jean-Luc Demeulemeester : Revisiting Graeber’s “Everyday Communism” in the Light of a Medieval Debt-enforcement Custom: being Hostage in an Inn for a Debt in the Low Countries between ca. 1250-1350
Revisiting Graeber’s “everyday communism” in the light of a medieval debt-enforcement custom: being hostage in an inn for a debt in the Low Countries between ca. 1250-1350.

In this paper we study the custom of being hostage in an inn for a debt contracted with the so-called Lombard —in fact ... (Show more)
Revisiting Graeber’s “everyday communism” in the light of a medieval debt-enforcement custom: being hostage in an inn for a debt in the Low Countries between ca. 1250-1350.

In this paper we study the custom of being hostage in an inn for a debt contracted with the so-called Lombard —in fact Piedmontese— moneylenders. As Graeber has pointed out, the close etymology between the English words host, hostile, hostage and hospitality hint at the behaviour to adopt when welcoming a potential hostile stranger. If we follow this ideological framework (Graeber 2011, 101), this “hospitality”custom of being allowed to sojourn in an inn for a debt would be also rooted in the “baseline communism” that Graber attributes to human social life during the preindustrial era.
With this framework in mind we studied the sojourns of debtors belonging to the high nobility in inns of the big cities of Rhineland, Brabant and Limburg: Bonn, Köln, ‘s-Hertogenbosch and Maastricht. These debtors had incurred high debts with Piedmontese moneylenders having far-reaching business connections in the Low Countries and in Rhineland (Kusman, 2013, 182-184). We argue that in most cases the Piedmontese moneylenders had close ties with local broker-hostellers families and that the high standing of the selected inns for the “debt garrison “ (or leisting in middle dutch) often fostered the commercial interests of the city where the inn was located. Moreover, the chosen cities often hosted chivalric tournaments, a component which convinced the noble debtor (or his squire) that he was not hostage of ill-famed usurers, but, instead, was hosted in a courteous setting where honour and generosity played a big part. Finally, these inns were, as correctly observed by Reyerson (2002, 167), true information hubs where the whereabouts of the debtors and his personal securities could be gathered. (Show less)

Benoit Maréchaux : Funding Businesses in the Early Modern Mediterranean: Marco Centurione’s Galley Enterprise, Genoese Credit Networks and the Piacenza Exchange Fairs (1612-1621)
The ‘Rise of financial capitalism’ narrative typically focuses on the Financial Revolution, the expansion of the joint-stock companies and the development of stock markets in England and the Netherlands. Drawing on this interpretation, conventional accounts of financial history tend to consider the emergence of corporate finance and stock markets as ... (Show more)
The ‘Rise of financial capitalism’ narrative typically focuses on the Financial Revolution, the expansion of the joint-stock companies and the development of stock markets in England and the Netherlands. Drawing on this interpretation, conventional accounts of financial history tend to consider the emergence of corporate finance and stock markets as a necessary condition for the development of large and liquid financial markets able to supply large amounts of credit, transform savings into investments, and fund local and long-distance businesses.
This special interest for the emergence of modern finance has, however, obscured the coexistence of alternative forms of credit supply that allowed the funding of a wide range of major economic activities. In this way, this paper analyses the financing of the Genoese galley enterprises who worked for the Spanish Empire in the seventeenth-century Mediterranean. Genoese contractors had to pay for the galleys running costs before having the money promised by the monarchy and they needed money in distant places from where they collected it. As a result, their activity required the raising of huge amounts of capitals and the obtention of international financial services of a high level of sophistication. Drawing on ledgers and merchant correspondence of Marco Centurione’s galley business (1612-1621), the paper examines his financing cycle focusing on 1) the raising of capitals in Genoa and in the Mediterranean; 2) the expenditures; 3) the restitution of the invested capital from Spain to Genoa; 4) the use of the exchange fairs of Piacenza that allowed to pay back and roll over the debts in a way that implied both advantages and risks for debtors and creditors. (Show less)

Tawny Paul : Incarceration and the Enforcement of Debts in Eighteenth-century Britain
Credit fuelled the eighteenth-century economy in Britain. Shortages of specie, irregular wages and seasonal employment all meant that credit became the means by which the majority of day-to-day financial transactions were carried out. But when debtors defaulted, creditors were not well protected by the law. Debt litigation had become overly ... (Show more)
Credit fuelled the eighteenth-century economy in Britain. Shortages of specie, irregular wages and seasonal employment all meant that credit became the means by which the majority of day-to-day financial transactions were carried out. But when debtors defaulted, creditors were not well protected by the law. Debt litigation had become overly expensive and time-consuming, leading to a ‘great litigation decline’ (Muldrew, 1998). Summary justice addressed debts of less than £2 while bankruptcy was reserved for those with debts of over £100, leaving the vast majority of middling credit unprotected. Despite the recent focus on institutional economics, creditors were underserved by the British legal and financial institutions. Within this climate, they turned increasingly to the debtors’ prisons. Incarceration became so normal that as many as one in four men of the middling sort in England would experience incarceration for debt during their lifetimes (Paul, 2019).



Drawing on an archive of prison commitments from London, this paper considers who used the debtors’ prisons and why. While most studies of the debtors’ prison consider this institution in terms of the plight of debtors, this paper instead considers the perspective of creditors. How well did the prisons function as a means of enforcing debt? What were the social and economic costs of incarceration? In answering these questions, the paper addresses how the majority of deferred payments, which according to Shammas (1990), constituted some half of investments in England, were enforced. (Show less)



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