There emerged enormously large banking companies in Florence during the early fourteenth century, such as Bardi and Peruzzi companies that attained exceptional size, diversity, and geographical reach. However, they went bankrupt in the 1340s. Accordin...
There emerged enormously large banking companies in Florence during the early fourteenth century, such as Bardi and Peruzzi companies that attained exceptional size, diversity, and geographical reach. However, they went bankrupt in the 1340s. According to the contemporary chronicler Giovanni Villani, their bankruptcy was attributed to the defalcations of King Edward III of England owing them the colossal sum of 1,500,000 florins. Many previous researches have focused on that medieval financial scandals and tried to clarify why such great companies went bankrupt. Many aspects concerning the process of their bankruptcy was made clear. But, until now, there are few researches that try to investigate factors which made such great companies appear in Florence during the early fourteenth century. This article aims to examine reasons for the emergence of these great medieval companies by focusing on the friendly relations between them and medieval feudal lords such as the Angevins of Southern Italy, the Plantagenet of England and the Papacy of Avignon. Medieval international merchants had to have a friendly relations with feudal lords who could give commercial privileges and protection in the commerce within the their kingdoms, if they wanted to succeed in the internationl trade. The key of their success was to make a great loan to their feudal kings who needed more and more money and to obtain protections and advantages. Two companies received many commercial privileges from Charles I, Charles II and Robert, kings of Southern Italy by offering a successive loan to these kings of french origin. They could have a monopolistic position in the exportation of grain produced in Southern Italy. In England they used the same method, that is to offer a loan to the king of England and to receive commercial privileges, especially in the wool trade. Their importation of wool on large scale motivated the rapid growth of the woolen industry in Florence. Finished textiles was, in turn, exported to Southern Italy and used in buying grain. The relation between those companies and the Papacy was a little different. It wasn``t a loan but a commercial networks that two companies offered to the Papacy who needed to transfer revenues of Churches from the Christendom to Avignon. Anyway, that transfer made it possible for their diverse commercial activities, for example grain trade, wool trade, textile industry, to circulate well.