Money in History

Karl Walker, George Reiff

• Publisher: Conzett Verlag
• Year: 2015
• eBook ISBN: 9783037600399
• Topic: Business
• Subtopic: Business General
• Index: Business

The Parthenon, the cathedral of Rouen, the Sistine Chapel—without money, these great monuments could never have been built. Only with the circulation of money could the sophisticated division of labor develop that enabled construction of these cultural and economic masterpieces. The story of all that money has enabled, from antiquity through the Middle Ages and especially in the Gothic period, is the subject of this illuminating, richly detailed book. Be prepared for some surprises in this tale of money and culture.

THE GERMANY HANSEATIC LEAGUE

It is self-explanatory that the wealth of the cities as much as the splendor of such pieces of art like they grew from earth within these three centuries, could not solely exist from the small space of neighborly cooperation within the town nor mutual promotion between township and the surrounding country side. It takes more. Division of labor and exchange of services rendered can start within a relatively small space, however, in order to dispense the full blessing of maximum productivity and the rich diversity of production, a far-reaching trade network was also required.

And there is again something particularly noteworthy that comes into our scope of study and falls in this period of these rich centuries: the development of the German Hanseatic League.

Other peoples of earlier cultures already maintained long-distance trade.

The land’s products of far-away lying areas were already among the things indispensable for a refined lifestyle in the big cities of classical antiquity.

Nevertheless, there is little comparable in economic history that could face the blossom of the medieval world trade, the powerful acts of the German Hanseatic League.

A series of fortunate circumstances combined. Commerce, trade and industry – everywhere in industrious action formed the basis of growing prosperity. Without interruption in the demand, the restlessly circulating embossed silver coins rules the market. There is no impediment of sales like in times of our modern economy; there is no inhibition of further production and supply. The products are becoming more artful and genuine and the buyers become more demanding. One seeks the extraordinary, the rare, the product of foreign lands and the results of refined production. And so the merchants go out in the world with horses and wagons and armed servants and take domestic products with them, and the farther they advance, the more valuable their goods are at the place of trade. What they trade for it there and return after a long and arduous journey has higher market value in the home city, which can be translated into sound profits.

And so the road of augmenting trade was formed and it stretched over mountain passes along river valleys like a network of blood vessels, which pulsed with strong life that made known the vital power of the whole economic area of Central Europe and it reached out to the periphery of the known world culture.

There was the trade route over the Alpine passes to northern Italy, Genoa, Venice, and Florence to the Rhine valley on this side of the Alps along the Rhine River to its mouth, and thus connected to the shipping lanes to England. The merchants via this trade route brought much seasoning and spices, perfumes and medicines from the East to the markets of Frankfurt, Cologne, Bruges, Antwerp, as well as raw materials, cotton, silk and elaborate brocades from Alexandria and Byzantium and alum, which was available for a long time through the Turks only and which was used for tanning and dyeing. The weaving products from Flanders and the fur from the far north went the opposite way. Furs were early considered as noble clothing and as a sign of dignity, splendor and wealth and they were always sold at a high profit. But the merchants who dealt with the procurement of these coveted items had really to make a lot of effort.

The networks of trade routes similar to those at the River Rhine were also formed at the rivers Danube, Elbe, Oder and Vistula and on the coast of the North Sea and the Baltic Sea. And the intersections of those trade routes developed liveliness, in a way we can imagine no more. It is no coincidence that Vienna was the flourishing commercial city in the southeast as it was situated at the vast peoples’ road along the Danube that ran through Hungary to the Black Sea and which directed trade relations beyond the borders of the Christian West. The trade route went in north-south direction equally across Vienna and linked the towns at the rivers Oder and Vistula to the passes over the Alps to the Adriatic Sea.

Similarly, Frankfurt was the big market of the medieval world economy in the West; here merchants met with their trade trains from Italy, France, Flanders, and from the north and the east. For centuries, Nuremberg’s wealth came through its city gates that were open to all directions. The merchant trains came in the city from Regensburg through the Gate of the Women with the products of distant Turkey and the Danube countries; coming from Breslau, from Prague and Krakow they entered through the Laufer Gate; toward the Alpine Road and Italy the Spitteler gate opened, which also let in the merchant goods of the West of France and Spain coming via Augsburg; the wagon trains that left Nuremberg past the Castle through the Tiergärtner Gate made their way to Central Germany, Erfurt, Magdeburg and further to the north to Denmark and Sweden.

It was worth the money to be located at such points of intersection of trade routes. Yet, it would be wrong to totally disregard the hard work, effort, wisdom and powerful industriousness that may have been necessary to imbue a place with so much life and appeal that it became a large gathering point, a cosmopolitan market and trading center going beyond local importance. Those cities who were able to make this happen did not owe their luster and their size to the sometimes overestimated fact to be the residence of the bishop or the prince, but they owed it to the bold industriousness of their merchants and the diligence of their craftsmen and artists. In addition to the many material goods on heavily loaded wagons pulled by strong horses and carts coming from afar, the traveling merchants brought home the self-conscious determination for the purposes of communal action and also ideal values like experiences and observations from other countries.

However, in order to stick a little with the economic situation and to look onto that time from the perspective of the 20th century: when crafts and trade of this kind could work for sales, which the merchants shipped to foreign markets, then this was according to today’s concepts of production for the “Export”, while the supply of foreign goods to the domestic market constitutes the “Import”. These terms with too often occurring problems of today were not yet known to the medieval world economy. The diversity in the coinage of that time never was a real hindrance for trade, although the area of validity of a coin was often very limited. Perhaps the simplicity and naturalness of the medieval world economy is in a substantial part based on the fact that no regimented policy intervened in the trade relations of the merchants. Certainly this was also no reason, as long as the money economy was fine with her undisturbed circuit to take the produce from the market.

And so the merchant who tended to distant trade relations took the local produce from the market, paid it with locally valid money and delivered for the same money those products that his wagon trains brought from afar. The domestic goods could be sold on the foreign market according to the same principles and so the money was acquired to pay for the products, which were meant to be the return freight back home. The problems of “exchange control” and procurement for the payment of exports resolved ridiculously easily and the mercantilist considerations of the “harmfulness” of import and of the “necessity” of exports, which would call on the state for regimented plans, slumbered at this time still in the bosom of the future. Perhaps it would have been better if these foolish and contradictory theories would never have come into effect and were never applied.

The economy of these centuries of the late Middle Ages was large and wholesome, and even if the distances were far larger than today based on the time traffic conditions, this generation daring merchants, penetrating the world in all directions, knew better how to help themselves than we can do it today with all the achievements of modern transport and communication systems.

Where organized cooperation was necessary it did not come about by magisterial law giving but by the initiative of the merchants acting in their own independent right. There was the most urgent need of protection on the road, on the rivers and on the seas. Yet it was not safe to bring precious goods over long distances to the cities. On the busiest trade routes and rivers some traveling businessman lost his cargo with wagons and horses to the knight who oversaw the way and descended from his castle. With gradually improving civilization, later on a toll developed from it and finally the imperial law sanctioned a way and bridge toll in order to maintain roads, and in exchange for traffic safety. But until then it took quite a while; and the merchants had to rely on their own strength and mutual assistance in advice and deed and they also had to rely on the support of the citizens of the cities. Developing from these conditions, the “crowd in a foreign land” transformed into the guild of merchants and then into the “German Hansa” – the awe-inspiring organization the old cities still dream about today. As acquisition and sale constituted two totally different tasks, and as the far flung journeys did not permit a dutiful execution of both, the merchants of the Hanseatic League started early on, to open branches afar, their trading posts and warehouses: in London the Steelyard close to the River Thames, in Flanders the warehouse in Bruges, and in Norway there was the northernmost Hanseatic warehouse in Bergen, and in the East the last branch of the Hanseatic League had been pushed as far as Novgorod, near the Lake Ilmen, as it was profitable enough through trade with Russia.

Between all these places and the specific production places or storehouses, and the major markets of the distant cities, constantly the wagon trains, and at sea the ships, of the Hanseatic league were on the move; and among all sectors of activity, trade was the decisive one of all the trades as the methodic and widely organized exchange of goods demanded for the noblest and most demanding, for boldness, courage and cleverness which were required at the same time. The hometowns of the merchants did not just so as a rule invite them into the City Council. Trade did not only bring wealth for the merchant, but it also brought orders for the domestic industry. It were merchants who founded the trade of weaving in the cities of their region as they were wool importers and brought to bloom a great many other promotions of crafts.

What a great fertilization of the economy came about only by the development of the fish trade, which was taken over by the Hanseatic League through the leadership of the Hanseatic city of Luebeck in the 13th Century; Saxo Grammaticus, the father of Danish history told that in the Baltic Sea Strait between Zealand and Scania, each year rich shoals of fish could be observed: “The whole sea space fills usually so abundantly with fish that sometimes the participating vessels get stuck and it is hardly possible with strenuous rowing to bring them out and the prey are no longer caught the with artificial device, but is taken easily by hand” (see E. Hering: “Die deutsche Hanse”, page 61).

But the wealth of these fishing grounds was worthless in the hands of the Danes until the Hanseatic merchants showed up, and opened not only a market now but also a gigantic market for centuries. After an initial contract of the Danes with Luebeck in 1225 – the first branches of the Hanseatic fishmongers were established in Scania and a convincing development through smart and tight organization soon gave rise to a different picture.

The cogs of the Hanseatic League came with Luebeck salt, which was used in huge quantities; from the cities of Pomerania hundreds of thousands of wooden tons were delivered, and they all were uniformly made by the exemplary Rostock ton. At the same time, of course, other goods were delivered like cloth from Flanders, Low German canvas, complete dresses, furs, silks, spices and Oriental spices, foods and beverages, especially beer and wine, and many other treasures, brocades, gold and silverware, jewelry, and household items were delivered to the market where the whole Baltic Sea coast was having an annual rendezvous during the herring fishing season. One worked well enough in order to live but one did not forget to enjoy life.

Processing, assorting, salting and inserting the herrings were carefully organized. Only a ton examined, locked and sealed by the “Wraker” could make the way into the world as “Good Scanian”. Thus, the fully loaded ships went back to the hometowns and the herring “swam” up the river and “rolled” by axle far to the south, across the Alps to France, to Italy, to Poland and Russia; and the merchants of the Hanseatic League delivered Scanian herring even to England, the island surrounded by the seas. The city of Visby further up in the north east of the Baltic Sea, founded by the Hanseatic League on Gotland became even more important than Scania, and its network of maritime trade reached out to the other Hanseatic establishments Tallinn and Riga, Konigsberg, Elbing and Danzig, Riga, via the River Daugava up to Livonia, to Lithuania, to Russia and from Danzig at the mouth of the Vistula up to the Hanseatic cities of Thorn, Warsaw and Krakow deep into the heart of Poland.

High up at the coast of Norway, the already mentioned Bergen was the northernmost branch. From there came cod that was already happily sold during the Middle Ages as “salt cod” to the markets. This fish was caught primarily around the Lofoten archipelago. It was beheaded, gutted and just tied together at the tail end with another one, dried over scaffoldings by hanging in the stiff wind of the northern spring. Afterwards, the fish went baled on the journey. Halibut, prepared by expert hands, dried, smoked, was also a very strongly desired commodity. From the hinterland of Bergen came all conceivable kinds of skins, Bear fur, Wolf pelts, fox pelts, marten pelts, beaver and otter skins to the warehouse of the Hanseatic League and were sold through merchants of the Hanseatic League together with the products of the sea and its coast: with whale blubber, seal oil, with seal skins and feathers and downs of songbirds.

While the products to the North were passed through the commercial organization of the Hanseatic League to the most distant cities, the vessels calling at Bergen harbor brought grain and flour, malt, beer from Luebeck, Luneburg salt and, “an amazing diversity in fabrics alone, gray linens made from Lunenburg Heath wool, brown linens made from good white and black Stralsund wool; white sheets of good white wool were purchased from Brunswick and Magdeburg. Additionally, there was bleached and unbleached canvas coming from the Lunenburg Heath, from Uelzen and Luechow and Luebeck shoes were popular for export. Ropes made of bast and hemp, copper kettle, pots, swords and anchors, fishing lines, tar for the construction and maintenance of wooden houses were also part of the cargo going to Bergen”, as Ernst Hering reports in his previously mentioned work (“Die deutsche Hanse”, page.75). Considering such turnover of goods, it is understood well that the Hanseatic League’s branch office, the warehouse of Bergen, represented a huge complex with large management: 60 large storage building took in the goods that crossed the stack space and shipping port Bergen within the medieval world trade on their way to the markets.

Let us take a look to the west and to the south, to Flanders and England. It would be surprising if we did not always see the same picture of bustling busyness, a considerable turnover of goods and powerfully increasing wealth. Since the merchants of the Hanseatic League had concluded a city alliance against the crowned masters of Denmark and Norway in 1367 in Cologne called most memorably “The Confederation of Cologne”, the citizen class could not be imagined as non-existent as history-making power anymore with its noblest and most active representatives, these worldly-wise and farsighted businessmen who had stepped onto the stage of medieval world politics.

About 170 cities joined the federation of the Hanseatic League. In them was the spirit of new creative powers, the trading citizen, the industrious artisan and worldly-wise merchant, and was authoritative and leading. Feudalism, the nobility and landlords could hardly exhibit a modest fraction of what the citizens materialize for general prosperity. The Hanseatic trade laid down rules for the exchange of certain products; and the cities, which were recognized storehouses for Hanseatic merchant goods, lived for generations from the particularity of their market. Here corn and grain coming from the hinterland was stacked and shipped, and there: fish, furs, amber and tin.

An old Hanseatic saying expresses it concisely: Luebeck is a department store, Cologne is a wine house, Brunswick is a honey house, Danzig is a granary, Magdeburg is a bakery, Rostock is a malt house, Luneburg is a salt house, Stettin is a fish house and Halberstadt is a women house, which of course does not imply that women were traded here as staple goods, Reval is a flax and a wax house, Krakow is a copper house and Visby is a pitch and tar house. It was clearly evident how much the general welfare was supported in the city and country by the foreign trade of the merchant class, and so the cities honored the commitments that emerged from participation in the blessings of trade as it was decided in the before mentioned Confederation of Cologne: “Due to many wrongs and damages the kings have committed and against the common merchant”, it says “the cities want to become their enemies and help one another faithfully” … “Whatever city from the Wendish side of Prussia, from Livonia and the German Hanseatic League in general, from the Zuiderzee (nowadays Ijsselmeer and the polders, Georg Reiff), from Holland and Zeeland does not want to contribute to this, will no longer have fellowship of their citizens and merchants with all the cities in this league. One should not buy from them nor sell them anything. In no harbor they should enter, load or unload for 10 years.”

That was certainly a different and powerful use of self-help compared with the early days, where it was to stand together now and then against robber knights and highwaymen. The small “crowd in a foreign land” had become a large organization without any political objective and nevertheless it had political importance. Now the Hanseatic League with her city league was strong enough to defeat the Danish king Waldemar and the Norwegian king Haakon. Each of the Hanseatic cities had contributed money, weapons and soldiers; and the maritime cities had equipped their trading cogs for military service.

However, not all the perils of trade were out of the way by such fights and victories. There was a peculiar nonchalance with which the nobility regarded the medieval law of the jungle, and considered robbery and plunder as a respectable business at the coast. There were some princes and lords and high nobles who operated the lucrative business of piracy or cooperated at least with the pirates and granted them shelter and arms assistance in order to share the spoils of robbery with them. The pirates were already so strong that they hijacked whole fleets of returning, cargo laden merchant ships! Such an endangerment of trade was at that time and on this level of development more than just a business misfortune whose loss would hit the merchants concerned; it was a direct threat to the general economic exchange of goods and logically a threat to the social order that had become noticeable far inland with its final effect.

It was also the Hanseatic League, the young power from the bosom of the citizenry, who established rule of law and custom regarding these matters, from which all culture and further development was dependent. The old order powers of the nobility had failed before this task, fro...

Table of contents

• Cover
• Titlepage
• Copyright
• Content
• About Coinage of Greeks
• The Money Based Economy of the Romans
• The Barbarians and Money
• Awakening Monetary Economy
• The Bracteates
• Medieval Economic Blossoming
• Immortal Creations of Culture
• The Development of the Cities
• The Germany Hanseatic League
• The Settlement East of the River Elbe
• Employment and Income
• Food and Beverage
• Socializing and Dress-Luxury
• Joy of Life and Morality
• Commencing Decline
• The Lost Measurement
• Faltering Demand – bad Consequences
• The Ways of Counterfeiting
• The Money in the Renaissance
• Gold and Silver from the New World
• The Fertilizatzion of National Economies
• Conquest or Trade
• Trade Wars and Customs Policy
• John Law – and his Paper Money
• Assignats – the Money of the Revolution
• Money Inflow and Population Growth
• From the Struggle for Gold to the First World War and Inflation
• Back to the Old Game
• Conclusion
• About the Author and the Translator