Trade in the Middle Ages

Early commerce developments

Trading in one way or another has always been an integral part of human society, as for example can be seen in the contents of the many pre-historic burial sites. In the Celtic grave of thologe ‘king of Oss’ indicated a flourishing salt trade between people in our region and the people in what is now southern Germany.

The Roman roads, built for military purpose, were as soon as they were established also used for commercial activities and this infrastructure remained an important transport network for later merchants to well into modern times.

Trade of course had been flourishing around the Mediterranean for some eight millennia, which of course had become an integral part of the way of life in this region. The lack of raw materials in this region had seen the Italians looking north for wool, salt and timber that some of that was again exported to the Middle East and North Africa.

When all of this happened around the Mediterranean, northern Europe was still a non existing economic backwater. After the capital of the Roman Empire was moved from Rome to Constantinople (325) the centre of European trade moved further to the east. With the further decline of the Roman Empire in the west also the limited trade that had created increased wealth in north-western Europe collapsed. The cattle trade in Oss came to an end – partly also because of climatic changes that saw large parts of the Low Countries flooded in the middle of the 3rd century.

One of the first political activities to again stimulate trade in north-western Europe can be contrubuted to the Merovingian King Dagobert, he established, around 650,  the  fair at St Denis near Paris; this was still flourishing some 400 year later, by that time it had become an important link in ‘Champagne’ one of four trading circles that by that had developed in north-western Europe.

These early trading activities were still based on the trade routes that were in place in Roman times. Roman roads but in particular the river systems as they were used than was again the main trading channel. They were used from the north were the wool from England entered the continent in Flanders and in the south were  goods from the Mediterranean moved northwards.

An early trade circle was in operation in England and in our regions there were the one in Flanders (Ypres, Bruges, Mesen, Lille and Torhout) and another one around the Rhine region (Utrecht, Duisburg, Aachen and Cologne). The Champagne one was the most central one in the early phase of the commercial revolution. During the 12th and 13th centuries  it became one of the first international centers were merchants of  the Low Countries met their counterparts from Northern Italy. However, these circles lost their importance once direct north-south trade routes between the Low Countries and the cities in south Germany (Augsburg, Nurnburg) and the cities in northern Italy were established.

Another important trading circle was added in Brabant (Antwerp, Bergen op Zoom). Later on, trading routes from here linked Amsterdam in the north and via Deventer the Rhine region in the east to the other regions in England and France. In the 14th and 15th centuries Deventer had become the largest interregional trading centre between the eastern cities, especially those along the Rhine and Weser and the trading cities in Holland in the west. Merchants from Deventer were already mentioned in the famous toll register of Koblenz in the 11th century. On the Danish island of Schonen – were in the 14th century the most important herring markets took place – Deventer shared a vitte (trading settlements in  Hanse cities) with Kampen.  In other places it shared vittes with Stavoren. Deventer also had the largest fleet that sailed to the stock-fish market in Bergen, Norway.

River ports, sea ports and junctions of roads all became key trading places that started to shape the commercial activities in our region. On these rivers the Frisii had already been active as traders since the 6th or 7th century and Dorestad became the most important trading city of north-western Europe. However, trading volume was rather limited with the ships not being able to transport much more that 10 tonnes. By the 11th century they dominated the trade along the costs of the North Sea and the Baltic Sea mainly operating from Stavoren. After the Frisians were defeated during a sea battle in Baltic by Lübeck and the other the Wendish cities (Greifswald, Rostock,Wismar, Stettin and Lünenburg) the Hanse started to take over the role of the Frisian. The same happened with the early medieval trading cities in Scandinavia namely Birka. Frisian products however, remained popular for another few centuries when it was overtaken by products from Flanders and Italy.

The concept of the ‘Peace of God’ and the ‘Peace of the King’ from the Carolingian period which was aimed at stopping the many war lords that still operated within the Merovingian and Carolingian time was further developed into the ‘Peace of the City’ and market peace. ‘Peace’ meant freedom as well as the provision of safe travel and trading conduct during the market days. Toll levies were often abolished or lowered during such periods in order to attract merchants to the town. Market rights and trading privileges in relation to mills, weigh-houses and hall-marks became part of the City Rights which were annually approved by the king or the local landlord.

There is no doubt that the crusades with brought the Franks in contact with the Mediterranean has been of great importance to the development of trade in northern Europe.

However, there is also evidence that places such as Antwerp and Ghent started to develop its own trading skills in the 10th century. Flemish merchant were already trading in England around that time. Already in the 13th century cities such as Ghent, Ypres and Bruges were digging canals to improve their trading facilities.

Pilgrimages and crusades also saw the arrival of tourism which also, be it in a modest way, added to the economic growth of the period.

Interestingly trade also led to a more or less new system next to and often separate from those followed by the many landlords, theirs was ruled by capitalistic principles rather that by feudal obligations. Prosperity was more driven by new commerce opportunities rather than by the government provided (or not) by the nobility.

However, for most of Europe subsistence continued to well into the 19th century. The Low Countries formed an exception to that rule.

The Commercial Revolution of northern Europe

While at the turn of the millennium the society could still be dived in three classes: warriors, priests and farmers, three hundred years later a whole range of new categories was added to society: lawyers, clerks, teachers, merchants, students, etc.

The end of the 13th century saw an end to the increase of the agriculture expansion, climate change but also other elements played a role in this. The period between 1350 and 1500 was a period of transition. While there was enormous poverty, death, illnesses and general misery on the one side at the same time we see the creation of enormous wealth and a large number of administrative, agriculture and commercial innovations.

An interesting observation here is that slowly but surely the superiority of the merchants, based on economic power started to win from the ‘armed’ power of the counts and the administrative powers of the cities. The merchants became the driving force behind the growth and the wealth of the cities and an early form of capitalism started to emerge.

This  would also not have been possible without the protection offered by the above mentioned Peace of God and the Peace of the King. Merchants often received privileges from the rulers giving them at least a certain guarantee of security while travelling through the region and beyond.

The term ‘commercial revolution’ was first coined by historian R.S Lopez. This revolution first started in another fringe area of the super powers. These regions were often left alone, as they were to far away from the centres of powers in France and Germany.  It were in these areas where cities were able to develop into city states. This happened in particular in Flanders and Brabant. The rest of the Low Countries followed soon. However, it wasn’t until 17th and 18th century before new agriculture innovations spread into England, France even followed later.

Various social and economic developments and innovations – that started to flourish around the turn of the first millennium – also fuelled this commercial revolution.

Under the favourable conditions of the Medieval Warmth, the agriculture innovations from around the turn of the first millennium onwards saw in increase in surpluses produced which increasingly became available for export. In some areas as much as a quarter of all yields. Cattle farming produced even larger surpluses. This was supported with some important innovations in the 14th and 15th centuries. The horse collar took away the choking weight from the horse’s windpipe, thereby increasing its horsepower output by 400%. The horse shoe increased the output even further by providing the horse with more endurance. In Flanders and Brabant the new carrucaplough with its sharp rectangular blade allowed the farmers to loosen the heavier soil here and turn it deeper. There was also a small pre-industrial revolution starting with the invention of windmills and watermills. We saw one of these early watermills at the Abbey of Fontenay in Burgundy.

These innovative farmers also started to experiment with lay farming, using fallow land to grow horse fodder, peas, beans and nitrogen-rich clover. Common farmland was changed in a more rational lay out developing enclosed larger parcels of land that could be used for these special crops and the new land management methods.

Already at its early stages, the agriculture boom, also led to an increase of the population, which in turn saw the need for more agriculture land, this stimulated the many land reclamation projects in north-western Europe, especially in the Low Countries, most of which had been  largely been inundated between 250 and 1000AC. Land reclamation reached its zenith in the Low Countries in the 17th century, by that time Dutch farmland had been increased by a third – roughly 100,000 hectares had been added by 1650.

Improved technologies led to a higher yield per farmer, this resulted in more people becoming available for other economic activities, this resulted in for example the exploitation of new (commercial) crops or adding other activities to the existing ones such as fishing or cottage industries.

Another major change that had started in Carolingian times only started to break through; the secularisation of writing. Slowly writing started to move on from the religious to the administrative and commercial elements of society. Slowly this first started to happen in the Courts and coincided with a revival of interests in Roman Law. This started to replace the trust based feudal systems where a arrangements were sealed with a kiss on the lips. By the 11th  and 12th centuries contracts started replace these trust relationships and this in turn stimulated the commercial developments. This in turn also greatly assisted the merchants and cities to govern their own affairs as concepts, thoughts, ideas and arrangements  could now be put down on paper and discussed with others. This ‘revolution’ provided power to those who used the many new benefits that writing had to offer and rapidly started to demolish the feudal arrangements. Communes started to become the first elements of independent city management and their oaths developed into documents that started to become the basis of the (written)  city privileges. See also:The arrival of the cities

This agriculture revolution allowed for a rapid increase in population and was the key driver behind the wealth explosion. In the 13thcentury the south north river systems through northern France, Flanders and Brabant saw large quantities of grain moving north from the fertile regions of Artois to the wealthy cities further north in Brabant and Flanders. This also highlights the importance of the symbiosis between the city and the region. The region was important for the production of trading goods but also they were an important market for the city merchants. Zuthpen for example had as many people in its region as there were in the city.  Of course in such a situation keeping the balance between the region and the city was always a delicate one.  City privileges often guaranteed certain monopolies to the cities such as milling, brewing and markets, this of course often led to tension with those in the region who would like to see more freedom for their activities.

However it was the wool industry that propelled this region into an economic cloth and textiles powerhouse. Interestingly knitting (derived from the old Dutch work knutten) arrives reasonably late, only during the Late Middle Ages are we starting to see more knotted ware.

The cloth and textiles business

At the coastal areas of the southern parts of the Low Countries the inhabitants have been breeding sheep since the very early times. Looms were already in use in prehistoric times. In the 3rdcentury the Romans reported on the good quality of the robes coming from Doornik (Tournai) and Atrecht. In Merovingian times the fair of Champagne served as the first means of selling Flemish goods. Frisian wool (pallia fresonica) was internationally recognised as the best wool in the early Middle Ages.

Innovations only started to arrive during the 11th century, when the horizontal loom with pedals arrived  - most likely from China –  in Flanders, used for the weaving of the famous pallia fresonica. The spinning wheel arrive – again also most likely from China –  in the 13th century, this increased productivity tenfold. All of these innovations also led to the development of the cloth industry that moved from the cottage based industry to the cities. However,  for many centuries to come the rural cottage industry remained of equal importance. A third innovation was the fulling mill, using horse power or water power, instead of the feet of the fullers.

The industry went through a boom period starting from the 11thcentury, Atrecht was the centre of it but also Rijssel (Lille), Dowaai (Douai) and St Omaars (St. Omar) made their entry in this market. In the 13thcentury the centre of gravity of the industry moved further north to Ieper, Bruges and Ghent.

These innovations led to an increase in the wool trade especially between the Low Countries and England.The Flemish received their wool from across the Channel, England was renown for its excellent quality. The 100 year war between France and England caused major disruptions and over time more and more wool was imported from Spain.

Onerous regulations regarding quality, engthand widthof cloth and their places of origin and a range of other English trading restriction such as the Wool Staple (import restrictions) severely disrupted the growth of Flemish trade and were a significant cause of the slow but steady downfall of Flanders as an economic  European power house. England and Brabant took over and Antwerp rapidly developed as the new commercial centre.

However, in 1356 still as much as 63% of the population of 64,000 in Ghent was working in the cloth and textiles industries.

The English word ‘cambric’, for a specific fine quality cloth has its name from Cambrai (Kamerijk) in Flanders, which in the Middle Ages was famous for this product.

From around 800 onwards the living standard in Europe kept on improving, despite some very severe famine, plagues, floods and other disastrous events.

Maritime trade

After the collapse of the Roman Empire trade in the Mediterranean became in the hands of traders in Constantinople and Alexandria.  With the decline of the Byzantine Empire - from around the 10th century - the merchants on the Amalfi coast in Italy were able to become the dominant trades in this area. However, it was Genoa further north that eventually became the center of Italian Mediterranean trade. This also led to a power shift from central Italy to north Italy which would have far reaching consequences for European developments from the 12th century onwards.

In northern Europe, when the river trade was replaced by sea trade, around 1300,  the trading power shifted from the above mentioned river ports  to those along the Atlantic Coast.  Direct sea trade with Genoa and other Italian cities, started to cut out the land locked trading centres. In particular Genoa played a key role here, they had to expand further west as Venice increasingly started to dominate the east-Mediterranean trade. At their height of their trading power, around 1300, 13 cities in Italy had more than 50,000 inhabitant. With the exception of Palermo all the other cities were in north Italy. Venice, Milan and Florence each had more tan 100,000 inhabitants. Trade required a good hinterland the fertile Po flats provides much of the needed produce, this created wealth and that attracted others to dominate the trade not just to the sea ports but also across the few trading routes via the Alps between north and south Europe.

Merchant started to join forces first to secure their travels but very soon also for other support and security services and this led to the guilds and hansas (Hanse=guild in German).

This also allowed other cities to participate in the economic boom. This in turn led to a shift in economic power from the southern parts of the Low Countries to the Northern parts, initially driven by the IJssel cities such as Deventer, Zwolle, Tiel and Kampen. However, these cities were never able to reach the level of urbanisation and mercantile activities as other cities such as Brugges, Ghent, Antwerp, Dordrecht, Leiden, Amsterdam, Utrecht  or Nijmegen. At their height in the 15th century Deventer, Kampen and Zwolle for example only accounted for 30% of the population of Oversticht. The urbanisation penetration of the cities in Holland accounted for 45%.

While shipping trade was in general ten times cheaper than land transport, cattle could not be transported that way. Significant cattle trade stock routes eventually evolved all the way from Denmark and Sleeswijk-Holstein to the river ports cities in Gelre and Over-Sticht and from here land routes continued to Flanders, Brabant and Holland. The Frisian ox trade between Westphalia and the Rhineland  became very successful during the 15th century.  Ootmarsum, Bentheim  and Oldenzaal also greatly profited from these land routes. Deventer became the most important interregional trading hub in this region.

Inefficient feudal transport systems

The feudal medieval system was not very conducive to efficient and effective transport. The practical organisation of it was handled by the shippers guilds often in cooperation with their city councils. To facilitate trade, quays had to be built and they as well as the river harbour itself needed constant maintenance, cranes needed to be installed and operated, harbour labourers were needed to load and unload the ships.

However, all these guilds had their own rules and regulations. Within the Hanse there was some form of coordination through the negotiation of privileges but they were far from uniform and many merchants and cities had also separate private bilateral arrangements.

The sea trade was often negotiated with overseas governments, kings and counts, this allowed organisations such as the Hanse to built up their privileged position.

However, the river trade often meant lengthy negotiations between the shippers and the guilds and the cities they passed through. Some had staple rights which required certain goods to be unloaded and reloaded in other ships. Obviously the richest merchants were always able to negotiate the best privileges.

On the rivers Scheldt and Leie the powerful shipper guild of Ghent was in charge of the transport arrangements. This basically provided them with a shipping monopoly, this made it nearly impossible for outside shippers to operate on these rivers. A similar situation occurred on the rivers in Brabant, which again made it nearly impossible for others to use these rivers. In the same way, Hamburg controlled traffic on river Elbe, Bremen controlled the Weser and Riga the Dvina.

On the river Rhine – the most important inland transport  route of the Middle Ages – the situation was different again, the river crossed many feudal states this stopped monopolisation but there was also the constant political interference and the ongoing wars between them which greatly interfered with the trade. Sometimes blockages lasted for months even years.

But what monopolisation prevented  feudalism replaced; for example there were ten tolls between Dordrecht and Köln. Apart from that many cities had the right to check the ships which greatly delayed transport and further increased costs. The infamous Gulik and Jülich tolls were so high during the 15th century that massive long-haul transport was developed (hessenwagons) to bypass these tolls.

But of course also the overland roads had many tolls . It wasn’t until modern times that this inefficient system of tolls started to disappear.

Despite all of this a extensive, integrated and well used transport network of rivers and road operated throughout the region. Sometimes the ‘systems’ competed with each other but in general they were very complimentary.

Hanseatic League

The Hanseatic League never started of as the alliance for which it is so well know.  It grew between 1280 and 1650 rather gradually and operated more like a virtual network than a formally organised trading organisation.  In its heydays (14th century) the alliance of trading guilds operated a trade monopoly that extended over the Baltic Sea, a large part of the North Sea, and most of Northern (inland) Europe . For a while they even effectively controlled Denmark’s monarchy. This League evolved into a very large trading circle of goods between the North Sea and the Baltic Sea. Original trading products such cloth were complimented with iron ore and copper from mines in Germany and Sweden, skins and honey from Russia, timber, grain and since the addition of hop to the beer brewing process, beer became another trading good. Herring and salt (need for the preservation for herring) were also products that featured on the top ten list of trading goods.

During the period od agriculture expansian, more commercial crops were planted, this led to specialisation, based on the best soil and climate conditions. Grain became the first bulk product, which led to the development of supra-regional market mechanisms. This in its turn led to innovations in ship building and the need for return cargo. During the height of the food crisis in northwestern Europe in 1317, grain was imported from Morocco in ships that could handle 8000 tonnes.

By the 14thcentury they had established  a well integrated European market from Prussia and the Russian Principalities in the east to Scandinavia in the north, England in the west and the whole of the Mediterranean region in the south.

Trading routes rapidly started to crisscross Europe. Around Europe, the Middle East and North Africa the foreign traders grouped together in the new cities. Here they build their own warehouse and living quarters which developed into specific trading quarters. These quarters often received special privileges regarding tax exemption, (diplomatic) immunities even with their own (military) protection. These enclaves made it also  a bit easier for these expatriates to live and work in foreign countries.

The Hanse  ‘Kontors’ (Offices) in Bruges for example became a privileged and wealthy part of the town . The first companies (cum pane = eating bread together) emerged in northern Italy in the 12th century and that commercial concept rapidly spread to all the major trading cities of that time.

Historians generally trace the origins of the League to the foundation of the Northern German town of Lübeck, established in 1158/1159 after the capture of the area from the Count of Schauenburg and Holstein by Henry the Lion, the Duke of Saxony. This town remained the geographical centre of the League. A turning point in the history of the Hanse was the Treaty of Stralsund in 1370 which ended the wars between the League and the King of Denmark. This restored the trade privileges of the Hanse and established the League as a powerful political entity.

The League succeeded in establishing some 200 additional Kontors  they included: Zwolle, Hattem, Hasselt, Cologne, Osnabrück, Münster, Roermond, Deventer, Groningen, Kampen, Zutphen, Oldenzaal, Bruges/Brugge, Antwerp, Arnhem, Bolsward, Doesburg, Greifswald, Harlingen, Hindeloopen, Nijmegen. At its heights they stretched across northern Europe from Novgorod to Edinburgh (video clip – also castles and cathedral).

In all there were 70 towns who were official members of the League and another 200 trading towns also working within the Hanse. In our region, Antwerp was amongst one of the most important cities the Hanse traded with.

However, most of the times the Hanse was unable to overcome the local or regional interests of the towns, these interests were often diametrically opposed and this prevented the Hanse from becoming a true pan-European trading power. In 1293 for example when Lübeck wanted to break the trade monopoly the Frisians had on the Baltic Sea, the Wendish Hanse towns  were supported by Kampen and Zwolle.

Nevertheless despite its fluid character and its lack of a large scale formal organisation the Hanse was able to operate as a political power next to those it its surrounding countries. Merchants and cities operated within the Hanse in a very opportunistic way; they were active when needed and absent when there was nothing to gain for them. What did bind them was the opportunity to lower transition costs and as such increase their profit margins, it was as simple as that.

From the start onwards the merchants received the support and the protection of the Emperor, when that support started to weaken during the Hohenstaufen dynasty, the Hanse cities startedto form stronger relationships with each other in order to maintain their power. This became easier for them as the cities started to fill the power vacuum and grew more and more powerful. They even established  their our naval fleet. These cities had of course a great incentive to support and protect their merchants as they brought wealth and prosperity to these cities. From these cities the merchants established their trading empires;  they often became members of the ruling city class. From these cities  they  send out their ships,  no longer lead  by them,  but  their captains who as trading partners did all of the  overseas  trading work, together with their office staff in these cities.

They used their (virtual) business network to combine  forces in their trading cities, where they operated combined kantors and where they negotiated trading privileges and other arrangements with the local rulers. They established their own unified code of conduct and also negotiated security arrangements to protect their trade against piracy and also to break blockades by governments and cities that prevented them from trading, or established blockades against cities that refused to trade with them. But also on this level the network remained fluid, cities opted in and out of these arrangements and many sub groups operated within the larger network. What kept them in general together was that all cities and their merchants profited from arrangements made by others within the network

They also had their own extensive social network  with arrangements for widows and orphans, they frequented certain inns and had their own social clubs. Brugge was perhaps the most networked city in the western world.

However, while the Hanse remained a typical medieval organisations, their arrangements depended on relationships, on the other side  the courts of the major powers became increasingly more sophisticated with improved administrative and legal structures, these emerging states no longer accepted the privileges that were dictated by the Hanse.

Because of the close relationship between the merchants and the cities, it sometimes is difficult to establish a clear demarcation line between the two, however, throughout the period the Hanse remained led by merchants.

After 1400 the Dutch towns and the Hanse started to go their own ways; the Dutch increasingly became a threat to the Hanse shipbuilders, this let to the Holland-Hanseatic War (1438 – 1441). In 1440 the Hollanders captured the entire Hanse fleet. The next year they agreed on a truce for twelve years with the towns of Lübeck, Hamburg, Rostock, Stralsund, Wismar and Lüneberg. While the Hanse (Lübeck) tried to hold on to its monopolistic trading system, protected by privileges Holland and England favoured free trade arrangements. Competition rules and brings innovation and soon  Amsterdam merchants won free access to the Baltic and broke the Hanse monopoly.

This war also resulted in a split between the cities of Holland and the cities along the river IJssel, who still  supported the Hanse.

However, from this time onwards, the Dutch traders became too powerful for the Hanse and this became the downfall of the League.

The Hanse finally became an institutionalised organisation in 1447. This led to the division of the trading region in four quarters: Lübeck, Braunschweig-Magdeburg, Hamburg and Köln. This last quarter included most of the cities covered in our area: Münster, Nijmegen, Deventer, Wesel and Paderborn. Later on we also come across more Dutch cities involved in the Hanse: Elburg, Venlo, Roermond, Hasselt, Oldenzaal, Ommen, Hattem, Tiel and Zaltbommel. Several of these cities became critical hinges between the Hanse and Holland cities. The confederation of Cologne (Zuythanse – south Hanse)  also made history when in 1369 they were able to negotiate the above mentioned Treaty of Stralsund. A further divison was made in 1447, within these confederations. The Zuythanse was further split up in five regions. The capitals of all the regions of all the confederations also formed a further alliance known as the (friendly)  toh0pesate( cooperation). Within this arrangements each of the cities had to contribute soldiers according to the importance of their city within the Hanse. Nijmegen was one the regional headquarters.

Zwolle developed itself as a key station post in the land based trading system.  Ootmarsum was also situated along this Hanse route between Flanders and Holland on the one side and the German and Wendish cities in the north-east.

Deventer took over the leadership role from Zwolle along the IJssel and became a supra-regional hub to the German hinterland. In 1538 Deventer stated that each of its famous annual fairs attracted between 1400 and 1500 wagons from Twente, Münster, Paderborn, Osnabrück and even from Hessen, Meissen and Thüringen. However, slowly Amsterdam started to dominate the international trading activities, using large new cargo ships that amongst other places travelled to the Baltic cities in north Germany.

Kampen (see videoclip) was the first IJssel city that started to feel the pinch here. By the start of the 17th century trading with the German hinterland was directly conducted from Amsterdam and started to bypass the IJssel cities and Deventer was relegated to a secondary trading town.

Following its success in the Hanse Wars, Holland supported by the Dukes of Burgundy and later Emperor Charles V, followed a policy of diplomacy to undermine the faltering unity within the Hanse where increasingly more cities preferred a more open market system. In 1514 Lübeck and the Wendish cities unsuccessfully tried to limit the trade from Holland. The Sound (Danish Sont) blockades in 1522-1524  did not have any serious result on the free trade movement.

Lübeck became an early supporter of the Reformation and later joined the Schmalkaldic League. Since 1529 it had a weak and divided rather radical democratic government and suddenly behaved totally out of tune with her actual power, amongst other things the city claimed it could nominate a candidate to the Danish throne as well that it had the rights to close the Sound. This led to a series of serious conflicts. However also the Sont blockades from 1532-1534 had little effect. Lübeck unsuccessfully tried to reintroduce the stapel markets and also their attempts to limit the trade from Holland, Zeeland and Brabant – through quotas – failed. Lübeck also had stared to lose the support of cities such as Gdansk and the cities in Prussia and Latvia. Also the kings of Denmark opposed Lübeck and favoured free trade on the Baltic Sea.

The religious wars following the Reformation led to further troubles for the Hanse trade.The Duke of Gelre for example forbade the representative of its (Ijsel) cities to travel to the Hanze meeting of 1530 in Lübeck, as these representatives would have to travel through the lands of  heretics and he feared they could be infected by them. It was at that meeting that it was decided to move the Hanse Kantor of Brugge to Antwerp. Further restrictions were issued by Gelre that prevented the Hanse representatives this time to travel to Lünenburg. This was for the first time in the Hanse history of the IJssel cities that higher authorities interfered in their trade. A clear indication that the medieval power of the cities was fading and that the larger government organisations started to dictate trade policies.

One of such precarious situation occurred in 1531 when the king of Denmark Christian II landed in the Netherlands to seek military assistance to supress a revolt from his nobles, who opposed his progressive reforms. He was married to Isabella of Burgundy, the sister of Emperor Charles V. Despite the fact that Christian severely mistreated Charles’ sister, all in the name of securing the family’s inheritance, candid support was provided, however, the Dutch never provided him with any military assistance. Their trading interest in the Baltic were far more important to them. Nevertheless the Hanse (Lübeck) linked Christian to the Dutch and closed – as mentioned above – the Sound to all Dutch ships. This unwillingly drove the Dutch into the arms of the Danish kings as they prepared for an open war against Lübeck.

Christian was lured to come back to Denmark to discuss a settlement with his nephew Frederick. He was captured and was kept imprisoned for 27 years at his castle. While Charles V aunt Margaretha of Australia was busy , as the Governess of the Low Countries, to try and solve the trading problems with the Hanse, Charles V tried unsuccessfully  to salvage as much as possible of his family inheritance now his Danish brother in law was disposed.

While the issue never scored high on his agenda, the Emperor clearly understood the value of trade. In a letter from the Emperor to Henry of Nassau ¹ he wrote about the Netherlands  ’These lands are rooted above all in commerce and we must not lose sight of this’. In his political conflicts with England he made sure that the trade between the Netherlands and England remained untouched. No doubt that Margaretha’s  continuous message to him in relation of the importance of this commercial relationship between these two countries was paying off. He also protected the merchants of Antwerp, despite their differences in relation to religious issues. On several occasions he supported the Dutch merchants in their ongoing attempts to create open seas in the Baltic by providing them with  imperial forces if needed to war with Lübeck or Denmark.

Thanks to Margaretha’s relentless efforts, an ‘open seas’  settlement was arranged in 1534 whereby the Netherlands received free passage in the Baltic.

After Charles V conquered Oversticht and Gelre he also confirmed the trading privileges of the Hanse cities: Deventer, Kampen and Zwolle in 1528, Groningen in 1536 and the Gelre cities in 1543. Politically however these cities had to accept the authority of the Hapsburgs and obviously this led to ongoing conflicts and in the end it was political power that had the final say.

The conservative nature of the Hanse – based on privileges - stopped them from innovation. On the other hand, the open-trade systems promoted by Holland was very conducive to change. Apart from technological innovation, financial innovations were as important.  Merchants spread their goods over a larger number of ships. This allowed them to transport at low cost and low risk, this significantly improved their competitiveness in relation to the Hanse system. The Hanse stayed well behind these innovations as well as the  management and administrative developments which took place in Italy.

The slow decline of the Hanse also had its effect on the hinterland. New north-south trading routes developed between central and South German and north Italy. The emerging economies of Poland and Hungary started to leave the sluggish systems in Prussia and north Germany behind and this also led to a decline of the Ijssel cities in the Low Countries and places such as Ootmarsum and Oldenzaal.

In the end it was the Thirty Year War (1618-1648) that  became the death knell for the Hanse trading system. The very last Hanse meeting in Lübeck took place in 1669, only six cities showed up for this meeting. Lübeck, Hamburg and Bremen continued their cooperation and operated overseas Kantors in Bergen, London and Antwerp, this treaty finally ended in 1920. A cultural revival of the Hanse started to occur in the late 20th century.

See also videoclips;

Hanzestadt Lübeck Centre

Lübecker Don, St Marien Basilik

Lübeck St Jacobi Kirche

Lübeck Heiligen-Geist Hospital

Bremen Rathaus Marktplatz St Petri

Bremen Bottscherstrasse

Coastal trade

While the Hanse and Mediterranean shippers traversed these seas, there were also a successful and active coastal traders operating along the Cantabrian and  Biscayan coast. It was under the leadership of king Alfonso VIII of León who founded the ports of Santander (1187) and Laredo (1200). From here they started to develop in the key ports for the trade with northern Europe. The seas in the Gulf of Biscay are  feared for their atrocious waters and until the 18th century less than 20% of foreign ships dared to pass Cape Finistère.  The Spanish traders also combined their efforts and had a strong presence in Bruges  were they were known as the ‘nation of the Biscayes’.  Key coastal towns for this Atlantic coast trade were: Bayonne, Bordeaux, La Rochelle, Harfleur and Rouen. The Castilians also started to play a key role in the coastal trade. This coastal experience was also important to the Portuguese as will be discussed below.

 

Trade on Asia and the need for discoveries

After the collapse of the Western Roman Empire, contacts with Asia mainly remained limited to the eastern Mediterranean and the Black Sea and was mainly in the hands of Greeks, Jews and Syrians.  With the arrival of the Vikings the trade with Asia became more and more in the hands of the Russian Principalities and the Volga Bulgars; they brought eagerly thought-after luxury goods from via the Black Sea and the eastern Mediterranean into northern and western Europe.  In the eastern Mediterranean it were the Genoese and Pisans who dominated the eastern trade in the 1oth century.

With the arrival of the Mongols – from the mid 13th century onwards – we saw these newcomers taking over these trading routes. However, a century later their empire started to collapse and travelling over the old Silk Routes and the Horse and Tea Routes became a very hazardous undertaking for foreigners. It were the Sogdians – traders from cities such as Samarkand, Buchara, Khiva and Tashkent who now controlled this trade and who were in better position to defend their trading routes against marauding bands or local kings and landlords in Central Asia.

At the same time the Muslims became more militant against the ‘infidels’, which made life difficult for the Christian traders. The Ottoman Empire had been extended to include all of modern Turkey, the Middle East and North Africa.

Cities such as Venice and Genoa felt the effects of these changes and this forced the merchants to start looking at new maritime trading routes to Asia. It were the Portuguese led by  Prince Henry the Navigator who started this quest with the first exploration expedition along the west coast of Africa.

It is rather amazing that it were the Portuguese who- at the beginning of the 15th century –  took over the lead in the international maritime trade. It was a rather poor – agriculture based –  country. However, it was its fishing tradition that delivered them the sailors and navigators needed for the next big step in conquering the more rougher seas of the Atlantic (or Ocean Sea as it was called at that time). The visionary Prince Henry put the money on the table that allowed these seamen to undertake their voyages of exploration. He was fascinated by new technologies in shipbuilding, navigation astronomy and instrument makers and brought the best people to his court in Lisbon. He was like all of his medieval counterparts deeply religious and had heard of a mythical Christian kingdom that was supposed the exist somewhere in Central Africa. He wanted to make contact with ‘Priest John’. Other important reasons for these voyages were: bypassing the Muslims and tapping into the rumoured gold mines and establishing an alternative route to the spice markets. Bartholomew Dias was accident rounded Cape of Good Hope in 1487 and in 1499 Vasco da Gama reached India.

As often happened with incumbents, the Portuguese made a critical mistake by sending the Genoese Columbus away who had plans to reach China by sailing west, he ended up at the Spanish Court and the rest of course is history.

The still powerful Pope consequently, in 1494, divided the world in two parts by drawing a line around the world around 300 miles west of the Azores . Under the Treaty of Tordesillas west of the line and the lands on the east to the Portuguese.

However, in the end it were not the pioneers of the new discoveries that became the winners, but the second wave in particular the Dutch and the English.

Money matters

The economic boom and growth of the population between 1000 and 1200 saw the change from an economy based on subsistence where the local lord was the only consumer of surpluses to one where surpluses were traded on local markets. Very little money changed hands in the subsistence economy; however the new economy did require the use of money. With territorial rulers starting to become involved in minting, trade started to expand across Europe. The actual value of the metals involved was of critical importance and was often a matter of dispute as rulers and others started to mess with these metals especially when they were in need of money. The most infamous of them all was the French King Philip IV (the Fair – 1268-1314), who received the nickname ‘le roi faux monnayeur’ (the false coiner king). In the end this led to the circulation of ‘black money’; so named because of the discolouring of the coins as large amount of tin and lead were mixed into it.

After the collapse of the Roman Empire, money largely disappeared. When standardised Roman coins started to disappear villages, towns, monasteries and individual nobles started to mint their own. However their legitimacy was often only very local and bartering became the key basis for trade in the Early Middle Ages.

Frisian traders required money and in the 7th century Frisian coins appeared (silver denarius), this ended when the Normans laid waste to Dorestad. A short revival happened during Carolingian times, with coins appearing in copper, silver and gold metals. A lack of a range of values and the fact that money, even when it was available, hardly ever went into circulation (it got saved, e.g. to pay taxes or big ticket items like a cow) might even have hampered the monetisation of the economy. After a ruling from Pepin II in 670 gold coins (solidi) disappeared from circulation. More regulated mining, under the control of dukes, counts and kings, started to re-occur in the 12th century (including gold coins), widespread use followed soon there after. Large silver coins started to become in use once more raw materials started to become available in the 13th century, large gold coins a century later. From this time onward we can start talking of a slowly re-emerging money based economy.

While the economy was still largely dominated by agriculture, commerce and industry were fast expanding, shifting economic capability (and power) to the towns and cities. Demand from the cities also increased trade (and income) from the rural areas. Especially farmers operating on the fertile reclaimed lands did well. Their plots were in general larger and in general again they also owned the land.  Rather rapidly these fields were used for dairy cattle and this lead to the production of butter and cheese; an export product the Netherlands is still famous for.

Already at the end of the 13th century wheat was imported into the Low Countries from the Baltic countries and the Upper Rhine region (see also Hanseatic League above).

The phenomenal growth in international trade led an enormous growth in wealth during the early part of the 14th century, especially in the cities of Flanders, Brabant and northern Italy. The subsistence from the previous 800 years this was rapidly changing into a currency based economy.

To support trading and commerce a very extensive banking and finance system emerged from Italy. In order to limit risk, pool capital and share profits they started to formalise their agreements and this became temporary partnerships and these in turn grew into ‘compagnies’ (literally meaning ‘ bread together’ – sharing bread).  The ‘campagnie’ also became involved in pure banking activities. Banks evolving from these campagnies often made enormous loans to rulers andthey collapsed when these rulers defaulted.

 

Pawnbroking – Lombard banking

Pawnbroking has a history that goes back to ancient times its name is derived from the Latin word ‘pawn’ that means ‘pledge. Most of the original regulations around pawnbroking date back to Roman times.

Other financial constructions were invented as well, similar to the current Islamic banking system. With usury prohibited both under Christian and Islamic law, pawnbroking was the only way to lend money without the involvement of interest. However, the border between the two became more and more blurred. Straight money lending was only tolerated if done by people outside the Church (by what the Church called heretics) such as Jews . Under Mosaic law also here usury was prohibited but again only between Jews.

Pawnbroking became known as Lombard banking and started in the pawn shops in Rome, this grew in an elaborate system of credit granting based on bills of exchange (ricorsa). This system spread all over Europe (but mainly in the south, the Hanse hardly used these bills of exchange  and preferred to trade in hard cash – which however, often was in short supply) and ended the role of the Jews as the bankers of Europe.

Pawnbroking – as separate from money lending – was officially endorsed by various Christian leaders as early as the 12^th and 13^th centuries as a charitable alternative to usury and a way to financially assist the poor.

The link between Lombard banking and charity can also be seen in the symbol used by the pawn shops, they were marked with three circles or spheres. It is believed to have been a tribute to the traditional symbol of Saint Nicholas and used as a sign of charity.

Northern Italy became one of the first ‘modern’ trading centres and Lombards were often seen at the upcoming trading fairs in France. They rapidly became the financial experts and soon any Italian financial expert was called a Lombard. They also became financial advisors at several courts in Europe and by the Late Middle Ages they were Lombards is all major towns and cities in northern Europe. Despite Church Law many courts and cities used their privileges to allow Lombards to become involved in lending – of course with a nice tax flowing into the coffers of the rulers.  Even relative smaller towns such as Heusden, Woudrichem and Culemborg had Lombards operating in their communities , often from the local castle. In 1309 there were 88 Lombards operating in 78places in Flanders and Brabant. In 1332 Lombards were invited by the Duke of Gelre to also operate within their territory. ²

In 1260 Gijsbrecht van Aemstel financed his business through the local Lombards in Utrecht and he was charged interest for one loan 86⅔% and another one for 65% per annum. It is clear that despite church rules the economy was well and truly capitalistically organised.

As in the early days throughout the Middle Ages  Lombards kept moving around and following the annual fairs and were – despite their relative low numbers -a well known group of people throughout the various medieval counties and duchies.

The position of Lombard remained however precarious  as they could easily be prosecuted by changing laws or referring to church law. The high risks involved in lending led to the extreme high interests rate as indicated above. The biggest lenders (local rulers) often couldn’t afford these interests and in particular in relation to the Jews that led to expulsion and prosecution as in that way they could wipe out their debts.

Money exchange transactions started to take place around Europe at set times of the days. This happened in Bruges in the famous inn of the family Van der Beurse. They lend their name to the most important element of the modern capitalistic society the ‘Bourse’ (Exchange). The inn was right in the middle of the kantor sites of the Genoese and the Florentines. The leading banking families of the Late middle Ages where the Medici in Florence and the Fuggers in Augsburg. (It were also these banking families who profited enormously from the discoveries in the New World, much of that wealth flew straight into the pockets of these banking families, who underwrote large parts of the trading expeditions).

However, in general the financial institution to handle this rapidly growing currency-based economy effectively were limited in numbers and those who did operate within this environment found it extremely difficult to cope with these massive economic changes. Amazingly the Italian administration and banking innovations only spread slowly through the rest of Europe and became only more universal in the 15th and 16th centuries.

The monetary system remained chaotic for many centuries. There were several monetary crises in Europe the most severe ones occurred between 1330-1360 (stagnation) and 1417-1435 (very high depreciation), these events can be linked to the Hundred Year War. The many different coins and the lack of stability in the value of the coins also several hampered the (international) trade. The cities were among the most active in trying to get their rulers to secure stability, they even allowed him to levy special taxes for that purpose however, at no avail. The enormous amount of coins with different values and different units, from different regions circulated together, which made conversions very complicated. As coins were predominantly used in north and west Europe this led to a chronic shortage of coins. Further south the problem was less acute as more trading took place through bills of exchange. Increases in economic activities and market specialisation created the need for more money and for a faster circulation of that money ³

It was not until the Great Depression in the 1930s until the global banking system became more stable when governments started to see the need for insuring bank deposits.