Mercantile organisation was sophisticated enough to cope with geographically extended businesses of widely varying sizes, and, like shipowning, must be reckoned a capitalist activity: sleeping partners could invest spare capital, and one man could employ scores.
The Italians are known for using the most advanced company organisation and business techniques of their time. Initially developed to cope with extensive businesses and high risks in the twelfth and thirteenth centuries, techniques were constantly refined. Companies could be formally set up with a fixed number of partners and fixed capital, for fixed periods, and for prearranged interest rates and profit-sharing schemes. Overseas branches were run by junior partners or salaried employees. Money was moved internationally by letters of exchange, and at home local deposit banks made it possible to pay workers by the equivalent of a cheque system. Double-entry book keeping spread, and premium insurance was introduced. The greatest company of the century (although smaller than the Peruzzi company in the fourteenth century) was the Medici company, with a staff of nearly sixty at its eight banking branches. Its founder, Giovanni di Bicci de’ Medici, had run a prudent banking and wool shop business, with several Italian branches and one in Geneva. In 1420 his sons Cosimo and Lorenzo (who died in 1440) took over. They opened a second wool shop and a silk shop. Branches were opened in Bruges, Pisa, London and Avignon, and in the sixteen years between 1435 and 1451 profits amounted to 290,791 florins. Active and shrewd in both politics and business, Cosimo had expanded the company far beyond his father’s ambitions. After his death in 1464, the business gradually declined, and in 1494 it was nearly bankrupt. It is noteworthy that the company’s fastest rise came in what are reckoned the most difficult economic years of the century.
Not all Italian companies ran at this level. Many were modest businesses with few overseas branches. Nor were the techniques exclusive to Italians — the Catalans also developed a sophisticated banking organisation, and English, French and German merchants used letters of exchange. German and English merchants were also capable of sophisticated commercial co-operation, as is shown by the large group of northern German towns known as the Hanse and the English Staple Company. Of the four great Hansard overseas centres (kontors), three (Novgorod, Bergen and the London Steelyard) developed closed areas where merchants and factors had to reside. In the case of Bergen the organisation was particularly strict, to supervise large numbers of young men who were sent to learn business. In the fourth (Bruges), they lived scattered in the town, but were still strongly aware of their group identity. In Venice the Fondaco dei Tedeschi was a similarly enclosed environment, but there it was for all Germans not just Hansards, and was promoted by Venice in order to supervise German activity and limit competition in the Mediterranean. The co-operation of the northern Hanse towns extended to regular meetings, usually at Lubeck, to co-ordinate economic policy. This might entail political and military action, from embargoes to war, to protect trade. However, as the Hanse grew it became less cohesive. The interests of Cologne, trading southwards up the Rhine, differed markedly from those of Lubeck with its exceptionally strong interest in Scandinavia, which in turn differed from those of Danzig, which found that English trade best complemented its own eastern interests. In strained economic circumstances, the differences often showed.
The English Staple Company illustrates a different sort of trade organisation. At the beginning of the century the Staple ran along lines of a regulated company, passing ordinances to maintain high prices. Reorganisation after the partition legislation of 1429 turned it into something closer to a joint-stock company, in that it was agreed that a merchant’s wool was graded and pooled with other wool of the same grade, and when all had been sold, so each merchant received his share of the proceeds. Associated bullion restrictions and political repercussions unfortunately hindered wool sales, and smaller merchants were driven out of business, unable to wait as long as the great merchants for returns on their exports. Regulations were, therefore, relaxed in the 1440s, again allowing merchants to make their own deals, provided these complied with the company’s minimum prices.
Trade within these co-operative groups was normally carried out through family firms of father and son, or one or two brothers, or through small partnerships normally set up for a single venture. Such businessmen were familiar with single-entry accounts, insurance, credit transactions. The English Grocers, for instance, did little inward trade and used letters of exchange to draft money home from sales in the Low Countries. Northern merchants were as aware as Italians of the need for up-to-date commercial news, and the letters of the Veckinchusens and of the Celys show constant discussion of trade conditions and political news. While their paperwork was less sophisticated than the most advanced Italian practices, it was adequate to run businesses in several places through servants and agents. They operated on a scale comparable to many lesser Italian partnerships, and used Italian bankers if necessary.
The Veckinchusen business illustrates the possibilities for medium-sized Hansard firms. The brothers Sivert and Hildebrand began in Reval, and benefited from family connections in the Hanse towns of Dorpat, Riga, Lubeck and Cologne, as well as in Bruges and Ghent. They moved westwards, and in the 1390s both were in Bruges. Sivert eventually settled in Lubeck, while Hildebrand, who also became a citizen of Lubeck, remained in Bruges. He sometimes travelled, but normally directed trade from Bruges, much of it on credit. The Veckinchusens primarily dealt in northern areas - along the Baltic coast, in Flanders, Frankfurt/Main and Cologne — but in 1407, with a capital of 5,000 marks, they also set up a ‘Venice Society’ to supply their northern markets.
The letters of the Cely family reveal similar business practices, although their geographical reach was smaller. Richard, his three sons and their cousin moved regularly between London and Calais, and visited Bruges, Bergen-op-Zoom and Antwerp. They similarly dealt for credit, and were familiar with transferring money by letter of exchange. They also branched out in a small way, buying their own ship and entering the Bordeaux wine trade. They were comfortably off and had interests similar to that of the country gentry from whom they bought their wool. Other English merchants ran businesses stretching to Danzig, Bruges, Iceland, Bordeaux and Iberia through factors and agents; some even sent their own wool to the Mediterranean through Italian factors.
Southern Germany, which offered extensive opportunities as Italian links grew with eastern Europe, also provides examples of large German companies in the Great Regensburg company and the Fugger company. The latter originated in the fustian industry of Augsburg, and developed in trade, finance and mining under a group of able brothers, especially Jacob Fugger. The firm collected papal taxes and lent to the Habsburg dukes and the Hungarian king.
Their loans were secured on silver and copper mines, which were made productive by further Fugger investment in new technology. They opened branches in Italy, the Low Countries, Germany, Silesia, Poland and Livonia and rose to immense wealth in the expansion of the early sixteenth century. However, the most spectacular personal rise in the fifteenth century was undoubtedly that of Jacques Coeur in France. Starting as a prosperous fur dealer in Bourges in the 1420s, in thirty years he built a widespread business and financial empire. He plunged into international trade in 1432 by buying two galleys and moving into the high-risk but profitable Levantine trade. He leased mines, and bought a paper mill. He owned property in Montpellier, Marseilles, Bourges and in the country. He was ennobled in 1440, and his loans helped the French king defeat the English in Normandy. Coeur’s crash in 1451 was for political reasons (too fast a rise bred resentment), not commercial or financial ineptitude, and his fortune was alleged to be 1 million gold crowns (the equivalent of over £200,000 sterling at that time). As with Cosimo de’ Medici, Coeur’s fastest period of expansion came in what is reckoned the worst of the recession, but whereas Cosimo showed prudence and steady growth, Coeur appears to show exhilarating energy in seizing every opportunity offered, whatever the risk. Obviously, both styles could succeed even in difficult times.