May 19, 2022

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Who were the first bankers?

Who were the first bankers?

One of the outgrowths of the Commercial Revolution was the formation of powerful families in Europe that handled trading and banking concerns. Such families thrived as the economic life of the Middle Ages began to change and long-distance trade became more common.   Although a local guild leader could handle trade in his area, he did not have the capital, the time, or the knowledge to run a worldwide operation. A new kind of businessman emerged to fill the gap. Usually such a man began as a merchant of a specific type and ended as a banker. The Medici family of Italy followed this path. So did the Fuggers in the area that is now Germany.  

The Fuggers began their rise in the early 1400s, when Hans (or Johann) Fugger gained control of the weaver’s guild in Augsburg. He began to deal in a new type of cloth, thereby extending his base of trade. As family members traveled to Venice, the business began to encompass spices, silks, and other Eastern goods. The Fuggers invested their profits in non-textile concerns, including mining. By the 1500s, they had enough extra capital to lend money to the popes, to Charles V (who spent it to gain the title Holy Roman emperor), and later to both the German and Spanish ruling families. Jakob II (called the Rich) Fugger, grandson of Hans, is shown above with his chief accountant.   The Fuggers continued to be a force through the end of the 1500s, declining only after 1600 as trade in the Atlantic became more important and the Dutch took control of the mouth of the Rhine River for their own profit.  


 

 

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