I. Fugger the Rich: Organizer of Capitalism

CHAPTER I

Fugger the Rich

ORGANIZER OF CAPITALISM

JACOB FUGGER, surnamed the Rich, was the most important and imposing figure in the dawn of the capitalist era. Starting out to be a priest, he ended by becoming the greatest millionaire of the sixteenth century—greatest of merchant adventurers, first important industrialist-promoter of the modern world, banker to emperors and popes, whose countinghouses, warehouses, and factories spread to every city and port along all the trade routes of Europe.

Born three decades before Columbus discovered America, Fugger came into the world at a moment when men everywhere saw with dismay that their world was mortally sick. A monstrous internal growth was splitting the womb of feudalism. A new set of bones and muscles and nerves was drawing life from the disintegrating tissues of the old social system. Life and vigor were already in the blood of the infant ism that would take over the world for the next five centuries and that now, in its turn, seems gray and feeble and finds within its own womb struggling for birth a whole litter of new systems. Men were groping for new forms and patterns under which to live, and new instruments of organization suited to ordering these new ways. Profit, the modern merchant, and the middle class had come upon the scene to challenge the scholastic ethics and economics of Aquinas, the political theories of Albertus Magnus, the acquisitive techniques of the brigand nobles. And in the organization of the commercial instruments of this new era Fugger played a role not unlike that of Rockefeller and Morgan in giving direction and form to the new corporate civilization which got under way in America in the early ’seventies.

Perhaps European society could have done nothing better for itself than feudalism in all the circumstances of the time. But essentially feudalism did not represent an effort at growth. It might be described as a vast shelter, a refugee haven into which the harried and starving and disordered masses of the first centuries following the destruction of the Roman Empire fled for safety. It was an escape from violence and want.

The terror of Europe in those early years was famine. Hallam records that in the seventy-three years in the reign of Hugh Capet and his two successors, forty-eight were years of famine and that from 1015 to 1020 the whole western world was almost destitute of bread—a frightful interregnum of barbarism when, as Hallam records, mothers ate their children and children their parents and human flesh was sold “with some pretense of concealment” in the market place. People sold themselves into slavery to escape hunger. In the presence of persistent hunger the outer crust of civilized morals crumbles and falls away, leaving only the unclothed savage man, pining for food. To him a precarious liberty seems a small price to pay for safety and meat.

Meantime, many of the stronger chieftains took to brigandage. Not yet emancipated from the ethical concepts of their northern paganism and the worship of gods who were little more than divine gangsters and celestial thugs, they broke upon the weak with that strange outpouring of cruelty that has marked man’s journey from the beginning. The only refuge for the weaker peasant was to sell himself into the servitude of a stronger feudal baron.

In time, of course, this system became organized, strengthened, crystallized. And it was this system which was now dying. A new system that would symbolize not escape and flight but growth and development was to take its place.

The world of the Middle Ages was a rural world in which men lived in little clusters of 50 to 500 souls. The unit was the manor. It was a communal microcosm made up of a small number of families clustered around the castle of the lord. The castle, the cottage, the orchard, the fields, the pasture, the wood; these were the physical constituents of this tiny society. It was isolated from other societies. There might be a village but it was just a part of the estate. In a few places there might be a town.

The society within that little cosmos was, as to its domestic affairs, totalitarian. It was a collectivist society. It was a society in which the lord was the master and the state.

The manor produced the wealth that was created in the Middle Ages. It was a community organized for subsistence. And that is all it got—little more for a family than one gets on relief in depression-ridden America. The fields yielded grain, a few vegetables (carrots, cabbage, turnips, and, perhaps, some peas, beans, onions, celery, garlic, parsley). There was probably an apple and pear orchard and a vineyard. The flour was ground in the small estate-owned mill, the wine pressed in the estate-owned press. There were craftsmen who might be farmers also, and who exchanged their services for other services or for the products of others. Furniture was made, wool raised, carded, and woven, hides cured and formed into shoes and jerkins and belts upon the estate. But the produce of the estate was limited by the ability of the handicraftsmen to make things with very crude tools and out of limited raw materials. There are more kinds of things upon the shelves of a modern grocery than was to be found in the whole of Germany. All that vast multitude of commodities and merchandise which forms the necessities of the twentieth century was unknown. There were more different kinds of monkey wrenches made in predepression America than there were articles of merchandise in the feudal Holy Roman Empire. As someone has observed, more freight sweeps over a single railroad in a single night in one direction than poured through the Tirol passes in a year in the age of Frederick III. When the season’s produce was available and all accounted for, the dwellers of the feudal commune had a modest subsistence while, by a variety of proscriptions and ordinances and dues and taxes, a certain amount of all that had been produced trickled into the bins and barns and cellars of the lord.

But since the lord commanded a fraction of the produce of only a small population of tenants, his whole share was not sufficient to make him rich. Only those lords who owned immense manors, comprising a town or two, or who owned a dozen or a score or a hundred manors, as some did, extracted enough from their tenants to amount to riches. The richest, of course, were those princes who possessed extensive domains and drew tribute from the tenants of hundreds of manors.

On the manor there was and could be nothing of this thing called abundance which the modern politician juggles before the hungering eyes of his constituents. Barring the visitation of famine or disease there was enough to eat, but little more. Life was inexpressibly dull. To the manor courtyard came at intervals the wandering acrobat and juggler and magician with their tricks; the pilgrim with his tales; the minstrel with his songs and sagas, and the peddler with his few exotic wares and spices and his gossip. But these were infrequent interludes in a world of dullness.

It was this world that was cracking up. And the force which was doing it was money, the merchant, and the town.

Imagine a little town—part of the estate of some flourishing lord. Within its walls is a jumble of rude dwellings, the homes and shops of craftsmen—weavers, glovers, armorers, smiths, perhaps glass-makers, or, mayhap, woodcarvers and other workers; the castle of the lord, with its retinue of workers, villeins, men at arms, and knights. Outside these walls, in some sheltered spot, is a cluster of merchants, with their carts and benches in the open air. As time wears on, these servile and declassed bargainers set up their dwellings, fix their headquarters there, and, after a while, form a small commercial community. Within are other thrifty craftsmen who assume the functions of merchants, handling their own and their neighbors’ products with these outlanders and at the market places and fairs. In time these merchants, within and without the walls, find they have common interests, common wrongs to resist, common rights to support against the exactions of the lord. They organize. And thus the bourgeoisie is born—the bourgeoisie and the Chamber of Commerce which is to inherit the earth. This bourgeoisie clamors for a voice in affairs. It spreads and grows until it swallows the town. It organizes guilds. It sets up demands. It takes over from the lord the function of governing the towns either by free charter or by violent assumption of power. It regulates trade, prices, production, competition. Imposing guild houses rise in these new towns all over Europe. These merchants grow moderately wealthy. They build stouter houses behind more impregnable walls. By the middle of the fourteenth century they were already challenging the power of the feudal lords. Thus they not only laid the foundations of the modern city, set in motion the money economy, and launched the capitalist system, but they brought into being the first rudimentary techniques of representative government, though it was a long time before the constituency represented would be a popular one. Thus the modern town was born, and out of it came that ogre which ate up the philosophy, the ethics, the slavishness, the ways of life of the almost frozen medieval system.

And thus a new kind of rich man came into the world. The rich man of the feudal system was the hereditary lord who in an outlaw world swapped with the peasant and burgher protection and order for a share of their product. He took part of their product and part of their labor directly, in places taking as much as three days out of six. He demanded fines and dues and tribute, making almost every event in his own life and his vassals’ births, marriages, and deaths the excuse for some new kind of levy.

But little by little gold and silver was flowing into this world of barter. By small degrees Europe found herself shifting to the money economy with consequences that her untutored social philosophers could not fathom or foresee. And as the towns spread out, the merchants began to accumulate money in exchange for a wholly different service from that performed by the feudal lord. After a few centuries they would take over the earth and set it spinning “down the ringing grooves of change” until one day a new force would arise to threaten the entrepreneur as he in his time challenged the lord.

It was about this time, in 1380, that a simple Swabian weaver named Hans Fugger left his small village of Graben to try his fortune in one of these growing towns—the free city of Augsburg. At the end of his life he was still a weaver, but he was more merchant than weaver, buying raw cotton for himself and his neighbors from Venice and selling his fustian and theirs to other cities.

When he died, he was succeeded by his two sons, Andreas and Jacob. They in time split off into separate enterprises and, indeed, separate dynasties. They became respectively the heads of the two Fugger houses—the Roe Fuggers and the Lily Fuggers. The Roe Fuggers, headed by Andreas, became prosperous first and disappeared quickly from the chronicles of the times. Jacob’s descendants became the Lily Fuggers (so named because of their arms). He built a flourishing business, married the daughter of a Franz Basinger, a prosperous merchant and Master of the Mint, and set up in a handsome house in the chief street of Augsburg opposite the guild house of the weavers. When he died in 1469 he was ranked seventh among the wealthy men of the city.

Jacob Fugger II, his youngest son, was born March 6, 1459, in this imposing home. He had two older brothers, Ulrich and George, who were already employed in their father’s counting room when he died. Ulrich at this time was 28, George 16. Jacob was but 10. But they were fortunate in the presence of an intelligent mother who was also a good businesswoman and who was able to direct her young sons wisely until they were able to take hold with a sure grasp. Jacob, however, was marked for holy orders. He proceeded as far as his first vows and was prebendary in Herrieden when his strong-minded mother decided he should forsake the sanctuary for the countinghouse. He left the cathedral in Franconia and went to serve his apprenticeship at Venice. In 1478, aged nineteen, he returned to Augsburg and took his place as a partner in the business which was then known as Ulrich Fugger and Brothers.

Thus Jacob did not start from scratch. It was into a very flourishing enterprise he stepped as a partner when he began his business career. His brother Ulrich, an able business administrator, had greatly enlarged the business and had actually made that connection with the House of Hapsburg which was later to prove of so much importance in the career of Jacob. He had already spread the firm’s branches to a dozen European trading cities and had established it as a collector of papal revenues in Scandinavia. However, while Ulrich and George were businessmen of marked ability, Jacob’s powers were of the highest order. And, despite his youth, he was not long in the firm before his influence began to assert itself. Before the fifteenth century had ended he had become the leader in the rapidly growing enterprise.

He was one of those men who not only possess great talents but exhibit them in their bearing and countenance. He had that kind of imperious manner and Jovian visage that marked the elder Morgan and made lesser money grabbers tremble in his presence. He possessed that inexhaustible vitality, that tranquil and unruffled temper, that immense talent for organization that characterize the greater industrial barons of our own day. In his lifetime he was assailed with varying degrees of fury as a monopolist, an enemy of German interests, a selfish and greedy hunter after profits, a foe to the established morals of the church and the state. Luther denounced him upon numerous occasions. And it was, indeed, Fugger’s fate to find himself mixed up in that fatal adventure in papal finances that precipitated Luther’s revolt. But through all this he preserved the perfect composure of the man who believes himself to be the special child and instrument of the deity. Just as a later-day industrial saint, John D. Rockefeller, said, “God gave me my money,” the pious and acquisitive Fugger said: “Many in the world are hostile to me. They say I am rich. I am rich by God’s grace without injury to any man.”

Beginning as a theologian and then as a merchant, he became in turn a banker, a promoter, an industrialist, a commercial statesman. He was a dynast. But he had no ambition to found a family of noble and unproductive rentiers. He looked with unmixed satisfaction upon the function of the entrepreneur and the profit by which he lives. He put aside the suggestion of retirement into tranquillity and ease with the observation that he “wished to make a profit as long as he could.” His ambition was to create a rich and powerful dynasty of bankers and industrialists. He consorted with princes, emperors, and popes, but he never fawned upon them. He could write to an emperor who owed him money—the most powerful potentate in Europe—to remind him that he owed his crown to Fugger’s financial backing, that his majesty owed him money, and he begged that he would “order that the money which I have paid out, together with the interest upon it, shall be reckoned up and paid, without further delay.” He lived amid magnificence, surrounded by priceless objects of art and the greatest library in Europe and with a collection of estates which he deemed becoming to a great prince of trade.

After his death the capital of the Fugger company, according to an inventory made in 1527, was 2,021,202 golden gulden. And twenty years later (1547) the firm, under the leadership of his nephew Anton, a man of ordinary abilities, had a capital of five million gulden.

The foundation of the Fugger fortune, of course, was merchandising. For a long time big merchants had been shouldering in among the swarms of peddlers who roved over Europe. The peddler’s cart had left its wheel ruts along new roads, and these, with the remnants of the old Roman roads, became the nerve system of the Renaissance. Along these trade routes new cities rose and old ones took on new life. Transport companies were formed and navigation canals were opened. These peddlers were changing the face and stirring the heart and lungs of Europe. They made it possible for the beekeeper in some remote Thuringian manor to exchange his honey for a few ounces of pepper or cinnamon from the spice islands of Asia. Through their profit and coin-hunting expeditions it became possible for the fustian weaver of Augsburg to buy the product of the silversmith of Florence, the silks of Venice, the brocades of Lahore, and the perfumes of Alexandria. Two great streams began to flow around Europe: one a stream of goods made up of every sort of product of every clime; the other a stream of money coined in the little mints of hundreds of petty princes. These fustian makers and wool weavers and tool mongers began to have a wider market for their wares and they began to produce more. Men flocked to the towns. The capitalist system, with its money and its freedoms, was becoming the reigning ism, even though that word was unknown and the only isms men heard of were those which described the bloody and warring armies of religion.

Men like Fugger were coming to be a need. The smaller merchants, moving in an incessant stream over the growing network of European trade routes, had depended upon the customers they found at the manor gates, at the market places and the fairs. They were bringing to merchandising the utility of place. But a different sort of merchant was needed to confer upon it the utility of time and who would add the function of the wholesaler or jobber.

This called for a special kind of talent, the sort that in later years accounted for the huge fortunes of the early Astors, the English merchant adventurers, the Stewarts, the Wanamakers, the Selfridges and Strauses in this country and England. They had to have something more than mere instinct for bargaining. They had to have not only a capacity for organization and for accounting, but the spirit of adventure—unlike the modern merchant who reduces all to formulas called the science of merchandising and who thrusts the element of risk upon other shoulders. These large-scale entrepreneurs were putting on respectability. Already some English merchants like Sir William de la Pole and Sir Richard Whittington had attained to knighthood, and in Florence the Medici had achieved nobility and become the rulers of the city. The merchant, who had been hardly distinguished from the pirate and whose morality, says Nietzsche, was merely the refinement of piratical morality, now emerged like the traders of Tyre, “the crowning city, whose merchants are princes, whose traffickers are the honorable of the earth.”

The Fugger firm handled a large number of commodities and products. Fustian, a sort of rugged cotton textile of which corduroy is one type, was in wide demand, and Augsburg was a great center of fustian manufacture. Fugger supplied the weavers with raw cotton that was picked up at Mediterranean ports, chiefly Venice, and brought by sumpter mule through the Tirol. In turn he bought their product and supplied it all over Europe. He was something more than merchant; he was also a manufacturer, of the contractor type, operating on the putting-out system, furnishing the wool and taking the cloth from some numerous hand looms—3500, some historians say.

He was a large importer of metals, spices, silks, brocades and damasks, velvets, herbs, medicines, works of art, rare and costly viands, fruits, and jewels. He purchased large diamonds, some costing as much as 10,000 to 20,000 golden gulden.

First among this merchandise was luxury goods. The princes, nobles, gentlemen, and the richer merchants were his customers. The lords and gentry and well-to-do townspeople were collecting their dues and fines and taxes in money, and there was a growing volume of silver and gold to spend. The lords had a constant flow of moneys which were for the most part dissipated. The income of Europe was beginning to pile up in the hands of the large merchants.

Inevitably these men were bankers—bankers to other merchants, to farmers, to weavers, and to governments large and small. When any government wanted money it customarily went to its rich merchants.

In the infant capitalist world of the fourteenth century the closest approach to big-business technique was the spice trade. Spice played the role that copper was to play in the fifteenth century and oil in the twentieth. There was not much variety in the foods of the time and the means of preserving them were even less developed. The palate took refuge from the monotony of a limited diet in a jolt of pepper or some other spice. Spices came into widespread demand and merchant captains roved the seas looking for spice supplies with something of the adventurousness of the modern wildcatter hunting for petroleum.

For many years Venice was the center of the European spice trade. But Portugal, following her conquests in India, got control of a supply that transferred the world’s spice capital from Venice to Lisbon and later to Antwerp. Here is the way this business operated. First of all, it was a royal monopoly. The Portuguese king, like most monarchs of the time—and since—continually needed funds. He would make a contract with a merchant to outfit a vessel at the merchant’s own expense for an expedition to the spice regions of the East dominated by Portugal. The merchant loaned the king a sum of money proportioned to the amount of spice or pepper he hoped to bring back. When he returned with his hold loaded with pepper, cinnamon, and other spices the king paid off the loan with the cargo. These were called pepper contracts or spice treaties. Obviously they were highly speculative, since it was a long voyage, in primitive vessels, across seas menaced by storms and pirates. The empty-handed skipper, of course, lost his loan.

Fugger dealt in spices, but for most of his life he looked upon these spice adventures and their treaties a good deal as John D. Rockefeller looked upon the oil producers. Rockefeller preferred to buy their oil after they had fetched it out of the ground, and Fugger preferred to buy spices from the successful shippers after they had brought it safely back. A man had to buy pepper at a distant point, pay for it in advance in the form of a loan to the king, haul it at his own expense and risk, and take the chance in a fluctuating market that it would be worth what he paid for it.

This was not the sort of business Fugger relished. But the other merchants of Augsburg, chiefly the great Welser firm, were active in this. When the Portuguese conquered India, a consortium of Augsburg merchants led by the Welsers made a pepper treaty with the king to equip a fleet and made an immense profit. Fugger took only a small piece of this.

But in the end he succumbed, as the refiners succumbed to wildcatting for oil. Magellan, after a three-year trip around the world, returned, having made various conquests. He took possession of the Moluccas, the fabulous Spice Islands, for the crown of Spain. Jacob Fugger sought a spice contract with the Spanish king. With his fellow South German merchants, he equipped two voyages, one led by Sebastian Cabot and one by Garcia de Loaisa, to bring back pepper from the Moluccas. Both voyages were complete failures. But Fugger died before they got well under way and never lived to see the wisdom of his earlier restraint vindicated. He lost 4600 Spanish ducats on this venture.

These rising magnates were not without dishonor in their own times. They were economic revolutionists. They were as obviously at war with the established order as the inventors of the power loom at a later day or the makers of modern corporate finance capitalism in the last century or the protagonists of the planned capitalist society in our own day. An old dogma of economic ethics, hoary with age and heavy with the benediction of the church—the principle of the “just price”—was being hustled out of civilization.

Europe had been operating on the economic and social ethics of Saint John Chrysostom, remodeled and adapted to the times by Saint Thomas Aquinas, for centuries. There was a ban upon the unrestrained pursuit of wealth as something inherently evil. Profit and interest were the twin devils of the scholastics as they were of the atheist Marxians four centuries later. Chrysostom had said: “Whoever buys a thing in order to make a profit selling it, whole and unchanged, is the trader who is cast out of God’s temple.” “What else is trading,” said Cassiodorus, a monkish jurisconsult and sort of ghost writer to Theodoric, “but buying cheap and wishing to sell dear at retail? . . . Such traders the Lord cast out of the Temple.” This was fourth- and sixth-century Christianity. The great Angelic Doctor amended this to permit a profit—but at a “just price.” “Trading in itself,” he said, “is regarded as somewhat dishonorable, since it does not involve a logical or necessary end.” “Gain,” he argued in his Summa Theologica, “which is the end of trading though it does not logically involve anything honorable or necessary, does not involve anything sinful or contrary to virtue; hence there is no reason why gain may not be directed to some necessary or honorable end; and so trading will be rendered lawful; as when a man uses moderate gains acquired in trade for the support of his household or even to help the needy.” (Question LXXVII, Article IV.)

Out of this grew the doctrine of the just price which was supposed to inspire the trade of Europe until the eighteenth century. But as Saint Thomas himself had said, the “just price is not absolutely definite but depends rather upon a sort of estimate.” Society therefore contrived a legal agency for ascertaining and proclaiming the just price. The merchant’s guild became the arbiter. The trader and craftsman were supposed to be content with an income fitting their station in life. And in fixing the just price the guild was supposed to be guided by the interest of society and not the interest of the entrepreneur, which is one point of difference between the ancient guild and its modern editions—the twentieth-century trade association. Under the influence of this philosophy the guilds set up as code authorities in a medieval NRA and proceeded to subject medieval trade to the most extensive and exacting regulations. Everything was formalized. Trade itself was caught in hard and fast jurisdictional ruts. In Frankfort there were 191 crafts—eighteen in the iron industry alone. And as regulation begets regulation, the feudal town became enmeshed in a tangle of rules and formulas and ordinances and red tape that utterly constricted the economic system.

Everything had tended to become frozen. The merchants sought to hold the workmen to long hours, low wages, and protracted apprenticeships. There was a resistance to new men coming into the merchant’s and master craftsman’s ranks. High fees were imposed to keep the newcomers out. A tinker in Brussels was charged 300 florins for the privilege of starting up his own shop. The apprenticeship and journeyman stage was lengthened sometimes to twelve years.

Every form of progress had to fight against the established rulers of manor and town. Poverty was appalling. Workers lived in hovels. Abortive proletarian uprisings appeared all over Europe. Peasants rose without success in Saxony, Silesia, Brandenburg, Illyria, Transylvania. English laborers demanded to be paid in money. Journeymen guilds arose under cover of religious and technical-instruction associations—bootleg unions, like American speakeasies during the prohibition era disguised as dramatic and literary clubs.

For a century a quiet, unostentatious, cautious, and inarticulate resistance to these multiplying fetters was under way. New ways of life, new demands of trade, the changes made by the expanding money economy were forcing growing alterations in the general acceptance of these theological concepts of trade.

For one thing, in a growing money economy credit was necessary, even to the pope and the abbot who thundered against interest. Pope John XXIII died with his miter in hock to Giovanni de’ Medici for 38,500 florins. When John died his successor demanded the miter back under pain of excommunication. Indeed, one monarch who possessed what was believed to be the crown of thorns that had pierced the brow of the crucified Christ pledged it to a Venetian banking house for a loan.

This need for credit expressed itself at first in a toleration of the Jews. The new monarchs assumed new powers without the financial means of supporting those powers. The religious orders, embarked upon grandiose programs of cathedral and monastery building, had to have money. Christians could not lend since the church forbade it. This offered an opening for the Jew, who was not bound by Christian ethics. And so, being excluded from other forms of trade, he became the moneylender of Europe. It is of more than passing interest that Aaron of Lincoln, one of the earliest known English Jewish moneylenders, had advanced funds to the St. Albans minister at Lincoln and at least nine other Cistercian abbeys. When he died the monasteries owed him $24,000, which the good King Henry II piously declared forfeited, at the same time confiscating Aaron’s property and cash, which he used to wage war against Philip Augustus of France. Many such instances are recorded.

For this pretty situation Saint Thomas had provided a convenient ethical shelter. The great theologian held lending at interest to be a sin and an injustice to the borrower who was the victim of usury. “The usurer sins in doing an injustice to the one who borrows from him upon usury. But the borrower upon usury does not sin, since it is not a sin to be a victim.” But, asked the theologian, does not the borrower induce the lender to commit a sin by offering him the occasion? “It is lawful,” expounded the Angelic Doctor, “to use sin for a good end.” He adds, with what might be called a naïve, almost holy sophistication, that “He who borrows money upon usury does not consent to the sin of the usurer, but uses it; nor does the taking of usury please him, but the loan, which is good.”

And what end could be better than the building of a monastery or a cathedral or the support of a Christian monarch? As to the confiscation of the property of the usurer, is not the sinful man subject to punishment? It is not possible to excommunicate a Jew. But it is possible to deprive him of the means whereby he or his tribe commits a sin. To take his funds is like disarming a brigand.

As the new methods spread under the influence of the expanding money economy, the need for credit by businessmen and sovereigns grew to the point where funds more formidable than the Jew could supply were needed. Moreover the merchant class was accumulating money savings which they were eager to put out at interest, and so the Christian banker appeared upon the scene and the Christian ethic lost some of its plausibility. Society divided into two schools, those who stood by the old scholastics and those who took the fork in the road behind the leadership of the humanists. The old-timers roundly denounced Jacob Fugger and his colleagues in trade. They carried the war into the Diet and into politics. There were great cities whose security depended upon the power of the guilds, like Constance and Basle and Lübeck and all the Hanseatic towns. There were some others, like Augsburg, and the Flemish towns, and many in France, which were building their prosperity upon the independent capitalist.

The Hanseatic League, which comprised 150 cities at its height, forbade any man to buy grain before it was grown, cloth before it was woven, herring before it was caught. It regulated prices, submitted its members to the most minute regulations, arranged all to perpetuate the place and power of the “Little Man,” backed its policies and rules with assemblies, tribunals, police, fleets of ships protected by a navy, flew its own flag, and maintained foreign branches where its branch managers and clerks lived in barracks under an iron discipline. Despite its power, such merchants were cruelly handicapped against the free, unfettered devices of the independent merchant. Hence they denounced the rising Fugger. At Constance the Ravensburg Company, until then the greatest trading corporation in Germany, demanded that no one should be permitted to have a capital exceeding 100,000 gulden, though its own was not less than 140,000. The Council of Nuremberg would restrict it to 25,000 gulden. In the German Diet it was said that the wealthy were reproached with “destroying all chances for work of the small trader on a moderate scale.” In France a similar movement was afoot. Jacques Coeur, the erratic but powerful French millionaire, was indicted as one “who had impoverished a thousand worthy merchants to enrich one man.” This sentence, in endless variations, was destined to go echoing through the succeeding centuries. In the American Congress, about the time John D. Rockefeller was born, a Mississippi representative would bewail “the death of so many small establishments which might separately and silently work their way into honorable existences” and “one great establishment rises on the ruins of all the surrounding ones.”

Fugger soon concluded, as John D. Archbold and John D. Rockefeller did, that his philosophy needed an apologist. And he found the ideal one in Dr. Konrad Peutinger, the humanist, whose home was in Augsburg. Peutinger was a more formidable champion than Chancellor Day of Syracuse University or the flock of prosperous preachers who took Rockefeller’s gold and used scripture to defend him. He was a sort of combination of Samuel C. T. Dodd, Rockefeller’s verse-making and philosophising counsel and Elihu Root, who spread his own respectability thinly over the hated monopolists of his time.

He was a lawyer and, like most lawyers of that era, a theologian who had taken his place with that school which believed that the philosophy suited to a human society must seek its criteria and data in the affairs of men rather than in the abstract contemplation of the spirit. He was Fugger’s chief adviser. He wrote: “Every merchant is free to sell as dear as he can and chooses. In so doing he does not sin against canonical law; neither is he guilty of antisocial conduct. For it happens often enough that merchants to their injury are forced to sell their wares cheaper than they bought them.” He defended cartels and monopolies, profit and interest. He was indeed the first great philosophical evangelist of the profit system. He drafted laws for the Emperor Maximilian I in conformity with his beliefs and the interests of his powerful client.

Thus always the reigning acquisitive group must have its philosopher. Rameses found his in the temple. Nicias had his Hiero. The corporations of Rome had their Cicero. Saint Thomas turns up providentially to build a fortress of philosophy around the feudal lord whose regime depends upon the suppression of the merchant. And Dr. Peutinger appears upon the scene to refute the Angelic apologist when his ethics no longer fit the prevailing process of wealth getting.

As a matter of fact, even the great Angelic Doctor himself had left a large loophole for the collectors of interest. He held that while a man could not receive interest, yet if he received a gift “not asking it and not according to any tacit or explicit obligation, but as a free gift, he does not sin; because even before he lends the money he might lawfully receive a free gift, and he is not put at a disadvantage by the act of lending.” (Summa Theologica, Lesson LXXVIII, Article II.)

Here is pretty thin skating upon the theological ice, and inevitably the ice cracked first by the use of the “gift,” then by an understanding, by means of the bonus, much as interest-rate laws have been evaded in our own time, and finally by frankly throwing overboard the whole Aquinian luggage. For when Fugger writes to Charles V for payment of his loan he asks plainly that “the money which I have paid out, together with the interest upon it, shall be reckoned up and paid, without further delay.” (Author’s italics.)

Certain it is that Fugger, the pious Christian merchant, stood in need of an ethical basis for his enterprises, since he reveled in profit and interest upon a most extravagant scale. His biographer, Jacob Strieder, estimates—using Fugger’s own figures—that in 1494 he and his two brothers invested a capital of 54,385 golden gulden in their firm and that seventeen years later (1511) this had grown to 269,091 golden gulden. Here was an increase in capital of about 400 per cent, or 23.5 per cent a year. But this does not measure the profit, since it takes no account of the sums withdrawn during those seventeen years by all the partners.

However, in 1511 a new accounting is begun. Various sums were taken out of the business to pay off female heirs. The firm made a fresh start in 1511 with a capital of 196,791 golden gulden. After Jacob’s death, the inventory made by his nephew Anton, which took nearly two years to complete, revealed a capital of 2,021,202 golden gulden. This represented a profit of 1,824,411 golden gulden, or over 900 per cent. Here was a profit over a period of sixteen years of well over 50 per cent a year. But again it is necessary to add a considerable percentage to this account for that part of the earnings withdrawn for the extensive expenditures necessary to support the Fuggers’ magnificent way of life.

The long struggle to break up the old feudal system and the primitive guild ethics of the towns and set in motion the capitalist society lengthened out into a series of steps. First there was the slow infiltration of money. Next came the shattering of public acceptance of the scholastic ethics. Then came the rise of free competition and the long retreat of the old guild trade monopolies. Next was the development of modern banking. Then came the rise of the large-scale industrial operator. It is because Fugger played a leading role in all these stages that he stands as the most important figure at the dawn of the capitalist era.

It is not easy to name the precise date when modern banking begins. It is simple to say that it begins when loans are made, not in cash, but in bank credit. Banks there had been in the earliest times. And indeed the famous Mercato Nuovo or the Vendi Tavolini in the Florence of the Medici did not greatly differ in appearance at least and in most functions from the bankers’ locations on the street of Janus on the north side of the Roman Forum. In the latter the moneylenders occupied a large ill-lighted apartment and sat in rows on high stools with their coins spread out before them behind a bronze screen. In the Mercato Nuovo, which still stands, the bankers sat on lower stools behind their tables covered with green cloth, ordinary paper parchment for notations, scales, a bowl for silver coins, and with their gold in pouches at their belts.

The early Roman banker was primarily a moneychanger. A time came when he accepted deposits which he loaned out for his clients.

The Florentine banker was also a moneychanger. But he was far more a lender of money. He loaned primarily his own money. But he accepted funds from others which he used in his business and which use he paid for.

There is a hiatus—a long period in the early Middle Ages—when all traces of banks are lost. The moneylender—and chiefly the Jewish moneylender—alone is evident, a lone figure moving through an unfriendly world from fair to fair and town to town, a prey to knights and kings and brigands.

It is about this time, however, that banking again shows itself in the business world. It appeared among the Lombards at Asti, Chieri, and other towns, and later at Florence. These men did a sort of pawnbroker business like the Jews, taking valuables of various sorts as collateral.

We then find the larger merchant-adventurers drifting into the banking business. They were compelled to do a certain amount of moneylending in connection with their activities at fairs. The banker-merchant posted himself at the fair. Merchants went about buying and selling goods. Sometimes they operated by means of exchanges of goods, sometimes with coins—perhaps to the extent of 40 per cent. But there were merchants who had to have credit until they had disposed of their whole cargo. And so they took their vendors to the banker who either guaranteed payment or actually made payment to be repaid later. Out of this developed the practice of bills of exchange.

Always there were people or institutions or rulers who felt the need of a safe depositor for their moneys. The English king deposited his funds at times with the Knights Templars and so did other princes and lords. It was a logical survival of the ancient custom of keeping funds in the temples. In time the bankers became more than mere lenders of their own funds. They accepted the deposit of others’ funds. These they were at liberty to lend out. Such deposits were treated as demand loans to the bankers. There were times, however, when the depositor came for some of his money only to find the banker did not have it available. Under these circumstances the banker would take his client to another banker with whom he had a deposit or enjoyed credit and thus honor the client’s demand. After a while it became unnecessary for the banker to go in person to another banker to arrange this withdrawal. He would give his client a written order upon a neighboring banker for the funds he lacked. Thus checks came into use. And the next phase was for the client himself to give to another a written order upon his banker for funds. Thus the general use of checks came into vogue.

All the time, the banker served to accommodate the kings and the petty princes and lords who needed money. When the king required funds on loan he might get them from a single usurer at first. But later he would be aided by a consortium of merchants who would subscribe to the loan, usually under the leadership of one of large means and influence among their number. Such a one was Fugger. And thus, we see the rise of the international banker.

Cities, supported now by orderly taxation, would in need sell their revenues in advance to tax farmers who, not infrequently, raised the funds as the old Roman tax corporations did, by subscriptions among the well-to-do merchants. One finds running through all these early years ordinances and edicts and laws and regulations of cities and kings and public bodies and guilds covering the subject of checks and deposits and bills of exchange and negotiable certificates of deposit and bank examinations and balance sheets. Double-entry bookkeeping was perfected at Venice, where Fugger served his apprenticeship. The Italians, chiefly the Florentine bankers, were inventing names for various instruments and transactions—casa, banco, giornali, debitore, creditore—which were to become the daily countinghousehold words the world over. Thus men were slowly forging the instruments, weapons, and the jargon of the modern capitalist state that would become in time the mold of society. These old bankers were leaving their names upon the institutions and streets of the cities of Europe. In Florence you will still find in the street names, the memory of the Bardi, Peruzzi, Albruzzi, Grecci, and others—bankers all.

The Fugger family had followed this evolution—first weavers, then lenders of money around the fairs and market places, then international bankers—the greatest of their time. Jacob Fugger’s firm had a web of branches and factories extending from Naples in the south and the Spanish peninsula to Hungary and Poland in the east and Scandinavia and England in the west.

No canvas designed to depict the dawn of capitalism would be complete without a brief place for what was perhaps the first authentic strictly capitalist depression in Europe, produced largely by the operations of these new bankers. The episode is generally known as the failure of the Bardi and Peruzzi banks in Florence and it produced consequences not unlike those attending the failure of Jay Cooke in America or Baring in England or the Credit Anstalt in Vienna in 1931.

Florence had carried far the organization of her producing energies. Wool textiles was one of her important products. The homes of the townspeople and the villagers were turned into sweatshops to which the merchants sent the raw wool to be processed in the homes. While the Church and her doctors thundered against interest and profit, the village priests read pastoral letters threatening the workers with a denial of the sacraments if they resisted the exactions of the wealthy usurers of Florence who dominated the system.

A continuous supply of raw wool on the one hand and wide markets on the other became essential to the city’s economic safety. This probably led the Florentine banker-traders to England, where the best wool was produced. Two of the greatest Florentine houses, the Bardi and the Peruzzi, began extensive operations in England in the latter part of the thirteenth and the beginning of the fourteenth century. They made large loans first to Henry III and later to Edward II and Edward III, but mainly to the latter. In return they got the privilege of trading in England, which was otherwise closed to foreign merchants, and the privilege of buying wool for the Florentine market.

It is these loans to Edward III which are called by historians the cause of the failures of the Bardi and Peruzzi. But this is a very considerable oversimplification. By 1337, when Edward III launched that bootless century of struggle known as the Hundred Years’ War by invading France, he owed the Bardi 62,000 pounds and the Peruzzi 35,000 pounds. But he immediately made enormous additional loans to finance his ambitious design to seize the crown of France from Philip VI. By 1343, when the first phase of that quixotic adventure came to an end, he is said to have owed 900,000 pounds to the Bardi and 600,000 pounds to the Peruzzi. Sapori, a recent student of this historic episode, thinks the sums exaggerated and that they were nearer 500,000 and 400,000 pounds each.

Edward had promised to pay the principal and interest of these loans in coin, and his undertaking was guaranteed by the Archbishop of Canterbury and the Bishop of Lincoln. So eager was the rash Edward for these sums that, upon completing the arrangement, Edward gave to “the merchants of the Bardi society” 30,000 pounds sterling, to the “merchants of the Peruzzi society,” 20,000 pounds sterling, and “in consideration of the great help given the king,” 500 marks to a Peruzzi agent in England and, for the same reason, 500 marks to the wife of another agent and to the wife of a Bardi agent. Wives of two other agents got 200 pounds each. It sounds as if two great American banking houses managed an American loan to the government of Chile on a 20 per cent basis, while the partners in the two banking houses got a several-hundred-thousand-dollar bonus from the Chilean president, who also distributed the largess among the South American agents of the banking houses and their wives. Thus, commercial bribery had already made its way into the investment banking business.

But all this time Florence, rushing forward in the first incident of uncontrolled expansion of the capitalist era, was moving deeper and deeper into debt. Merchants were making profits and depositing them with the Bardi, the Peruzzi, the Mozzi, the Frescobaldi, the Scali, and also investing in various bond issues underwritten and managed by these houses, but chiefly by the Bardi and Peruzzi. Competition with their wool industry was growing from England and the Flemish weavers. But as they produced ever more they were ceaselessly seeking to expand their markets. Florence, an economic unit like modern England, imported raw materials and exported finished products. She enjoyed her expansion through the strategic activities of her rich bankers, who grew wealthy milking European monarchs and princes and at the same time using their loans as weapons to force Florentine products into those old custom-sealed European countries and cities.

One market, among others, was of great value to Florence—the city of Lucca. This city was a commercial battleground between the merchants of Florence and Pisa. And out of this situation it became the victim of an episode that depicts strikingly the inheritance of violence that deformed the early struggles of primitive capitalism. A band of German mercenaries seized Lucca and offered to sell it to the city of Pisa. Pisa agreed to pay 60,000 golden florins and made a down payment of 13,000 florins, which it was destined to lose when Florence armed to balk this sale of its valued market to its chief rival. Later certain Florentine merchants and bankers—including beyond doubt Bardi and Peruzzi—offered the German mercenaries 80,000 florins. They would thus control Lucca as a market for their products and own its customhouses and its tax revenues. It was as if a few leading merchants and manufacturers of Philadelphia were to propose to buy Pittsburgh from a mutinous regiment of the New York National Guard that had seized the latter city and was now peddling it around the East. But Florence, still ruled by the remnant of the old Guelph spirit, protested against this immoral purchase of a city’s population like so many slaves. Finally the captors of Lucca knocked the city down to a Genoese merchant-adventurer named Gherardino Spinola for 30,000 florins. The outcome of this was war between Florence and Pisa.

The first effect of the war was a demand for war loans, which the banking houses were called upon to float. And this came at a time when Edward III was marching his armies around Flanders and making new appeals for larger advances from the Bardi and Peruzzi.

The competition of the English and Flemish wool weavers had been undermining the trade of Florence much as the competition of the Carolinas cut into the business of the New England textile industry and as the competition of the East cut into the textile industry of Manchester. Production in Florence fell off. The streets were filled with the unemployed. Merchants who had large deposits with the Bardi, the Peruzzi, the Frescobaldi, and others were calling for their funds. Some of the smaller bankers failed. Indignation against all the bankers was rising. Florence faced a crisis not unlike that which faced America in 1933 or Germany in 1932. Nothing could save the great bankers but a moratorium. Disturbing rumors floated in from Flanders, where Edward’s generals were having but small success. In this crisis this old city, where the popular party had always been strong, with its active popolo minuto, which hated the Ghibellines not only because they represented the philosophy of the economic royalist, but of external interference and domination, submitted to the device of dictatorship. In 1342 that fantastic adventurer, Walter of Brienne, a Frenchman who styled himself the Duke of Athens, was made dictator through the machinations of the bankers. He proclaimed a moratorium on private debt for three years, which saved them.

But, having come into power, he plotted immediately for complete mastery. He suspended payment of the interest on the public debt and planned gradually to extinguish it by progressive repudiation, which promptly brought upon his head the wrath of the bankers. In 1343 the distress of the city was so great, the fortunes of the war so melancholy, the anger against the dictator so general that the people poured into the streets in an unrestrained uprising. They looted the palace of the Bardi, taking it is said, valuables to the amount of 30,000 florins. The dictator was compelled to resign and flee from the city. Certain Neapolitan bankers who had loans outstanding in Florence called them. The news came of Edward’s reverses that brought the Hundred Years’ War to its first pause in 1343, and Edward delivered the crowning blow by defaulting upon his loans. Immediately the Peruzzi bank failed. And within a year the great Bardi bank crashed. They carried with them most of the bankers of Florence. The disaster shook all Europe and produced in those cities where capitalist organization had proceeded to any length, such as Venice and Genoa, the most depressing consequences. Excessive debt, overexpanded industry, concentration of money and power and wealth, the extravagance of governments, the destructive power of war had made for Europe its first great capitalist depression in the modern era.

Like most of the great bankers from Jacques Coeur and William de la Pole in the dawn of capitalism to J. P. Morgan and the Mitsui in our own day, Fugger found it essential to his larger schemes to maintain an intimate association with the sovereign. And the sovereign, as Fugger mounted to power, was Maximilian I, who, like all the rulers of history, from Pericles and Caesar to Roosevelt and Churchill, found it essential to maintain an intimate association with the sources of credit. Fugger established a close relationship with the impecunious and unstable Maximilian, the “last knight of Europe.” When the hard-pressed Hapsburg needed funds the faithful Fugger with his seemingly inexhaustible resources was at hand. But if Fugger was a never-failing well of cash to the Emperor, his majesty was a never-failing source of new privileges and monopolies and profits to Fugger. If Fugger had in his vaults what Maximilian required, Maximilian had in his rich realm priceless metal and other resources that were indispensable to the acquisitive Jacob.

Maximilian was Emperor of the Holy Roman Empire, that pale imperial shadow of power which was slowly vanishing out of Europe. But of far more importance to him was the struggle for mastery that was going on in Germany, as in every other country, between the king on one side and the numerous feudal lords on the other. As in the thinly concealed struggle which smolders today in America between the local governments and the Federal government over the rising supremacy of the latter, Germany was turning to strong central government to solve her little-understood problems. The spirit of revolt in religion, the expansion of knowledge, the awakening curiosity of the masses, dynastic and commercial and technological and political energies kept the population in a ferment, but, perhaps, in the center of all this, accentuating and stimulating all the other elements of unrest, were economic forces.

Probably more than anything else the prime moving spirit of turbulence, controversy, and change was money. For at least two hundred years the feudal world was disintegrating. Men knew things were wrong. They debated and argued and fought over the causes and the cures. They held conferences all over Germany to inquire what was amiss and how it was to be set right. But they never seemed to get around to the real cause or even to talk about it. The struggle resolved itself now into bitter religious controversies, now into wars between princelings and estates, now into political debates. What they saw was a political upheaval, the effort of the king to make himself master against the savage opposition of the lords. They took measures against this. But they took no measures against the one potent energy that entered the system like a malevolent germ—money. So that as you examine the long history of the decline of the Middle Ages you are struck by the fact that nothing contributed so much to destroying the existing order as the measures that were taken by the politicians of the day to save it.

For several hundred years money—coins—had been trickling into the hands of rulers and people. After the downfall of the Roman Empire, coins began to disappear. It is estimated that in the year A.D. 518 there were about $3 70,000,000 of gold and silver in Europe. By A.D. 806 this had dwindled to $160,000,000, or about half. Whether these metals were destroyed or merely hidden away or lost cannot be said. But after A.D. 800 the production—chiefly in the Holy Roman Empire—was more than sufficient to make good the yearly disappearance, and in the fourteenth and fifteenth century the production was notably increased. Doubtless, much of the hidden precious metals began to reappear. Estimates of the precise quantities in use must be taken with a good deal of caution. Certainly as men became sensible of the value of these metals in exchange the hunt for them was quickened. All through these years one reads of the adventures of the alchemists who were being grubstaked by various wealthy men and rulers in the hope that they might produce the gold so eagerly desired. Kings began to impose and enforce the most drastic measures to increase the supply of precious metals in their kingdoms. In England, for instance, every merchant was compelled to import a certain amount of coin or bullion in every ship, and export of the metal was prohibited.

For a while these metal coins were little more than glorified commodities—gold, silver, copper—confronting, as Marx puts it, all other commodities. But coins were not consumed as other commodities were and they acquired a velocity other commodities could not have. Workers wanted their wages in coins. Farmers preferred to exchange their produce for coins where possible. They preferred to pay their dues and services in money, even their rent. The lords preferred to have it so. The lord could now indulge in luxuries. People bought more and more from merchants who in turn grew wealthy. The banker became important as credit grew. No longer could men—merchants, bankers, townspeople—tolerate the disorders that grew out of the petty wars and feuds and brigandage of the numerous lords and knights. They turned to the crown for order, stability, and protection against the feudal barons. The king—Maximilian—had no revenues from the kingdom save those from his own estate—the Tirol. Soldiers he could get from his vassal lords by levy under their feudal obligations when he wished to fight the heathen or a foreign foe. But for use against the lords themselves in the great struggle for mastery of Germany, the emperor had to have a mercenary army, and this required cash. He could get enough cash only by borrowing from the bankers, who in turn, through consortiums, could raise the moneys amongst the merchants.

Thus king and towns and merchants were drawn together by the inescapable necessities of this new money economy. This immense need for money for emperor, and pope too, for that matter, laid too great a strain upon the old scholastic ethics of Aquinas, for king and pope needed the rich man as the source of credit, and this, in turn, brought about a frank abandonment of the “just price” and the proscription against money wealth and interest. And thus the merchants and bankers waxed mighty, became the most powerful subjects, challenged the power of the lords, built castles of their own, acquired titles and estates, and became, in time, the lords of creation.

Maximilian was one of those frail vessels into which is poured the destinies of a people in a moment of crisis. He was young, well proportioned, ruddy and healthy, restless, ambitious, and not wholly devoid of ability. He lived simply, ate moderately, and avoided those copious draughts of Rhenish wine and beer that besotted the German nobility. The Tirolese peasants adored him because he was brave and adventurous as a hunter and a glamorous figure in the courtyard tilts. He enjoyed immense popularity with the younger nobles, was gracious and charming in his personal relationships, encouraged artists and scholars, and, in general, exhibited the qualities of urbanity, heartiness, ebullient good nature and courage that became one who was called the “last knight of Europe.”

But he was unstable, flighty, always plotting for supreme power. He engaged in one calamitous war after another. He was forever fabricating new devices for getting more money. Even as an old man in 1518 he was talking of another crusade against the infidel. Declining toward the end of his reign into the most humiliating poverty, embittered by the embarrassments to which it exposed him, he left the Tirol, traveled down the Inn and the Danube, where, prostrated by a long illness, he died.

It was to this unstable, chimerical, and tolerant prince that Jacob Fugger attached himself as chief banker. And the heights to which the great Augsburg banker rose in the Hapsburg hierarchy will be seen in the part he took in naming the successor to Maximilian’s throne.

Charles I, King of Spain, was a Hapsburg. He was the elder son of the Archduke Philip, Maximilian’s only son. Philip had married the daughter of Ferdinand and Isabella of Spain and died before those monarchs. His son succeeded them on the throne of Spain as Charles I. Maximilian had decided to make his grandson, Charles, Holy Roman Emperor to succeed him.

But there was another candidate in the field, Francis I of France. The selection of the emperor was in the hands of the electors, a small group of dukes and archbishops. The Margrave of Brandenburg, the Count Palatine of the Rhine, and the electors of Mainz and of Trier were practical gentlemen and their votes could be had upon one condition only—Maximilian had to be able to offer a bigger price than Francis. The fight started at the Diet of Augsburg in 1518. Maximilian was growing old. His treasury was empty. And though he talked of his plans to launch another crusade he could not pay the tavern bills of his courtiers. Nevertheless, there, supported by the financial resources of Fugger, Maximilian was able to secure the promise of support for the Spanish king.

The negotiations, reduced to the grossest commercial terms, reached a point where the Margrave of Brandenburg had the deciding vote. Fugger undertook to purchase the noble miscreant. Francis had offered him a rich French wife with a large dowry. But Fugger countered with the granddaughter of Maximilian—the sister of Charles of Spain—and 300,000 Rhenish gulden. Fugger guaranteed to deliver 100,000 in coin as a down payment as soon as Charles was elected. Large sums had to be provided from various sources, including immense amounts to be collected in Spain to complete the purchase of the other electors. Maximilian had commissioned Fugger to carry out these arrangements.

But the aging Maximilian died shortly thereafter, and Charles I assumed the direction of his own campaign. Almost his first act was to displace Fugger. He turned over to the Welsers, Fugger’s chief rival in Augsburg, the task of moving over 300,000 gulden collected in Spain to control the election.

Fugger was enraged at this. His whole position as the banker for the most powerful royal house in Europe, the Hapsburgs, was threatened. He lost no time acting. He let Charles know that he had but to throw his support to the French to blast the expectations of the refractory Spanish monarch. He got in touch with the electors. Soon Charles learned that an election consists not merely in making promises to those who have votes to sell but in convincing the purchased electors that the promises will be kept. When Charles’ agents got down to brass tacks with the electors they made it plain that they wished Fugger to manage the financial arrangements by which they had to be bribed not to sell the crown of their country to a Frenchman. They insisted that they would be satisfied with nothing less than Fugger’s guarantee of the payment of their respective shares.

Fugger was called back to the helm in triumph. In the discharge of this important commission, which resulted in the election of Charles of Spain as Holy Roman Emperor under the title of Charles V in 1519, Fugger extended credits of over half a million gulden in gold. His fame now reached its highest point. After this he remained the undisputed chief banker and financial adviser of the Emperor. Augsburgers said with pride that the name of Fugger was known throughout the world. He became almost a legendary figure. Luther related, with a touch of awe despite his hatred of Fugger’s predatory class and his feud with Fugger himself, how the Bishop of Brixen, one of Peutinger’s literary companions, had died in Rome, leaving a scarcely legible scrap of paper, and how Pope Julius sent it to Fugger’s agent in Rome to be deciphered. The agent recognized it as evidence of a deposit of several hundred thousand gulden which the good Bishop had with the Fugger house. When the Pope asked how soon the money could be sent, Fugger’s factor replied: “At any hour.” The Pope turned to the French and English cardinals present and asked: “Could your kings also deliver three tons of gold in an hour?” When they said no, his Holiness replied: “But that is what a citizen of Augsburg can do.”

The astute Augsburg banker made more than his interest and his “gifts” out of his sovereign. The function of banker—ever-ready and loyal banker and financial adviser—opened for him the door to priceless privileges in Maximilian’s ducal domain of the Tirol, rich in natural resources—that same Tirol with its mines which stimulated the patriotic yearning of the twentieth-century German statesmen for Anschluss. He obtained from the debt-ridden royal spendthrift those invaluable copper and silver monopolies that became the chief source of his great fortune.

It would be unfair to Fugger, however, to say that his loyalty to the Hapsburgs was the mere fruit of his predatory plans. He was banker, merchant, industrialist, Catholic and German. What were the percentages in which these ingredients fused in his imperious nature, it is not, of course, possible to say. He felt a strong tie to the Hapsburg house. His political philosophy, based upon his commercial interests, drew him inevitably to the monarch whose struggle against the principalities and estates advanced the cause of order and stability in a stronger central government, so essential to the rising merchant class. He gave to the Hapsburg drive for strong central government that kind of zealous support that the industrial magnate of Mark Hanna’s day gave to McKinley and Taft and that their successors today give with equal vigor to the champions of local rule against the forces of Federal power, because their changing interests now have shifted. But he doubtless felt a strong personal attachment to Maximilian. Through all that bewildered sovereign’s battles against the old order, his frantic efforts to obtain military and financial aid from the hostile lords, in Diet after Diet in which, as in Augsburg, the estates refused his appeal for arms and men or at Trier when they refused his request for the common penny, Fugger stood by his side and, in the last extremity, always opened his brimming chests of gold.

He must have been touched as he beheld his own growing wealth beside the ever-increasing poverty of his sovereign. At the Congress of Vienna, where Fugger, surrounded by his rich agents and the members of his family, magnificently attired, conferred upon favored nobles rich gifts of gold and pearls and other precious stones, the impecunious Emperor strode about resplendent in costly jewels that his rich banker had secretly loaned him to enable him to play more splendidly the role of monarch.

Fugger must indeed have been fully conscious that he occupied a sovereign eminence in a province within the empire—the new province, the great principality of money. For we find him addressing the Emperor .Charles V in terms used then only by great and powerful vassals who, under the formal language of allegiance, talked to kings with the assurance of equals.¹

He began to play the magnifico. In 1511 he was made a count. But already he had begun to acquire great estates. Before 1511 he had acquired at least four splendid domains—two of them from the Emperor himself, all in Swabia, and one of them very near to Augsburg. He had also an estate or two in the Tirol and in Hungary, and his magnificent palace in Augsburg, filled with the paintings and sculptures of the best artists in Europe, was a treasure house of art. Chiefest of all, like that other magnifico of the last century, J. Pierpont Morgan, he was an inveterate collector of valuable and rare and beautiful manuscripts and books. His library at his death was already the finest in Germany and after his death, through additions of his family, became the most famous in Europe. Indeed the greater part of its treasures was brought together by Jacob Fugger’s successors. It is worth recording here that 125 years after Jacob Fugger’s death, this famous library was sold by Count Philip Edward Fugger to the emperor for 15,000 florins—about a fifth of the sum that had been offered for it in an earlier day, and when the imperial librarian went to Augsburg to fetch the collection to Vienna the town councilors prevented him at the instance of the creditors of the Fugger family, whose wealth and power and glory had by this time departed.

Jacob, like many of the wealthy Christian men of wealth of his day, was a generous but never secret dispenser of philanthropy, giving to monasteries, churches, almshouses, and the poor. For one of these benevolences he is indeed famous. This was his erection of a model housing project—fifty cottages housing two families each, still known as The Fuggerei—in the suburbs of Augsburg to offer, at very low rents, decent homes to the underprivileged workers of the city. It is perhaps the first instance of a low-cost housing enterprise in Europe. And that the job was well done is attested by the fact that the houses remain in good condition and are still tenanted.

Always it was Fugger’s wish to enlarge and embroider the visible evidences of his wealth and power, partly, perhaps, to gratify his vanity, partly to add to the prestige of the House of Fugger.

For always this great House of Fugger assumed an identity in his mind separate from that of its members, and the proud merchant studied ceaselessly to ensure its immortality and its magnificence.

The Fugger partnership contract was built around this dynastic dream. The three Fugger brothers were equal partners. Upon the death of any brother the remaining brothers were to act as directors and to select from among the male heirs one worthy to be trained to take his place as a director when needed. When all of the brothers were dead the two directors, thus named from among the heirs, would assume command and train a third for the succession.

Female heirs and those in orders were excluded from the business. All heirs were compelled to leave their inherited share in the business for three years, after which they could, if they wished, withdraw it only gradually. The great mining interests were segregated from other enterprises, and only male heirs were permitted to inherit them. Various devices with penalties were contrived in the business structure to ensure its permanence.

But Fugger, who knew so well how to manage the great craft he captained, knew little enough of the perils of the seas it sailed. Anton Fugger, a nephew, succeeded to the chief directorship on Jacob’s death. Before he died in 1560 the great Fugger house was as deeply morassed in the financial adventures of the House of Hapsburg as the Bardi and Peruzzi were in the finances of Edward III. When Anton’s son Marcus took over the reins, he saw the Fugger riches slipping out of the company’s hands. Most of the wealth amassed by Jacob was dissipated in the lifetime of his grand-nephew. A century later the only part of that wealth that remained was what had been invested in lands.

Greater than any emperor, richer in revenue than any temporal monarch, was the pope of Rome. The papacy was then, as it is now, a highly organized superstate with its branches in every village, its parochial, provincial, and national officials, diplomats, armies, secret agents. Its primary function was the salvation of souls, but in the performance of that duty it had contrived an immense machine. Its founder had administered his great enterprise with literally no plant capacity beyond the open fields, the blue sky, and the simple habiliments of a mendicant. But the modern Church continued his ministry from the palaces of its wealthy prelates and a vast physical structure that required an endless flow of revenues into its treasury.

Inevitably the Church had developed an extensive system of papal taxes originating in little contributions from every corner of the world, flowing into larger pools in the numerous dioceses, finally making their way to Rome.

For several centuries the pope had employed the services of various bankers—chiefly Italians. But after 1502 Jacob Fugger elbowed all other rivals aside as the foremost fiscal agent of Rome. He collected the papal revenues in Germany, Holland, Hungary, and the Scandinavian countries. He made advances to the pope, recouping his loans out of these collections. Similarly he transported papal moneys to diplomats, monarchs, generals, missions all over Europe.

His place in history in connection with this traffic, however, rests chiefly upon the part he played in the collection of indulgence money and the sums paid by wealthy candidates for Church benefices for their promotion. His role here was a sinister one. There seems little doubt that he artfully established himself as what in modern American parlance would be called the “contact man” with the Holy See in the distribution of Church honors and benefices in Germany. The ambitious cleric seeking the purple of the monsignori or the pallium of the archbishop as a rule had “to see Fugger.” He was required to put up an immense sum with the Roman dataria, and Fugger was the gentleman who knew how to make the best terms for him, how to provide the money and the means of repaying it. Indeed, Fugger once boasted that he “had been concerned in the appointment of all the German bishops.”

It was out of this traffic, denounced openly as simony by the Church, but practiced behind the scenes by its prelates from pontiff down, that Fugger got for himself a dubious immortality in that historic episode that precipitated Martin Luther’s break with the Catholic Church.

In the fall of 1517, faithful Catholics gathered in the Catholic churches in the diocese of Mainz to hear a famous preacher portray for them the inspiring theme of a great mother basilica for Christendom—St. Peter’s at Rome—which Pope Leo X planned to complete. What the preacher wanted was funds—money for the holy project. To those who would contribute, the Pontiff had offered a plenary indulgence. The faithful gave, at least for a while. But the success of the campaign for funds was interrupted by an exposé of the sinister facts behind it.

Young Albrecht, Margrave of Brandenburg, had an inordinate ambition to collect archbishoprics for himself. Having achieved through the influence of his brother, the Elector of Brandenburg, the see of Brandenburg, he next succeeded in becoming archbishop of Magdeburg, in 1513, at the age of twenty-three. This was a hitherto unheard-of achievement. But he decided to seek also the archbishopric of Mainz when that post became open, in 1514, by the death of its incumbent. To command three dioceses was an exhibition of ecclesiastical greed which the avaricious Florentine party in power at Rome knew how to exploit. The dataria—the sacred bureau concerned with graces and benefices—informed the audacious Albrecht that the business could be arranged if he could raise 10,000 gulden in addition to the fifteen or twenty thousand which he would ordinarily have to pay for such a diocese. Albrecht’s chance of raising so much money out of the overtaxed communicants of Mainz was slim, since that see had had two short-lived archbishops, each of whom had paid fourteen thousand ducats for his elevation. The diocese was bankrupt and hence would not yield further funds to the ordinary appeal. Some more effective squeeze was necessary.

The matter, apparently, was arranged in Rome by Johan Zinc, the Augsburg ecclesiastic who was in the pay of Fugger. Albrecht would borrow the 10,000 gulden needed from Fugger. Pope Leo would grant to him in Mainz and Brandenburg a plenary indulgence, ostensibly for the building of St. Peter’s. In fact, however, the “gate” would be split fifty-fifty between the Pope and the Archbishop, like one of those American prize-fight benefits for the Milk Fund where the Milk Fund gets a modest percentage while the promoters and fighters get the rest, and all the ballyhoo is on the Milk Fund.

With this privilege granted to him, Albrecht was in a position to borrow the needed ten thousand from Fugger, while the banker, as security, took over the collection of the indulgence money. But it was important that there should be no mischance in selling the indulgences to the faithful. Therefore Albrecht and his banker managers did what an American Y.M.C.A. drive or Community Chest campaign does. They employed a professional high-pressure drive manager. There was at least one such person in Germany—John Tetzel, the famous indulgence preacher, a sort of Billy Sunday who had shown in other dioceses that he could bring the pennies tinkling into the collection boxes. Tetzel made a specialty of preaching indulgence drives.

With this organization—Tetzel managing the exhortation and Fugger managing the money—Albrecht set out to gather in Mainz and Brandenburg the ten thousand he had borrowed from Fugger and the fifteen or twenty thousand he was to pay besides. Tetzel went from town to town and from church to church. He preached the gospel of the full remission of the temporal punishment due to sin for those who would contribute to build St. Peter’s, without disclosing the real object of the drive. The contributions were put into sealed boxes, counted at Fugger’s office in Augsburg in the presence of representatives of Albrecht, and turned over to the banker to be divided in accordance with the deal.

At this time Martin Luther was engaged in his rising controversy with the Church over this very question of indulgences. The Albrecht-Fugger-Tetzel performances aroused his indignation, and he let fly at the whole incident in which an archbishop “sent Fugger’s cutpurses throughout the land” to collect money under the guise of aiding a sacred cause to pay off a loan to the Augsburg usurer. Luther denounced Fugger in the roundest terms. He piled his scorn upon the banker’s trade practices. While Luther based his attack upon purely religious grounds, his fulminations found an answering echo in the minds of the practical German burghers who saw in the whole indulgence and benefice racket a scheme to gather up the all-too-meager supplies of German coin and drain it off under hypocritical pretenses to Italy. The incident produced so violent an effect upon Luther’s mind that it precipitated his decision to bring the whole subject to an issue, and, within two months of the commencement of the Tetzel preaching campaign, the revolutionary monk nailed upon the gates of the town of Wittenberg his famous Ninety-five Theses.

If you will go back to the end of the fifteenth century to the ancient city of Neusohl, you will come upon something that strangely resembles in significance the Butte, Montana, of today or perhaps the oil regions of Pennsylvania in the ’seventies. As for the Augsburg of Fugger’s time, it bore to the rising copper industry the same relation which Cleveland bore to the oil regions in Rockefeller’s time. For there in Augsburg and in the copper country of the Tirol and of Hungary, Jacob Fugger was laying the foundations of the modern industrial system. There, the musty records of the era reveal, were the seeds of the coming industrial organization, its companies, its subsidiaries, its cartels, its patient and intriguing monopolists, its trust busters, its antimonopoly drives with its prosecutions, investigations, and failures.

It would not do to assert that Fugger invented any of the devices that became the familiar tools of his monopolist successors, any more than it would be true to say that the Rockefellers, Morgans, Carnegies, and Harrimans invented the devices by which they built the corporate system of our day. But Fugger organized these devices, used them with audacity and skill. And through them he acquired most of the vast fortune that made him the richest man of his world. It was this role of industrial pioneer that gives him his chief claim upon history.

These activities were carried on in the copper and silver industries. The scene of these exploits was in the mining districts of Germany, in the Tirol, and in Hungary. From about the middle of the fifteenth century German merchants, chiefly from Augsburg, began to trade in the copper of the Tirol. The metal was produced by many small operators. The mines, of course, under the feudal system, were the property of the Duke, the owners holding them as feudal grants. The Duke, therefore, was entitled to a share of all the copper and silver taken out of them by the operators. Here was the foundation of the mineral and oil royalty that still persists.

The Augsburg merchants got into the business purely as traders, taking the product of the Tirolese operators. However, the Duke—Sigismund I—like all his contemporaries, constantly needed funds. He was an habitual borrower from merchants or a consortium of merchants in Augsburg, pledging his copper and silver royalties for the loans. Or, since he had the power to command the entire output of a mine, he might proclaim himself the only purchaser of the whole output at his own price and grant the handling of this to some merchant. These were called copper deals, silver deals, and so on.

Up to 1491 Hans Baumgartner, a rich Kufstein merchant, was the chief beneficiary of the Duke’s copper deals. But in that year Fugger managed to shoulder Baumgartner out. From this point on Fugger felt the infection of that savage organism, the dream of the monopolist. And for the next thirty-two years he patiently schemed and bribed and intrigued to become copper king of the sixteenth century.

This, of course, he could not do unless he could control the resources of Hungary. But trade in Hungary was practically closed to the German merchant even if it were not too risky, for Matthias, the Hungarian king, was at war with the Holy Roman Empire. Maximilian, son of the Emperor, took the field against Matthias and defeated him after a bloody war, memorable for the fact that in it bombs were first used. Maximilian ended this struggle with a great victory, the death of Matthias, the elevation of Vladislav of Bohemia to the throne of Hungary, and the famous Peace of Pressburg. By this treaty Vladislav agreed that upon failure of male issue the crown of Saint Stephen should fall to the Hapsburgs.

With Hungary rendered safe for trade, Jacob Fugger made his entry. There an able engineer, Johann Thurzo, had risen to importance in the metals industry. He had perfected a method of rescuing flooded mines by means of a hydraulic pump and he had made great advances in the art of separating metals. What Thurzo needed was money. Fugger needed Thurzo’s technical skill, and so they united to form the Fugger-Thurzo Company, much as John D. Rockefeller, the money man, united with Andrews, the practical oil refiner, to form the first unit of Standard Oil. And this company, backed by the political influence of Maximilian and the power of Vladislav, acquired a dominating position in Hungarian copper and silver production.

But Fugger never relaxed his intrigues to hold that position and to consolidate it. His strength lay in his relationship with the Hapsburg rulers and, of course, his own growing fortune. He wished to leave nothing to chance or to take the risk of any repudiation of the Pressburg convention. Accordingly, he schemed for years to unite the heirs of Maximilian with the daughters of Vladislav. And this he succeeded in doing at the Congress of Vienna in 1515, when the daughter of Vladislav, Anna, was betrothed to the grandson of Maximilian, Ferdinand. Fugger’s biographer records that Fugger’s expense account charged to the Fugger-Thurzo firm at this Congress was 10,000 gulden.

The Hungarian copper and silver trade was dominated by a subsidiary company, one half of which belonged to the Fugger Company and the other half to the Thurzo Company. It was known as the Fugger-Thurzo Company and it engaged entirely in the mining, smelting, and production of copper. Its entire product was sold to its constituent companies. The Fugger Company took half its product; the Thurzo Company took half. These two companies then sold their respective shares and pocketed the proceeds.

The Fugger-Thurzo Company operated mines, some of which they bought and some of which were leased. They handled the ores in their own smelting plants and treated the product in their own rolling and plate mills. They had three principal plants, at Neusohl, at Hochkirch, and at Fuggerau—an industrial town, forerunner of the modern Gary. The company employed several hundred workers in the mines and mills. This was probably the largest-scale business which had developed up to that time.

All through this period one perceives the continual efforts of Fugger to widen and cement his dominion over copper. Like the modern American trust barons whose first experiments in monopoly were made through trade agreements, Fugger’s first efforts were made through cartels. As early as 1498 he made a cartel agreement with Herwart and Gossembrot of Augsburg and Hans Baumgartner of Kufstein. They pooled their supplies of Tirolese copper and sold them in Venice wholly through Fugger’s factor, Hans Keller, thus eliminating competition and keeping the price and profits up.

In 1515 the Emperor Maximilian granted the entire copper product of Schwaz, richest mining district of the Tirol, to a consortium of Fugger and Hochstetter. Thus Fugger controlled the copper output of the Tirol through this consortium and of Hungary through the Fugger-Thurzo Company. It was agreed that Tirolese copper was to be sold only in upper Germany and Italy and the Hungarian output only in the Netherlands. These machinations became known, and Fugger found himself greeted by a howl of rage from the small businessmen of Germany. Frequent attacks were made upon him in the German Reichstag. Finally the imperial advocate or attorney general instituted proceedings against him for violating the antimonopoly laws of Germany. The great German merchant had to open the doors of his palace to the process server. The technique of subpoena dodging had not yet been perfected. About the same time, the town fathers of Augsburg rose against him and started proceedings to bring him to book.

In this crisis Fugger did what the American trust magnate has always done. He mobilized his lawyers and turned the heat of political influence upon the officials. He communicated with Emperor Charles V who was at Burgos. Charles wrote to the chief advocate directing him to end his prosecution. He wrote also to the Archduke Ferdinand to quash the court action. But this did not satisfy the insatiable Fugger. In May, 1525, the Emperor Charles V issued a decree, prepared for him largely by Fugger’s imperial lobbyists, declaring that hereafter ore contracts granting monopoly rights to merchants would not be considered monopolistic and that such merchants might sell their ores to one buyer, under monopolistic agreements, without violating the Reichstag decrees. Even this did not quiet the imperious Jacob. He did not rest until, five months later, the Emperor issued another decree declaring that his two copper contracts in 1515 and 1520 did not involve “criminal enhancement of prices.”

But despite these strenuous stratagems to defend the structure of wealth he had reared, the clouds were gathering over the relentless monopolist. The flames of religious strife spread over distracted Germany from the torch of Luther. The Anabaptists were in eruption, the peasants rose, the castles and estates of nobles and men of wealth were destroyed. Fugger saw many ancient families forsaking the old Church for the standard of Luther, who lost no opportunity to denounce him and his “cutpurses.” And as he sat in his splendid palace scheming to escape further damage and humiliations from the antimonopoly crusaders, the gravest news came from Hungary. That unhappy and backward country lay under the shadow of the Turk, for Sultan Suleiman had already captured one of the fortresses of Belgrade and merely awaited a favorable surcease from some of his other warlike enterprises to swoop down upon the land where Jacob had built his great industrial edifice.

But Hungary itself was in a state of political confusion while its people wallowed in the most degrading poverty. Vladislav, Fugger’s royal friend, had died, leaving a boy of ten on the throne and a flock of courtiers and politicians struggling for control. A powerful nationalist movement sprang up. The half-starving peasants united with the small nobles to rise against the “foreign” capitalists who were exploiting their land and draining away its resources.

In the midst of these disorders Alexis Thurzo, who succeeded his father Johann as factor of the Fugger-Thurzo Company in Hungary, became treasurer of Hungary. The king was loaded with debts partly growing out of the indemnities or “reparations” payments of the treaty of Pressburg and others of his own making, a good deal of which was due to the Fugger firm. The country itself groaned under a crushing debt. Thurzo brought about a devaluation of the currency. It did not affect Fugger’s credits since they were payable in gold, but it did enhance in Hungary the value of his copper holdings. In any case, a storm of indignation against Fugger swept over Hungary which, added to the general hatred of the foreign concessionary, brought the mobs swarming to the Ofen and Neusohl plants of the company, which were sacked and looted with immense losses. The young King Louis summoned Thurzo and forced him to sign an agreement canceling the royal debts to Fugger, renouncing all claims for damages to the Fugger-Thurzo plants, and agreeing to furnish to the king 200,000 Rhenish golden gulden.

When the news of these disasters reached Fugger at his desk in Augsburg it filled him with wrath. He lost no time in the pursuit of vengeance and restoration. He did precisely what the American or British oil concessionary does in Mexico when the government seizes an oil well. He appealed directly to the Emperor, Charles V, who was then in Spain. The Emperor promptly notified the Hungarian king that he would support the claims of Fugger to the uttermost. Menaced by the Turk on one frontier and the outraged monopolist on the other, Louis yielded. But the masterful merchant prince and banker was at the end of his labors. Worn out by all his ceaseless adventures in pursuit of wealth upon so many fronts, before the Hungarian business could be repaired, Jacob Fugger lay dying in his Augsburg palace. The Archduke Ferdinand, who represented the Emperor during his absence, proceeding to the opening of the Diet at Augsburg with his train of courtiers and guards, ordered the drums and trumpets silenced as the royal procession passed the house of the dying merchant.

Fugger breathed his last December 30, 1525. The next year Suleiman with his Turks swept down upon Hungary, annihilated its small army, devastated a fourth of the country, and departed, carrying with him 107,000 captives. But in the one decisive battle where Louis’ futile army was destroyed, the King himself was killed. The Hungarian monarch died without a son, and under the treaty of Pressburg, the crown of Saint Stephen fell into the lap of the Hapsburgs. In 1526 Archduke Ferdinand was elected King of Hungary. The Fugger dynasty, now ruled over by Anton Fugger, Jacob’s nephew, came into complete possession of the Fugger-Thurzo interests and once again into complete domination of the Hungarian copper resources.

Fugger was buried in the beautiful chapel that, like a Pharaoh, he had begun to build fifteen years before. How differently these two men—Maximilian and Fugger, his banker and counselor—looked upon their deaths and monuments! Maximilian, feeling within him the signals of age and dissolution, had for four years carried around with him wherever he went a stout oaken coffin. Before his death at Innsbruck he left minute directions for his burial. He ordered that his hair be cut off, all his teeth extracted, pounded to powder, and publicly burned in the chapel of his palace. He ordered his corpse to be exposed to the people as a royal instance of mortality. He commanded that his body, put into a sack of lime swathed in silk, should be put into the oaken coffin and buried under the altar of his chapel so that the priest, daily saying his Mass, would humiliate the mortal remains by walking over the head and heart.

But the proud merchant of Augsburg provided for himself a magnificent mortuary chapel gleaming in marble and color and gold, decorated by artist and sculptor, and bearing the epitaph for which Fugger had provided both the text and the artist before his death, amazing in its brazen egoism:

TO GOD, ALL-POWERFUL AND GOOD! Jacob Fugger, of Augsburg, ornament to his class and to his country, Imperial Councilor under Maximilian I and Charles V, second to none in the acquisition of extraordinary wealth, in liberality, in purity of life, and in greatness of soul, as he was comparable to none in life, so after death is not to be numbered among the mortal.

Historical Pictures

JOHN LAW

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¹ Charles V was slow in repaying the large sums advanced by Fugger to accomplish Charles’ election to the imperial throne. Fugger, his patience taxed by the royal delinquent, wrote to the Emperor the following extraordinary letter:

His Most Serene, All-Powerful Roman Emperor, and most Gracious Lord!

Your Royal Majesty is undoubtedly well aware of the extent to which I and my nephews have always been inclined to serve the House of Austria, and in all submissiveness to promote its welfare and its rise. For that reason, we co-operated with the former Emperor Maximilian, Your Imperial Majesty’s forefather, and, in loyal subjection to His Majesty, to secure the Imperial Crown for Your Imperial Majesty, pledged ourselves to several princes, who placed their confidence and trust in me as perhaps in no one else. We also, when Your Imperial Majesty’s appointed delegates were treating for the completion of the above-mentioned undertaking, furnished a considerable sum of money which was secured, not from me and my nephews alone, but from some of my good friends at heavy cost, so that the excellent nobles achieved success to the great honor and well-being of Your Imperial Majesty.

It is also well known that Your Majesty without me might not have acquired the Imperial Crown, as I can attest with the written statement of all the delegates of Your Imperial Majesty. And in all this I have looked not to my own profit. For if I had withdrawn my support from the House of Austria and transferred it to France, I should have won large profit and much money, which were at that time offered to me. But what disadvantage would have risen thereby for the House of Austria, Your Imperial Majesty with your deep comprehension may well conceive.

Taking all this into consideration, my respectful request to Your Imperial Majesty is that you will graciously recognize my faithful, humble service, dedicated to the greater well-being of Your Imperial Majesty, and that you will order that the money which I have paid out, together with the interest upon it, shall be reckoned up and paid, without further delay. In order to deserve that from Your Imperial Majesty, I pledge myself to be faithful in all humility, and I hereby commend myself as faithful at all times to Your Imperial Majesty.

Your Imperial Majesty’s most humble servant,

JACOB FUGGER