Chapter 16
Tereza Siglová
Introduction
The trade in farm money (gruntovní peníze) was connected to the exchange of farm holdings and mainly with a specific system of repayments. It was a sale of claims on farm holdings secured in land transfer registers, which were called farm money. When a farm holding was sold, only a part of the market price was paid in cash, the so-called deposit (závdavek), with the remaining amount being paid off using repayments. The farm holder gradually settled the claims of previous owners or their heirs. As a result, as many as five groups of people could have claims on a single farm holding. The practice was the same with inheritances – one of the heirs bought out the shares of the other heirs. The unpaid balances of market prices were often bought and sold. Subjects frequently sold their claims only after a long period of time for a cash sum which amounted to merely a fragment of the original amount (Chocholáč 2007, p. 300; Mainušová 1965, p. 1).
The essence of the sale of farm money meant that a seller sold the farm money to which they had a claim for a specific farm holding. The buyer purchased it for a lower price and expected that, in the future, the whole claimed sum would be repaid. When farm holders bought out the farm money themselves, they could deduct it from the repaid sum as if they had repaid them themselves. In these cases, purchasing farm money could be considered a means to reduce the indebtedness of a farm holding and to pay off the farm more efficiently, that is more quickly and for a lower amount. When the money was bought by a third party, it was primarily a way to invest free financial resources or to save capital with profit. The buyer could expect a gradual return of the invested amount in the future and repayment of the whole sum. There were also rare cases of buyers changing their minds and selling off the purchased money, which could have been profitable.
Farm money was usually purchased for a sum of money and was therefore a type of financial credit with the possibility of solid appreciation of the invested money. The farm money was occasionally paid in kind, for example in livestock, grain, beer or wood. In these cases, it was a form of business credit (Chocholáč 2001, pp. 71nn, 80). On the Pardubice estate, no case of purchasing farm money for labour was found, as is documented on Moravian estates (Chocholáč 2001, p. 81).
I have chosen three small towns for this analysis (Bohdaneč, Dašice and Týnec nad Labem), which were part of the large Pardubice estate in East Bohemia. This estate was situated along the Elbe River and included two large towns, five small towns and approximately 120 villages. From 1560, it belonged to the monarch. The selected towns varied in population size and were evenly distributed across the estate. According to the tax register (berní rula), which recorded payers of the tax from tenant farms, after 1650, there were 89 such farm holdings in Bohdaneč, 80 in Dašice, and 46 in Týnec. In Bohdaneč, there were said to be 463 persons excluding small children, with 344 in Dašice, and 175 in Týnec (Siglová 2011, p. 75).
The sale of unpaid farm money was recorded either in orphan books or in land transfer registers (Siglová 2017, p. 230). These sources contain information about the name or the surname of the seller and buyer, about the amount of the bought out sum, and the sum which the seller usually received immediately. The date of the sale is also given.
The attitude of landlords to the trade in farm money
Judged by a different number of sales of farm money on various estates, not all landlords had the same attitude to this type of transaction. The trade in farm money appeared quite often in records in the orphan books on the Pardubice estate, with approximately one-quarter of farms sold after the death of the tenant holder. On one household, there could even have been several (as many as five) such transactions. Sales of farm money were at least formally approved by the local landlord or estate manager (Vs Pce, bk. no. 302, fol. 318r, 1655; bk. no. 282, fol. 363v, 1579). On the Mělník estate, sales of farm money were not a very common transaction and appeared more often before the Thirty Years’ War (Koumar 2010, p. 261). On the Frýdlant estate, the practice of purchasing farm money was not at all common (Štefanová 2009).
The negative attitude of landlords to the selling of farm money resulted from their efforts to protect their own claims to escheat and to prevent the impoverishment of their subjects. The landlords did so from the position of the supreme owners of the land. On the Strážnice estate, the landlord did not intervene in subjects’ right of disposal when the sales were within the borders of the estate. Some sales, for example to Jews and guilds, were tied to the consent of the landlord (Mainušová 1965, p. 2). It is clear from the landlord’s decrees, orphan books, and land transfer registers that the landlords on the Pardubice estate wanted to have these transactions under control. They primarily aimed to restrict the involvement of their own administrators in this type of trade (Kalousek 1905, pp. 378n). Even though an administrator did occasionally purchase the repayments, this was rare (Vs Pce, bk. no. 327, fol. 80v). The landlords were apparently concerned that the administrators could have misused the disadvantageous position and poverty of the subjects and used buy-out of the money for their own enrichment.
The landlords oversaw the transactions mainly for the protection of orphans’ rights and also occasionally cancelled a whole transaction. One of the possible reasons was when the seller sold farm money belonging to somebody else (for example, to stepchildren or siblings) (Vs Pce, bk. no. 336, fol. 27r). Another scenario was when the sum of sold farm money was higher than the rightful claim of the seller which meant that the sold sum was higher than the share of the inheritance to which the seller was entitled. Both these cases caused confusion in the settlement of inheritance claims and due to invalid sales some groups of heirs could have received less than they were entitled to (Vs Pce, bk. no. 336, fol. 460r, 1704). There were also exceptional cases of orphans who abandoned a part of their financial claims for ‘social’ reasons.
In contrast, the landlord’s decrees positively encouraged people to purchase money from people who wanted to sell it because of their poverty or some other reason. The estate manager was also tasked to support purchasing farm money of orphans, whose shares of the inheritance or their parts lay unused in orphan chests (funds) or church endowments (Kalousek 1905, pp. 378n; Černý 1930, p. 90).
The motivation of buyers and sellers
The most common reasons for sales which are mentioned in orphan books and land transfer registers are only general, such as ‘from necessary, important or great need’ or ‘out of necessity’. These references to need were made particularly in the second half of the 17th and at the beginning of the 18th centuries when the buyers were mostly institutions (Vs Pce, bk. no. 336, fol. 155r, 1685; bk. no. 321, fol. 671r, 1657; bk. no. 338, fol. 196r, after 1702).
More specific reasons for selling farm money are found only rarely. Some sellers were motivated by the necessity to obtain cash quickly to cover various expenses and by their own worsening social, health or economic situation. Some sellers needed to get cash quickly to purchase their own farm holding and to pay for related expenses, such as furnishings (Vs Pce, bk. no. 336, fol. 396r, 1692, fol. 213v, 1686; bk. no. 327, fol. 524r, 1657). The owner may have needed the money to repair the buildings on a farm holding (Vs Pce, bk. no. 325, fol. 953v, 1659). Selling farm money may have been connected to providing financial help to a family member, for example a husband (Vs Pce, bk. no. 336, fol. 486v, 1707, fol. 46v, 1688).
Some sellers were motivated by health problems that made them pay for medical care for their relatives or themselves (Vs Pce, bk. no. 336, fol. 474r, 1692; bk. no. 327, fol. 614r, 1704). Their deteriorating health and efforts to provide for themselves in old age were reasons for some people to prefer an immediate cash payment to a long-term repayment (Vs Pce, bk. no. 336, fol. 59r, 1664; bk. no. 327, fol. 430v, 1688). Another circumstance which could have prompted the seller to sell was old age (Vs Pce, bk. no. 327, fol. 568v, 1697).
Social reasons would include cases where a widow decided to sell the farm money in order to provide financial resources for expenses connected to the upbringing and sustenance of orphans (Vs Pce, bk. no. 336, fol. 335r, 1716). Widows were sometimes forced to pay off their late husbands’ debts and they evidently needed the consent of the orphans in these situations (Vs Pce, bk. no. 336, fol. 46v, 1692; bk. no. 320, fol. 717r, 1596; bk. no. 285, fol. 70r). The obligation to pay funeral expenses could also have accelerated the sale of farm money (Vs Pce, bk. no. 336, fol. 206v, 1716).
Some sellers sold their money in order to acquire resources for satisfying creditors and repaying debts (Vs Pce, bk. no. 327, fol. 174v, 1659; bk. no. 320, fol. 717r, 1596; bk. no. 336, f. 396r, 1698). Others needed to pay fees and the financial demands of the state (Vs Pce, bk. no. 336, fol 179r, 1719; bk. no. 338, fol. 196r, 1704).
A farm holder occasionally sold farm money on his already repaid farm. He would definitely have been motivated by the need to obtain cash which he could not acquire elsewhere. In this way, the tenant farmer obtained a loan similar to a mortgage (Mainušová 1965, p. 8). The sale could have been a symptom of his economic problems. But even this kind of sale was permitted by the landlord. Some sellers probably decided to sell a part or a whole share because the period for repayment of farm holdings was extended and they had to wait longer to receive their own share of the inheritance. There was also a chance that they would never receive it.
On average, after 1625, the period for repaying orphans or whole groups of heirs increased in the towns being studied. Before that, repaying a group of orphans took almost 22 years but during the Thirty Years’ War, it was almost 39 years. This period was not shortened until the beginning of the 18th century when it was more than 42 years. An heir who, as a rule, anticipated that they would be paid their share of an inheritance after many years and who would know the current economic situation of the holder and other circumstances, such as his abilities, preferred to give up their share of an inheritance. For many orphans, it was more acceptable to sell their farm money at a loss and to obtain at least some cash. It was common that a seller gradually sold their share of the inheritance, money inherited from parents or siblings or purchased money depending on how much cash they needed or inherited. The moment the farm money was sold apparently depended on a number of various factors and a seller’s individual motives played an important part in the process.
Understanding the motivation of buyers is even more difficult than understanding the sellers, since the records in orphan books do not contain sufficient information. For example, in Podůlšany, these financial activities were related to building a new church instead of the existing chapel and securing financial income for the church endowment.
Some buyers managed to transfer the repayments which they had to pay from their own farm holding, to the farm where they had purchased money. This was a rare situation and it is not clear to what extent these buyers could rely on exchanging the claims of their creditors for their own claims on other farm holdings.
The extent of the trade in farm money and its buyers
In the 16th and 17th centuries, a total of 737 sales of farm money were recorded in the three small towns of the Pardubice estate. Most of them were made in Bohdaneč (57.5%); in Dašice, it was 30.5% and 11.9% in Týnec. The size and number of farm holdings in each town played an important part in this. The high percentage of sales in Bohdaneč might have been caused by financial possibilities connected to the large output of local beer which was supplied to the part of the estate north of the Elbe River until the beginning of the Thirty Years’ War.
In the first half of the 16th century, there were surprisingly few documented sales which was caused by the gradual introduction of the administrative books by the estate and by the fact that in the oldest period many records were made only retrospectively and mutual claims were not registered in detail. Almost a half of the sales was recorded after 1650. It is mainly orphan books which reveal the increasing number of these transactions. The amounts of purchased repayments reached their maximum in the second half of the 17th century when the buyers were mostly holders of the farms whose farm money was purchased. In (myslím, že tam není velké I) land transfer registers, most sales were recorded in the second half of the 16th century. The number of sales decreased afterwards, which was due to the few preserved registers of patrimonial duties. The higher number of recorded sales is also reflected in large amounts of purchased repayments in these periods. The amount of purchased money ranged from one kopa (a bag of threescore groschen) to 454 kopas. The highest sums were paid in the last quarter of the 16th century and in the first half of the 17th century.
Three groups of buyers participated in the money trade to varying extents. The first group was holders of the tenant farms whose farm money was purchased. The second one was buyers who did not hold this tenant farm or it was not recorded about them, which means a third party. The last group was institutions. The farm holders predominated after 1650 – from that date, they bought more than half of the farm money sold. The amount of purchased money ranged from 1.33 to 370 kopas and the paid amounts varied from 0.67 to 165 kopas. Buying up farm money became a more common way for tenant farmers to pay off their own farm holdings more quickly and cheaply and it also reduced the indebtedness of tenant farms. It is clear from the records that farm holders had a right of first refusal to buy out farm money, which they did more and more frequently. An institution or a third party buyer purchased the money only after the farm holder refused to do so, either because he did not want to, or because he did not have sufficient cash (Vs Pce, bk. no. 336, fol. 206v, 1710, fol. 337v, 1731, fol. 616r, 1713; bk. no. 327, fol. 167v, 1646, fol. 348r, 1662; bk. no. 282, fol. 574r, 1582).
Institutions participated in about one third of sales, mostly in the last quarter of the 16th century. In general, they bought out larger amounts and on average they had a higher proportion of the purchased sums than of the number of sales. The most common institutions which bought farm money were local towns and villages (in almost half of the cases). Church endowments constituted one third of buyers, but unlike towns and villages, these for the most part were not local. The proportion of towns and villages was larger until 1675, afterwards church endowments started to participate in this trade much more. The growing activity of church endowments was connected to the gradual consolidation of their property in the second half of the 17th century (Pumpr 2010, p. 294nn). It was also supported by landlords who secured the right of first refusal after farm holders. The next institutional creditors were guilds from Bohdaneč, chiefly butchers (9) and tailors (7). The final frequent buyers were found only in Bohdaneč – a literary brotherhood (church choir) (6) and a hospital which surprisingly appeared only once (Vs Pce, bk. no. 319, fol. 79r 1594, fol. 194v, 1591; bk. no. 336, fol. 506v, 1706, fol. 703v, 1692; bk. no. 283, fol. 110r, 1588; bk. no. 279, fol. 207r, 1561).
The share of third-party buyers on the whole decreased, although not evenly. They were represented more strongly between 1551 and 1575 and then between 1601 and 1625. Third parties were later replaced by other groups of buyers who had the right of first refusal, that is by farm holders and probably institutional buyers, mainly church endowments and apparently also towns and villages.
The group of third-party buyers also included orphans for whom the farm money was purchased as a form of appreciation of the cash which had remained on the farm holding after their father’s death or of invested orphan money. This practice was supported by landlords who stated in their decree that farm money ‘was better purchased for our poor orphans, whose money would have lain in chests otherwise’ (Kalousek 1905, p. 378n). Out of 13 cases of purchasing farm money for orphans, only four occurred in the 17th century. The trade in farm money on behalf for orphans in general was certainly bigger. Farm money in surrounding villages was bought for orphans from towns and at the same time farm money in towns was purchased for orphans from villages.
In the group of third-party buyers, there are also individuals for whom purchasing farm money was a strategy for investing or saving surplus cash. In the 16th century, some buyers appeared repeatedly, particularly in the town of Bohdaneč. Some of them were presumably involved in the lucrative brewing of beer which they supplied to inns across a designated area. The profit and cash they made in this way could have been invested afterwards, for example in buying out farm money. However, landlords gradually restricted brewing by the inhabitants of Bohdaneč until it ended completely at the beginning of the Thirty Years’ War. Involvement in the trade with demesne fish, which reached far beyond the borders of the estate to approximately 100 km-distant Prague, represented a rather more short-term investment (Vs Pce, bk. no. 315, fol. 64r, 1562).
The profitability of purchasing farm money is reflected in the percentage of purchased money to money paid out in cash. Procházka states that this figure ranged from 15% to 70% of the purchased amount (Procházka 1963, p. 352). On the Strážnice estate at the turn of the 16th century, it was between 8% and 40% (Mainušová 1965, p. 4). On the Pardubice estate, this range was even wider than Procházka suggested – from 11% to 92.7%. Chocholáč indicated that the paid amount was around one third of the purchased sum in several Moravian localities before the Thirty Years’ War. Based on an analysis of one locality, this ratio decreased even more after the war, due to the shortage of cash and uncertainty over repaying shares on farm holdings (Chocholáč 1999, p. 128). If the first half of the 16th century is not taken into account, the average percentage of purchased money to money paid out in cash gradually decreased. After 1650, it was common that farm money was purchased for one third of its real value on average. The sample did not prove that this percentage was influenced by the type of buyer or the purchased amount. Judging from the average values, it seems that it was more profitable to sell the farm money to a third party or to relatives who were represented mainly in the group of farm holders. The seller could usually expect a higher share of the sold amount from them than from the other two groups of buyers. Nevertheless, the differences are not significant.
Conclusion
The trade in farm money was connected to the exchange of farm holdings and mainly to the specific system of repayments. It was a sale of claims on tenant farms guaranteed in the land transfer registers. The seller sold their farm money which they were entitled to on a farm holding. The sellers needed to obtain cash quickly in order to cover various expenses related to worsened social, health, and economic conditions. During the 17th century, they were probably more motivated by prolonging the repayment of farms and by the necessity to wait sometimes even decades to be paid their own share of the inheritance. The sellers therefore preferred to obtain at least a part of their share immediately. Buyers usually purchased farm money for a third of their value. If the buyer was the holder of the farm where the money was purchased, they could deduct the whole amount from the repaid amount as if they had paid it themselves. In other cases, the buyer expected repayment of the whole purchased sum and considered it an investment. The security of claims was tied to regular payment of repayments which was heavily influenced by the economic situation of tenant farms. It can be assumed that during the Thirty Years’ War and in the second half of the 17th century the farm holdings had very low reserves and were unstable. Any fluctuations caused by crop failure, death of livestock or other disasters disrupted the economic balance of the farm and made it impossible for tenant farmers to meet their liabilities. This instability was probably a reason why third-party buyers participated less in this trade. It was the third-party buyers and institutions who risked the irretrievability of the investment. In contrast, the number of buyers–farm holders who reduced the indebtedness of their homestead in this way increased. From this point of view, it seems logical that landlords aimed to oversee these transactions. Landlords supported the practice of farm holders’ and institutions’ purchasing farm money by invoking their right of first refusal and they also tried to prevent third-party buyers from undertaking risky financial operations.
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