Eight 
“I have known many bankers in my time. Some of them were lazy; the majority however were very busy, highly intelligent men, indefatigably intent on extending their field of action. They had to, otherwise their banks would have paid no dividend at the end of the year … In a word, it is stupid to speak of ‘the bankers.’”
—Dr. Hjalmar Horace Greeley Schacht1
“Venice found distinctive solutions to monetary problems that were common to Western Europe.”
—Frederic C. Lane and Reinhold C. Mueller2
“The transfer of accounts on bankers’ books, or ‘giro di partite,’ from which the term ‘giro bank’ derives, was the hallmark of Venetian banking.”
—Frederic C. Lane and Reinhold C. Mueller3
TO ASSUME THAT THE COLLAPSE of the Florentine super-companies, the Bardi and Peruzzi, was due solely to their over-exposure to England’s King Edward III—that is, to assume that their collapse is explainable along “safe, friendly academic lines”—is to assume that nothing else happened, that there were no “dark conspiratorial hands or signatures” evident.
To be sure, those companies were over-exposed in their loans to Edward III, and had made those loans to him to advance his purposes in the opening phases of the Hundred Years’ War. Those purposes may have been in part financial, for one of Edward’s targets was the textile manufacturers in Flanders. These challenged Edward’s royal monopoly over English textile manufacturing, and in turn, the Bardi and Peruzzi companies’ profits, since they had won, through their loans to Edward, the usual “conditionalities”: the right to export wool, and rights, or liens, on certain royal revenues to reimburse their loans. When Edward’s campaigns in Flanders floundered, Edward defaulted on his loans, and the Bardi and Peruzzi were caught in a cash flow crisis that rippled across their corporate networks from London to Naples. Eventually, they succumbed.
That, at least, is, or was, the standard line, until Hunt published his now indispensable study. There Hunt points out that the default of Edward III represented a small portion of the dealings of the Bardi and Peruzzi, and that a combination of other natural factors also contributed.
So why bring Venice into the picture at all, much less imply that it had some dark or conspiratorial role to play in the demise of the Bardi and Peruzzi? Briefly, there are two reasons that are rather obvious, and a third not-so-obvious reason that, as we shall see, shows the clear hand of Venetian manipulation. The obvious reasons are that the Bardi and Peruzzi companies conducted much of their international trade—particularly their lucrative grain trade—with the Kingdom of Naples by leasing Venetian ships. This is a very important point, for it means that Venetian intelligence was faultlessly well-informed of the scale of the Florentine super-companies’ trading with that kingdom, and thus were well-informed of their major international competitor’s exposure to foreign trade, and how a disruption of their cash flow could ruin those competitors’ business.
The second reason is even more obvious. Much of the Bardi and Peruzzi’s trade consisted of seasonal commodities, as indeed, did much of Venice’s: grain and wool were both of course subject to seasonal change, and the weather and seasons also determined, particularly in Venice’s case, when cargo and war galleys would sortie. The cyclical regularity allowed the Venetian merchant bankers and the Florentine super-companies to make predictions on market behavior of all commodities for these two reasons. Merchants would be most exposed to risk or failure when the ships were outbound, for it was the returning cargos and caravans that brought to Florence and Venice the commodities that were sold or marketed to the rest of Europe, and hence, these returning caravans brought the profits on the whole trading system.
But there is a third, much more hidden, reason for the demise of the super-companies, one hidden securely in Venice itself, and in its status as the world’s bullion market, a status that allowed Venice to manipulate the value of money itself. To appreciate this, one must dig deeply into the structure of that bullion trade, and even further into the agencies of Venetian oligarchical government.
As a final note before proceeding, as stated in the Preface, the argument that Venice was behind the collapse of the super-companies has made its rounds on the internet, with this or that researcher—some quite famous, such as Tarpley—stating that Venice not only had a hand, but orchestrated the collapse. In some versions of this idea, the Venetian oligarchy is viewed as “taking out” a rival (Florence), before beginning the transfer of those oligarchical families’ funds and centers of operation quite deliberately northward, to Amsterdam, and finally London.
In making this case, internet articles often refer to the work of Hunt, and two other scholars of the period, Frederic Chapin Lane and Reinhold C. Mueller, and their magisterial works Money and Banking in Medieval and Renaissance Venice: Volume 1: Coins and Moneys of Account, and Mueller’s The Venetian Money Market: Vol. 2: Banks, Panics, and the Public Debt: 1200–1500. But in referring to these works, those articles and researchers have often committed the standard error regrettably found so much within the alternative research and truth community: they simply fail to reference with any exactitude, leaving the reader to “take them at their word.”
This “conspiratorial” interpretation of events—that Venice had a hand in the collapse of the Bardi and Peruzzi, and even orchestrated the crisis, that Venice was manipulating the global bullion market, and that its oligarchy (and that of the other northern Italian city-states) eventually transferred their family fortunes or fondi and base of operations northward to Amsterdam and eventually London—is far too important an hypothesis to be left to mere assertion, without specific referencing and a closer argumentation.
With that in mind, we may now proceed …
A. BASICS OF MEDIEVAL MONETARY SYSTEM AND THE VENETIAN BULLION TRADE
1. The Structure of Florentine Super-Companies’ Trade, and the Interface with Venetian Bankers
The first thing we must note is that during the early fourteenth century, when the Bardi and Peruzzi companies were at the height of their power, it was actually they, and not the Venetian bankers, who were the “international merchant bankers” of the day. Indeed, these super-companies wereinternational commodities traders first and foremost, and loans to various royal houses such as the Kingdom of Naples or Edward III’s England were made in pursuit of gaining trading concessions or monopolies, and in the hopes of attaching corporate liens on royal revenues and taxes in order to repay the loans that they had advanced. In this sense, they became the defining prototypes of “international merchant bankers.” But by dint of their leasing of Venetian shipping to accomplish all these goals, they had to deal with the deposit bankers of the Venetian Rialto.4 As a result, insofar as the Bardi and Peruzzi conducted day-to-day business for their shipping, this was done by interfacing with the Venetian banks.5
Again, the reasons are relatively simple to appreciate. Europe was at that time, just as it was until very recently in its history, a tapestry of small kingdoms, duchies, and city-states, each with their own coinage, and each system of coinage with its own standards of weight, fineness, bullion content, and so on. Additionally, most of these states were part of a vast trading network flowing through Genoa and Venice with the Middle and Far East, with their systems of coinages, weights, fineness, and so on. By the nature of the case, then, Venetian bankers on the Rialto, even when conducting business transactions largely occurring within the city itself, had to be competent at dealing with many different systems of coinage and with exchange rates of gold and silver bullion on a daily basis. For international companies like the Bardi and Peruzzi, they were indispensible.6By now the reader will have guessed that this is the “soft underbelly” of their business, for as we shall discover, there were available to these bankers a variety of means—all perfectly legal within the Venetian system—of manipulating the bullion supply, and hence, the value of silver or gold-based coinage, and therefore, the value of money.
One must not make the mistake, however, of assuming that the crisis was brought about by the over-use of “fractional reserve banking” on the part of the Bardi or Peruzzi, or, for that matter, by the Venetian bankers. At the time of the super-companies’ decline and collapse, ca. 1335–1343, they were not engaged in extending bank money credit, that is to say, they were not engaged in fractional reserve banking (unlike the deposit banks in Venice with which they dealt).7 Even then, the use of fractional reserve banking and the extension of bank-money credits to governments to finance wars was not a step taken by such bankers until later, where it made its first appearance in (you guessed it) Venice.8
The implications of this interface between the international merchant bankers represented by the Bardi and Peruzzi companies on the one hand, and the Venetian Rialto deposit bankers on the other, cannot be lingered over too long, for those Rialto banks were invariably in the hands of a few small Venetian families, each with their own direct ties to the Venetian oligarchical nobility, but also because the Rialto became not only a nerve-center for banking and international commercial transaction, but accordingly became a nerve center for accurate economic and political intelligence for the world, based on the analysis of the commodities trade flowing between East and West through Venice.9
Venice thus provided not only the ships by which the Bardi and Peruzzi conducted the lucrative grain trade with the Kingdom of Naples, providing the very lifeblood of food for Florence, but that trade also involved Venetian middlemen in yet another way, since that grain was paid for in gold or silver coins and bullion, and Venice, of course, was by far and away the world’s largest concentrated bullion market at that time, about which more in a moment. The point here to be remembered is that if there is a sudden or drastic shift in the relationship of gold and silver bullion or coinage exchange rates, then the value of gold-based or silver-based money will change accordingly, and with it, the Florentine super-companies’ ability to conduct their commodities trade.10 And again, all of this would have been well-known to the Venetian oligarchical noble families through their banks’ intelligence gathering capabilities, as well as through their contacts within the Venetian government, for it will be recalled that the agencies of the Venetian government were similarly all controlled by the same families.
To reinforce this point, it is worth noting that prior to 1300, there had been a “silver glut” in Europe, with the result that gold rose in value against silver, leading the nobility in Florence to mint a new gold florin,11 which quickly became a standard of value in international trade of the day, a kind of equivalent to a modern “reserve currency” in international commercial exchange. The result, so far as account keeping was concerned, provides us our first clue of the looming and sinister hand of the Venetian oligarchical bankers in the Florentine crisis, and it is best to allow Lane and Mueller to state the clear outlines of the shadow:
Since Florence was coining gold at the same time, however, whereas Venice coined gold only later, Florence had less need then for a money of account based on fine silver to serve as a standard of value. Its lira a fiorini was based on fine silver to serve as a standard of value. Its lira a fioriniwas based on both gold and silver only very briefly. After 1296 it clung to the gold connection. All the accounts of the Bardi and Peruzzi, great Florentine firms of international merchant-bankers of the fourteenth century, were kept in lire, soldi, and denari a fiorini, with regular conversions offiorini d’oro into lire, soldi, and denari a fiorini by use of the equation 1 fiorini d’oro=29/20 lira a fiorini.12
This requires a little unpacking.
Very simply put, the Florentine super-companies, the Bardi and Peruzzi, were still keeping books in terms of silver-based coins or “moneys of account”—the lire, soldi, and denari—while the value of gold continued to rise to the point that it became prudent to coin the gold florin, which became, as noted, an internationally-used standard of exchange and value. So long as the gold-to-silver exchange ratio remained more or less stable, the calculations on the account books of the Bardi and Peruzzi would remain stable, and so would their liquidity.
Notably, while the Florentine city-state, equally in the hands of its own oligarchical-financial class as Venice, was coining its new gold florin, Venice was attempting to defend the value of its silver grosso, which had been, up to that time, the standard of value in international exchange, until mints in the Middle East started to issue close “clones” of the Venetian grosso with less silver content but the same stated value. As a result, the “bad” Middle Eastern money began to drive out the Venetian grosso, while Genoa, like Florence, began to mint and issue gold coins.
Succinctly stated, there was a wholesale “coinage war” taking place between Venice, Florence, Genoa, and the Middle East at the period the Bardi and Peruzzi entered their prime and decline, as each city-state (and the sultans of the Middle East) struggled to control the bullion trade via the process of making their coinage the standard for international trade.
This is the key, for Venice meant to dominate that bullion and coinage war, and to protect its dominant position in the global trade between western Europe and the Far East that flowed through Venice and the Middle East. Venice was attempting to defend its silver grosso.13 It was a gold versus silver war, and given Venice’s dominant position in the bullion exchange trade and its ability to manipulate that trade, and hence, the value of money, it was a struggle that Florence, like the Middle Eastern mints, was destined to lose.
We must now pause to note yet another contributing factor, and thereby yet another indicator of Venetian manipulation, behind the collapse of the Bardi and Peruzzi super-companies. By the middle to late 1330s Florence was involved in yet another of the many “mini-wars” that so often occurred in northern Italy for supremacy between the various city-states. The Bardi and Peruzzi companies were heavy financial backers of the Florentine cause. Venice was a Florentine ally in that war, until Venice concluded a separate peace, leaving the Florentine companies—the Bardi and Peruzzi chief among them—over-exposed and unable to recoup their loans through war booty. So outraged was Florence that the city-state passed a law forbidding all trade with the Venetians and any of their territories, a law which only made the financial crisis deepen for the super-companies, for after all, their ability to exchange various coins depended in large part on the bankers of the Rialto.14 The precise timing of the Venetian withdrawal from the war suggests quite strongly that the ultimate motivation for its involvement in the war was simply to over-extend the super-companies, as part of a long-term strategy of attack on the value of Florence’s money and the basis of its international trade, the gold florin.15
This pattern only deepens the more deeply one digs into the details, but we have already pinpointed the soft underbelly of Florentine trade in the quotation of Lane and Mueller on the gold florin, and the silver-based monies of account. The meaning of this two-fold system is revealed by a further consideration introduced by Hunt:
One other explanation for the reduction in company profitability that deserves consideration is the effect of the well-known changes in the gold-silver ratio in the thirteenth and fourteenth centuries. Grossly oversimplified, this ratio was said to be important to Florentine businessmen because a significant part of their expense, especially wages, was incurred in silver or billon coinage,16 while their sales in the international markets were mainly in gold florins. An increase in the price of gold relative to silver was thus expansionary and favorable to business interests, while a decrease was depressing and unfavorable to them.17
In other words, a change of gold-to-silver exchange rates, if effected quickly enough and in conjunction with other factors (such as embroiling the super-companies in a war, and then suddenly pulling out of that war), could ruin Florentine international trade and greatly magnify its domestic economic problems. And the result, of course, of the collapse of the Bardi and Peruzzi was that Florence never again became the major international competitor to Venice it had been.
Before we can turn to that, however, a final few words about the bankruptcy of the Bardi and Peruzzi companies is necessary in order to properly set the stage for our closer examination of Venice’s hidden manipulations during the whole affair.
As we noted in the previous chapter, the logic of the corporate person doctrine was developed in response to a theological doctrine based on a Latin mistranslation of the original Greek of Romans 5:12, and in that secular development, the individual partners of a corporation such as the Bardi and Peruzzi were not exempt from personal liability if the corporation failed. Yet, as we also noted, there are indicators that the whole bankruptcy was a charade.18 But what are these indicators?
They are quite disturbing, and in them we discover yet another part of the “oligarchical playbook.” Hunt observes that when the Bardi and Peruzzi finally collapsed, the Peruzzi company itself created the meme that it was the default of Edward III of England that precipitated the crisis. Yet, upon examination of the Assets and Secret Books of the company, there is not a single mention of any advances from the company to the Florentine city-state, nor to Edward III, but simply advances to King Federigo of the Kingdom of Sicily.19
One may add to this the unusual behavior of the Peruzzi shareholders after the public disclosure that the company was bankrupt, for they remained in Florence for a full month after the company’s collapse,20 and then suddenly fled. This prompted the government of Florence to issue an amnesty to twenty-two Peruzzi shareholders to allow them to return to the city without threat of prosecution, in order to get to the bottom of what had happened. The terms of the amnesty are themselves illuminating, for they stated that these shareholders “would be free to reenter the city to defend themselves against charges of having transferred company or personal assets beyond the reach of the syndicate … Some of the names were of men from the foreign branches… .”21 While Huntdoes not actually come out and state what is going on here, it is easy to see: the company was being used by the family to transfer its personal assets out of Florence and to the branches of the family in northern Europe, and chief among these branches was the English branch.22 The same phenomenon occurred with the Bardi family, where Philip de Bardi continued to head a powerful and independent Bardi English branch, and Walter de Bardi was Edward III’s mint master!23 We shall encounter a similar oligarchical pattern of the transference of their family financial fortune, and base of operations, northward once again with Venice. The head of the Bardi and Peruzzi hydras in Florence had been severed, but the companies, or rather the familiar power they represented, survived.
2. The Venetian “Grain Office” and the Council of Ten: Tools of the Oligarchs
With these facts and insights in hand, we may now once again turn our attention to Venice itself.
It is worth noting that the infamous Venetian “Council of Ten” was established in 1310, just as the Bardi and Peruzzi were entering their period of greatest growth, and just as the amount of gold and silver on the European market began to shift. One may gain an appreciation of just how incestuous the relationship between this Council of Ten—a combination star chamber with summary judicial powers and intelligence and counter-intelligence agency—and the Venetian banks and oligarchical families really was by noting that by ca. 1390, the Council of Ten allowed bankers to assign silver to the Venetian mint, which was then coined into Venetian coin of the realm and returned to the bankers, who, under the terms of the “arrangement,” agreed to loan it to the government!24 In other words, while it is strictly true that Venice had no central bank in the modern sense, the Council of Ten, by granting such favors and privileges to various private banks, served the essential functions of one. In its own way, it was a typically Venetian expedient ofappearing not to favor such direct and open oligarchical practices, while pursuing them behind a byzantine mechanism of councils and committees of the state, all in the hands of the oligarchical class.
The other great tool of Venetian oligarchy was the “Grain Office.” While many of the dealings with the Grain Office we shall review postdate the period of the collapse of the great Florentine super-companies, they are reviewed here for the manner in which they clarify the operational mentality of the Venetian oligarchy that was reviewed in chapters two and three. By 1256 the Grain Office, or Camera Frumenti, was in existence,25 and like the Council of Ten established in 1310, was in full operation during the Florentine crisis. Bankers quickly turned to it to deposit their coins, and thus for the approximate century-long period of its operative power, it functioned, as Mueller observed, as a kind of Swiss bank to the financial elite of Venice.26 One of the key noble families with large deposits in the Grain Office, and hence, with large influence in its affairs, was the d’Este family, whom we shall encounter again.27
The key here is that since the Grain Office was an agency of the Venetian Republic, the state “had use of the money, for its own extraordinary expenses.”28 When one looks more closely at those “purposes,” however, one begins to see another oligarchical pattern, for the Grain Office in turn made “occasional loans to Venetian entrepreneurs, mostly but not solely nobles, in sectors involving the common good—mills for grinding wheat and kilns for baking bricks and roof tile, above all … ”29 In this the Grain Office functioned in a manner similar to the American Pentagon today, as the rewarder of lucrative contracts to defense industries for various projects affecting the security of the state as a whole. Mueller puts it this way:
Alongside loans to the state, this financial institution also made long-term loans to private entrepreneurs, more often than not nobles, upon authorization and in areas of strategic importance for the Venetian economy.30
It even made loans to the Byzantine Emperor in Constantinople, with the imperial crown jewels listed on the account books of the Grain Office as collateral.31 The Grain Office thus functioned not only as a kind of “Swiss bank” but also as a kind of Federal Reserve,32 since it administered both public and private floating debt,33 making it also oftentimes the center of various intrigues between the nobles and bankers maintaining deposits, or the entrepreneurs receiving loans. Interestingly enough, and predictably enough, deposits were sought by the state initially to obtain the necessary funds to make grain purchases, with the grain itself—Venice’s food supply—being the collateral on the loans.34
Finally, emphasizing the ever-present connection in Venetian oligarchical arrangements between the nobility, the financial power, intelligence, and the state, it is also important to observe that the Grain Office was the financial agent to the Council of Ten.35
Curiously and conveniently (or perhaps not), the archives of the Venetian Grain Office have been “completely lost,”36 leaving modern researchers to piece together its story from other records and accounts of foreigners seeking permission to make deposits at the Office. In this, too, there is perhaps another footprint of the Venetian oligarchy, deliberately concealing its internal factional strife and activities, while presenting a united front outwardly. It is also interesting, and perhaps also a testament to oligarchical maneuvering, to note that a century later, after the collapse of the Florentine super-companies and when Venice was at the height of her power, that the Grain Office was dissolved, and the bankers of the Rialto stepped openly on to the scene to administer the Most Serene Republic’s floating public debt.37
One episode highlights the duplicitous nature of the Venetian oligarchy in general, and with respect to the Grain Office in particular. This we may here refer to as the “Cangrande Affair.” That we know about this matter at all is due to the fact that records of its resolution were drawn up in Venice by the Procurators of San Marco—yet another important Venetian oligarchical agency of state, which unfortunately time does not permit us to explore in depth—and one Cangrande II della Scala, a nobleman of yet another Italian city-state, Verona. Making a very long and complicated story short,38 Cangrande made a deposit to the grain bank that was claimed by an heir (a certain Fregano, whose nobility the Venetians disputed), and after much haggling, he managed to press his claim to the point where the Venetian authorities were not able to deny it legally.
The problem was, the claim against the Grain Office and hence against the Venetian state itself had grown, with interest, to the extraordinary sum of some 250,000 ducats,39 a sum the Venetians clearly did not want (and perhaps did not have the means) to pay. The Venetian disputes over his nobility were doubtless an attempt to evade payment of the massive amount of money, and additionally, there were two failed assassination attempts against him which, in Mueller’s careful phrasing, “in time involved important organs of the state.”40 When assassinations and delays failed to deter Fregano, a compromise was finally reached, whereby Fregano agreed to quit his claim against the Grain Office, and in return Venice agreed to pay him an annuity of 1,500 ducats, to include 1,000 ducats after his death to his male heirs41 (heirs, it might be noted, who could easily be subjected to the same tactics of evasion, payment avoidance, and assassination). In other words, the Venetian oligarchs had simply refused to pay what they owed, resorted to threats, violence, evasions, and eventually were able to “re-negotiate” their obligations, doubtless against an exasperated and exhausted opponent who wanted to realize at least some beneficial outcome from the ordeal. For the oligarchs, it was a boon, for they had effectively negotiated their obligation down to a few pennies on the ducat, so to speak.
The Cangrande Affair highlights an important function of the Grain Office, for as we have seen, it became the locus of Venetian financial dealings with the “seignorial families elsewhere in central-northern Italy and even in the Balkans.”42 It was, to highlight the point once again, one of the crucial choke points through which the Council of Ten and the Venetian Republic gained the flow of intelligence so crucial to the conduct of their trade, exchange, and empire. By the time that the Grain Office had declined and bank loans to the state were made openly by banks on the Rialto, the functions of the Grain Office in administering the Council of Ten’s funds for its various nefarious activities had also been taken over by the banks directly, even to the point of a “new openness in business,” such that one request to a Rialto banker from the government was for a loan to offer a reward for the assassination of Venice’s enemies (in this case, King Sigismund and Brunoro della Scalla, in 1415)!43
Before returning to the main theme of the collapse of the Florentine international merchant bankers, and leaving the Grain Office and its eventual replacement by the direct funding of the Venetian state debt by the private bankers of the Rialto—always remembering that these banks in many cases were directly connected to the very same oligarchy running the state—one should also note that the period of the highest lending to the state by the banks was precisely coterminous with the period of Venice’s decline.44
3. The Venetian International Bullion Trade, or, Manipulating the Global East/West Gold/Silver Bullion Flow for Oligarchical Fun and Profit
If one were to rely solely upon academic histories of the decline of the medieval super-companies, or upon more general academic histories such as Fernand Braudel’s massive The Perspective of the World, or even upon the studies of Hunt, Lane, and Mueller, one would never come away with anything more than perhaps a faint “whiff” of something malodorous, something “wrong” hovering just behind the tidy histories, or just beyond the limits of perception. It is when one reads those studies closely, comparing notes, connecting dots, that the pattern begins to emerge.
But one cannot hold one’s nose forever, and even academics sometimes notice something is wrong. Hunt perhaps caught some whiff of this odor when he pointed out that one possible, and indeed plausible, reason for the decline of the Bardi and Peruzzi was the relatively sudden shift of silver-gold bullion exchange ratios, as noted earlier in this chapter.45 Hunt even went further, and pointed out the curious examples of gold and silver bullion exchange ratios cited in Lane’s exhaustive Money and Banking in Medieval and Renaissance Venice. Let us refresh our memory about what Hunt said:
One other explanation for the reduction in company profitability that deserves consideration is the effect of the well-known changes in the gold-silver ratio in the thirteenth and fourteenth centuries. Grossly oversimplified, this ratio was said to be important to Florentine businessmen because a significant part of their expense, especially wages, was incurred in silver or billon coinage, while their sales in the international markets were mainly in gold florins. An increase in the price of gold relative to silver was thus expansionary and favorable to business interests, while a decrease was depressing and unfavorable to them.46
Hunt went on to say this:
There is abundant evidence that the price of gold in terms of silver had been rising steadily in Italy from the middle of the thirteenth century until it peaked at around 14 ounces of silver for one ounce of gold (14:1) in Venice and Florence in the late 1320s. Then the ratio began to move firmly in favor of silver during the 1330s and 1340s, provoking the severe coinage devaluations in Florence of 1345 and 1347. Lane and Mueller place the turning point in 1327, when the rulers of Bohemia and Hungary agreed to coordinate the coinage of silver groats …
The relationship of the price of gold to silver was of course reflected mostly in currency rates of exchange, although it was just one of many variables involved in determining specific rates between different coinages in specific locations … The florin moved quite strongly against the soldi of Florence, Siena, Pisa, and Genoa, although much less so against the currencies of Naples, England, France, and Venice.47
Thus, as Hunt also points out, the relatively quick demise of the gold to silver ratio “contributed importantly to the demise of the Florentine super-companies in three ways.”48 As we already have observed, Florence’s international trade was conducted in gold florins, whereas its domestic costs were handled in silver, and thus, the terms of trade for importing commodities, the basis of the super-companies’ business, were made higher with the decline of gold relative to silver. Secondly, and even more critically, when the Bardi and Peruzzi made loans, the loans were stipulated in gold, and thus when they were repaid in gold that had diminished in value, they lost money in the transaction. Finally, as Hunt also notes, “the Florentines imported gold and exported the undervalued silver on a large scale in the early 1340s, intensifying an already ruinous deflation. In this connection, the Florentines, unlike the Venetians who were the prime silver traders in the Mediterranean, were not in a position to offset their losses by profitable trading in the Levantine silver markets,”49 a market to which, of course, Venice had easy access.
But, says Hunt, “These arguments, while persuasive to a point, are seriously flawed as explanations for the downfall of the super-companies.”50 At best, Hunt notes, the gold-silver ratio and the decline of gold “added to the problems of the super-companies”51 to be sure, but this did not have a “significant influence on their results”52 in that the Peruzzi companies had sustained heavy losses already from 1331–5, prior to the gold-silver exchange problem.
However, even with all that said, Hunt does acknowledge that something was going on, something beyond simple coordination of dates, events, and gold-silver ratios, when he admits that the Florentines were not “great international bullion traders like the Venetians.”53 It would seem, then, that a much closer look is in order, and Hunt himself points the direction where we must look.
We must look, once again, at the research of Frederic Chapin Lane and Reinhold C. Mueller.
a. Coins, Bullion, Mints, and “Seigniorage”
The complicated case of Lane and Mueller lies beneath a mass of details, and these we must unpack very carefully in order to make the case that one contributory factor in the demise of the Florentine super-companies was indeed Venetian oligarchical manipulation.
We will begin with bullion, coins, mints, and the concept of “seigniorage.”
Money within medieval and renaissance Europe meant primarily two things: (1) virtual, or “bank” money, created on the ledgers of banks and transferred from one account to another, and by extension, through the trading and discount of bills of exchange from one location to another by international merchants such as the Bardi and Peruzzi, and (2) “real” money, or bullion and coinage, which, as noted previously in this chapter, came in three kinds:
a)Yellow money: gold coinage, used primarily in international trade
b)White money: silver coinage
c)Black money: copper coinage or coins struck with alloys of silver and copper. These latter two kinds of coinage were principally used in local and domestic exchange.54
Within city-states famous for their banking houses and families, such as Florence, Genoa, and Venice, the variety of coins both foreign and domestic in circulation and being exchanged in the banks (not to mention that within each system of coinage there was essentially a “tri-metallic”55system) meant that these banks, and the super-companies like the Bardi and Peruzzi, maintained their ledgers in several different moneys of account.56
Effectively, however, this “tri-metallic” system was a bi-metallic system, in that even in the so-called “black money,” it was the presence of silver in the alloy of the coin that gave it its relative value. The careful reader will now have noted that there are two possibilities for manipulation that immediately open up:
1)the first possibility for manipulation occurs in the accounting of banks and corporations themselves, based on manipulations between various moneys of account, which is in turn based upon
2)the gold-to-silver ratio of bullion exchange.
It will be recalled from chapter six that the value of coins in turn was dependent largely on two factors: first, the bullion content of the coin itself, about which more in a moment, and the stamp of value, the mint of the coin itself, which stated a legally defined value, often in excess of the intrinsic value of the bullion itself. The intrinsic value of the bullion was measured by weight, and fineness, and this constituted part of its exchange value, which gives rise to the second possibility of manipulation mentioned above. Lane and Mueller put the point this way:
When differences in bimetallic ratios were large and persistent, merchants collected for export coins of the metal more highly valued elsewhere. As soon as their market value in bullion exceeded their legal value, they became “good” money … and were subject to being driven out by “bad” money made of the metal that was legally overvalued. With bimetallic ratios changing as much as 20 percent within a decade or two during the Middle Ages, the export of undervalued coins repeatedly destroyed efforts to maintain a stable bimetallic standard.57
For Venice, which controlled the bullion market of Europe, and as we shall see most of Europe’s silver production as well, the export or import of gold from or to Europe was a simple matter. By manipulating the supply, Venice could force the value of one or the other forms of bullion, and hence the coins based upon it, to rise or fall, wreaking havoc with the coinage of a putative opponent.
Let us take one simple example. If, say, a silver coin was used in a transaction during a period when the intrinsic value of the bullion in the coin exceeded the legally defined value of the coin in transactions, merchants and bankers could demand that payments to them be made in the telling, ortell, of coins—“telling” simply being the counting out of coins in payment of an obligation or settlement of a transaction. Conversely, in paying out on a transaction, they could insist on weighing the coins as the statement of value being transferred during the transaction.
This difference between weighing and telling leads us to the next component of the complexity of medieval and Renaissance money: the mint. During this period, the very act of minting or making coins—“real money”—was still held to be the prerogative of thestate, not a particular private central bank. As such, mints were expected to contribute revenue to the state. A mint, Lane and Mueller note, “paid out for a given weight of silver or gold bullion somewhat fewer coins than the number made from the bullion.”58 This difference was, effectively, a kind of tax on bullion sales to the mint, and this difference was called “seigniorage,” representing the profit to the government for coining bullion.59
There is a catch in the system, however, since each prince, and in the case of the Italian city-states in close proximity to each other, each city-state, had its own mint. Thus, competition would arise between various mints, and mints could be used as a means for attacking the money-minting monopoly of competitors.60 The method of doing so was relatively simple. Cheaper products, or coins of lesser bullion purity, or “fineness,” could be minted with stamps very similar, or even identical, to that of a competitor. The result was that the mint issuing such coinage increased the bullion flow and reserves of its mint, since less purity was involved in its coinage issue. Such an act, Lane and Mueller observe, “was considered an act of hostility close to armed conflict.”61 Coinage, in other words, presented limitless opportunities for manipulation, and when coupled to the ability to manipulate the bullion ratio of gold and silver itself, the possibilities multiply like rabbits. With this in mind, it is now understandable why Venice required accounting bytell, and not by weight.62
There were other manipulation possibilities. For example, by charging high seigniorage, the export of coins out of a particular sovereignty could be inhibited, “because it increased the difference between their exchange value and that of the metal they contained.”63
b. Banksters, Coinage, and Tactics of Manipulation of the Money Supply
Thus far, we have been dealing with the possibilities open to governments for the manipulation of the value of coinage. But in a republic such as Venice, where the functions of government and finance were in the hands of an oligarchy, the possibilities for manipulation become even greater when one considers how the banks of the Rialto could add their own unique technique to the inventory. This is made even more explicit when one takes note of the fact that the Venetian mint was firmly in the control of its nobility.64
Bankers and merchants could deliberately withhold, or “cull,” coins of relative “newness” or “proof”, i.e., coins that had not yet been widely circulated and hence experienced the inevitable wear and tear and reduction of weight. They could also “clip” the coins, i.e., shave off a minute portion of the bullion of the coin, collecting a stockpile of such shavings and then melting them down for export or sale to the local mint, whichever was more profitable. Similarly, culling had the effect of reducing the amount of money in circulation, and thus raising the relative stamped monetary andintrinsic weight value of the coins that were in circulation.65
If this sounds familiar to readers of my previous book, Babylon’s Banksters, it is, but for those who have not read it, here in essence is how the ancient financial elite managed the transition from those exchangeable clay tablets of credit, to coinage:
1)Penetrate and ally with the temple, to give the financial activities of that elite the aura of probity associated with religion;66
2)Issue false receipts, that is, simply circulate counterfeit clay tablets, thus destabilizing the money supply and its value;67
3)Substitute bullion for letters of credit (i.e., for those circulating clay tablets), as a “secure” measure against counterfeit, or false, receipts;68 and finally,
4)Create the facsimile of money, new letters of credit against the bullion.69
As I pointed out in that book, crucial to this activity is the practice of culling, or hoarding, i.e., the deliberate removal from circulation of competing moneys, namely, the legitimate letters of credit or clay tablets, while substituting into circulation the false ones, and, eventually, the bullion-based ones.
c. Venice, the East/West Gold/Silver Flow, Moneys of Account, and Indicators of Manipulation During the Bardi-Peruzzi Crisis
We now come to the central issue, the manipulation of the relative amounts of gold to silver bullion in Western Europe, and to the role of Venice in doing so. Venice, by dint of her position astride East-West trade, straddled the European bullion market like a colossus.
And the key here, as so many centuries before with the trade of Rome with the Orient, was how the two regions of the world respectively valued gold and silver bullion. As I pointed out in Babylon’s Banksters, the West (Rome) tended to value gold more highly, and the Orient, silver.70 Venice, since it virtually controlled most of this bullion flow, represented in this respect a continuation of the “bullion brokers” of ancient times, and in this, one may have yet another loose corroboration that its banking practices—passed down through the ages by the noble families constituting its oligarchy—are themselves a testament or indicator that perhaps those families constitute an unbroken connection to ancient times and similar financial elites.
The relative regional supplies of gold and silver, in other words, could be orchestrated to flood one region with one kind of bullion (thereby reducing its value and the value of coinage minted in that bullion), while causing a “famine” of that kind of bullion in another region, then reversing the process, all the while culling and clipping according to the dictates of the overall trend.
In this respect, Lane and Mueller produce a table in their work showing the best estimates of the gold to silver ratios during the crucial period from 1310 to 1350, the period of the rise and collapse of the great Florentine merchant super-companies. In 1310—the year of the founding of the Venetian Council of Ten—the silver to gold ratio was 14:1. But by 1350, this had dropped, somewhat precipitously, to 10:1.71 This drop, plus the fact that different moneys of account were in use, all based or attached more or less to units of gold and silver coinage72—oftentimes within the same corporate entity—could also present other opportunities to play financial havoc with a merchant or government competitor. Indeed, as Mueller notes in his scholarly sequel to his and Lane’s joint work, the bullion trade in Venice peaked sharply, precisely at the time of the Bardi and Peruzzi crisis.
But there was one unique feature of Venetian banking used locally by most merchants in the city, and that was the banchi di scritta—banks that would simply transfer, from one account to another, sums of money on their books in payments of transactions,rather than the transfer of coins or specie itself. They became, in the apt expression of Lane and Mueller, the “common bookkeepers” for the entire community,73 and eventually for the Venetian state itself. This had the effect of freeing coinage and specie for international trade (and thus, for currency speculations of the sorts we have been outlining), while allowing domestic trade to continue.74 In effect, they vastly expanded the money supply of Venice, and her ability therefore to draw—to the perplexity of her competitors—on a seemingly inexhaustible supply of money to fund her trade and wars. This transference on the ledgers of the banchi di scritta also greatly simplified, and sped up, the pace at which business could be conducted in Venice, since it avoided the lengthy process of telling and weighing coins.75 With the increased speed and efficiency of circulation, the wealth of the republic expanded.
In other words, with such concentrations of power, of intelligence gathering capabilities represented by the Venetian merchants, banks, government institutions such as the Grain Office or the Council of Ten, and the ability to manipulate the bullion supply and value of money, it is difficult to avoid the conclusion that, all other factors considered, Venice at least played a significant and deliberate role in the demise of the Florentine super-companies.
This conviction can only grow when we look back once again to the duplicitous behavior of Venice during the Fourth Crusade, and to the behavior of the famous (or, depending on one’s lights, infamous) “Blind Doge” Dandolo prior to the crusading army’s departure for what it hoped would be Egypt. It will be recalled that Dandolo, through a combination of skullduggery, blatant manipulation, and Byzantine intrigue (in the literal sense!), managed to divert the Crusade to Constantinople itself. It is a little known fact, often completely overlooked in medieval history textbooks, that Enrico Dandolo caused the Venetian mint to issue—prior to the Fourth Crusade—a new silver coin that was a virtual copy of the Byzantine “hyperpyron”76—for trade with the Middle East, virtually assuring that the coin would supplant the Byzantine imperial issue, which is exactly what happened, obviously increasing both in value and in quantities in circulation after Venice gained outright control of regions of the Eastern Empire after the Fourth Crusade. Eventually, the coin of Dandolo became the “basis for an international standard of value for the region.”77
Since Venice conducted trade with the Orient, which valued silver as a general “cultural” phenomenon more highly than gold,78 it became necessary for Venice to control the production of silver in Europe as much as possible. This, of course, was made possible through its relationship to the famous German merchant banking and silver mining family, the Fuggers, who, incidentally, were trained in the techniques of banking and accounting, in Venice.
As silver was flowing Eastward through Venice, gold coincidentally was flowing westward, through Venice, and into Europe, and—again “coincidentally”—in the spring of the year of the Peruzzi bankruptcy, 1343, a very large shipment of gold arrived in Venice from places that ranged from Constantinople, to Tana, the Venetian outpost on the Black Sea, and perhaps even as far away as the interior of Asia,79 all of which suggest a vast and coordinated effort, requiring a large and extensive intelligence network such as Venice possessed.
But the real clue, the final nail in the coffin so to speak, comes with two observations that Lane and Mueller record in their magisterial study. These observations clearly indicate that the Bardi and Peruzzi companies were caught in a bullion vice of Venetian manufacture:
Exchange rates used in the account books of the big Florentine firm of the Peruzzi for 1335–37 varied in a range indicating bimetallic ratios of about 13 to 1 to 16 to 1. A more decisive drop came in 1337, when the French minted the gold piece called in England the florin de l’écu. It was given a price that expressed the ratio 11.5 to 1, the same as the ratio set in Venice a half-dozen years earlier with the coinage of the soldino, in 1331–1332.80
In other words, the Peruzzi ledgers reflected a fantasy world, divorced from the gold glut that Venice was introducing into Western Europe as it was simultaneously exporting German silver to the East!81 It is worth citing the carefully worded evaluation of Lane and Mueller in this respect:
Although the gold glut cannot be considered the main cause of Florence’s financial crisis, the voluminous minting of gold while silver coin was scarce may have made the deflation worse. Although no modern analogy helps explain the conjunction of deepening deflation and increased supplies of gold, monetary conditions of the mid-fourteenth century suggest a connection. The profuse coinage of florins in years when silver coins were scarce may have lowered the exchange value of the gold coins. Previously, for almost a century, 1250–1330, gold had been rising in value compared with silver. Those who had accumulated wealth had found that gold was the best stuff to hoard and that credits stated in gold-based money of account, which was likely to be devalued by the minting of lighter silver … coin … Amid the general loss of confidence and the resulting need for liquidity, they turned to their gold, only to find that gold that had been worth more than 14 times as much as silver in 1330 was worth hardly more than 10 times as much in 1350.82
To see even more deeply into just how the Venetian bullion vice had gripped the Florentine super-companies, and thereby Venetian rival Florence itself, one must ask, and answer, a question:
Why had Florence not adjusted earlier its fine silver coinage to the rising value of silver, the value to which the coinage of France as well as that of Venice had been adjusted much earlier, before 1340?
The answer has two sides. On the one hand, the quattrino83 gave all the needed protection against a draining away of the kind of currency needed for small and local transactions. On the other hand, the profits of the international bankers had come to depend on the exchange rates between florins and various foreign currencies. Where Florentines made loans in florins and collected repayment and interest in a local currency based on silver, they profited from maintaining an exchange rate that set a high value on gold. In England, as the English complained, the Florentines had maintained such a high exchange rate. The vested interest that they as international bankers had acquired in a high bimetallic ratio gave them reason to maintain a high bimetallic ratio also in Florentine coinage.84
Or, to put it more plainly, the Florentine super-companies—and with them Florence itself—had simply been wrong-footed, and toppled by the gold glut that gives every indicator of having been orchestrated by the Vipers of Venice. Not for nothing does Shakespeare’s play bear the title The Merchant of Venice, and not The Merchant of Florence.
B. A FURTHER MEDITATION ON THE TOPOLOGICAL METAPHOR OF THE MEDIUM: ON THE “FINANCIAL PYRAMID” VERSION OF THE METAPHOR
We are far, however, from being done with the techniques of financial manipulation, or, for that matter, the Metaphor and how at a deep cultural and subconscious level, it had come to be understood and operate. To appreciate this phenomenon, we must return to a concept that has recurred throughout this chapter, namely, the concept of “moneys of account.” These are, simply stated, the units of value in which various accounts were expressed, and hence, in the Middle Ages and Renaissance, were always loosely connected to coinage, even when being transferred as mere ledger entries between various banks.
But almost immediately a philosophical problem occurs, and it is safe to say it probably occurred to the medieval bankers as well (after all, once again witness the hostility of Venice to Giordano Bruno and to the full implications of the Topological Metaphor of the Medium). Lane and Mueller observe that during the 1930s, “just as the gold standard was passing into history,” two very different ways of interpreting the problem of the relationship between coins (and therewith, bullion) and moneys of account arose. One version, advocated by Belgian numismatist Hans van Werveke, advanced the idea that moneys of account were always defined in one of three ways:
1)as a definite weight of gold or silver, usually as embodied in a particular coin;
2)as a particular coin in general circulation;
3)as “imaginary money, absolutely independent of any ‘real money’ … that is, of any coin or fixed quantity of precious metal.”85 This third type, van Werveke maintained, “did not describe any historical reality.”86
In contrast, Italian economist Luidi Einaudi argued that moneys of account represented a standard of value used in accounting and contracts, and “real” money used in payments.87
In other words, as these economists and historians were studying the Middle Ages, they came face to face with the problem we outlined previously in chapter six: did the Metaphor come first, or did coinage?
We gain an appreciation of the importance of this question by noting, once again, that most business transactions in Venice itself were conducted on the basis of ledger transfers using various moneys of account, all more or less abstract, and all circulating much faster than local market conditions reflecting the value of those monies in corresponding coinage. “By creating such ambiguities,” Lane and Mueller observe, “the mobility of moneys of account limited or undermined the unity and continuity of monetary standards.”88 This of course was in the control of the Venetian oligarchy that owned the banks, while domestic and foreign exchange, conducted in bullion and coinage, was for everyone else, and there too, the oligarchy virtually controlled the bullion market as well.
All this brings us chin to chin, once again, with the Topological Metaphor of the Medium, and again to the reasons why the Venetians would have so strenuously objected to the construction Bruno put upon it. We may refer to this version of the Metaphor as the “Debt Finance Construction.”
Here, as always, there are at least two ways to interpret it, one issuing in ever-present debt, and the other, in ever-increasing fecundity.
In chapter six, we saw how the symbolization of the physical medium as the empty hyper-set Ø could also represent the bullion substrate of coinage, as well as the physical substrate or materia prima of the physical world itself. Thus, coins could represent the resulting instantiations, or derivatives, of that substrate, and as common surfaces of transaction. Suppose we now fix the “value” of that original empty hyper-set at “1.” Doing so would mean that all subsequent derivatives have a value of less than one. As derivatives increase, their “value” decreases as fractions of the original.
But, as we have seen in this chapter, as coins circulate, that is, as they change from one context to another, they progressively lose weight, become worn, and so on, thus losing both intrinsic and stamped value. We may express this phenomenon in our topological metaphorical terms as a kind of recontextualizing rule:
where the subscript “x” denotes the “coin” in its original valuation in a particular context “x,” say, that of its legally defined and minted value, and “y” denotes a new context into which it has moved, represented by the arrow, with a corresponding incremental loss of value, represented by the partial derivative sign ∂.89 Over time, more and more such recontextualizations will, of course, take their wear and tear on the coin, such that, the amount of circulating coins will never sum to the original “value” of “1” from which the system began. No matter how much one culls, clips, hoards, and so on, there will always be an incremental loss in the system. This, briefly put, is how the Metaphor can come to be, by analogy to coinage, interpreted as a Metaphor of perpetual indebtedness. In this instance, positioning oneself closest to the top of the Metaphor will, of course, result in a pyramid of power associated with it.
But as will be evident, there really is no a priori reason to view the metaphor as ever-decreasing fractions of the original “value” of 1. One could equally view such derivatives as “countable entities,” giving rise to whole numbers. In this view of the Metaphor, information simply increases, with no limit, and no fractionalization or “indebtedness.” To the Venetians, ever mindful of their bullion and money, this prospect of a genuinely open system was in itself anathema, for in their closed system understanding, it would only be inflationary, and any inflationary prospect was anathema …
… unless, of course, they controlled it.
But that control was about to be threatened in yet another fashion, and by a new way of opening the system, one perhaps, as we shall now see, they may have known long before, and suppressed.
It is small wonder that, after centuries of such duplicitous behavior, feigned alliances and sudden withdrawals from them, double-dealing negotiations, coinage war, bullion manipulation, assassinations, and summary secret trials by the Council of Ten, the rest of Europe finally had it, and went to war with Venice during the War of the League of Cambrai. The preamble of alliance for the League is worth recalling; the League was formed, it stated,
… to put an end to the losses, the injuries, the violations, the damages which the Venetians have inflicted, not only on the Apostolic See but on the Holy Roman Empire, on the House of Austria, on the Dukes of Milan, on the Kings of Naples and on divers other princes, occupying and tyrannically usurping their goods, their possessions, their cities and castles, as if they had deliberately conspired to do ill to all around them.
Thus we have found it not only will-advised and honourable, but even necessary, to summon all people to take their just revenge and so to extinguish, like a great fire, the insatiable rapacity of the Venetians and their thirst for power.90
As noted above, however, the system was about to be opened in a dramatic fashion, a fashion that the Venetians may have even known about for some centuries before events, finally, compelled the secret out into the open …
________________________
1Hjalmar Horace Greeley Schacht, Confessions of the Old Wizard: The Autobiography of Hjalmar Horace Greeley Schacht (Cambridge, MA: Houghton Mifflin, 1956), p. 1.
2Frederic C. Lane and Reinhold C. Mueller, Money and Banking in Medieval and Renaissance Venice: Volume 1: Coins and Moneys of Account (Baltimore: Johns Hopkins University Press, 1985), p. 89.
3Ibid., p. 81.
4The Rialto was the region in Venice where the deposit bankers principally conducted daily operations and business.
5Lane and Mueller, Money and Banking in Medieval and Renaissance Venice, p. 75.
6Reinhold C. Mueller, The Venetian Money Market: Vol. 2: Banks, Panics, and the Public Debt 1200–1500 (Baltimore: Johns Hopkins University Press, 1997), p. 262: Mueller notes that the Bardi company, like the Peruzzi, maintained a permanent factor, or branch manager, in Venice.
7See Hunt, Medieval Super-Companies, pp. 201–203.
8Ibid., p. 202, n. 69.
9Lane and Mueller, Money and Banking in Medieval and Renaissance Venice, pp. 146–147.
10Ibid., pp. 276–277.
11Ibid., p. 277.
12Ibid., p. 280.
13See the much more detailed remarks in ibid., p. 281.
14Hunt, Medieval Super-Companies, pp. 205–206.
15Reinhold C. Mueller covers this war as well. See Mueller, Venetian Money Market, p. 260.
16Billon coinage was the so-called “black money,” i.e., money that was an alloy of silver and copper, or simply, copper itself, in the three-fold classification of money in the Middle Ages: yellow money (gold), white money (silver), and “black money,” which eventually came to mean everything else.
17Hunt, Medieval Super-Companies, p. 176.
18Ibid., p. 231.
19Ibid., p. 232. It should be noted that the Kingdom of Sicily was the major rival of the Kingdom of Naples. In other words, the Peruzzi, like international merchant bankers ever since, were playing both sides, and drawing profits from both sides.
20Ibid., p. 232.
21Ibid., p. 233, emphasis added.
22Ibid., pp. 236–237.
23Ibid., p. 241.
24Mueller, Venetian Money Market, p. 446.
25Ibid., p. 360.
26Ibid., p. 360.
27Ibid., p. 373. Mueller notes that Jacobina d’Este had large deposits in the Grain Office, and the Campagnola damily of Padua held deposits in excess of 60,000 ducats, a considerable sum of money. This is important, for it illustrates Venice’s role as a haven for oligarchical money not only for its own nobility but for those of other city-states as well.
28Ibid., p. 360
29Ibid.
30Ibid., p. 402.
31Ibid., p. 360
32Ibid., see the comments of Mueller with respect to the public floating debt on p. 363.
33Ibid., p. 359.
34Ibid., p. 364.
35Ibid., p. 371.
36Ibid., p. 359.
37Ibid., p. 360. Mueller also notes that the Grain Office was also the administrator of the office of the papal inquisitor in Venice (see p. 365).
38Ibid., pp. 375–381, where Mueller presents the detailed story.
39Ibid., p. 380.
40Ibid.
41Ibid., p. 379.
42Ibid., p. 384.
43Ibid., p. 429.
44Ibid., pp. 426–427.
45See pp. 194–195.
46Hunt, Medieval Super-Companies, p. 176.
47Ibid., pp. 176–177.
48Ibid., p. 178.
49Ibid.
50Ibid.
51Ibid., p. 179.
52Ibid.
53Ibid.
54Lane and Mueller, Money and Banking in Medieval and Renaissance Venice, p. 11.
55The term “tri-metallic” is that of Lane and Mueller, ibid.
56Ibid., pp. 9–10.
57Lane and Mueller, Money and Banking in Medieval and Renaissance Venice, p. 40, emphasis added.
58Ibid., p. 16.
59Ibid.
60Ibid., p. 17.
61Ibid.
62Ibid., p. 45.
63Ibid., p. 22.
64Ibid., pp. 96–97.
65See the discussion in Lane and Mueller, ibid., pp. 26–30. It is worth noting Muller’s comment in The Venetian Money Market, p. 447, concerning the incestuous relationship between the Venetian nobility, the Venetian banks, the government, and the Venetian mint: “A century later, beginning with the War of Ferrara, the Council of Ten adopted a different approach to the granting of favors: it permitted bankers to consign silver to the mint and have it struck into coin, an activity otherwise prohibited, as long as they would make large loans to the government—usually with the very coins struck.”
66Farrell, Babylon’s Banksters, pp. 202–203.
67Ibid., p. 203.
68Ibid.
69Ibid., p. 204. The relevance of this four-step program in the light of recent financial events concerning the derivatives and bullion markets should be carefully noted.
70Ibid., p. 162.
71Lane and Mueller, Money and Banking in Medieval and Renaissance Venice, p. 39.
72Ibid., pp. 46–47.
73Ibid., p. 63.
74Lane and Mueller note that the use of bank money in Venice was largely a local phenomenon, ibid., p. 64.
75Ibid., p. 63.
76Ibid., p. 118.
77Ibid., p. 123.
78Always bearing in mind, however, that this is subject to regional and local market conditions of famine or glut in a particular bullion.
79Ibid., p. 377.
80Ibid., p. 437, emphasis added.
81One may now appreciate the techniques of banks in culling and clipping coins, for over time, a “secret” reserve of this or that bullion could be hoarded, then to be suddenly released into the market. It is worth noting that one liquidator of the rival Bardi company even recorded silver to gold ratios as low as 9.4 to 1! (See ibid., pp. 442–443.)
82Ibid., pp. 454–455.
83A common coin in circulation in Italy.
84Ibid., p. 456.
85Ibid., p. 467.
86Ibid.
87Ibid., p. 468.
88Ibid., p. 473.
89A much more formally explicit version of this recontextualizing version of the Metaphor is presented in the appendix to chapter nine in my Giza Death Star Destroyed.
90Ibid.