William Tyler
Banking: Jews, Templars, and Medici
William Tyler - Banking: Jews, Templars, and Medici
- It’s very good to be back, particularly since I last saw you all about a fortnight ago. My wife and I have had this awful bug that’s going around Britain. Sort of what they call a super cold. I’m fine, but if I sound slightly husky, that’s the reason I’ve got a cup of tea here and I’ll take a swinger back from now and again. So we’re looking at mediaeval banking. I said sometimes I wonder when I’m teaching history, why anyone would want to listen to something, which sounds so boring as mediaeval banking. But I can assure you it’s a subject that is not boring at all. It’s a fascinating story.
So let me begin with two sentences. First, Jews were the bankers of mediaeval Europe. Two, they were bankers because Christians were forbidden by their religion to deal in usury. That is the say of lending money with interest. There’s no point in being a banker unless you make money. So if you can’t charge interest, then you aren’t in banking. And it was a niche mediaeval opportunity for the Jews right across Europe to create banking opportunities. Now, those two simple statements that I’ve just made are both true, but they’re also untrue at the same time. And like much of our knowledge of history, we need to unpick those two sentences and look at facts instead and see what that uncovers in this subject of mediaeval banking. So let me take you back to mediaeval England in the year 1173, We’re in the east of England, in the county of Suffolk and in the beautiful town of Bury St Edmunds. Bury St Edmunds had one of the largest abbeys in mediaeval England. And in that year of 1173, a young man called Jocelyn went to become a monk in that abbey he was a Saxon, he was born in Suffolk. And his importance is that he wrote a chronicle. It’s our most fascinating account of life and politics. In a mediaeval abbey, there is a bit of religion, but it is really about politics. At the time that he entered the monastery in 1173, the abbey was in a very bad way indeed.
It had lost lots of its land and it had growing debts. It really was being quite honestly, badly run. And this is Jocelyn’s book. It’s not very big and it’s easily available because it’s published by Oxford University Press in the World Classics. And it’s on my blog, so you can look it up. He writes this Abbot Hugh had grown old and was losing his sight, a gentle and kind man, he was a good and about monk, but he lacked ability in business matters. Every employee had seen that the Abbott was naive and elderly, ignored his duty and did as he pleased. So in other words, the man at the top of the monastic organisation at Bury St Edmunds had lost control of the plot. He’d lost it. He was too old, too naive. He was being taken for a ride, we might say in modern English by others inside the monastery. And Jocelyn goes on to say the Abbots villages and all the hundreds, those are areas of land and all the hundreds were leased out. The woodlands were destroyed, the memorial houses were about to collapse. And from day to day, everything grew steadily worse. The abbot sought refuge and consolidation in a single remedy that of borrowing money.
Well, that’s a very modern as well as a very old answer to problems, borrow money. And we all know that borrowing money is never the answer. But the abbot borrows money, the abbey borrows money To maintain at least the dignity of his household. In the last eight years of his life, up to 1180 sums of 100 pounds or 200 pounds were regularly added to the debt every Easter and Michaelmas 200 pounds in 1173. Well, it’s impossible to say what that is in present day money, but if you think of multiplying by a thousand, then you’ll get somewhere near. This is enormous sums of money they’re borrowing. The bonds were always renewed, in other words, not paid. The bonds were always renewed, and further loans were taken out to pay for the growing interest. Oh my goodness. If borrowing is bad, then to borrow, to pay the interest on the first loan is madness itself. This infection spread says Jocelyn from the top downwards from the abbot to the monks, they were all borrowing money and they were all not paying it back. And Jocelyn tells us quite what was going on now, who they borrowing money from In the 1170s in Bury St Edmunds? From the Jewish community, there was a large Jewish community in Bury as there was in almost every important town across England. And the major occupation of those Jewish families was banking. One of the reasons, of course, was they didn’t have to transfer cash from say Bury St Edmunds to York because they would’ve had possibly family members in York, but certainly other Jews in York whom they could trust.
And so they didn’t have to cart gold and silver and bullion along the well roads, which would’ve been extremely dangerous in terms of highway robbery, to take money. And so they simply sent a note saying whatever amounts of money. So it was very modern banking really today it would be done electronically, then they did it with paper. But they had this advantage because there’s a Jewish banking setup in every town. It may not be called in to take a British bank’s name, the National Westminster branch in York and the National Westminster branch in Bury St Edmunds. But it was a Jewish family that could trust a Jewish family in York. And as I say, maybe they have a son or a brother or an uncle working in York who was doubly trustworthy, if you like. And that’s where the monks and the Abbot were borrowing. Now the Sacrist in the abbey, the Sacrist is a man responsible for the church furnishings and the running of the chapel in the church. Now the sacrist borrows a lot of money and there’s a row between the Sacrist and the Abbot. Someone went to the Abbot and spoke on behalf of the sacrist. And so def deceived him that the abbot allowed the sacrist to take out another loan from Benedict the Jew for 400 pounds to be paid at the end of four years. This was for the 100 pounds already accumulated at interest and another hundred pounds, which the Jew lent the sacrist for the Abbots use. So a hundred pounds was to pay off the debt from the first hundred the sacrist had borrowed, another hundred pounds he borrowed on behalf of the abbot ‘cause the Abbot didn’t want to deal with Jews. And he borrows 200 pounds on his own behalf. The sacrist undertook to repay the whole debt. And a bond was drawn up, which was sealed with the abbeys seal. When the obligation could not be met. A new bond was issued for 880 pounds to be paid off at fixed terms of 80 pounds per anum and this same Jew held several other bonds for smaller debts. The abbey and its monks are beyond heavily in debt. They are extraordinarily in debt to this one Jewish banker in this case, his name is Benedict. And talk of these debts reached the king.
And the king had appointed all the abbots since 1066. And the king wasn’t very pleased about this. And they sent what we would call auditors in, and somehow or other they pulled the wool over the auditor’s eyes, who reported back that it was a well run, abbey. All the services were right. All the behaviour of the monks were totally moral. Everything was wonderful, but no reference that these huge debts owed to Benedict. Now we come to a very interesting part of the story. This is a normal banking story that the monastery has over borrowed and it can’t pay back. What was Benedict hoping they would do? Hoping that they would be bailed out, I guess, by the church to save face. So maybe Benedict didn’t think it was a risky loan. Maybe he thought it would, or they’d have to sell more property. They own lots of land and stuff. Maybe they’d have to sell more of it to pay the debt. But the really didn’t want to pay the debt. In 1181, a blood libel happens in Bury St Edmunds the monastery accused the Jews of murdering a young Christian boy called Robert on, significantly, good Friday. Of course, there was no such murder. It was an unexplained death that that’s what most of the, well, I think all the blood libels were in England were all unexplained deaths. And the unexplained death was changed into this accusation that the Jews had murdered him. Now, that is given as a reason for increasing antisemitism in Bury St Edmunds and in other parts of England. It’s also given us a reason why in 1190 there were serious anti-Semitic riots in Bury St Edmunds. And 57 Jews within the local community were butchered and the rest were thrown out. And having been thrown out, the monastery didn’t repay its debts. There’s no one to connect them. No Jew can enter the town. So the story goes like this. The Jews lend money to the abbey. The abbey can’t pay it back. The abbey fabricate the story of a murder of a child.
Anti-Semitic riots occur and the Jews are blamed and thrown out of the town, with the net effect that the abbey doesn’t have to pay its debts. Now all of that is interesting and it’s the usual story given, but there’s other things going on. First of all, in Norwich there had been another blood libel and the cult of a young boy called William of Norwich was raking in large sums of money in Norwich. And the abbey at Bury was losing money and therefore needed one of these cults. And so the blood libel in Bury St Edmunds ones and the burial of this young boy Robert, attracts more pilgrims and more cash. But secondly, the abbey in Norwich was trying to take over the abbey in Bury ST Edmunds. I guess because Bury ST Edmunds was in such terrible trouble with its debts that Norwich thought it could persuade the king or the church to allow them to take it over. But by having their own blood libel and their own cult of Robert the abbey in Bury ST Edmunds hoped to recover a lot of the money they’d lost. It’s a very odd story. But there’s another twist in this story. And Jocelyn tells us of this twist, which is I think quite extraordinary. He says, I should explain that the sacrist, the sacrist we’ve met before the man who runs the church itself. I should explain that the sacrist was referred to as the father and patron of the Jews, or they enjoyed his protection. Hang on, this is a bit odd, isn’t it? Aren’t we talking about anti-Semitism? And this is a senior member of the abbey who gave protection to Jews. They had free entrance and exit to the abbey and went everywhere throughout the abbey wandering by the alters and round the shrine while mass was being celebrated.
Elsewhere, we’re told that at the end of the mass on a Sunday in which the people of town were invited to come, the Jews set up stores at the back of a high alter. Rather, like banks set up stalls at Fresher’s weeks at universities to attract custom. And the Sacrist enabled them to do that. Moreover, the sacrist allowed the Jews to put all their money into the treasury at the abbey. Now, why would the Jews want to put it into the treasury at the abbey? Well, because cash in the Middle Ages was a very difficult thing to hold. Most houses were wattle and daub. You could break a hole in them and grab and grab the money. So if you put it into the abbey there would’ve been a strong room. And the sacrist allowed the Jews to put all their banking money in the abbey’s treasury. Now, this is given some weight because in England, if there’s a mediaeval house built of stone, it’s often said to be a Jew’s house because the Jews built houses of stone because they were bankers, so that people couldn’t break through a wattle and daub wall and snatch the money. But in Bury St Edmunds, there was a Stone house, which was called the Jew’s house. Historians don’t believe that now because it wasn’t in the part of the town in which Jews lived. If you want to see a genuine Jews stone house bank, then you’ll go to Lincoln and it’s at the top of the hill in Lincoln. Before you get to the abbey, quite near the abbey. Surprise surprise. But in Bury they didn’t have one. So they’re using the treasury. This is very, very odd, even more incongruous as Jocelyn. D
uring the troubles anti-Semitic riots of 1173, 74 Jewish wives and children were sheltered in the abbey, the abbey gave shelter to women and children of the Jewish community, whilst the Jews themselves were being, or the men were being attacked by the townspeople. So this is not straightforward. The relationship between Jews and Christian in the 12th century is a confusing one. In fact, one of the most interesting things of all is that in the 12th century, sorry, in the 13th century, the following century, there’s a structure set up for banking in which every town had a sort of, I’m not sure how one would describe it, really, a sort of board for banking. And the board consisted of four men, two Jews, two Christians, Jews elected by Jews, Christians elect by Christians. So these four people come together, and any agreement between Jew and Christian is written out by these four men, cut in a jagged line, one half given to one party, the other half of the other party, and then the remainder put in a large chest and locked. And which both the Jews and the Christians had keys. Not one could open it against another, a very sophisticated system and certainly does not reek of anti-Semitism. Now of course there was anti-Semitism and like the riots in Bury in 1173, and yet the abbey provided sanctuary for Jewish women and Jewish children. It’s not as straightforward as one might think. Excuse me, a moment. So I find all of that absolutely fascinating. So what’s all this about? Why?
Why did the Jews then get thrown out of England in 1290? Why was there such huge and awful anti-Semitism of the sort that all of you will know? In Leventhal’s and Goldstein’s book “Jews in Britain” again on my blog, they write this, the status of Jews in England began to deteriorate a situation which became evident at the time of the coronation of Richard. The first in 1189, sorcerers told Richard that having Jews present at his Westminster Coronation would be a bad omen. Richard banned them from attending, but the decree did not reach the Jewish community in time. This is the Jewish community in London, in keeping with tradition, the Jews sent delegation offering gifts and loyalty to the king. When the Jews were seen entering Westminster Hall by the king in his courtiers, they were killed. The violence continued into the next day with a deadly attack on the Jewish quarter in London. The attacks extended across England to every town with a Jewish community including Colchester, Headford, Norwich, Stanford, Lincoln, and then that dreadful occurrence at York in 1290 where the Jews commit mass suicide in Clifford’s Tower. And those that refused to commit suicide and decided to surrender instead were massacred. It’s one of the most horrendous events in mediaeval England. So what had changed? anti-Semitism was running at a certain level. And we’ve explored that the blood libel is very much linked to churches and abbeys and very much linked to debts.
But what? What on earth caused this in 1290? And the truth in the matter was, it was the crusades, the Christian crusades against Islam in the Middle East, the the attempt to recover Jerusalem. And soon the distinction between Muslim and Jew vanished and Jews were considered to be enemies of Christianity, killers of Christ. This is where it comes from. And that’s why we have this appalling antisemitism, which amounts to a form of genocide at the end of the 13th century. And it’s because of the crusades. In fact, a German Christian crusade was gathered together in order to march the holy land and fight for the recovery of Jerusalem. But they instead said, it’s a rather a long way to go to the Middle East. Why don’t we simply butcher Jews here in Germany, which is what they did. So what happens now? The Jews aren’t here in Britain, but we still need to have loans. We still need banking. What we done, we’ve shot ourselves firmly in the foot. There’s always someone ready to fill the gap. And the people that come to fill the gap are the Knights Templar the Order of the Knights Templar. Now, the Order of the Knights Templar was an elite military force created to fight for God in the Holy Land. They were also monks. It’s a religious force, if you like a religious military unit. I was racking my brains to think of a modern example. Maybe the Taliban is as near as you can get, except that these people were terribly moral and terribly rich. Rich because people gave them land and property right across Europe. Why? Well, Christianity says you will be judged at your death by God.
And if you’ve lived a bad life, it’s hell for you. So towards the end of your life, you’re thinking, my God, my life’s been dreadful. Look at all those things I’ve done wrong. Oh goodness, what can I do? And the church says, brother, give us money. The Knights Templar say give us your land and we will pray eternally for your soul. Oh, that’s a good thing. I’ll give my land. I don’t want my wife to have it anyhow, so I’ll give it to the Templars. So they acquire huge amounts of land. They become the largest property owners in Europe. They become extremely rich and they become extremely politically powerful because no national or local laws apply to them because the Pope said so they’re only answerable to the Pope in Rome. And he of course is in their debt. So they’ve got it made. How could it possibly go? Well, hang on you a sec. Hang on, hang on, William. You said at the beginning the Jews were the bankers because they could lend it interest and the Christians couldn’t. So how did they get away with it? Well, it’s an extraordinary story when you think about it because it depends upon the different interpretations of a two verses in the book of Deuteronomy. Now the book of Deuteronomy is both in the Christian Old Testament and the Jewish Torah.
Maybe I don’t need to remind you of what it says, but the two verses say, thou shall not lend upon interest to thy brother. Interest of money, interest victuals interest of anything that is lent upon interest, unto a foreigner now may lend upon interest, but unto thy brother, thou shall not lend upon interest that the Lord thy God may bless thee in all that thou puttest their hand unto in the land whether thou to possess it. The rabbi said, that’s fine. It says you cannot lend to a Jew and charge interest. That is against God’s law. You can lend to a Christian, but you can’t lend to a Jew. The Christian said, you can’t lend money to a Christian, but you can borrow money from a Jew awfully convenient all round. It’s fantastic When you think about it, the same two verses can be used to justify Jews charging interest of Christians, Christians borrowing from Jews, but Christians not allowed to lend on interest to fellow Christians. So how can the Knight’s temper and others get away with it in the 14th century when Jews are no longer here? Well, they get rounded in two ways. No, we don’t charge interest. The phrase used was late repayment fees, late repayment fees. Is that not the same as the compound interest being charged by the Jews? Oh, absolutely not, they said. But you might say, well, look, the Jews are charging three and a half percent and what are you charging for late repayment fees?
Well, by coincidence, three and a half percent. And then there’s exchanging currency in French to English and so on. And they adjusted the exchange rate in order to put some money into their pockets, Criminal? Well, pretty well so. So did they get away with it? Of course they did because people needed to borrow money. Now, I said to you that the advantage of the Jews was that they had family connections or Jewish connections from town to town in indeed across country boundaries well so did the Knights Templar. Moreover, the Knights Templar were far more politically powerful than the Jews could ever have dreamed of being. So for example, the Knights Templar controlled the King’s Treasury in Paris and the King’s Treasury in London. So if the King of France owed a debt to the King of England, they didn’t cut money cash across the channel. It was done like the Jews had done with a piece of paper. It was a notional transaction. What we would today, as I said before, have done electronically. It’s an extraordinary development. So the basis of how the Jews operated is the same basis as the Knights Templar, except there has to be a sort of an adjustment of theological thought with the Knights Templar and other Christian bodies in the Knights Hospitaller, for example, lent money.
They got round it in the ways that I’ve said by talking about late repayment fees and so on. This is a book by a lady called Helen Nicholson. It’s on the Knights Templar. Again, I put that on my list and it’s a very good book and I wanted to share some of the things in this with you. And she writes this, the Templars provided a range of financial services for rulers. This could vary from making loans and looking after valuables to running the Royal Treasury. As I’ve said in France and in England, the temples were not a bank in the modern sense, as their financial operations were merely a sideline, a result of their need to store and move large quantities of cash about Christendom money deposited with them was not pooled and reinvested, excuse me but remained in the owner’s strong boxes within the order’s treasuries, and could not be accessed without the owner’s permission. So it’s slightly different than the modern banking, but not in the sense that they’re making money out of their banking interest.
In 1148 during the second crusade, the Templars lent money to King Louis VII of France, without which he could not have stayed so long in the Middle East. In 1250 during Louis the Knights Crusade, the temples allowed Louis to have the money he needed to ransom himself from Sultan of Egypt. You now begin to see the political power that this group of knights could exercise. This is from the abbey of Dunstable here in England. And this is a contemporary report. The king came with the queen, Eleanor Provence to the Tower of London on the 26th of May, 1263, while the Lord Edward, their eldest son, later Edward I, was staying at the hospital of St. John in Clarkenwell in London. All of them were short of money, not a surprise. And there was no one in London who would give them a penny on credit. Well, would you, this is like lending to Boris Johnson or Donald Trump. Would any of you if Donald Trump had come, if you’re American, and said, look, can you lend me a hundred dollars? I can’t pay for my dinner. Or if Boris came up to you in London and said, Oh, can you slip me a hundred grand? I need money now. Of course we wouldn’t. And they were the same in 1263. So since the Lord Edward did not like being in this embarrassing position on the Feast of St. Peter and St. Paul, he assembled Robert Walerand and many others and went to the new temple. The new temple, it’s not a religious site, it’s the base of the Knight’s temple in London. He went to the new temple when the doors were closed on his request, he was admitted and he said he wanted to see the jewels of the queen his mother, which had been left there.
The custodian of the Treasury was fetched. And the Lord Edward fraudulently entered the temple’s treasury with his men. Where upon they broke open the chest of certain persons there, people who had lodged their money there, with hammers, which they had brought with them, took much money to the value of a thousand pounds and carried it away. That’s a thousand times a thousand to get a rough estimate. When they heard about this crime, the citizens of London rose up against them and other members of the King’s Council who were staying in the city. These people we say today, don’t we, that there are some people, big business men who control lots of things and maybe are more important in the western world than politicians. Well the Knights Templar were exactly the same. They had such power, even over kings, but they fell foul of the same thing that the Jewish bankers had fallen foul on. The kings couldn’t repay. But if you are a king, you have enormous power. And the King of France could not pay at all. And he hatched a plot to arrest all the temples in France on one day. And unbelievably for the middle ages, it was all done perfectly across France.
And the King of France gains support from other kings, all of whom owing money to the Templars and from the Pope. And in the end, the Pope closes the order down. On what grounds? Well, you name a crime and the kings of your accused the tempers of it. From homosexuality, to adopting Islam, to the worshipping of cats, to perjury, none of which was true, as in the case of the blood libel against Jews. None of this was true either. It’s a means of getting shot of the people to whom you owe debts. And so they were banned 1312, not long after the banning of Jews in England. So what does this tell us about the Middle Ages? I think it tells us something very interesting about Jews and Knights Templar and the structure of mediaeval Europe. Many of you will recall from school that the structure of many of Europe is feudal. You owed allegiance up a pyramid to the king at the top and the peasant at the bottom. It’s a structured feudal society, but neither the Knights Templar nor the Jews were in that feudal society. Jews were outside of it for very obvious reasons. And the Knights Templars had been taken outside of it by direction of the Pope. So neither of these groups were in the system, both were alien to the system and both caused problems to the system.
And so they were dealt with in these extraordinary harsh ways, banning the Jews from England in 1219, closing down the entire order of the Knights Templar in order to protect those who owed them money. But come on, what happened when the Jews ceased to be bankers, and what happened when the temper cease to be bankers is the same. There’s a vacuum and society abhors a vacuum. You’ve got to borrow money from somewhere. We’ve already resolved the issue of usury, and we are told that usury doesn’t apply, if you call it by a different name. And banking now shifts into a much more recognisable form of modern banking. And it has its roots in the great city states of Northern Italy. We have records in Genoa, which go from 1244 to 1259. There’s a company established, a bank established in Genoa. This bank called the Lecacorvo Bank in Genoa did most of its business with merchants, genoa is a merchant city, with other bankers and government officials, including the governments of Genoa and Piacenza, the king of France, and the Pope. Usury? Well, don’t ask, just don’t ask. Another Italian city that began lending was Luca. But the big one is Florence. And the big bank is the Medici bank based in Florence, These banks began at a local level, but as we’ve seen with the one in Genoa, they begin to lend further.
They begin to lend to the King of France and to the Pope, they’re taking over the roles that had previously been done by Jewish bankers and by organisations like the Knights Templar. But this takes off really in the 14th century. And the 14th century is a time across Europe where, how should I say, the capitalist system begins to take off. This becomes a much more sophisticated society. It becomes a much more urban society. And of course those in the forefront of this urban society are the northern Italian city states who are the link between trade from the east and trade to the west, trade to the south and trade to the north. It’s the Mediterranean, the Middle Sea, it’s the centre of the world. And that isn’t going to change until we begin. That is say Europeans begin to cross the Atlantic and then everything changes again because of the gold and silver in central and South America. We were running out in Europe particularly of gold, but we were also running out of silver. And the influx of gold and silver from the new world transforms capitalism as indeed does the Protestant faith replacing Catholicism. Protestants have no hangups about trade. Very similar to a Jewish attitude towards trade and not a Catholic attitude or a Orthodox Christian attitude. So these banks in Italy become involved, but we’ve still got the problem. We’ve still got the problem of going to hell. I said, look, if I think I’m going to go to hell, I make a big contribution to the Catholic church and all my sins have forgiveness and I can die happy. Yeah, but what happens if you’re a Catholic banker who’s going to give you absolution? And you might say, well, they aren’t bothered.
Yes, they were bothered because this is not a society like ours. This is a very religious society in which all the political and social arguments and issues are framed in terms of religion. So the church always, always comes up with an answer. Hang on, said the church, we’ve got heaven and we’ve got hell. Ah, ah. But we’ve forgotten to mention we got purgatory. When Dante wrote his famous divine comedy, Dante said that the bankers were in the seventh circle of hell in fire. And people read it and began to believe it. But now the church said, don’t worry, don’t worry, Purgatory, you can go to Purgatory. It’s not unpleasant. It’s really like a sort of long weekend in Florida, frankly. And then you’ll get to heaven anyhow. Well, they thought. that’s all right. having dealt with the theological issue of usury and having now dealt with the concept of hell by mitigating it, all is fine. And so we don’t have questions anymore about whether Christians can set up banks because they do. And the biggest of these are the Medici. And the man who really founded it is Giovanni de Medici who was born, we don’t know precisely when, but about 1360, died in 1429. And although there were Medici bank interests before, he really created the Medici bank in almost a modern concept of a bank.
So it fits all the dates, second half the 14th century into the 15th century. And this is the last gasp of mediaeval banking and they established it right across. So let me just give you by reading some names and dates, 1400 a branch in Naples 1402, Venice 1426, Geneva, 1433 Bar 1436, Ancona 1439, Bruges, 1442 Pizza, 1446 Avino, 1446 London, 1452 Milan They’ve moved into northern Europe, they’ve moved to London and to Bruges by 1450 they have branches there. The problem for them was overreach. Now today, if you are in business, you could set up banks, you could set up whatever you want around the world. You’ve got instant contact by phone, by internet, you can move monies in seconds, but they couldn’t. To go from Florence to Bruges or London is a hell of a journey with lots of risks. Let’s take the example of England, where there’s major overreach. In 1467, the King of England is Edward IV and he’s desperate for cash because he’s fighting the Civil War, the wars of the roses, the House of York, Edward IV, against the house of Lancaster, Henry VI. Now we know from the American experience in Afghanistan, goodness sake, just the latest one of how expensive wars are to fight. Just think of the amount of money that the Americans have spent in Afghanistan over the last quarter of a century or so. So here, Edward IV is desperate for cash. Where can he get cash from? Well the Medici bank in London is his best chance, the Medici family as such, the whole, all their operations, they’re short of wool in Florence. They run textile factories in Florence and you need wool. The trouble is that the English don’t want to sell raw wool. They want to sell the finished product, the the finished textile.
And that’s no good to Florence. That’s what Edward is offering in return for a loan. So the bank in the Medici bank in London says, back to Florence, look, we can give this loan to Edward. And he’s prepared in exchange to give us finished textiles. And the bank in Florence say no, we don’t want wretched British textiles, flooding the Italian market. We want British wool so that we can flood the Italian market in textiles from Florence. It all is very reminiscent of Brexit, I might say. However, the banker in London and the King’s representatives come to a deal. Wow. And what happens? Well, let me tell you what happens. Goes like this. In 1468 when King Edward’s sister Margaret became the Duke of Berg and his third wife, the Medici branch in London, took advantage of the lavish celebrations to sell the king. 6,000 Florence worth of Florentine silk, quite a coup. But in order to get the sale, he had to make another loan, to by any count when collecting loans, it seemed one must always appear to have more to lend in the end. In the end, the London branch was lent money from the Milan branch in order to lend more money to Edward. The Medici manager in London is out of control. Florence has lost control. Worse. Edward IV is not having an easy ride in the wars of the roses, to put it mildly.
He’s desperate for even more cash to fight the wars. And as Tim Park says in his book “Medici money” Edward had to borrow heavily to pay for his military campaigns making even less likely that he would be able to pay back the Medici Bank. But to make matters worse, a long roll call of other noble Medici Debtors lay dead on the battlefield of Bartlett and Dukesbury where Edward had triumphed. So the Medici bank is in some horrible story. It’s lent money that it can’t recover. Heard the story before? The Jewish bankers, the Knights Templar, PS, in the end, Edward is bailed out by the Hanseatic League and not by the Medici bank. And in 1494, the Medici bank collapsed. It had overreached itself. it had made the same error as the Jewish bankers and as the Knights Templar it had lent to people who when they decided not to pay, could not be forced to pay. You can’t take the King of England to court. There’s no international tribunal. He says, I’m not paying. I can’t pay. Sorry, chaps. On your way. Such an interesting story, I think. Outside the feudal system were the Jews and the KNights Templar, outside the feudal system were these city states in northern Italy. All three filled gaps. Let me read from final book, I’ve got on my side here, Jack Weatherford’s book “The History of Money” which I think is an excellent book. And in this, he writes two things. If I can find it, I will read it to you. Here we are at the start of the Hundred Years War between England and France.
But when Edward II defaulted on his loans in 1343, his bankruptcy caused the bankruptcy of the leading Florentine family banks as well as many of their depositors. The entire system of money, based on bills of exchange, ultimately rested on the honesty and goodwill of the participants. But when the government became too burdened by debt, it had the power to cancel them, thereby destroying the system. The banking fortunes of the Italians dissolve like sandcastles on the beach at high tide. Absolutely right. I said the Medici bank moved northwards, a branch in Bruges, a branch in London. And we’ve got to the end of the 15th century and the world is turned upside down when Columbus sails the ocean blue in 1492. And the gold and silver come into, first of all, Spain, although much captured by Dutch and English privateers and Spain has been a basket case forever. And it managed to get itself into enormous debt. Why? Because it borrowed on the next shipment of Gold and silver across the Atlantic. It borrowed huge sums of money because they said, well, all this golden silver’s coming in. And the gold silver was captured by the English in Francis Drake, by the Dutch, and it didn’t come. And the shift goes to the north and Spain is Catholic. England and the Netherlands are Protestant with a quite different outlook on capitalism. And the world has shifted away from the Mediterranean to the Atlantic and the dominant financiers shift from the northern Italian states to germinate to the Netherlands and to Britain, or specifically to England.
And thereby begins a new story. It’s the story of the modern world, a story of the collapse of Catholicism as the one church in Europe, the collapse of the limited gold and silver resources of Europe supplanted by huge and unfathomable resources from central and South America. And in 1588, the Spanish are completely defeated by the English at the Armada, and never recover. Philip II was four times declared bankrupt during his reign. The world has changed. We sometimes use the word renaissance and that started in Italy. And when we come to England and the Netherlands, we aren’t talking about art for goodness sake. Those of you are British. Let alone those who aren’t British know that we’re hardly a cultured people, but we’re good at wheeling and dealing and we’re good at empire building. And we move into a different world, a world which is dominated by Europe. But this is a post mediaeval world. A post mediaeval world. I didn’t know how to end this particular talk. And I thought, well, probably the best thing to do is to give you a piece of advice. And this is Ogden Nash. I like Ogden Nash, bankers of just like everybody else except richer. Thanks for listening. Should I see if I can find some questions or comments?
[Judi] Yes, if you are up to a William, I know that you’ve have a cough and you are recovering.
No, no, I’m all right.
[Judi] As long as you’re fine.
Q&A and Comments:
Q: - What is the tie?
A: It isn’t a club tie. I bought it when I was teaching a course on Hanseatic League, because red and white are the colours of Hanseatic League. If you are English, it is a public school tie, not my public school. It’s a tie from, let me try and remember. Radley, it’s Radley College tie.
Q: Oh, two sentences. Can you enlighten?
A: Yes, sorry. Right out of Ivanhoe. Absolute well, Ivanhoe Well, that’s another story for another day. You’ll have to ask Trudy, I think somebody in the future is going to talk about 19th century English attitudes towards Jews. And Ivanhoe is central to that.
Oh, bless you. I hope Michael is a banker. He said banking wisdom. A rolling loan gathers no loss. That’s wonderful. By the way, if any of you are retired bankers and want a job, then there is a book to be written on mediaeval banking. There simply isn’t an accessible book. You have to draw through whole lots of books. My own interest began because I collect coins. And I’m particularly interested, although I can’t afford that many, I am interested in mediaeval coins and collecting mediaeval English coins. I moved into collecting mediaeval European, particularly French coins.
Yes. Don’t worry. I’ve tested for COVID. God knows how many times. We’re all clear.
Q: What about the vow of poverty?
A: Oh yes. The vow of poverty. Yes. The temps had a vow of poverty, but it’s easy to get away with it. So they would’ve said, for example, do have a glass of this very fine Rhenish wine, but don’t you have a vow of poverty? No, no. I drink this to the glory of God. Everything was done to the glory of God. You look very smart. Well, this is all to the glory of God, of course. If it was my choice, I would wear rags. People can argue anything if it’s a religious argument.
Oops, I’ve lost everybody. Let me see if I got some more. Hang on, I’ve got to go down again. Q: Yeah. Well, as I said, somebody says, why did they keep extending credit when it wasn’t paid back?
A: If that refers to the Jews, I think I answered it. It’s because they believe that in the end, the church or the king would pay them back. And you could say they were naive. Someone else is put no choice. Jews were only allowed to be money lenders to non-Jews. The Christians killed the money lenders to cancel their, well, yes that’s okay.
Q: Yes. Where did Benedict earn his wealth?
A: Well, they earned wealth through the banking. They started small and built up bigger like any business. And then it went down. Benedict wouldn’t have been the first in his family. Remember Jews arrived here in 1066. Many Jews who came with William of Normandy, well at least a number, were mint masters. In other words, they controlled the mints, which wasn’t just in London, right across the country in minting the coins. Now I’m not of course making any suggestions, but all to say that if you got a job as a monier, not only were you well paid by the king, but there were certain perks. A certain amount of silver would disappear. A certain certain coins would not be quite of the silver value given. And anyone in that sort of role had opportunities. And yes, If the Jews were expelled, the loans just disappeared. Yes.
Q: Why do you say adjusting a fees is criminal?
A: Perfectly legal. It wasn’t according to the mediaeval Christian Church. That’s why. It was considered to be practise.
Q: Do I rate Pier’s Paul Reed’s book?
A: Yes, I do, on the Knights Templar. Yes, that’s fine. Yes. Okay. I do need chicken soup. You’re quite right. I need something.
Q: How many men join the Knights Templar?
A: Well, you volunteer. But say I’m a Lord in England, and I have three sons. My eldest son will take over my land. My second son will enter the church. What do I do with my third son who’s a bit thick anyhow? well put him into the Templars. Well, how do you put him in? I write, well, they didn’t of course, but I write a check. You pay. Well, no. If they didn’t pay the Jews. Let me make this point very clearly. The blood libel relates to church that didn’t pay. abbeys is that didn’t pay. Other people would’ve paid back. They had small loans. So somebody like me in Bristol where there was a large Jewish community in the Middle Ages might have wanted borrow money to open a shop, and I would’ve borrowed and paid back. it’s only the abbeys who borrowed too high Bitcoin. Yeah. It’s very interesting to compare things now with things then. One of the big changes, if you think banking is a huge change in society, which it was, then today, the huge change is the decline of cash. Particularly, we’re seeing the end of cash. And I don’t know about other countries, but in Britain, the pandemic caused almost a collapse of cash. And many people here now do not carry cash at all. And I think that’s a sort of international thing in the western world.
Q: Are there Templars now?
A: No, there are not. There are people that call themselves Templars but no, there aren’t. The organisation that still exists is the Knights Hospitaller Hospitaller, which in England is called the Knights of St. John. And they do charity work. They run a hospital for the blind in Jerusalem, for example. But not the Templars And there’s the thing about Templars. And Masons, entirely fabricated, no link. None whatsoever.
Q: Were any of the Knights Templars Jews?
A: No, absolutely not. No. They would not have been allowed in. It’s a very religious order. You had to be a monk as well. So absolutely no chance. And there weren’t Jews anyhow that were involved in the Crusades. Why? Because they’re outside the feudal system. The feudal system recruits the soldiers. To fight in the holy land.
Yes. Wonderful. Thank you, Brian. Northern Italy, hence Lombardi Street. Absolutely right. Absolutely. Medicis got their money from textiles, absolutely. Jews. No, not so much. Not the way that the Medicis did.
Q: Lily has asked, how do I rate “The king’s Persons” Joanna Greenberg about the Jews of York.
A: I haven’t read it, sorry. I can’t comment.
Yes, “The Merchant of Prato” I do know And that’s about the wool trade in Italy.
Yes. Oh, Henny Goldenberg. You are quite right. And I didn’t make the point. I had it in my notes and get carried away…
Q: Isn’t what you explained about not being allowed to charge interest reminiscent of today’s Sharia banking.
A: Absolutely correct. Islam and Christianity, oh, sorry. Islam and mediaeval Christianity had the same view about usury. Oh, that’s a very different question.
Q: What was the impact of the discovery of diamonds and gold in South Africa?
A: Well, we’re in a different world in the 19th century. Gold certainly was important. I can’t really answer that in a couple of sentences. Discovery of any valuable commodity is important. What was important about gold and silver on the Spanish main was we were in serious problems in Europe without the gold and silver. We were running out of mines for it.
Oh, that’s nice. I’m glad some of you enjoyed it. Thank you.
Oh, the bank in Sienna, which was the oldest bank in the world. It’s the same story. It it’s the Italian story of banking. And that one just happened to survive longer.
Q: Why were the abbeys in debt?
A: King’s fought wars. Yes, they did. Abbeys were, because they built and they spent money as though it was like water. So if you were travelling around England and you wanted the finest meal that money could buy avoid the Lord in his castle. It’ll be fairly typically English food. Where you need to go is to the abbey. The finest wines. The finest meats, the finest everything. Yeah. They lived high on a hog.
Q: Where is my blog?
A: Simply www. one word, talkhistorian, Talk historian, T, A, L, K, talkhistorian, one word .com. www.talkhistorian.com.
Q: When did the Jews come back?
A: Well, they came back under Cromwell. A good question. They come back in the 1650s because Cromwell has run out of money because of the civil war, and he needs money. Where’s he going to get money from? Well, Jews, yeah, but there aren’t any Jews in England. So he is got to bring Jews in from Holland who can set up banking and loan money. But he can’t say in 1650s England, we’re going to bring the Jews back because of antisemitism. So he uses the argument. He says, look, I’ve been thinking this through. He said, and I understand my reading, they used to refer to the Book of Revelation, and he said, in the Book of Revelation it seems to me that Jesus Christ can’t come back for the second coming unless there are Jews in every country of the world. And my goodness, I found out there are no Jews here. We better put that right immediately. And so that was the argument that they used. Sorry, somebody.
William?
[William] Yes.
It’s Wendy.
[William] Hi. Hi. I just want to say, I’m going to jump in here because I think I want to say thanks a million for a wonderful presentation.
That’s nice.
Can you hear me? And I really I think that we should let you go have a nap.
[Judi] Sorry, William, Wendy is currently on an aeroplane and she’s wanting to say thank you and maybe let you go because you’re coughing and you’re feeling. Have a bit of drink. Wendy, we’ve got you back.
Okay, there we go. Sorry, I’m just on an aeroplane. I’m just leaving South Africa to come back to London. So I just wanted to say thanks a million. I just hope you feel better and I want think you must let you go.
Oh, that’s sweet of you. Thank you very much. Safe, safe journey from all of us.
Thank you very much, and I’ll see you soon. And thank to thank you to all our participants for joining. And thank you for doing this presentation. I can hear that you’re not feeling a hundred percent. Thank you.
Thank you.
Get better soon.
[William] Bye-Bye everyone.
Thank you so much. Take care.
Thank you William, safe travels, Wendy. Thank you everybody.
[Wendy] Thanks Judes. Thank you everyone, bye bye.