The Medieval Super Companies A Study of Peruzzi Co PDF

This book breaks new ground by focusing on the Florentine "super-
companies" of the early fourteenth century in their own right. The

author closely examines the Peruzzi Company in particular, describ-
ing its ownership, family connections, scope of business, organiza-
tion structure, accounting systems, and its history from 1300 to its
dissolution in bankruptcy court in 1347.
From this analysis, the author offers a radical reassessment of the
nature and role of these extraordinary organizations. He establishes
that although they engaged in all forms of commerce in substantial
volume, what made them exceptional was commodity trading, espe-
cially in grain, which they conducted on a heroic scale. It was this
activity that required heavy capital, sophisticated organization, and
an international network. But the author also exposes the limitations
of their financial power and explodes the myth that their downfall
was caused mainly by bad loans to Edward III to finance his invasions
of France.
This book is much more than a business history. It presents the
operations of these companies in the context of the swiftly moving
political, military, and economic developments in Florence, the Medi-
terranean, and western Europe during a tumultuous period.
The medieval super-companies
The Peruzzi Company Network
133S
* Headquarters
• Branch Headed by Partner
• Major Branch Headed by Factor
A Minor Branch
X Agency
The medieval super-companies
A study of the Peruzzi Company of Florence
EDWIN S. HUNT
University of Cincinnati
CAMBRIDGE
UNIVERSITY PRESS
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© Cambridge University Press 1994

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no reproduction of any part may take place without
the written permission of Cambridge University Press.
First published 1994

First paperback edition 2002
A catalogue recordfor this book is available from the British Library
Library of Congress Cataloguing in Publication data

Hunt, Edwin S.,
The medieval super-companies: a study of the Peruzzi Company of
Florence / Edwin S. Hunt.
p. cm.
Includes index.
ISBN 0 521461561
1. Compagnia dei Peruzzi - History. 2. Florence - Commerce -
History. 3. Merchants - Italy - Florence - History. I. Title.
HF416.H86 1994
380.1'06'04551-dc20 93-40289 CIP
ISBN 0 521461561 hardback

ISBN 0 52189415 8 paperback
To Iris and Clifford
Contents
List of tables, figures, and map page ix

Introduction 1
Part I Anatomy of the medieval super-company

1 The company and the family 11
2 The nature of the business 38
3 The structure of the Peruzzi Company 76
4 The accounting of the Peruzzi Company 101
Part II History of the Peruzzi Company

from its reorganization in 1300
5 The prosperous years, 1300-1324 127
6 The decline begins, 1325-1335 156
7 The critical years, 1335-1340 184
8 The collapse, 1340-1343 212
9 The aftermath 230
Conclusions 243
Appendixes
I Genealogical charts of the Peruzzi family 252
II Peruzzi Company balances at July 1, 1335 256
III Peruzzi Company and shareholder data 259
IV Exchange rate trends 266
V Giovanni Villani: his background and
reliability 268
Bibliography 272
Index 285
Tables, figures, and map
Tables
1. Price ranges for grano ciciliano in Florence,
1309-35 page 53
2. Salary ranges of Peruzzi Company factors,
1331-43 91
3. Deployment of Peruzzi Company factors and family
members 95
4. Personnel effectively working for the
Peruzzi Company, 1335 98
5. Account positions at July 1, 1335 112
6. Balances owed company by
Giotto d'Arnoldo Peruzzi 153
7. Profit of the Bardi Company, 1330-2 165
8. Balances at June 30, 1335 181
9. Assets and liabilities in major foreign branches 181
10. Total number of Peruzzi employees, 1335-43 223
Al. Detail of "others'" balances at July 1, 1335 256
A2. Detail of Peruzzi branch balances
at July 1, 1335 257
A3. Summary of capital and profit, 1300-35 259
A4. Summary of shareholdings in the Peruzzi
Companies, 1300-43 260
A5. List of shareholders of the Peruzzi
Companies, 1300-43 261
A6. Changes in company loan balances due
(to)/from shareholders, July 1, 1335
to July 1,1343 265
A7. Currency effects on Angevin wheat
export tax, 1300-40 266
A8. Exchange rate index - Florentine florin versus
various silver-based currencies, 1300-45 267
x Tables, figures, and map
Figures
1. Organizational structure of the
Peruzzi Company 79
Al. Peruzzi family until the mid-fourteenth
century 252
A2. Early genealogy of the Filippo branch
of the Peruzzi family 253
A3. Early genealogy of the Arnoldo branch
of the Peruzzi family 254
Map
1. The Peruzzi Company network, 1335 ii
Abbreviations
CCR Calendar of Close Rolls
CPR Calendar of Patent Rolls
Introduction
During the last half of the thirteenth and first half of the fourteenth
centuries, there emerged a number of very large Italian merchant
banking companies. Three of them, the Bardi, Peruzzi, and Acciaiuoli
companies of Florence, attained exceptional size, diversity, and geo-
graphical reach, but all collapsed in the 1340s. The two largest, the
Bardi and Peruzzi, came to grief, according to the chronicler Giovanni
Villani, because they advanced loans foolishly and excessively to King
Edward III of England to help him finance the opening phases of the
Hundred Years' War. Villani claimed that the English king owed the
Peruzzi Company the colossal sum of 600,000 Florentine florins when
it went bankrupt in 1343, and the Bardi an even larger total of 900,000
florins when it failed in 1346.l
Most students and general readers have become aware of the ex-
istence of these great organizations from popular political or social
histories of the period in which the Bardi and Peruzzi are briefly
introduced and promptly dismissed.2 In such accounts, the firms are
characterized as banking houses that naively and greedily overreached
themselves in lending huge sums to the king in the vain pursuit of
profit. But many other historians have written thoroughly researched
works in various languages about particular aspects of the compa-
nies' activities, including their role in the history of medieval Flo-
rence, or about the operations of individual branches in southern
Italy, Sicily, England, France, and the papal courts. 3 In virtually all
studies to date, however, the mighty companies have been merely a
part, albeit important, of the phenomenon on which each author
had concentrated his or her attention. The only exceptions are two
1
Giovanni Villani, Storia di Giovanni Villani (Florence, 1587), Book XII, Chap.
55.
2
Barbara Tuchman, A Distant Mirror (New York, 1978), 81; Paul Johnson, Ed-
ward III {London, 1973), 71.
3
For example, Robert Davidsohn, Storia di Firenze (Florence, 1956), 7 volumes;
Georges Yver, Le commerce et les marchands dans Vltalie meridionale, au XIIP et au
XIV siecle (Paris 1903); E. B. Fryde, William de la Pole (London, 1988) and his
unpublished Ph.D. dissertation, "Edward Ill's War Finance, 1337-41: Transac-
tions in Wool and Credit Operations" (Oxford, Bodleian Library, 1947); and
Yves Renouard, Les relations des papes d 'Avignon et des compagnies commerciales et
bancaires de 1316 a 1378 (Paris, 1941).
2 Introduction
old works written in the early part of this century about the Bardi
and Peruzzi, but even these are narrowly focused, concerned mainly
with the events leading up to the downfall of the companies. 4 There
is no literature that considers these unusual firms as complete busi-
ness organizations, describing how they arose, what they actually did,
how they were structured, and why they attained such an extraordi-
nary size. And no scholar has yet published a thorough chronologi-
cal history of any of these firms. Until such analyses are made, we
cannot begin to understand why they collapsed and also why organi-
zations of such proportions never again appeared in medieval Eu-
rope. And only then can we free the history of the companies from
the simplistic distortions imposed by the chronicler Villani.
This present book is an attempt to begin filling this lacuna by ex-
amining one of the three above-named organizations in depth to find
out how companies of such exceptional size were able to function in
the demanding business environment of the high to late middle ages.
Such companies deserve a special title to distinguish them from the
many Italian merchant-bankers typical of the early fourteenth cen-
tury, including some that were fairly large. The word "multinational"
is tempting but inappropriate because it inaccurately suggests a simi-
larity to the modern version and because there were no nation-states
worthy of the name at that time. "Megacompany" is another seduc-
tive term, but is misleadingly pretentious, conjuring up a vision of
much greater resources than we will find is the case. I have therefore
opted for the relatively simple term "super-company," which connotes
an entity both larger than and qualitatively different from other busi-
ness organizations of that era.5
The period with which this book is mainly concerned, that is, the
late thirteenth and early fourteenth centuries, coincides almost ex-
actly with the economic "crisis" that has been the subject of much
scholarly debate over the past fifty years or so.6 Stated in its simplest
terms, the crisis theory holds that the economic expansion of the
4
Ephraim Russell, "The Societies of the Bardi and Peruzzi and their Dealings
with Edward III, 1327-1345," in Finance and Trade under Edward HI (London,
1918), 93-115; Armando Sapori, La crisi delle compagnie mercantili dei Bardi e dei
Peruzzi (Florence, 1926).
5
The definition of and qualifications for "super-company" status are outlined at
the beginning of Chapter 2.
6
A very useful recent review of this debate appears in Bruce M. S. Campbell, ed.,
Before the Black Death (Manchester, 1991). This collection of essays includes not
only some of the latest analysis, but also a thorough historiography on the sub-
ject. Barbara Harvey's introduction is especially helpful in articulating the vari-
ous theses as well as her own views.
Introduction 3
two preceding centuries had reversed itself because of population
pressure, stagnant technology, and climate change, and that these
forces were sufficient to create the conditions for the subsequent long-
term recession without the intrusion of the Black Death catastrophe
of 1347-50. The super-companies were undoubtedly affected by these
developments, especially insofar as the forces contributed to the
growth of centers of consumption and centers of production, and
thus to the large-scale trade in foodstuffs on which the companies
thrived.
It is not the purpose of this study, however, to enter this great de-
bate. For one thing, most of the evidence examined in the contro-
versy concerns the agricultural economics of England and northwest-
ern Europe, whereas the orientation of the super-companies, as we
shall see, was more toward the Mediterranean area. For example,
they were affected little by the Great Famine of 1315-17 that ravaged
northern Europe but very much by the Italian crop failures from the
late 1320s onward. More important, the businesses of the super-com-
panies were subject to a wide range of complex overlapping forces -
political, military, and cultural, as well as economic - over a wide
geographic area. I have therefore concluded that it is more enlight-
ening to bring all of these environmental forces to bear on the story
of the super-companies as a matter of relevant information than to
attempt to fit them into an evaluation of any general economic argu-
ment. As a result, the book is essentially a business history, but per-
meated with social, economic, and political history.
Three principal and related theses emerge from this study. The
first is that although the super-companies engaged in general com-
merce, banking, and manufacturing in substantial volume, what made
them exceptional was commodity trading, which they conducted on
a heroic scale. The core of the business was the Florence-Naples axis,
wherein the companies controlled most of the export of grain from
the Angevin kingdom of southern Italy, while exploiting that market's
appetite for textiles of all types. These activities were founded on the
need of the growing urban population for imported foodstuffs and
industrial raw materials and the need for cash by the rulers who con-
trolled those commodities. It required the companies to be big, with
substantial capital, sophisticated organizations, and international
branch networks, because only such enterprises had the resources to
obtain and exploit the necessary licenses from those rulers.
The second thesis is that the much-discussed English wool trade,
while eventually very important to the super-companies, was not their
4 Introduction
principal target nor the reason that they had to be especially large.
The Peruzzi Company was not involved in the commerce of wool in a
really important way until late in its history, while the Acciaiuoli was
never a significant participant. The Bardi Company, the biggest of
them all, was unique in being a major player in both grain and wool
over a considerable stretch of time, and even that great enterprise
had been a super-company in the grain trade of southern Italy long
before it became a large-scale buyer and seller of wool.
The third thesis is that the resources of the super-companies have
been greatly overstated by historians, possibly to reconcile them with
the huge losses purportedly suffered on loans to Edward III. Their
resources, although extraordinarily large for their time, were in fact
quite limited compared with the demands made on them and had to
be deployed with great skill. The managers had to maintain a con-
tinuous recycling act with the rulers they served to ensure that there
was sufficient money coming out of the system to fund enough new
loans to keep those same rulers satisfied and the companies solvent.
Although the Bardi Company was by far the largest and best-known
of the super-companies, I have selected the Peruzzi Company as the
representative model to study for a number of important reasons.
The first is the existence of a wealth of records of this company, which
permit an independent analysis of its organizational structure, oper-
ating systems, and management philosophy, as well as a plausible re-
construction of its history. The second is that there is a continuous
record of shareholder participation of both family and nonfamily
members, allowing the examination of the business as a corporate
entity distinct from the Peruzzi family. The third reason is the exist-
ence of a good set of accounting records depicting the state of the
company on July 1, 1335, just nine months before its first significant
investments in England. These data make it possible to ascertain what
resources the company had available for its English joint venture with
the Bardi Company and to isolate the effect of that venture on the
company's fortunes. Finally, there is much information available on
the key members of the Peruzzi family who were instrumental in con-
ceiving the operating systems and in driving the business forward. It
was these creative and energetic people, in the final analysis, who
converted the economic and political opportunities presented to them
into a spectacular commercial success.
The book is organized in two parts. Part I is designed to provide
background information on the origins, business activities, organi-
zation structure, and accounting systems of super-companies in gen-
Introduction 5
eral and the Peruzzi Company in particular, along with the economic
and political environment in which they operated. Because the fam-
ily and the company are often confused, the opening chapter has
been devoted to exploring the origins and early history of the Peruzzi
family and of the company in order to identify the nature of each
and the linkages between them. It examines the family's rise in wealth
and status and its role in Florentine politics, and provides brief pro-
files of three key personages. By the end of the chapter, it is clear
that while the affairs of family and company were very much inter-
mingled, they remained quite distinct entities. Chapter 2 moves on
to the discussion of the super-companies and the nature of their busi-
ness, dealing with all facets, including their well-known financial ac-
tivities, but concentrating on the three dominating elements, trade
in grain, wool, and cloth. This chapter also reviews the historical
background to the rise of the super-companies and the develop-
ment of their economic and political relationships with the lead-
ership of the kingdoms of Naples, England, and France, and of
the papal court. Chapter 3 focuses on the organization structure
needed to run a super-company of geographic and product-line
diversity, drawing on data mainly from the Peruzzi Company to
create the model. Chapter 4 turns to the accounting systems of
the period, including a brief discussion of the double-entry con-
troversy and the training of accountants. It then goes on to ana-
lyze the Peruzzi accounts in detail, describing the system and what
it was and was not designed to achieve.
These four chapters of background and function set the scene for
Part II, which presents the chronological history of the Peruzzi Com-
pany from its corporate reorganization in 1300 until its final dismem-
berment in bankruptcy court in 1347. This survey divides conveniently
into five chapters, comprising periods covering the company's pros-
perous years, the beginning of its decline, the attempt to reverse its
decline, the events leading to its eventual collapse, and the aftermath
of the failure as it concerned both the company and the family. Al-
though the review focuses on the activities of the Peruzzi Company
and its personnel, it does so in the context of the political and eco-
nomic environment in which the company operated. The action
moves from place to place where the Peruzzi did business, touching
on the great wars and famines that so affected the company in those
tumultuous times. In the last two chapters, the scene shifts back and
forth between Florence and England, as the events in both places
impinged on the fate of the Peruzzi. This chronological history is
6 Introduction
vital to the thrust of the book, serving more than just to put flesh on
the analytical bones identified in Part I. It is needed to reveal how
such a company operated in the real world of power politics and
repeated calamities in the early fourteenth century.
The conclusions of this study are discussed in a final brief chapter.
Probably the most obvious of them is the disposal of the myth that
Edward III was the principal agent of the collapse of the super-com-
panies. The losses of the Bardi and Peruzzi in England were not nearly
as large as supposed and were only one, and not the most important,
of the factors leading to the firms' demise. This myth badly needs
disposal, because it continues to be reinforced in otherwise excel-
lent recent works of serious scholars. For example, Sumption's The
Hundred Years' War, Orm rod's The Reign of Edward IIIy and Waugh's
England in the Reign of Edward ///all blame the bankruptcies of the
Bardi and Peruzzi on their loans to Edward III.7 A less obvious but
intriguing conclusion is that after the bankruptcies of the 1340s, no
new companies emerged approaching the stature of the super-com-
panies. Even the Medici Bank, large as it became, lacked the reach
and dominance of the super-companies of a century earlier. The rea-
sons for this phenomenon are to be found in the reversal of the same
forces that caused the appearance of the super-companies in the first
place. Although proponents of the "crisis" thesis of the early four-
teenth century might take comfort in the fact that all three super-
companies failed before the Black Death of 1347-50, the nonreappear-
ance of such organizations can most logically be ascribed to drasti-
cally reduced population growth following the Black Death and to
reduced recourse to borrowing by the rulers who controlled the key
commodities.
Included in this volume is a map of the Peruzzi network and sev-
eral appendixes that I believe are useful references. The first is a
genealogy of the Peruzzi family from its known beginnings to the
middle of the fourteenth century derived from the monumental study
of the nineteenth-century historian and genealogist Luigi Passerini. 8
The charts may look complicated, but they are essential to the un-
derstanding of the two main branches of the family and help explain
why it is so often necessary to identify an individual by including his
father's name. Other appendixes give additional detail on exchange
7
Jonathan Sumption, The Hundred Years'War, vol. 1, Trial by Battle (London, 1990),
363-4; W. M. Ormrod, The Reign ojEdward III(New Haven, CT, 1990), 88; Scott
L. Waugh, England in the Reign ofEdwardlll (Cambridge, 1991), 183.
8
Luigi Passerini, "Genealogica e storia della famiglia dei Peruzzi," MS folio 41 in
the Biblioteca Nazionale Centrale, Firenze.
Introduction 7
rates and the accounts of the Peruzzi companies and their shareholders
to support comments made in the main text. Finally, I have included a
biographical note on Giovanni Villani along with a discussion of the
comments of various scholars on his many disputed claims. Villani mer-
its special attention because of the important influence he has had on
scholars of the economic history of the early fourteenth century. Whether
one agrees with him or not, his is the benchmark against which most
numerical estimates for the period are compared.
A word needs to be said here about the main currencies that ap-
pear in this work and the symbols used to express them. 9 The symbol
most commonly used is "li." for the lira a fiorino, which is not a cur-
rency at all, but a flctive unit of account employed by the Florentine
business community. Local coins, such as the soldi di piccioli, will
also be mentioned, but the key Florentine coin used in international
trade was the florin (fl.), valued usually at approximately li.1.45. The
other main currency encountered is the English pound sterling (£).
The exchange rates between the currencies of Florence and England
varied considerably, but here we will use a rate close to the standard
applied between the super-companies and the English treasury, that
is, one florin equals three shillings. This results in a rate of £1 =6 2/
3 florins, which converts to a rate of £1 = li.9.67, which I have rounded
to £1 = li. 10 for convenience. Several other currencies appear in
Tables A2, A7, and A8, but the only ones cited with any frequency in
the text are the Neapolitan carlin and ounce (oz.).
This book reflects several years' research of the Peruzzi accounts
as well as the secret books of Giotto and Arnoldo Peruzzi and other
primary sources.10 It also owes much to the many scholars whose
works I have cited throughout the text. But its unconventional ap-
proach comes from my own extensive personal experience in the
world of multibranch operations in international business, which
perhaps has enabled me to ask questions of the data that might not
occur to other historians. This perspective has driven me to enquire
how these very large companies with widely dispersed operations
could have been organized, managed, and controlled in an essen-
tially hostile environment. I am encouraged in this approach by the
conviction expressed by the renowned businessman-turned-historian
Raymond de Roover that the medieval businessman faced the same
9
Details are discussed in Chapter 4 immediately following Table 5.
10
The Peruzzi documents noted here have been meticulously transcribed by Pro-
fessor Armando Sapori in /libri di commercio dei Peruzzi (hereafter, / libri) (Milan,
1934). This publication has made a wealth of primary data available to scholars
all over the world.
8 Introduction
problems of policy and management as do businessmen today - meet-
ing fierce competition, forecasting changing market conditions, and
motivating personnel.11 The similarity of the problems does not mean
that medieval super-companies can be regarded as direct ancestors
of the modern multinational corporation. The environment and cul-
tures called for very different managerial responses from those de-
veloped by today's companies. The book attempts to present those
responses in the real-life context of the political, military, and eco-
nomic events of those very troubled times.
I owe a great debt of gratitude to James Murray and John Brackett
of the University of Cincinnati for their many thoughtful and con-
structive reviews of this study and for their encouragement of my
unconventional approach. I am also deeply indebted to Richard A.
Goldthwaite of Johns Hopkins University and David Abulafia of the
University of Cambridge for their well-reasoned criticisms and con-
structive suggestions for further research, which have done much to
improve the final version of this work. Any errors or omissions that
remain are, of course, my own, as are the viewpoints expressed herein.
Finally, I am grateful to the editor of the Journal of Economic History
for permission to re-present some of the material I used in an article
published by the Journal in March 1990.
II
Raymond d e Roover, "The Story of the Alberti Company of Florence, 1302-48, as
Revealed in Its Account Books," Harvard Business Review 32 (Spring 1958): 49-50.
Parti
Anatomy of the medieval super-company

The company and the family
One of the problems in analyzing the very large medieval Italian

merchant-banking organizations that are the subject of this study is
that all of them bore the name of a single family that was usually in
control.1 As a result, it is often difficult to distinguish between the
activities and motivations of such companies and those of the epony-
mous families. Historians have compounded the confusion by indis-
criminately referring to company and family alike as "the Bardi," "the
Peruzzi," "the Frescobaldi," and so forth. This tendency is admittedly
difficult to overcome because the affairs of most companies and their
family shareholders were indeed very much intermingled. 2 The early
companies were in fact largely family associations; the very word
compagnia etymologically means a family partnership as well as shar-
ing the same bread.3 But companies that were comprised of a mix-
ture of family and nonfamily shareholders became increasingly com-
mon in the later Middle Ages, and some of them became extraordi-
narily large. In these big "mixed-type" companies, the relationships
between firm and controlling family were necessarily less straightfor-
ward.
A further complication in the analysis of the very large mixed com-
panies is that although they were usually dominated by certain mem-
bers of the controlling family, many of their close kinsmen had little
or no involvement in the business. For example, the Bardi Company
1
The term "usually" applies here, because, as will be seen in Chapter 2, compa-
nies known as the Ricciardi of Lucca and the Frescobaldi of Florence appear to
have been really consortia of several firms.
2
Robert L. Reynolds gives a useful description of this phenomenon in "Origins
of Modern Business Enterprise: Medieval Italy," Journal ofEconomic History (Fall
1952), 350-65.
3
Florence Edler, Glossary of Medieval Terms of Business: Italian Series, 1200-1600
(Cambridge, MA, 1934), 80. Raymond de Roover adds that although the firms
were partnerships, they can be correctly called "companies," because this is the
term the companies themselves used. See his "New Interpretations of the His-
tory of Banking," Journal of World History 2 (1954): 44.
12 Medieval super-companies
was able to satisfy the Commune of Florence that none of the sixteen
Bardi family members who participated in the failed coup attempt in
November 1340 was an active partner in the company.4 The evidence
from the Peruzzi Company is that only six to eight family members
were shareholders at any one time between 1300 and 1335. They
were consistently outnumbered by outside shareholders throughout
the period, although they did not lose majority share ownership un-
til 1331.5 Of course, many Peruzzi kindred served the company in
various capacities. Some were salaried employees, called fattori or
factors, but these were relatively few in number, comprising only 14,
or just over 10 percent of the 133 factors employed by the company
between 1331 and 1343.6 From the account books it is clear that sev-
eral other Peruzzi who were neither shareholders nor employees were
active in the company's affairs. But thirty-five, exactly half of the sev-
enty Peruzzi adult males identified as living between 1331 and 1343,
had no part in the running of the business.7 Five of them were church-
men. And in the case of the Bardi, less than 3 percent of the 346
factors working for that company between 1310 and 1345 can be iden-
tified as members of the huge Bardi lineage. 8
This evidence casts doubt on the logical assumption that the pow-
erful Florentine merchant-banking lineages were tightly linked to
the operation of the family-controlled enterprise, drawing their wealth
and cohesion from it. The Peruzzi records show that different mem-
bers of the family followed different career paths - military, diplo-
matic, political, ecclesiastical, professional, and entrepreneurial - and
many generated their own sources of wealth. This is not to deny the
powerful sense of solidarity attributed to medieval Florentine lin-
eages by numerous scholars.9 On the contrary, the diverse activities
of its members inside and outside the company must have had a sym-
4
Sapori, La crisi, 127. One of the plotters had, in fact, been a shareholder of the
company until the eve of the coup. Sapori rightly treats the termination of his
partnership with skepticism, but then goes on to say that the company and
family were one and the same, an argument that I challenge at the beginning
of Chapter 8.
5
See Table A4 and discussion in Chapter 6.
6
A. Sapori, Studi di storia economica, Vol. 2 (Florence, 1955), 718-29.
7
See Figures A1-A3.
8
Sapori, Storia economica, Vol. 2, 730-54. Only 5 employees of the 346 are specifi-
cally listed as Bardi, but another 5 are probable kin.
9
See, e.g., Jacques Heers, Family Clans in the Middle Ages, trans. Barry Herbert
(Amsterdam, 1976); George W. Dameron, Episcopal Power and Florentine Society,
1000-1320 (Cambridge, MA, 1991); Carol Lansing, The Florentine Magnates
(Princeton, NJ, 1991).
The company and the family 13
biotic effect on the family as a whole. The power and wealth of the
company doubtless enhanced the careers of individual members,
while their political, military, and diplomatic efforts often redounded
to the direct or indirect benefit of the company - all adding to the
prestige of the family name. But what is less certain is whether there
was a subservient relationship in either direction between the two
entities.
A reasonable first approach toward understanding the very large
commercial organizations of the early fourteenth century is to take a
closer look at some of the people involved in their rise and fall. The
Peruzzi Company provides much useful material for a study of this
nature. The object of such an examination is not merely to search
for commercial geniuses responsible for the firm's success, although
the family was indeed blessed with some very able people. The emer-
gence of these exceptional companies is too suggestive of an impor-
tant economic and social phenomenon to be explained away by the
existence of exceptional individuals. The purpose of investigating
the Peruzzi family and the careers of certain of its members is to
obtain a grasp of the complex relationships among family, business,
and the Florentine polity that helped make these extraordinary en-
terprises possible.
The main source for the data on the family stems from Luigi
Passerini's "Genealogica e storia della famiglia dei Peruzzi," which
traces the Peruzzi family in great detail back to 1150. As a historian,
Passerini is often undiscriminating, not only accepting a great deal
of the Peruzzi Company mythology, but also adding some inventions
of his own.10 As a genealogist, however, he is meticulous.11 The point
is worth making because he has argued persuasively against the strongly
pressed claims that the Peruzzi originated just outside the earliest walls
of Florence near the Porta della Pera and that the family took its name
from that location. One source contemporary with Passerini even as-
serted that the Peruzzi were of Roman descent, which would fit com-
fortably with Florence's self-image at the time as a daughter of Rome.12
10
Passerini, "Genealogica." For example, he claims that the Peruzzi loaned
1,370,000 florins to Edward III, the nonrestitution of which brought the com-
pany down in 1338. This amount was more than double Villani's figure and
dates the bankruptcy five years early.
11
Passerini has also constructed a genealogy of his own family, tracing the various
branches of both his father's and mother's lines to the eleventh and thirteenth
centuries, respectively. See Storia e genealogica delle famiglie Passerini e de' Rilli
(Florence, 1874)
12
Conte Francesco Galvani, Sommario storico delle famiglie celebre Toscane, Vol. 3 (Flo-
rence, 1864), chapter on Peruzzi, 1.
These claims bear the hallmarks of the typical effort of an impor-
tant family to enhance its status by attempting to establish a pedigree
of antiquity and nobility.13 The family crest and the company logo,
consisting of golden pears on a field of blue, build on the della Pera
origin and its connection with the pear.14 But Passerini reluctantly
concludes that there is no firm evidence to support the della Pera
provenance. He points out that the Peruzzi name is most likely to
have evolved from a diminutive of the very common name Piero,
buttressing his position with the observation that there were Peruzzi
families in several Italian cities that lacked a Porta della Pera. Passerini
is probably correct; Giovanni Villani, whose close connections with
the Peruzzi company might have biased him in its favor, merely re-
marks on the existence of the Porta della Pera connection. He is not
prepared, however, to confirm that the Peruzzi of his day were de-
scended from that lineage.15
A property document in San Remigio dated 1150 is the earliest
authentic Peruzzi record presented by Passerini and contains the
name of Ubaldino di Peruzzo, indicating his domicile as the village
of Ruota in the Valdarno.16 Early in the thirteenth century the family
seemed to gain status in Florence. By 1203, one Guido became a
councillor and his name appeared on a peace treaty with Siena. In
1225, one Mazzetto matriculated into the Arte della Seta, the silk
guild that was one of the seven major guilds until it was absorbed
into the Arte di Por Santa Maria.17 But the family remained of little
significance for some time. Villani compiled a long list of the Guelf
and Ghibelline families in each quarter of Florence, when these fac-
tions first emerged in 1215. The list included the Bardi described as
"of small beginnings," but not the Peruzzi.18 Nor is there any men-
13
See Gene A. Brucker, Renaissance Florence (New York, 1969), 90-1, for further
discussion of the claims to antiquity of various Florentine families. Much of the
research by families into their past dated from the fifteenth century onward,
but efforts on the Peruzzi pedigree must have begun early, because the com-
pany logo was already in use in the early fourteenth century and Villani men-
tioned the Pera Gate connection in his chronicles. Also, Heers, Family Clans,
100, notes the early enthusiasm for research into family origins.
14
According to Passerini, the number of pears in the family crest varied over time
and was "indeterminate" in the early fourteenth century. Renouard indicates
a company logo at that time with three pears (Les relations, 45); Davidsohn indi-
cates that it had "one or three" pears (Firenze, Vol. 6, 386).
15
Villani, Storia, Book IV, Chap. 13.
16
There are references elsewhere to the family dating as far back as 1135 (dis-
cussed later).
17
S. L. Peruzzi, Storia del commercio dei banchieri di Firenze, 1200—1345 (Florence,
1868), 54, 94; Edgcumbe Staley, The Guilds of Florence (London, 1906), Chap. 7.
18
Villani, Storia, Book V, Chaps. 14 and 15.
tion of the Peruzzi among the leading Guelf or Ghibelline families
cited by Villani in connection with his various accounts of the Guelf-
Ghibelline struggles in the 1260s.19
The men who brought the Peruzzi family into prominence were
Filippo and Arnoldo, sons of Amideo. Each founded a dynasty with its
own distinct characteristics.20 Arnoldo's was strongly commercial, pro-
ducing many of the men of "ink-stained fingers" who provided most of
the company's leadership and staff. His descendants furnished twenty-
eight of the Peruzzi personnel directly involved in the business until its
collapse; only nine Peruzzi came from the Filippo branch. Notwithstand-
ing the fact that Filippo was the driving force behind the establishment
of the Peruzzi as a super-company, he and his offspring were much more
attracted to politics and warfare. He became a knight as did his son
Guido. Another son, Chiaro, was a churchman, and a grandson, Simone,
of whom we shall hear more, was a celebrated diplomat. But both
branches of the family made important contributions to the business
and to Florentine politics, and Arnoldo's sons Pacino and Giotto com-
bined business and political skills very successfully.
Initially, the family's progress was held in check by the fact that it,
like Florence, was divided into two hostile factions. Filippo was a
Ghibelline who participated in the victory over the Guelfs at the Battle
of Montaperti in 1260. He was a leader of the Ghibelline party and
councillor of Florence and was very influential during the years fol-
lowing the Montaperti triumph.21 At the same time, the Guelf branch
of the Peruzzi was included in a long list of families that opted to stay
in Florence while quietly attempting to raise funds for the continu-
ing struggle against the Ghibellines.22 After the Ghibellines went down
to defeat with the Hohenstaufen Manfred at Benevento in 1266 and
Conradin at Tagliacozzo in 1268, Filippo disappeared into exile, prob-
ably as a soldier of fortune. Passerini tells us that he returned to Flo-
rence in 1280 and became one of the Ghibelline signatories to the
formal reconciliation between the Guelfs and Ghibellines in that city.
We know, however, that he was running a company registered in his
name in Florence as early as 1274.23 Less is known about Arnoldo,
19
Ibid. Book VI, Chaps. 79, 81, and 83, and Book VII, Chaps. 14 and 15. Although
not among the leaders, members of the Peruzzi were definitely in business in
the 1260s (see Peruzzi, Storia commercio, 160-1).
20
Figures A2 and A3 show each branch in detail.
21
Filippo's name was included in the list of guarantors of a treaty with Siena in
1261. See Sergio Raveggi etal., Ghibellini, Guelfiepopolograsso (Florence, 1978),
54n.
22
Davidsohn, Firenze, Vol. 2, 701.
23
Sapori, Storia economica, Vol. 2, 656.
except that he too was a decorated warrior, but on the Guelf side, as
well as an active businessman.
The social status of the family around 1280 is not entirely clear.
One historian regarded the Peruzzi as noble, citing the Villani pas-
sage that included the Peruzzi among the noble families that lived in
the quarter of the Porta Santa Maria.24 Another included the Peruzzi
in a list of "noble" families along with the Albizzi, della Scala, and
Medici.25 But Villani's disclaimer, as noted, appears to negate such a
conclusion. Moreover, the lack of any mention of the Peruzzi family
in any of the lists of leading Florentine lineages up to that time im-
plies that it was not an ancient house. Nor was it a "quasi-noble" fam-
ily by virtue of having one or more consecrated knights among its
members. Knighthood, although not necessarily a mark of nobility,
was closely connected with it in terms of social status.26 The earliest
of the four Peruzzi knights recorded in Gaetano Salvemini's dignita
cavalleresca was not consecrated until at least the 1290s.27 All bore the
honorific "messer," reserved for the highest social order in Florence,
the knights and judges. 28 Two other Peruzzi, Amideo di Filippo and
24
Yver, Le commerce, 2 9 9 .
25
John Larner, Italy in the Age of Dante and Petrarch, 1216-1380 (London, 1980),
121.
26
Gaetano Salvemini, La dignita cavalleresca nel Commune di Firenze e altri scritti
(Milan, 1972), 142-4. See also John K. Hyde, Padua in the Age ofDante (Manches-
ter, 1966), 91—2, for a brief but useful discussion of knighthood in medieval
Italy and Lansing, Magnates, Chap. 8, for a fuller account of the complexities of
knighthood status in thirteenth-century Florence.
27
The four Peruzzi consecrated as knights were Filippo di Amideo (date unknown,
but sometime between 1292 and his death in 1303), Ridolfo di Donato (1315),
Guido di Filippo (1324), and Simone di Chiaro (date uncertain, probably early
1320s). For the first three, the evidence, although indirect, is convincing, be-
ing memoranda in Giotto's Secret Book detailing some of the expenses paid for
food, vestments, and retainers for the consecration ceremonies. See G.
Salvemini, La dignita, 201; Peruzzi, Storia commercio, 363; / libri, 497-9. For
Simone, the evidence is the official record, which describes him as a knight on
his election to the office of prior in 1344 (La dignita, 146, 175), but Passerini
says he was knighted much earlier.
28
The title messer carried a wide variety of meanings in different times and places,
ranging from great respect to ridicule. In Venice, it was reserved for the Doge,
and throughout medieval Italy, God was "Messer Dominiddio." The Grande
dizionario della lingua Italiana, ed. S. Battaglia (Turin, 1978), Vol. 10, 216-7,
devotes several columns to the word, with a vast number of quotations. From
these it appears that, in medieval Florence, messer was reserved for judges and
knights (dottori e cavalieri), but it is unclear which institutions or persons had
the authority to bestow the title. We know, however, that Guido di Filippo trav-
eled to Faenza in September 1324 to be dubbed by Count Rugieri of Dovadola
di Conti Guidi {I libri, 499).
Iacopo di Pacino, also enjoyed that title, but the basis for their award
is unknown.
The family's great advance in social status therefore did not occur
until the the late thirteenth century. Nevertheless, it is clear from the
level of affluence evident in the early 1280s that both branches had
enjoyed for several decades increasing wealth and respect in the com-
munity, even if not political prominence. The family's line of busi-
ness was trade in international commodities and luxury goods, con-
sidered as "noble and honest, not base merchandise."29They were, in
effect, members of the class known as the popolo grasso, the well-to-do
merchants who were shortly to dominate the political and economic
life of Florence.
How did the Peruzzi family amass the wealth that enabled it to
launch a large-scale enterprise by the late thirteenth century? The
usual reasons given for such success are shrewd investments, advan-
tageous marriages, political activity, as well as hard work, drive, and
business acumen. Unfortunately, there is little specific evidence on
the methods used by Florentine families to acquire their fortunes
before the latter half of the thirteenth century. One specifc line of
business that has been reported during the twelfth century was the
usurious management of monasteries. Peruzzi businessmen were early
practitioners of such enterprise when they acted as agents for the
nuns of Santa Felicita.30 One source even suggests that it laid the foun-
dation for the family fortune, but credible support for this view is
lacking.31 There are more likely sources of the family's wealth, how-
ever, and it may be productive to attempt certain generalizations based
on indirect evidence and on the researches of scholars into other
urban families of medieval Tuscany.32
A good starting point is the fact that the Peruzzi became impor-
tant members of the international merchants' and cloth finishers'
guild (Arte di Calimala) and the guild of money changers and bank-
29
P.J.Jones, "Florentine Families and Florentine Diaries in the Fourteenth Cen-
tury," Papers of the British School of Rome 24 (1956): 191.
30
Davidsohn, Firenze, Vol. 1, 1191. The citation is based on two documents dated
December 8, 1135, and October 23, 1140, dealing with land transactions.
31
J. Lestocquoy, Aux origines de la bourgeoisie (Paris, 1952), 99.
32
Sources include Jones, "Florentine Families"; Richard A. Goldthwaite, Private
Wealth in Renaissance Florence (Baltimore, 1968); Thomas Blomquist, "Commer-
cial Association in Thirteenth-Century Lucca," Business History Review 45 (Sum-
mer 1971): 157-78; idem, "The Castracani Family of Thirteenth-Century Lucca,"
Speculum 46 (1971): 459-76, and idem, "The Dawn of Banking in an Italian
Commune: Thirteenth Century Lucca," in The Dawn of Modern Banking (New
Haven, CT: 1979), 53-75.
ers (Arte del Cambio), which makes it likely that the early activities
that generated the family's capital following its migration into Flo-
rence were concentrated in these two areas.33 The two types of enter-
prise were symbiotic, the profit of each providing capital for the other.
Thomas Blomquist's exhaustive studies into the notarial contracts of
thirteenth-century Lucchese money changers reveal a broad range
of endeavor beyond the mere changing of money. They took depos-
its, made small short-term loans, dealt in precious metals, and eventu-
ally financed international commerce. 34
Typically, the surplus cash generated by commercial activity was
not entirely plowed back into the business; a part was used to ac-
quire rural property by various means. Among the money changers'
favorite loan customers were peasants who borrowed cash to meet
their needs and repaid in kind at an exploitative markup. 35 Such
deals sometimes ended in foreclosure, contributing to the money
changers' large holdings of rural land. Philip Jones goes further, sug-
gesting that in Florence, urban merchants often made loans to land-
lords and peasants in the contado (the rural area surrounding the
city) with a view to eventual purchase, commenting that "loans, cal-
culated purchase, and sometimes coercion were combined in devel-
oping the estates of merchant families."36 Prestige was often part of
the motivation, as some of the purchases of rural real estate were
obviously noneconomic.37 Most of the investment, however, was de-
cidedly economic, and merchant families committed considerable
money and effort in improving their properties to develop produce
for their own consumption and sale. With the rapid growth of the
population of Florence, such properties became very valuable and
generated increasing cash. The Peruzzi family certainly engaged in
similar acquisitions. Giotto di Arnoldo's "Secret Book" is replete with
entries dealing with purchases and improvements in his rural pos-
sessions, and even mentions buying a building in Florence for the
storage and sale of the wine from his vineyards.38 Although this evi-
33
They also joined a third major guild in 1297, that of the doctors, apothecaries,
spice importers, and shopkeepers (Medici, Speziali, e Merciai) on account of
their commerce in spices. See Raveggi et al., Ghibellini, 216n, 257n. And later
they became members of the powerful wool guild (Arte della Lana). See
Davidsohn, Firenze, Vol. 5, 255 n4.
34
Blomquist, "Dawn of Banking," 60-6.
35
Ibid., 64.
36
Jones, "Florentine Families," 188.
37
Ibid., 200. The Peruzzi were proud to own the ruined castellare of Baroncelli
"for the honor it conferred."
38
Ibid., 201, and I libri, 412, 451, 457, 463, 469, 473, 510.
dence is from the early fourteenth century, it suggests a long-stand-
ing interest in such investments.
Marriage does not appear to have played a significant part in the
early years of the Peruzzi family's accumulation of wealth. Blomquist
has noted that intermarriage occurred among money changers in
Lucca, enhancing the interest of each party, and the Peruzzi no doubt
entered into similar alliances. There is no evidence, however, that
Peruzzi family members obtained wealth by deliberately marrying
advantageously. Evidence of marriages into the important houses of
Florence occurs only with Filippo di Amideo's children, and these
were likely arranged for reasons of prestige and politics rather than
wealth, because at that time the Peruzzi were already affluent. The
holding of political offices may have made a contribution to the
Peruzzi riches, but again it is difficult to say how much. Certainly
some family members occupied minor political posts in the early days,
but the Peruzzi do not appear to have been frequent holders of sig-
nificant offices before 1284.39
All of these factors may have contributed to the family's wealth in
property and revenue-producing assets, but not a great deal to the
accumulation of the daunting amount of cash needed for the Peruzzi
Company's ambitious overseas expansion. On the contrary, the local
property investments of the kind cited above, although income pro-
ducing, may even have been a net drain on the family's cash reserves.
The most important source of cash therefore had to be business it-
self, that is, well-managed profitable enterprise, along with frugal
living habits and a determination to put every spare soldo to produc-
tive use. Moreover, the accumulation had to take place over a consid-
erable length of time, given the family's relatively humble origins.
Although the earliest evidence of a company appears only from 1274,
the family's participation in commerce goes back many years before
this date. Davidsohn has noted that the Peruzzi name appeared in
French banking affairs as early as 1248.40 Mazzetto's matriculation
into the silk guild in 1225 demonstrates a very early engagement in
the luxury cloth business. And, as we have noted, there was probably
more than one line of business activity. Filippo and Arnoldo each
ran separate enterprises and had achieved considerable success prior
to their merger in the 1280s.
The political leanings of the family in the 1280s are not entirely
clear. Passerini stated that Filippo converted to the Guelf cause in
39
Raveggi et al., Ghibellini, 215-16, includes the Peruzzi in a list of families de-
scribed as having only "participated sporadically in public offices" before 1282.
40
the general reconciliation of 1280, suggesting a family then en-
tirely Guelf in persuasion. But other sources indicate a family re-
taining Ghibelline sympathies while carefully avoiding extremes.
Nicola Ottokar placed the Peruzzi among a number of families
that at first tended to Ghibellinism or presented themselves as
indifferent, before blending themselves completely into the domi-
nant Guelf category in the 1290s.41 Another source surprisingly
identifies the Peruzzi as Ghibelline throughout the 1290s.42 Be-
yond doubt, however, is the fact that the family became united in
1280 and that this event marked a great step forward for the
Peruzzi.43 Two ambitious, rising, well-to-do family units had be-
come one relatively wealthy and politically important entity. The
family had not yet "arrived" but was beginning to command re-
spect in Florence's high places. Filippo's political credentials had
become such that he was elected a prior in 1284, only two years
after the office was first established. 44 And the family's great house,
the Palazzo Peruzzi, was built in this period.45
Family unity was confirmed in 1283, when the sons of Arnoldo and
Filippo formed a special corporation in two equal shares, composed
of two separate funds - one to buy land in the contado and the other
for buildings in Florence, each with common books for accounting. 46
This institution, distinct from the Peruzzi Company, accumulated
property for many years. Such corporate arrangements were com-
monplace in Florence at that time and were created for a variety of
reasons and purposes. For example, the four Villani brothers established
one in 1322 to provide for their father in his old age.47 One important
motivation for such special corporations was the fact that shareholders
of companies were subject to unlimited personal liability to creditors in
case of bankruptcy. Shareholders accordingly employed this and other
devices to insulate as much family property as possible from the risks of
business failure. The Peruzzi Company had reached a size and level of
41
Nicola Ottokar, 77 commune di Firenze alia fine del dugento (Florence, 1926), 65.
42
P. Parenti in Raveggi et al., Ghibellini, 325.
43
Sapori, Soria economica, Vol. 2, 657.
44
Under the constitution of 1282, leadership of the commune was vested in six
priors, one from each of the six districts into which Florence was divided at the
time. All belonged to one of the major guilds. Term of office was limited to two
months.
45
Davidsohn, Firenze, Vol. 7, 493, suggests that the house was built "around 1283."
46
Sapori, Storia economica, Vol. 2, 657; / libri, 443.
47
Michele Luzzati, Giovanni Villani e la compagnia dei Buonaccorsi (Rome, 1971),
16.
48
international exposure to risk to make such a precaution advisable.
The nature of the company's early operations is difficult to assess but
probably was limited to relatively small-scale commerce and lending,
even if on an international basis. There is evidence of a small branch in
Naples as early as the 1270s.49 The union of the family business under
the two brothers was timely, as new opportunities for large-scale com-
modity trading were opening up in the Angevin realm of southern Italy,
as will be discussed in Chapter 2. The business prospered mightily, and
by 1289 Arnoldo, then manager of the Naples branch, had become a
familiar and advisor of Charles II.50 The company exported grain from
Brindisi to Greece in ships of the Templar Order, participated in the salt
trade, administering the papal salt flats, and apparently engaged in trade
and deposit business in the Levant.51 During this period, Filippo was
the leading shareholder and driving force behind the business, and af-
ter Arnoldo's death in 1292, he was paramount, even though Arnoldo's
son Pacino briefly headed the company from 1298 until his death in
1299. He mixed business with high politics and community service, set-
ting the tone for the company and for the family. Under his leadership,
the company's standing as a model of success and probity was consoli-
dated. It had indeed become an important factor at the court of Naples
and was establishing a significant presence in Paris.52 And in 1294, King
48
This evidence runs counter to the argument of Heers, Family Clans, 218, that
the Florentine companies of the "Peruzzi Period" allowed their members little
initiative to invest capital outside the companies. This restriction, he says, made
it impossible to spread risks over various enterprises, leaving the shareholders
vulnerable to bankruptcy. As we shall see in the case of the Peruzzi, there was
no lack of diversity in the company's business and much evidence of share-
holder investment outside the company.
49
Yver, Le commerce, 292; Davidsohn, Firenze, Vol. 6, 838.
50
Yver, Le commerce, 299. Yver added that Arnoldo was also chamberlain to the king,
but the reference cited, "Registro#6, folio 49," mentions only that Arnoldo was "his
Florentine familiar of his house." A familiar to the Angevin king (familiaris regis) is
normally defined as "an intimate, a familiar resident or visitor in the household, a
member of the familia, that wider family that embraces servants, confidents, and
close associates." See H. Takayama, "Familiares Regis and the Royal Inner Council
in Twelfth-Century Sicily," English Historical Review 10 (April 1989): 357.
51
Davidsohn, Firenze, Vol. 3, 505-6.
52
Villani, Storia, Book VIII, Chap. 63. In discussing the Anagni expedition that
led to the seizure of Pope Boniface VIII in 1304, Villani described the Peruzzi
as "merchants of the King of France." The company does not seem to have
been important to him, however, as Philip IV avoided excessive dependence on
any foreign merchant-banker. The relatively modest position of the Peruzzi in
France is argued byj. R. Strayer, "Italian Bankers and Philip the Fair," in Economy,
Society, and Government in Medieval Italy, ed. D. Herlihy, R. S. Lopez, and V.
Slessarev (Kent, OH, 1969), 113-21.
James II of Aragon granted Filippo the right to live and practice com-
merce in his territories.53 It was acquiring substance and reputation
in Florence, attracting nonfamily partners as early as 1292.
One bizarre explanation of the Peruzzi's rapid accumulation of
wealth around this time deserves comment. This is Robert Davidsohn's
suggestion that they enjoyed a sudden windfall when holders of large
deposits perished along with their documents during the destruc-
tion of Acre by the Muslims in 1291.54 Although Davidsohn pointed
out that there was only one source for this story, he supported it by
alleging a close relationship between the Peruzzi and the Templar
Order, principal defenders of Acre.55 But the case for the claim is
weak on two counts. First, the Peruzzi was only one company, a mi-
nor one at that, among many from Florence and other Italian cities
engaged in commerce at Acre.56 Why should the Peruzzi, and not
others, be singled out for a huge windfall? Second, the deposits had
to have been held outside of Acre to be of use to the Peruzzi, in
which case they would also have been available to heirs of the de-
positors. It is very difficult to believe that such supposedly large de-
posits would have escaped the notice of potential claimants.
During Filippo's dominance in the 1290s, the sons of Arnoldo,
except for Pacino, were relatively inactive in the company and may
not even have been shareholders. They did, however, along with
Filippo, participate energetically in guild and communal politics.
Pacino di Arnoldo was especially active. He had already been elected
prior twice during the 1280s (1286 and 1288), was chamberlain of
the commune in 1290, became consul of the powerful merchants'
guild in 1293, and gonfalonier of justice in 1297. Moreover, he was a
conspicuous actor in the constitutional debates of 1293, proposing,
along with the notorious butcher Dino Pecora, a radical guild-based
electoral system.57 His brother Giotto was prior in 1293 and consul of
53
R. Davidsohn, Firenze, Vol. 6, 737, and Vol. 7, 700. Filippo's nephew Giotto, to
be discussed in detail later, spent considerable time in Catalonia around 1300.
There, he kept a mistress who bore him a son, Donato, who became legitimized
and made an active partner.
54
Davidsohn, Firenze, Vol. 3, 505-6, and Vol. 6, 788.
55
Ibid., 506 n 1. The source cited is the chronicle formerly attributed to Brunetto
Latini, 232.
56
See Abulafia, "Crocuses and Crusaders," in Outremer (Jerusalem, 1982), 239.
57
John Najemy, Corporatism and Consensus in Florentine Electoral Politics, 1280-1340
(Chapel Hill, NC, 1982), 53-7. Pacino became less radical later and by 1295
had fallen out with Pecora. The latter was sharply rebuked by the chronicler
Dino Compagni for slandering Pacino, "a man of good repute." Dino Compagni,
Chronicle of Florence, trans. D. E. Berstein (Philadelphia, 1986), Book I, Chap. 18.
the bankers' guild in 1297, while another brother, Tommaso, was
prior in 1299. Filippo himself held the prestigious post of captain of
Orsanmichele in 1294, followed by Giotto in 1297.58 At the same
time, the solidarity of the family was affirmed at Arnoldo's death in
1292, when the two branches established two common funds, one
for good works and the other for expenses "in honor" of the group.59
The latter included contributions toward the costs of the elaborate
knighthood consecration ceremonies already discussed, and the settle-
ment of feuds with the Caviciuli and Passerini families, among other
things.60
Filippo's most remarkable feat was his success in steering the fam-
ily and company from 1292 till his death in 1303, an extremely vio-
lent and dangerous period in Florence's much-troubled history.
During that time, the Peruzzi managed to acquire influence as well
as increased wealth without exciting the enmity of other families.
They were not damaged by the constitutional crisis of 1292 and the
consequent Ordinances of Justice, which placed severe restrictions
upon some 150 families designated magnati. By escaping this desig-
nation they almost certainly benefited, because the Ordinances ren-
dered ineligible for important public office a large number of com-
peting candidates. Many of the magnati families affected took part in
an uprising in 1295 and succeeded in coercing the priors to make
changes in the Ordinances in their favor. According to Villani, the
popolo class was so angered by the action of the Priorate that there
58
Orsanmichele was one of the largest religious confraternities in Florence,
charged with the responsibility of distributing alms to the severely poverty-
stricken of the city. The Bardi Company distributed some of its charitable do-
nations through this organization, as described by A. Sapori in Storia economica,
Vol. 2, 854-7. Intriguingly, the square in front of the confraternity hall was the
site of the city's main grain market, also called Orsanmichele, since the second
half of the thirteenth century. Here a miracle was recorded in 1291, which
promptly gave rise to this popular and prestigious confraternity managed by
eight, and later six, capitani. It is tempting to seek a connection between the
Orsanmichele captaincy and the Peruzzi dealings in the grain market, but there
is no suggestion of such in any of the literature. Nevertheless, to be a captain
was a signal honor, and irrespective of any grain-market association, the post
had important commercial and political as well as religious significance. See
Luigi Passerini, Storia degli stabilimente de beneficenza e d'istruzioneelementaregratuita
della cittd di Firenze (Florence, 1853), 404-39, and J. Henderson, "Piety and
Charity in Late Medieval Florence: Religious Confraternities from the Middle
of the Thirteenth Century to the Late Fifteenth Century" (Ph.D. diss., micro-
fiche, University of London, 1983), Chap. 5.
59
60
I libri, 497-9, memoranda in Giotto's Secret Book.
was a fresh ordering of the leadership of the popolo in Florence. Included
among the names of the new leading families was that of the Peruzzi.61
Despite their new prominence in Florentine politics, the Peruzzi
managed somehow to avoid direct involvement in the Black-White cri-
sis that split the Guelf party into two warring factions. No Peruzzi name
can be found among any of the long lists of combatants compiled by
Villani or Compagni in their descriptions of the controversy.62 Logically,
the Peruzzi should have been sympathetic to the Whites led by Vieri
Cerchi, who, although one of the magnati, was a rich, talented merchant-
banker, was prepared to live with the Ordinances, and had many friends
among the popolo. The leader of the Blacks was Corso Donati, the some-
what impoverished head of an ancient noble family who despised guilds-
men and was utterly unreconciled to the Ordinances. The Blacks, how-
ever, secured the support of Pope Boniface VIII. The pope, after unsuc-
cessfully demanding that the Cerchi share offices and honors with the
Donati faction, sent Charles of Valois, brother of Philip IV of France, to
Florence in 1301 with a force of men-at-arms to "restore order." After
the dust from this extremely complicated struggle had settled in 1302,
the Black party was in full control of the government of Florence, and
the Peruzzi were among the leading families supporting that faction.63
There is no record of the behavior of the Peruzzi during the crisis, or
the motivations that drove them to side with the Blacks, but, as Dino
Compagni makes clear, the Peruzzi, like all Florentines, would have
belonged to a set of social associations and could hardly avoid commit-
ting themselves one way or another.64 Almost certainly their decision
was influenced by Filippo's sober assessment of practical business needs,
and the current imperative was to cooperate with the papacy and the
French. But loyalties tended to fall victim to the pressure of changed
priorities, and just one year later Filippo appears to have turned on the
pope. If Villani can be believed, the Peruzzi were alleged to have pro-
vided drafts "for as much money as may be needed" to help finance
Philip IV's expedition in 1303 to kidnap Boniface VIII at Anagni.65
61
Villani, Storia, Book VIII, Chap. 12.
62
Ibid., Chaps. 39-42; Compagni, Chronicle, Book II.
63
Compagni, Chronicle, Book II, Chap. 26.
64
Ibid., Chap. 22.
65
Villani, Storia, Book VIII, Chaps. 63 and 64. There is no corroborating support for
Villani's statement, nor any indication of the value, if any, of the drafts cashed by
the French. Scholars have accordingly given the comment little attention, and
even Davidsohn has little to say (Firenze, Vol. 4, 349). This alleged action contrasts
with the strong financial support the Peruzzi and other Florentines gave the same
pope in helping him defeat the Colonna uprising five years earlier. In Villani's
favor, however, is the fact that he was a shareholder of the Peruzzi Company at the
time and in a position to have inside information.
During this same period of 1292 to 1303, the Peruzzi Company
metamorphosed from an essentially family concern into a multi-
shareholder firm with substantial non-Peruzzi representation, but
with control retained firmly in the hands of the leading members
of the Peruzzi clan. Already in 1292 Filippo brought in three part-
ners from the business community-Banco Raugi, Gianni Ponci,
and Bandino Spiglati. In 1300, in recognition of its growth and po-
tential, the company was reorganized along the lines it was to main-
tain until its collapse forty-three years later. Its capital was set at an
impressive li.124,000, equivalent to over 85,000 gold florins, of
which just under 60 percent was contributed by the Peruzzi family,
split roughly 60/40 between descendants of Arnoldo, and Filippo
and his heirs. The remaining 40 percent was held in varying
amounts by outsiders representing several families - the Baroncelli,
Raugi, Infanghati, Ponci, Folchi, Bentacorde, Silimani, and Villani,
an interesting mix of Florentine society of the period. Infanghati
was one of the magnati; Ponci was the brother of a minor guildsman
who was politically influential; Baroncelli and Bentacorde were
from powerful popolani families; Raugi, Silimani, and Folchi were
wealthy investors; and Villani was an ambitious young businessman.
And most were prepared to contribute effort and talent as well as
capital.
Filippo's leadership during his final years reflects extraordinary
political dexterity along with outstanding business vision. He estab-
lished the Peruzzi family as an important force in Florentine politics
while avoiding identification with any of the extreme factions. He
structured a family company capable of operating successfully on a
vast international scale without tying up an excessive amount of the
family's resources. And it has to be noted that despite the significant
outside shareholdings, the company capo was always a Peruzzi of
unquestioned authority who was usually also head of the Peruzzi fam-
ily.66 Credit, however, also belongs to the family as a whole. It seems
to have prospered steadily over a century in a violent, arrogant, and
unstable society without provoking the serious hostility of other fami-
lies. To be sure, it had its feuds, most notably with the Adimari, but
the family had the good sense to effect a settlement before the situa-
tion got out of hand.67 Overall, the family seems to have acquired a
certain souplesse in its business, political, and social behavior. There
66
See Raymond de Roover, The Rise and Decline of the Medici Bank, 1397-1494 (New
York, 1966), 78, for an insight on the dominating role played by the "head of
the company."
67
See later in this chapter for a fuller discussion.
is only one recorded instance in which a member of the family was
fined for an act of violence.68
Both Filippo and Arnoldo produced a substantial number of off-
spring. As the charts in Appendix I show, many of them survived to
engender large families of their own, so that as the fourteenth cen-
tury progressed, the Peruzzi family was becoming a sizable lineage.
In so large a group, it is not surprising that the individuals would
engage in a variety of pursuits. Many of the Peruzzi served the com-
pany in one capacity or another, but the majority found careers in
the church, army, and public service. Of the churchmen, the most
notable were Chiaro di Filippo, who received the benefice of
Montefoltro directly from the pope, and Zanobi di Giotto, who was
dispatched to Avignon to appeal for special prayers for his father on
the latter's death in 1336.69Three of Filippo's sons - Amideo, Guido,
and Biero (also known as Lepre) - served as soldiers at one time or
another, and the latter two were killed in Florence's disastrous de-
feat by Lucca under Castruccio Castracani at the Battle of Altopascio
in 1325. Two other Peruzzi, Simone di Chiaro and Pacino di Guido,
were captured in that battle and ransomed for 1,225 florins each. In
addition, the battle cost the family li.261 slO for losses of horses,
harnesses and traces.70 However, the Peruzzi clan does not seem to
have been very militaristic overall. Aside from Altopascio, the Peruzzi
representation in the various campaigns between 1300 and 1340 was
very small in relation to the size of the family. To be sure, there are
examples of Peruzzi involvement in these conflicts. Arnoldo di
Arnoldo was mortally wounded in the campaign of 1312 against
Emperor Henry VII.71 Biero fought in the Battle of Montecatini in
1315 against the dictator of Pisa, Uguccione della Faggiuola.72 But
these are isolated cases, and after Altopascio, the Peruzzi, in com-
mon with most other affluent Florentine families, eschewed direct
68
/ libri, 15-16. Ottaviano di m. Amideo was fined the very substantial sum of
li.546, which the company originally paid in the early 1330s and later recov-
ered, with interest, from Simone, Pacino, Guido, and others.
69
For Chiaro, see Passerini, "Genealogica"; for Zanobi, see I libri, 255-6.
70
Peruzzi, Storia commercio, 402.
71
Ibid.
72
Archivio di Stato diFirenze, Bardi, serie 111 e 88. Biero's name is included in a long
list. This source also indicates that Amideo was among three men nominated
as captain in 1309. Peruzzi has reported in Storia commercio, 402, an expense of
li.237 s7 for fifty foot soldiers who accompanied Giovanni di Giotto Peruzzi in
the Battle of Montecatini, but he offers no source and dates the event twenty
years later, suggesting that the item may refer to another conflict.
73
participation in military activity. Most, however, were extensively
involved in community or diplomatic endeavors even if very few chose
public service as a full-time occupation.
Of the many capable Peruzzi individuals who lived during the first
half of the fourteenth century, there were three who so distinguished
themselves that they deserve special attention. The careers of these
men also serve to illustrate the subtle, symbiotic interconnection
among family, company and community. Simone, a grandson of
Filippo, had no direct ownership or management role in the com-
pany but effectively served it well through his community service and
foreign diplomacy. Tommaso, son of Arnoldo, devoted most of his
energies to the company, leading it for twenty-eight consecutive years,
but he also involved himself to a significant extent in community
affairs. Giotto, also a son of Arnoldo, was simultaneously engaged in
company and community activities, occupying a series of important
political posts while acting as shareholder and officer of the com-
pany. And all, in their turn, became family patriarchs.
Simone was the son of Chiaro di Filippo who had entered the
church and had little or nothing to do with the business. Simone's
career also had no direct connection with the business, but his ef-
forts in diplomacy likely often worked to the company's interests. He
was an independently wealthy property owner. He was not a share-
holder in the company, but was a substantial investor, having an in*
terest-bearing deposit of approximately li.7,900 with the company
and a further li.5,000 jointly with his nephews at the opening of the
last company on July 1, 1335.74As noted in the following chapter, he
owned part of the company's warehouse in Florence, which he rented
on a long-term lease.75 Although he was much more a cavalier than a
merchant, he did not entirely lack commercial instinct.
According to Passerini, Simone had already been knighted in
1323 when ordered to Naples to notify Beltrano dal Balzo, brother-
in-law of King Robert, that Florence had elected him captain-gen-
eral of its army. After serving as podesta of San Gimignano and
Prato, he fought in the war against Castruccio, and, as noted, was
73
See C. C. Bayley, War and Society in Renaissance Florence (Toronto 1961), 3-17, for
a useful description of the transition of Florentine forces from mainly local
militia to mainly mercenaries between 1260 and 1342. For a more detailed
review, see David Waley, "The Army of the Florentine Republic," in Florentine
Studies, ed. Nicolai Rubenstein (London, 1968), 70-108.
74
Ilibri, 1.
75
Ibid., 180.
captured at the defeat of Altopascio in 1325 and later ransomed.
Between 1326 and 1333, he was sent several times as ambassador
to Siena, once to Avignon to beg John XXII for aid, and finally
to the court of Naples to represent Florence at the wedding of
Johanna, the daughter of King Robert, to the son of the king of
Hungary. In 1335, he headed the delegation to Mastino della
Scala, dictator of Verona, to negotiate the purchase of Lucca, and
following collapse of the talks he was nominated as military mag-
istrate, responsible for finding money for the signoria with which
to seek aid from other towns.76 He then held various offices in
Pistoia and San Gimignano until recalled to Florence to serve as
prior in 1341. He was deeply involved in the rise and fall of
Walter de Brienne as dictator of Florence in 1342-3, and was am-
bassador to various Tuscan cities. In 1344, he was again elected
prior.77 His last official mission was as part of the embassy to the
king of Hungary in 1347, the year before his death from the
Plague.
Simone's repeated diplomatic appointments suggest that he was
recognized as a man of considerable intelligence, grace, and wit.
These attributes and his familiarity with decision-makers through-
out Italy clearly did much to enhance the Peruzzi name and to
make doing business with the company more respectable for aris-
tocrats. What is most instructive is that he seems not to have been
affected by the later misfortunes of the company. Being made prior
in the reform regime shortly after the firm's collapse in 1343 sug-
gests either that he enjoyed a personal "Teflon coating" or that
the family had somehow managed to distance itself from the ruin
of the company. The fact that many members of the family, as we
shall see, retained wealth, office, and status after the crash would
indicate the latter.
Tommaso served three times as a prior between 1299 and 1321,
was consul of the merchants' guild in 1303, and was an official of
the mint in 1311. He was also invited in 1312 to be ambassador to
Lucca and to seek allies in Lombardy against Emperor Henry VII.
Despite these and other public activities, Tommaso devoted most
of his energies to the company. He became "chairman of the
board" in 1303 on the death of his Uncle Filippo and directed
the company with diligence for twenty-eight years until his own
76
The signoria was the collective name given to the top officials of the commune.
77
The official announcement of the election makes it clear that Simone was a
knight at this point (Salvemini, La dignita, 175).
death in 1331. Outside the company, he owned large possessions
in San Gimignano, where he died and was buried. 78
Family genealogists and biographers tend to underestimate the
skill, discipline, and sheer talent required to manage an organiza-
tion as large, diverse, and geographically dispersed as the Peruzzi
Company in an environment of dreadful communications and virtu-
ally no international law. Tommaso may or may not have helped de-
sign the sophisticated control system that will be discussed in detail
in Chapter 3. There is no question, however, that he made the sys-
tem work for an extended period of time. It must be remembered
that his public service, although essential to the business, was much
more than a mere distraction; when he was prior, he would have had
to absent himself completely from the business for each two-month
term of office.79 He successfully guided an enterprise that comprised
commodity trading in grain and wool; manufacturing and finishing
of textiles, fur and leather; general merchanting; and banking, money
changing, and transferring funds - all on a grand scale across Eu-
rope and the Mediterranean. That success required not only busi-
ness acumen but the maintenance of satisfactory relations with a num-
ber of temperamental rulers, whose favor was essential and who were
often at odds with one another. Despite the discretion that had to be
allowed to branch managers, given the very slow communications, a
modicum of central control had to be established to ensure that the
company's overall interests were best served. Tommaso achieved the
necessary balance profitably, a feat that proved too demanding for
his successors.
Tommaso's brother, Giotto, may have been the most brilliant
of the Peruzzi of this era. He was certainly the most colorful, while
combining the attributes of both Tommaso and Simone. As a sub-
stantial shareholder and treasurer, he was closely involved in the
company's affairs. At the same time, he was extremely active in poli-
tics, domestic and foreign. He was a prior no fewer than eight times
78
San Gimignano was a medium-sized town in southern Tuscany most noted for
its cultivation of top-quality saffron. This was an important item of medieval
trade, valued as a medicine, dye, and condiment, and was exported throughout
Italy, France, and especially the Levant, where it was highly prized (see Abulafia,
"Crocuses and Crusaders," 227-33). The Peruzzi of Florence (not to be con-
fused with a San Gimignano family of the same name) did not acquire these
holdings of lands, houses and towers until 1329, shortly before Tommaso's death.
(See Enrico Fiume, Storia economica e sociale di San Gimignano [Florence, 1961],
33-40, 214-17).
79
Ferdinand Schevill, History of Florence (New York, 1976), 210. Priors were pro-
hibited from leaving the Palazzo dei Signiori to conduct private business.
between 1293 and 1335. He participated in the reform of the Floren-
tine representative government with the institution of the office of
gonfalonier ofjustice and other provisions to restrain the magnates. 80
In addition to his service as captain of Orsanmichele and consul of
the bankers' guild mentioned earlier, he was three times consul of
the merchants' guild. As governor of the mint in 1326, he put the
coinage in order; in 1328 he helped compile the ordinances which
established the commissions of scrutators responsible for determin-
ing the eligibility of guildsmen nominated for office.81 By then, in
partnership with Donato Acciaiuoli and Taldo Valori of the Bardi
Company, he was a formidable power in the city administration.
Giotto was an extremely wealthy man, although, as will be discussed
later, his secret books reveal that he was often short of cash. Most of
the entries in these books deal with acquisitions and disposals of prop-
erty, many involving large sums.82 In his palace, reputed to have been
one of the grandest in the city, he was host to King Robert of Naples
in 1310 shortly after the latter's coronation at Avignon.83 Giotto mar-
ried twice, both times into prestigious families, the Cavalcanti and
the Donati. With these ladies and the mistress of his Catalonian in-
terlude, he sired a total of twelve children. The family status was now
such that it became involved in a blood feud with the Adimari, an
ancient, powerful, and fractious lineage, which was considered so
serious that the signoria felt compelled to intervene.84 The dispute
was finally settled by Giotto in May 1313, when he gave his daughter
80
Passerini, "Genealogica," and Peruzzi, Storia commercio, 258.
81
See Najemy, Corporations, Chap. 4, for a cogent discussion of the complex elec-
toral reform of 1328. The new system, designed to reduce factional conflict,
provided for the selection of groups of scrutators whose job was to present for
approval lists of potential candidates for high office. The names of the success-
ful candiates were placed in sealed bags for drawing at each bimonthly elec-
tion.
82
Ilibri, 419-512.
83
Villani, Storia, Book IX, Chap. 8. See also Davidsohn, Firenze, Vol. 6, 534, and /
libri, 476-7. In the latter, Giotto's Secret Book details the extension and repair
of the roof and the construction of a special kitchen in preparation for the
visit.
84
Passerini, "Genealogica." Unfortunately, we do not know the reason for the
feud, but the reason for the intervention of the signoria is likely to have been
the need for concord among the city's leading Guelf families in the face of the
invasion of Henry VII. See also Carol Lansing, "Nobility in a Medieval Com-
mune: The Florentine Magnates, 1260-1300," (Ph.D. diss., University of Michi-
gan, 1984), 304-5, for a useful sketch of the Adimari lineage. Described as an
urban-rural hybrid, it became a leading Guelf lineage noted for its propensity
to enter into disputes. Most of the line joined the White faction, but one branch
was Black.
Filippa in marriage to Carlo, the son of Guerra di Adimari with an im-
pressive dowry of 1,800 goldflorins.85Giotto did not pay the entire dowry,
however, as it was regarded as an expense "per onore di loro e de la
casa" (for their honor and that of the house) to be borne by the whole
family, distributed 60 percent among the heirs of Arnoldo and 40 per-
cent among those of Filippo.86 Their contributions were actually made
to the company, which used the proceeds to buy property and gifts for
the happy couple. Interestingly, the main element of the dowry, a prop-
erty valued at 1,000 florins, was sold for them by the Peruzzi at their
request in 1335. The sale price was also 1,000 florins.87
In addition to his many other activities, Giotto took over the com-
pany chairmanship after the death of Tommaso in 1331. Judging by
the increasing disarray in the company's affairs and decline in its
fortunes, Giotto was unable or unprepared to devote the attention
that Tommaso had given to the business. As will be shown later, the
books were not even properly closed at the end of the 1331-5 part-
nership, and when the results of the period were finally known, they
proved to be a substantial loss. Toward the end of his life, he ap-
peared most interested in the prestige of the family and the salvation
of his soul, as evidenced by the vast donations to churches that
Passerini describes in great detail.88 His death in August 1336 was
marked by lavish ceremony. The expense for appropriate robes,
prayers, vigils, and for bringing high-ranking churchmen from
Avignon to Florence in connection with his funeral reached the as-
tonishing sum of li. 1,465.89
The most famous monument to the family's prestige is the artist
Giotto's frescoes in the Peruzzi Chapel in the church of Santa Croce.
The dating of the execution of the murals, ranging between 1317
and 1335, is the subject of much debate, with the most probable tim-
ing being between 1325 and 1328.^ Interestingly, the initiation of
85
For perspective, Brucker, Renaissance Florence, 92, cites 1,000 florins as a typical
figure for a dowry among patrician families in 1400. Davidsohn, Firenze, Vol. 7,
683-4, describes it as "very high" compared with most dowries at the time.
86
/ libri, 426.
87
Ibid., 348, 510.
88
Passerini, "Genealogica," mentions religious institutions in and around Florence,
including Santa Croce, where the family had its famous chapel decorated by
the artist Giotto (see next paragraph).
89
I libri, 255-6. For perspective, this sum is equal to the combined annual salaries
of the six highest-paid employees of the company.
90
J. F. Codell, "Giotto's Peruzzi Chapel Frescoes: Wealth, Patronage and the Earthly
City," Renaissance Quarterly 41 (Winter 1988): 585-6. Codell summarizes the
views of other scholars, but offers no estimate of her own.
this masterpiece seems to owe little to Giotto d'Arnoldo, although
he was undoubtedly consulted on it. The original funding for the
chapel itself came from the will of Donato d'Arnoldo written in 1292,
which set aside li.200 for its construction in the proposed church of
Santa Croce within ten years of his death.91 The murals for the chapel
were commissioned by Giovanni di Rinieri di Pacino, probably in
1325 before the Battle of Altopascio, in which he was captured and
held for ransom.92
The only reference in the company's extant books is a modest ex-
pense of li.27 slO in fiscal year 1335-6, implying a minor repair or
maintenance cost relating to an existing structure.93 It is very likely
that the company would have been involved in financing the origi-
nal construction, because several entries show that the company had
advanced a total of li.807 plus interest to Tano and Gherardo
Baroncelli, two of the company's largest outside shareholders, for
one of the three chapels that they built at Santa Croce.94 This work,
begun Christmas eve, 1332, and completed in 1338, has been fre-
quently attributed to the surviving chapel painted by Taddeo Ghaddi,
one of the artist Giotto's followers. However, Andrew Ladis offers
convincing evidence that the chapel referred to in the Peruzzi books
did not survive and that the chapel we see today was painted between
1328 and 1330.95 Given the further evidence that Taddeo's work was
strongly influenced by Giotto's Peruzzi chapel, the latter must have
been at least partially completed by 1328.96
The narrative to this point may suggest a preoccupation with pres-
tige and pride on the part of Peruzzi family members. In the highly
competitive social and political atmosphere in Florence at the time,
91
L. Tintori and Eve Borsook, Giotto and the Peruzzi Chapel (New York, 1965), 95,
App. A - l .
92
Ibid., 10, 42 n 39. Borsook suggests that the work may have begun in 1325 and
that at least the Baptist cycle was finished before Giotto's departure for Naples
in 1328.
93
I libri, 36.
94
Ibid., 13, 14, 47. There were actually two chapels being completely funded by
the company for the Baroncelli brothers at that time, the second being at the
church of Sanpiero Scheraggio. The total amount charged to their account for
the two projects was li. 1,726 plus li.450 accrued interest. Ironically, both broth-
ers died at around the time of the chapels' completion.
95
Andrew Ladis, Taddeo Gaddi, Critical Reappraisal and Catalogue Raisonne (Colum-
bia, 1982), 22. Ladis asserts that the 1332-8 chapel was erected in honor of St.
Martin on the now-destroyed tramezzo or rood screen. The surviving chapel to
the Annunciate Virgin was "built and begun" in February 1328, according to
the dedication inscription. See also 89-90.
96
Ibid., 24-8.
such an attitude among the leading lineages is to be expected. There
is, however, a piece of evidence in the Peruzzi chapel which possibly
indicates a tendency to understatement lacking in some of the other
great families. Borsook refers to "six little heads which gaze toward
the altar from the ornamental border," which she believes represent
Peruzzi family members. She adds, "Compared to some other
Florentines at the time, such as the Strozzi at Santa Maria Novella,
who had themselves painted almost life-size being welcomed into
Paradise, the Peruzzi were both circumspect and modest by relegat-
ing their portraits to the frame."97
During the long tenure of Tommaso and Giotto, the political im-
portance of the family continued to grow, as the popolo grasso exerted
increasing control over the electoral process of the commune. Be-
tween 1310 and the reform of 1328, Peruzzi family members were
elected as priors nine times, and between 1328 and 1342, the family
was represented a further seven times.98 But this showing, however
impressive, needs to be put into perspective. Many other families of
the popolo grasso equalled or exceeded the Peruzzi representation,
and some, such as the Strozzi, Acciaiuoli, Alberti, and Baroncelli-
Bandini, did so by a considerable number.99 The Peruzzi family was
undoubtedly an important actor in the political scene in Florence,
but only as one member of the business-oriented oligarchy that ruled
the city during those years.
A mere count of the number of family members serving in the signoria,
however, understates the influence of the Peruzzi in the commune, be-
cause it ignores the considerable power wielded directly by the com-
pany itself. As will be seen in later chapters, the commune's ambitious
foreign policy depended heavily on the largest companies for their in-
ternational connections and their unmatched capability to mobilize cash.
As the largest by far of all Florentine companies, the Bardi was enor-
mously influential in city politics, but the Bardi family, having been des-
ignated magnati, did not have a single representative in the signoria from
1293 onward. The largest companies must therefore be understood as
political forces in the commune in their own right.
Returning to the business, a new generation took over the leader-
ship of the Peruzzi Company in 1336 and sharply changed its course
during its final years.100 Bonifazio, one of Tommaso's sons, took the
97
Tintori and Borsook, Peruzzi Chapel, 23.
98
Najemy, Corporatism, 87, 116-18.
99
Ibid.
100
The remainder of this paragraph summarizes briefly what will be discussed in
detail in Chapter 7.
helm in that year following Giotto's death. He had been reason-
ably active in Florentine politics, holding a number of offices,
including that of prior in 1334, and had served the company in
Avignon and for several years in England. The business had been
faltering under Giotto's leadership and was operating at a sub-
stantial loss. Bonifazio apparently determined to restore the
company's fortunes by reviving its moribund participation in the
English wool trade. Shortly after taking over, to advance this new
policy, he entered into the ill-fated joint venture with the Bardi
Company to help finance Edward Ill's war with France. Less than
two years later, probably influenced by his familiarity with the
country, he took the startling step of moving to England to over-
see directly the operations there. Although this attests to the im-
portance that Bonifazio and presumably other shareholders at-
tached to this venture, it was a bizarre decision to leave the cen-
ter of operations in Florence unattended. This was no short-term
move; company records show that he was in England as early as
March 1338, and remained there until his death in October
1340.101 In fairness to Bonifazio, it is likely that he appointed his
brother Pacino to take charge in Florence, but a stand-in is never
the same as a leader, so that the business overall continued to
deteriorate.
In any event, Pacino was elected chairman as soon as news of
Bonifazio's death reached Florence (in three weeks, a surprisingly
short time, given the continuing hostilities between England and
France). 102 He had served the company for some years in Bruges
and was familiar with the business, but he was severely distracted
by the demands of the recurring crises in Florentine politics be-
tween 1340 and 1343.103 His main legacy as far as the company is
concerned was his attempt to bring some order into the books.
The surviving Assets Book and Secret Book of the last company
are all in his hand.104 But he may have one other claim to fame.
The historian S. Peruzzi asserts that annotators of Boccaccio say
101
Ilibri, 352, records that Bonifazio brought £101 to the English branch on March
1, 1338, although he did not settle there until later in the year. The earliest
English reference is an entry in Calendar of Patent Rolls, Edward III (hereafter,
CPR E III), 1338-40, 8, dated June 3, 1338.
102
Ilibri, 1.
103
The crises are discussed in detail in Chapter 8.
104
As discussed in Chapters 4 and 9, much of the writing in the books was probably
not done until after the bankruptcy.
that Pacino is the model for Dioneo, one of the interlocutors in The
Decameron.105
Although the collapse of the company in October 1343 obviously
did great economic damage to the Peruzzi lineage, it did not seem to
result in social disgrace. To be sure, the family members most closely
associated with the company fled the city in November 1343, as will
be discussed in Chapter 8. But in addition to the previously noted
election of Simone as prior in 1344, no fewer than five family mem-
bers were appointed as scrutators in that year. This is a remarkable
demonstration of the continued political influence enjoyed by at least
the Filippo branch of the Peruzzi lineage immediately after the crash,
despite the assumption of power by a new popular regime. 106Nor were
the family's economic losses ruinous or lasting. Within five years of
the bankruptcy court settlement in 1347, most members of the fam-
ily appeared to remain affluent. The family shareholders or their de-
scendants "were nearly all in the upper one-fourth bracket of tax assess-
ments in 1352, and some were in the upper one-tenth."107 Simone di
Rinieri, grandson of the brilliant Pacino di Arnoldo, retained some of
the Peruzzi business acumen and, as a successful merchant from the
1350s to the 1370s, became one of the wealthiest men in Florence.108
The family also escaped relatively lightly from the ravages of the
Black Death in 1348. According to Passerini's accounts, seven family
members died during that year, one of whom was Simone di Chiaro,
possibly a victim of advanced years rather than the pestilence. 109 Given
the great size of the lineage at the time, this seems a small number,
representing less than 7 percent, much lower than even the most
modest estimates of plague losses in that city. Being well nourished
and wealthy, the Peruzzi may have had the stamina to survive and the
105 p e r u Z zi, Storia commercio, 259. The annotator is identified as Domenico Manni,
an eighteenth-century publisher. Tintori and Borsook in Peruzzi Chapel, 41 nl8,
drawing from this citation, incorrectly identify the Dioneo model as Pacino di
Guido instead of Pacino di Tommaso. Another less desirable claim to fame is
that Pacino's wife was Alianora di messer Niccolo Gianfigliazzi, of one of the
families identified from their coat of arms as usurers by Dante in Canto XVII of
Inferno. The Gianfigliazzi logo was an azure lion (lines 59-60).
106
Passerini, "Genealogica." The nominees were Ottaviano di messer Amideo and
four sons of messer Guido - Filippo, Giovanni, Alessandro, and Pacino. Two of
them, Ottaviano and Pacino, were shareholders.
107
Gene A. Brucker, Florentine Politics and Society, 1343-1378 (Princeton, NJ, 1962),
18 n68.
108
Ibid. Fragments of his Secret Book are published in I libri, 515-24.
109 j n Fig U r e s A2 and A3, asterisks include the family members who died in 1348.
means to escape to safer areas, but the death rate for the family does
seem surprisingly low. Other important families suffered heavy losses,
some more than half the male relatives. The Donati, for example,
lost nineteen out of thirty-one male members of the family.110
Thus, the family continued to prosper but, with the exception of a
few like Simone di Rinieri, as landowners and rentiers rather than en-
trepreneurs. The Peruzzi remained active in politics; several members
of the family served in the high offices of gonfalonier of justice and
prior into the fifteenth and sixteenth centuries.111 And although the indi-
vidual household units of the lineage went their separate ways with re-
gard to their economic status and choice of occupations, they were re-
markably cohesive overall. In the fifteenth century they still tended to
cluster around the Piazza de' Peruzzi in the San Pier Scheraggio sec-
tion.112 And their willingness to accept the imposition of lineage author-
ity is dramatically revealed in a series of documents culminating in a
formal self-disciplining agreement drawn up in 1433.113
This brief history tells us that the Peruzzi family was wealthy, cohe-
sive, and an important force in Florentine politics during the life of
the Peruzzi Company. It also confirms a close and continuing rela-
tionship between the company and the family. And it reveals that the
chief architects of the company's huge operations were also patri-
archs of the family and notables in the community. But there is no
evidence that the interests of the company were subordinated to those
of the family, despite the fact that the family survived the collapse of
the company with so much of its wealth intact. To be sure, the
company's resources, as will become obvious in subsequent chapters,
were frequently used by family members. But those same resources
were also made available to non-Peruzzi shareholders and even to
employees. Again, the company often served as a financial interme-
diary for personal transactions, but the individuals involved, family
and outsider alike, were properly assessed for their debts.114 More-
110
Gene A. Brucker, Florence: The Golden Age, 1138-1737 (New York, 1984), 43.
111
Galvani, Sommario storico; Passerini, "Genealogica."
112
D. V. Kent and F. W. Kent, "A Self Disciplining Pact Made by the Peruzzi Family
of Florence (June 1433)," Renaissance Quarterly 34 (Fall 1981): 347.
113
Ibid., 337-52, and Thomas Kuehn, Law, Family, and Women (Chicago, 1991),
Chap. 5, "A Reconsideration of Self-Disciplining Pacts Among the Peruzzi of
Florence," 143-56. The pacts were aimed at the containment of a vendetta
with a family with which the Peruzzi had political ties.
114
See, e.g., the dowry for Giotto's daughter, which was arranged by the company
and cleared through its books. This expense "for the honor of the house" was
eventually prorated among all family members, shareholders and
nonshareholders alike. Also, the costs of the Baroncelli chapels, paid by the
company, were charged to the Baroncelli brothers.
over, as will be made clear, the company was not the creation of the
lineage as a whole. As Lansing has noted, lineage members were
normally prepared to act in concert in matters of family prestige and
power but were much more pragmatic in commercial undertakings,
choosing their partners on the basis of resources and talent rather
than kinship.115 In the case of the Peruzzi, the members of the lin-
eage united to form the property acquistion corporation of 1282 and
the charitable foundations of 1292, but company shareholdings were
strictly individual and mainly owned by those prepared to work for
the company. In short, the company, with its exceptional size and
widespread activities, was not a lineage undertaking, but the product
of the imagination and effort of a few individuals in the family, espe-
cially Filippo and Tommaso, who perceived an opportunity and found
the means to act upon it.
Gifted leadership was therefore undeniably a factor in the
company's earlier growth and success, but more than raw talent was
required to account for the emergence of three Florentine super-
companies during the first half of the fourteenth century. A unique
convergence of economic forces occurred, creating the conditions
that made these improbable companies possible. This study will now
turn to an examination of these forces.
115
Lansing, Magnates, 53.
The nature of the business
Much of the literature on Florentine economic history of the first

half of the fourteenth century has focused on the very large compa-
nies, especially those of the Bardi and Peruzzi, perhaps leaving the
impression that they were representative of business organizations
during this period. Nothing could be further from the truth. The
number of companies operating in Florence in the 1330s and 1340s
ran to many hundreds. 1 Hundreds more flourished in the numerous
commercial centers in Italy and northwestern Europe. But the term
"company" encompassed a broad range of enterprises of differing
magnitude and complexity, the preponderance of which were small
and simple businesses. Some were in manufacturing, others in mer-
chandise trading, others in banking and money changing, and still
others in combinations of these activities.
Only a few companies, however, embraced the entire spectrum.
Of these, most formed relatively modest-sized organizations, with a
small number of partners and limited capital. To be sure, there were
many Italian companies of significant size during the late thirteenth
and early fourteenth centuries, such as the Ricciardi of Lucca, the
Bonsignori of Siena, and the Frescobaldi and Scali of Florence. And
of the important non-Italian businesses, William de la Pole's had at-
tained a size that made it a formidable competitor of the Italians in
England and northern Europe. But there were a few international
companies of such extraordinary dimensions that they deserve to be
singled out with the special descriptive term "super-companies."
The medieval super-company is defined here as a private profit-
seeking organization operating several lines of business in very large
volume in multiple, widespread locations through a network of per-
manent branches. Super-companies were not distinguishable from
1
As an illustration of the large number of companies in Florence, Brucker cites
an incomplete list of 350 companies that failed between 1333 and 1346, pre-
sumably only a small part of those extant. See Florentine Politics, 16-17.
The nature of the business 39
other important companies merely by their size, which has often been
exaggerated to explain the losses allegedly sustained in lending to
monarchs, but by what set them apart - a combination of the magni-
tude, diversity, and geographical reach of their business interests. 2
Above all, it was their high capitalization that enabled them to de-
velop the volume of business necessary to support an organization
capable of dealing with the complexity of a broad range of enter-
prise in a widely dispersed branch network. The key to volume was
large-scale commodity trading, an activity that required superior re-
sources, sophisticated organization, and political sensitivity and that
has been given less attention by historians than the banking, general
commercial, and manufacturing aspects of medieval business. 3
Because statistical evidence is limited and untrustworthy, it is not
possible to identify super-companies by means of specific numerical
benchmarks. For purposes of this study, therefore, it will be neces-
sary to determine membership in the exclusive super-company club
on the basis of certain broad and somewhat arbitrary criteria. These
are that the entity must have been, over an extended period of time,
a large-scale commodity trader, an international merchant, an im-
portant international banker (with the papacy and at least one mon-
archy as clients), and a manufacturer - all supported by substantial
capital and a branch network manned by numerous employees and
working partners. As will be shown throughout this study, the Peruzzi
Company easily met all of these requirements. Two other companies,
the Bardi and the Acciaiuoli, also qualified. Specific data are lacking
regarding the number of branches, employees, and the amount of
capital subscribed, but from all other measurements, it is probable
that the Bardi Company was at least 50 percent larger than the
Peruzzi.4 It was as important as the Peruzzi in the Kingdom of Naples,
2
See Edwin S. Hunt, "A New Look at the Dealings of the Bardi and Peruzzi with
Edward III,n Journal of Economic History bO (March 1990): 149-62.
3
David Abulafia and Georges Yver are notable exceptions. See Abulafia, "South-
ern Italy and the Florentine Economy, 1265-1370," Economic History Review 2,
series 33 (1981): 377-88, and Yver, Le commerce, Chap. 6, for the importance of
the super-companies' involvement in the grain trade. The latter pointedly com-
mented (123) on the part played in this commerce by companies such as the
Bardi, Peruzzi, and Acciaiuoli, "que Ton regarde d'ordinaire comme
exclusivement vouees aux affaires de banque" (that are normally regarded as
exclusively devoted to banking).
4
For example, the ratio of the companies' share in their English joint venture
was 60% for the Bardi and 40% for the Peruzzi. The oft-reported total Bardi
assets of li. 1,266,775 in 1318 compared with the Peruzzi total of li.742,247 in
1335 (see Table 5) suggests that the size advantage of the Bardi over the Peruzzi
was at least 70%. Additional evidence regarding the size and reach of the Bardi
will be presented in following chapters.
4O Medieval super-companies
it enjoyed a greatly superior position in England in wool trading and
banking, and it also had a larger general merchandise business in
the eastern Mediterranean. France was the only major market in which
it trailed the Peruzzi. Although firm information on the Acciaiuoli is
scarce, we know that it had major branches in Naples, Sicily, France,
Avignon, and England. It was active in most of the same areas as the
Peruzzi and was significantly smaller only in England in the late 1330s,
when the latter greatly increased its activity there. It had nearly as
many factors working abroad as the Peruzzi.5 It shared the grain
monopoly of the Kingdom of Naples and was generally regarded by
contemporaries in Florence and Naples as the third member of the
"Big Three."6
A fourth company, the Buonaccorsi, comes close to super-company
status, but falls short because it lacked the capital and personnel to sus-
tain itself at super-company level of activity for more than a brief period
of time. Its growth was explosive in the late 1320s and 1330s, but it soon
became overextended and collapsed in 1342 for the essentially com-
mercial reasons of too much ambition supported by too little capital
and inadequate staff.7 The earlier great companies, such as the Ricciardi,
Frescobaldi, and Scali deserve mention as candidates, but they too are
less than super-company rank for different reasons. The Ricciardi and
Frescobaldi, as will be discussed later in this chapter, were extremely
important in the English banking and wool trade, but were rather nar-
rowly focused, with relatively minor operations in southern Italy and
the Mediterranean.8 The Scali Company was certainly very large and
diversified, and its collapse in 1326, with liabilities allegedly in excess of
400,000 florins, sent shock waves throughout the lay and ecclesiastical
bureaucracies as well as the commercial world.9 But there is insuffi-
5
De Roover, Medici Bank, 3. De Roover asserts that the Acciaiuoli had forty-three
factors residing outside Florence; the Peruzzi had forty-eight factors abroad
(Table 2).
6
M. Luzzati, Villani e Buonaccorsi, 30-3, gives several examples of taxes and con-
tributions as a guide to the size of a company, and the Acciaiuoli was always
among the largest companies. See also Yver, Le commerce, Chap. 5, and Sapori,
Storia economica, for various references.
7
M. Luzzati, Villani e Buonaccorsi, 39, estimated the Buonaccorsi capital at only
li. 15,000 in 1324 and noted that although it grew rapidly thereafter, the firm
was relatively undercapitalized (82).
8
According to Yver, Le commerce, 292, the Frescobaldi set up a branch in Naples
very early, but nothing seems to have come of it. The Ricciardi are not men-
tioned at all in Yver's work; neither the Ricciardi nor the Frescobaldi are named
in Henri Bresc's massive study of Sicily, Un monde Mediterraneen; economie et societe
enSicile, 1300-1450 (Rome, 1986).
9
Yver, Le commerce, 317. Villani called it "worse than Altopascio," Florence's mili-
tary disaster of the year before (Storia, Book X, Chap. 4).
cient information on the Scali as a going concern to support its can-
didacy as a super-company. It was not dominant in any line of busi-
ness or geographical area and did not seem to be in the class of the
Big Three for an extended period of time.
It is immediately noticeable that all of the super-companies and
even the very large merchant-banker organizations were concentrated
in the inland towns of north-central Italy, mostly in Florence. Many
reasons have been advanced to explain the preeminence of Italian
cities in international trade and finance. The geographical location
of Italy between the East and Western Europe has been cited by eco-
nomic historians such as Renouard and Sapori; and a glance at the
map at the beginning of this book is sufficient to confirm the cen-
trality of northern Italy in the medieval commercial world.10 Other
scholars have focused on the genius of the Italian people. Burckhardt
stressed their individuality.11 Peter Burke, in discussing late Renais-
sance Italy, emphasized its pro-enterprise cultural environment,
"where the value-system had been shaped by entrepreneurs." 12 Sapori
argued that the supremacy of those entrepreneurs was due to their
orderliness, clear thinking, and managerial skill.13 And in a very re-
cent book, economist Michael Veseth attributed Florence's commer-
cial achievements to a "fifth element" that he called the "creative
spark" of the people.14 But the cultural rationales suffer from their
exclusive application to Italians, ignoring the gifted and energetic
citizens of Flanders, Catalonia, and Provence, and they do nothing
to explain the emergence of super-companies in Florence. Raymond
de Roover's "technical" explanation of the Italians' domination of
the Commercial Revolution would, if correct, apply even more di-
rectly to Venice and Genoa, neither of which produced very large
private enterprises, let alone super-companies.15
10
Renouard, Les relations, 40; A. Sapori, "The Culture of the Medieval Italian Mer-
chant," in Enterprise and Secular Change, ed. F. C. Lane and J. C. Riemersma
(Homewood, IL, 1953), 65.
11
Jakob Burckhardt, The Civilization of the Renaissance in Italy (New York, 1954).
Burckhardt discusses the individuality phenomenon throughout, but especially
in Part II.
12
Peter Burke, "Republics of Merchants in Early Modern Europe," in Europe and
the Rise of Capitalism, ed.J. BaechlerJ. A. Hall, and M. Mann (London, 1988),
221.
13
Sapori, "Culture," 65.
14
Michael Veseth, Mountains of Debt (New York, 1990), 19ff.
15
Raymond de Roover, "The Commercial Revolution of the 13th Century," Bulle-
tin of the Business Historical Society 16 (1942): 34-9. In this brief but useful ar-
ticle, de Roover encapsulates many of the views he has expressed in his other
works.
The reasons for the emergence of these very large companies must
be sought in the effects of the economic expansion in Western Eu-
rope during the twelfth and thirteenth centuries and the concomi-
tant development of incipient, but increasingly effective, bureaucratic
states. The history of these phenomena is too well known to dwell on
in detail here, but a brief review will be useful because the growth of
the economy and the emergence of the state bureaucracies during
that very busy period have not often been treated together. Both of
these developments were important in introducing the circumstances
under which the super-companies arose.
The improvement in agricultural productivity across Europe, the
attendant surge in population growth, and the exploitation of the
Freiberg silver mines led to a concentration of cash among the up-
per ranks of nobility, lay and ecclesiastical, rural and urban. These
developments, in turn, all contributed to the creation of flourishing
money economies and greatly increased trade. 16 Mounting demand
for fine foods, clothing, and other objects of conspicuous consump-
tion gave rise not only to long-distance trade to the East, but also to
substantial indigenous industries - in particular, cloth in Flanders,
wool growing in England, and increased viticulture in France and
Italy. Commodity markets developed in northern Europe to provide
the industries with essential raw materials, such as wool, dyes, and
alum, and their urbanized workers with abundant cheap food. In the
Mediterranean area, the growing inland towns of north and central
Italy began to compete aggressively in these markets as well as in
trade in the East, long dominated by Venice and Genoa.
During the twelfth and thirteenth centuries, the trade in impor-
tant commodities was closely controlled by the rulers of the territo-
ries from which the commodities originated. The Venetian state kept
a firm grip on its salt trade, the rulers of southern Italy and Sicily on
their grains, and late in the period, the kings of England on that
country's wool. The growing cash flow from trade in such commodi-
ties helped fuel the growth of the rulers' administrative organiza-
tions, which, in turn, guided as much as possible of the revenues
from these sources into the royal treasuries. In some cases and at
some times, the rulers' bureaucracies directly managed the commod-
ity trade; in others, they exercised their monopolies through export
controls and customs duties, subcontracting the actual sale of the
goods to certain of the private merchants who paid the export duties
16
The early chapters of Peter Spufford's Money and Its Use in Medieval Europe (Cam-
bridge, 1988) give an excellent analysis of the interaction of all these dynamics.
17
and taxes. But such subcontracting rights were granted only to fa-
vored merchants in return for services rendered. The service most
appreciated was the advance of ready money, of which the rulers be-
came increasingly in need. They required cash for luxury goods and
impressive buildings not merely for personal gratification, but also
for enhancement of prestige in a court society where ritual was an
important indicator of power. Monarchs also needed cash to improve
their bureaucratic control over their subjects and, above all, to fi-
nance their territorial and dynastic ambitions.
Merchants throughout western Europe prospered in this period
of economic growth and bureaucratic order, most finding profitable
niches in segments of enterprise - local and regional trade, long-dis-
tance trade, or various facets of manufacturing and banking. They
formed associations to regulate commerce and to protect their inter-
ests and they generally stayed within their own specialty. By the end
of the twelfth century, foreign merchants, primarily Italians, found
themselves increasingly involved with rulers whose needs, especially
for foreign adventures, could no longer be satisfied by native busi-
nessmen.18 Thus, what Sapori calls the "first emigration" of Italian
merchants to England occurred after the Third Crusade in which
Richard I incurred huge expenses abroad, not the least of which was
his ransom.19 From the middle of the thirteenth century onward,
larger merchant companies, especially from the Italian cities, became
increasingly involved in financing princely objectives, such as the
papal struggle against Emperor Frederick II, Charles of Anjou's cam-
paigns to conquer southern Italy, and the unsuccessful attempt of
England's Henry III to install his son Edmond on the throne of Sic-
ily. Businessmen thereby crossed enterprise as well as geographic
boundaries, becoming buyers and sellers of wool, lenders to princes,
and transfer agents of the papacy, in addition to being general mer-
chants. As will be discussed later in this chapter, firms such as the
Bonsignori of Siena and the Ricciardi of Lucca became substantial
well-capitalized partnerships, capable of providing finance to rulers
on an unprecedented scale.
17
Venice provides an example of direct management of commodity trade. France
and England occasionally exercised direct control but usually used indirect
methods. Naples under the Angevins is the best example of a kingdom with the
consistent use of indirect controls through merchant monopolies.
18
Among the foreign merchants were southern French, Catalan, Flemish, and
German as well as Italian. And in southern Italy and Sicily, the many Italian
merchants from the north were regarded as foreign.
19
Sapori, Storia economica, Vol. 2, 861, n39.
Meanwhile, Florence had begun to emerge as the prime indus-
trial and financial center of Italy, despite its lack of natural advan-
tages. The city was landlocked and located off the main north south
routes connecting Rome and Lombardy.20 As a route from the sea,
the Arno River was reliably navigable only partway to Florence, and
passage depended on peaceful relations with Pisa and Lucca.21 And
the town was situated in hilly country that was both unsuitable for
large-scale grain cultivation and lacking in mineral or timber re-
sources in the immediate area.22 But it was well suited to the develop-
ment of the cloth industry. It had abundant, rapidly flowing water
nearby for cleansing, fulling, and dyeing wool, and while not on im-
portant trade routes, it was easily accessible to them and to large
population centers. Until the second half of the thirteenth century,
the Florentine cloth industry was a modest local enterprise using in-
ferior local wool, but as population and the market for its products
increased, it sought better wools from more distant places and im-
proved the quality of its product. Meanwhile, its merchants were sell-
ing increasing quantities of textiles of all kinds and qualities, includ-
ing top-quality woolens obtained from Flanders and Brabant, and
had become expert in finishing imported northern gray goods to
suit the preferences of the Mediterranean market. All of these tex-
tiles achieved wide distribution in the major markets of Italy, south-
ern France, and the Mediterranean, although woolens manufactured
entirely in Florence did not begin to compete with the best of the
northern fabrics until the 1330s.23 This profitable business and the
international trading network that accompanied it generated a great
20
Florence was situated on the Via Cassia, but the main north-south route was the
Via Francigena, which crossed the Arno west of the city. Another main route,
the Via Flaminia, passed east of Florence on its way to Bologna.
21
Davidsohn, Firenze, Vol. 6, 526, notes that full boatloads of grain and other com-
modities could get as far as Signa, or even Empoli when the water level was
high, but only lighter boats could reach Florence.
22
Brucker, The Golden Age, 67, notes that Tuscany's forests were depleted and its
iron deposits were insignificant, so that ore had to be imported from Elba. Suf-
ficient timber for smelting iron occurred only in the higher slopes of the
Appenines, the nearest being beyond Pistoia to the northwest. See also Richard
A. Goldthwaite, The Building of Renaissance Florence (Baltimore, 1980), 280-1.
23
There is some controversy over Florence's importance as an industrial center.
Villani's assertion that more than 30,000 persons obtained their livelihood from
working in just the wool industry (Storia, Book XI, Chap. 93) would place Flo-
rence as a leading industrial city. But Hidetoshi Hoshino, L'Arte della lana in
Firenze nel basso medioevo (Florence, 1980), 132 and elsewhere, disputes Villani's
production estimates and argues that Florence was never an industrial city in
the same sense as the great towns of Flanders.
deal of capital, a crucial element in making Florence a center for
international finance. But, as we shall see, cloth manufacturing and
trading could be successfully managed by moderately capitalized
firms; a further ingredient was necessary to create the need for su-
per-companies - large-scale grain trading.
By the end of the thirteenth century, the expansion of agricultural
production and population in Europe had run its course, but the
population of towns continued to grow to meet the needs of industry
and trade. The Italian cities, especially Florence, attracted large num-
bers of industrial workers with the result that they had greatly out-
run the agricultural resources of the surrounding areas. Already in
1258 the commune of Florence forbade the export of grain from its
contado, and in 1274 it created an office at Orsanmichele to control
and distribute grain in the city.24 By the early fourteenth century, the
Florentine contado could supply food for the city only about five
months of the year, so that Florence had to import food grains on a
massive scale to maintain its industrial and commercial well-being.25
Further supplies were obtainable from nearby Romagna or from
Sardinia to the west, but the principal centers of reliable surplus grain
production were Puglia in southern Italy, Sicily, and the Crimea. These
sources of food energy, especially the nearer ones, were to cities like
Florence what the oil-rich countries of the Middle East are to today's
industrial centers of Europe.26
Accordingly, the businessmen who dominated Florentine politics
had a strong economic interest in acquiring the ability to influence
the power structure in southern Italy. It was the desire to gain access
to the granaries of Puglia and Sicily, aside from any religious or po-
litical convictions, that prompted the Florentine Guelfs to support
24
Dameron, Episcopal Power, 144. Further details will appear later in this chapter.
25
Domenico Lenzi, // libro del Biadaiolo (hereafter, // Biadaiolo), G. Pinto, ed. (Flo-
rence, 1978), 317. Although Lenzi, the chronicler of II Biadaiolo, actually made
the statement in the famine year 1329, he obviously intended it as a generaliza-
tion. The editor agreed with Davidsohn's contention (Firenze, Vol. 5, 238) that
the comment referred to "normal" times. Lenzi also asserted that food prices in
Florence were always higher than anywhere else in Italy, presumably because of
its heavy reliance on imports.
26
The concern for provisioning medieval cities was not unique to Italy. Flemish
towns faced similar problems in the fourteenth century when the climate in
northern Europe became increasingly inhospitable to grain growing and grain
supplies had to be imported from northern France up the Leie River. Ghent
adapted to this situation by reorienting itself from a predominantly industrial
basis to a mixed economy of grain and trans-shipment, as well as textiles. See
David Nicholas, The Metamorphosis of a Medieval City (Lincoln, NE, 1987).
the papacy in its efforts to install Charles of Anjou as king of Naples
and Sicily. After a long and expensive struggle, Charles' project was
crowned with success following the Battle of Tagliacozzo in 1268.
The Florentine businessmen duly followed in his wake, as Charles,
like the Normans before him, welcomed foreign merchants. They
brought wealth and could be controlled or ejected, whereas native
merchants might one day pose a threat to the monarchy.27 Further-
more, the use of foreign merchants fit comfortably with the Angevin
system of government, which drew its administrators from outside
each region to ensure that officials were beholden to the king and
his regime.28 Hence, partners and employees of the Florentine mer-
chants also began to occupy important positions in the Neapolitan
bureaucracy.29 At the same time, the Angevins possessed the military
strength that Florence often needed. The result was a relationship of
mutual advantage.
Initially, the pickings for the Florentines were not very rewarding,
as Charles and his court continued trading with Provence, which had
been under Charles' suzerainty since 1247.30 More important, the
king maintained tight control over the grain trade, requiring licenses
for export and setting prices or imposing duties that left little room
for profit for the merchants.31 He managed this feat with the help of
secret agents who kept his government posted on current cereal prices
in the main importing markets.32 Charles' financial independence,
however, was short-lived, as the Sicilian revolt erupted in 1282, sup-
ported by King Peter of Aragon. This reverse denied Charles a rich
source of income and cost him huge sums in fruitless efforts to re-
27
D. Abulafia, "The Crown and the Economy under Roger II and His Successors,"
Dumbarton Oaks Papers 37 (Washington, DC, 1983), 1-13. Abulafia concluded
that the Norman rulers of Sicily saw foreign merchants as "suppliants in search
of the vital necessities Sicily and Apulia produced." The Angevin successors
likewise preferred merchants they could control.
28
Steven Runciman, The Sicilian Vespers (Cambridge, 1958), see especially
Chap. 8.
29
Yver, Le commerce, 325-7.
30
Ibid., 291-4. Yver suggests here that preference for French fashions was the
main reason for the continued trade with Provence. But this trade did little to
enhance the position of the port of Marseilles, also under Charles' sway since
1252. SeeJ. Pryor, "Foreign Policy and Economic Policy: The Angevins of Sicily
and the Economic Decline of Southern Italy, 1266-1343," in Principalities, Pow-
ers and Estates (Adelaide, 1978), 45.
31
Michel de Bouard, "Problemes de subsistances dans un etat medieval: Le marche
et les prix des cereales au royaume angevin de Sicile (1266-1282)," Annales
d'Histoire, Economique et Sociale, 53 (September 1938), 483-501.
32
Ibid., 491.
cover the island. He died in 1285; his son, who became Charles II,
had been captured during an ill-conceived naval expedition in 1284
against the Aragonese-Sicilian fleet and was not ransomed until
1289.33 By 1293, the Angevin kingdom was desperately fending off
invasions of the mainland from Sicily. Charles II's normal source of
financing, the papacy, had declared a crusade on his behalf, but typi-
cally the income from clerical tenths and other levies flowed in very
slowly while the Angevins spent very quickly. The Italian merchants
were willing to advance funds to the papacy only to the extent that
they could secure their loans with near-term papal revenues. 34 They
held back in lending money directly to Charles until he was prepared
to share his monopolies and set aside part of his revenues to repay
his debts.35 Despite these precautions, some of the lenders failed, most
notably the Bonsignori of Siena after 1298.36 The stronger and bet-
ter-managed companies - the Bardi, Peruzzi, and Acciaiuoli - survived
to enjoy the fruits of the risks they had taken. The Sicilian war finally
ended with the Peace of Caltabellotta in 1302, but the Angevins re-
mained dependent on the merchants, as they embarked on a spend-
ing spree, rebuilding Naples and indulging themselves in prestige-
enhancing conspicuous consumption. Thus, the lucrative grain trade,
delivered to the Florentines through the exigencies of war, became
transformed into a long-term quasi-monopoly for them as a result of
subsequent Angevin profligacy.37
33
Runciman, Vespers, 247.
34
N. Housley, The Italian Crusades (Oxford, 1982), 238-9. The word "Italians" rather
than "Florentines" is used here despite the fact that the latter became domi-
nant in southern Italy, because non-Florentine firms were important players
there in the thirteenth century. Although Siena was for many years a Ghibelline
stronghold, the Bonsignori of that city were key papal bankers, holding the
distinction of being the longest serving (twenty-five years) of the companies
designated Mercatores Cameres Apostolice by the popes of the latter half of
the thirteenth century. During that period, such companies were entrusted with
the bulk of the financial operations of the papacy. See Renouard, Les relations,
570, and E. D. English, Enterprise and Liability in Sienese Banking, 1230-1350 (Cam-
bridge, MA, 1988), 23-40.
35
Charles of Anjou operated all export trade as a state monopoly. Rights to ex-
port goods, especially food grains, were granted to merchants sometimes for
specific amounts and sometimes for limited periods of time - and always in re-
turn for loans. See Abulafia, "Southern Italy."
36
The failure of the Bonsignori, which was not complete until 1310 in some
branches, had multiple, complex causes, but the principal one was inept man-
agement in its later years (English, Sienese Banking, 55-78).
37
In fairness to the Angevins, it should be noted that they also invested consider-
able sums in productive assets such as shipping and port facilities. See Yver, Le
commerce, 155-70; Pryor, "Foreign Policy," 48-9.
With few exceptions, historians, drawn by Villani's account of the
collapse of the super-companies, have tended to see the English wool
trade and banking as the vital components of those firms' business,
relegating their southern Italy operations to a role of secondary im-
portance.38 To be sure, English trade and finance played a key part in
the spectacular rise and fall of the important earlier companies, such
as the Ricciardi and the Frescobaldi, and also loomed large in the
considerations of the super-companies, especially in their declining
years. But it was the special relationship between Florence and the
Kingdom of Naples, especially the two-way trade of grain and cloth,
that enabled a select group of Florentine merchant-bankers to evolve
into super-companies. It is no coincidence that the Big Three super-
companies of the early fourteenth century, the Bardi, Peruzzi, and
Acciaiuoli, were all strongly represented in the Angevin kingdom
over several decades. The qualitative difference in these companies
from other merchant-bankers arose from the challenge of organiz-
ing the grain monopoly, which launched them into a quantitative
level of operations beyond anything previously experienced by pri-
vate firms. For example, Florentine exports of Puglian grain in 1311
were recorded at the astonishing total of 45,000 tons, "enough to fill
fifty of the largest Genoese ships of the fifteenth century."39 And be-
tween 1327 and 1331 the total annual volume of grain exports con-
trolled by the super-companies averaged a more normal but still very
impressive 12,300 metric tons.40It is important to recognize that these
tonnages were far in excess of Florence's needs, so that the shipments
of grain were destined not just to Florence, but to a great number of
locations throughout Italy and the Mediterranean, especially Tunis
38
Villani, Storia, Book XI, Chap. 88, and Book XII, Chap. 55. The huge English
losses reported by Villani (1.5 million florins) dwarf the 200,000 florins alleg-
edly suffered in Naples. As noted earlier, Yver and Abulafia are among those
historians who have recognized the importance of southern Italy to the Bardi
and Peruzzi.
39
Abulafia, "Southern Italy," 382.
40
Abulafia, "Sul commercio del grano Siciliano nel tarda duecento," La societd
mediterranea all'epoca del Vespro: XI Congresso delta Corona d'Aragona, Palermo—
Trapani-Erice, 25-30 aprile 1982, Vol. 2 (Palermo, 1983), 5. The figure cited was
actually 110,000 salme, which is converted at about .112 metric ton per salma.
Unfortunately, these data do not include the destination of the grain exports,
so that we do not know how much of the total went to Florence. Villani in his
famous panegyric on Florence (Storia, Book XI, Chap. 93) gives a rough partial
estimate of grain consumption, from which I will attempt to estimate grain im-
ports in Chapter 5.
41
and other North African ports. And there was much more. The su-
per-companies enjoyed preferential trade in the region's other abun-
dant raw materials, such as edible oil and wine, which were much
appreciated in the northern Italian markets. In return, they exploited
a virtual monopoly in the Angevin market for the better grades of
cloth, as local manufacture was limited to the lower end of the mar-
ket and the nobility became admirers of the merchandise offered by
the Florentines.42 They increasingly penetrated the economic life of
the kingdom, practicing all manner of trades, major and minor, farm-
ing the gabelles, and operating the mints. In 1316, the Bardi, Peruzzi,
and Acciaiuoli formed a syndicate (enlarged in 1330 to include the
Buonaccorsi) that collected taxes, transported cash, paid bureaucrats'
salaries and troops' wages, managed military stores and, of course,
the grain and wine trade.43 They dealt with government officials as
equals, many of whom, as already indicated, were fellow Florentines,
and they did not hesitate to approach the king with complaints when-
ever they encountered difficulties with them.44
The grain markets as they affected the super-companies need to
be examined on two distinct levels - international and local. In the
international markets, the super-companies operated somewhat like
the modern great commodity dealers Cargill and Archer-Daniels-
Midland, negotiating with governments for the acquisition of huge
quantities of grain while attempting to distribute advantageously these
surpluses among clients in need.45 The companies leased ships from
Venice, Genoa, and other maritime cities to transport these bulk car-
goes of up to 2,500 salme (approximately 280 tons) each to destina-
tions throughout Italy and the entire Mediterranean area.46 With re-
gard to Florence, some of the grain was shipped from Naples to Pisa,
Genoa, or even Talamone, but most of it moved from the Adriatic
ports of Manfredonia, or Barletta, where the super-companies formed
41
David Abulafia, "A Tyrrhenian Triangle: Tuscany, Sicily, Tunis, 1276-1300," in
Studi di storia economica toscana nel Medioevo e nel Rinascimento in memoria di Federigo
Melts (Pisa, 1987). See also M. de Bouard, "Problemes de subsistances," 491.
42
Charles I and his successors actively fostered the establishment of a woolen
industry, luring Florentine workers to Naples with concessions, but were only
modestly successful (see Pryor, "Foreign Policy," 47).
43
44
Ibid., 305.
45
See the Economist (June 1, 1991): 71, for an account of the international com-
modity operations and government dealings of Archer-Daniels-Midland.
46
For a comprehensive listing of loading ports, destinations, and sources of ships,
see G. Yver, Le commerce, 123-5.
an exclusive colony. Northbound ships from Barletta often stopped
at Ragusa (now known as Dubrovnik), some to unload cargo, others
to transact business en route to their final destinations of Venice,
Ancona, or other ports along the Adriatic.47 The final leg of the jour-
ney to Florence from such ports was overland, although from Venice
goods could be shipped by river transport at least as far as Bologna
via the Po River and a canal.48
The super-companies' customers for grain supplies were local grain
dealers, local governments, and sometimes their own branches. Some
markets, such as Florence, with its constant need for foreign grain,
were regular. Others, such as Siena, were sporadic customers, im-
porting only in times of scarcity. But destinations were often ad hoc.
Contracts for ship leases from Palermo reflect several alternative
destinations with tonnage fees for each, allowing the owner of the
grain the option to wait until the last possible moment for intelli-
gence on market conditions.49 At the other extreme, for grain shipped
under export tax exemption from the Angevin kingdom, the desti-
nation was predetermined and had to be strictly observed.50
The local markets, particularly in the heavily populated towns of
north-central Italy, came under increasing regulation from the third
quarter of the thirteenth century. The attitude of the local govern-
ment toward food supplies was pragmatic; it determined to fill the
commune's needs at lowest possible cost, because to do otherwise
would invite dangerous social upheaval, especially in times of scar-
city.51 In Florence, the control of the distribution of cereal grains was
assigned to the "Six of the Biada" from about 1274 onward. The ce-
reals covered included four main types of wheat and several other
grains including barley, rye, sorghum, and millet. The officials were
47
B. Krekic, "Italian Creditors in Dubrovnik (Ragusa) and the Balkan Trade, Thir-
teenth through Fifteenth Centuries," in Dawn of Modern Banking (New Haven,
CT, 1979), 246. The Peruzzi were very active in Ragusa, with as many as nine
agents there who not only dealt in grains and other merchandise, but also acted
as temporary custodians of cash being remitted from southern Italy to Florence
via Venice.
48
49
Abulafia, "Commercio del grano," 12-13, cites an example of the Peruzzi in
1299 contracting to ship 2,500 salme of wheat to Pisa, Genoa, Tripoli, Tunis, or
Gabes, with rates agreed for each option.
so Yver, Le commerce, 119. Certificates of discharge were required from the consular
authorities of the port of debarkation for the exemption to be honored.
51
William M. Bowsky, The Finance of the Commune of Siena, 1287-1385 (Oxford,
1970), 37-8, reports that in April 1329, during the great famine, mobs rioted in
Siena, killed four officials, and made off with the grain stores.
elected under a complicated system for periods ranging from two to
six months and were assisted by notaries, official weighers, messen-
gers, police, and spies.52 The "Six" oversaw the managers of the only
market in which grain could legally be bought and sold, the
Orsanmichele, and they regulated the importation of grain. In times
of scarcity, they induced the commune or any of the major guilds to
import grain, stockpile it, and offer it at fixed prices below cost, as-
signing the loss to the commune.53
How did the super-companies fit into this local regulated scene?
Family members would have sold some of the produce from their
farms in the contado, and the companies would have marketed im-
ported grains directly to millers and other customers in the
Orsanmichele. They may also have sold to other grain dealers and
certainly to the commune from time to time. They were not in the
business of milling grain, although the Peruzzi did own at least three
mills that were leased to third parties.54 Whatever their activity in
the grain market, they were clearly affected by its regulations. Prof-
its were frequently constrained in times of plenty by the competi-
tion of supplies from nearby sources and in times of dearth by the
political necessity to "do the right thing."55 But the super-companies
were in a position in normal times to make reasonable, if not exces-
sive profits. Their Puglian wheat consisted mainly of the hard pre-
ferred grano ciciliano, which commanded a higher price than the lo-
cal varieties.56 There was also opportunity for profit in the wildly fluc-
tuating prices caused by variations in availability.57 And the compa-
nies could turn the regulatory system to their advantage, being closely
52
Davidsohn, Firenze, Vol. 5, 240-1. The spies were employed to track down hoard-
ers and rule breakers.
53
Ibid., 241.
54
John Muendel, "The 'French' Mill in Medieval Tuscany," Journal of Medieval
History 10 (December 1984): 245 nl5.
55
In good harvest years, Siena and its contado had surplus to sell to Florence. See
William M. Bowsky, A Medieval Italian Commune: Siena Under the Nine, 1287-1355
(Berkeley and Los Angeles, 1981), 201-9. From 1329 (the year of the great
famine) onward, the Florence Commune intervened increasingly in the market
in poor harvest years, enforcing a "political price" significantly below the free
market price. See IlBiadaiolo, 62. This governmental intervention will be treated
more fully in Chapter 6.
56
According to // Biadaiolo, wheat in Florence was graded into four main types.
The most expensive was grano calvello, a very soft grain used in the best bread
and cakes; next was grano ciciliano, then grano communale, and, last, grano grosso.
57
See 77 Biadaiolo, 63-70, for a useful set of tables summarizing monthly prices of
all grains in Florence from 1320 to 1335.
connected to it, occasionally even as poacher turned gamekeeper. 58
It is not possible to estimate the profitability of the grain business
with any degree of accuracy, given the constantly changing variables
of market prices in the growing areas, the Angevin export tax, trans-
port costs, and market prices at the destinations. It is, however, pos-
sible to obtain a very rough idea of the profit potential of shipments
to Florence from the detailed price data that appear in // libro del
Biadaiolo. These prices are expressed in soldi di moneta piccola per
Florentine bushel, and by converting the export tax and transport
costs into that measurement, we can judge how much room for ma-
neuver the companies had in selling to the Florentine market. The
export tax, as will be shown later, could vary widely, but the typical
rate was twelve Neapolitan ounces per 100 salme. As shown in Table
A7, this converts to a range of 2.5 to 3.4 soldi per bushel. Marine
transport costs were of course highly variable, but data on ship leases
from Sicily to Pisa suggest a range of si.5 to s2.2 per bushel.59 Adding
transfer, demurrage, port fees, insurance, and overland cartage, the
total transport cost to Florence is unlikely to have been less than s2.5
to s3 per bushel.60 To break even, therefore, the companies would
have had to buy the grain in Puglia at a price at least s5 to s6 per
bushel less than the market price in Florence. The Florentine price
ranges for grano ciciliano are shown in Table 1.
Clearly, during those extensive periods when prices ranged be-
tween s8 and si2 per bushel, profit margins on imported Puglian
wheat would have been thin to nonexistent. Even in some of the years
of higher prices, margins might not have been great if widespread
scarcities had also driven up the cost of grain in southern Italy. As a
result, the super-companies probably did not consistently earn a very
large markup in shipping grain to Florence, although they no doubt
did better in other cities where they were able to seek out the best
prices. But given the huge volumes involved, the business required
58
Ibid. Taldo Valori and Gherardino Gianni of the Bardi and Guccio Soderini of
the Peruzzi were elected to the Six of the Biada in 1328 and 1329 (304n), as was
Bonifazio Peruzzi in 1335 (523).
59
D. Abulafia, "Commercio del grano," 12—13, gives a range of 2.1 to 3 tari per
salma of eleven bushels from Sicilian ports to Genoa and Pisa.
60
Per bushel overland transport costs are fiendishly difficult to estimate because of
variations in terrain and differing availability of river transport, types of vehicles,
and traction animals. For the most recent study of medieval grain transport costs,
see James Masschaele, "Transport Costs in Medieval England," Economic History Re-
view 2, series 46 (May 1993): 266-79. The author has courageously constructed ton
per mile averages from wide variations of data, but it would be risky to apply them
to the very different conditions of Tuscany and Romagna.
Table 1. Price ranges for grano ciciliano in Florence, 1309-35
Years Soldi per bu. Years Soldi per Bu.

1309-10 10-12 1325-7 11-14
1311-13 13-18 1328 18-20
1315-16 9-12 1329 NMFa
1320-1 8-10 1330 20-32
1322 12-18 1331-2 11-18
1323-4 18-23 1333-5 17-22
a
No meaningful figure; prices were very volatile in this famine year.
Source: II libro del Biadaiolo, 160-542.
only a small operating margin after direct costs to generate enough

income to carry the companies' overheads and leave a generous profit.
For example, a margin averaging a mere .25 of a soldo per bushel on
the Peruzzi's share of the Angevin grain monopoly (30,000-40,000
salme or 330,000-440,000 bushels) would yield around 80,000-
100,000 soldi or 13,000-17,000 florins per year. This, in turn, con-
verts to li.20,000-25,000 per year, which would have covered the
Peruzzi's annual salary bill of approximately li.9,000 and made a major
contribution to the profits reported in Table A3.
Overall, therefore, the international grain trade - vast, fluctuat-
ing, subject to risks of tempest, piracy, war, and arbitrary government
action - was lucrative in the hands of these astute managers. It had
to have been very rewarding to justify these risks and the enormous
cash investment needed to participate in this business. For the super-
companies' privileged position with its chief supplier, Angevin Italy,
did not come cheaply. It had to be sustained by continuous advances
of sums, large and small, to meet the king's needs, both public and
private. The most regular of the large loans was for the payment of
part or all of the substantial annual cens to the papacy.61 Other large
advances were for military operations, as in 1310, when the compa-
nies contracted to pay 24,000 ounces of silver carlins to pay Robert's
troops stationed in Romagna.62 Still other big loans covered major
personal expenses of the king, such as the cost of his visit to Provence
61
Yver, Le commerce, 303. The king of Naples held his kingdom as a vassal of the
Holy See, to which he was obligated to pay an annual fee, or cens, of 40,000
florins. The Bardi, Peruzzi, and Acciaiuoli advanced part or all of the cens to the
papacy virtually every year between 1309 and 1330.
62
In 1310, this sum would have been equivalent to about 110,000 florins. At 60
silver carlins per ounce and an exchange rate of 13 carlins per florin quoted in
P. Spufford's Handbook of Medieval Exchange (London, 1986), 63, a Neapolitan
ounce was valued 4.6 florins.
and Avignon in 1309-10.63 Most of the smaller advances related to
routine royal household expenses, including the liveries and salaries
of household servants and men-at-arms and even the king's chari-
table donations. The mechanism of funding varied according to the
amount and purpose of the credit provided. The small routine sums
for household expense were disbursed by requisitions issued directly
on the companies, an arrangement that may have given rise to the
questionable claim that the Peruzzi had opened unlimited credit to
the monarch.64 The large payments by the companies were covered
by specific loan agreements for each advance, giving detail as to how,
where, and when the money was to be handed over, and the means
and timing of reimbursement.65
Repayment was achieved mainly by diverting to the lenders cer-
tain revenues of the crown designated in the loan contracts, such as
general tax receipts from a city, province, or the whole kingdom, or
from gabelles or customs.66 Frequently, repayment was made through
the waiver of the export tax on grain. The companies' expectation of
profit on the loans came not from charging interest, which was con-
trary to Angevin, as well as canon law, and there is no evidence that
any was paid.67 Nor were "damages" for late payment seen as a collu-
sive form of disguised interest, because the regime continually put
pressure on its officers to pay on time to avoid late-payment penal-
ties.68 The companies looked to currency exchange and fees for trans-
porting cash for some profit but obtained most of their earnings in
the form of "gifts" from the king.69 These were frequent and signifi-
cant and were formalized in certain loan contracts. Sometimes the
gifts were in cash, but mostly they were in the form of tax exemp-
tions, franchises, and valuable privileges, the most coveted of which
was the right to export grain.70
By helping to satisfy Florence's need for grain while providing a
63 Vver, Le commerce, 369-70. Here, Yver provides a month-by-month schedule of
advances made by the Peruzzi during the trip.
64
Ibid. The "unlimited credit" comment was made by Yver on 297.
65
Ibid., 371.
66
Ibid., 380-6.
67
Ibid., 376.
68
Ibid., 388. Yver concluded that the pressure for timely payment and the penal-
ties for late payment induced frequent errors by the primitive Angevin bureau-
cracy, usually in favor of the super-companies.
69
Fees for currency transport and exchange could be significant in the case of
large loans of Florentine florins requiring military escort. Davidsohn refers to
charges for portagium of as much as 12% and for exchange of 6% or more (see
Firenze, Vol. 6, 418-22, 792-8).
70
Ibid., 380.
large secure market for a variety of manufactured goods, the Angevin
connection was immensely profitable for the companies that were
large enough to take full advantage of it. The relationship conferred
the additional benefit of providing a platform for expanded trade
throughout the Mediterranean. B. Z. Kedar has suggested that the
medieval trading area had an "inner core" comprising Catholic Eu-
rope and the lands around the Mediterranean and Black seas. By the
late thirteenth/early fourteenth century, this inner core, he argues,
had become commercially settled, with intense competition leading
to greater efficiency, rational weighing of chances, and focus on long-
term operations.71 This "routinized" business climate was made to
order for the large Florentine companies with their quasi-permanent
corporate structure and well-trained factors available to act as for-
eign representatives. With trade in grain and cloth as a base, they
established branches in strategically located markets throughout the
Mediterranean that in themselves may have been too small to war-
rant the expense and complexity of permanent organizations for
general trading. By setting up their subsidiary structures in such lo-
cations, they avoided confronting the great maritime powers of the
Mediterranean - Genoa, Venice, and Catalonia. Thus the Peruzzi had
branches in Majorca, Sardinia, Tunis, Chiarenza, Rhodes, and Cyprus,
but not in the major centers of Constantinople, Alexandria, Ragusa,
or Barcelona, where they dealt primarily through agents. Moreover,
the companies made themselves useful to Genoa and Venice by di-
recting maritime trade their way and establishing small branches in
their cities.
Sicily was a special case where the Florentine companies prospered
despite their close association with the detested Angevin regime in
Naples and the fierce economic rivalry in that area between Florence
and Catalonia.72 Probably, by the time of the Sicilian rebellion in
1282, the Florentine presence had been too slight and too recent to
have generated the hatred of the Sicilians.73 Moreover, in spite of its
close links with Catalonia, the Kingdom of Sicily was independent. 74
In any event, the new government welcomed all foreign merchants
71
B. Z. Kedar, Merchants in Crisis (New Haven, CT, 1976).
72
See Carmello Trasselli, "Nuovi documenti sui Peruzzi, Bardi e Acciaiuoli in
Sicilia," Economia e Storia 3 (1956): 180. Here, and in his Iprivilegi di Messina e
Trapani (Palermo, 1948), Chap. 3, Trasselli argued that the War of the Sicilian
Vespers was really an economic struggle between Florence and Catalonia over
Sicily's important textile market.
73
As noted earlier, Charles I had given the Florentines only limited scope be-
tween 1266 and 1282. See de Bouard, "Problemes de subsistances," 482-501.
74
Trasselli, "Nuovi documenti," 182.
without distinction except those deemed "enemies of the king." As
Henri Bresc puts it, the government proclaimed "liberte, egalite,
Jiscalite" to keep the ports open for sale of its wheat on which the
kingdom relied for its tax revenues.75 All three super-companies had
important branches in Sicily. The Peruzzi's branch manager in
Palermo, Francesco Forzetti, served a remarkable forty-two years from
1299 to 1341 and became a partner in the company from 1331 on-
ward.76 Here was no monopoly of any sort, and the quantities traded
by the super-companies, while substantial by normal standards, paled
to insignificance against those in the Angevin kingdom. For example,
Bresc reports that the Bardi shipped 7,073 salme (about 800 tons) of
wheat over the period 1307-9, which was useful business, but not
really big.77 Nevertheless, Sicily was a worthwhile operation with a
significant home market. Palermo was a very large city and an impor-
tant transit port for the western Mediterranean. In addition to wheat,
the companies exported wine, cheese, and salted tuna and they im-
ported cloth from Florence and elsewhere, trading not merely be-
tween Sicily and Florence, but selling Sicilian products all over the
Mediterranean and north-west Europe, transported in ships chartered
from Genoese, Catalan, Sicilian, and Tuscan owners.78
For Florence, Sicily seems to have been a backup source for wheat
in case of severe need, and the normal destination port was Pisa.
Villani mentions the importation of Sicilian wheat by the Florence
Commune during the famine of 1329, landed in this instance at the
small port of Talamone, well south of Pisa. This route then entailed
long, expensive cartage overland, illustrating the problem of import-
ing comestibles when the nearest port is hostile.79 The Tuscan share
of Sicilian wheat exports fluctuated greatly, ranging from 71 percent
during the period 1300-9 to 6 percent during 1319-29.80
A word should be said about cotton. It was cultivated widely in
southern Italy and Sicily, as well as other parts of the Mediterranean,
and in theory should have been a logical target for large-scale ex-
ploitation by the super-companies in both its raw and finished forms.
75
H. Bresc, Un monde, Vol. 1, 371.
76
Ibid., 382. Forzetti was a rare type of branch manager, neither factor nor part-
ner, but an influential local. Due to gaps in documentation, we cannot be sure
that he represented the company continuously for the entire period, but there
is no reason to suggest that he did not (see Trasselli, "Nuovi documenti," 186).
He first appears on the list of partners in the 1331 company, the one in which
"outsiders" theoretically became a majority. See Chapter 6.
77
Ibid., 549. 78 Ibid., 433, 285.-
79
Villani, Storia, Vol 10, Chap. 118. 80 Bresc, Un monde, 549.
As Maureen Mazzaoui points out, "cotton manufacture stands out as
the only major export industry geared to the output of low-priced
goods for popular consumption with profits heavily dependent upon
volume of turnover."81 And certainly, the super-companies dealt in
cotton. Pegolotti's Pratica contains numerous references to cotton,
cotton thread, and cotton wool.82 There is also evidence that
Florentine companies, including the Peruzzi, were active in the cot-
ton trade in Armenia and probably also in Cyprus.83 But this com-
modity seems to have been of slight interest to the super-companies,
possibly because its cultivation and manufacture were so widely dif-
fused.84 There is not a single mention of cotton in the entire Peruzzi
accounts.
Turning to northern Europe, the commodity of greatest interest
to the Italians, as already noted, was wool, and its primary source was
England. Like Apulian grain, English wool was very big business.
During the last half of the thirteenth century and the first half of the
fourteenth, exports of wool ranged between 20,000 and 33,000 sacks
per annum, with two peak years in excess of 40,000.85 It was wonder-
fully profitable; merchants are estimated to have earned more than
£2 sterling per sack on an investment ranging between £8 and £10
per sack for wool sold to cloth manufacturers in Flanders.86 The trade
had been dominated by Flemish merchants until the second half of the
thirteenth century when their influence declined as a result of repeated
embargoes and confiscations by the English government as well as in-
creasing competition from English and especially Italian merchants.87
The position of the latter was enhanced by the opening of the Atlantic
81
Maureen F. Mazzaoui, The Italian Cotton Industry in the Later Middle Ages, 1100-
1600 (Cambridge, 1981), 60.
82
Francesco B. Pegolotti, La pratica della mercatura (Cambridge, MA, 1936), see
index, 417.
83
Mazzaoui, Cotton Industry, 39.
84
Ibid., 61-2. In northern Italy, manufacture was confined mainly to the Po Val-
ley.
85
E. M. Carus-Wilson and Olive Coleman, England's Export Trade, 1275-1547 (Ox-
ford, 1963), 122. The sacks reported were of standard customs weight of 364
pounds (13).
86
E. B. Fryde, "The Wool Accounts of William de la Pole," St. Anthony's Hall Publi-
cations 25 (1964): 14. These are very rough estimates but are based on a reason-
ably broad array of data during the late 1330s and early 1340s. Depending on
the quality of the wool, Fryde calculated profit at between £1 10s and £3 ster-
ling (equivalent to about li.15 to li.30) per sack after all transport and storage
expenses.
87
For discussion on the Italian competitors, see later this chapter.
sea routes by Genoese and Catalan shippers in the 1270s.88 Here it must
be noted that the attraction for the Italians was the profit to be made in
buying and selling wool, especially of high quality, to Flemish and
Brabantine textile manufacturers. As will be discussed more fully in
Chapter 5, English wool as a raw material for the Italians' own cloth
manufacturing did not begin to flow into Italy in quantity until the
early fourteenth century, and then in mostly inferior grades. Top-
quality English wool did not become an important ingredient in
Florentine cloth until the 1320s and 1330s.89
In England the Italians had to deal with a monarchy that was dif-
ferent in many respects from that of the Angevins in Italy. The latter
were conquerors determined to exploit their newly acquired posses-
sions; their aristocracy were beholden to the king and the king to
the papacy and the Florentine financiers. The king had direct power
over the country's resources and was able to put their management
in the hands of the select foreign merchants on whom he relied,
rather than local merchants whom he considered neither adequate
nor trustworthy. By contrast, the English monarchy in the latter half of
the thirteenth century was long established, but with a powerful, inde-
pendent-minded baronage that over time had hedged the king round
with restrictions on his ability to raise revenue.90 The Italian merchants,
although active in the wool trade and banking, faced strong competi-
tion from well-entrenched local and Flemish merchants. Moreover, they
were reluctant to become heavily involved in financing the monarchy,
given the fluctuating and uncertain nature of its income.
The advent of Edward I changed the situation dramatically. Like
the Angevin kings, he had a penchant for expensive display as well
as costly territorial ambitions, and had already become significantly
indebted to the Ricciardi Company of Lucca during a leisurely re-
turn from his crusade to the Holy Land after Henry Ill's death in
1272.91 Looking to the bountiful wool crop for a source of cash that
he could claim as his own, he succeeded in establishing in 1275 a
88
Robert S. Lopez, "Majorcans and Genoese on the North Sea Route in the Thir-
teenth Century," Revue Beige de Philologie et d'Histoire 29 (1951): 1163-79, puts
the earliest recorded Genoese arrival at an English port at 1277. Lopez' argu-
ment that Majorcan ships may have been even earlier is disputed by David
Abulafla in "Les Relaciones commercials i politiques entre el Regne de Mallorca,"
XIII Congress of the History of the Crown of Aragon, Palma, 1989-90, Vol. 4, 69-79.
89
Hoshino, L'Arte della lana, 115-30.
90
J. R. Lander, The Limitations ofEnglish Monarchy in the Later Middle Ages (Toronto,
1989).
91
Richard W. Kaeuper, Bankers to the Crown (Princeton, NJ, 1973), 81-2.
92
customs duty of 6s 8d per sack on virtually all exports of wool. Al-
most immediately, Edward turned over much of the management of
the customs to the Ricciardi Company of Lucca, which was expected
to provide him with advances on the security of the anticipated duty
revenue. The "Ricciardi system" described by Kaeuper, which was
designed to help the monarchy match income and expense flows
more closely, involved the king's other revenue sources and in-
cluded a multitude of services, especially money transfers to and
from the continent. The system was sustained by adequate cash flows
from collections and profit until 1294, when Edward revoked the
Ricciardi's authority to collect customs and imprisoned members of
the firm.93
The Ricciardi has the appearance of at least an incipient super-
company. It had multiple shareholders and was engaged in substan-
tial international financing and commercial enterprise, including an
extensive papal deposit and money transfer business, a sizable share
of the wool trade, and widespread merchandising activities in En-
gland and France.94 But its business was limited essentially to north-
ern Europe and Italy, it was only a significant rather than a dominat-
ing factor in the wool trade, and it had no manufacturing activity. It
was really a very large merchant-banking organization, with empha-
sis on the banking. Moreover, its status as a company is unclear. Rich-
ard Goldthwaite notes that only two of the partners can be identified
as Ricciardi and suggests that the "company" may well have been a
consortium of Lucchese merchants.95 This view is reinforced by the
curious fact that it was the London "branch" that declared bankruptcy
in 1301, whereas the Lucca "company" simply faded away several years
later without a formal liquidation procedure. 96
The next big company to become entangled in the web of English
wool was the Frescobaldi. This was a substantial organization, with
branches in Naples and London dating back to the 1260s and 1270s,
92
Carus-Wilson and Coleman, Export Trade, 1. Exceptions to liability for duty on
wool and cloth were "insignificant" (2).
93
Kaeuper discusses the Ricciardi system in detail in Bankers; see especially Chap.
3, "The Control of the Customs, 1275-1294."
94
Ibid. This book is the source of most of the information in this paragraph.
95
Richard A. Goldthwaite, "Italian Bankers in Medieval England, "Journal of Euro-
pean Economic History 2 (Winter 1973): 765-6. Here a consortium would have
been a group of independent companies conducting the specific English and
papal businesses, much like the English joint venture of the Bardi and Peruzzi
of the late 1330s.
96
Kaeuper, Bankers, 244ff.
97
respectively. It was also one of the papacy's official bankers from
1291 to 1293.98 By the beginning of the fourteenth century, it had
lost ground to the Big Three in Naples as it concentrated its efforts
in England. In 1299, it became a leading banker to Edward I and by
1302 was appointed the king's principal banker, with control of cus-
toms to ensure repayment of its advances.99 In short, the Frescobaldi
occupied roughly the same position as the Ricciardi before it. Unfor-
tunately for the Frescobaldi Company, its reign was brief. Edward I's
heavy reliance on Italian bankers was one of the major grievances of
the English aristocracy, and when weak-willed Edward II continued
the system after his succession in 1307, he quickly enraged his bar-
ons. The resultant "Ordainers' Revolt" of 1310 included the
Frescobaldi among its victims, causing the main partners and em-
ployees to flee the country.
Not much is known about the size of the Frescobaldi business ex-
cept that on its own it was probably not very large. The resources
sufficient to finance lending to the English crown at an average of
£15,300 (over 100,000 florins) annually from 1302 to 1310 were made
possible by working through a consortium of companies.100 More-
over, it seemed incapable of maintaining large-scale operations else-
where at the same time.101 The loss of the English business eventually
drove it into bankruptcy in 1315, but the repercussions in the com-
munity of Florence seem to have been mild. The family remained
influential and certain of its members resumed active business, al-
beit on a modest scale.102
Following the expulsion of the Frescobaldi, Antonio Pessagno of
Genoa was Edward IPs principal banker until 1319.103 The Bardi also
became a lender of increasing importance until the end of the civil
war of 1321, when Edward II began to amass considerable treasure
and used this company more for depositing surplus than for borrow-
ing.104 As regards the borrowing, the amounts involved were well
97
Richard W. Kaeuper, "The Frescobaldi of Florence and the English Crown," in
Studies in Medieval and Renaissance History, ed. W. M. Bowsky (Lincoln, NE, 1973),
44; Yver, Le commerce, 292.
98
Renouard, Les relations, table (570).
99
Kaeuper, "Frescobaldi," 62-3; A. Sapori, Storia economica, Vol 2, 872-7.
100
Goldthwaite, "Italian Bankers," 765-6.
101
Kaeuper, "Frescobaldi," 71-2.
102
Ibid., 92.
103
Natalie Fryde, The Tyranny and Fall of Edward II, 1321-26 (Cambridge, 1979),
22. This man is often also referred to as Anthony Pessaigne.
104
Ibid.; see Chap. 7, "Royal Finance, 1321-6."
within the capacity of this enormous firm. The other super-compa-
nies did very little royal lending; the Peruzzi's main connection to
the crown was indirect, through its business dealings with the king's
favorite, Hugh Despenser the Younger, a substantial depositor.105 Dur-
ing Edward II's reign, the Bardi had become the major factor in the
English wool trade, but the Peruzzi and the other super-companies
were also able to participate, although on a more modest scale.
The accession of Edward III to the throne in 1327 brought a re-
turn to the pattern of large loans to the monarch as the price of
admission to the wool trade, even before he began to rule in his own
right in 1330.106 Edward III never granted exclusivity to any of the
merchant-bankers, but as his needs grew, he narrowed his dealings
to a few select firms, to which he gave large segments of tax revenue
and wool trade in exchange for loans. The Bardi became Edward
Ill's principal banker from the beginning of his reign, but the Peruzzi
did not become seriously involved until late in 1336, while the
Acciaiuoli did not become royal lenders at all. This complex story
will be discussed at greater length in subsequent chapters.
One important fact is clear: The super-companies did not owe their
emergence to their involvement with the English kings or domina-
tion of the English wool trade. The Bardi and Peruzzi had become
super-companies long before they had developed their intimate rela-
tionship with the English crown, and the Acciaiuoli became a super-
company with virtually no association with English kings at all. That
company's only involvement with Edward III occurred in the sum-
mer of 1341, when it played a small part in the unsuccessful attempts
to obtain ransom for the release of Henry of Lancaster.107 Wool trad-
ing and cloth merchandising were clearly very important parts of
their businesses throughout most of their histories, but domination
of their sources of wool supply was not essential to success.
The third important political and commercial relationship of the
super-companies was with the papacy. In terms of actual size and prof-
itability, this business was not a significant segment of the super-com-
panies' operations. The Curia had used Italian merchant-bankers for
loans and deposits during the latter half of the thirteenth century,
105
E. B. Fryde, "The Deposits of Hugh Despenser the Younger with the Italian
Bankers," Economic History Review 2, series 3 (1951): 344—62.
106
E. B. Fryde, "Loans to the English Crown, 1328-31," English Historical Review, 70
(1955): 198-211.
107
See T. H. Lloyd, The English Wool Trade in the Middle Ages (Cambridge, 1977),
188. The problems of the Bardi and Peruzzi in connection with the ransom are
discussed in Chapter 8, this volume.
but Clement V, the first Avignon pope, suspended formal relations
with them early in the fourteenth century, influenced by the collapse
of the Bonsignori and Ricciardi companies. Pope John XXII resumed
the employment of the merchant-bankers in 1316, but restricted them
largely to money transfer operations.108 The bankruptcy of the Scali
Company in 1326 made the Curia even more cautious, causing it to
spread its risks among several of the leading firms, including all three
super-companies. 109 The amount of money involved in transfers
handled by these merchant-bankers was modest, relative to the size
of their overall business. Collections and transfers within most of
France were handled internally by the papal treasury, and although
those in the British Isles were substantial, they were not really big
business. For example, the total transfers from England to Avignon
between 1332 and 1337 averaged only 13,000 florins per annum
handled by the Bardi and 12,000 florins by the Peruzzi, not very great
sums compared with the transactions of these firms with the English
crown.110 The papacy did not place deposits with or borrow money
from the merchant-bankers during the first half of the fourteenth
century so that its total business with them was neither large nor very
lucrative.
Papal business nonetheless was extremely important to the super-
companies. As already described, papal influence as suzerain of the
kingdom of southern Italy was vital to their operations in that coun-
try. In all parts of Europe, their formal relationship with the papal
treasury and their personal contact with the princes of the church
gave those select companies an entry into the vast ecclesiastical trans-
fer business outside the Curia as well as a cachet that was of inesti-
mable value in dealing with their aristocratic clients. The transfer
system in itself was very useful to the companies' operations through-
out Europe, especially in England, where it was helpful to have papal
collections available to pay for wool purchases. And finally, the pa-
pacy frequently used its good offices to recommend the companies
to potential clients and to intervene, or threaten to intervene, on
behalf of the companies against recalcitrant debtors. 111
Finally, a further word needs to be said about the merchandising
operations of the super-companies. As mentioned earlier, they were
important and normally very lucrative but not essential to the super-
108
Renouard, Les relations, 420-2.
109
I libri, 94, reveals a case, however, wherein the Bardi and Peruzzi made good on
one Scali default to the Curia. See Chapter 3, this volume, for details.
110
Renouard, Les relations, 137.
111
Ibid., 541-6.
companies' evolution. Merchandise sales did, however, profit from
the economies of scale resulting from the super-companies' domina-
tion of the rich market of southern Italy and their deep penetration
of other Mediterranean markets through their branch system. Their
power, market knowledge, and creditworthiness improved merchan-
dise profits in two ways. The first is that these factors enabled the
super-companies to pick and choose among suppliers throughout the
known world to achieve optimum landed costs. The second is that
the large volumes and steady business generated through their mar-
ket penetration helped them reduce unit transport costs by means of
consolidation of shipments and repeated use of selected carriers. 112
The references to market penetration suggest that the super-com-
panies were highly competitive, and indeed they were. They com-
peted aggressively for trade against the merchants of other cities and
for the favors of princes and prelates against all comers. Commercial
rivalry often manifested itself at the political level, as firms vied for
privileges that played out in the marketplace, But within Florence,
competition among businessmen appears to have been muted in some
respects, with a guild-oriented tendency to share certain markets
rather than to drive single-mindedly for market penetration. Clearly
this was the case in the joint monopolies in southern Italy and En-
gland. Within these market-allocation arrangements, however, there
was likely to have been considerable jockeying for position. And al-
though competitive pressures do not appear to have been mainly
responsible for the major bankruptcies of this period, they will have
played a part. In the scramble for survival in 1342-3 described in
Chapter 8, there was little evidence of cooperation among Florentine
companies. Finally, despite the many friendly arrangements, price
competition was a powerful force in medieval business, as is shown
in the discussions of wool and grain markets throughout this book.
This long preamble leads at last to the nature of the super-compa-
nies' business. The length and range of this analysis has been neces-
sitated by the great scope and complexity of the super-companies. To
focus only upon specific aspects of the businesses produces results
like those of the fabled three blind men trying to understand the
nature of an elephant. A study limited to the spectacular dealings
with the English crown and the papacy concludes that the companies
112
Transport costs were a significant and increasing proportion of total costs in
the early fourteenth century. See J. H. Munro, "Industrial Transformations in
the North-west European Textile Trades, c. 1290-c. 1340: Economic Progress or
Economic Crisis?" in Before the Black Death, ed. B. M. S. Campbell (Manchester,
1989), 120-130. See also later in this chapter for further discussion of carriers.
were primarily bankers and wool traders. One that emphasizes Medi-
terranean commerce suggests that they were just very large general
merchants; and one that is restricted to Florentine operations pic-
tures these firms as mainly manufacturers and traders. They were all
of these, but the core of their businesses was commodity trading,
principally grain and wool, and the marketing of cloth. The core
marketing axis was Florence-Naples, wherein the latter ensured ad-
equate supplies of foodstuffs of all kinds to the working population
of Florence, which, in turn, provided manufactured goods, especially
cloth, to the Angevin kingdom of southern Italy. Beyond that core
there was significant trading of products of all kinds in the major
markets of northern Europe, Italy, and the Mediterranean, but this,
while important and profitable, was peripheral to the main enter-
prise.
Knitting these businesses together was the financing power of the
super-companies. There has been much scholarly argument on
whether the Italian companies exposed themselves to the high-risk
financing of monarchies for its inherent profitability or for the lu-
crative privileges that such lending made possible. The probability
is, as usual, some of both. Financial operations in general were ex-
pected to turn a profit, and certain forms - such as cash transfers,
currency exchanges, drafts, and commercial loans - were clearly struc-
tured to do so. The companies also may have aimed to earn a profit
on royal lending, and negotiated cash "gifts" and "damages" as eu-
phemisms for interest in their contracts. But realistically, they ex-
pected to do no better than break even on such business, that is, to
recover the money advanced and perhaps their own interest costs,
because experience had taught them that cash "gifts" were elusive
and that repayments were subject to lengthy delay. The gifts that re-
ally mattered were those that came in the form of tax exemptions
and privileges to trade in valuable commodities and manufactures.
Certainly, few of the important companies were prepared to under-
take royal lending on its own merits; there are no known examples
of large-scale continuous financing of monarchs unaccompanied by
important commercial privileges. Exceptions such as the advances
made to Edward III in the late 1330s by Flemish and German mer-
chants were isolated cases of stand-alone pawnbroker-type loans at
the pawnbroker rates of interest approximating 1 percent per week,
secured by hard assets such as jewelry or hostages.113 Most evidence
113
E. B. Fryde, "Financial Resources of Edward III in the Netherlands, 1337-40,"
Revue Beige de Philologie et d'Histoire 45 (1967): 1188-90.
concerning the huge high-risk loans to monarchs that comprised the
bulk of the super-companies' financing suggests that they were consid-
ered more as facilitators of lucrative trade than as important purposeful
generators of profit. For example, even at a time when the Bardi Com-
pany was said by Fryde to have earned an excellent profit on large loans
to Edward III, the preponderance of the company's earnings for the
period 1330-2 stemmed from wool, cloth, grain, and general trading,
with wool alone accounting for 43 percent of the total profit.114
Seen in this light, finance was a business in its own right but for
the most part remained ancillary to trade. Nevertheless, it was vital
to the companies because it made possible the political favors that
were very much a part of the nature of the business. We have ob-
served from the dramatic examples in southern Italy and England
that financial power was essential to enable the companies to negoti-
ate with the governments for a favorable environment for their en-
terprises. Without that financial power, the great trading operations
would have been impossible.
Cash flow and its control were thus the central problems of the
super-companies. Their early successful management of those prob-
lems created the basis for attaining much of their size and power, just
as their later failure to control cash did much to destroy them. The
substantial amounts of money advanced to monarchs were only part
of the cash problem. The companies had to pay market prices for
the grain and wool; these commodity investments were not recov-
ered until the products were sold in the export markets some consid-
erable time later. In the case of grain to Florence or wool to Flanders,
the delay was sometimes only a month or two, but often, especially
when wool began to be imported into Italy, the immobilization of
cash could last many months.
The extent of this deferral of payment is vividly illustrated in
Francesco Pegolotti's Pratica delta mercatura, which details the expense
and the multitude of steps involved in transporting wool by the sea-
land route from London to Florence.115 In London, customs and ex-
port tax had to be paid, along with tips to officials, wine for the clerks,
fees to the customs weigher and broker, charges for porters, haul-
age, customs porters, and shipping to Libourne in Gascony, near
Bordeaux. There the wool incurred innkeeper charges for the per-
114
Robert S. Lopez and Irving W. Raymond, Medieval Trade in the Mediterranean
World (New York, 1955), 370-1. This earnings analysis is discussed in further
detail in Chapter 6, this volume.
115
Pegolotti, La pratica, 256-8. The alternative all-sea route mentioned earlier was
also important during the early fourteenth century.
sonnel and temporary storage, carriage and turnpike fees for the
overland trip from Libourne to Montpellier and then on to Aigues-
Mortes, where it was transferred to the port and loaded on a ship for
Pisa. In Italy there were porter, warehousing, carriage, and notarial
fees to pay, followed by tolls at three different locations, unloading
at Signa, carriage from Signa to Florence, and customs in Florence.
Assuming all went well, the entire trip would take several months; we
know from the papal records that the time allowed for money trans-
fers just from Avignon to Florence was thirty to forty-five days.116 But
often all did not go well. The many transfers and formalities afforded
almost unlimited opportunities for delays. Ships that turned back to
ports in England to escape piracy or bad weather were sometimes
held up for customs examination all over again. On such occasions,
the king had to intervene with letters of authentication to satisfy the
officials that appropriate duties had already been paid.117
Even before the transport began, there were problems of delay.
The Calendar of Close Rolls and the Calendar of Patent Rolls of Ed-
ward III are studded with examples of the agonizing slowness in
securing permission to export wool already bought and held by
the companies. There is also much evidence that the companies
paid wool growers, especially monasteries, well in advance of de-
livery, sometimes years in advance, to ensure availability and at-
tractive prices.118
The case illustrated here deals with wool from England, an im-
portant source of supply from the 1320s onward, but the
Florentines, as noted earlier, obtained their wool from a variety of
sources in western Europe and the Mediterranean.119 Once the wool
had safely landed in the company's warehouses in Florence from
whatever source, the company would gradually sell it off to the
hundreds of lanaiuoli, the petty capitalist entrepreneurs of the wool
guild.120 Only a small amount will have been kept for the company's
116
Renouard, Les relations, 476. This convention applied during the reigns of John
XXII, Benedict XII, and Clement VI.
117
See, e.g., Calendar of Close Rolls Edward III (hereafter, CCR E III), 1339-41, 93,
429, and E III 1337-9, 570. The latter entry shows that London customs even
had to be ordered to release wool for export on the basis of the first lading,
ignoring the extra weight caused by the "damp" when the ship carrying the
wool returned to port after a storm at sea.
118
Eileen Power, The Wool Trade in English Medieval History (Oxford, 1941), 43;
M. M. Postan, Medieval Trade and Finance (Cambridge, 1973), 10.
119
See Hoshino, L'Arte della lana, 115-30.
120
Ibid., Table 35, 226, gives data on the number of enrollments in the guild dur-
ing the first half of the fourteenth century. There were 626 members in 1332.
own manufacturing. Cloth production was organized on the "putting-
out" system, whereby the entrepreneurs oversaw operations as the the
goods that they owned passed from specialist to specialist in the long
process of turning wool into finished product.121 This is a system that
does not lend itself to economies of scale or high profitability, with
the result that the super-companies did not participate in cloth manu-
facturing in a large way.122 Nevertheless, they did enter manufactur-
ing on a small scale, just as they did in other lines of endeavor.123
Although a super-company's commitment of cash to in-process
goods was minimal, it did have a significant investment in intermedi-
ate textiles imported for finishing. And it had a large capital outlay
tied up in finished product acquired both from Florentine lanaiuoli
and foreign producers, especially those from Flanders and Brabant.
The finished goods, like the raw wool, immobilized cash for a long
time. Some were disposed of quickly, through local sales from an
annex to the company's main warehouse or to its employees in Flo-
rence or abroad.124 Most of the cloth, especially the finest materials,
had to be shipped to the markets in southern Italy, the Mediterra-
nean, and northern Europe. The entire process from purchase of
wool in England to final sale in foreign markets resulted in a cumu-
lative immobilization of cash over an extensive period of time creat-
ing a severe burden for the super-companies.
No discussion of the movement of goods is complete without a
reference to insurance. The super-companies sometimes acted as in-
surer, sometimes as insured. In situations such as the sea-land trans-
port of wool, they assumed the risk for their own merchandise, and
often provided insurance for others for a fee.125 And occasionally they
121
The specialist processes included combing/carding, spinning, weaving, fulling,
tentering, raising, shearing, and dyeing. J. H. Munro describes these steps in
detail in "Textile Technology," in Dictionary of the Middle Ages, Vol. 11 (New York,
1988), 693-710. See also Brucker, Renaissance Florence, 60-6, for the functioning
of the putting-out system.
122
Hoshino, in L'Arte della lana, 201, asserts that the wool industry was essentially
artisanal, with little capital (500 to 2,000 florins) needed to compete and with
low but secure profit expectations. Production output of each entrepreneur
ranged between 50 and 150 bolts per year and in no case exceeded 300 bolts
per year.
123
The Peruzzi Company's manufacturing activity is briefly described in Chap-
ter 3.
124
/ libri. There are numerous references in the Peruzzi accounts to advances to
overseas partners and factors being made in the form of cloth in lieu of cash.
125
For example, the Bardi charged a premium of 8 3/4% of the value of the goods
to insure a shipment from Paris to Pisa via Genoa. This and other information
in this paragraph is derived from Davidsohn, Firenze, Vol. 6, 429-36.
insured marine shipments, such as the Peruzzi coverage of a con-
signment of silk from Sicily to Tunis in 1337. But more often, espe-
cially in the case of marine transport in the Mediterranean, the su-
per-companies were the insured parties, with insurance usually ar-
ranged as part of the overall financing of the venture. The risks cov-
ered varied, sometimes very broad for overland shipments, but often
very narrow for maritime transport, limited to acts of piracy. Logi-
cally, the role of the insurer tended to go to the party best situated to
assess or even influence the risks. Overland, it went to the super-
companies, which were able to use their political connections, inn-
keeper network, and close oversight - at sea, to the shippers who
could call upon the intelligence and power of their home ports to
manage the threat of pirates.
Because cash was the central problem, the super-companies had
both to mobilize the cash and to deploy it judiciously. With regard to
the former, Sapori makes much of the "myriads of small investors" as
major sources of financing through their participation in specific
ventures (accomandigia) and their advances on merchandise ordered
(depositi) ,126 These were unquestionably important in helping to fund
the buying and selling of the raw materials and finished products of
all kinds in markets throughout Europe and the Mediterranean. But
they were essentially short-term devices suitable for providing the
money for general trading operations, not for financing the large
sums tied up in the loans to monarchs, in the transport of wool, and
in the manufacture of cloth. To meet such needs, the companies re-
quired a strong capital commitment from partners both inside and
outside the immediate family. As discussed in the previous chapter,
the Peruzzi's record of profitability and probity during the 1280s and
1290s provided the incentive to attract a number of wealthy outsid-
ers as shareholders. As a result, the 1300 company, the first for which
corporate details remain, raised a capital of li.124,000, of which
li.54,000 (nearly 44 percent) were contributed by ten outsiders. This
impressive capital stock was supplemented by interest-bearing depos-
its, initially at 8 percent, later 7 percent, from shareholders and
wealthy individuals.127 There are no data for the early years, but the
deposits in the final years, even in a period of decline, were large
126
Armando Sapori, Studi di storia economica medievale (Florence, 1947), 278.
127
Davidsohn, Firenze, Vol. 3, 556, misleadingly asserts that depositors received a
share of profits in addition to fixed interest. Participants in the accomandigia
contracts might share in the profits of those specific ventures, but only share-
holders were entitled to a distribution of profit (or loss) of the company as a
whole.
128
enough to suggest that they were an important source of funds.
Although obtaining cash was important, husbanding it was even
more so. The super-companies took sensible steps to ensure the most
effective use of their capital for the essential needs of the business -
loans and inventories - avoiding investment in fixed assets. They did
not own ships or wagons; they hired them along with the necessary
personnel, including soldiers to protect the cargoes. The Peruzzi
Company did not even own its main warehouse and subsidiary shops
in Florence.129 This is not to suggest that the companies shunned
real estate ownership altogether. As will be shown in Chapter 3, the
Peruzzi seemed to have had a branch of its organization that special-
ized in the purchase and sale of property, largely on behalf of family
members, shareholders, or even employees. But overall, the guiding
principle of the Peruzzi Company was to run its operations with as
little investment as possible in real estate and business-related fixed
assets. In addition, by having such property in noncompany hands,
the companies avoided the risk of its seizure to satisfy creditors in
case of bankruptcy, apparently a common motivation.130
Armed with ample capital, a system for conserving cash, and as
will be shown, a solid organization, Florentine super-companies such
as the Peruzzi were prepared to move aggressively into Angevin Italy
at the beginning of the fourteenth century when opportunities arose
there to share in large-scale trading monopolies in exchange for
loans.131 They found further resources in wealthy local depositors.
The extent of these deposits has been the subject of much debate
because the evidence is patchy and largely anecdotal, but it is known
that the Peruzzi received permission to establish a bank in Naples in
1302.132 Local deposits were almost certainly recorded in the branch
books, as there are few instances of deposits from outside Florence
128
Deposits in the Peruzzi Company by both partners and outsiders were signifi-
cant in 1335, but declining between 1335 and 1343. See Tables Al and A6.
129
/ libri. Numerous leases are recorded in the expense section of the Peruzzi
Book of Assets, 180. Here may be seen several examples of lease arrangements
for shops, stables, and warehouses, including three- and four-year leases on the
main Santa Cecilia warehouse, part of which was owned by Simone di Chiaro
Peruzzi, a man with no company ownership connections.
130
Luzzati, Villani e Buonaccorsi, 12. Luzzati notes that the Peruzzi put Giovanni
Villani in charge of its Palazzo Alessi in Siena after he had left the company in
1308, citing this as a common device to protect important property because of
the ever-present risk of bankruptcy.
131
Abulafia, "Southern Italy." The opening pages of this article give numerous
examples of large-scale business opportunities being offered by the Angevin
kings in exchange for loans.
132
appearing in the surviving central accounts of the Peruzzi.133 Anec-
dotal evidence is usually problematic, but there is enough of it to
suggest that over time the amount of local deposits is likely to have
been substantial.134
Finding money to advance to the king in return for lucrative privi-
leges was only part of the super-companies' problems. The impera-
tive was to ensure that a significant portion of the loans was recycled
back to the company with reasonable promptness, because medieval
companies, unlike modern corporations, had few resources on which
to fall back in an emergency and certainly no banks of last resort.
Recycling was not difficult in the case of those loans that merely an-
ticipated export taxes due on grain sales that the companies would
have paid anyway at a later date. But most other advances that were
to be recovered directly or indirectly required skillful negotiation to
obtain adequate means of repayment or privileges worth at least as
much as the loans extended. As discussed earlier, Yver's analysis of
the Angevin kingdom's records reveals a well-conceived system of
loan recovery, reinforced by tenacious follow-up to ensure prompt
collection of the money sources assigned to the loans. Examples of
the fierce pressure exerted by the companies on government agen-
cies for repayments included recourse to the king himself as a potent
tactic against dilatory debtors.135 Indirect recoveries were more com-
plex, consisting as they did of money-generating rights or offices.
Abulafia cites direct control over port taxes (including taxes on grain
exports) in the Adriatic provinces of the Kingdom of Naples and con-
trol of the Neapolitan mint as the most remunerative privileges
granted to the super-companies.136
Timing of effective repayment was as important as the amount of
repayment. Although the super-companies were well capitalized, they
133
I libri. Examples appear on 12 and 185, apparently representing deposits of the
Hospitalers and an individual in Palermo, but these are rare cases. There is no
direct evidence of local deposits in the Peruzzi branches because those records
did not survive, but surviving Datini books of its Barcelona branch in 1399 re-
veal the existence of local deposits at that time. See Raymond de Roover, "The
Development of Accounting Prior to Luca Pacioli According to the Account-
books of Medieval Merchants," in Studies in the History of Accounting, ed. A. C.
Littleton and B. S. Yamey (Homewood, IL, 1956), 142-3.
134
Luzzati, Villani e Buonaccorsi, 86-95, offers one example, the case of a Provencal
lady who sold her chateau and unfortunately deposited the proceeds with the
Buonaccorsi in Naples shortly before that company's bankruptcy.
135 Yver, Le commerce, 388, reports that Charles of Calabria, King Robert's son, warned
his justiciars in a letter to take care and pay up, lest the Peruzzi withdraw its
credit from "my lord and father."
136
soon found that the sums requested by the Neapolitan monarch would
quickly milk them dry. They also recognized that if they ran out of
lendable funds to the king, they would promptly lose their privileges.
This meant that with indirect payment, the super-companies had to
evaluate not only the intrinsic worth of the privileges granted, but
also the rate of cash flow that they produced. The management of
the royal loan portfolio thus entailed the effective recycling of cash
so that fresh funds would be continuously generated for relending to
the monarchy, for financing the business, and for an adequate re-
turn to the shareholders in Florence. The handsome dividend dis-
tributed by the 1300 Peruzzi Company in 1308 and the maintenance
of its privileged relationship with the Neapolitan government for over
forty years testify to an early and continuous success in this complex
juggling act.137
The importance of politics extended to all facets of the super-com-
panies' business. As has been shown in the previous chapter, strong
company leadership was essential at headquarters in Florence to pro-
tect both company and family from rival intramural factions. Abroad,
the companies were constantly struggling to win position with the
ruling class of one polity while trying to do the same in another pol-
ity that was an antagonist of the first. Despite Kedar's claim of rela-
tive stability in the Mediterranean and northern Europe in the early
fourteenth century, the term "relative" needs to be emphasized.138 As
mentioned, the Peruzzi had a very large branch in Aragon-associ-
ated Sicily and loaned money to its government, which remained
hostile to the Kingdom of Naples and the papacy even after the Peace
of Caltabellotta. King Robert of Naples launched six expeditions
against Sicily during his long reign and one serious invasion attempt
in 1314 to punish King Frederick for offering aid to Emperor Henry
VII.139 It also maintained a branch in Majorca, an autonomous king-
dom, but under loose Aragonese overlordship at the time.140
France and England presented a special problem to the super-com-
panies. They were frequently at loggerheads, even between the ac-
tual wars of the first, second, and fourth decades of the fourteenth
century, but the Peruzzi maintained active, if modest, operations in
both countries. During the reign of Edward II, when relations be-
137
A history of dividend distributions of the Peruzzi Company is given in Table A 3.
138
Munro, "Industrial Transformations," 121-9, argues against even relative stabil-
ity.
139
Runciman, Vespers, 278.
140
See D. Abulafia, "The Problem of the Kingdom of Majorca (1229/76-1343): 2.
Economic Identity," Mediterranean Historical Review 6 (June 1991): 35-61.
tween England and France were reasonably amicable, the Peruzzi
Company capitalized on this good will and even used the good of-
fices of the King of France on two occasions to support its defense
against claims of the English government. 141 But the animosity of
France toward England, as well as its repeated conflicts in Flanders,
where the super-companies also had important branches, eventually
forced the Bardi and Peruzzi to make a choice. The decisions were
made easier by the French government's lack of steady assured rev-
enue and its record of harsh treatment of foreign merchant-bankers
on several occasions.142 Early in the fourteenth century, the Bardi
opted for England, accepting a negligible role in France. The Peruzzi
Company deferred its decision until the eve of the Hundred Years'
War when it began financing Edward Ill's war preparations and re-
duced its presence in Paris.143
Papal politics, as usual, were complex and problematic, but largely
continued to be aimed at curbing the power of the Empire in north-
ern Italy and the Angevins in southern Italy, while increasing the
papacy's own temporal holdings in central Italy. The Holy See at-
tempted to play the role of peacemaker between France and England,
but after its transfer to Avignon in 1305, it tended to favor France in
its diplomacy, despite Philip IV's brutal attacks on the Order of the
Templars.144 The super-companies were, by and large, comfortable
with these politics, especially after the cessation of the Sicilian cru-
sade, which allowed them to keep their valuable close connections
with the papacy without serious offense to the various monarchies
with which they did business. The Bardi, and especially the Peruzzi,
built good will with the papacy by providing substantial financial aid
to the Knights Hospitalers after that Order's conquest of Rhodes in
1309.145 The Hospitalers was among the earliest of the crusading or-
ders of chivalry recognized by the pope and became particularly im-
portant to the papacy as heir to many of the Templars' estates after
the suppression of that order. The Peruzzi's assistance also gave them
an important branch in Rhodes, a useful market in itself as well as a
transit point for trade in the Levant and Asia Minor.
Finally, the commune of Florence had its own political agendas
141
CPRE II 1307-13, 515; CCRE II 1318-23, 303.
142
Strayer, "Italian Bankers," 113-21.
143
These events are discussed fully at the beginning of Chapter 7.
144
Joseph R. Strayer, The Reign of Philip the Fair (Princeton, NJ, 1980), 285-95.
Philip's persistent harassment and property seizures led eventually to Pope Clem-
ent V's decision at the Council of Vienne in 1312 to suppress the order.
145
See Chapter 5 for details of this loan.
that further complicated the companies' relationships with the for-
eign rulers. Florence's disastrous wars with neighboring communes
during the 1320s, 1330s, and 1340s, which the leading families
strongly supported, clearly demonstrated the city's military incom-
petence and its continuing reliance on the support of the Kingdom
of Naples and the papacy, putting its super-companies at a disadvan-
tage in their dealings with those and other polities.146 Unlike the Ve-
netian and Genoese merchants, the super-companies had no flag to
follow, no armed force to carve out their markets. As private busi-
nesses headquartered in a militarily weak city-state, they could bring
only indirect pressure to bear on the rulers of the territories in which
they operated through the need of those monarchs for the compa-
nies' resources.
Given the international financial and political aspects of the su-
per-companies' operations, an important part of their business activ-
ity was intelligence gathering. Timely information was vital to their
financial dealings in which predicting monetary flows and rates of
exchange was crucial to profitability. Information from their far-flung
networks also made the companies' representatives welcome at courts,
where news and gossip of any kind were much appreciated. The in-
telligence came mainly in the form of letters that accompanied busi-
ness instructions and transaction data. An excellent example of this
is to be found in a letter from the Ricciardi firm in Lucca to its Lon-
don representatives in 1303, which included news on the Pope's
movements, the conclusion of the French-English war, the status of
the struggle between Black and White factions in Florence, along
with local news of a sensational murder.147 But intelligence services
to royal patrons could go much further. The Wardrobe Book of William
de Norwell includes a large payment made to the Bardi and Peruzzi
for the expenses of their spying activities on French military prepa-
rations in Normandy.148 The Bardi Company ingratiated itself with
Edward III in 1333 by capturing the traitor Thomas de Gourneye in
Sicily and delivering him to the king.149 It also aided that king in Au-
146
The disadvantage to the companies of Florentine politics became increasingly
evident in the 1330s and 1340s, as will be discussed in Chapters 7 and 8.
147
George A. Holmes, "A Letter from Lucca to London in 1303," in Florence and
Italy: Renaissance Studies in Honour of Nicolai Rubenstein, ed. P. Denley and C.
Elain (London, 1988), 227-33. Although the Ricciardi's London branch was
technically in bankruptcy from 1301, the representatives remained there for
several years.
148
Mary Lyon, Bryce Lyon, and Henry S. Lucas, The Wardrobe Book of William de
Norwell, 12fuly 1338 to 27 May 1340 (Brussels, 1983), 60.
149
CPflEIII 1330-4,483.
gust 1336, when his diplomatic mission to France, fearing that im-
portant letters to him would be intercepted by the French, used the
Bardi to send duplicates to England.150 But the companies' own sur-
vival often depended on a swift courier service such as that which
could get the news of Chairman Bonifazio's death in London to the
Peruzzi headquarters in Florence within three weeks.151 If a political
patron could be served as well, so much the better.
To sum up, what set the super-companies apart from the typical
merchant-banker was their focus on large-scale commodity trading,
which, in turn, necessitated the large-scale financing of political po-
tentates to obtain permission to exploit such trade. The super-com-
panies' size and political power opened up opportunities for econo-
mies of scale in marketing widely distributed products such as tex-
tiles, but these were a bonus, rather than an essential ingredient dif-
ferentiating super-companies from other firms. Said the other way
around, it was the rulers in control of exploitable surpluses and in
need of large and efficient sources of cash who made the super-com-
panies possible. And when these rulers developed other means of
raising cash, as in England, or found their commodity less exploit-
able, as in southern Italy, the need for the medieval super-companies
disappeared.152
The super-companies sustained their size and reach through their
ability both to accumulate very large amounts of capital and to keep
that capital circulating profitably. By astute management of their cash
flows, the super-companies were able to provide a vital service to
powerful but cash-short rulers, to attract additional investment from
private individuals with surplus funds, and to maintain diverse pros-
perous businesses in Europe and the Mediterranean. This latter ac-
tivity - buying and selling raw materials and merchandise, oversee-
ing manufacturing, financing trade, lending money, exchanging cur-
rencies, and the attendant paperwork - was the companies' raison
d'etre, but it could not be carried out gainfully on a large scale with-
out close attention to the political and cash control underpinnings
of the business. Successful management of the kind of business dis-
150
Malcolm Vale, The Angevin Legacy and the Hundred Years' War (Oxford, 1990),
258.
151
Ilibri, 1.
152
In England, it was the vastly improved administration of royal income and ex-
pense that released the monarchy from the grip of private financiers. In south-
ern Italy, the demand for its main export, wheat, collapsed as a result of the
catastrophic drop in population following the Black Death of 1348. These fac-
tors are discussed in greater detail in the Conclusions.
cussed here called for a sophisticated organization structure that
would enforce tight central control while recognizing the necessity
for local independence of action in an environment of widespread
operations, very poor communications, and political opportunism.
Such a structure required skillful, dedicated, and loyal managers at
all levels to make it function effectively. An examination of the Peruzzi
Company will provide some insights into how these organizational
challenges were met.
The structure of the Peruzzi Company
The medieval super-companies, like most companies of significant size,

were organized legally as quasi-permanent multiple partnerships. They
were quasi-permanent in that they did not dissolve with the death or
retirement of a partner, and even upon "dissolution" of the partnership
they were immediately renewed. Each partnership lasted as long as it
suited the partners; some were closed and profits distributed after two
years, while others continued for as many as twelve years. The main
purpose of closing a partnership was to effect a new alignment of
shareholdings, usually, but not always accompanied by a formal distri-
bution of profit. Whatever the reasons for closure, the business contin-
ued without interruption. Partnerships were multiple, with as many as
twenty-one partners in the 1331 Peruzzi Company, each contributing a
specific amount of money. The money values constituted share owner-
ship, which entitled each owner to a share of profit or loss prorated to
the percentage of his contribution to total company capital. Thus, the
word "shareholder" can be used interchangeably with the word "part-
ner." The companies were partnerships in the sense that each share-
holder was subject to unlimited liability against all of his personal pos-
sessions in case of bankruptcy. Any distribution of profit was therefore
tentative, subject to subsequent positive or negative adjustments years
or even decades after the original distributions.1
The super-companies' intended permanence is attested by the fact
that none was terminated voluntarily. This sense of permanence was
enhanced by the use of a company logo, such as the golden pears on
a blue background in the case of the Peruzzi and the diamond-shaped
heraldic design of the Bardi. The very conservative papal treasury
apparently found the logos to be especially reassuring. 2 Each com-
1
Several examples of long-deferred adjustments to profit are shown later in this
chapter and in Chapter 4.
2
Y. Renouard observed that the logos were necessary to create a sense of perma-
nence for clients located abroad who would distrust companies that they saw
were frequently dissolving and reconstituting themselves (Les relations, 45).
76
The structure of the Peruzzi Company 77
pany also had its own seal, kept by the chairman. It seems to have
been used sparingly, as there are only three instances of its employ-
ment reported in the Peruzzi accounts, all of which were to confirm
the signature of a partner on formal documents. 3 The company style
was based on the name of the chairman of the company and was
changed not with each partnership renewal, but only with a change
in the company's leadership. Thus the legal title of the Peruzzi Com-
pany was Tommaso de' Peruzzi e compagni from the date of
Tommaso's assumption of the chairmanship in 1303 until his death
in 1331, when it became Giotto de' Peruzzi e compagni upon Giotto's
election to succeed Tommaso as chairman.
The earliest clearly defined Peruzzi Company was that of 1292. It
was formed on November 1, after Arnoldo's death, and ran until May
1, 1296. Probable shareholders included Filippo as chairman and
the four sons of Arnoldo - Pacino, Tommaso, Giotto, and Arnoldo -
and at least three outsiders. The next company, with similar share-
holders, existed from May 1, 1296, to May 1, 1300. Filippo was chair-
man except for a brief period (1298-9), when Pacino d'Arnoldo
headed the company. Unfortunately, little is known about the size of
the shareholdings or the structure of the companies. It is only the
companies from 1300 onward that provide sufficient information from
which to construct an analysis of the organization of the company's
business.
There is no direct evidence from which to determine whether any
of the large multibranch companies commonly drew up formal divi-
sions of responsibility and lines of authority. It is certain, however,
that organization structures did exist, whether formal or implied,
because the scope of their businesses demanded them. It is well known
that the chairman had complete authority, that many of the partners
were active managers both at headquarters and in foreign branches,
and that well-trained factors were given important sedentary and trav-
eling assignments. But what has been lacking is a picture of how they
all fit into a coherent organization plan in a very large company.
Fortunately, in the case of the Peruzzi, a reasonable idea of structure
can be gleaned from a careful study of the surviving account books,
the Libro deWasse sesto and the Libro segreto sesto of the last company,
that of 1335-43.
These account books indicate that, from the 1300 company at least,
the Peruzzi had adopted a bilevel form of organization that permit-
ted a degree of decentralization at the operating level, but that re-
3
Ilibri, 105, 217, 221.
served important areas of decision making to the chairman's central
office in Florence.4 Thus, all partners, whether in Florence or abroad,
participated in the company's management, but they deferred to the
man they chose as their chief. The chairman was a powerful, domi-
nating figure whose tenure, in the case of the Peruzzi, was ended
only by death or bankruptcy.
The organization chart that follows in Figure 1 shows that there
were several subsidiary "companies" in Florence controlled directly
by the chairman or his delegate, in addition to fourteen foreign
branches, each with a manager reporting to the chairman. 5 The fact
that some branches were headed by a partner and others by a factor
is important, and the reasons for this distinction will be addressed
later in the chapter. What a chart of this type cannot reveal is the
inevitable relationships that cut across organization lines - branch
to branch, branch to subsidiary, and subsidiary to subsidiary. These
relationships will be brought into the discussion of each of the seg-
ments of the business.
Florence Edler has characterized the tavolazs comprising the bank-
ing business and the mercanzia as including all segments of medieval
business except banking.6 This is correct in the sense that the de-
scription covers the primary functions of these two main subdivisions.
And certainly there is evidence that the tavola was a distinct section
of the company with its own leader.7 But it is a serious oversimplifica-
tion of corporate structure for the larger entities, especially the su-
per-companies. First, Figure 1 reveals that in addition to the compagnia
della tavola and the compagnia delta mercanzia, there existed a distinct
compagnia della drapperia which isolated at least part of the cloth busi-
ness. The Bardi company went even further; as noted in Chapter 2, it
not only separated its wool and cloth businesses, but also treated them
as distinct profit centers. Second, the super-companies had a well-
developed foreign branch system, with each branch responsible for
4
Although the surviving account books deal mainly with the 1335-43 period,
these, the Secret Book of Giotto, and other sources provide evidence that the
bilevel form of organization had been in place from virtually the beginning of
the century, as will be made clear from Chapter 5 onward.
5
In fact, there were sixteen branches, but two of them, Genoa and Chiarenza,
are not shown in the table because they were very small and did not have resi-
dent managers
6
Florence Edler, Glossary of Medieval Terms of Business (Cambridge, MA, 1934),
176.
7
Davidsohn, Firenze, Vol. 6, 280 nl, refers to the company of 1308 showing the
banking affairs of Tommaso de' Peruzzi & Co conducted by the cambiatori della
tavola under Giotto Peruzzi as chief.
Chairman
1
1
Direct reporting Foreign branches
1
1
Headed by
i
1
Part ners Factors
|
-Co. della
tavola -Naples -Barletta
Donato Peruzzi
-Co. della - Sicily - Cyprus

mercanzia F. Forzetti
-Avignon -Rhodes
Co. della F. Villani
drapperia
-England - Sardinia
G. Baroncelli
Co. della
limosina -Bruges -Tunis
Pacino di Guido Peruzzi
Special - Paris - Majorca

accounts Filippo Peruzzi
-Venice
-Pisa
Figure 1. Organizational structure of the Peruzzi Company, July 1, 1335.

The Bruges branch was led by a factor from 1336 onward. The Paris branch
was led by a factor from 1337 onward, on the death of Filippo Peruzzi.
8
its own results. It must also be remembered that the Florence-based
subsidiary companies and the foreign branches were really depart-
ments, organically part of the main company and not legally distinct
entities, as in the case of the Medici a century later.9 But each branch
was required to maintain a complete set of accounts and report its
balances periodically to Florence, especially at the close of each part-
nership, and was subject to the laws of the polity in which it was lo-
cated. The fact, as will be demonstrated in Chapter 4, that the sys-
tems of reporting differed from branch to branch suggests a degree
of independence at the local level, or conformity to local practice.
Third, the central office in Florence had direct manufacturing,
trading, and banking businesses of its own for which it needed the
branches as outlets, limiting branch independence. Furthermore,
under certain circumstances the central office overrode the principle
of branch responsibility entirely. These exceptions generally related
to the resolution of unfinished business left over from previous com-
panies, such as past-due collections, lawsuits, and conflicts with local
authorities, which were handled by the central tavola. Merchandise
and real estate claims appear to have been the province of the
mercanzia. The tavola, however, was the only mechanism used to route
the adjustments in profit of previous companies to the shareholders
of those companies.10 Beyond such "cleanup" issues, there were in-
evitably situations in which the interests of the branch clashed with
those of the company as a whole. In such cases, the concerns of the
central office were paramount. The most outstanding instance is
Chairman Bonifazio's startling decision to take personal command
of the company's relations with the English monarchy in 1338.
There are, however, less dramatic but equally instructive examples
8
The surviving fragment of the Bardi account of 1318 reveals balances for eight
branches. Sapori, La crisi, 216. The Peruzzi branch balances will be discussed in
detail in Chapter 4. The fact that balances were reported, however, does not
necessarily mean that each branch was controlled as a profit center, as there is
no evidence to support such an assumption. Some of the large companies be-
low super-company rank had substantial branches, but others, such as the Alberti
in the early fourteenth century, had only factors resident abroad (R. de Roover,
"Alberti Company," 20).
9
De Roover, Medici Bank, 76-8. De Roover argued that the Medici's holding com-
pany system gave the shareholders better protection against risk of losses by
errant branches. The virtue of this arrangement in the medieval environment
is questionable, as it entailed entrusting the fate of each branch to long-term
local minority shareholder-managers. Even the Medici dropped the system in
1455.
10
/ libri, 280-3, provides some of the many examples of debit or credit allocations
to the shareholders of the 1324-31 and 1331-5 companies.
of the kinds of situation in which the Florence office took charge.
One was a lawsuit against the 1324-31 company tavola by the heirs of
a Landuccio Mazetti, a Florentine concern, for a large sum due in
Bruges. The claim caused Donato di Pacino de' Peruzzi, a shareholder,
to journey to Bruges in 1333 to take charge of the litigation over the
head of the branch manager and fellow-shareholder Pacino di Guido
di Filippo de' Peruzzi. Donato was actually named by the plaintiffs in
the suit, which was to be brought before the count of Flanders.11 The
expenses reported for Donato's trip included the cost of horses and
four bolts of velvet, which had been made in Florence and brought
to the countess of Flanders as a gift. Other expenses for the suit were
relatively minor, consisting mainly of the costs of making presenta-
tions to the count's lawyers and clerks to obtain a favorable judg-
ment, which apparently was finally received in 1338.12 The latter costs
were paid by the Bruges branch, charged to the 1324-31 tavola and
eventually allocated to the shareholders of the 1324-31 company.13
A second example involved the mercanzia which was ordered to
transfer to the 1331-5 company 2,333 1/3 florins in October 1336 to
compensate for the return of a deposit by Filippo Villani's Avignon
branch to the Abbot of Samichele delle Scluse (now known as St.
Michele della Chiusa) in August of that year. The abbot had origi-
nally made deposits totaling 7,000 florins in 1312, split one-third each
among the Bardi, Peruzzi, and the Scali companies. Also in October
1336, the company authorized the Avignon branch to pay the abbot
a further 583 1/3 florins. After the Scali Company had gone bank-
rupt in 1326, the Curia had only obtained 50 percent of the Scali's
share of the deposit through the bankruptcy court. The Bardi and
Peruzzi agreed to reimburse the Curia 583 1/3 florins each to make
up for the Curia's 50 percent loss of 1,166 2/3 florins.14 This is an
obvious case where the branch took the action, but strictly on direct
orders from Florence. It may also be a medieval example of the con-
troversial practice of reimbursing the investment losses of really im-
portant clients!15
The compagnia della drapperia appears to have encompassed only
11
Donato, the previous manager of the Bruges branch who also served as the
count's general receiver, was obviously well placed to deal with the count's court.
See Chapter 6 for more details on Donato's activities in Bruges.
12
Ilibri, 101,28, 158.
13
Ibid., 158.
14
Ibid., 94.
15
Renouard, Les relations, 542, has noted that the companies were contractually
obligated to make the reimbursement, but the record is not entirely clear on
this point.
the manufacture of cloth and its sale in Florence. This unit is not
mentioned in connection with the sale of cloth abroad, and it prob-
ably did not deal with the product of other manufacturers in Flo-
rence. There are numerous entries in the Peruzzi accounts covering
cloth transactions, but only two of them refer to the compagnia della
drapperia.16 Two of the Peruzzi Company's factors were assigned to
the drapperia, but in what capacity is not indicated.17 A third factor,
Giovanni di Berto Ruggieri, wrote up the accounts for the 1331-5
drapperia and traveled to Bruges and Paris on behalf of that unit.18
The manufacturing operation seems to have been quite small. It
likely included the finishing of cloth imported from Flanders, in view
of the long association of the Peruzzi with the Calimala guild, which
specialized in finishing, and of the already-mentioned journey of the
accountant to Bruges. It probably also engaged in complete cloth
manufacturing as a logical extension of its wool business. Reference
is made to two men, Tano Chiarissimi and Gherardo Rustichi, who
are described as "compangni a la drapperia."19 These men were not
employees of the company, and apparently paid part of del Bene's
salary.20 It is probable, therefore, that they were entrepreneurs who
ran the cloth manufacturing shop for the Peruzzi Company, even
though the latter was represented in the wool guild. It should be
noted that the company also employed a full-time shearer, but there
is no evidence to connect him with the drapperia. Instead, he seems to
have been used for special assignments, some involving lengthy trans-
fers abroad, rather than for routine manufacturing.21 All things con-
sidered, the drapperia appears to have been a clearly defined but small
manufacturing arm of the company.
The final "company" shown in Figure 1 is the compagnia della
limosina, really an account through which the Peruzzi Company do-
16
/ libri, 240, refers to a single bolt of cloth sent to a factor in Barletta in 1338;
Giotto's Secret Book also contains an entry on 462 that includes several bolts
supplied to his family by the drapperia in 1329.
17
Ibid. The factors were Dono Berci (6, 46, 237) and Lorenzo di Bettino del Bene
(82).
18
Ibid., 102. The entry referred to the "ragione della drapperia vecchia da Santa
Cicilia." Santa Cicilia was the Peruzzi's main warehouse, rented from Simone
Peruzzi.
19
Ibid., 82.
20
Ibid. The entry includes a note that part of del Bene's salary was due "aside
from that which Tano Chiarissimi and Gherardo Rustichi, our partners in the
drapperia, assigned him."
21
Ibid., 65. The shearer, Giovanni di Iacopo, resided in Naples between July 1335
and May 1337 and spent time on company business between July 1338 and July
1339 in Milan and Pisa.
nations to charities were channeled. It was common for the super-
companies to set aside 1 to 2 percent of their shareholdings for "God's
work," from which the limosina received appropriate allocations of
profit and loss.22 The Bardi designated its charity shareholding Messer
Domeneddio, that is, God. Because of the irregularity and uncertainty
of profit distributions, the limosina was also funded within the com-
pany, with charitable allocations being made routinely, usually in Janu-
ary or February of each year for the fiscal year commencing the fol-
lowing July 1. The money was destined not only directly to the poor,
but to unnamed religious organizations and hospitals that served the
poor. Such gifts no doubt enhanced the company's reputation in a
general way as a good corporate citizen, but there is no evidence that
they were specifically directed at furthering the company's political
and social interests in Florence. Between 1335 and 1338, the Peruzzi
gave over li.300 per year; from 1338 to 1341, the payments declined
to an average of a little over li.125 per year and dried up thereafter.23
The donations of the Bardi to their charities were very large, averag-
ing close to li.3,000 per year during those same years, suggesting
that the Bardi Company was much larger, more profitable, or more
generous than the Peruzzi.24 It is risky, however, to draw too many
conclusions from this difference, because the two companies may
have accounted differently for their donations. For example, it is likely
that the foreign branches had charitable obligations, which may have
been included in the Bardi, but not the Peruzzi totals.
The final segment of the business shown in Figure 1 as reporting
directly to the chairman is a collection of individual foreign loans or
deposits controlled from Florence, called, for convenience, "special
accounts." These include the Hospitalers' important account, a large
deposit in Palermo, and accounts held by certain church dignitaries.
The company units discussed so far were all under the control of
the office of the chairman. The management of the foreign branch
system was more decentralized due to the sheer length of time re-
quired for coherent round-trip communication. The organization of
the super-companies' sprawling branch systems must have been one
of the most serious problems facing their managements, given the
environment of primitive and often dangerous communications. To
be sure, they developed excellent internal courier arrangements, as
earlier attested by the prompt receipt in Florence of the news of
22
Ibid. Surprisingly, the limosina charity fund was also charged with its share of
company losses, like any other shareholder. For examples, see 119 and 319.
23
Ibid., 30-1.
24
Sapori, Studia economica, Vol. 2, 853.
Chairman Bonifazio's death in London. The Peruzzi spent over
li. 1,000 between 1335 and 1341 on the dispatch of correspondence
and in one famous instance paid li.203 to charter a fast ship to send
an urgent message to Rhodes.25 Such provisions permitted some con-
sultation with the head office in Florence on decisions of exceptional
import to the company, but clearly, most commercial decisions had
to be made on the spot by local managers. They would have been
given the legal tools to do their job, that is, powers of attorney to
bind the company.26 At the same time, their freedom of action had to
be circumscribed by firmly applied internal controls. Unfortunately,
there is no evidence of the precise form of such controls, but it is
inconceivable that a branch manager would have had the authority
to take unlimited deposits or make unlimited loans.27 At the very least,
his power to obtain deposits from or lend money to individuals or
institutions outside his territory would have required the concurrence
of the Florence head office.
The presentation of the probable Peruzzi organization structure
in neat chart form should not beguile the reader into viewing the
super-companies in the simplistic terms of a modern business-school
case study. As far as can be discerned, each of the super-companies
had its own philosophy. For example, the Bardi Company, possibly
by reason of its enormous size, appears to have been somewhat more
decentralized than the others, carrying on a large and continuous
business with the monarchies of England, Naples, Cyprus, and oth-
ers from its local branches. Its approach was to put its ablest and
most politically adroit people in such branches, giving them a fairly
loose rein. For example, the head of the London branch for many
years was Taldo Valori, who became a powerful political figure back
in Florence in the 1330s.28 And Francesco Pegolotti, the Bardi's high-
est-paid factor, was given a virtually free hand to negotiate arrange-
ments with the rulers of Cyprus and Armenia.29 The Buonaccorsi,
25
/ libri, 181. This long entry includes a collection of disparate expense items
covering several years. The charter of the ship to Rhodes, which has drawn
comments from Sapori, Fryde, and S. L. Peruzzi, will be discussed in detail in
Chapter 7.
26
De Roover, Medici Bank, 79. He notes that the Calimala guild statutes of 1332
specified that anyone, whether factor or partner, representing a trading com-
pany abroad had to be armed with a power of attorney.
27
The need for prompt authorization for the stream of large loans necessitated
by the business in England was an important reason for Bonifazio's decision to
move to London.
28
Passerini,"Genealogica," in an essay on Simone Peruzzi.
29
Pegolotti, La pratica, xx-xxii.
although not quite a super-company, is of interest because it seems
to have been very centralized for a large firm, having the reputation
of employing inferior people and shifting them from branch to
branch, especially between Naples and Avignon.30
With regard to the Peruzzi, it appears that the Florence manage-
ment centralized policy but was prepared to decentralize execution
within the constraints established by policy. As a result, each branch
was operated pragmatically and, therefore, differently, depending on
the character of the business and the personality of the branch man-
ager. For the complex and lucrative branch of Naples, both policy
and execution called for close coordination with Florence. The busi-
ness was obviously of great importance and therefore deserving of
attention. But equally important, as will be shown in subsequent chap-
ters, was the close political connections between the kingdom and
the commune which called for coordinated actions by the company
in both centers. Moreover, reasonably rapid overland courier com-
munication was possible, permitting relatively frequent consultation.
At the other end of the spectrum was the English branch. Here, until
1336, judging from the company's actions, the policy was that the
branch could carry on normal commerce but could engage in large-
scale lending, especially to the monarchy, only with prior approval
of Florence. It granted loans to ecclesiastical establishments, espe-
cially the Hospitalers, but the accounts were controlled in Florence
even though the branch advanced the funds.31 It acted as a deposit
bank for Hugh Despenser the Younger and possibly other of Edward
II's favorites, but otherwise steered clear of royal entanglements. 32
Between 1300 and 1321, its lending was limited to a trifling £900
sterling to Edward II and nothing at all to Edward I, putting it in the
lowest rank of Italian merchants in this regard.33 The Peruzzi had the
resources to be a more aggressive lender in England, but policy seems
to have dictated otherwise, possibly out of Tommaso's apprehension
over the Ricciardi and Frescobaldi disasters, and possibly also for
fear of prejudicing the company's important French business.34
There were two main types of branches, one headed by a share-
30
Luzzati, Villani e Buonaccorsi, 71.
31
The Hospitalers loans will be dealt with more fully in Chapters 4 and 5.
32
Fryde, "Despenser."
33
W. E. Rhodes, "The Italian Bankers in England and Their Loans to Edward I
and Edward II," in Historical Essays by Members of the Owens College, ed. T. F. Tout
and James Tait (London, 1902), 168. Two minor loans that were made in Ed-
ward II's reign after 1321 will be discussed in Chapter 5.
34
As will be discussed in Chapters 5 and 7, the Peruzzi had strong connections
and ambitions in France.
holder and one headed by a factor. The criteria for determining the
level of manager assigned to the branch were clearly related more to
the political demands of the post than to the economic importance
of the business conducted by the branch. As can be seen in Figure 1,
shareholders managed those branches where close, continuous, and
diplomatic contact with the ruling elite was essential to the success of
the business. There, the managers had to have the social status, so-
cial graces, intelligence, and authority in the company to deal with
demanding prickly noblemen. Thus, we see shareholders managing
the politically sensitive branches of Naples, Sicily, England, Avignon,
Paris, and Bruges. We also see the downgrading of Paris to a factor-
led branch after the death of Filippo di Pacino de' Peruzzi in May
1337 and the decision to enter the joint venture with the Bardi in
England. The business had become low-level and low-profile. The
Bruges branch was also relegated to management by a factor in 1336.
In one sense this is curious, given the increased activity in that city
regarding the financing of the English king. However, it is likely that
the political aspects of the Bruges operation came under the
chairman's office, especially after Bonifazio's presence in Flanders
and London from March 1338.
The leadership of the English and Sicilian branches deserve addi-
tional comment. In England, the level of the managers changed with
the fortunes of the branch. For several years in the 1320s, Bonifazio
led the branch. At that time, he was neither shareholder nor factor,
but as the son of Chairman Tommaso, he was clearly an important
figure. But with the fall of Edward II, the Peruzzi connection with
Despenser put the company in bad odor, and Bonifazio departed the
country, leaving a factor as his proxy.35 The Sicilian business was run
from its inception in 1299 by Francesco Forzetti, a permanent resi-
dent. Whether he was originally a factor or whether he had some
special status, he did not become a partner until 1331. It is worth
noting that the branch had a series of loans outstanding to King
Federigo III reported separately from the branch trading accounts
and apparently under the control of Florence.36
Branches headed by factors were those where the presence of a
high-status manager was not vital to the conduct of the business. The
branches in Venice, Genoa, and Pisa dealt primarily in logistics and
legal problems rather than buying and selling for the local market,
and in any case were close enough to Florence to enable sensitive
35
CPRE III 1327-30, 372.
36
Ilibri, 195. Some peculiarities of these loans will be discussed in Chapters 4 and 5.
political problems to be handled from there. Barletta was a very large
branch, but its business was essentially technical trading and logis-
tics, best suited to the talents of a well-trained factor. Moreover, it
was located away from the seat of power in Naples, where the share-
holder-manager could look after all the company's political interests
in the kingdom. The branch at Rhodes was also substantial and in-
volved contact with ruling nobility, in this case the Knights Hospitalers.
In its early start-up years, it was managed by a partner, Ruggeri di
Lottieri Silimanni.37 However, it was remote, its business was largely
trading, and control of the very large loans and deposits rested in
Florence. Nevertheless, it was important enough to warrant being
run by some of the company's highest-paid employees. Cyprus,
Majorca, Sardinia, and Tunis, being useful but relatively small and
remote operations, did not warrant the attentions of a full-time share-
holder-manager. In particular, although Cyprus was a significant mar-
ket and entrepot in the first half of the fourteenth century, the Peruzzi
branch there was modest compared to that of the Bardi presence.38 It
was managed by a low-level employee, while the Bardi had Francesco
Pegolotti, its highest-paid and most valued factor in charge for sev-
eral years. In Genoa and the port of Chiarenza on the west coast of
Greece the Peruzzi had what were described as branches, but with no
resident manager. Chiarenza, which did not even seem to have a per-
manent factor, may have been run out of Naples, whose king bought
the port in 1307.39 Finally, there were important locations such as
Ragusa, Constantinople, and Barcelona in which the companies' in-
terests were represented only by independent agents.
The basic structure that emerges is about what should be expected
of an enterprise of this size and type - a clear vertical line of quasi-
autonomous units reporting to the office of the chairman, supple-
mented by horizontal connections among the units. Each of the com-
panies in its own way would have adapted this structure to strike the
balance between central control and local autonomy most suited to
its needs. Rigid centralization requiring head office approval of all
significant transactions would have made it impossible to operate in
lucrative markets that happened to be distant and politically com-
plex. Excessive decentralization, in contrast, would have placed the
head office in the position of helplessly having to deal with faits
37
Ibid., 439.
38
Cyprus's role as an entrepot owed much to the papal ban against direct trading
with Alexandria and other Islamic ports. See Peter W. Edbury, The Kingdom of
Cyprus and the Crusades, 1191-1374 (Cambridge, 1991), 150-3.
39
Peruzzi, Storia commercio, 318-20.
accomplis by local managers. The Ricciardi seem to have suffered
from this problem in England, as did the Bardi and Peruzzi compa-
nies. But the fact that the super-companies flourished for so many
years indicates that at least for a time, they had found a satisfactory
balance.
Having adopted the branch system and having accepted varying
degrees of decentralization, the most serious challenge facing the
companies was the need to overcome the negative aspects of such an
organization structure. The emergence of independent-minded
satrapies was a serious threat, especially in locations where the branch
manager was in constant contact with the ruling aristocracy and ex-
ercised the control over monopolies that had been granted to the
company. Branch managers enjoyed personal privileges and money
grants, which put considerable strain on their loyalty to the company's
interests. For example, in England, the king promised substantial
sums to the wives of Peruzzi managers there, and 500 marks to
Bonifazio's daughter for her marriage, suggesting that even the chair-
man was not free from temptation.40 At least two Bardi employees
were granted significant parting gifts by the same king, implying that
they had done a good job on his behalf.41 We cannot be sure that the
sums were actually paid to these individuals, but the existence of such
promises indicates serious potential for conflict of interest.
With regard to factors, the most serious threat was outright cor-
ruption. Temptations abounded, and there is evidence that a few
employees did succumb. In 1330, the company accused Silimanno
Bottieri, a factor who had worked for sixteen years in Bruges and
England, of defrauding the company of 5,000 florins out of the 50,000
he had managed.42 In 1336, the Peruzzi Company had Iacopo di
Tuccio Ferrucci seized and thrown into Florence's jail, the notorious
Stinche, for having "made much damage to us while staying in Naples
and Avignon."43 And Bartolo Gherardini confessed on his deathbed
in 1340 that he had embezzled a sum from the company.44
The Peruzzi Company recognized that these problems required
continuous attention and used four principal means of dealing with
them. The first was the maintenance of a strong control group at
40
CPR E III 1338-40,195, 392. The sum of 500 marks was equivalent to about
2,250 florins. For perspective, the dowry given in the marriage of Giotto's daugh-
ter to settle the feud between the Peruzzi and Adimari families in 1312 was
1,800 florins, considered a very handsome sum.
41
CPRE III 1340-43. 412 (200 marks to P. Bini) and 469 (£1,000 to Filippo Bardi).
42
43
Ilibri, 107.
44
Ibid., 96.
Florence headquarters. Unfortunately, we have no direct informa-
tion on the composition of the "office of the chairman," which may
well have been an informal group with changing membership. Nor
is there any evidence of any formal delegations of authority to group
executives. What is certain is that the chairman, even one as diligent
as Tommaso, required a trusted support group to help him hold the
reins of such a large diverse organization. One member of this group
is likely to have been his brother Giotto, who was his treasurer for
many years and who eventually succeeded him.45 His sons Bonifazio
and Pacino almost certainly worked for him at the center of opera-
tions in Florence, which made them acceptable to the shareholders
as successor chairmen. Bonifazio also gained branch experience by
serving in Avignon from 1319 to 1321 and in England during much
of the 1320s, as did Pacino from 1322 to 1325 in Avignon and from
1334 to 1335 at the Bruges branch. In addition, there is abundant
evidence from the 1335-43 accounts that several shareholders were
actively engaged in monitoring the company's business, both in Flo-
rence and abroad. For example, between December 1336 and De-
cember 1338, Giovanni Soderini lived for ten months in England,
made a trip to Paris, returned to Florence, and then stayed three
months in Venice.46 Baldo Orlandini traveled to Flanders and Brabant
on behalf of the English branch in 1339, then worked in England
from July 1339 to December 1341, when he returned to Florence.47
Geri Soderini worked in Naples in 1336 and 1337, and his brother
Ghuccio worked in Sicily from May to August 1338.48Donato di Pacino
Peruzzi seemed to be a high-level troubleshooter in matters requir-
ing good connections with the French court. In addition to his in-
volvement in the Bruges claim discussed earlier, he participated in a
very important Paris lawsuit as well as various affairs in Burgundy
and Avignon.49 In short, many of the shareholders and their sons
were actively engaged in helping the chairman control the business.
The second important key to the proper functioning of this orga-
nization structure was staffing, which was kept strictly under the con-
trol of the Florence office. All branch employees were carefully se-
lected Italians, usually trained in Florence and given tours of duty at
the home office and various foreign locations.50 Professor Sapori has
45
Ibid., the libro segreto di Giotto, 419-512. 46 Ibid., 254-5.
47
Ibid., 259. 48 Ibid., 249-50.
49
Ibid., 251-2.
50
All companies attached great importance to the selection and control of em-
ployees. See, e.g., de Roover, "Alberti Company," 49-50. But misconduct oc-
curred nonetheless, as noted earlier.
go Medieval super-companies
prepared a useful analysis of 133 factors who worked for the Peruzzi
Company from 1331 to 1343 drawn from the Peruzzi account books.51
Of this number, 14 were from the Peruzzi family and 9 were from the
families of other shareholders, altogether slightly over 17 percent of
the total. The vast majority of factors were outsiders, including a host
of impressive family names - Strozzi, del Bene, Guicciardini, Alberti,
but notably no Bardi nor Acciaiuoli. Attractive remuneration was
obviously of vital importance in luring quality employees and sus-
taining their loyalty, and the salary information available for 110 of
the factors shows that, for the most part, they were well paid. Table 2
gives the number of factors in each salary range. This is an approxi-
mation because the data cover a twelve-year period (the information
being too fragmentary to be useful for any single point in time), and
salaries of course increase over time through seniority and promo-
tion. The table shows the highest-attained salary of each individual,
giving the data an upward bias but permitting a satisfactory generali-
zation of the range of factor salaries.
One advantage in showing the highest-attained salary is that it in-
dicates the level to which an ambitious young Florentine white-col-
lar worker might aspire - somewhere between li. 100 and li. 150 per
year, a very handsome income.52 It should be noted that all salary
figures reported here are in lire afiorino, the unit of account used in
the bookkeeping of the super-companies and should not be confused
with the lire di denari piccioli, the unit in which most living expenses
are measured. The relationship of the lira a piccioli to the lira afiorino
varied over time, as can be derived from Table A7, ranging from 1.72
to 2.28 between 1300 and 1340.53 In 1338, the lira afiorino was equiva-
lent to over 2 lire a piccioli. The salaries shown here should there-
fore be doubled before comparing them with living costs cited by
most economic historians.54 The highest-paid individual earned li.290,
giving him parity with the salary the Bardi paid the famous Pegolotti
51
Sapori, Storia economica, Vol. 2, 718-29.
52
De Roover, "Alberti Company," 24-6, notes that the highest-paid employees
(H.200+) "could afford a large house, one or two servants, and a horse or mule
in the stable." He also reports that Bardi and Peruzzi salaries were significantly
higher than those of the Alberti and most other companies.
53
This relationship is derived by dividing the soldi figures in Table 2 by 29, the
number of soldi afiorino per florin.
54
For examples of Florentine data expressed in lire a piccioli, see Charles M. de
La Ronciere, Prix et salaires a Florence au xive siecle, 1280-1380 (Rome, 1984), or
Henderson, "Piety and Charity." The multitude of figures reported by
Henderson, including citations from archival sources and de La Ronciere's many
works, are reported in lire a piccioli.
The structure of the Peruzzi Company gl
Table 2. Salary ranges of Peruzzi Company factors, 1331-43
Annual Salary lire a fiorino Non-Peruzzi Peruzzi Total

Below 60 27 1 28
60-79 15 7 22
80-99 7 - 7
100-119 17 3 20
120-149 18 1 19
150-199 5 - 5
200+ 9 - 9
Total 98 12 110
referred to earlier. The salaries of Peruzzi family members, cluster-

ing at the lower end of the scale, suggest that the company did not
offer sinecures, at least highly paid ones, to its kinfolk.
In addition to salary, a factor might earn a bonus under special
circumstances: for example, Giovanni Bonducci was granted li.40
given "of our good will" for well representing the company in Puglia.55
The manner in which factors were paid, especially those on foreign
assignment, was to provide advances for all their living expenses, while
their salaries were accrued in another account. This was a perfectly
logical practice, enabling the branch to fund factors in local currency
while keeping their actual salaries confidential and under the con-
trol of the central office. What is curious is that each account could
carry on for years, running to extraordinary size, including accrued
interest, euphemistically described as dono di tenpo, before being
settled, suggesting a breakdown in accounting procedures.56
Although most, if not all shareholders, along with several sons of
shareholders, worked actively for the company, none received any
apparent remuneration other than their pro rata share of profit. The
repeated use of the phrase dono or donamento di tenpo has confused
some historians into deducing that the company was compensating
partners for time devoted to the business. Even as astute a business
historian as Raymond de Roover fell into this error, incorrectly cit-
ing a credit as a salary equivalent that on close examination was sim-
55
/ libri, 304.
56
Ibid., 303-18. An analysis of the interest credits in the salary accounts shows
that salary was considered due at the end of each year, so that interest at 7%
was calculated from the beginning of the following year.
ply another of the many euphemisms for interest.57 There is no evi-
dence anywhere in the accounts of salary compensation to sharehold-
ers; the single example cited by de Roover is questionable.58 Such
compensation might have been paid by the branches, but this is highly
unlikely in a firm that controlled all other salaries, domestic and for-
eign, in Florence. But if all were contributing effort, possibly rough
justice was served by only the pro rata profit distribution. Other com-
panies sometimes apportioned their profit allocations to recognize
the "industry" of certain partners, but there is no evidence of such
practice by the Peruzzi. Shareholders did, however, have ready ac-
cess to company cash, goods, and services through expense advances
for personal as well as company needs. Each had what amounted to a
running tab on the company's books in which were logged advances
of cash, cloth, grain, or horses and other livestock for reimburse-
ment of travel and living expense on company business, but also for
such obviously personal outlays such as acquisition of property, pay-
ment of dowries, luxury items, taxes, and funeral expenses. As noted
in Chapter 1, even the Baroncelli Chapel in the Santa Croce was fi-
nanced through the company. In another instance, the company paid
60 florins to bring a certain mastro Alberto from Bologna to treat
Bonifazio for a malady of the throat.59 A useful way to demonstrate
57
De Roover, Medici Bank, 80. He cites Donato di Giotto as a good example of
"time and efforts" compensation during the period December 9, 1332, to June
30, 1335, from 160 (actually 260) of / libri. The entry concerns not Donato,
however, but his son Giottino, a factor who earned a salary of li.160 sl6 d8 for
the period. Giottino was also awarded donamento di tenpo of li.115 up to July 1,
1343. This is interest at the standard rate of 7% per annum, which when com-
pounded for the eight years equals 71.8%; applied to the unpaid salary, this
yields exactly the li.115. The donamento di tenpois simply an acknowledgment of
delinquent payment, of which there are many examples in the salary accounts,
all of which test out arithmetically as interest at 7% per year. The application of
interest is evenhanded, as it is also charged on the accumulation of expense
advances. Elsewhere, de Roover describes dono del tempo as salary (Money, Bank-
ing and Credit in Medieval Bruges [Cambridge, MA, 1948], 32) and the interest
liability as "bonus" (44nn 28, 29).
58
De Roover, "Luca Pacioli," 129, cites salary awarded to Pacino di Tommaso Peruzzi
for his service in Bruges in 1334-5 (/ libri, 378) as evidence of a stipend to a
branch manager-partner. But it is unlikely that Pacino was a partner at that
time. The entry cited was one of a group of salary adjustments to five of the late
Tommaso's sons, four of whom never became partners. The name of Bonifazio,
Tommaso's senior sen and heir, is conspicuous by its absence. And the branch
manager of Bruges was a different Pacino, Pacino di Guido. See n62, this chap-
ter, for further comments.
59
/ libri, 261.
T h e structure of the Peruzzi Company 93
the flavor of these accounts is to present a rough translation of an
entry made in the account of one of the shareholders:
And debit Donato . . . li.439 si3 d5. . . . The said moneys were
taken and posted to his account from July 1, 1338 to July 1, 1339:
li.8 s5 d4 we gave for him to Bettone Cini and Company, tax
collectors, for the tax on his own possessions for the years 1337
and 1338; and li.76 s5 dl for house expenses and two bales of
flax that had come to him from Naples and for amber prayer
beads and capers that came to him from Venice and to reclothe
his bastard son Tommasino in Pisa where he had been ill; and
li.61 si 7 d3 for bolts of cloth taken from our warehouse for cloth-
ing for himself and his family in that year; and li.224 s8 d9 for
28 ounces 15 teri of silver carlins converted at li.7 si7 d6 per
ounce that Ruberto de' Peruzzi and our Naples company paid
. . . for the needs of Francesco, son of the said Donato; and li.68
sl7 for 9 ounces of silver carlins converted at li.7 sl3 per ounce,
which our above-mentioned company of Naples gave for him to
Puccio Duti of Florence. . . . And they add up in total to the
above sum.60
This was not an unusual or exceptionally lengthy entry. Conversely
the shareholders and sons made deposits to their accounts in the
form of cash, goods, and property. To the balances the company
meticulously applied interest at the usual 7 percent per annum. In
most cases, it is possible to work out the interest calculation precisely,
but in some instances the numbers cannot be traced satisfactorily
because the amounts to which interest is applied are accumulations
over time.
The system described here confirms the comment made earlier
that the affairs of the company and its shareholders were very much
60
Ibid., 253. "E de dare Donato . . . lbr.439 s.13 d.5. . . . I detti danari a presi e
sono posti a sua ragione da kalen luglio anno 1338 a kalen luglio 1339: le lbr.8
s.5 d.4 a fior. demmo per lui a Bettone Cini e compangni ghabellieri per la
ghabella delle posesioni sue per l'anno 1337 e per l'anno 1338; e lie lbr.76 s.5
d.l a fior. tra per spese di chasa in Firenze per due balle di lino che gli venneno
da Napoli e per paternostri d'anbra e chapperi che gli venneno di Vinegia e
per rivestire a Pisa Tommasino suo figluolo bastardo ch'era la malato; e lie lbr.61
s.l 7 d.3 a fior. per panni avuti dal fondacho nostro per vestire di lui e di sua
famiglia in dett'anno; e lie lbr.224 s.8 d.9 a fior. per once 28 teri 15 di carlini
d'argento, a ragione di lbr.7 s.l7 d.6 a fior. Toncia, che Ruberto de' Peruzzi e
compangni nostri di Napoli pagharono per l u i . . . per bisongnie di Francescho
figluolo del detto Donato; e lie lbr.68 s.l7 a fior. sono per once 9 di carlini
d'argento 60 per oncia, a ragione di lbr.7 s.l3 a fior. l'oncia, che'detti nostri
compangni di Napoli dierono per lui a Puccio Duti di Firenze. . . . E montano in
tutto la sopradetta somma."
intermingled. But the data also indicate that a shareholder facing
the risk, family disruption, and expense of a foreign posting received
no more compensation than a shareholder who remained in Florence.
This is unreal and provokes the question of whether the shareholder
accounts in / libri represent normal practice or whether they reflect
changes made by the auditors of the bankruptcy court to maximize
assets available to the firm's creditors. This and other anomalies will
be discussed more fully in Chapters 4 and 9.
From the Peruzzi accounts it is clear that there was a sharp distinc-
tion between factors and managing shareholders, countering any
notion that in the big companies a young man would join as an ap-
prentice factor, work his way through the ranks, and become a part-
ner or even chairman one day.61 The evidence from the Peruzzi Com-
pany, with one exception, is once a factor, always a factor.62 The ge-
nealogical tables in Figures A2 and A3 identify the Peruzzi factors
and show that often factors were sons or brothers, and even heirs, of
family shareholders but never attained that rank. The relatively small
number of employees from the large shareholder families is surpris-
ing, given the propensity in family oriented cultures to provide "jobs
for the boys," and suggests that management and employee positions
were filled on the basis of qualifications rather than patronage or
social status. Another employment criterion appears to have been
that a factor must not be a member of the family controlling another
super-company. As noted earlier, no members of the Bardi, Acciaiuoli,
or Buonaccorsi families were on the Peruzzi payroll.63 Furthermore, in
the list of 346 employees of the Bardi Company between 1310 and 1345,
there were no Peruzzi, Acciaiuoli, or Buonaccorsi.64 Thus, although these
firms often collaborated to exploit markets, they were indeed competi-
tors who jealously guarded their proprietary information.
61
Although there may have been exceptions (see later this chapter), they were
rare. De Roover, Medici Bank, 80 confirms this, as does Sapori, Storia economica,
Vol. 2, 704. In the case of the Bardi, 5 out of 346 factors rose to partner status
between 1310 and 1345, but four of the promotions occurred in 1320, suggest-
ing an exceptional deviation from normal policy.
62
The possible exception is Pacino di Tommaso de' Peruzzi, who was credited
with a salary while working in Bruges in 1334-5 (/ libri, 378), which strongly
indicates that he had been a factor. But Sapori does not include him in his list
of factors. Francesco Forzetti was not an exception. He was a special case, a
long-term resident branch manager who, before he became a partner in 1331,
was probably compensated by commision because there is no evidence that he
was ever paid a salary.
63
64
Ibid., 730-54.
Table 3. Deployment of Peruzzi Company factors - outsiders and
family members
July 1335 1331-43

Non- Non-
Peruzzi Peruzzi Total Peruzzi Peruzzi Total
England 3 2 5 21 6 27
France 4 — 4 7 — 7
Avignon 2 2 4 8 4 12
Flanders 3 1 4 15 3 18
Naples 5 1 6 13 4 17
Sicily 6 6 9 — 9
Barletta 5 — 5 12 1 13
Other a 13 1 14 30 3 33
Total 41 7 48 115 21 136
Florence 39 1 40 b b b
Grand Total 80 8 88 NMF NMF NMF
a
Rhodes, Majorca, Sardinia, Cyprus, Tunisia, Pisa, Venice.
* Not possible to quantify, but most factors spent some time in Florence dur-
ing this period, resulting in no meaningful figure (NMF) for the grand total.
The third means of control was rotation of personnel from location

to location, including sojourns in Florence, to keep them from becom-
ing too closely associated with local interests. From the Sapori data we
learn that 98 out of the 133 factors, and all Peruzzi family member fac-
tors, worked in at least one foreign location between 1331 and 1343. We
also discover where they worked, which helps give a rough sense of the
size of each branch. These data are presented in two ways in Table 3 -
estimated factors on hand July 1, 1335, and factors employed over the
1331-43 period. Both are approximations, but close ones. The former
is probably slightly understated because specific dates are not always
clear. In the latter presentation the totals are higher than the number of
factors involved because the data give all the "transfers in" to each branch
over the twelve-year period, without subtracting the "transfers out." Also,
the branch numbers are affected by differing rates of turnover. Despite
these limitations, the additional presentation gives a sense of the inten-
sity of activity in each branch over a period rather than a static situation
at only one point in time. Note how "busy" England, Naples, and Avignon
are compared with France and Sicily.
Staffing decisions in the branches required a delicate balance of
assigning a long enough tour of duty in any location so that the fac-
tor would be knowledgeable and effective in the local market, but
not so long that he became too enmeshed with local society. Factors
of proven loyalty might be left for extended periods in branches where
their expertise was vital to the business, but even as trusted an em-
ployee as the Bardi's Pegolotti was given a number of different as-
signments. Managing partners, on the other hand, were not deliber-
ately rotated. Their loyalty was reinforced by occasional sojourns at
Florence headquarters as evidenced by travel expense entries such
as "spese del camino a venirsene a firenze" (travel expense to Flo-
rence) for Francesco Forzetti, the long-serving branch manager of
Sicily in 1337.65In addition, numerous visits were made by sharehold-
ers to the main branches as shown earlier.
A smoothly functioning central office, quality staffing, and rota-
tion of personnel all contributed to the cohesiveness of the com-
pany, but the fourth and most important means of holding the com-
pany together was the dedicated, tenacious attention of the chair-
man. Raymond de Roover has aptly underscored the significance of
central management control, especially of foreign branches in an
age of slow communication, citing the Alberti Company and
Francesco Datini as examples of successful "stern and difficult" em-
ployers.66 In contrast, he attributed the downfall of the Medici Bank
largely to the relaxed grip of Francesco Sassetti, the general man-
ager for an underinvolved Lorenzo de' Medici.
The Peruzzi Company was very fortunate in having two very able,
single-minded chairmen over a period of more than forty years. The
talented and enterprising Filippo dominated the company from its
inception until his death in 1303. His successor, Tommaso, was char-
acterized by Sapori as a strong, prestigious governor, of great hon-
esty and ability during his uninterrupted tenure from 1303 to 1331.67
Filippo built the company structure and Tommaso maintained it rig-
orously, but after Tommaso's death in 1331, the tight central control
weakened. Giotto became chairman in the early to mid-1330s, when
he was already an old man distracted by family and political priori-
ties. The company was losing money, but it was years before anyone
knew how much. At around the same time, the company was losing a
large reservoir of senior-level experience, as Amideo, Filippo, Ridolfo,
and Guido de' Peruzzi all died in the mid-1330s, along with Tano
65
Ilibri, 248, 253.
66
De Roover, "Alberti Company," 49-50.
67
and Gherardo Baroncelli and Geri Soderini. In addition, three out-
side shareholders of long standing - Catellino di Manghia degli
Infanghati, Gherardo di Gentile Bonaccorsi, and Piero di Bernardo
Ubaldini - dropped out at the closing of the 1331-5 company, possi-
bly indicating worsening conditions and loss of confidence in the
company's ability to deal with them. Bonifazio's brief stewardship, as
already noted, was marked by his long absence in England, further
eroding central control. It should be noted, however, that the struc-
ture remained intact, as Giovanni Baroncelli remained as manager of
the English branch. Bonifazio had merely changed the locus of his
office from mainstream Florence to peripheral London.
Raymond de Roover has made the point that one of the drawbacks
of the multiple partnership system of the fourteenth-century compa-
nies was that "in case of losses or difficulties, quarrels among part-
ners about policy and appropriate remedies were likely to make mat-
ters worse instead of better." He went on to say, "Discord of this kind
. . . may have played a part in causing the collapse of the Bardi and
Peruzzi companies by alarming the depositors at a critical juncture." 68
Discord was certainly possible after 1335 and even probable during
Bonifazio's extended absence in England. Although direct evidence
is lacking, the departure in 1335 of three outside shareholders could
be construed as indirect evidence of conflict. As a point of interest,
de Roover and Sapori have drawn attention to the fact that outside
partners had acquired the majority of the shares in 1331, implying
that the Peruzzi family had lost control of the business.69 With the
withdrawal of the three outside shareholders and the addition of the
heirs of Ridolfo di Donato, however, the Peruzzi family was almost
certainly again in the majority from 1335 onward. Possibly this indi-
cates a rallying of the Peruzzi clan to the aid of the company, but it
could also indicate failure to recruit additional outside shareholdings.
The Peruzzi majority could also explain the prompt election of Pacino
to the chairmanship immediately after the news of Bonifazio's death
reached Florence.70
A word should be said about the number of people involved in the
company's operations. In total, there were many more than normally
indicated by historians. Table 4, based only on the evidence of the
accounts, shows the number of people effectively working for the
company in July 1335.
68
De Roover, Medici Bank, 78.
69
Ibid., 78; Sapori, Storia economica, Vol. 2, 678. But as is made clear in Chapter 6,
this volume, effective control remained firmly in the hands of the Peruzzi.
70
Ilibri, 1.
g8 Medieval super-companies
Table 4. Personnel effectively working for the Peruzzi

Company, 1335
No. of people
Shareholders 21
Shareholder sons 8
Factors related to shareholders 18
Unrelated factors 70
Drapperia "partners" 2
Total 119
In modern terms, this is a small number for a business organiza-

tion, but bearing in mind that these were mostly "white-collar" per-
sonnel, it represented a very large establishment by medieval stan-
dards. For perspective, the largest single bureaucracy of the period
was the papal court at Avignon; excluding the guards, ceremonial
officers, and palace staff, the total number of personnel is estimated
at around 250.71
What did all these people do? Of course, many of them were en-
gaged directly in doing the company's business - overseeing the
manufacturing and movement of goods, trading, banking, and pre-
paring the transactional paperwork. As shown in Chapter 1, the share-
holders and their sons also often held official positions with the Flo-
rence Commune, which indirectly impinged upon the business. But
a large number were involved in seeing to the proper function of the
company's internal controls. The surviving Peruzzi Company ac-
counts, running to 390 printed pages, are literally the tip of the ice-
berg. The task of painstakingly recording thousands of transactions,
logging them in the books of original entry, analyzing them, and
ensuring follow-up kept many of these people busy both in Florence
and in the branches. Letter writing also occupied the senior mem-
bers of management, who spent over li. 1,000 between 1335 and 1341
on dispatching correspondence. To illustrate the magnitude of the
recording function, the reported purchases of materials between 1335
and 1341 included seventy-eight reams of paper, eleven account books
71
Yves Renouard, The Avignon Papacy: 1305-1403 (Hamden, CT, 1970), 83-7.
Renouard calculated the total staff at the papal court including the cardinals
(but not their retinues) at about 500. This total comprised 200 guards and cer-
emonial officers and probably 50 palace staff serving in the kitchen, pantry,
buttery, stables, and almonry.
identified by different colored covers (white, black, red, yellow, or-
ange, and green), one book of income and expense, one assets book,
and seven notebooks for memoranda and writing letters.72
Aside from the company personnel already listed, there was an
unknown but significant number of people who were dependent on
the company for at least part of their livelihood. In Florence these
included carters and "putting-out" system workers engaged in the
manufacture of cloth, such as carders, spinners, weavers, fullers, and
dyers.73 Abroad, people employed by the company included marine
shippers, overland carters, correspondents, and innkeepers (oste).
Many of these people would have worked regularly with the same
company, which tended to do repeat business with the same contrac-
tors of proven reliability. The innkeepers were in a special category,
usually working regularly with the same one or two companies; for
example, the Peruzzi and Alberti employed the same oste at Nice.74
The innkeepers did much more than supply food and lodging for
men and horses. They offered temporary warehousing and porter
services along the trade routes, and the Peruzzi used them in places
such as Libourne and Montpellier on the wool route through south-
ern France described in Chapter 2. The innkeepers also assisted fac-
tors accompanying the trade goods with formalities required by lo-
cal authorities and advanced funds to such factors and to couriers.75
Historians have tended to focus more on the commercial func-
tions of factors, agents, and correspondents in foreign locations than
on the responsibilities of the branch managers. It has already been
established that the most important Peruzzi branches were headed
by partners and that their role was political and diplomatic, as well as
commercial. In effect, they represented the company at the courts of
Naples, Sicily, Paris, London, Flanders, and Avignon, often assisting
the rulers in their administration. Donato di Giotto de' Peruzzi,
branch manager at Naples, was well connected in that court, as were
the heads of the branches of other super-companies.76 In Flanders, as
we have seen, Donato di Pacino served as Count Louis' general re-
ceiver between 1326 and 1329.77 At Avignon, much of the manager's
effort was directed toward seeking papal influence to secure favors,
72
Ilibri, 181.
73
The Peruzzi Company did have in its direct employ, however, one stable hand,
as well as the shearer mentioned earlier.
74
75
Ilibri, 72, 74, 127.
76
Yver, Le commerce, 326.
77
Ellen Kittell, From Ad Hoc to Routine (Philadelphia, 1991), 142, 207.
ioo Medieval super-companies
redress injustices, or pursue delinquent clerics.78 And in England, as
is well known, the company's business from 1337 onward was pre-
dominantly government related. Thus, the success of the company
overall depended to a large extent on the skill of the shareholder
branch managers in obtaining trading and banking privileges at an
acceptable cost.
As has been demonstrated here, the organization and control sys-
tems of these large diverse businesses were sophisticated and, by and
large, effective. The super-companies were successful for a consider-
able length of time because they operated under a coherent set of
principles directed from the center by a strong-willed chairman who
was supported by intelligent working associates, along with compe-
tent and loyal employees both in Florence and abroad. The system,
however, was fragile, because in an environment of volatile politics
and poor communications, it demanded a degree of consistent ex-
cellence that could not be sustained indefinitely. The system also had
a price, as the controls required a significant number of people en-
gaged in unproductive paperwork and communications, which
constitued a substantial overhead burden not faced by smaller enter-
prises.
The use of the word "unproductive" in association with paperwork
is not meant to be disparaging, but merely descriptive of effort that
does not directly contribute added value. Well-designed and executed
paperwork was, as de Roover has aptly pointed out, an essential ad-
aptation to the changes in business organization.79 Because medieval
accounting has been the subject of so much controversy, the follow-
ing chapter will be devoted to a detailed description and analysis of
the Peruzzi accounts, which will illuminate both their surprising so-
phistication and their limitations.
78
79
De Roover, Medieval Bruges, 13.
The accounting of the Peruzzi Company
The Peruzzi Company has often been cited in the long-standing con-
troversy over the origin of double-entry accounting, and because of
this it is worthwhile to digress briefly to review medieval bookkeep-
ing systems and their relevance to the business world in which the
Peruzzi and other companies operated. This review will not attempt
to deal with the arcane arguments of Weber, Sombart, Schumpeter,
et al. regarding the role of systematic bookkeeping in defining profit
and depersonalizing business, thereby creating the essential ingredi-
ents of capitalism.1 These concepts not only are outside the scope of
this study, but also relate to developments largely beyond the era of
the super-companies. Nor will it delve into disputes, such as that be-
tween Lane and Yamey, over the influence of double-entry account-
ing on the transition of merchant-entrepreneurs from an itinerant
to a sedentary mode of operation. 2 The super-companies were rooted
firmly in Florence as far back as can be determined and do not ap-
pear to have passed through an itinerant phase. Yet, although the
1
For a discussion of these theories and a guide to further reading on them, see
Basil S. Yamey, "Scientific Bookkeeping and the Rise of Capitalism," Economic
History Review 2 series 1 (1949): 99-113; andj. R. Edwards, A History of Financial
Accounting (London, 1989), 59-63.
2
Basil S. Yamey, "Notes on Double-Entry Bookkeeping and Economic Progress,"
Journal of Economic History 35 (Winter 1975): 717-23, and Frederic C. Lane,
"Double Entry Bookkeeping and Resident Merchants," Journal of European Eco-
nomic History 6 (1977): 177-91. In essence, Yamey argued that double-entry
accounting made no contribution at all to the resident merchant's control over
the activities of distant factors, agents, or partners. Lane allowed that Sombart
had exaggerated the role of double-entry accounting in the emergence of capi-
talism, but he maintained that this new form of bookkeeping did play an impor-
tant part in the "revolution" in commercial practices in the thirteenth and four-
teenth centuries. The Yamey article is perhaps too abrupt in dismissing the
double-entry contribution outright; Italian businessmen would not have devel-
oped it if it had had so little value. But Yamey in his many other commentaries
has served us well by consistently puncturing the mystique around which economic
historians in the past have tended to wrap a simple record-keeping system.
importance of evolving accounting systems may have been exagger-
ated by some authors, the invention of a number of new techniques
did take piace in the period of the super-companies and undeniably
helped them evaluate and control their businesses.
Early in their histories, before the companies grew large enough
to need a comprehensive system for accounting, they would have al-
ready encountered single-entry bookkeeping, also known as charge
and discharge or stewardship accounting. Feudal manors and gov-
ernments registered income, expense, and the settlement of obliga-
tions, sometimes in narrative form with figure references, sometimes
in separate lines for each category, and sometimes in separate lines
with figures in columns.3 Merchants used single entry in managing
individual ventures and were faced regularly with the system in their
many transactions with various governments. Although rudimentary,
this form of accounting had the virtue of providing the basis for ra-
tional decisions at lowest cost, given the needs of such institutions at
the time. It did not provide profit measurement routinely (although
it could do so on an ad hoc basis, especially in merchant ventures),
and it did not distinguish between capital and revenue. Most impor-
tant, it made the concealment of fraud easy, resulting in the need for
frequent audits. Governments continued to use the charge and dis-
charge method long after the Italian companies moved toward double
entry with the result that audits were a continuing feature of the rela-
tions between the Bardi and Peruzzi and government treasurers, es-
pecially those of the English monarchy.4
For companies, the charge and discharge method broke down
when trading activity began to entail numerous complex transactions
in numerous locations, creating disorder and loss of control. The
concept of double entry evolved slowly as one of the means of meet-
ing the problems of expanded international business. This evolution
may have begun when Italian accountants noticed that receipt of cash
from a debtor resulted in two entries, a discharge in the record of
the debtor and a charge in the record of the cashier, prompting the
establishment of crossreferences.5 By 1300, the prefixes dove avere and
dove darewere used to distinguish positive entries (cash receipts) from
negative entries (cash payments). One advantage to companies of
the evolving double-entry method over single entry was the greater
care and accuracy it demanded of the clerks, fostered in part by the
arithmetic check that arose from periodic balancing, which increased
the difficulty of falsifying records. Another was that the new system
3
Edwards, History of Accounting, 35-41.
4
To be discussed in detail in Chapters 7 and 8.
5
Edwards, History of Accounting, 50-1.
The accounting of the company 103
made it easier to divide accounting duties safely among a number of
people as the business expanded. But the primary value of double
entry to the management of the business was its role as an aide memoire
and as a much improved system of control. It had no advantage, then,
as now, over single entry as an aid in assessing the merits of a busi-
ness proposition.
Double entry is defined in Webster as "a method or system of book-
keeping that recognizes both the receiving and giving sides of a busi-
ness transaction by debiting the amount of the transaction to one
account and crediting it to another account, the total debits in the
system always equaling the total credits." On the basis of this simple
definition, it can be said that the Peruzzi Company employed this
method. But accounting historians are much more demanding in
setting qualifications for double-entry status. Melis and others, find-
ing business and household transactions jumbled together in medi-
eval accounts, insisted that they be separated to qualify as double-
entry systems, describing some of them as "lame" double entry be-
cause of their failure to meet this standard.6 But mingling business
and private affairs has nothing to do with accounting systems and
everything to do with the predilections of the owners and managers.
Even today there is no shortage of examples of such mingling in the
accounts not only of closely held companies, but also of public cor-
porations.7 Other scholars have stressed the importance of separat-
ing capital from revenue accounting, striking trial balances, produc-
ing balance sheets, making columnar presentations, and so on. De
Roover listed three criteria for double entry- (1) each transaction
must be recorded twice so that the books will balance; (2) the ac-
counts must be complete; and (3) they must lead up to a comprehen-
sive financial statement showing assets and liabilities and profit and
loss.8 Given these restrictions, most scholars involved in the subject
have concluded that the Peruzzi accounting system, while complex
and sophisticated, fell somewhat short of double-entry technique.9
6
Lane, "Double Entry Bookkeeping," 187.
7
The savings and loan scandal of the late 1980s revealed countless cases of com-
pany assets appropriated by owners and associates. Occidental Petroleum fi-
nanced and provided operating funds for a museum to house chairman Armand
Hammer's art collection. For examples of company managers making personal
use of company assets, see B. Burrough and J. Helyar, Barbarians at the Gate
(New York, 1990), an account of the takeover of the RJR/Nabisco Corporation.
8
Raymond de Roover, "The Organization of Trade," in Cambridge Economic His-
tory,Vo\. 3 (Cambridge, 1956), 92.
9
See De Roover, "Luca Pacioli," 114-74; Richard Brown, ed., History of Accounting
and Accountants (1905; London, 1968); Federigo Melis, Storia delta ragioneria (Bolo-
gna, 1950), Part III, Chaps. 3 and 4.
A careful analysis of the surviving Peruzzi books by and large con-
firms these conclusions, but whether or not the system qualified com-
pletely as double entry is of little significance and was certainly un-
important to the Peruzzi Company's owner-managers. While it lacked
some of the necessary refinements, it definitely was not single entry,
as it used debits, credits, and multiple crossreferences throughout.
Moreover, as we shall see, it produced a set of balances from which a
comprehensive balance sheet might have been discernible, had the
surviving documents been those of a going concern rather than of a
failed company in bankruptcy court. In any case, the system satisfied
the needs of the company's owners for a considerable number of
years. The main weakness in its design was the substantial continu-
ing effort and organization required to keep it functioning effectively,
so that when this effort began to flag, the control began to crumble.
Along with a coherent system of bookkeeping, the companies
needed qualified personnel trained in arithmetic to cope with the
enormous number of complex calculations involved in a large busi-
ness dealing in multiple currencies. Adding to the complexity is the
fact that all figures were required to be reported in roman numerals,
a mathematically cumbersome system, although the more supple ara-
bic system was well known and understood.10 One solution to this
problem was an ancient device, the abacus, a counting board of
squares and columns, on which computations could be made based
on the roman system, using quarteruoli or counters of various sizes,
shapes, and colors.11 Another was to make calculations in arabic, but
post the results in the books in roman numerals. Either solution was
possible, because students of commerce were trained both in the
abacus and the arabic system.
Young students preparing for a career in commerce received train-
10
The acceptance of arabic numerals, then called algorismus, in record keeping
was slow due to their perceived susceptibility to fraud by adding, removing, or
changing a single figure (Edwards, History of Accounting, 47). Arabic numerals
were specifically prohibited for use in account books in the 1299 statutes of the
Arte del Cambio in Florence. See W. Van Egmond, "The Commercial Revolu-
tion and the Beginnings of Western Mathematics in Renaissance Florence, 1300-
1500" (Ph.D. diss., Indiana University, and University Microfilms, Ann Arbor,
MI, 1976), 320-1.
11
Frank J. Swetz, Capitalism and Arithmetic: The New Math of the 15th Century (La
Salle, IL, 1987), 29, asserts that the abacus mathematics used the Roman sys-
tem. See also 29-33 for a brief history of the evolution of the abacus in medi-
eval Europe. Sapori, Storia economica, Vol. 1, 74-8, provides useful details of the
layout of the abacus and the use of the counters, drawing upon examples from
the Bardi Company.
ing in mathematics from private tutors or, more likely, after 1300 in
the so-called abacus schools (scuole d'abbaco),12 Such schools taught
not only the use of the abacus, as their name suggests, but all kinds
of computational skills needed in the practical business world and,
in particular, the system of arabic numerals. 13 By the 1330s, accord-
ing to Villani, there were six schools in the city teaching the abacus
and algorism (the arabic system) to 1,000 to 1,200 children. 14 The
teaching methodology was one of practical problem solving, estab-
lishing rules for specific problems that could be applied to similar
problems, rather than examining the logical foundations of the prob-
lems and their solutions.15 In other words, the approach was "learn
the answers to the problems, not why the methods are true," empha-
sizing learning by rote and developing a retentive memory. The
brighter graduates from such schools might then become appren-
ticed to a super-company such as the Peruzzi and trained in the intri-
cacies of that company's specific accounting system.
The Peruzzi system was unquestionably complex. Although only
two of the important books, the Sixth Assets Book and the Sixth Se-
cret Book, have survived, they contain numerous entries from sub-
sidiary books, which reveal an enormous accounting undertaking.
Unfortunately, aside from the Book of Bad Debtors, all of the miss-
ing books have singularly uninformative titles, determined by the
size of the book or the color of its cover. Thus, it is tantalizingly dif-
ficult to divine the specific purpose of each of them, requiring care-
ful examination of the postings to seek clues as to their nature.
Some generalizations can be made about these lost books. Accord-
ing to the page numbers in the postings, they were large, running to
several hundred pages, in one case as many as six hundred. They are
also numbered consecutively, apparently as they were filled up, but
from what starting point is unclear. The latest White Book was the
eighteenth, the Red Book the eleventh, while the Orange Book was
still on the first. In contrast, the two surviving main books were num-
bered in accordance with the company concerned, starting with the
12
Van Egmond, "Western Mathematics," 72. The earliest documents indicating
the existence of abacus schools, one in Florence and one in Milan, are dated
1316, but their content makes it clear that the schools had been in operation
for some time. Van Egmond places their origin at around 1300. See also P. F.
Grendler, Schooling in Renaissance Florence (Baltimore, 1989), 6-11.
13
Richard A. Goldthwaite, "Schools and Teachers of Commercial Arithmetic in
Renaissance Florence," Journal ojEuropean Economic History 1 (1972): 419.
14
Villani, Storia, Book XI, Chap. 93.
15
Van Egmond, "Western Mathematics," 234.
1300 company. Thus, the Fifth Assets Book deals with the 1331-5
company and the Sixth Assets Book with the 1335-43 firm.16 This
book-numbering system suggests that the subsidiary accounts were
continuous and corporate, whereas the main Assets and Secret Books
were periodic, that is, specific to each partnership.
The accounting period by which records were kept was not the
calendar year, which at that time in Florence commenced on March
25, but a fiscal year that began on dates suited to the company's con-
venience. That convenience must have changed over time, because
the earliest company in 1292 started its year on May 1, while those
from 1300 through 1324 opened on November 1, and the last two
companies commenced on July 1. The Bardi Company, in contrast,
consistently started its year on July 1 at least as far back as 1318. The
cause of these changes is obscure, but they suggest changes in the
nature of the business, because companies typically close their ac-
counting years at an appropriate point between the end of an active
period and the beginning of a slack one, when inventories are low
and there is opportunity to "take stock" in every sense of the term.17
Possibly the November date was influenced by the completion of the
harvest, while July may have been appropriate for the wool trade, or
even because it marked the onset of the summer doldrums, but these
can only be speculations. In any event, coincidence with an "official"
new year's day was unimportant, because throughout the territory served
by the company there was a variety of such dates, including January 1,
March 25, Easter, July 15, September 1, and Christmas Day.
Among the subsidiary books, the easiest to discern are the Libro
Grande and the Red Book. The former was the merchandise trade
register that was the source of the balances in the foreign branches,
reflecting accounts payable by the branch and good receivables from
debtors. Bad debts were taken over by the Florence office for follow
up and attempted collection, including the use of lawsuits where ap-
propriate. Curiously, there is no report of merchandise balances for
Florence, which there had to be, because there were obviously sales
and purchases in the Florentine area. In addition, a large portion of
16
There were actually seven companies from 1300 onward, but the books desig-
nated "First" covered the first two companies, those of 1300-8 and 1308-10.
17
De Roover points out that inventory valuation was less important than today,
because venture accounting still prevailed. Separate accounts were opened for
each lot of merchandise, and balances were transferred to profit and loss only
after the goods were sold. Inventories were therefore not totaled separately for
balance sheet presentation or revalued, as in modern accounting. But obvi-
ously, they had to be counted periodically and revalued to account for loss or
damage. See de Roover, "The Organization of Trade," 93.
the accounts payable had to be for intercompany transactions, be-
cause most of the branch sales were of imported goods and some
were from the company's manufacturing operations in Florence.
These balances must have been carried elsewhere, most likely in the
White Book or Black Book discussed later in this chapter.
The postings from the Red Book make it clear that it was prima-
rily a holding account for expense advances to partners and employ-
ees and their families throughout the company. The disbursements
of cash and kind were made both in Florence and the branches,
cleared through the Red Book for control, and then routed to the
individual accounts in the Assets and Secret Books. It also was the
channel for miscellaneous but significant expenses such as broker-
age commissions, accounting supplies, dispatch of couriers and let-
ters, entertainment, warehouse fixtures, and losses on wool contracts,
to name a few.18 A "holding" or "conduit" account of this kind has
two purposes - a place to accumulate certain expenses until they can
be posted in their final destinations, and a control device for identi-
fying and totaling such expenses. An account of this type leaves no
open balances at the closing of the books. Similarly, the Orange Book
had no balances, but its purpose was much less clear. From the few
postings to the main books, it appears to have been a conduit for odds
and ends of expenditures and receipts that did not fit anywhere else.
The purpose of the Yellow Book is relatively easy to determine. It
dealt primarily with the legal claims of the entire company. The nu-
merous entries from the Yellow Book describing lawsuit expenses and
receipts relating to Sicily, Genoa, Majorca, and England attest to the
company's procedure of controlling legal matters centrally.19 This
book also received the charges for the rent of the company's ware-
houses, shops, and stables, along with the expense of maintaining
the horses. At July 1, 1335, there were balances reflecting a modest
number of open cases, forty-four receivables and "several" payables.
The two remaining subsidiary books, the White Book and the Black
Book, are quite important and large, but very difficult to interpret.
They both appear to be books of original entry for disbursement
and receipt transactions of all kinds in Florence and for
nonmerchandise transactions abroad that were controlled by Flo-
rence. For example, a major property purchase in Rhodes and a loan
to the prior of the Hospitalers in England were entered in the White
Book.20 Although there is no evidence of merchandise transactions
18
Ilibri, 181. 19 Ibid., 104, 108, 152.
20
Ibid., 23,195.
passing through these books, the volume of entries and the lack of
Florence office merchandise account balances elsewhere suggest that
some merchandise dealings were recorded in them. The only dis-
cernible difference between the Black Book and the White Book is
that most, if not all, Black Book postings dealt with indirect transac-
tions - that is, cash or goods received or given by someone on behalf
of someone else. As shown in Table 5, both books had large balances
on July 1, 1335, made up of 192 open entries for payables and 226
for receivables in the White Book and 107 for payables and 112 for
receivables in the Black Book. No information is provided on what
these open entries represented, although, as discussed later, the share-
holders' capital contributions were probably recorded in both books.21
The Assets Book and the Secret Book combine to produce some-
thing that at first glance appears broadly similar to the consolidation
account of a modern multinational corporation. They contain what
look like the opening balances of the new company carried forward
from the old company, and they deal with certain items of income
and expense, especially interest, not carried in the subsidiary books.
But their primary function is to house the individual accounts of
depositors and borrowers controlled by the Florence office, mainly
nonshareholders in the Assets Book and shareholders in the Secret Book.
The Assets Book, and probably the Secret Book, opens with a brief
prayer for the profit and safety of the company and its employees.22
Each main section of both books is headed by the phrase, "Al nomen
di Dio amen." These pious invocations in mundane account books
may seem incongruous, perhaps even cynical, to twentieth-century
eyes. Partly they attest to the pervasiveness of the Christian faith
among medieval businessmen, about which much has been written.23
But also they may perform a legal function. A. P. Usher has com-
mented that bankers in Mediterranean countries were required to
swear that their journals were a true record of transactions so that
entries were made in more detail than needed for purely accounting
purposes, a characteristic borne out by the Peruzzi documents.24 He
also suggested persuasively that the pious phrases appearing ori bills of
exchange and account books were designed to give additional sanction
to otherwise informal documents, enhancing their enforceability.25
21
Ibid., 11, 12, 195. The notes accompanying the balance merely give the num-
ber of entries and the number of pages.
22
The opening pages of the Secret Book are missing.
23
See, e.g., Brucker, Renaissance Florence, 101-9, 172-212.
24
Abbot P. Usher, The Early History ofDeposit Banking in Mediterranean Europe, Vol. 1
(Cambridge, MA, 1943), 11.
25
Ibid., 77-8. Usher cited as authority the constitution of emperors Arcadius and
Before describing the mechanics of these books in detail, it is worth
commenting on two features in them that attest to sophisticated ac-
counting conceptualization. The first relates to the manner in which
the outstanding balances in the previous company are carried for-
ward into the new company. At the beginning of the debit and credit
sections of the Assets Book, a series of entries have been posted, which,
to the unwary scholar, might appear to be a restatement of the bal-
ances brought forward from the old company. In fact, they are mir-
ror images of those balances, necessitated by double-entry account-
ing procedures to provide the offsets to the opening individual ac-
count balances in the new company. This device is needed because
the books of the previous partnerships were never really wound up
as long as the corporate entity continued to exist.26 Simply stated,
then, the debits shown in the opening pages of the new company's
books represent not the assets of the new company but the liabilities
of the old company.27 Those liabilities are carried forward into the
new company through offsetting entries into the individual accounts.
Likewise, balances shown in the opening pages of the credits section
of the books represent assets, not liabilities. As a result of these en-
tries, the new company's books start out with exactly the same indi-
vidual account balances as those with which the old company ended,
ensuring smooth continuity.
The second feature is that all debit and credit entries to the indi-
vidual accounts are constructed logically, with signposts clearly in-
forming the reader of the whereabouts of the offsetting entries. As a
result, it is possible to trace the evolution of each account over the
life of each partnership. The Peruzzi books may not qualify as double-
entry accounts, but, as discussed earlier, they do reflect considerable
double-entry thinking.
Honorious of A.D. 395, which provides that any bare agreement in which the
name of God is invoked should be enforced by the courts. In addition, the
authority of the New Testament was invoked, usually Paul's Epistle to the
Colossians (3:17), "Whatsoever ye do, in word or deed, do all in the name of
the Lord Jesus."
26
As we have seen, numerous adjustments were made to the balances of super-
seded companies many years after their "closure." I will continue to use the
word "closing," however, when referring to the settlements of accounts at the
end of each partnership. The term is appropriate, even if not technically cor-
rect.
27
For example, in / libri, 8, the entry giving the balance of the Naples branch shows it
as an asset in the new company but describes it as money assigned to pay 88 credi-
tors. This is obviously a liability of the old company. Conversely, the balance for
Naples shown in / libri, 193, as a liability of the new company is described as money
receivable from 137 good debtors, clearly an asset of the old company.
lio Medieval super-companies
Unfortunately, it is impossible to determine precisely how final
balances and profit and loss calculations were made, because, as we
have seen, these two surviving books deal not with a going concern
closing in a normal way, but with a company sliding into bankruptcy.
It is obvious that the company suffered losses during the 1335-43
period, but to what extent remains a mystery. The bankruptcy court
eventually settled with Florentine creditors at the rate of 7 soldi 3
denari on the lira, or 36.25 percent, but the total amount owed the
creditors is unknown, as is the amount raised from the private re-
sources of the shareholders.28 Nor do we know whether there were
significant numbers of unpaid creditors in the branches.
The structure of the Book of Assets is well known from the de-
tailed descriptions of Sapori and de Roover.29 Very briefly, the first
section deals with debit accounts, starting with the balances carried
forward from the old company, picturesquely described by Sapori as
its "living remains," although, as discussed, they were really the re-
verse of the living remains. These are followed by over two hundred
pages of individual accounts and then by forty pages of expense deb-
its, mainly interest. The second half of the book is devoted to credits,
adopting the same pattern as the first part - "credit" balances car-
ried forward from the old company, followed by individual accounts
and lastly by income credits, again mainly interest.
The term "Secret Book" conjures up to twentieth-century minds
the idea of a repository for the recording of nefarious or illegal ac-
tions. In fact, its content is entirely innocent, and it would be more
aptly described as "confidential" or "private." It completes the Assets
Book with information on the balances carried forward, individual
account transactions, and expense and income for shareholders and
their heirs, again with debits in the first part and credits in the sec-
ond. It also contains the company's articles of association, interim
year-end balances (although none were calculated during the period
1335-43), and the salary accruals for all employees. Finally, it includes
the allocations of adjustments to profit or loss of previous companies
to the shareholders of record for those companies, or their heirs.
These allocations are reminders that the shareholders were subject
to unlimited liability and that they could be assessed with gains or
losses years or even decades after the books were closed. Mostly, the
adjustments were positive, reflecting eventual collection of deemed
bad debts, indicating a conservative attitude toward accounts receiv-
28
Sapori, La crisi, 174. The settlement is discussed in detail in Chapter 9, this
volume.
29
I libri, Introduction; de Roover, "Luca Pacioli," 129-30.
30
able as well as a tenacious collection policy. There were, however,
occasional allocations of losses, such as a thirty-year-old Paris lawsuit
that failed, which no doubt was greeted by the relevant shareholders
with dismay.31
There are extensive lacunae in the Assets Book, especially toward
the end of the second half, which create serious problems of analy-
sis. The Secret Book also has gaps, but these are less troublesome,
and many of the missing pages can be reconstructed from data avail-
able elsewhere. Despite these deficiencies and lack of a complete
picture of the methodology, it is possible to achieve a reasonable
comprehension of what the surviving accounts mean. A useful way to
start is to construct an estimated balance sheet and profit or loss state-
ment from the data available as of July 1, 1335 (see Table 5).
Before discussing what these figures mean, a word needs to be
said about what the figures are. They are lire afiorino, a fictive money
unit of account that all Florentine businesses used to measure their
operations and represented throughout this book by the symbol "li."
The lira was divided into 20 soldi afiorino and 240 denari afiorino. All
"real" currencies, Florentine and foreign, were translated into these
lire for record-keeping purposes, although the cash used in transac-
tions or sitting in the till would be gold florins, silver grossi, quattrini,
and denari piccioli in Florence and the local currencies in each of
the branches. The basic intermediary currency was the gold florin
which was initially established at a rate of 1 florin = 1.45 lire afiorino
(usually expressed as 29/20). 32 This conversion rate could change
from time to time, and many actual conversions of florins into lire
were at rates as high as 1.55, although never lower than 1.45. In trans-
lating a foreign currency, the conversion was sometimes made in a
two-step procedure, first from the foreign money to the florin and
then from the florin to the lira, but just as often directly to the lira.
Whatever the procedure, the system was extremely useful for the
management of the business, as it reduced a hodge-podge of coin-
30
For example, in Table 5 there is a credit to the 1331-5 shareholders recogniz-
ing accumulated collection of debts of that company up to November 1341.
Several additional examples will be seen in this chapter and in Chapters 5 and
6. And evidence of other forms of conservative accounting policy will appear
later in this chapter.
31
The rejection of the Peruzzi position by the Parlement of Paris in 1336 was an
important event affecting the company's business plans in both France and
England, and will be discussed in detail in Chapter 7.
32
For a helpful brief commentary on units of account, see Spufford, Handbook of
Medieval Exchange, xx-xxi; also Carlo Cipolla, The Monetary Policy of the Fourteenth
Century (Berkeley and Los Angeles, 1982), 20-3.
Table 5. Account positions at July 1, 1335 (lire a florino)
Item Assets Liabilities Balance

Advs. to/borrowed from
Shareholders 27,260 66,375 (39,115)
Factors 1,638 6,841 (5,203)
Others 0 30,712 104,219 (73,507)
Subtotal 59,610 177,435 (117,825)
Accts. receivable/payable
Previous companies 11,755 8,725 3,030
White Book 179,464 101,027 78,437
Yellow Book 44,618 14,285 30.333
Black Book 115,390 96,317 19,073
Branches* 328,871 382,421 (53,550)
Subtotal 680,098 602,775 77,323
Fixed Assets 2,539 - 2,539
GRAND TOTAL 742,247 780,210 (37,963)
Unidentified, net (715)

1331-5 loss at July 1, 1335 (38,678)
Special "gift" charge from 1335-43 company (20,550)
1331-5 loss allocated to shareholders (59,228)
1331-5 late collections credited to shareholders
November 18, 1341C 4,560
Net final reported 1331-5 loss (54,668)
a
See Table Al for details.
* See Table A2 for details.
C
A1 though dated 1341, the entry was clearly made in 1343,
following two other entries dated July 1, 1343.
ages of constantly changing relationships into a statistical measure

of value common to all the company's operations.33 Finally, as indi-
cated earlier, all units were reported in roman numerals, although
for convenience they are shown here in arabic. It is worth pointing
out at this time that the computations were remarkably accurate; in
all of the surviving Peruzzi documents, Sapori was able to detect only
a few minor errors.
33
For an indication of the diversity of coinages, see Spufford, Medieval Exchange,
and for a useful discussion of money units of account, see Frederic C. Lane and
Reinhold C. Mueller, Money and Banking in Medieval and Renaissance Venice, Vol.
1, Coins and Moneys of Account (Baltimore, 1985).
Returning to Table 5, the first section shows the balances in the
shareholders' accounts. Here, assets reflect money owed by partners
to the company, and liabilities money owed by the company to part-
ners. Stated from the standpoint of the shareholders, the asset bal-
ances represent their borrowings from the company, and the liabili-
ties represent their deposits, described as sopraccorpo, in excess of
their capital contribution. The large negative balance indicates that
partners kept more deposits in the company than they borrowed from
it, a situation that changed significantly by 1343 (see Table A6). These
figures also reflect the enormous variety of transactions described in
the previous chapter - money, goods, and property for personal use.
All balances, positive or negative, attracted interest at 7 percent per
annum. Regarding the factors, the open balances are due to the fact
that the salary records were kept in the Secret Book in Florence and
that employees working in foreign branches were granted living ex-
pense advances instead of being paid their salaries. In his examina-
tion of the Alberti Company, de Roover has commented that receiv-
ables from factors included merchandise entrusted to them for trad-
ing, but there is no evidence of this in the case of the Peruzzi.34The
assets here represent only the accumulation of unsettled expense
advances and the liabilities the accumulation of accrued unpaid sala-
ries. It is interesting to note that in a largely cash-based society, the
company was familiar with the concept of accruals. Also, interest at
the usual rate was calculated on open balances.
The "others" balances are long-term deposits or borrowings from
other than shareholders, as shown in Table Al. The balances reflect
mainly deposits by members of the Peruzzi family not involved in
ownership, former shareholders, and clergymen. The largest single
item for both assets and liabilities at July 1, 1335, was the Florence con-
trol account for the Order of the Hospitalers. The assets and liabilities
virtually netted out, as deposits were largely offset by borrowings, espe-
cially in England. As in the case of the shareholders, all balances were
credited or charged with interest at 7 percent per annum.35
The likely content of the balances in the colored books has al-
ready been discussed and the "due to and from" previous companies
is self-explanatory. The branch balances, however, deserve detailed
examination. The first point to note is that the closing dates reported
from the branches vary significantly. As shown in Table A2, many,
34
De Roover, "Alberti Company," 22.
35
A possible exception is the Hospitalers. Its balances were carried in a special
account, which has not survived, so that we cannot be certain whether interest
was applied.
such as Venice and Pisa, are within a few months of July 1, 1335, but
others, such as Tunis and England, came in over a year later. What-
ever the date, however, the balances of all branches were those as of
June 30, 1335. Another point to note is that several of the branches
reported receivables as being from "good debtors," not just debtors,
attesting again to conservative accounting. In the cases of late-report-
ing branches, the good debtors at June 30, 1335, would have been
factually established as such because they had actually paid up by the
time the positions were submitted to head office.36
A striking characteristic of branch reporting is its individuality, sug-
gesting a degree of independence from central office control. In addi-
tion to the timing variations noted above, each branch reported its re-
sults in a somewhat different way. According to accounting historian
Federigo Melis, there were two ways of presenting balances - a croce,
that is, the total assets and liabilities reported separately; or less com-
mon, a bilancio, that is, the net balance of assets and liabilities.37 Most of
the Peruzzi branches used the a croce system in one way or another. Some
merely gave total values with little added comment; others listed the
number of debtors and creditors; still others gave indications of other
assets such as cash, household goods, and merchandise. Of those using
the a bilancio, Venice helpfully included the number of debtors and credi-
tors and the money totals applicable to each in its report. England,
Bruges, and Majorca, however, merely showed the net balance, with no
indication of what it represented. Such netting is confusing to scholars
because it makes it impossible to make a rational assessment of the size
of the branch. Bruges, for example, shows a balance of only li.593, a
grotesque understatement of its importance.
The figure for fixed assets looks ludicrously small and represents only
business-related land and buildings in Rhodes. Elsewhere, including
Florence, the company rented premises and had no capital assets in
connection with manufacturing or transport operations. Furniture and
fixtures were expensed.38 As a matter of accounting interest, the con-
cept of depreciation was understood during the fourteenth century, but
as is obvious here, the Peruzzi had little reason to apply it.39
The large special "gift" item that appeared at the very end of the
Sixth Secret Book is puzzling at first glance, but can be explained.40
36
Supporting this interpretation is an entry from the Rhodes branch dated April
12, 1336, reporting a balance of li.2,820 representing "fifty more good debtors"
in addition to the 114 debtors reported previously (September, 1335). I libri,
193.
37
Melis, Ragioneria, 503. 38 For an example, see I libri, 181.
39
De Roover, "Luca Pacioli," 144. 40 I libri, 390.
According to the total balances reported in Table 5, there was a loss
on operations of li.34,118 (li.38,678 less the credit for subsequent
collections of li.4,560). But the shareholders of the 1331-5 company
were not charged with the burden of the loss until July 1, 1343, so
that they owed interest to the 1335-43 company on the loss for the
seven years from July 1336 to July 1343. The special "gift" was un-
questionably an interest charge from the 1335-43 company to the
1331-5 company at the standard rate of 7 percent. Compounded over
seven years this amounts to a rate of over 60 percent, which would
yield the "gift" charge of li.20,550. It is not possible to be sure that
the Peruzzi accountants used this method of calculation, but it seems
as likely an approach as any.
Finally, the small unidentified number of li.715 is simply what it
takes to get from the total of the reported balances to the reported
loss of li.59,228 that was allocated to the 1331-5 shareholders.
One crucial liability in the "living remains" of the 1331-5 com-
pany has been left unidentified - the capital account. The company
owed its shareholders their capital contributions of li.88,500 and the
charity contribution li. 1,500, and this large sum had to be reflected
somewhere. De Roover's analysis of the Alberti partnerships from
1302 to 1329 clearly labels the owners' equity as one of the compa-
nies' liabilities.41 De Roover also asserts that profit or loss was deter-
mined by deducting total liabilities and invested capital from total
assets.42 But there is no evidence of the equity investment in the indi-
vidual shareholder balances in the Secret Book where one would ex-
pect to find it. Moreover, interest was consistently applied to all of
the shareholders' balances, positive or negative, whereas interest is
never applied to equity. Sapori was also puzzled by this peculiarity
and concluded that the capital of the company was recorded in the
book of the accounts, not the Secret Book.43 The most likely answer to
this problem is that the capital subscriptions were posted to two accounts,
one for residents of Florence and one for residents abroad. One White
Book entry specifically refers to money relating to shareholders outside
of Florence, which would include li.21,000 in capital contributions.44
The capital account for the residents of Florence must have been en-
tered in the Black Book, because no other single liability entry was large
enough to encompass the li.67,500 owed to those shareholders.45
41
42
De Roover, "Luca Pacioli," 125. 43 Sapori, La crisi, App. II, 240.
44
libri, 9. The entry, dated May 17, 1335, was for a total of li.56,249 s3 d9.
45
I libri, 11. The Black Book entry was for a total of li.96,317 s8. There were two entries
from the White Book, the li.56,249 already noted and li.44,777 s l l d5 on 12.
n6 Medieval super-companies
It is worth noting here that there was also a "gift" charge to each
of the shareholders of the 1335-43 company, immediately following
the charge previously described, which added up to li.32,408. It is
impossible to determine how the calculations were made, but clearly
some sort of formula was used, judging by the amounts levied. Again,
these were obviously additional interest charges to these sharehold-
ers relating to an equity shortfall, either because of inadequate ini-
tial capital contributions or because of accumulated losses over the
1335-43 period. This and other evidence suggest that the 1335-43
company was never recapitalized. It should be understood that eq-
uity shortfalls were not unusual in medieval companies, as will be
discussed more fully in Chapter 5; Giotto di Arnoldo Peruzzi reported
delinquencies in his capital contributions over extended periods of
time and was accordingly charged interest on the deficiency.46
The accounting techniques revealed here, while impressive with
regard to record keeping and controls, were not adequate to man-
age such a complex business. Unlike the Bardi, the Peruzzi made no
evident attempt to assess the profitability of any of the company's
enterprises or product lines. Nor do these results provide any more
than a rudimentary feel for the operating effectiveness of any of the
branches, as they reflect only merchandise activity, ignoring even
direct personnel costs, let alone an allocation of central-office over-
heads. The wide variations of positive and negative balances among
the branches and the colored books lead to deep suspicions about
the representativeness of the individual balances. It is certainly possible
that a chairman such as Tommaso and some of his branch managers
kept informal data for operating profit analysis. In the last decade of the
company's existence, however, events were moving so much more rap-
idly than the flow of accounting information that timely analysis would
have been impossible. Sapori claims that the collapse of the Peruzzi in
October 1343 came as a complete surprise to the Florentine business
community.47 An examination of the accounts in the final years of the
46
I libri, 459-62. Giotto appeared to be consistently in debt to the company from
about 1315 onward. In 1324, he finally settled a very large "overdraft" by means
of crediting the company with his share of the dividend from the preceding
period and paying his share of capital due. This seems to have been a "window-
dressing" maneuver, as he immediately went into debt to the next company.
47
Sapori, Storia economica, Vol. 2, 686. Here he refers to G. Villani's chronicles,
Book XI, Chap. 88, for support. But Luzzati in Villani e Buonaccorsi speculates
that the Peruzzi were among the last to abandon Walter of Brienne in 1343
because, knowing that the company was close to collapse, they appreciated the
protection the dictator had been giving them against their creditors (54-5). The
question of "surprise" is discussed more fully at the beginning of Chapter 9.
company exposes a situation sufficiently confused to lend credence to
this assertion, but the events that unfolded during 1342 and 1343, as
discussed in Chapter 8, let alone the lack of a dividend since 1324, must
have created doubts about the company's viability in the minds of at
least some Florentine businessmen.
There is no way of judging whether the subsidiary books were prop-
erly maintained during the final years, but it is probable that they were
kept reasonably well. The company did continue to operate, and the
data needed for eventual entry in the Assets and Secret Books seem to
have been available for posting years after the events. The Assets and
Secret Books were clearly not kept current. At the head of each page is
written the year in which the entries were supposedly made and to which
they supposedly refer, but many pages contain anomalies that bring into
question the date on which they were really written.
According to Sapori, the Assets and Secret Books were compiled
simultaneously in their entirety by Pacino di Tommaso, the chair-
man of the last company.48 It is possible that he started writing the
accounts at the inception of the company in July 1335, but this is
questionable both because he had just returned from his assignment
in Bruges and because control of these books, especially the Secret
Book, normally rested with the chairman. At the opening of the com-
pany, Giotto di Arnoldo was still chairman, albeit very old, and when
he died in 1336, he was succeeded by Bonifazio. Pacino may have
written entries earlier, but it is unlikely that he took charge of the
books until Bonifazio left for England in the spring of 1338.
Irrespective of when Pacino started posting, there is much evidence
to show that entries were made long after the transactions concerned.
Several are clearly of a catch-up nature. One example is the multiple
posting regarding Donato quoted in the previous chapter, but there
are several of much greater length, including a catchall entry of a
long series of unrelated expenses incurred between 1335 and 1341.49
The expense and salary sections of the Secret Book are especially
suspect, where the dates of entry are frequently at variance with the
year indicated at the head of the page. Moreover, the preponder-
ance of the salary entries was made on pages designated 1343, with
many relating to earlier years.50 As mentioned previously, expense
48
I Mm, XXV.
49
Ibid. The "catchall" referred to is on 181, but there are many others, such as on
140, 151,255-6,269,363.
50
Ibid., 302-18. Entries were few in the years 1335-42 (none in the years 1336,1340,
and 1342), but there were eighty in 1343, suggesting a postbankruptcy cleanup.
They cover salaries through previous years and are often confusing. For example,
under the heading 1339, all but one entry deals with salaries up to 1341.
advances to factors often accumulated to very large sums, while ac-
crued salaries did the same. Clearly no attempt had been made to
balance accounts for years.
The most serious anomaly in these books is the fact that the 1331-
5 accounts were not actually finalized until well after July 1343. This
is more than merely a matter of the allocations of the loss to the
1331-5 shareholders being delayed until July 1, 1343. The fact is that
the loss was not finally determined until that time. The special "gift"
charge already discussed was calculated as of that date. Moreover,
the Sicily branch balance was not struck until after April 9, 1343, the
effective date of the exchange rate used to convert a large account
receivable from King Federigo III of Sicily from local currency to
lire.51 This anomaly is further evidence to support the view that the
1335-43 company was never recapitalized.
The long delays in posting might be excused on the grounds that
these books were intended for summarizing data well after the events
strictly for shareholder accounting. But the eight-year delay in final-
izing the results of the previous company hints at a virtual collapse of
the company's information systems. It is entirely within the realm of
possibility that the settlement of the 1331-5 company did not take
place until after October 1343 under the aegis of the bankruptcy
court. Between July and October of that year, Florence was suffering
the upheavals of the overthrow of the dictator, Walter of Brienne,
and the revolution of the lower-order guildsmen against the regime
of which the Peruzzi were a part - hardly the time for orderly con-
centration on arcane accounting issues.
There are three additional accounting anomalies which add to the
impression that at least part of the Peruzzi accounts were dictated by
the bankruptcy court. The first is what must have been a most wel-
51
Ibid., 196. This very large (li.62,434) entry was for a series of loan contracts
made with the court of King Frederick up to July 1, 1335. It is curious on two
counts. The first is that it came through the Libro Grande, suggesting that the
advances were in the form of merchandise, not cash. The second is not only
the very late date for the establishment of the exchange rate, but the rate it-
self, which reflects a devaluation of the Sicilian currency from the rate showing
in the other balances of 1335. But Spufford's tables in Medieval Exchange, 65,
point in the opposite direction, a relative devaluation of the florin. This pecu-
liar rate suggests that either the king actually paid the debt on that date at a
negotiated rate, or the company was using an exchange rate mechanism to
write down the receivable. Neither of these alternatives is very plausible, espe-
cially the first, because Trasselli's research into the Palermo archives indicates
that much of the debt was still owed after 1342, a fact he believed may have
contributed significantly to the failure of the company (see Trasselli, "Nuovi
documenti," 194).
come receipt in April 1345 from Warden Abbey in Bedfordshire,
England, of £900, equivalent to li.9,787. This money was credited to
the shareholders of the 1324-31 company, which had made a loan to
the abbey back in the 1320s.52 Entries into the individual accounts of
those who were also shareholders of the latest company made the
point that the special "gift" charge of July 1343 did not take this allo-
cation into account as it occurred after that date. But entries dated
July 1343 followed these 1345 entries using the word sopradetti (above-
mentioned) indicating that the 1343 entry was made after the 1345
entry.53 What this suggests is that most of the closing entries, irre-
spective of date, were made at one time, possibly as late as the end of
1345.54
The second anomaly is an inexplicable aberration from the nor-
mally meticulous allocation of income or expense to shareholders.
One of the 1331-5 shareholders, Gherardo di Gentile Bonaccorsi, is
not mentioned anywhere in the accounts, simply disappearing with-
out trace. He is not given an allocation of his share of the 1331-5
loss or of any of the adjustments made to any of the other companies
of which he was a shareholder dating back to 1310. What is especially
curious is that allocations were made to all the other shareholders as
though his share remained in place; where his portion went is a mys-
tery. It is possible that he was involved directly in the Buonaccorsi
Company, which collapsed under questionable circumstances in 1342
and that his share of the adjustments went to the bankruptcy settle-
ment of that company.55 This seems unlikely, as there is no evidence
that he was part of the Buonaccorsi Company, and some activity should
have been registered in his personal account between 1335 and 1342.
The most probable answer is that he died before 1335 and his ac-
count was cleared in the missing Fifth Secret Book, but still left dan-
gling is the question of what happened to his allocations.
The third anomaly is the fact that expenses paid for shareholders
52
The only loan recorded in England was on April 3, 1323 (CCREll 1318-23,195)
for £1,330 6s 8d. It may have been a long-term advance, which was common
practice among Italian companies to ensure availability of an abbey's wool pro-
duction for years ahead at attractive prices. But see Chapter 5 for some curious
aspects of Warden Abbey's relationship with the Peruzzi Company.
53
I Mm, 362. Moreover, the balances of entries posted at the foot of this page "as
of July 1, 1343" include the 1345 item.
54
Ibid. The latest entries in the book are dated around the end of 1346, when a
few of the former shareholders no longer associated with the firm had their
accounts cleared by bankruptcy court, as discussed later.
55
See Luzzati, Villani e Buonaccorsi, 46-60, regarding the unusual circumstances
surrounding the Buonaccorsi bankruptcy.
on company business, including travel and living expense abroad,
were meticulously recorded and charged to their personal accounts.
For factors, charging living expenses was logical, since these repre-
sented advances against the salaries that were being accrued in Flo-
rence. But for the shareholders, there is no evidence of any such
offset. It is utterly unrealistic to expect that certain of these hard-
headed businessmen would accept this considerable extra expense
for service to the company over a period of years without some form
of appropriate compensation. Either they did receive it in some hid-
den way off the books, or the expenses had in fact been absorbed
originally by the company and later charged back to the individuals
under instructions from the bankruptcy court auditors. The latter
seems the most probable explanation for two reasons. The first is the
interest of the court to increase the assets of the bankrupt company
by any means possible. The second is that most of the charges to the
individuals occur in the larger "catchall" types of entry, suggesting a
concerted effort to root out expenses that could be legitimately at-
tributed as personal to the shareholders.
Finally, there are three declarations of discharge written into the
Secret Book by the company chairman, Pacino di Tommaso, in the
presence of officials of the Florence Commune and the bankruptcy
court. The first concerns two of the minor family shareholders, the
brothers Salvestro and Donato de' Peruzzi on March 27, 1346.56 The
second and third declarations are for two former outside sharehold-
ers, Chatellino di Mangia degl' Infanghati on October 19, 1346,
and Piero di Bernardo Ubaldini on November 16, 1346.57 Possi-
bly there were others in the missing pages. These discharges ap-
pear to be settlements of the individuals' obligations to the com-
pany.58 The significance of these declarations is that they are direct
evidence of bankruptcy court intrusion into the Peruzzi Company's in-
nermost accounts. The addition of this anomaly to all those already cited
produces the strong impression that important parts of the surviving
accounts of the Peruzzi Company represent not the activities and status
of a going concern but the creation of the court auditors of a bankrupt
firm as dictated to its chairman, Pacino di Tommaso.
56
Ilibri, 275. Salvestro was a former shareholder. Donato's name appears on the
list of the 1335-43 company shareholders but for some reason was paired with
his brother, and the two were discharged together.
57
Ilibri, 284, 290.
58
The declarations make no mention of the fate of the men's capital contribu-
tions. Donato's was presumably forfeited, because he remained a shareholder
of the final company. But the capital of the other dischargees may also have
been lost, because there is no evidence that it was returned to them at the close
of the 1331-5 company.
Returning to the July 1, 1335, balances in Table 5, a word needs to
be said on the meaning of asset totals. The total assets figure of
li.742,247 is the Peruzzi equivalent to the total of li. 1,266,756 reported
by the Bardi Company in 1318.59 This Bardi figure, sometimes cited in
its equivalent of around 875,000 florins, has been frequently quoted
and almost universally misunderstood by historians of every kind.
Brucker, for example, erroneously called it turnover, a very differ-
ent value and, in any case, a meaningless one in a mixed manufac-
turing, trading, and banking business.60 Most have correctly recog-
nized the figure as a total of assets but have simply marveled at it,
some trying to grasp its significance by making inappropriate com-
parisons. Brucker related the Bardi total to the 120,000 florins that
the king of France paid for the Dauphine, and Renouard to the
80,000 florins Pope Clement VI paid for the purchase of Avignon
from Queen Johanna of Naples in 1348.61 Fryde went so far as to
compare the Bardi number with the annual revenue of the king of
England, a completely unrelated statistic, from which he drew hor-
ribly unreal conclusions.62 Bolton and Kaeuper have echoed Fryde's
comparison.63
The Bardi Company was indeed a very large and powerful com-
pany, in a class by itself, but the total of its assets must not be con-
strued as being convertible into deployable ready cash. The fragment
from which this total is obtained shows it as the sum of accounts re-
ceivable, merchandise, and other goods. The document also includes
an incomplete schedule of the balances of eight branches, totaling
li.424,000, which means that probably one-third of the assets were
scattered among various foreign locations. The Peruzzi branch to-
tals for 1335 shown in Table 5 amounted to 44.3 percent of all assets.
What the fragment does not contain is a statement of total liabilities.
Judging from the Peruzzi balances - and Sapori confirms that they
are comparable to those of the Bardi - the assets are likely to have
59
Sapori, La Crisi, 216.
60
Brucker, Florence: Golden Age, 88-9.
61
Ibid., 89; Renouard, Les relations, 60.
62
E. B. Fryde, "Public Credit, with Special Reference to North-Western Europe,"
in The Cambridge Economic History of Europe, Vol. 3, ed. M. M. Postan, E. E. Rich,
and E. Miller (Cambridge, 1963), 455. Here Fryde writes, "In 1318, at a time
when the ordinary revenues of Edward II probably did not surpass £30,000 per
year, his main bankers, the Bardi of Florence, possessed total assets of 875,000
florins (£130,000). Italian firms of this stature could afford to be easygoing in
their relations with royal clients."
63
J. L. Bolton, The Medieval English Economy, 1150-1500 (London, 1980), 390; Ri-
chard W. Kaeuper, War, justice, and Public Order (Oxford, 1988), 44 n84.
been financed to a large extent by small deposits and accounts pay-
able directly linked to much of the merchandise and receivables
making up the assets.64 The means of financing is crucial to under-
standing the significance of asset totals; very large assets supported
by even larger liabilities spell weakness, not strength. There are many
familiar examples in bankruptcy courts today. The Peruzzi Company,
despite its impressive asset totals in 1335, was en route to collapse.65
One more point needs to be made in evaluating asset totals. Not-
withstanding the expert opinions that the companies did not quite
attain double-entry bookkeeping, they were close enough to it to have
employed double-entry balancing procedures. As made clear earlier,
for every debit there was an offsetting credit, for every asset a liabil-
ity. The nature of this accounting often results in reporting gross
instead of net positions, thus inflating both asset and liability totals.
Three examples from the Peruzzi balances will illustrate this point.
Total assets include li. 1,638 receivable from factors, but these are
merely advances made against salaries owed and accrued on the li-
ability side. Similarly, "advances to others" includes li.25,233 receiv-
able from the Hospitalers, but this asset is more than offset by a li-
ability of li.28,636 borrowed from that order. Finally, there can be a
huge difference in the total of branch assets, depending upon
whether, as discussed, the balances are rendered gross {a croce) or
net (abilancio). England, Bruges, Venice, and possibly Majorca elected
to report net; if all branches had done so, the total branch assets
would have dropped from the li.328,871 reported to li.101,803.66 From
an accounting point of view, the method that the Peruzzi chose to
disclose these assets and liabilities is entirely valid; but an equally
valid method would have resulted in a more realistic assets total of
less than li.500,000, only two-thirds of the total actually presented.
Part of the reason for delving so deeply into the accounting as-
pects of the companies is to emphasize the risk of erroneous inter-
pretation of events from an examination of only the surface num-
bers. Historians of business seem too easily beguiled by large figures
and rush to deduce relationships where none exist. An example com-
mon today is the tendency to compare the net sales of a company
with the gross national product of a country, equating the "power" of
a corporation with that of a country when the only relationship be-
tween the two statistics is that they are numbers expressed in U.S.
64
65
See Tables 8 and 9 for a more detailed analysis of the Peruzzi balances of 1335.
66
The li.101,803 is the total of all the positive balances submitted by the branches.
See Table A2 for details.
67
dollars. For medieval companies, the accounting "living remains"
need to be studied with special care because they were designed not
for twentieth-century scholars but for the enlightenment of contem-
porary management or law courts regarding the conduct of the busi-
ness. The closer we come to understanding the purpose of these con-
structions, the closer we come to interpreting accurately the nature
and progress of the enterprises and the men who managed them,
free of the hyperbole of chroniclers' reports.
Some of the statements in this chapter have been perhaps too criti-
cal of the Peruzzi bookkeeping and information systems because most
of what we know about the company comes from the questionable
accounts of its dismal final years. The company was in fact very suc-
cessful throughout most of its existence, and the accounting proce-
dures undoubtedly played their part in that success by reinforcing
the management and control structure described in Chapter 3. It
should also be understood that these procedures were not unique to
the Peruzzi but were widely used by other Florentine companies of
that period. Moreover, the accounting scheme, whether double en-
try or otherwise, was not a forward-looking management tool for
decision making. Its value was primarily in maintaining order and
broadly measuring the performance of the various parts of the orga-
nization. But it was a cumbersome system, and when the organiza-
tion began to crumble, so did the reporting function.
The first four chapters of this book have been devoted to an analy-
sis of the medieval super-company phenomenon, using the Peruzzi
Company as a model. The study has focused on the relation of the
firm to the family that dominated it, the nature of the business and
why such business required a company of exceptional resources, the
organization of the enterprise, and finally, the accounting systems.
This background is essential to understanding the chronological his-
tory of the Peruzzi Company, the ingredients of the company's suc-
cess through the years, and the sources of its ultimate failure - the
subject of the remaining chapters.
67
See Edwin S. Hunt, "A Critique of the Anthropological literature on the Multi-
national Corporation" (M.A. thesis, University of Cincinnati and Microfilms In-
ternational, Ann Arbor, MI, 1984), Chap. 4, 53-9.
PartH
History of the Peruzzi Company from its

reorganization in 1300
The prosperous years, 1300-1324
The year 1300 was a good year for pause and reflection. Pope Boniface
VIII had declared it a Jubilee Year, granting full remission of sins to
those who spent a stipulated amount of time at the churches of the
Blessed Apostles of St. Peter and St. Paul in Rome during the course
of the year.1 This declaration prompted a host of pilgrims to visit that
city, bringing with them rich offerings for the church and lucrative
business for Roman merchants. Giovanni Villani joined the pilgrim-
age to the Eternal City and claimed that it was this experience that
moved him to begin his famous chronicle of the history of Florence.2
And Dante, of course, set his Divine Comedy in this year.
Although tensions remained throughout western Europe, 1300 was
also a year of relative calm after a decade of political instability.
Florence's staunchest ally, Charles II of Naples, had become firmly
established and was winding down the long and fruitless struggle to
reconquer Sicily. Another important ally, Philip IV of France, had
overcome an uprising by his vassal, Count Guy of Flanders, in 1297
and occupied all of the county in 1300. Philip's war with England
over Aquitaine had given over to protracted diplomacy following the
preliminary peace agreement at Montreuil-sur-Mer in 1299.3 Harvests
had been good, and the general prosperity that gave rise to the su-
per-companies in the thirteenth century seemed ready to be extended
comfortably into the fourteenth.
In this somewhat benign atmosphere, the leadership of the Peruzzi
Company decided that the company must undergo a thorough reor-
1
According to Villani (Storia, Book VIII, Chap. 36), a Roman was required to visit
these churches for thirty days and a non-Roman for fifteen days to qualify for
remission.
2
Ibid. The purpose of his sojourn in Rome is believed to have been Peruzzi
business as well as spiritual edification. See Louis Green, Chronicles into History
(Cambridge, 1972), 11.
3
Strayer, Philip the Fair, 323. The final peace, including the restitution of
Aquitaine to Edward I, did not take place until June 1303 (see Vale, The Angevin
Legacy, 224).
127
128 History of the Peruzzi Company
ganization. The exact nature of the restructuring is not known, be-
cause there is very little information available on the antecedent com-
panies of the 1290s. The most important change was probably the
introduction of a large number of outside shareholders bringing with
them significant amounts of fresh capital. Although there is an indi-
cation of outside participation in the 1292 and 1296 companies, only
three non-Peruzzis appear to have been partners in each of these
companies, and the amount of their capital contribution, if any, is
unknown.4 Again, there is no basis for comparing the capital of the
1300 partnership with that of its precursors, but the amount of capi-
tal in the new company, li. 124,000, was so enormous by the standards
of the time that it probably represented a significant increase from
previous levels. Certainly, it was a breathtaking figure for what had
been a small family business barely a generation earlier. This much
is clear: in the eyes of its owners, the 1300 company was something
new and different, a departure from all that had gone before. It was
recorded as the "First Company," and all subsequent organizations
were numbered in relation to it, suggesting a completely new set of
company statutes. Details of shareholdings in the 1300 and subse-
quent companies are given in Tables A4 and A5.
The reasons for the reorganization are unknown, but some intel-
ligent speculations can be advanced. The driving force behind the
change was almost certainly Filippo di Amideo, the company's co-
founder and chairman. He was getting old. His cofounder and
brother, Arnoldo, had died in 1292. Arnoldo's eldest son, Pacino,
had briefly run the company (1298-9), but he too had died, and ap-
parently none of his brothers had sufficient experience to take charge
at that point. Filippo's own sons seemed to have had little interest or
aptitude for business management. In resuming leadership in 1299,
Filippo must have felt the need to place the company that he helped
create on a sound footing to assure its importance, its permanence,
and its maintenance under Peruzzi control. By making it a more "pub-
lic" company with a large number of shareholders, but with the ma-
jority of shares in Peruzzi hands, he achieved all three objectives.
The outside shareholders contributed to his aims in three ways. First,
their infusion of fresh capital enabled the company to take advan-
tage of the magnificent opportunities opening up in the Angevin
4
I libri, 210, 215, 228, 232, give the names of Banco Raugi, Gianni Ponci, and
Bandino Spiglati of the 1292 company and Raugi, Spiglati, and Ugo Aldobrandini
of the 1296 company as being credited with late collections due those compa-
nies, implying that they were partners. Raugi and Ponci also became share-
holders of the 1300 company.
The prosperous years, 1300-1324 129
kingdom of Naples. Second, they brought much-needed talent to help
run this diverse and geographically dispersed business. Finally, their
wealth and prestige increased the company's influence in the com-
munity, helping to steer it through the factional strife that was so
much a part of social and business life in Florence and that was sur-
facing again in 1300, this time as the Black-White controversy.5
Whatever the motivations for its formation, the 1300 company
emerged full-blown, like Athena from the brow of Zeus, endowed
with sufficient strength to take advantage of its opportunities and to
overcome the hazards of the turbulent years immediately ahead. The
main features of its branch system were already in place, with perma-
nent representation in Naples, Barletta, the Papal Court of Rome,
Pisa, Venice, Paris, Cyprus, and Tunis. The Sicilian branch was al-
ready established, headed from 1299 by Francesco Forzetti who would
eventually serve the company there for forty-two years.6 The com-
pany was also active in Bruges, where the young shareholder Giovanni
Villani was soon to reside briefly, and in Catalonia, where Giotto di
Arnoldo was in residence.7 Only two locations that were to become
important to the Peruzzi, England and Rhodes, were insignificant
business centers for them in 1300.8
This powerful new company soon had to face a series of crises in
its home territory. In 1301, Boniface VIII sent Charles of Valois to
Florence to intervene in the Black-White controversy in favor of the
Blacks. As discussed in Chapter 1, there is no information on the
part that the Peruzzi and their associates played in this struggle, but
the fact that nothing untoward happened to them suggests that they
at least avoided antagonizing the triumphant Blacks. When violence
erupted anew in 1303 and again in 1304, they appear to have been
more involved. The original leader of the Blacks, Corso Donati,
formed a new faction in 1303 with a group of Whites headed by the
5
Villani, Storia, Book VIII, Chaps. 38 and 39. Here Villani describes the origins
of the dispute, which engaged most of the important families of Florence dur-
ing the first decade of the century.
6
Bresc, Un monde Mediterraneen, 382, 400; Davidsohn, Firenze, Vol. 6, 822. The
company was already shipping large quantities of cereal grains from Palermo in
1299.
7
As noted in Chapter 1, Giotto lived in Catalonia at that time (actually in the
northern inland town of Gerona). The company never established a branch
there, but later set up one in Majorca.
8
T. H. Lloyd, Alien Merchants in England in the High Middle Ages (Sussex and New
York, 1982), estimates that the Peruzzi started trading in England in 1303 "at
latest" (172). By 1306, the company is recorded as having two employees in
that country (193).
Cavalcanti family and provoked so much violence that the new pope,
Benedict XI, sent Cardinal Niccolo da Prato to Florence to restore
peace. When the mission failed in June 1304, the cardinal left the
city, placing it under interdict and excommunicating its citizens.9 The
new party, now headed by the Cavalcanti and others, backed the car-
dinal and attempted to take over the city. In this endeavor they ob-
tained the support of several leading businesses and families, includ-
ing the Peruzzi and Baroncelli, according to Villani.10 They may have
participated in the fighting that followed and probably suffered losses
in the huge fire that was started by the combatants and gutted a large
part of the city, destroying much merchandise. It is even possible
that they were among the popolani who later joined the plot to take
the city with the help of exiled Whites but then defended it when
they perceived that a large part of the exile force was Ghibelline.11
There were other big problems for the company, both at home
and abroad. The fourteenth century opened with a series of cold,
wet years that resulted in harvests so poor that scarcities were re-
ported in seven out of the ten years between 1301 and 1310.12 Villani
described 1303 in particular as a year of famine and extraordinarily
high grain prices only partially relieved when the commune arranged
large imports of grain from Sicily and Puglia in Genoese ships.13 For
the decade 1300-9 Tuscany took more than 70 percent of recorded
Sicilian exports of grain.14 On another front, the Flemish revolt against
France interrupted the supply of both finished and unfinished cloth,
especially between 1302 and 1305. Finally, in the midst of these cri-
ses, the company lost the steady hand that had guided it for so many
years. Filippo died in September 1303 and was succeeded by his as-
tute but less experienced nephew Tommaso.
The Peruzzi's business with France and the papacy also suffered
later in the decade. In France, the Peruzzi had been one of the most
prominent Italian merchants and appeared to work closely with Philip
IV's principal bankers, the Franzesi firm headed by Albizzo and
Musciatto Guidi, better known as Biche and Mouche, respectively. As
9
Excommunication was a serious practical matter to the city merchants, as it
sanctioned the expropriation of their goods and the voiding of their contracts.
10
11
Ibid., Chap. 72. Villani notes that the change of heart by these popolani fami-
lies was prompted more by fear that victorious Ghibellines would dispossess
them than by loyalty to the city, although they naturally cited loyalty as the
reason. Villani makes a point of saying that he was a witness to these events.
12
La Ronciere, Prix et salaries, 716.
13
14
Bresc, Un monde Mediterranean, 549.
is well known, Philip had become engaged in a bitter controversy
with Pope Boniface VIII over the taxation of clergy in France, among
other things.15 This dispute culminated in the notorious French ex-
pedition in 1303 to Anagni, a small town souths of Rome, where
Boniface was eventually taken from his papal palace and briefly held.
The Peruzzi, as noted in Chapter 1, may have helped finance the
enterprise by providing Mouche with credits "as much as may be
needed."16 Villani added that the Peruzzi managers were unaware of
the purpose of the funds, a reasonable comment because the attack
on the pope apparently was an improvisation following long negotia-
tions, not the original plan of the expedition.17 The Peruzzi may have
gained some short-lived advantage from its cooperation, being given
control of the mints of Paris, Troyes, Tournai, and Sommieres in
1305.18 But Philip became increasingly disinclined to depend on any
foreign bankers and gradually squeezed them out, although the
Peruzzi fared better than most.19
The Peruzzi's commerce with the papacy appeared to make no
headway and probably went into reverse. The company had a branch
in Rome that did transactions with dignitaries of the papal court, but
it was not one of the official bankers or transfer agents of the papal
treasury. When Clement V was elected pope in 1305 and moved his
court to southern France, he disrupted what little official business
the Peruzzi had with the court. His decision in 1306 to discontinue
the policy of using designated Italian firms to manage the finances
of the Curia closed off any chance the Peruzzi may have had of achiev-
ing a direct commercial relationship with the papacy.
Despite these various afflictions, the first decade of the new Peruzzi
Company proved to be reasonably profitable. At the first closing in
1308, the company declared a dividend of 100 percent, that is,
li. 124,000. Subsequent collections of doubtful accounts, mostly dur-
ing the next ten years, resulted in additional distributions of about
li.71,500 so that the total payment to the shareholders over the first
eight and one-half years was li.195,500.20 Sapori attributes an annual
15
For a concise account of this argument, see Strayer, Philip the Fair, 251-81.
16
Villani, Storia, Book VIII, Chaps. 63 and 64.
17
Strayer, Philip the Fair, 277-8.
18
Strayer, "Italian Bankers," 119 nl 2. In effect, the Peruzzi became successor to
the Franzesi (Davidsohn, Firenze, Vol. 4, 432).
19
Strayer, "Italian Bankers," 117. Note also I libri, 435, which shows large uncol-
lected debts from the king of France and several of his barons at the close of
books in 1308. These were recovered by 1313.
20
The eight and a half years is due to the fact that the company started on May 1,
1300, and closed November 1, 1308.
rate of return of 15.4 percent to these figures on the basis that part
of the later dividend remained with the company for a number of
years.21 He cites this as an excellent rate of return, nearly double the
typical interest rate on loans. But this figure is not nearly as good as
it looks because Sapori, like many other historians analyzing busi-
ness profits, ignores the time value of money in all his rate of return
calculations.22 The Florentine businessmen were aware of this con-
cept because they could easily compare what they earned on their
shareholding with what they received on loans to the company. At
that time, the interest offered by the Peruzzi was 8 percent per annum,
which, compounded over eight and one-half years would have yielded
them 92 percent, not much less than the first dividend the share-
holders received. The two main subsequent distributions came five
and eleven years later, so that their effect on the rate of return would
be modest. Overall, the real rate of return for the first eight years
was likely not more than 11 percent, a far-from-handsome reward for
the time and effort most of the shareholders put into the manage-
ment of the business. But it was not a bad yield for such a hazardous
period, and the shareholders must have felt gratified at the close of
the books. Besides, the perquisites associated with being a share-
holder, such as access to company merchandise, facilities, services,
and finance, were not inconsiderable, as will be seen toward the end
of this chapter.
The next closing of the books completed the accounts of the First
Company. For an unknown reason, the 1308 company, despite a slight
change in capital and shareholders, including the replacement of
Giovanni Villani by his brother Filippo, was regarded as a continua-
tion of the First Company. The capital was increased to li. 130,000,
with the Peruzzi share dropping to li.71,000 or 55 percent of the
total from li.74,000 or 60 percent. The dividend declared at the end
of 1310 was li.52,000, or 40 percent of the capital, an annual rate of
return of truly handsome proportions. This closing marked the apo-
gee of Peruzzi Company fortunes; although subsequent companies
21
Sapori, Storia economica, Vol. 2, 673. His explanation for the 15.4% figure is
maddeningly vague and does not include any calculations.
22
See Table A3 for a comparison of Sapori's figures and real rates of return for all
of the Peruzzi companies. The use of the word "profit" in this table may be
questioned here because the figures represent distributions to shareholders
rather than reported earnings. They closely approximate profit, however, be-
cause they reflect not only the initial dividends, but also the subsequent alloca-
tions right up to the final years of the firm. The only exception is the 1331-5
loss, which, as indicated in Chapter 4, was clearly established within the
company's books.
were profitable, none attained the level of the 1308-10 business.
These results suggest that the company suffered setbacks in the
first half of the decade but recovered strongly in the second half.
What accounted for the conversion of the ill winds described into
such good results? One important factor was the return to relative
stability within Florence. To be sure, conflict continued, but much
more of it was directed outside the city toward the conquest of Pistoia
and Prato. Another reason was the fact that the repeated scarcities of
grain, while deleterious in their effect on the Florentine economy,
were not entirely bad news to a company active in the grain trade. It
may not have made much profit on sales controlled by the commune,
despite rumors of profiteering reported by Villani, but it must have
enjoyed the generally higher price levels prevailing between 1305
and 1310.23 Yet another reason was because the unrest in Flanders
was only temporary, and while it may have reduced textile sales and
finishing activity, it may have also given further impetus to full-scale
cloth manufacturing in Florence. Finally, although the Peruzzi Com-
pany was not an important factor in the English wool trade at this
time, its involvement was showing signs of increasing. The earliest
Peruzzi Company entry to appear in the English Calendar of Patent
Rolls is dated November 1306 and relates to the shipwreck involving
a consignment of the company's wool destined for Flanders.24
These developments, while useful, contributed little to the well-
being of the company. The predominant source of its success lay in
its expansion in the Mediterranean and, in particular, the Kingdom
of Naples. Peace was finally established with rebel Sicily in 1302, af-
ter the failure of the final papal-organized campaign led by Charles
of Valois. The Angevin rulers now directed their energies into build-
ing projects and political ventures in northern Italy. These activities
consumed more money than ever and brought the Angevins into in-
creasingly close contact with the Florentines, who, in turn, had in-
creasing need for their military support. The Peruzzi Company care-
fully cultivated the king and his court and by 1304 was an important
lender, advancing the equivalent of approximately 90,000 florins over
a thirteen-month period.25 In 1306, it loaned a further 45,000 florins
23
Villani, Storia, Book VIII, Chap. 68, mentions demands to examine the com-
mune's accounts on the grain traffic. For grain price levels, see La Ronciere,
Prix et salaires, 716.
24
CPREl 1301-7, 538.
25
Abulafia, "Southern Italy," 380. The figure cited is actually 18,280 gold ounces.
According to Spufford's Handbook, 62-3, the Neapolitan ounce at that time was
equivalent to about 5 florins.
that seem to have been repaid, with profit, fairly promptly.26 Peruzzi
credit helped King Charles II purchase the port of Chiarenza in the
Morea, where the Peruzzi promptly set up a branch.27 The king showed
his appreciation of the company's help in various ways. In 1302, he
granted the company permission to establish a bank in Naples. In 1306,
he bolstered the Peruzzi's power and prestige in Florence by petition-
ing the authorities there to permit Peruzzi personnel to bear arms.28
Two years later he gave the Peruzzi control of the taxation of grain ex-
ports from the Abruzzi.29 And in 1309, the newly crowned King Robert
gave the company the right to have civil cases in which it was involved
put before the Court of Appeals, not the ordinary tribunals.30
Robert was a special friend of the Florentines and of the Peruzzi
in particular. As duke of Calabria, he had taken part in the siege of
Pistoia in 1308 and later, as king, he led the Guelf League against the
incursion of Emperor Henry VII. While in Florence, he resided at
the palace of Giotto Peruzzi. This cozy relationship naturally rested
on the ability of the Peruzzi and the other super-companies to mobi-
lize the cash that the king needed and on the king's willingness to let
these firms monopolize his export trade and manage much of his
administration. The two-way trade of grain, edible oil, and other
materials for textiles and other manufactured goods was wonderfully
lucrative and produced the bulk of the Peruzzi's profits.
The company expanded elsewhere in the Mediterranean, building
substantial businesses throughout the western half from its branches in
Sicily, Tunis, Majorca, and Sardinia. Its presence in the eastern half con-
sisted only of small branches in Cyprus and Chiarenza, and agency ar-
rangements in Ragusa, Constantinople, Alexandria, and the Levant. The
firm's most important action in that area was its aid in financing the
conquest of Rhodes by the Knights Hospitalers in 1309. Although the
initial advances were probably small (the large loans were to come later),
the influence of this association was to become extremely important to
the company. In addition to the direct commercial advantage of secur-
ing a privileged position on the island and in the region with the new
masters, the Peruzzi gained the prestige of associating with an institu-
tion that enjoyed substantial assets and public goodwill in western Eu-
rope. The Hospitalers were very much a part of the alliance of the pa-
26
27
Peruzzi, Storia commercio, 318—20.
28
Ibid., App. 12, which includes an excerpt from Reg. 154 folio 141 of the king-
dom.
29
30
pacy, the Angevins, and Florence, and supported Charles II in his Sicil-
ian campaigns.31 And the papacy would have especially appreciated the
Peruzzi's assistance to the Hospitalers in their hour of need, especially
in the wake of Philip IV's campaign to demolish that other great crusad-
ing order, the Knights Templar.32
The Second Company came into being in 1310 and lasted until
1312. Capital was augmented further to li. 149,000, the highest level
ever attained by the Peruzzi. The Peruzzi family increased its contri-
bution to li.79,000, while that of the outsiders rose to li.68,000, or 46
percent of the total, mainly through the addition of two new share-
holders. This company also produced an amazingly good return, given
the disruptions in and around Florence resulting from Henry VTI's
campaign in the area. Henry had invaded Italy in 1310 with the ap-
parent approval of Pope Clement V, who wanted to check the expan-
sion of Angevin power in Italy. The emperor received the Iron Crown
of Italy in Milan in 1311 and planned to move on to Rome for his
imperial coronation. The Black leadership of Florence rebuffed
Henry, amnestied a number of less conspicuous Whites, called upon
Robert of Naples for help, and feverishly resumed construction of
the city's third circle of walls. After long negotiations and his corona-
tion in Rome in June 1312, Henry determined to crush Florence. He
failed in this endeavor, lifted the siege in the autumn, regrouped his
forces over the winter for a drive on Naples, but died before he could
mount a serious offensive.
The Peruzzi's part in this struggle was mainly financial, as, together
with the Bardi and Acciaiuoli, the company financed the cost of
Robert's troops in the Romagna.33 But it was also personal, as Arnoldo
d'Arnoldo, one of the prime family shareholders, died in battle be-
fore the city in September 1312.
The Second Company was short lived, closing in 1312 after only
two years. The main reason for the early dissolution seems to have
been the untimely death of no fewer than four shareholders. In addi-
tion to Arnoldo, three outside partners died in 1312 - Banco Raugi,
Gianni Ponci, and Uguccione di Bonaccorso Bentaccordi.34 Neither
31
A. J. Forey, "The Military Orders and the Holy Wars against Christians in the
13th Century," English Historical Review 104 (January 1989): 1-24.
32
For details on Philip's attack on the Templars, see Strayer, Philip the Fair, Chap-
ter 4, and Peter Partner, The Murdered Magicians: The Templars and Their Myth
(Oxford, 1982).
33
Yver, Le commerce, 304. The three companies contracted for a total of 24,000
Neapolitan ounces, equivalent to about 120,000 florins.
34
Sapori, Storia economica, Vol. 2, 674. No indication is given as to whether any of
these men were killed in action.
the men nor their capital contributions were replaced, so that the
Third Company began business with a capital of li. 118,000, down
li.31,000, or over 20 percent from the previous company. The Peruzzi
share fell by li. 11,000, but that of the outsiders dropped even more,
by li.20,000 to li.48,000, raising the Peruzzi family ownership to nearly
60 percent. Especially remarkable is the fact that not one of the four
shareholders seems to have had brothers, sons, or nephews with the
aptitude or interest to maintain his share in the business.
A second possible reason for the fleeting existence of the Second
Company is the severe business depression that struck Florence be-
tween 1310 and 1315 as a result of the costs and trade disruptions
associated with the invasion of Henry VII, followed by the war with
Pisa in 1314-15. This depression nearly ruined the Alberti Company,
which was obliged to suspend crediting interest to depositors between
1312 and 1314 in order to stay afloat.35 It no doubt also contributed
to the collapse of the Frescobaldi Company in 1315. And the effect
of the financial crisis on the Peruzzi shareholders' other interests
may have caused them to cash in part or all of their Peruzzi holdings.
But the Peruzzi Company sailed through the storm (including the
years beyond 1312) virtually unscathed, very likely because the most
profitable part of its business was concentrated in the .south.
The first significant contraction of ownership of the company rep-
resented by the 1312 reorganization was not occasioned by any re-
duction in opportunities for the use of cash. On the contrary, as will
be shown later, the Peruzzi became involved on an ever-increasing
scale with the Angevin kingdom. Of immediate import, the company
apparently negotiated in 1312 a very large loan to the grand master
of the Knights Hospitalers, reportedly in the amount of 191,000 flor-
ins repayable in four equal annual installments on the feast day of St.
John the Baptist.36The money was to be used to finance the construc-
tion of buildings and fortifications for the Hospitalers on the secu-
rity of all the order's possessions in all countries.37
It is worth digressing to consider this alleged loan in detail as an
example of the exaggerated accounts of the super-companies' ability
35
36
Peruzzi, Storia commercio, 254. This report is questionable not only for the
reasons discussed in the text, but also because it attributes the instigation for
the loan to John XXII, who did not become pope until 1316. Of several pos-
sible dates for the feast of St. John the Baptist, the most likely is June 24, his
birthday in the calendar of the Roman church. St. John the Baptist was the
patron saint of Florence, and his birthday was the traditional date for the an-
nual payment of rents in the diocese (see Dameron, Episcopal Power, 119).
37
to lend huge amounts of money at short notice. The Peruzzi connec-
tion with the Hospitalers' conquest of Rhodes may have begun as
early as May 1306, when a certain "Fulco" of that company report-
edly participated in a meeting in Cyprus with Fulkes de Villaret, grand
master of the order, and the Genoese corsair Vignolo di Vignoli to
plan the invasion.38 The timing and amount of lending, however, are
far from clear. Anthony Luttrell asserts that the Hospitalers had con-
tracted huge loans "with the pope and his bankers" by 1310, the year
the conquest was completed.39 But as we have seen, Pope Clement V
had discontinued the practice of having designated bankers, and in
any case, the Bardi and Peruzzi were already heavily engaged in lend-
ing to King Robert in connection with Emperor Henry VII's invasion
of Italy in that year. Moreover, the Hospitalers Order was a terrible
credit risk after its expulsion from Syria in 1291 and even more so
during the trial of the Templars, when rulers throughout Europe were
casting covetous eyes at the Hospitalers' assets in their territories. It
is therefore unlikely that the Peruzzi committed significant funds
before 1312, the year in which the pope granted the Hospitalers the
lucrative Templar properties in Cyprus.40
As for the figures, the earliest cited ones are not of the sums origi-
nally loaned by the companies, but the amounts alleged to be due to
them several years later. Luttrell states that the Hospitalers owed the
Bardi and Peruzzi "at least 500,000 florins" in March 1320.41 Delaville
le Roulx cites an amount of 575,900 florins at that time, but owed to
all lenders.42 But all seem agreed, based on papal records, that in 1321
the Peruzzi were owed 191,000 florins and the Bardi 133,000.43 There-
fore, let us consider the 191,000 figure and its significance. This
38
Anthony Luttrell, "Interessi fiorentini nell'economia e nella politica dei Cavalieri
Ospedalieri di Rodi nel Trecento," Annali delta Scuola Normale Superiore di Pisa:
Lettere, storia efilosofia, 2d series, 28 (Pisa, 1959), 317-26. "Fulco" was presum-
ably Bencivenni di Folco Folchi, a shareholder of the Peruzzi Company at the
time.
39
Ibid.
40
The Peruzzi and the Bardi probably did not feel entirely comfortable in advanc-
ing serious funds to the order until the following year, when formal transfer of
the Templar assets took place (see A. Luttrell, "The Hospitallers in Cyprus after
1291," Acts of the First International Congress of Cypriot Studies 2 [Nicosia 1972]:
161). In that year also, the threat to Florence had evaporated with the death of
Henry VII and the agreement of King Robert to become protector of that city.
41
Luttrell, "Interessi fiorentini," 318.
42
Jean Delaville le Roulx, Les Hospitallers a Rhodes (1310-1421) (Paris, 1913), 23-
4, 53-5. In addition, he said that the order owed £10,000 Genovese.
43
Renouard, Les relations, 542; Davidsohn, Firenze, Vol. 6, 547 (in addition to the
others cited).
amount, equivalent to li.275,000, would have tied up more than twice
the company's capital in one risky venture. But the company prob-
ably never loaned anything like this total. First, the 1321 figure would
have reflected not only accumulated interest since the inception of
the loan, but also a sizable markup for arranging and managing the
debt.44 Second, although the commitment may have been made in
1312, realistically the cash would have been advanced in tranches as
needed, rather than all at once, and charged to different priors of
the order.45 The main sources of funds would have been depositors,
lay and ecclesiastical, very likely in Naples and elsewhere in the Medi-
terranean, given the shortage of cash in depression-ridden Florence
at that time. Possibly the Peruzzi syndicated part of the loan as a sepa-
rate venture, parceling it out among various individuals and institu-
tions with a political, moral, or economic interest in aiding the
Hospitalers.46 And while interest was theoretically illegal, the deposi-
tors no doubt expected and received a return at the then going rate
of 8 percent per annum, which the Peruzzi would have been obliged
to recover from the borrower. Thus, after subtracting the interest,
fees, and amounts allocated to other investors, the cash outlay of the
Peruzzi would have been considerably less than the stated amount
due. The company's share of the loan was clearly not too burden-
some, because it was able to award its shareholders a handsome divi-
dend in 1319 while acknowledging that the Hospitaler loans and the
Rhodes branch accounts were still open.47 The company's confidence
in eventual repayment turned out to have been well placed, perhaps
helped by the intervention of Pope John XXII.48
At the beginning of this digression, the word "alleged" was used
with reference to the Hospitaler debts to the companies because there
is another possible explanation for these extraordinary loans. It is
that the principal lender may not have been the super-companies,
but the papacy itself, using the super-companies as agents of the pa-
44
If the money had been advanced in 1312, the cumulative effect of interest alone
over nine years at the then going rate of 8% would have been 100%, so that the
original loan would have been less than half the amount cited.
45
/ libri, 439. Giotto's Secret Book names several Hospitaler chapter priors as
debtors, including those of Venice and Avignon as well as Rhodes.
46
While there is no evidence that the Peruzzi syndicated the loan, there was a
precedent for such action in the consortia operated by the Ricciardi and
Frescobaldi in their financing of the English monarchy (see Chapter 2).
47
/ libri, 439. But Giotto noted that "we expect great profits, God willing."
48
Renouard, Les relations, 542; Davidsohn, Firenze, Vol. 6, 548. Repayment was
scheduled in eight semiannual installments beginning in 1321, but it became
necessary to extend the term a further two years.
pal treasury. There are three reasons for suggesting this alterna-
tive. The first is that the order, besides being financially unstable,
was headed by a grand master, Foulkes de Villaret, who by 1312
had proved to be extravagant, incompetent, and corrupt, alienat-
ing his leading brethren. 49 Under such circumstances, the super-
companies would have been wary of lending large sums to that
organization without the explicit support of the papacy. The sec-
ond reason is the Peruzzi Company's apparent lack of concern
mentioned earlier at its interim closing in 1319, which gives the
decided impression that this was a lucrative arrangement, with
little company money at risk. Finally, the popes appear to have
regarded the Hospitalers' repayment installments as indirect in-
come to the papacy even when they continued after the debt had
been extinguished in 1335.50
The point in discussing this loan in such detail is to emphasize
the need to question the inflated amounts involved in so many of
the financial transactions attributed to the super-companies. The
fact that historians have rarely challenged the reports of very large
loans (which later become astronomical in the Peruzzi's English
dealings) has helped create a mystique around the super-compa-
nies that has obscured the reality of their business. They were
indeed big organizations for their time, and they made use of the
available instruments of cashless transfer, such as bills of exchange
and bank debits and credits. 51 But in an economy where creation
of credit through fractional bank reserves was insignificant, such
devices had only limited application, and larger payments had to
49
Luttrell, "The Hospitallers in Cyprus," 288. The leading brethren later pressed
for his resignation and even tried to assassinate him in 1317. He was eventually
replaced in 1319 by a more responsible leader, Helion de Villeneuve.
50
Luttrell, "Interessi fiorentini," 319. The payments after 1335 were described
as "deposits" to the super-companies, accumulating to 360,000 florins by 1343.
This figure is based on a note dated 1382 in the accounts of the Hospitalers at
Malta, which mentions the existence of a document showing that the Bardi,
Peruzzi, and Acciaiuoli owed this sum. Luttrell associates these purported de-
posits with the unsuccessful attempts to recover with the pope's help sums owed
by the Peruzzi in June 1345 (Sapori, La crisi, 198). But the Hospitalers' muted
efforts to obtain satisfaction from the bankrupt Peruzzi (discussed further in
Chapter 9) lead to the suspicion that most payments had been passed along to
the papacy, leaving a relatively modest balance really owed the order by the
company.
51
Spufford in Money and Its Use, 255-9, gives a useful description of these finan-
cial instruments and their widespread use in medieval Europe. Lane and Meuller
in Money and Banking, 61-4, 69-89, provide additional data and an excellent
overview of medieval banking systems.
be made in hard cash.52 Therefore, either the sums reportedly loaned
by the super-companies were greatly overstated or the super-compa-
nies found ways to lay off large parts of both the cash and the risk
entailed in such loans. There is no evidence in any of the surviving
company books to support the existence of "megaloans." To illus-
trate, the Peruzzi had reportedly lent very large amounts up to 1308
to the king of France, the Hospitalers, the papacy, and above all, to
the king of Naples. But at the close of books in 1308, the balances
due from the first three of these debtors totaled a mere li.26,000.
The amount due from all other debtors was li.40,000, and the king
of Naples was not even mentioned. 53 This suggests that the company's
system for managing its cash flow in that kingdom, discussed in Chap-
ter 2, was working very well indeed.
The Third Company lasted a remarkable twelve years from 1312
to 1324, with an interim accounting and dividend distribution in 1319.
It was the last of the prosperous Peruzzi companies driven by unpar-
alleled success in its most important market, the Angevin kingdom
of southern Italy. Yver cites the period between the death of Henry
VII in 1313 and the arrival of the duke of Calabria in Florence in
1325 as the apogee of the super-companies' fortunes in that coun-
try.54 Two developments greatly enhanced their position. The first
was the very close liaison that came about between Florence and
Naples following Henry VII's invasion. To ensure its protection, Flo-
rence in 1313 granted King Robert overlordship of the commune
for five years, albeit with limited powers, and renewed it in 1318 for
a further five years. Under these circumstances the leading merchants
became virtual ambassadors between Naples and Florence. 55 The sec-
52
Spufford, Money and Its Use, 255, acknowledges that the commercial credit sys-
tem he describes was inadequate to handle large international political pay-
ments or even smaller payments where there was an imbalance of trade. The
problem of credit is discussed more fully in Chapter 7, this volume, in connec-
tion with Peruzzi loans to Edward III.
53
/ libri, 435. The Secret Book of Giotto reports for the closing of the 1308
company, "rimase a partire del guadagnio fatto infin'a quel die de quelo ch'era
scritto lbr. 26,236 e d3 in fior., i quali si riserbaro a partire per cagione de la
ragione di parigi che no si pote metere in saldo per li molti danari che si dovea
ricevere da Re di Francia e di altri baroni d'intorno de la Corte del Re; e rimase
a metere in saldo la ragione di Benciveni Folchi ch'avea tenuta intorno del
Maestro de lo Spedale, e quella di Corte di Papa, e quela d'Inghiliterra del
cambio che non si pottero fare; e rimasero er apuntati e i pendente, che non si
contaro per alcuna cosa, da lbr. 40,000 a fior. che si deono ricevere da moke
gienti."
54
55
Ibid., 306.
ond was Robert's quarrel with Venice between 1311 and 1314, marked
by his seizure of Venetian goods. Even when peace was finally concluded
in 1316, the Venetians had lost their old privileges, and the Florentines
exerted great pressure to ensure that they stayed lost. In 1316, the Bardi,
Peruzzi, and Acciaiuoli companies formed a syndicate and succeeded in
getting the grain export monopoly formalized under their control. As a
result, as Yver commented, "the Adriatic was plowed by Venetian ships
loaded by Florentine merchants who transported to Venetian posses-
sions and even to Venice itself grains bought from growers or royal es-
tates, as well as oil, wine, cheese, and other agricultural products."56
It is worth emphasizing once more the size and importance of the
grain trade. Recorded Florentine exports of Apulian grain in 1311
reached the remarkable total of 45,000 tons.57 A few calculations may
be helpful in putting this figure into perspective. The 45,000 tons
are roughly equivalent to 400,000 salme, or 4.4 million Florentine
bushels.58 Drawing on various sources, including chroniclers Villani
and Lenzi, Giuliani Pinto has calculated annual grain consumption
of 150,000 moggia for the combined city and contado of Florence, ver-
sus a total production of 120,000 moggia in "normal" crop years.59
The shortfall of 30,000 moggia, equivalent to 720,000 Florentine bush-
els per year, would have been the normal import requirement in the
early decades of the fourteenth century.60 An unknown amount would
have been supplied from the Romagna nearby and from Sardinia,
leaving normal annual requirements from the south of perhaps
400,000 bushels. These estimates, as crude as they are, make it clear
that the supplies available from the Apulian grain monopoly signifi-
cantly exceeded Florence's normal needs. Admittedly, 1311 seems to
have been an atypical year, and the normal amount of grain available
for export was probably more like that in the years 1327-31, that is,
110,000 salme, or around 1.2 million bushels.61 Also admittedly,
56
Ibid., 310.
57
Abulafia, "Southern Italy," 382, mentioned in Chapter 2, this volume.
58
One salma of wheat grain weighs about 112 kilograms (see Yves Renouard,
"Une expedition des cereales des Pouilles en Armenie par les Bardi pour le
compte de Benoit XII," in Melanges d'Archeologie et d'Histoire [Rome, 1936] ,813)
and is equivalent to about eleven Florentine bushels (see Edler, Glossary, 256).
59
// Biadaiolo, 77-9.
60
Conversion from moggia to Florentine bushels is tricky, as the ratios vary accord-
ing to time and place. Lopez and Raymond, Medieval Trade, 73, cited 16.59
bushels as the conversion factor, but the figures used here are based on twenty-
four bushels per moggio as applied by Pinto and confirmed by Edler, Glossary, 187.
61
David Abulafia, "Sul commercio del grano siciliano nel tardo duecento," La
societa, mediterranea alVepoca del Vespro (Palermo, 1983), 5.
Florentine crops fell well below normal in several years; as Pinto
points out, a relatively modest reduction in Florentine grain produc-
tion would have had a dramatic effect on import requirements. 62 In
most years, however, the super-companies would have directed the
sale of substantial quantities of this valuable commodity to other cit-
ies in Italy and the Mediterranean.
Prices of grains were generally high throughout the 1312-24 pe-
riod, although years of actual reported scarcity were rare.63 As Abulafla
points out, however, years of scarcity were not always good for Apulian
grain because, being of higher quality and more expensive than the
local product, it was less affordable to the poorer segments of the
population.64 But Apulian wheat had the advantages of being pre-
ferred both for its superior quality and its remarkable keeping prop-
erties.65
Trade between Florence and the Angevin kingdom, as already
noted, consisted of much more than the exchange of cloth for grain,
but these two commodities formed the heart of the commerce be-
tween the two polities. Until the early 1320s, virtually all the luxury
cloth sold in Naples was of Flemish, Brabantine, or French origin,
and companies such as the Peruzzi either bought the finished prod-
uct for reexport, or imported semiprocessed material for finishing.66
Their direct manufacturing was limited to a bewildering variety of
lighter and cheaper grades of cloth. According to Hoshino's careful
study of Florentine customs and wool guild documents, English wool
began reaching Florence in quantity during the second decade of
the fourteenth century, primarily in inferior grades, such as agnellina
and boldrone.61 More typically at that time, however, Florentine manu-
facturers made cloth from wools originating in various parts of Italy,
62
// Biadaiolo, 78. For example, a crop reduction of 25% would double import
needs to 1.4 million bushels.
63
La Ronciere, Prix et salaires, 716. Scarcities were reported only in 1317 and
1322.
64
65
De Brouard, "Problemes de substances," 484, citing archival sources, noted that
the best quality of Sicilian wheat, properly stored, could keep "10, 15, 20 ans et
plus."
66
Rules of the Calimala Guild, to which the Peruzzi belonged, forbade its mem-
bers to finish cloth manufactured in Florence. See Staley, The Guilds of Florence,
131.
67
Hoshino, L'Arte della lana, 116-17. For a discussion of the varieties of cloth
produced in Florence and sold throughout the Mediterranean, see 123-30.
Hoshino's research calls into question the contention of earlier scholars that
most Florentine cloth production was made from English wool by the early four-
teenth century (see Lopez "Majorcans and Genoese," 1168).
including the south, as well as Spain, North Africa, and Burgundy.
The Peruzzi reportedly used both English and Burgundian wool be-
tween 1322 and 1325.68
A word should be said at this point about the composition and
manufacturing processes involved in luxury cloth, as opposed to the
cheaper grades.69 In medieval Europe, the finest short-staple wools
from which luxury fabrics were made came from the Welsh Marches,
the Cotswolds, and Lincolnshire in England, shorn from mature,
preferably live sheep. Such fine wools produced relatively weak yarns,
with the result that cloth woven from them had to be compressed
and strengthened by the process of fulling. Moreover, it had to un-
dergo several shearings to achieve a satisfactorily smooth finish and
texture. In contrast, the lighter, coarser cloths, such as worsteds, or
local varieties woven from worsted warps and woolen wefts, were made
from cheaper, tougher, longer-staple wool.70 Such fabrics required
little or no fulling or shearing. Thus, luxury cloth was expensive be-
cause of costly raw materials, a long, complex manufacturing pro-
cess, and the meticulous attention to detail required to satisfy a dis-
criminating clientele.
The lighter and cheaper woolen goods made in Florence found a
ready market in southern Italy, sold in fairs and in the lesser cities
throughout the kingdom, but in the early 1320s the penetration of
the luxury cloth market by Florentine manufacturers was modest.
The Peruzzi cloth sales in southern Italy would, up to 1324, have
consisted of lesser-quality goods fabricated by itself or other manu-
facturers from Italy and various parts of Europe for the "mass mar-
ket" and luxury cloths mostly made in northern Europe, possibly in-
cluding a small quantity of Florentine production. There is no evi-
dence to suggest that the Peruzzi had the capability of making luxury
textiles at this point.
Other sales outlets for Florentine-made cloth were, of course, Flo-
rence itself and its contado, as well as cities throughout Italy. As
Hoshino emphasizes, Florence was a major distribution center for
textiles, and merchants from other cities came there to buy, rather
68
Hoshino, UArte della lana, 118.
69
The source for the statements in this paragraph is Munro, "Textile Technol-
ogy," 694. For those interested in further details on this subject, the entire
article (693-711) is most helpful. For a discussion of the various types of north-
ern European cloths sold in the Mediterranean area, see H. C. Krueger, "The
Genoese Exportation of Northern Cloths to Mediterranean Ports, Twelfth Cen-
tury," Revue Beige de Philologie et d'Histoire 65: 4 (1987): 722-50.
70
The local varieties had their own names, such as serge, saye, saye drappee, and
baye.
than having Florentine merchants take their wares to those cities.71 It
is worth noting that the Peruzzi lacked significant branches in any of
the cities in north and central Italy except Pisa, Genoa, and Venice,
where company employees worked mainly in forwarding operations
rather than local selling.72 But like most Florentine merchants, the com-
pany no doubt bought merchandise in other Italian cities for sale in
Florence and elsewhere. Certainly, cloth manufactured in other cities,
especially Milan, competed successfully both at home and abroad with
the Florentine product. In the western Mediterranean and Sicily, Tuscan
merchants marketed Florentine and Lombard cloth as well as a wide
range of draperies from the Low Countries, because local manufacture
had not been successful.73 Documentation from Sicily covering the first
half of the fourteenth century is too scarce, however, to judge the mar-
ket penetration of the various makers, particularly the Catalans, who
must have been fierce competitors in the western Mediterranean.74
Unfortunately, data on quantities sold are so sparse that it is im-
possible to make a rational estimate of the size of the Florentine tex-
tiles business. Given the limited range of product quality and the
stiff competition for the available markets, Villani's estimate of an-
nual Florentine production of 100,000 pieces early in the century
seems high.75 If it is anything close to accurate, however, this figure
underlines the tremendous importance of the captive market in south-
ern Italy to Florence's well-being.
The Angevin connection was also important in the eastern Medi-
terranean, as the grain monopoly and the demand of the court for
luxuries helped to justify the establishment of branches in Cyprus
71
Hoshino, L'Arte della lana, 69, 72.
72
The company reportedly did have representation in Milan (from 1309) and
Bologna (from 1323), which Davidsohn described as "branches" (Firenze, Vol. 6,
883, 853), but there is no evidence of formal branch accounts nor reference to
such branches in the surviving Peruzzi books.
73
Ibid. Hoshino notes on 82 that various attempts to implant wool manufactur-
ing in Palermo by Genoese artisans were unsuccessful. In southern Italy, local
manufacturing was modest and limited to low-quality goods. It should also be
remembered that early in the fourteenth century, exports of Flemish cloth still
included a range of cheaper goods that did not disappear from the Mediterra-
nean market until the 1330s (see Munro, "Industrial Transformations," 110-
11).
74
Bresc, Un monde Mediterraneen, 476.
75
Villani, Storia, Book XI, Chap. 94, cites 1336-38 annual production as 70,000-
80,000 pieces, compared with 100,000 pieces thirty years earlier. Hoshino, L'Arte
della lana, 131-2, argues strenuously that the 70,000-80,000 estimate is vastly
overstated, but his presentation lacks coherence. See Appendix V on Villani
for further details.
and Rhodes. Once such a branch was in place, it could be used as
a base of operations for the Levant, the East, and Africa for the
buying and selling of a vast range of goods. The Peruzzi accounts
contain numerous references to the variety of materials and prod-
ucts in which the company dealt, including wool, cotton, silk,
cloths, alum, dyes, rope, precious metals, jewelry, and spices of
many kinds. Some of the goods and commodities purchased there
were for company use, but most were for resale in Italy and north-
ern Europe. The branches also engaged in local and regional
trade, and served as distribution points for forwarding merchan-
dise of the company and other merchants to further destinations.
In short, the company seemed prepared to enter any kind of com-
merce, however minor, that would turn a profit. These myriad
small transactions helped carry the considerable overhead costs
of the company's permanent organization, a subject that will be
discussed more fully in Chapter 6.
The company's branch in Bruges was undoubtedly a very active
one despite the lack of documentary evidence and the tiny account
balance registered in 1335. As indicated in Table 3, there were four
permanent employees in Bruges under the management of a family-
member partner, a sizable operation by medieval standards. More-
over, the branch was a "busy" one, with many employees coming and
going between 1335 and 1343. There is every reason to believe that
the branch was at least as active during the first quarter of the four-
teenth century, because Bruges was the marketing and financial cen-
ter for the nearby industrial cities of Flanders and Brabant. Here was
the prime, if not the only, source of luxury cloth so vital to the company's
southern trade. From here, too, Peruzzi factors could market the En-
glish wools acquired from the company's London branch or elsewhere
to the entrepreneurs from whom it bought finished product. Finally,
from here company employees would have engaged in financial opera-
tions, arranging credit with both buyers and sellers as well as transfers
of funds through letters of credit and bills of exchange.
The Bruges branch's intercompany links were not limited to Flo-
rence. Although most of the finished goods would have been shipped
to the headquarters warehouse, a considerable volume of product
would have been destined to the customers of the company's branches
in Paris, Avignon, and London. 76 The branch also could provide
76
There is only limited direct evidence of interbranch commerce within the Peruzzi
Company because of the lack of detailed branch accounts. But the fact that such
business was a logical part of the branch system is supported by the accounts of the
Barcelona branch of the Datini Company, which showed significant debit and credit
balances with other Datini branches (see De Roover, "Lucca Pacioli," 142-3).
financial services to clients unrelated to the company's merchandise
business.
The peace following the disruption of the Flemish revolt of 1302-
4 was uneasy, but it lasted throughout most of this period, despite a
serious flareup in 1314.77 The French victors levied huge indemni-
ties, falling mainly on the towns, but eventually received only a small
amount. Nonetheless, the relative calm and the threat of action on
the indemnities gave those towns both opportunity and motivation
to increase their production. The end of hostilities between England
and France also assured the uninterrupted flow of English wool. The
city of Bruges nevertheless needed financial help and was able to
borrow from the Italian companies, given its importance to them
and its respectable credit rating. The Peruzzi Company acted as a
collector of Flemish indemnities for the king of France and occa-
sionally granted loans to help make the payments possible. The only
loan to Bruges for which there is direct evidence in the Peruzzi ac-
counts did not take place until 1328, but it is unlikely to have been
the first of its kind.78
The Paris branch was also considered important, even after the
company's involvement in royal financing had all but petered out.
According to Strayer, in the latter part of the reign of Philip IV it
remained responsible for the receivership of Carcassonne, the col-
lection of the Flemish indemnity, and technical assistance in the mints,
and it made a minute contribution to Philip's preparations for a Flem-
ish war in 1314.79 The fact that the company had to work both sides
of the Flemish dispute exemplifies the awkward situations into which
a super-company could be drawn by political rivalries. But the size of
the Paris market, with its large population of elites and its nearby
industries and fairs, seems to have been sufficient in itself to warrant
a substantial permanent branch. In 1335 it had the same number of
factors as Bruges and was also headed by a Peruzzi partner. Given its
government activities in the early years of the century, it may have
been even larger then.
The work of the branch is most likely to have been of a marketing
nature, selling merchandise of all kinds drawn from the Mediterra-
nean and the Levant as well as from the north. Marketing of course
77
See Strayer, Philip the Fair, 337-46. There was also the very serious maritime
revolt starting in 1323, which will be discussed in the following chapter.
78
De Roover describes this loan (Medieval Bruges, 84—5) as well as another smaller,
but still sizable loan of 1330 (281). Details of the 1328 loan will be given in
Chapter 6.
79
Strayer, "Italian Bankers," 117 and n32, 121.
included any necessary credit and financing arrangements to con-
clude the sales. The branch also may have provided raw materials for
the industries in the suburbs. Paris was an important transit point;
company travelers from Florence to Bruges or London would often
pass through Paris. The branch must have been profitable or useful
to the company in many ways. Despite the many arbitrary fines, lev-
ies, and even imprisonments at the hands of the French authorities,
the Peruzzi, like other Italian companies, continued to operate in
Paris, presumably treating such hazards as a cost of doing business
there.
The company's business in Avignon was also conducted by a well-
staffed branch, led by a partner, Filippo Villani, brother of the chroni-
cler. Although a small city, Avignon was large in potential, with the pa-
pal court, cardinals and their retinues, hangers-on, and petitioners from
abroad all bent on gaining prestige with conspicuous consumption, a
market made in heaven for traders. The branch took deposits from prel-
ates and loaned money to them, but the papal treasury remained aloof
from the Italian merchants until the accession of John XXII in 1316.80
The new pope approved a contract in January 1317 with the Bardi and
Peruzzi, giving them the authority to transfer to Avignon sums gathered
by the collectors in England, Italy, and the East.81 Later that year, the
contract was extended to include Scotland and Ireland.
The business was important for the prestige it brought even though
the companies were not designated as "official" apostolic bankers. It
also brought financial flexibility, because the companies were able
to meet their obligations by delivering funds from locations most
convenient to them, instead of from the actual collection points. Thus,
papal funds collected in England could be kept there to buy wool,
and the cash due to Avignon could be remitted from Florence by the
dates agreed. The companies charged fees for the service to reflect
distances and risk, but since the papal treasury was aware of the use-
fulness of the business to the companies, it could negotiate them to a
low level. The amount of money transferred was modest because the
greatest source of papal revenues, France, was excluded from the
arrangement. Thus, the much-discussed papal transfer business, while
attractive to the companies, was not a very profitable one.
80
There was, however, a deposit of 7,000 florins in 1312 by the Abbot of Samichele
della Scluse divided one-third each among the Bardi, Peruzzi, and Scali compa-
nies. The deposit, while ostensibly the abbot's, was registered by the notary of
Clement V's chamberlain, and the complicated eventual reimbursement in 1336
appeared to involve the administration of Pope Benedict XII. / libri, 94.
81
Renouard, Les relations, 127-31.
The English branch was also an important one by 1335, with five
employees managed by the son of a partner, but it was probably much
smaller in the first two decades of the century. The company seemed
determined to keep clear of royal entanglements. Its presence in the
English wool trade was accordingly overshadowed by the Frescobaldi,
the Bardi, and others who were prepared to lend money to the king.
The only loans made by the Peruzzi to an English monarch prior to
1336 were for £700 in 1311, £200 in 1315, and 1,000 marks (£667) in
1322.82 Some indication of the Peruzzi's level of activity in England
can be obtained by examining the Calendar of Patent Rolls and the
Calendar of Close Rolls and comparing the entries with those of the
Bardi, known as a very active firm there. During the period 1301 to
1321, the Peruzzi Company was cited in eight entries in the Calendar
of Patent Rolls, most dealing with minor issues, while the Bardi ap-
peared in eighty-four entries, many of significant importance. In the
Calendar of Close Rolls for the years 1307 to 1323, the numbers were
five and sixty-five, respectively.
This modest level of market penetration seems to have been satis-
factory to the conservative chairman Tommaso, and must have given
the company adequate access to its wool requirements for Flanders
and Florence. In the early 1320s, however, the Peruzzi suddenly be-
came more active in England with the arrival of Bonifazio, son of
Tommaso, as branch manager. In June 1322, he signed a ten-year
lease with the Bishop of Durham for the manors of Hoveden and
Richall, York. The purpose of these manors is not known; most likely
they were collecting points for wool. What is remarkable about the
lease was its confirmation nearly two years later in a ceremony at
Westminster that appears to have been attended by no fewer than
five of the company's shareholders.83 The presence of so many se-
nior representatives of the company in England's capital cannot be
explained by a minor lease agreement. Rather, it attests to a decision
by the company to become an important player in the English mar-
82
CPRE II 1307-13, 399, E II 1313-17 254, and E II 1321-24, 198. The 1322
loan, along with one for £4,000 from the Bardi, was needed for Edward II's
Scottish campaign of that year. It was the last time that Edward II was to bor-
row significant sums in England from the Italian firms. See N. Fryde, The Tyr-
anny, 93. The Peruzzi did, however, advance 3,951 gold florins to the constable
of Bordeaux in 1324. See Vale, The Angevin Legacy, 237.
83
CPRE II 1321-24, 401. The entry is dated March 20, 1324, but refers to a lease
dated June 21, 1322. It is not entirely clear from the English translation in the
Calendar whether all the Peruzzi notables listed were present or represented by
proxy, but such an array of names would be extraordinary for a lease of this
type unless the people happened to be on the spot.
ket, in particular in the wool trade. The timing of this event suggests
that the change in attitude was motivated by the company's determi-
nation to supply the manufacturers of higher-quality textiles in Flo-
rence for which English wools of the better grades were essential.
Two entries in the Calendar of Close Rolls provide evidence of seri-
ous investment in the English wool trade. The first is a loan in April
1323 of £1,330 to Warden Abbey, an early wool-producing Cistercian
establishment in the county of Bedford.84 This is an enormous sum
to advance to an abbey with an annual income of little more than
£200, which planned to use at least part of the money to rebuild its
church on a lavish scale.85 The abbey seems to have had both resources
and influence, because the loan was recorded as repaid in full, prob-
ably in 1340.86 This was no more than two years after having been
excused by reasons of extreme poverty from having to pay the latest
clerical tenth.87 The Peruzzi apparently made a further large loan
sometime between 1324 and 1331 for which records are missing,
because the company received payment of £900 sterling from War-
den Abbey in April 1345, eighteen months after its bankruptcy, and
credited the receipt to shareholders of the 1324-31 company.88
There seems to be no commercial rationale for such large invest-
ments in a minor producer of middling-grade wool.89 Possibly, the
abbey served as an important collection point for the surrounding
area and used some of the funds to buy wool for the Peruzzi. But the
84
CCREll 1318-23, 705.
85
The Victoria History of the Counties of England Bedfordshire, Vol. 1, 362-4.
The very costly ceramic tile floors of the church, similar to those in Prior
Crauden's chapel at Ely Cathedral of 1324-5, have survived and are described
by Evelyn Baker in "Images, Ceramic Floors, and Warden Abbey," World Archae-
ology 18 (February 1987): 363-81.
86
CCRE II 1318-23, 705. The entry was noted "cancelled on payment acknowl-
edged by Peter Dini and Henry Accursi, merchants of the aforesaid society."
Dini served in England only from March 18, 1339, till his death in July 1340
(see Sapori, Storia Economica, Vol. 2, 727).
87
CPR E III 1338-40, 46. The entry states, "Pardon, out of compassion for their
recent depressed estate, to the abbot and convent of Wardon of their contin-
gent of the last three-yearly tenth granted to the king by the clergy of the prov-
ince of Canterbury." This pardon was confirmed on February 1, 1341, in CCRE
III 1341-3, 7. Pleading poverty may not be proof of poverty, but getting ex-
cused from taxes is persuasive evidence.
88
I libri, 272. This is one of several similar entries on various pages relating to this
receipt from the "abate di Guardona in Inghliterra."
89
Pegolotti, La pratica, 262. The prices quoted for wool from Guardona fall in
the lower middle range of producers listed. Annual production is shown as
twenty-five sacks, which is in the upper middle range.
incongruity of these transactions suggests a more compelling logic,
the intervention of an anonymous powerful benefactor. This man
could well have been Henry Burghersh, bishop of Lincoln, who is
recorded as staying at Warden Abbey in 1323 when he granted the
abbot and convent an indulgence to aid in the rebuilding of the
church.90 Burghersh, as bishop of a great wool-producing diocese,
would have been well worth cultivating by a company ambitious to
advance its position in the higher-quality wool trade. Also, as a con-
sistent opponent of the Despensers and the king, he enjoyed the spe-
cial protection of Pope John XXII and could be a useful friend in
court in case of a change in the regime. Later, when he was chancel-
lor, treasurer, and councillor to Edward III, Burghersh would have
been in a position to continue his assistance to the abbey's building
project by arranging the tax exemption already noted. For the Peruzzi,
he would have been an invaluable contact, although there is no evi-
dence that he ever intervened on the company's behalf.
The second Close Rolls entry, dated March 1324, is the acknowl-
edgment by the prior of the Hospitalers in England of a debt of
£1,303, with lands and chattels in Bedford, Essex, and Hertford as
collateral.91 This is the first of many entries relating to the Hospitalers
in England and appears to reflect the parceling-out of the liability of
loans made by the company to the grand master of the order in
Rhodes.92 A further entry in February 1326 confirmed that there was
an apportionment of the loans granted to the order for the conquest
of Rhodes and commanded the prior to pay its debts to the Bardi
and Peruzzi, notwithstanding a prohibition the king had imposed on
the export of currency.93 Interestingly, the text of the writ gave credit
to the Hospitalers, and by inference their financiers, for conquering
Rhodes from the Saracens. In fact, the island was taken from the
Christian Byzantines, showing once again how easily and conveniently
history can be distorted.
Further evidence of quickening interest in England is the 1322
loan to the crown. More important, the Peruzzi became principal
deposit banker for Edward II's favorite, Hugh Despenser the Younger.
Starting in January 1321, Despenser maintained an active account
that attained a balance exceeding £3,000 on November 1, 1324.94
90
E. Baker, "Warden Abbey," 364. Baker cites M. Finch's translation of Bishop
Burghersh's memoranda as the source for this statement.
91
CCRE II 1323-7, 170.
92
These are part of the loans discussed earlier in this chapter.
93
CCREIl 1323-7, 545.
94
E. B. Fryde, "The Deposits of Hugh Despenser the Younger with Italian Bank-
ers," Economic History Review 2 series, (1951): 360.
Fryde comments that between 1321 and 1326, Despenser was a more
important source of funds to the English branches of the Bardi and
Peruzzi than were the papal collectors in England, a tribute to the
importance of this account and the often unappreciated smallness of
the papal transfers.95
During the early 1320s, then, the Peruzzi's English business seemed
set fair. It had acquired a valuable relationship with the most power-
ful man in the kingdom aside from the king himself, holding money
for him rather than having to lend it. In this case, the Peruzzi Com-
pany was even more favored than the Bardi, which began to hold
only a lesser amount of the Despenser cash from 1324 onward.96 The
company's papal connection, while not especially lucrative, greatly
enhanced the company's status in England. And even its good rela-
tionship with the French monarchy was helpful during this period.
On one occasion, the French king intervened on behalf of the Peruzzi
to relieve the firm's English branch of a fine of 500 marks for alleged
violation of the wool staple charter.97
Overall, the twelve-year term of the Third Company was one of
solid achievement, with stability in its major markets in the Mediter-
ranean and new growth in the papal and English businesses. Even
the retrenchment in France was not a serious matter, and the com-
pany maintained a significant commercial position in that country.
Profit averaged a respectable, if not outstanding, li. 18,000 per year,
and the real rate of return for those shareholders who were fully
invested throughout the period was 11 percent for the first seven
years and a very good 14.5 percent for the later five years. The share-
holders wished to close the books in 1319 but could not do so be-
cause of the open accounts with the Hospitalers and the Rhodes
branch, but they felt sufficiently confident of the soundness of these
accounts and the prospect of profit to distribute an interim dividend
of 100 percent.98 Their confidence was eventually justified, as the fi-
nal closing in 1324 yielded a further dividend of 90 percent.
There were, however, disturbing signs of trouble ahead. Political
problems were emerging in the second decade of the fourteenth cen-
tury that would distract and eventually overwhelm the popolani lead-
ership, of which the Peruzzi Company shareholders were very much
a part. Following the successful defense of the city against Henry VII
95
Ibid., 348.
96
Ibid., 347. The Bardi, however, was the king's main deposit banker. See N.
Fryde, The Tyranny, 93.
97
CCREll 1318-23, 303.
98
Ilibri, 439.
in 1312, Florence became involved in a series of wars with its neigh-
bors over the next thirty years that proved disastrous, thanks to a
remarkably consistent demonstration of military incompetence.
The first phase of these new local struggles began when Uguccione
della Faggiuola took over as dictator of Pisa and sacked Lucca in
1314. He then attacked the Guelf League of Tuscany and adminis-
tered a crushing defeat on its forces at Montecatini near Pistoia in
1315. Biero di Filippo was the only Peruzzi family member involved
in the battle, although there is a questionable claim that Giovanni di
Giotto also served there." In 1316, Uguccione was overthrown by
Castruccio Castracani, who secured Lucca's independence. There
followed a long period of inconclusive skirmishes between the mer-
cenaries of Castruccio and those of Florence.100 In 1318, Florence
felt sufficiently insecure to renew King Robert of Naples' powers as
signor for a further four years. Given the Peruzzi's close relationship
with the king both in Florence and in Naples, the family and com-
pany would have supported the renewal. The commune's leadership
regained confidence in 1322, however, and allowed the king's man-
date to lapse, a decision apparently justified by the subsequent col-
lapse of Lucca's alliance with Pisa. But Castruccio's shocking seizure
of Pistoia in May 1325 set the stage for the now independent Flo-
rence to embark on a new campaign, which will be discussed in the
following chapter.
There were signs of future trouble for the company as well, stem-
ming from an apparent tendency of certain shareholders to draw
heavily on company money for their personal needs. The only early
evidence is from one partner, but a very important one, Giotto
d'Arnoldo Peruzzi.101 As far as can be ascertained, Giotto maintained
his capital investment in the company in full from 1300 to 1314, and
between 1308 and 1314 he kept a small running deposit as well.102
But from 1315 onward, he became increasingly indebted to the com-
pany, as shown by the fiscal year-end balances in Table 6.
99
Peruzzi, Storia commercio, 402. The author provides costs associated with
Giovanni's participation in the Battle of Montecatini, but since he dates the
event 1335, he is probably referring to a different battle, which he has misnamed.
100
See Louis Green, Castruccio Castracani (Oxford, 1986), for a useful account of
the complex political and military maneuverings of this period. Both sides also
contributed troops and money to the rival Guelf-Ghibelline forces in Lombardy
and Liguria.
101
Giotto's behavior may not have been typical of family members. According to
the 1335 balances shown in Table A6, several non-Peruzzi shareholders were in
debt to the company, but only one other Peruzzi family member besides Giotto
was in debt.
102
Ilibri, 419-26.
Table 6. Balances owed company by

Giotto d'Arnoldo Peruzzi (lire afiorino)
Year at Nov. 1
1315 7,638
1316 10,389
1317 16,272
1318 18,695
1319 19,508°
1320 10,710
1321 12,171
1322 15,196
1323 17,120
1324 22,018*
a
Before interim dividend of li.l 1,000.
b
Before final dividend of li.9,900 and
closing of company.
Source: I libri, 448-60.
These balances for a considerable period greatly exceeded Giotto's

capital contribution of li.l 1,000. Thus, the dividends he received
produced an outstanding return, despite the fact that he was charged
interest at a rate of 8 percent per annum on his balances. Between
1312 and 1319, his actual investment was li.l 1,000 for less than three
years. He received a dividend in 1319 of li.l 1,000 and was assessed
interest on the capital shortfall compounding to li.4,250. He thus
earned a net dividend of li.6,750 on his investment of two and two-
third years, an excellent rate of return of 23 percent. Between 1319
and 1324, he did even better, earning a dividend of li.9,900 while
being effectively charged li.5,200 in compound interest, yielding a
net profit of li.4,700 on zero investment and thus a rate of return of
infinity. Not bad!
When the books closed effective November 1, 1324, Giotto's ac-
count balance of li.22,018 was squared by crediting it with the divi-
dend of li.9,900, a further dividend from the 1300 company of li.237,
elimination of his capital contribution liability of li.l 1,000, and a
cash remittance of li.881.103 This cleanup has the look of what is now
called the year-end "window dressing" applied by modern corpora-
103
Ibid., 459-60.
tions and banks, and might imply that Giotto's normal deep indebt-
edness to the company was being hidden from the nonfamily share-
holders.
This development has, of course, its positive aspects. It shows that
the company's cash needs were increasingly being met by outside
depositors and, therefore, that the enterprise was seen to be suffi-
ciently successful to attract them. Even more gratifying, it confirms
that the company's management of cash flow was effective and sug-
gests that the branches may have been to a large extent self-financed.
And finally, in theory at least, the shift from equity financing to bor-
rowing from outsiders is of limited significance, given the fact that
the company charged the shareholder interest on his shortfall and
that all shareholders were subject to unlimited liability.
On balance, however, the withdrawal of equity capital must be
judged a negative development for the company for several reasons.
First, it signals increasing attention of a key partner on his personal
affairs and a slackening of his commitment to the company's well-
being. A large part of Giotto's borrowing from the company was for
acquisition of property, often in tandem with other Peruzzi family
members or on behalf of the family corporation that had been estab-
lished in 1283.104 Since the company charged Giotto only for his share
of such acquisitions, it is probable that it handled the entire transac-
tion and allocated appropriate shares to the other beneficiaries of
the transactions. Similarly, the company handled allocations to the
Peruzzi "family fund" established in 1292 and allocated charges to
the individual concerned. It is therefore possible that other family
members were in debt to the company at that time, although prob-
ably not to the same extent as Giotto.
As seen from these dividend data, Giotto's dividend income after
interest netted to li. 11,450, or less than li. 1,000 per year over the
twelve-year period. In addition to the property transactions noted,
the company paid for several years the routine living expenses of
Giotto and his family and billed him annually. Over the five years
1316 through 1320, these charges averaged almost li.1,500 per year,
which means that he was living well beyond his earnings from the
company and clearly relied heavily on the income from his private
holdings. As a matter of interest, these figures, which exclude any
expenses he may have paid for directly, show that he was indeed en-
joying a princely standard of living. For perspective, the annual sal-
ary of the company's highest-paid employee reported in Chapter 3
104
That is, the 1283 foundation discussed in Chapter 1.
was li.290, on which he could afford a house and servants, and could
accumulate savings.
A second problem for the company with this situation is that its
personnel - notaries, accountants, and buyers, for example - were be-
ing used extensively on shareholders' personal affairs. The living
expenses for Giotto and his family included food, drink, clothing,
the salaries of their servants, membership fees and donations to or-
ganizations to which they belonged, maintenance of horses, and "all
other expense that the family has requested." Company personnel
will have executed most of the transactions involved and accounted
for them. Very likely there were many more services that went unre-
corded. At the very least, these services were a distraction to com-
pany employees; more seriously, they added to the firm's overhead
costs.
Finally, reliance on the deposits of outsiders for long-term financ-
ing would have committed the company to steady interest payments.
These are easily borne when business is flourishing, but become a
burdensome fixed overhead when business turns soft or less profit-
able. Whether interest costs were excessive in the years ahead cannot
be ascertained, but they are likely to have been a contributing factor
to the company's forthcoming decline and fall.
The decline begins, 1325-1335
The Fourth Company, formed effective November 1, 1324, marked a

distinct change in the fortunes of the business. Its most immediately
striking feature was the reduction of capital to almost half the level
of the previous company, from li.118,000 to li.60,000. The reduction
was not due, as in 1312, to the departure of shareholders, although
two did leave the company. One outsider, Bencivenni di Folco Folchi,
had died and was not replaced; one Peruzzi, Iacopo di Pacino, left
for unknown reasons but was replaced by his brother Donato di
Pacino. Most of the decrease by far stemmed from sharp cuts in the
capital contributions of virtually all shareholders, including the char-
ity share.
What were the reasons for this dramatic change? Sapori argues
persuasively that the main motivation for the lower capital was tax
avoidance.1 The dictator of Lucca, Castruccio Castracani, had culmi-
nated months of intrigue in the internal politics of Pistoia with the
sudden seizure of that city on May 5, 1325.2 This alarming event cre-
ated the need to revive the estimo or wealth tax, abandoned in 1315,
to finance a military force to rescue the city. Affluent Florentines
were expert at concealing the value of their holdings, but the capital
of a company was easy prey for the city authorities to locate and tax.
Sapori says that the shareholders would have been aware in late
1324 of the likely imposition of an estimo and acted accordingly.3 Here
he seems to be assuming that the official establishment and dissolu-
tion dates of each company were those on which the actions took
place. As we have seen in Chapter 4, the dates recorded in the books
often were not the dates on which the actual entries were made. Re-
alistically, the accounting for a company closing would take many
months to complete before sufficient profit information was avail-
able on which to determine the size of a dividend, so that the date on
1
2
For details, see Green, Castruccio, 156-61.
3
The decline begins, 1325-1335 157
which the books were actually closed would have been much later
than the stated closing date. Unfortunately, the accounts rarely show
the date of the actual entry.4 This is not a problem in calculating
rates of return, because the company's internal accounting allocates
credits to the shareholders and credits their interest as though the
transfers were, in fact, made on the dates indicated. The curse of the
lack of entry dates is that it robs historians of clues as to the motiva-
tion for certain actions. Fortunately, in this case Giotto d'Arnoldo
provides an entry date in his Secret Book where he has formally re-
ported the closing of the Third Company and the establishment of the
Fourth Company.5 The date is May 18, 1325, almost two weeks after the
fall of Pistoia, when it would have been clear that the Florence com-
mune must raise extra money for a major military campaign.6
Although this evidence lends support to Sapori's fiscal avoidance
theory, the argument has a serious weakness. He points out that the
company's capital was known not only to the authorities but also to
the business community at large. If so, it would be obvious to all
concerned what had happened, so that the calculation of the tax due
could easily be adjusted to reflect the old capital level. Besides, such
a blatant tactic would harm the Peruzzi's reputation at a time of grave
crisis.
An equally valid reason for the reduction of capital is that the old
company had far more subscribed capital than it needed. As discussed
in the previous chapter, Giotto for long periods not only failed to
contribute his capital, but also was able to borrow heavily from the
company. Other shareholders may also have had shortfalls in their
contributions, although it is unlikely that many of them would have
been as deeply in deficit as Giotto. Another factor is that Giotto may
have decided that he was paying an excessive amount of interest on
his capital deficiency. By reducing his shareholding from li. 11,000 to
li.5,500, he realized a significant saving in his interest charge. Fur-
ther support for an interest-cost motivation comes from a decision
at around the same time to reduce the interest rate applicable to
debit or credit balances from 8 percent to 7 percent per annum, a
rate "good and permitted and blessed by God."7 In any case, Giotto
4
One exception is the report of the Bardi Company for the period July 1, 1330,
to July 1, 1332, which was dated January 1, 1334. Lopez and Raymond, Medieval
Trade, 372.
5
/ libri, 440.
6
In late 1324, however, there was no circumstance that would have called for
emergency taxation.
7
Ibid., 441.
immediately went into debt to the new company, but for a much lower
amount, due to the 1324 dividend of li.9,900 and his capital contri-
bution reduction of li.5,500. His debt remained low-li.4,152 in No-
vember 1325, li.6,039 in 1326, and li.7,061 in 1327, the last recorded
balance.8 His interest cost in 1327 was li.438, a great deal less than
the li. 1,257 charged in 1324.
Another good reason for an interest-rate cut would have been to
save money payable by the company to its depositors. Sapori's claim
that the general knowledge of the company's capital reduction would
have alarmed depositors does not seem to be borne out by their ac-
tions. The simultaneous reduction of interest payable to depositors
suggests a company confident that they were not in a panicky mood.
While these changes were being made in the company, the Florence
Commune was girding for war against Castruccio. It hired a captain who
assembled over 2,400 horsemen, most of whom were mercenaries, and
15,000 citizen foot soldiers.9 This force was soundly thrashed at Altopascio
on September 23, 1325, a battle in which two Peruzzis were killed and
two captured and later ransomed. The company as well as the family
suffered from this catastrophe, one of the slain being a shareholder,
Guido di Filippo. His son, Pacino di Guido, was one of the captives and,
after his release, took Guido's place as shareholder.
After the defeat, followed by Castruccio's foray to the very gates of
Florence, the commune felt obliged to look once again to the Angevin
kingdom for help. In December of that year, Florence asked Robert
if he would send his son and heir, the duke of Calabria, to be the
city's regent and protector for ten years. The commune promised
him 200,000 florins per year, the maintenance of 1,000 French
knights, and the authority to nominate the podesta, the priors, and
all other officials, and to exercise the right to decide on peace or
war. The duke finally arrived in July 1326 and turned out to be both
ineffective and extravagant. To add to Florence's worries, Emperor
Ludwig of Bavaria crossed the Alps in 1327 and assisted Castruccio in
the conquest of Pisa late in that year. Ludwig pushed on to Rome
with Castruccio's help and received a less than convincing corona-
tion in the following year.10 During Castruccio's absence, the
8
Ibid., 461.
9
Green, Castruccio, 162. He cites Villani as indicating that 900 of the cavalry
were Florentines and the balance mercenaries of mixed origin. The captain,
Count Rugiero da Dovadola, was the same man who had dubbed Guido di Filippo
Peruzzi knight in the preceding year.
10
Ludwig received the imperial diadem in January 1328 from a representative of
the Populus Romanus in a civil ceremony and was then consecrated by two
bishops, both of whom had been declared heretics by Pope John XXII.
Florentines recovered Pistoia without the help of the duke, who had
rushed to Naples when Ludwig marched on Rome. Castruccio re-
turned from Rome to recapture Pistoia but died on September 3,
1328, shortly after successfully completing the siege. Two months later,
the duke died in Naples.
The Florentines could well breathe a collective sigh of relief. By
sheer good fortune, they were relieved of both their tormentor and
their expensive and arrogant protector. Ludwig was forced to retreat
from Rome to Lombardy and eventually to Germany. Pistoia was firmly
under Florence's control and Lucca was weak and vulnerable. The
Florentines celebrated by instituting yet another constitutional re-
form, broadening the basis of eligibility for high office and electing
candidates by lot in an attempt to break the pattern of factional in-
fighting. The centerpiece of the selection process was the creation of
three committees of scrutators who were to present lists of suitable
nominees for the approval of a scrutiny committee.11 Several of the
Peruzzi family were appointed to the first of these committees.12 Pri-
ors selected by lot from the approved lists were to be advised by Twelve
Good Men and nineteen gonfalonieri (heads of the administrative dis-
tricts), comprising the collegium. Despite these well-intentioned
changes and the seemingly democratic procedures, many of the same
families, including the Peruzzi, continued to dominate public policy
and foreign diplomacy over the next fourteen years.13 Their policy
was expansionist, with the financing of their machinations to be
achieved through continued reliance on indirect taxes, the gabelles,
supplemented by the estimo in the countryside only, and by interest-
bearing loans secured by future gabelles. The inept execution of this
policy over the next fifteen years brought Florence to crisis and con-
tributed greatly to the bankruptcy of its super-companies.
The war with Castruccio had unquestionably been costly and dis-
ruptive to the Peruzzi and the business community as a whole. For a
while, the sojourn of Duke Charles in Florence seemed beneficial to
the Bardi, Peruzzi, and Acciaiuoli companies, which advanced him
some 60,000 florins over a six-month period.14 Much of the money
was spent on entertainment and luxury goods, as well as arms, prob-
11
See Najemy, Corporatism, 103-9, for an analysis of the complex procedures in-
volved in the new system.
12
Passerini, "Genealogica."
13
Najemy, Corporatism, 118, points out that thirteen families, including the Peruzzi,
held 20.9% of the key posts between 1328 and 1342, commenting that "perhaps
at no time more than in the 1330s did the government of Florence approach
the character of a true plutocracy."
14
ably provided at least in part by the companies. Duke Charles' pres-
ence also gave the firms and their families added political prestige.
For example, Giovanni Peruzzi was appointed provost of the prince's
stables.15 But Charles' excesses were becoming increasingly costly,
alienating the people of Florence to the point of contemplating his
ouster, had he not obliged with his timely death.
Further evidence of economic dislocation was the bankruptcy of
the venerable Scali firm in August 1326, shortly after the duke's ar-
rival in Florence. This collapse sent shock waves throughout western
Europe. As an active participant in the commerce of southern Italy,
England, and France and a favorite of papal princes, the company's
fall created serious problems for the super-companies.16 An indirect
result was that it made depositors nervous and the Curia more cau-
tious than ever in dealing with bankers. More directly, it put the su-
per-companies under pressure to make good on the losses of their
more prestigious clients. There is evidence that the super-companies
felt obliged on at least one occasion to reimburse an ecclesiastical
depositor for its eventual loss on a Scali default.17
Difficulties for the Peruzzi were also looming in France and En-
gland, as the two kingdoms began skirmishing over Aquitaine, fol-
lowing a brief period of unusual amity. The French had actually sup-
ported Edward's disastrous Scottish campaign of 1323-4 because the
Scots had allied themselves with the Flemish.18 This aberration ended
soon after the accession of Charles IV, who provoked a brief war in
Gascony, which was settled to his satisfaction in 1325. The antipathy
of the French crown toward foreign merchants and bankers persisted
long after the death of Philip the Fair, despite a succession of short-lived
and relatively weak monarchs. The Peruzzi Company continued to in-
gratiate itself with the French kings by collecting indemnities in Flanders
and especially by helping finance the 1328 campaign of their vassal,
Count Louis, against the Flemish rebels (discussed later). Under these
conditions, the Peruzzi operations in France remained profitable and
15
Ibid., 316.
16
Davidsohn, Firenze, Vol. 4, 1068-9. The company's origins date back to 1222,
and in its final years the company had as many as twenty-five shareholders, only
four of which were Scali. The losses on bankruptcy were no doubt considerable
and widespread, but the figure of 400,000 florins cited by Villani (Book X, Chap.
4) should be treated with the usual caution applicable to his estimates. The
settlement, which yielded creditors 44 1/6%, was accomplished in the remark-
ably short time of eight months.
17
This is the deposit shared by the Bardi, Peruzzi, and Scali referred to in Chap-
ter 3.
18
N. Fryde, The Tyranny, 140.
were able to support the occasional fines as a "cost otdoing business,"
but they were nevertheless neither very rewarding nor very secure.
Meanwhile, the Bruges branch came under great stress when that
commune and Ypres joined a revolt of the free peasants of West
Flanders in 1323. This turned into a particularly vicious class war,
causing the rich merchants and patricians (the so-called leliaerts) to
flee, mainly to Ghent, which had not joined the rebellion.19 It is not
at all certain that the Italians decamped along with them, because
commerce in and out of Bruges continued at a reasonable level until
November 1325, when the French severed commercial relations with
Flanders. This action promptly caused a split in the rebels' ranks,
resulting six months later in the Treaty of Arques, which was unfavor-
able to them. At that point, Count Louis named Donato di Pacino
Peruzzi his General Receiver with responsibility for collecting the
penalties assessed under the treaty.20 Donato later arranged a loan to
the count, apparently to help finance the campaign that led to the
final crushing of the revolt at Cassel in August 1328. The acknowl-
edged amount of the debt was the very large sum of lbr. 20,000 parisis,
then equivalent to 33,333 florins, or nearly li.50,000. Under a con-
tract signed in December 1328, the count assigned to the city of Bruges
responsibility for repayment over a five-year period, with installments
due monthly, presumably as a penalty for the city's participation in
the uprising. As the managing partner of the Bruges branch at the
time the contract was drawn up, Donato di Pacino Peruzzi, still the
count's receveur, saw to it that the repayments were made directly to
him.21 The loan was apparently reimbursed by 1333.
In England, Edward II's incompetent but friendly regime was com-
ing under increasing pressure, partly due to the king's attachment to
Hugh Despenser, with whom the Peruzzi's relationship was now em-
barrassingly close.22 By 1325, the English branch served not only as
19
See H. Pirenne, Histoire de Belgique, Vol. 2 (Brussels, 1922), 75-100, for a more
detailed account of this revolt. Leliaert would be roughly translated in today's
terms as "lily-lover," i.e., a supporter of the fleur-de-lis of the French king.
20
Kittell, From Ad Hoc to Routine, 151-6.
21
De Roover, Medieval Bruges, 84-5, describes the contractual arrangements in
detail, citing the Bruges municipal charters. A long, complex entry on this
loan also appears in / libri, 164. It was written in 1345 after the firm's bank-
ruptcy, acknowledging that the 1324-31 company owed Donato di Pacino one
year's interest at 7%, because Donato had extended the remaining lbr. 8,000
parisis of the loan from February 1, 1332 to February 1, 1333, apparently out of
his own pocket.
22
Despenser referred to Bonifazio as "most beloved" and "my valet" in a letter
written in late 1325 (Davidsohn, Firenze, Vol. 6, 719-20).
Despenser's deposit bank, but also as his purchasing agent and gen-
eral merchant, dealing in all kinds of merchandise and services.23 It
is difficult to determine whether or not this was a profitable relation-
ship for the Peruzzi. Given the frequent withdrawals, it is unlikely
that the Peruzzi paid interest on much of the deposit balances.24 At
the same time, the cash was of limited use to the branch because it
had to be available to Despenser at short notice, and the record con-
firms that payments were made with extreme punctuality. 25 Nor did
this relationship bring to the company deposit business from other
leading families of England; although data are too sparse to make a
definite judgment, the consensus among English historians is that
deposits from private individuals were not significant.26
Balances in the Despenser account declined precipitously by the
end of 1324 due to large withdrawals and then eroded further over
the next eighteen months as expenditures exceeded new deposits.
By October 1326, when the Despensers were overthrown, the bal-
ance was actually a small deficit.27 During that period, however, the
prestige of the Peruzzi Company in England continued to rise. On
September 13, 1326, Bonifazio, still head of the company's English
branch, was selected by the government, along with Taldo Valori of
the Bardi, to take charge of all the assets of the bankrupt Scali branch
for eventual distribution to creditors.28
The Peruzzi fortunes in England were abruptly reversed eleven
days later when Queen Isabella and Roger Mortimer invaded England
with a small force, ostensibly to destroy the despised Despensers, but
ultimately to overthrow Edward II. As they approached London, riot-
ing broke out, and one of the looters' targets was the Bardi house.
The Bardi personnel, and no doubt the Peruzzi, went into hiding.
The Bardi Company, however, was quickly restored to grace, due to
its generous funding of the queen during her sojourn in France and
her continuing need for the Bardi's resources.29 That company was
23
Fryde, "Italian Bankers," 352.
24
There is, however, a record of a five-month deposit by Despenser, with "inter-
est" allowed through a favorable sterling-florin exchange rate. See Michael
Prestwich, "Early Fourteenth-Century Exchange Rates," Economic History Review
2 series, 32 (November 1979): 476.
25
Fryde, "Italian Bankers," 354.
26
Ibid., 355; Lloyd, Alien Merchants, 197; Prestwich, "Italian Merchants," 96.
27
Fryde, "Italian Bankers," App., 360-2.
28
CCREII 1323-7,607.
29
N. Fryde, The Tyranny, 193-4. Elsewhere, Fryde notes that Mortimer and the
queen disposed of Edward II's accumulated treasure with astonishing speed
(see 105).
therefore able to conduct business as usual with the regency and then
with Edward III when the young king overthrew Mortimer in 1330.30
The Peruzzi had been too closely associated with the hated Despensers
to be fully reinstated, but it at least avoided expulsion. Bonifazio contin-
ued to act as a comanager in the Scali bankruptcy proceedings and con-
ducted a business that was modest but not moribund.31 But he departed
for Florence early in 1328, leaving a factor in charge, confirming the
relegation of the English business to a low-profile trading operation.32
In southern Italy, business seemed to be continuing as usual. Ex-
ports under the grain monopoly persisted at high levels between 1327
and 1331, as previously mentioned. There is no evidence to suggest
that the commerce in the south was weakening; on the contrary, with
gradually increasing emphasis on the manufacture of higher-quality
textiles, Florentine penetration of this market with its own cloths may
well have been improving.33 But something must have been going
wrong with this most important business, because the profitability of
the Peruzzi Company had vanished.
Overall, during the late 1320s, the Peruzzi business had lost its
earlier momentum. It had stopped growing in its established mar-
kets and had suffered setbacks in its attempts to expand into new
territories. Not only had it lost ground in England, but it had also
been rebuffed in its ambitions to develop business in Christian Spain.
Its attempts to compete in the Kingdom of Aragon suffered from the
close ties of the Peruzzi with the kings of Naples and France and
finally ceased in 1331, after the king of Aragon's treasurer failed to
pay 421 florins due on armor that the company had made in Flo-
rence on orders from the king.34
The Fourth Peruzzi Company closed its books effective June 30,
1331, after six years and eight months of not very satisfactory perfor-
mance. It is not clear why closing took place on that particular date,
but two possibilities come to mind. The first is that the long-serving
30
See Fryde, "Loans to the English Crown."
31
CR E III 1327-30, 40. A very long entry on the Scali bankruptcy confirms the
role of the Bardi and Peruzzi as controllers of the Scali assets.
32
Ibid., 372. This entry formalizes the appointment of Rinieri di Tommaso Peruzzi,
a low-salaried factor, as attorney for Bonifazio and his experienced factor,
Giovanni Giuntini, who were leaving the country. The appointment was re-
newed for a further two years in 1330 (CPRE III 1327-30, 492).
33
Hoshino, LArte delta lana, l±-b and Table VIII. The data here, although far
from precise, do show unmistakable evidence of a trend toward sales of higher-
priced textiles.
34
Sapori, La crisi, A2\Ilibri, 10. The entry recognizing the bad debt and charging
it to the mercanzia company was made in 1337.
chairman Tommaso may have wished to tidy up his and the company's
affairs in anticipation of his death later that year. The second is that
the decision to close occurred a/^rTommaso's death with the date
brought forward to July 1 to suit a new mix of operations. Perhaps
the new date reflects a change of emphasis from grains to textiles,
but there is no way of confirming this. It is worth noting, however,
that the July 1 start for the Peruzzi's year was maintained throughout
the remainder of the company's existence and that the Bardi Com-
pany, long a leader in the wool and cloth trades, had begun its year
on July 1 at least as far back as 1318.
Irrespective of the reasons for the timing of closing the Fourth
Company, the results were not good. There is no record of a divi-
dend distribution until July 9, 1338, when accumulated collections
of old debts permitted a payout to the 1324-31 shareholders of
li.26,518. This is probably all the company earned, because, judging
from the actions of the previous companies, dividends were only paid
when the amount of surplus was significant or certain. A further
distribution was made in 1345 as a result of the windfall recovery
from Warden Abbey, but this came after the bankruptcy and no doubt
ended up in the coffers of the creditors and so cannot be considered
a profit for the shareholders. Realistically, therefore, the company
can be considered as having earned a paltry li.4,000 per year over
the life of the company. Given that the partners had to wait fourteen
years for the dividend, their return on capital was a derisory 3 per-
cent.
What was going wrong? The war with Castruccio and the upheav-
als in Florence in 1326 very likely played a part, with disrupted busi-
ness and special taxes. The collapse of the Scali Company and the
setback in England may have also dented the Peruzzi's profitability.
But the flagship of the company's business, Angevin Italy, appears to
have been thriving as never before. As has been previously mentioned,
the grain export monopoly was operating at a sustained average rate
of 110,000 salme per year between 1327 and 1331. Even though the
Angevin rulers diluted the monopoly by including the Buonaccorsi
in 1330, there remained plenty of business to go around. And the
super-companies' penetration of the markets and administration of
southern Italy appeared undiminished.
The most important cause of the poor results for the 1324-31 pe-
riod is likely to be found in the weakening profitability of the Peruzzi's
biggest business, the grain trade. Since the volume continued at a
high level the problem must therefore have been lower profit per
unit. Although direct evidence is difficult to find, there are clues to
Table 7. Profit of the Bardi Company, 1330-2 (lire a fiorino)
1330-1 1331-2 1330-2

General account 22,493 18,792 41,285
Wool business 22,491 17,463 39,954
Cloth business 3,911 3,910 7,821
Other 1,856 1,500 3,356
Total 50,751 41,665 92,416
Source: R. S. Lopez and I. W. Raymond, Medieval Trade in the

Mediterranean World, 370-1; A. Sapori, La Crisi, 218-19.
support such a contention. The first is the very helpful profit analysis
of the Bardi Company for the years 1330-2, as summarized in Table 7.
What is immediately striking about these figures is the enormous
profitability of the Bardi Company, nearly twice that of the Peruzzi
in its best years. There is no information on the capital subscription
of that company, so that a return on capital cannot be estimated, but
it must have been quite rewarding.35 The next most noticeable fea-
ture is the lucrative wool business, which contributed almost half of
the company's profit. By contrast, the contribution of the cloth busi-
ness was minor. Within the "other" category were two items identi-
fied only by folio number, making it impossible even to guess what
they represent. But one very important business is notable by its ab-
sence, the grain trade. Possibly it was too widely dispersed to be con-
trolled as one profit center, but it is curious that this crucial business
should have been relegated to a folio number or, more likely, to the
general account catchall. What is clear is that grain sales, which we
know were substantial during this period, did not account for a large
share of Bardi profits.
The second clue provides a reason why profit on grain sales may
have been low. This is the severe famine that struck Florence along
with most of Italy in 1329, following two consecutive disastrous har-
vests, causing food riots in the grain market of Orsanmichele. The
famous confraternity of the same name made extraordinary alloca-
tions of charity to the poor that year and, exceptionally, was appointed
as the main agency of the commune for distributing government funds
35
The capital of the 1331 Bardi Company was divided into fifty-eight shares held
by eleven shareholders, but the value of each share is unknown. See Sapori, La
crisi, 248-9.
to the population for the purchase of foodstuffs.36 Villani's vivid de-
scription of the crisis and his estimate of the cost of subsidies to the
commune may have been exaggerated, but Lenzi's lengthy day-by-
day reports confirm a severe and unusual situation.37 Villani pointed
out that the wheat distributed by the commune came from Sicily.
Puglia, however, remained the chief supplier of grain for northern
Italy, even when there were riots from its own citizens over food short-
ages, which were blamed on the hoarding of wealthy merchants.38
But the profiteering merchants in this case were probably not the
super-companies. Instead, the latter were caught in a classic market
squeeze, under enormous popular and government pressure to hold
their selling prices down in Florence and other markets, while being
forced by their suppliers to buy at premium prices. The famine, sur-
prisingly, may well have driven the profit out of the super-compa-
nies' grain business.
Evidence for the profit squeeze appears in // Biadaiolo price re-
ports for 1329 and 1330. When the famine struck with full force in
April 1329, the imported grano ciciliano disappeared entirely from
the Orsanmichele for six weeks; the small amounts of grano communale
available had to be mixed with barley or millet.39 At the same time,
the commune intervened to set a "political price" for grain several
soldi per bushel below the market price and maintained these con-
trolled prices right through the autumn of 1330.40 The communal
intervention may not have directly affected the super-companies'
profit because the commune paid for the price differential. But the
companies would have been under enormous pressure to keep their
prices as close as possible to their costs, or even to sell at a loss.41
The reduced profitability of the Peruzzi Company was no passing
phenomenon. The steady decline from low profits to severe losses
that will be seen over the next several years was occurring at a time
when the grain business was still the heart of the company's opera-
36
J. Henderson, "Piety and Charity," 155.
37
Villani, Storia, Book X, Chap. 118. Here he sets the cost to the Commune as
60,000 florins over the two years. For Lenzi's comments, see II Biadaiolo, 292-
354.
38
Abulafia, "Southern Italy," 380-1.
39
See Chapter 2 for a listing of the grades of grain.
40
// Biadaiolo, 68.
41
As mentioned in Chapter 2, Davidsohn (Firenze, Vol. 5, 241) noted that guilds
were expected, in times of scarcity, to buy grain abroad and sell it to the com-
mune below cost, assigning their losses to the commune. Under such circum-
stances, it would be difficult for important guild members such as the Peruzzi
to take profits on grain sales on a "business as usual" basis.
tions. Even the Bardi, although buffered by its strong participation
in the wool trade, saw its profitability decrease sharply, suggesting
that it too was losing money in its grain dealings. Sapori indicates
that earnings for the 1332-4 period were low, with the eventual divi-
dend probably not much more than 1 percent.42 Specific reasons for
these unfavorable results are offered later in this chapter. But it is
worth mentioning at this point that the government involvement in
the relief of the 1328-9 famine seems to have sparked a change in
official attitudes toward the marketing of foodstuffs, directly affect-
ing the super-companies' pricing policies. Although the Florentine
Commune ceased its intervention during part of 1331 and all of 1332,
it resumed this activity briefly in 1333 and continuously throughout
1334-5.43 Further data after December 1335 are sketchy, but the
record to that point suggests that political pricing would be imposed
by the authorities whenever they deemed market prices to be unac-
ceptable. Such actions were probably taken in 1336-7 and definitely
during the next severe famine in 1339-40.44
It is unfortunate that Tommaso should have died at this time. Con-
servative in outlook, he built a powerful and prosperous business on
the base of a long-term commitment to Angevin Italy and its grain
trade. For twenty-eight years he steered the company firmly through
wars and famines and established an effective system of control over
its far-flung operations. He seems, however, to have shown only hesi-
tating interest in capturing a leading position in the English wool
trade. After an energetic start in the early 1320s, he left that business
to the domination of the Bardi following the fall of Edward II. He
recalled his son Bonifazio and appeared to show no further interest
in rebuilding the Peruzzi's position with the English monarchy. Nev-
ertheless, the business as a whole, although in decline, was still prof-
itable and may well have remained so for several more years had his
brand of cautious, close stewardship been continued by his succes-
sors.
The Fifth Company opened for business on July 1, 1331, still un-
der the nominal leadership of Tommaso. After Tommaso's death later
that year (the precise date is not known), the company under its new
leader adopted the style Giotto d'Arnoldo de' Peruzzi e compagni.
The new company registered a 50 percent increase in capital, from
li.60,000 to li.90,000.45 The additional money came partly from an
42
Sapori, La crisi, 106.
43
// Biadaiolo, 68-70.
44
Ibid., 95 nlO5, 102.
45
See Tables A4 and A5 for details.
increase in contributions from existing partners but mainly from the
addition of six new nonfamily shareholders who subscribed a total of
li.22,250. One of the new partners was Francesco Forzetti, the
company's long-serving manager of the Sicilian branch. The others
were new associates - Baldo Orlandini, Piero Ubaldini, and three
Soderini brothers - indicating that the Peruzzi Company still had the
reputation and prestige to attract new investors. Only one minor
shareholder, Giovanni Raugi, left the firm.
These changes meant that for the first time in its history, the ma-
jority ownership of the Peruzzi Company passed out of the hands of
members of the Peruzzi family. Scholars have made much of this trans-
formation, but in reality, the Peruzzi family leadership remained
firmly in control of the business. One of the new shareholders,
Forzetti, was a loyal company man and a permanent nonresident,
unlikely to be influenced by any group of outside shareholders. The
Baroncelli brothers were associates of such long standing that they
could be regarded almost as family. The new partners were welcomed
both for their cash and their particpation in the business; Orlandini
served in England and Florence and his son worked as a factor in
Bruges, while all of the Soderini brothers were active in Naples and
Sicily.46 And the capo remained a Peruzzi of towering prestige in the
community. Giotto was an even more powerful figure in Florentine
politics than Tommaso had been. Whether the new members were
aware of the firm's lackluster performance over the previous few years
is not possible to ascertain.
The four years of the Fifth Company, from July 1, 1331, to June
30, 1335, passed in relative peace under Giotto's stewardship. To be
sure, Florence continued to be involved in the complex Guelf-
Ghibelline conflicts in northern Italy, but without the cost in blood
and gold of the ill-starred campaigns of the previous decade.47 The
company's good friend King Robert of Naples continued to make his
kingdom a happy hunting ground for the super-companies. Pope John
XXII's long crusade against the Ghibellines was winding down and
ended with his death in 1334; his successor, Benedict XII, began his
reign in a less aggressive style. England and France maintained an
uneasy peace while the new king, Edward III, was bringing Scotland
to heel and the still newer king, Philip VI of France, was consolidat-
ing his power. Altogether, this was hardly a placid period, but decid-
edly more orderly and felicitous for business operations than either
the years preceding or following.
46
/ libri, 359-60 and 310 for Orlandini and 57 and 45 for the Soderini.
47
G. Mollat, The Popes of Avignon, 1305-1378, trans. Janet Love (Paris, 1949), 106-7.
Nature was also reasonably cooperative. Although 1333 and 1334
were rainy and grain prices were somewhat above normal, there was
no repetition of the severe shortages of the late 1320s.48 But the one
natural disaster to strike Florence in that period was catastrophic -
the great flood of November 1333, the equal of which was not seen
until 1966. The flood waters passed through the heart of the com-
mercial districts, damaging or destroying not only buildings, furni-
ture, and equipment, but also the great stores of merchandise of all
kinds that were always present in Florence because of its role as a
distribution center. Grain supplies were also affected; after a nine-
day closure, the market reopened with prices up four soldi per bushel,
a level that was sustained for several months. 49 Villani, as usual, offers
a quantification of the loss, citing the city repair bill at 150,000 flor-
ins.50 Whether this estimate is anywhere near the truth even as an
order of magnitude is unimportant. The fact is that the Peruzzi,
among all the entrepreneurs of Florence, will have suffered serious
losses in damaged property and ruined merchandise. Moreover, they
will have shared in some way the cost of the disruption and restora-
tion of public services.
Aside from the losses associated with the flood, the Peruzzi busi-
ness should have enjoyed in this benign environment about the same
level of profitability as it did during the late teens and early twenties.
On that basis, annual profit should have averaged in the range of
li.15,000 to li.20,000 before flood damage. The actual results were
losses averaging li.9,700 per year; thus, over the four years 1331-5,
profits were almost li.100,000 to li.120,000 below what should have
been expected. As we have seen in Chapter 4, there is no record of
inventories in the surviving account books, so that it is impossible to
make even a rough guess at the value of stocks exposed to flood risk,
let alone any idea of actual losses. The total assets recorded in the
Black Book and White Book on July 1, 1335 were li.295,000, and a
significant portion of those assets may have been merchandise, so
that it is theoretically possible for flood losses to have been as high
as li. 100,000. But a loss of anything approaching this magnitude is
extremely unlikely without some mention of it somewhere in the
company's records. A more credible scenario for the Fifth Company
is a significant but not overwhelming flood loss and a deteriorating
basic business. Flood damage no doubt also contributed materially
to the Bardi's profit decline for 1332-4 cited earlier, but the next
48
La Ronciere, Prix et salaires, 716; // Biadaiolo, 69-70.
49
II Biadaiolo, 491-2.
50
biennial balance, 1334-6, also reflected weak results, suggesting more
deep-seated problems.51
With Giotto in charge, the basic business was not likely to receive
much innovative stimulus. Giotto was very much preoccupied with
communal and family interests and, far from being prepared to com-
mit cash to the business, he continued to borrow consistently and
heavily from the company. On July 1, 1335, Giotto's debt was li.8,216,
suggesting that the previously reported arrears of over li.7,000 in
1327 were maintained during the intervening years.52 Given his con-
tinued preoccupation with personal and political affairs, it is not sur-
prising that Giotto would have let the company run very much as
before, albeit without the close control exercised by his predecessor.
One important change was taking place in Florentine business
during this period - the accelerating trend toward the local manu-
facture of top-quality cloth.53 Whether the Peruzzi Company was a
leader or follower of this movement is uncertain, but it undeniably
was a participant. The Peruzzi accounts reflect an entry for legal ex-
penses incurred in 1333 to obtain the favorable settlement of a law-
suit in Bruges. The expenses include the cost of four bolts of velvet
made in Florence as a present for the countess of Flanders.54 It is not
known whether the cloth was of Peruzzi manufacture, but such a gift
to a lady whose husband controlled Europe's finest fabricators of
luxury cloth showed a level of confidence in the Florentine product
that bordered on cheekiness. It must have been pleasing, neverthe-
less, because the lawsuit was eventually settled successfully.55
The Peruzzi participation in cloth manufacturing, however, was
unlikely to have been significant. Members of the Peruzzi family had
been enrolled, and exercised leadership, in the Calimala Guild since
early in the company's history and, as such, would have been en-
gaged in the redressing and finishing of imported cloth.56 At a later
51
Sapori, La crisi, 106, 230. There are no data for this or subsequent periods on
Bardi results, except for a fragment that gives an apology for delays in getting
figures because of lack of responses from branches. Sapori suspected that the
Bardi began to incur losses, although probably not as great as those of the
Peruzzi.
52
See Table A6.
53
Hoshino, L'Arte della lana, makes this point repeatedly in text and tables in
Chaps. 2 and 3.
54
/ libri, 101. The cost of the cloth was an unidentified portion of the substantial
sum of li.3,577, which included legal expense for the lawsuit and the cost of
horses for Donato di Pacino Peruzzi's trip to Bruges.
55
Ibid., 28.
56
Filippo, Arnoldo, and Tommaso were all members of the Calimala Guild (Peruzzi,
Storia commercio, 255, 257).
date, other family members also matriculated in the powerful Lana
Guild of wool processors. The company definitely kept wool in its
warehouses and shops in Florence, and although much of this raw
material would have been for resale to other entrepreneurs, it would
be surprising if the Peruzzi did not engage in cloth production for
its own account.57 Also, the company had enough activity going to
justify having a full-time shearer on the payroll.58 Finally, given that
cloth making operated entirely on the putting-out system, with the
entrepreneur providing capital and oversight, it would be an easy
kind of endeavor for a super-company to enter.59
Why should the Peruzzi's involvement in cloth fabrication have
been so limited? Hoshino makes an eloquent case that the typical
cloth-making shop was of modest size, with production averaging
between 80 and 100 pieces per year, consuming only eleven to four-
teen English sacks of wool.60 This is not to say that a super-company
would shun a small business; the Peruzzi firm engaged in many small
operations, including a furrier's shop in Florence.61 Despite the logi-
cal expectation that companies such as the Peruzzi, and certainly the
Bardi, would become large-scale cloth manufacturers, given their
massive involvement in the wool trade, there are two reasons for be-
lieving that they would not. The first is that there are no significant
economies of scale that larger firms could bring to the putting-out
system. The second is that profitability was low because of the large
number of small entrepreneurs and the stiff competition for market
share discussed earlier. Hoshino argues that the manufacturers in-
vested very little capital - from 500 to 2,000 florins - and were pre-
pared to accept safe but low margins, leaving the big merchants and
financiers to earn the big rewards and take the market risks.62 The
evidence from the Peruzzi accounts indicates that super-company
avoided direct involvement in cloth manufacturing, participating
instead through an association with two men described as "partners
57
/ libri, 180. Here are several entries dealing with the rent of fondachi and case
for storing wool.
58
Ibid., 65, 314. Entries describe Giovanni di Iacopo as a cimatore. But much of
his time would have been spent on finishing imported cloth, and as noted in
Chapter 3, he was absent for significant periods on assignments outside of Flo-
rence from 1335 onward.
59
A brief description of the putting-out system appears in Chapter 2.
60
Hoshino, UArte delta lana, 203. The conversion rate for the number of pieces
per English sack of wool is 7.26 (Table XX, 148). The English sack of 364
pounds is used throughout this book, rather than the smaller Italian sack of
220 pounds.
61
/ libri, 312, refers to the company's bottegha di nostra pelliccieria (our furrier shop).
62
Hoshino, UArte della lana, 201.
in the drapperia."63 The typical cloth-manufacturing shop in Florence
at that time was a two-man entrepreneurship.
The conclusion of this analysis is that the shift to the manufacture
of higher-grade cloth in Florence in the 1330s would not have added
much to the Peruzzi's profit and more likely would have reduced it.
The company, like other Florentine merchants, was in effect market-
ing fewer quality finished goods brought in from Flanders and
Brabant, replacing them with more cloth from Florence, and ship-
ping more wool to Florence and less to Flanders. Was this shift a
positive action initiated by Florentine merchants to make more money
or a reaction to preserve their markets in the Mediterranean and the
Levant, following a production decline in Flanders? Hoshino has ar-
gued forcefully for the latter view, asserting that the decline in Flem-
ish textile production after 1320 damaged the Florentines doubly, by
simultaneously reducing the Flemish market for quality English wool
and creating a scarcity of quality finished product.64 The transport of
English wool to Florence instead of Flanders was riskier and prob-
ably less profitable, and certainly, as we have seen, immobilized cash
much longer.65
There are additional reasons for believing that the manufacture
of high-quality cloth in Florence in the 1320s and 1330s was deleteri-
ous to the profit of the super-companies. Aside from the lower mar-
gins in the wool trade, the Florentine finished product would likely
sell for less than Flemish goods of equivalent quality until the former's
reputation had become established. Again, in the start-up phase,
Florentine manufacturing costs would be high. But the effect on the
super-companies' profit in the 1330s should not be exaggerated. Even
Hoshino agrees that the decline in Flemish production was gradual
and did not assume significant proportions until the second half of
the fourteenth century.66 Moreover, as reported earlier, the trade in
raw wool remained very profitable for the Bardi as late as 1331-2.
For the Peruzzi, the profits probably declined, but only moderately.
Except for its venture into quality cloth manufacturing, the pat-
63
See Chapter 3 for a fuller discussion of this arrangement.
64
Hoshino, L'Arte della lana, 139-40.
65
Ibid. Also, Hoshino's estimate of profit on English wool landed in Florence is
5.3 florins (see table, 142), or £0.8 sterling per sack of 220 pounds, equivalent
to £1.3 sterling per sack of 364 pounds. This compares with an average profit
of at least £2 for the large sack, which Fryde calculated for wool shipped to
Flanders ("The Wool Accounts of William de la Pole," 14). These are, of course,
comparisons of very approximate data that may not really be comparable, but
they tend to confirm Hoshino's intuitive judgment.
66
Ibid., 137.
tern of the Peruzzi's business throughout the period 1325-35 would
have been much the same as before, with continued reliance on the
old standbys of a large grain trade, a small wool trade, marketing of
cloth and other merchandise, and financial services. As far as can be
told, the core enterprise was functioning normally. Yver notes that
although the registers of the Angevin kingdom for the 1330s were
incomplete, enough remained when he was doing his research to
prove that relations between the super-companies and the Neapoli-
tan court were as active and productive as ever.67 There is no evi-
dence from the company's markets in western Europe and around
the Mediterranean to suggest a significant decline in business. Steadily
draining out of the company, profits were meager between 1324 and
1331, and turned to severe losses between 1331 and 1335. Specific
problems have been cited already, such as the setback in England,
the famine of 1329, and the flood of 1333, but something more fun-
damental seems to have been sapping the company's strength. Three
possibilities come to mind - the weakening of the company's leader-
ship, rising transactions costs, and reduced profit on grain sales.
A company of the size and complexity of the Peruzzi required lead-
ership of a special kind. Given the widely dispersed operations and
poor communications, the chairman needed to possess an intuitive
grasp of how far he should trust his branch managers to make deci-
sions. Even more important, he had to pay intensive and continuing
attention to day-to-day operations to make sure that all the moving
parts of the company were working more or less in harmony. Tommaso
appears to have provided such oversight during his first twenty years
or so in running the business, but even he seems to have relaxed his
grip during his declining years.68 Giotto was already advanced in age
when he took over the helm of the company and, as we have seen,
had too many personal and political distractions to enable him to
devote the intensive care that the company's affairs needed. Giotto's
great prestige and his political acumen were important assets, but
they did not seem to bring any noticeable benefits to the manage-
ment of the firm. The company drifted along in the same old way,
with the leadership seemingly unaware that the company was in de-
67
Yver, Le commerce, 319. Yver completed his research early this century, long be-
fore the wholesale destruction of Neapolitan archives by the Nazis in World
War II.
68
The Peruzzi's overly close relationship with Despenser in England, for example,
suggests that Tommaso had relied too much on Bonifazio's judgment of the
political situation there, so that he failed to insist on the kind of hedging action
that the Bardi took to reduce the company's vulnerability to a change in rulers.
cline or, if aware, unwilling or unable to do very much about its prob-
lems. These statements are, of course, speculative, but we do know
that management neglect was a frequent cause of the failure of medi-
eval as well as modern companies.69
Another of the problems that may have been contributing to the
company's malaise is a rise in what John Munro and others have called
"transactions costs." This term is usually narrowly defined to contain
the costs of market information, contract negotiation, and property-
right protection, but Munro has logically included those of trans-
port and direct marketing to encompass all costs "ultimately involved
in transferring goods between producer and consumer."70 Because
all of these elements contained very large fixed costs, he stresses the
importance of economy of scale. The Peruzzi Company faced many
fixed costs despite its avoidance of investment in buildings and trans-
port equipment. Even the hired public carriers faced fixed costs that
they had to pass on to their customers. And the company had its own
direct fixed costs in the form of building rentals and the eighty-eight
full-time factors employed in Florence and in the branches, despite
its preference for hiring specialists only as needed.71 The company's
staff provided much of the market information, negotiation, and prop-
erty protection services noted. Many of them, especially the accoun-
tants, served only the company's internal needs for information, com-
munication, and control because of its size and complexity.
For the Peruzzi Company, therefore, fixed overhead costs were
very large and required a steady volume of profitable business to
absorb them. Merely taking into account the eighty-eight salaried
factors on the payroll on July 1, 1335, who were paid an average of
li.100 per year, and the rent of shops and warehouses in Florence at
nearly li.2,000 annually results in a total annual fixed cost of almost
li.11,000. The average annual loss of li.9,700 for 1331-5 indicates
that the company failed to generate enough income to recover these
overheads. But in those four years of relative stability, there is no
evidence to suggest a significant reduction in the volume of general
merchandise or wool business. Nor is there any indication that trans-
69
One of the most clearly identified and spectacular medieval cases of manage-
ment failure was the decline and fall of the Medici Bank.
70
Munro, "Industrial Transformations," 110-48; see especially 120-1 for defini-
tions and 121-30 for discussion.
71
For example, on specialists, / libri, 552-3, shows that the company employed
sixty-nine notaries in Florence and abroad for a variety of purposes but main-
tained only one full-time notary, Michele Boschi, on its payroll. For total fac-
tors employed, see Table 4.
actions costs had risen inordinately. Munro cites the impact of Medi-
terranean warfare between 1280 and 1350 as a prime cause of in-
creases in costs, especially of transport and presumably insurance,
but during the period of most intensive conflict from 1280 to 1328,
the Peruzzi and other super-companies prospered. The reversal of
Peruzzi fortunes was too abrupt to have been caused by the secular
trends that Munro describes.
The third and most likely explanation of the company's problem
is that the volume and profit margins in the grain trade had shrunk.
Except for the fact that the Buonaccorsi gained admittance to the
Neapolitan grain monopoly in 1330, thereby diminishing the
Peruzzi's share of that trade, there is no evidence to suggest that
the quantity of grain available from Puglia had declined.72 Certainly,
the monopoly of the Florentines appears to have persisted throughout
the 1330s.73 But, as suggested earlier, following the debacle of 1328-9,
the grain companies may have been subjected to closer scrutiny by gov-
ernment authorities and constrained in their pricing practices.
We know that the Florentine government resumed setting official
prices below market prices in 1334-5 after a brief respite resulting
from the good harvest of 1331. At the same time that the super-com-
panies' margins came under this renewed pressure, King Robert was
making seemingly arbitrary and drastic changes in his export tax.74
In November, 1333, the time of the Florence flood, he raised the
export tax on wheat from 12 golden ounces (oz.) to 20 oz. per 100
salme, increasing the super-companies' costs by 2 soldi di piccioli per
bushel (see Table A7 for the calculation of these relationships). He
reduced it briefly in December 1334 to 10 oz. but promptly raised it
again to 21 oz. in March 1335. But were such changes merely arbi-
trary? Renouard has stated that, in 1336, the export tax varied ac-
cording to the season and the abundance of the crop.75 If these ad-
justments had become policy, they suggest that Robert, to meet his
growing needs, was returning to Charles I's practice of charging what
the market would bear, leaving little profit for the super-companies.
As a decade of mostly mediocre or disastrous harvests wore on, a
new problem emerged for the super-companies. Local government
72
73
David Abulafia, "Venice and the Kingdom of Naples in the Last Years of Robert
the Wise, 1332-1343," Papers of the British School at Rome 48 (1980): 26-49. Al-
though Abulafia does not confirm directly that the Florentine monopoly con-
tinued throughout the 1330s, the implication from his Venetian sources is that
it did.
74
75
Renouard, "Une expedition des cereales," 812.
bodies increasingly negotiated directly with the Angevin king, by-
passing the super-companies' monopoly or using the companies
merely as expediters. Renouard describes the revealing case of a pa-
pal purchase of about 5,000 salme of wheat for the relief of Christians
in Cilicia.76 The Bardi Company was employed to arrange the pur-
chase and delivery, but appears to have "donated" its services as a
goodwill gesture to the papacy. It may even have suffered a loss, be-
cause it was left holding 4,000 salme of high-priced grain that it had
bought in anticipation of the order. Extended negotiations between
the papacy and the Naples government delayed the execution of the
order until the new crop came in at a lower price. Another purchase
was by Rome, which secured 10,000 salme from Naples in 1339.77 And
in 1341, Siena "pawned" several of its outlying communities for cash
to import desperately needed wheat.78 Overall, there is a high prob-
ability of a reduction in the volume of the Peruzzi grain trade along
with the likelihood of a narrowing of profit on that business. The
grain trade, the engine of the company's earlier prosperity, was there-
fore at the heart of the company's decline.79
One other possible explanation for the reduction in company prof-
itability that deserves consideration is the effect of the well-known
changes in the gold-silver ratio in the thirteenth and fourteenth cen-
turies. Grossly oversimplified, this ratio was said to be important to
Florentine businessmen because a significant part of their expense,
especially wages, was incurred in silver or billon coinage, while their
sales in the international markets were mainly in gold florins.80 An
increase in the price of gold relative to silver was thus expansionary
and favorable to business interests, while a decrease was depressing
and unfavorable to them. There is abundant evidence that the price
of gold in terms of silver had been rising steadily in Italy from the
middle of the thirteenth century until it peaked at around 14 ounces
76
Ibid., 793-831.
77
78
Bowsky, Finance of Siena, 38-40.
79
The depopulation of the Florentine contado before the Black Death documented
by D. Herlihy in Medieval and Renaissance Pistoia: The Social History of an Italian
Town, 1200-1430 (New Haven, CT, 1967) and other works may also have been a
factor affecting the grain trade. It is not a useful explanation here, however,
because a secular depopulation does not help us understand the Peruzzi's sud-
den reversal. Also, depopulation in the contado cuts two opposing ways, reduc-
ing production as well as consumption of grain.
80
See Cipolla, Monetary Policy, 20-9, for a fuller and more elegant account of this
phenomenon. Billon is an alloy of silver and copper, with a high (at least 50%)
copper content. Billon coins, usually of small nominal value, were often called
"black money."
of silver for 1 ounce of gold (14:1) in Venice and Florence in the late
1320s.81 Then the ratio began to move firmly in favor of silver during
the 1330s and 1340s, provoking the severe coinage devaluations in
Florence of 1345 and 1347. Lane and Mueller place the turning point
in 1327, when the rulers of Bohemia and Hungary agreed to coordi-
nate the coinage of silver groats.82 The decline in the relative value
of gold proceeded at different rates and timing around Europe - for
example, 1331 in Venice, 1334 in Florence, 1337 in France, and 1344
in England.83 In Naples, the decline was less severe, because, like
most parts of the Mediterranean trading area, the gold-silver ratio
never reached the peaks obtaining in western Europe.84
The relationship of the price of gold to silver was of course re-
flected mostly in currency rates of exchange, although it was just one
of many variables involved in determining specific rates between dif-
ferent coinages in specific locations.85 It is instructive, therefore, to
review the relationship of the Florentine gold florin with various sil-
ver-based currencies (including the Florentine soldo) reported in
Peter Spufford's Handbook of Medieval Exchange for the period 1300-
45. Although some of the data are fragmentary and although each
currency had its own peculiarities, some important generalizations
can be made by indexing the exchange rates of Florence's major trad-
ing partners. The indices presented in Table A8 show that the
Florentine florin strengthened against virtually all currencies between
1300 and 1330, directionally in line with the movement of the gold-
silver ratio. The florin moved quite strongly against the soldi of Flo-
rence, Siena, Pisa, and Genoa, although much less so against the cur-
rencies of Naples, England, France, and Venice. Then, between 1330
and 1335, the florin weakened significantly against most currencies,
but rallied or at least stabilized thereafter.86 The modest recovery of
the florin in Florence was attributed to the introduction of a new
coin, the quattrino, equivalent to four denari piccioli. This coin, a
81
See Spufford, Money audits Use, 271, 354; Lane and Mueller, Money and Banking,
Vol. 1, Chaps. 14-19.
82
Lane and Mueller, Money and Banking, Vol. 1, 435.
83
Ibid., 436-45,460. In broad terms, the ratio dropped from about 14:1 to 11.5:1.
84
Ibid., 442-3. The ratio averaged only about 12:1 before dropping to under 11:1.
85
Other important variables included local supply and demand pressures such as
trade imbalances, seasonality, warfare, and, occasionally, local government de-
cisions to change the content of precious metals in their coinages. See Spufford,
Handbook, xlvi-xlix, for a useful discussion of these variables.
86
There were two important exceptions. Against sterling, the florin continued to
rise until nearly 1340. However, the florin's weakness against the Neapolitan
carlin persisted into the 1340s.
popular denomination for local use, contained only slightly more
silver per lira than the piccioli, but much less than the silver grossi,
both of which were left unchanged.
Lane and Mueller argue that the fall in the price of gold contrib-
uted importantly to the demise of the Florentine super-companies in
three ways.87 First, it worsened the terms of trade for both domestic
costs and imported raw materials because the companies' sales were
denominated mainly in florins and their costs in silver-based curren-
cies. Second, and very important, the companies made large loans in
florins when the price of gold was high and had to accept repayment
(often only partial) when the price of gold was low. Third, the
Florentines imported gold and exported the undervalued silver on a
large scale in the early 1340s, intensifying an already ruinous defla-
tion. In this connection, the Florentines, unlike the Venetians who
were the prime silver traders in the Mediterranean, were not in a
position to offset their losses by profitable trading in the Levantine
silver markets.88
These arguments, while persuasive to a point, are seriously flawed as
explanations for the downfall of the super-companies. First, the terms
of trade expressed in exchange rates between Florence and its principal
suppliers did not really change a great deal. As noted, most silver-based
currencies in northern Italy moved in tandem with the florin's relation-
ship to its own soldo. The currency of Naples, the source of so much of
Florence's foodstuffs, actually weakened against the Florentine soldo be-
tween 1320 and 1335 and only modestly exceeded the 1315-20 average
in 1335-40 (see Table A7). Remember that the period 1315-20 was very
prosperous for the super-companies. And the exchange rate of the great
wool supplier, England, continued to reflect the relatively high price of
gold until the early 1340s.89 Finally, it will be shown later in this chapter
that the bulk of the Peruzzi Company business during the 1330-5 gold-
price decline was concentrated in the Mediterranean, where, as we have
seen, the price of gold never reached the peaks that it did elsewhere.
Overall, then, the movement in terms of trade, while generally adverse,
was not in a range that should have presented astute businessmen with
insurmountable problems.
87
Lane and Mueller's arguments are not laid out in the sequence followed here,
but are expounded in a series of observations made in Money and Banking, Vol.
1, 439-55.
88
Ibid., 442.
89
The higher price of gold in England than that on the Continent is cited as one
of the principal causes of the acute shortage of silver coinage there in the late
1330s and early 1340s. See Prestwich, "Exchange Rates"; Waugh, England of
Edward III, 80-2.
The argument that the super-companies suffered from lending in
expensive florins and recovering (partially) in cheaper ones leans
heavily on the premise that the Bardi and Peruzzi companies' loans
to Edward III were made in the late 1330s-early 1340s and were re-
paid from 1344 onward, when the florin was devalued against ster-
ling. But the Peruzzi Company was already bankrupt in 1343. And in
any case, very little of Edward's debt was repaid after 1343, as will be
shown conclusively in Chapter 9, so that the exchange rate obtaining
at the time is irrelevant as far as the companies' losses are concerned. 90
Regarding the third argument, it is probable that the price move-
ments of the precious metals intensified Florence's problems. It is
also true that the Florentines were not great international bullion
traders like the Venetians. But Florentine companies did profit by
bringing metals to the mints. Lane and Mueller point out that the
mint in Florence relied exclusively on offerings of bullion and old
coins by merchants and had to allow them acceptable profits to at-
tract an adequate flow of metal.91 The Peruzzi would have been im-
portant participants in this trade.
In summary, it is possible to justify the thesis that the reversal in
the gold-silver ratio added to the problems of the super-companies,
but not that it had a significant influence on their results. Certainly,
it played little part in the heavy losses of the 1331-5 Peruzzi Com-
pany. We have already seen that exchange rate changes impinged
only slightly on the cost of grain in the 1330s and were even
directionally helpful up to 1335. At that time, the Peruzzi's involve-
ment in the English wool trade was still too small to be a factor, and
in any case, the ratios in northern Europe did not change materially
until after 1335. And in the remaining eight years of the company's
existence, the changes in gold-silver ratios pale to insignificance
against the clearly identifiable causes of the company's eventual col-
lapse that will be discussed in subsequent chapters.
At this point, it will be useful to reexamine the closing balances of
the Fifth Company at June 30, 1335. These are extremely important
because they provide a detailed picture of the company as it was just
nine months before its first moves toward the ill-fated joint venture
in England with the Bardi Company. The balances have already been
discussed in Chapter 4 in the context of accounting procedures and
90
Aside from the fact that the argument is inapplicable to the Peruzzi, the ex-
change rates between sterling and the florin on the company's huge transac-
tions with the English government in this period were fixed at 1 florin equals 3
shillings. See Prestwich, "Exchange Rates," 478-9.
91
Lane and Mueller, Money and Banking, Vol. 1, 447.
the calculation of profit. Now, we shall consider what they mean in
terms of the size and health of the company, how it was financed, and
what resources it had available for the English venture. To start, it
will be helpful to condense and restate in balance sheet form in Table
8 the figures presented in Table 5:
The current assets in the Florence accounts reflect the cash, mer-
chandise inventories, and accounts receivable reported in the White,
Black, and Yellow Book totals. Although most of these assets are likely
to have been located in or near Florence, we know that some were
located elsewhere, even though recorded in the head office ledgers. 92
The foreign branches' asset total includes not only the usual cash,
inventories, and receivables, but also loans to clients. As regards li-
abilities, the Florence accounts are primarily merchandise payables,
including the small deposits and suppliers' advances linked to mer-
chandise trade. Shareholders' capital has been extracted from the
colored book totals and shown in the equity section. Foreign branches
liabilities include not only merchandise payables, but also client de-
posits. The loans/deposits section deals with only loans and deposits
recorded in the Florence books. The equity "asset" is the 1331-5 loss
approximately as it would have been calculated at that time, that is,
without the li.20,550 "interest" charge accumulated between 1335
and 1343.
These figures reveal a number of significant facts about the com-
pany. The first is that its working capital, that is, the excess of current
assets over current liabilities in the Florence accounts, was financed
primarily by the deposits of shareholders and of outsiders both in
Florence and in the foreign branches. Less than 25 percent was fi-
nanced by equity. The second is that over 42 percent of total com-
pany assets and nearly 50 percent of its liabilities were in the foreign
branches. The third is that the foreign branches overall not only were
self-sustaining, but also provided some surplus cash for the company.
These data depict a loss-making company that was surprisingly highly
leveraged with outside debt and poorly positioned to assume heavy ad-
ditional borrowing that would later be needed for its English venture.
The balances of some of the foreign branches merit closer exami-
nation. As can be seen in Table A2, the individual organizations vary
widely in size, composition, and strength. The June 30, 1335, bal-
ances for the most important branches are shown in Table 9.
These figures immediately highlight the importance of southern
Italy to the Peruzzi Company, with 31.6 percent of all foreign assets
92
For example, the fixed assets of li.2,539 recorded in the Florence Accounts
were actually situated in Rhodes.
Table 8. Balances at June 30, 1335 (lire a fiorino)
Assets Liabilities Balance

Current assets/
liabilities
Florence accts. 353,766 130,354 223,412
Foreign branches 328,871 382,421 (53,550)
Subtotal 682,637 512,775 169,862
Loans to/deposits from:

Shareholders 27,260 66,375 (39,115)
All other 32,350 111,060 (78,710)
Subtotal 59,610 177,435 (117,825)
Equity 37,963 90,000 (52,037)

Total0 780,210 780,210 —
a
This total omits the "unidentified" li.715.
Table 9. Assets and liabilities of major foreign branches (lire a fiorino)

Naples 74,092 120,960 (46,868)
Barletta 30,124 32,997 (2,873)
Subtotal southern Italy 104,216 153,957 (49,741)
Sicily - Trading 37,191 43,083 (5,892)

- Royal loans 62,434 — 62,434
Subtotal Sicily 99,625 43,083 56,542
Paris 21,610 46,290 (24,680)

England — 20,674 (20,674)
Bruges — 593 (593)
Avignon 29,568 59,568 (30,000)
All other 0 73,852 58,256 15,596
Total branches 328,871 382,421 (53,550)
"Rhodes, Cyprus, Majorca, Sardinia, Tunis, Venice, and Pisa.

18 2 History of the Peruzzi Company
and 40.2 percent of all foreign liabilities. They also bring into focus
the Mediterranean orientation of the business; bearing in mind that
the "all other" category consists entirely of branches in that area,
Mediterranean operations accounted for 84 percent of total branch
assets and 67 percent of total branch liabilities. To be sure, the fig-
ures exaggerate this bias because two of the northern European
branches, England and Bruges, reported their results on a net (a
croce) basis.93 Judging solely on the basis of the manpower assigned to
these branches, they would be roughly comparable in size to the
company's Paris branch. But even after adjusting for this difference
in reporting, it is clear that the company's business in 1335 was pre-
dominantly Mediterranean.
The southern Italy balances deserve special attention. The assets
consisted of cash, merchandise, household goods, and a large num-
ber (239) of debts receivable.94 The liabilities were entirely moneys
payable to 112 creditors.95 The large credit balance and the high av-
erage payable per creditor (li.1,400) suggests that the liabilities in-
cluded a number of important deposits, supporting the widely held
assumption that Neapolitan deposits were a significant source of fi-
nancing for the super-companies. In contrast, the smaller assets total
spread over a large number of items implies that the company's loans
to the king and his courtiers were quite modest at that time. This is a
surprising situation, indicating that the company had its royal accounts
well in hand and possibly also that the grain trade was at a low ebb at
the time the books were closed.96 The probable low loan balance in
Naples contrasts sharply with the large total of advances to the king
of Sicily, the Angevin king's long-time rival.
In the case of the Paris and English balances, the nature of the
excess of liabilities over assets appears to indicate that these branches
were operating at a loss and financing their bad debts by rolling over
93
In the discussion of Table 5, we saw that most branches reported gross asset and
liability totals (the a bilanciosystem), but three branches, England, Bruges, and
Majorca, reported the net balance of assets minus liabilities (the a croce sys-
tem). Majorca provided supplementary data to permit presentation on a gross
basis, but unfortunately Bruges and England did not. Worse, they did not even
indicate the number of debtors and creditors.
94
I libri, 193. See separate entries for Naples and Barletta.
95
Ibid., 8, 9. See separate entries for Naples and Barletta.
96
It also suggests that government finances were in reasonably good shape, in
line with indications that Robert was rapidly paying off the regime's long-stand-
ing deficit to the papacy during the 1330s while continuing his established policy
of borrowing from the super-companies to meet his day-to-day needs (see Pryor,
"Foreign Policy," 46).
97
short-term deposits. In Avignon, as in Naples, the liabilities are de-
scribed as amounts due to creditors "assigned" to the period 1331-5,
suggesting that at least some of them were of a longer-term nature,
such as deposits.98 It is, of course, risky to draw too many inferences
from the sketchy data available, especially in the absence of informa-
tion on the structure of intercompany accounts. The branch entries
contain no references to the status of transactions between branch
and parent and branch and branch, and there must have been many
of these. Nevertheless, there is sufficient evidence to establish that
overall the branches financed their working capital locally and had
enough left over to enable the parent company to fund the large
long-term loans in Italy as well as some of its needs in Florence.
The company that is depicted here in mid-1335 is one that was
drifting steadily toward bankruptcy. When the accounts for the 1331-
5 company were finally drawn up in 1343, the entries referring to the
losses described them as the amount that the company "lost more
than it gained."99 Effectively, what this meant is that its core business
in southern Italy was losing more money than could be made up by
profits on general merchandise trading and financial services. Al-
though there was no obvious way to turn this situation around, bank-
ruptcy was far from an inevitable fate. The company was still strong
enough to respond to sound direction and determined leadership,
and could try again to enter new markets, despite its earlier rebuffs in
England and Spain. But the reversal of its fortunes required a further
period of relative calm, and this was not to be. The company in its weak-
ened state was fated to enter a period of exceptional turbulence.
97
Ibid., 7, 191, 192. These branches describe their liabilities as amounts due to
creditors on June 30, 1335, and paid by the branch shortly afterward, indicating
that none of the payables were of a long-term nature. But the branch deficits
must have been financed somehow, at least partly by new deposits.
98
Ibid., 7. There were eighty-one creditors in all, some of whom may have been
suppliers, but more will have been clients giving funds to the company for trans-
fer or deposit. The intriguingly round balance of li.30,000 is the coincidental
result of several separate entries in florins translated into lire at differing rates.
99
Ibid., 286, e.g., "che la detta compagnia perde piu che non guadangno in detto
tempo."
The critical years, 1335-1340
The Sixth Company of the Peruzzi was formed effective July 1, 1335,
again under the style Giotto d'Arnoldo de' Peruzzi e compagni. The
motivation for establishing what turned out to be the last company,
and the reasons for the timing of this event are not immediately evi-
dent. There was no hint of a dividend for the foreseeable future; the
chairman was not about to die, and there is no evidence that any
shareholders had passed away without heirs capable of taking over.1
Most curious, there is no evidence that the new company was ever
capitalized. As we learned in Chapter 4, the preceding company was
not formally closed, and final distributions were not made to its share-
holders until July 1, 1343, or later. The Sixth Company appears sim-
ply to have inherited the account balances from its predecessor with-
out any infusion of fresh capital.
The most likely reason for the formation of the new company is
the striking change in the list of its shareholders. Three outsiders
(Gherardo Bonaccorsi, Catellino degli Infanghati, and Piero
Ubaldini) and one Peruzzi (Rinieri di Pacino) departed without re-
placement. Earlier, two senior Peruzzi shareholders had died, be-
queathing their shares to two heirs each.2 As a result, the Peruzzi
family achieved parity with outsiders at least in the number of share-
holders.3 Also, several other partners, both Peruzzi and outsider, had
passed their shares along to heirs. The total effect of all these changes
was a radical difference in the makeup of the Sixth Company com-
pared with its predecessor, and even more so with the Fourth Com-
pany, which had closed a scant four years earlier. By April 1338, when
1
One possible exception is Gherardo di Gentile Bonaccorsi, who simply disap-
peared from the record at the close of the Fifth Company after having been a
shareholder since 1310. He may well have died sometime in the 1331-5 period,
but what happened to his shares is a mystery.
2
Tommaso was replaced by his sons Bonifazio and Pacino, Amideo by Niccolo
and Ottaviano.
3
See Table A2.
184
The critical years, 1335-1340 185
a further four senior partners had "passed from this life," only three
remained who had been shareholders of the 1324-31 company, and
none of them were Peruzzi!4
The loss of so many experienced owner-managers and the infu-
sion of so much new blood are bound to have affected the complex-
ion of the company and the attitudes within it. Although sharehold-
ers old and new are unlikely to have known the bleak results of the
Fifth Company at the time, they would have realized that all was not
well. The Peruzzi Company had not paid a dividend in over ten years,
nor were there prospects for one in the foreseeable future. Those
shareholders who departed may have done so out of discouragement
(we know that at least Infanghati and Ubaldini had not died), and
the long-serving partners who stayed on may have simply hoped for
the best. But the newer shareholders, recognizing that the company's
business was stagnating, must have looked for a radical change in the
direction of the firm.
Only two realistic options were available. One was to eliminate
unprofitable operations and cut staff, what is commonly known to-
day as downsizing. This would not have been a promising approach
because the company lacked the analytical sophistication to deter-
mine which of its enterprises were unprofitable, especially where
company and shareholder personal transactions were often so thor-
oughly intermingled. In any case, this alternative does not seem to
have been tried, as there is no evidence that any lines of business
were dropped or employees terminated. 5 The other option was to
launch a large-scale expansion of business that would generate ma-
jor new revenues and more fully utilize the company's resources. This
the company attempted to do, targeting the English wool trade as
the business opportunity most likely to restore its fortunes.
Historians have usually explained the motivations of the Bardi and
Peruzzi for their massive lending to Edward III in terms of an expec-
tation of direct profit on the loans, or of profit derived from privi-
leges granted to market wool as a reward for the loans, or a combina-
tion of both. These are reasonable assessments of the perceived re-
wards and of the probable motivation of the Bardi Company, which
was simply doing on a larger scale what it had already been doing in
England for years. They do not, however, explain adequately what
4
The four who had died were Giotto and Filippo Peruzzi and Gherardo and Tano
Baroncelli. The three survivors were Ruggieri Silimanni, Filippo Villani, and
Stefano Bencivenni.
5
Employee enrollment did, however, begin to decline, but not significantly until
after 1338. See Table 10.
i 86 History of the Peruzzi Company
prompted the Peruzzi to embark on this demanding new program in
the face of the well-known risks of lending to an English monarch.
Fryde was one of the few who recognized that the Peruzzi, driven by
the need to "mend its fortunes," might have had an additional incen-
tive to those of the Bardi.6
The conservative Peruzzi Company had to consider a number of
problems before it was prepared to increase its risk exposure in En-
gland. The first was the effect on its resources of the probable out-
break of a new war over Lucca. The second was the need to face up
to a decision on its French business, which was certain to be affected
if the company opted for closer ties with the English monarchy. The
third was the need to clear itself with the English monarchy regard-
ing its old relationship with Hugh Despenser the Younger before
exposing additional assets to the risk of seizure in England.
The city of Lucca had been left weak and vulnerable after the re-
treat of Emperor Ludwig from Italy in 1330. It was occupied by his
unemployed German mercenaries, who sold it to the Genoese mer-
chant Spinola, who sold it to John of Bohemia, son of Henry VII,
who in turn sold it in 1334 to the Rossi of Parma, who turned it over
to Mastino della Scala of Verona. Mastino attempted to negotiate the
sale of the hapless city to Florence for 360,000 florins, but the talks
collapsed, and the "war with Mastino" was decided upon at the be-
ginning of 1336. Among the six leading citizens charged with the
responsibility of obtaining alliances and prosecuting the war were
Simone Peruzzi, Ridolfo Bardi, and Acciaiuolo Acciaiuoli, whose close
family connections with Florence's top three enterprises ensured the
financial support of these great firms.7 A complex set of alliances,
including an exceptionally costly one with Venice, was duly arranged
by July 1336. To finance the war, an elected committee of ten mer-
chants and company representatives decided to double many of the
gabelles. The yield was estimated at 300,000 florins, 100,000 of which
was to be anticipated by a forced loan on all businesses and citizens.8
The big companies pledged to pay up one-third of the loan and to
offer guarantee of repayment to those lenders distrustful of the
commune's ability to repay the loan out of forthcoming gabelles.9
6
Fryde, William de la Pole, 48.
7
Simone Peruzzi, the family's leading diplomat, was, as we have seen, an impor-
tant depositor in the company and owner of its main warehouse, although not
a shareholder.
8
Sapori, La crisi, 109-10. The loan was secured by the expected revenues from
the gabelles.
9
There is no evidence in the Peruzzi accounts of direct advances by the company
to the commune on this loan, but there are numerous entries reflecting pay-
The critical years, 1335-1340 I 87
Those lending directly to the commune were promised interest at 15
percent per annum; those requiring a company guarantee would re-
ceive 8 percent and the companies would earn 5 percent for provid-
ing the guarantee.10 At this point, the war, although threatening, does
not seem to have been a strain on the company's resources.
The dilemma of the French business was a vexing one for the
Peruzzi. The company had long run a generally successful branch in
Paris and had enjoyed a long and for the most part productive rela-
tionship with the French monarchy. The latter's strong connections
with other important clients of the company, especially the Avignon
papacy, could not be ignored. Given the rapidly deteriorating rela-
tionship between the French and English monarchs, any attempt by
the Peruzzi to enter into a closer association with the English would
surely be met with hostility by the French.11 And although, as Mollat
emphasizes, the Avignon popes were by no means puppets of the
French kings, an action offensive to the French monarchy was un-
likely to sit well with the papacy.12 Finally, the French-papal connec-
tion had recently become more valuable to the Peruzzi, as Benedict
XII entrusted the bankers with the collection of papal revenues in
northern France in 1334, an important break with previous practice. 13
The event that may well have triggered the company's decision
was an adverse judgment from the Parlement of Paris on a long drawn-
out lawsuit. The origins and basis of the suit are obscure, as they
dated back to the 1300 company. The claim concerned a large debt
allegedly owed by the company to the Maghaloti firm of Florence.
ments made on behalf of shareholders, employees, and clients to the "Dieci
sulla lega con Vinezia" ([committee of] Ten on the league with Venice) . See /
Mm, 46, 53, 68, 85, 86, 129, 201, 209, 210, 213, 343, 356, 357.
10
Sapori, La crisi, 109-10.
11
This concern was a real one for the Peruzzi. Two years later, when entering
into a huge financial undertaking with Edward III, the Bardi and Peruzzi ob-
tained from the king an agreement that he would compensate them for any
damages incurred in France, because by entering into the agreement, the com-
panies had "put themselves in rebellion with the King of France" (CCR E III
1337-9,400,412).
12
Mollat, The Popes of Avignon, especially 249-54. Mollat acknowledges the close
ties between Avignon and the French kings, but stresses that the objectives of
the popes, in particular, Benedict XII, were distinctly independent. The strong
attachment of Clement VI to the French monarchy, however, made it difficult
for him to mediate the French-English conflict impartially when he became
pope in 1342. See Diana Wood, Clement VI (Cambridge, 1989), Chap. 6.
13
Renouard, Les relations, 126-9. France was by far the largest source of funds for
the papacy, which traditionally used local collectors. The change to the use of
the Italian bankers in 1334 applied only to northern France; the rest of the
country continued to employ papal collectors.
i 88 History of the Peruzzi Company
The Peruzzi clearly felt strongly about the merits of their case, be-
cause they paid the expenses of a procurator for a period of over six
years at a cost totaling at least li.1,000.14 The judgment itself cost
li.3,538, and "interest" accumulated over the years on all expenses added
a further li.1,118.15 All told, the suit cost the shareholders of the 1300-8
company li.5,706, a sum that was finally allocated to them in 1339.
The judgment was rendered by the Parlement of Paris on March
27, 1336. On April 15, 1336, the Peruzzi Company made a commit-
ment to lend the very large sum of 5,500 marks to the English crown,
its first loan of any size to that monarchy since 1322.16 The proximity
of these two dates may be coincidental, but there is good reason to
suspect some linkage between the two events. Giotto, the chairman,
was a prominent partner of the 1300 company affected by the French
lawsuit and is likely to have invested much of his personal prestige
within the company in its defense. At the same time, the English
branch had undoubtedly been negotiating quietly with English offi-
cials for some time, presumably with the support of the company's
more aggressive shareholders.17 It is inconceivable that the branch
would have obligated the company to a major loan that also consti-
tuted a profound change in policy without the approval of the chair-
man. The approval of the old and conservative Giotto would have
been made easier by the disappointing outcome in France. To be
sure, the dates are too close to have permitted a referral back to Flo-
rence for the approval, but it is entirely possible that the arrange-
ments had been set up within the company to commit for the loan
only on receipt of news of an adverse judgment from Paris.
The above analysis can be properly criticized as speculative, but it
14
I libri, 115-19. The expenses, which included food, drink, and house rent in
Paris for "our procurator," were incurred from January 1330 to July 1336.
15
Ibid. The actual fine was 1,846 reales, 2 soldi, translated at s38 d2 per real.
16
CPR E III 1334-8, 249. The king acknowledged receipt of £3,666 2/3, promis-
ing to repay £1,000 by Midsummer and the balance by Michaelmas or All Saints
from the tax revenues of tenths and fifteenths. Also promised was what ap-
pears to have been a "gift" of £1,000 to be paid 500 marks on each of the up-
coming and the following two Michaelmases.
17
The agreement for a loan of this size, with a complicated repayment schedule,
would have taken months to arrange. One indication that the Peruzzi was edg-
ing closer to the monarchy is an entry in the Calendar of Close Rolls (CCR E III
1333-7, 486) dated May 12, 1335, ordering the Bardi and Peruzzi to appear at
York regarding the king's moiety of the clerical tenth and other items that had
been agreed with Pope John XXII but interrupted by his death. The king ex-
pected that the advice of the companies "will be most opportune for the comple-
tion and happy disposition of the affair." Moreover, the first tentative step
toward lending to the Crown occurred as early as November, 1335 (Fryde, "Ital-
ian Bankers," 347 n i l ) .
does attempt to take into account the fact that decisions, including
business decisions, are often influenced by the inclinations of lead-
ers, which, in turn, are driven by their emotions as well as their expe-
rience, intuition, and intelligence. The importance of personalities
would shortly become even greater, as Giotto died a few months later,
to be replaced immediately as chairman by his nephew Bonifazio.
There is no question as to the direction of the new leader's interests.
Bonifazio had been in the forefront of the company's brief attempt
at aggressive business-building in England in the 1320s and would
have been among the "new men" anxious to restore the company's
fortunes by vigorously expanding its participation in the English wool
trade. His actions after becoming chairman left no doubt that En-
gland was where his priorities lay.
Whether or not this analysis of motivations is accurate, the fact
remains that the Peruzzi determined to make a large-scale loan to
the English crown and that this decision represented a change in
direction of enormous significance for the company. From its earli-
est years, its political bias had been aligned with that of the Florence-
Naples-Avignon-Paris axis, adapting to the many twists and turns
within that axis. The company lent its financial support routinely to
these polities and their clients, such as the Hospitalers and the count
of Flanders. Its involvement in England in the 1320s occurred at a
time when relations of that country with France were reasonably
amicable, and its operations in Sicily raised no objections from Naples
or the papacy. Now, lending to an English monarch who was patently
hostile to the French and uncomfortable with the papacy represented
a momentous break from the company's tradition.
The April loan, although large, was only a tentative step carried
out by the Peruzzi under a hesitant Giotto. A closer and more lasting
association with the crown awaited the release of the company from
all claims relating to its business with Hugh Despenser a decade ear-
lier. The first move came in June 1336, when the Peruzzi Company
was discharged of liability on certain goods claimed from Despenser.18
There followed several other "confidence building" agreements dur-
ing July and August, which settled various claims regarding Despenser
and clarified the assignment of revenues to repay the April loan. 19
The final exoneration of the Peruzzi from all Despenser liabilities
was published in December 1336, freeing the company from this con-
tingency for the first time since the overthrow of Edward II.20
18 19
CPRE III 1334-8, 277. CCRE III 1333-7, 519, 599, 608, 609.
20
CPRE III 1334-8, 343. The announcement included a statement of the total of
receipts and payments, which acknowledged that the company ended with a
negative balance of £182 in its account with Despenser.
i 9o History of the Peruzzi Company
The death of Giotto, the last of his generation, on August 9, 1336,
marked a genuine "changing of the guard," both for the company
and the family. The leading lights were now three grandchildren of
the founders of the firm-Simone, descended from Filippo's side,
and Bonifazio and Pacino, sons of Tommaso, from Arnoldo's side.
Simone continued to occupy himself with politics and diplomacy,
while Bonifazio took over the reins of the company, and Pacino in-
volved himself in both business and politics. The previous changes
of chairman - Tommaso replacing Filippo and Giotto replacing
Tommaso - involved men content to continue the policies of their
predecessors. Bonifazio, in contrast, was charting a new course, and
from this point onward a large part of the company's energies would
be directed toward England. Historians accustomed to associating
the Peruzzi with that country need to be reminded, however, that the
company's preoccupation there took place only during the last seven
years of its existence.
It is not the purpose of this study to struggle with the stupifying
complexity of Edward Ill's financing of his early campaigns against
France. Professor Fryde has analyzed the English king's war finance
in great detail, and there is little to be gained by attempting to repli-
cate his investigations. Fryde's valuable works, moreover, deal with
the king's total financing resources and in most places couple the
Peruzzi's involvement with that of the Bardi. It will be necessary, there-
fore, to extract relevant data on the Peruzzi alone from direct sources
as well as his several studies.21
Because of the complexity of the company's dealings with the En-
glish monarchy, it is useful to break them down into manageable
periods, which can be discussed separately in their appropriate place.
Two periods will be dealt with in this chapter. The first, from April
1336 until February 1338, covers the company's early advances made
independently before the joint venture with the Bardi came into force.
The second, from March 1338 to October 1340, marks the arrival of
Bonifazio on the scene and the launching of the Bardi joint venture.
The final three years will be discussed in Chapter 8.
The first period is riddled with apparent anomalies. Here is a com-
pany weakened by persistent losses lending on a lavish scale to a
monarch from whom it must gain prompt recompense to recover its
fortunes. Mere lending to a prince for profit was entirely out of keep-
21
The works of E. B. Fryde to be cited are "Edward Ill's War Finance, 1337-41";
"Materials for the Study of Edward Ill's Credit Operations, 1327-48," Bulletin of
the Institute of Historical Research 22 (1949): Section A, 105-38, and 23 (1950):
Section B, 1-30; "Financial Resources 1337-40"; and William de la Pole.
ing with years of company policy and made even less sense in a situa-
tion where the company was short of reserves. The Peruzzi must have
expected a tangible reward, such as privileges in the wool trade. But
just four months after the first large loan, on August 12, 1336, Ed-
ward III placed a total embargo on shipments of wool to the Low
Countries to bring them to heel. At the same time, he was making
plans to establish the English Wool Company in the following year
under an agreement with a group of leading English wool merchants.
This company, duly formed in July 1337, was to grant the king a loan
of £200,000 out of the sale of 30,000 sacks of wool over which it had
been awarded monopoly control, along with the power of forced ac-
quisition from English growers. Simultaneously, customs duty on wool
exports was raised from 6s 8d to 20s per sack, which would be used
by the king to help repay the loan. The expectation was that after a
year of embargo, the English Wool Company would be able to exact
a premium price from the desperate Flemish cloth manufacturers
and reap a handsome profit.
These machinations should have, in theory, shut the Peruzzi out
of the wool trade. It appears, however, that although the embargo
was strictly enforced, some shipments by foreign merchants were li-
censed for export to southern European destinations.22 At the same
time, there is evidence that the king had given orders in 1337 to
confiscate the assets of all foreign merchants except the Bardi and
Peruzzi, putting the latter firms in the position of monopoly export-
ers to southern Europe.23 The value of sharing with the Bardi even a
limited opportunity to export wool to cloth manufacturers in south-
ern Europe was significant, given the shortage of quality finished cloth
in the Mediterranean resulting from the Flemish embargo. The al-
ternative of being turned out of England along with the other for-
eign merchants was no doubt added incentive to lend to the king.
During this early period, there is some evidence of connection
between the Bardi and Peruzzi in their relationship with the monar-
chy, but the latter appeared to be making its loans independently.24
22
Fryde, William de la Pole, 58.
23
CPRE III 1334-8, 506. An entry dated September 1, 1337, gave a release to an
officer of the crown to arrest, imprison, and take all valuables from all foreign
merchants except the Bardi and Peruzzi. A subsequent order dated July 16,
1338 (CPRE III 1338-40, 123), granted the king's clerk, E. de la Beche, immu-
nity from claims due to his actions against the foreign merchants.
24
For example, protection and safe-conduct were granted jointly to the two com-
panies in February 1337 (CPR E III 1334-8, 381); the assessment of "losses"
reimbursable to the companies appeared in a single order in November 1337
(CCRElll 1337-9, 206).
i g2 History of the Peruzzi Company
The fixed allocation of loans between the two companies (60 per-
cent for the Bardi and 40 percent for the Peruzzi), a notable feature
of the joint venture, did not become established until the spring of
1338.25 Between April 1336 and February 1337, the Peruzzi had run
up an acknowledged credit of £11,733, identified as being for the
Scottish war, possibly in deference to the company's sensibilities about
France.26 Most of these advances took place after Bonifazio's acces-
sion to the leadership of the company, and most after the imposition
of the wool embargo, when the only means of repayment was the
assignment of direct taxes. By September 1, 1337, the acknowledged
debt of the king had risen to £28,000, and then increased to £35,000
the following day, apparently to reflect "compensation" for the
company's services.27 On October 15, the king issued a formal writ
on the Liberate Rolls of the Exchequer commanding the treasury to
pay the entire £35,000 promptly.28 Then on November 5, the king
reconfirmed the £35,000 total and ordered the treasury to pay the
£9,000 "losses" included in that total, an order that also confirmed
that no action had been taken on the October 15 writ.29
The Calendar of Patent Rolls and Calendar of Close Rolls are normally
not a good source of loan data, as will be made strikingly clear later,
but they are adequate for this early period of relative orderliness,
especially as they provide figures of acknowledged cumulative debt.
The net lending of £26,000 late in 1337 is a reasonable-looking sum
compared with the later astronomical figures, but it is extremely large
in relation to the Peruzzi resources we have seen just eighteen months
earlier. Using the rough but convenient ratio of one pound equals
ten lire a fiorino, the £26,000 translates into li.260,000.30 Referring
back to Table 8, the company showed little evidence of surplus cash.
It had a small equity of li.52,000, net borrowing in Florence of
25
CCR E III 1337-9, 349. This order to the Treasury specified £30,000 due to the
Bardi and Peruzzi should be assigned £18,000 to the former and £12,000 to the
latter.
26
CCR E III 1337-9, 9. The largest single advance was for £8,000 in January 1337
(CPREIII 1334-8,388).
27
CPRE III 1334-8, 515, 517.
28
Edward A. Bond, ed., Extracts from the Liberate Rolls Relative to Loans Supplied by
Italian Merchants to the Kings of England in the 13th and 14th Centuries (London
1839), 320, extract 193. Russell was so impressed with the wording of the writ
that he was convinced that the entire amount was reimbursed in one payment
(see Russell, "Societies of the Bardi and Peruzzi," 114), which, of course, it was
not.
29
CCRE III 1337-9, 206. The same entry confirmed the Bardi's "losses" of £10,000.
30
See the Introduction for the calculation of this ratio.
li. 118,000, and net borrowing from foreign branches of li.53,000, all
of which added to li.223,000, less than these new lending demands
in England alone. The company would have to obtain all this money
from long-term deposits, paying at least its standard rate of 7 per-
cent. Where did it come from?
The first place to look is Florence, as most historians knowledge-
able about the situation seem to concur with Villani's claim that the
greater part of the funds for the English venture originated in Flo-
rence.31 Florence, however, was unlikely to be awash with surplus funds
for risky foreign investments. As we have seen, preparations for war
with Mastino were very expensive, and the big companies, including
the Peruzzi, were in the forefront of the financing. According to
Villani, the war cost 600,000 florins over the thirty months until its
effective termination at the end of 1338, a rate of 20,000 florins per
month.32 The figure may or may not have been accurate, but it was
clearly far in excess of the funds available from the commune's taxes,
even at their increased level, so that further forced loans were neces-
sary. By the end of the war, the communal debt had risen to 450,000
florins.
The wartime cash needs of the city took precedence over invest-
ments in the super-companies, not only by virtue of their patriotic
merit and obligatory nature, but also because of the superior return
that the forced loans offered investors - up to 15 percent, versus the
Peruzzi's 7 percent.33 The Peruzzi's ability to attract Florentine cash
for its English operations would depend entirely upon the amount
of surplus funds that were available in the city after the wartime needs
had been met. This question brings us to Villani's famous chapter on
the greatness of Florence, which has attracted the attention of so
many historians.34 Even assuming that the key economic numbers
are accurate for the 1336-8 period to which he refers, a question-
able assumption, do they necessarily indicate a plenitude of cash? To
be sure, the 1330s was a period of exceptional building activity- the
completion of the third ring of walls, the Santa Maria Novella and
Santa Croce basilicas; the reconstruction of the Ponte Vecchio after
the 1333 flood; and the start of construction of the cathedral campa-
nile and the loggia of Orsanmichele, to say nothing of private resi-
dential and industrial building.35 Such activities may create a sense
31
See, e.g., Sapori, La crisi, and Fryde, William de la Pole, 90.
32
Villani, Storia, Book XI, Chap. 89. 33 Sapori, Storia economica, Vol. 1, 237-8.
34
35
Brucker, Renaissance Florence, 25. Note that Villani was directly involved in the
construction of the city walls (see Appendix V).
of prosperity, but they absorb cash, not generate it. The consump-
tion figures are also impressive, but they merely reflect a large, bus-
tling population's daily necessities, which tend to be much the same
whether times are good or not so good.36 The production figures
that he cites have, as we have seen, been seriously challenged. 37
The most problematic aspect of Villani's glowing report on Flo-
rence is that the period described, 1336-8, falls between the years we
have just examined and found to be lackluster commercially and the
years 1339 onward, which are universally acknowledged to have been
disastrous. Moreover, Sapori has conceded that in 1336 the main eco-
nomic indicators were decidedly negative, pointing out that the en-
emy was near the gates, that the passes through the Apennines and
Alps were closed or insecure, and that the capacity for the citizens to
acquire goods was reduced by previous heavy taxes.38 Under these
circumstances, he expected foreign trade to be down and factories
closed, but he insisted that Villani did not exaggerate Florence's opu-
lence in those years. He has reconciled this anomaly by arguing that
the prosperity Villani described was a transitory phenomenon caused
by the war. Thus, jobs lost in industry and trade were recovered in
military production and military service. But the huge sums in circu-
lation, he said, did not constitute wealth, because the jobs were tem-
porary and non-productive, replacing employment that had been
permanent and productive, so that when the war ended and tempo-
rary employment ceased, the economy became very depressed.39
Sapori's scenario is reasonable as far as it goes, but it does not give
adequate weight to the draining of resources from the commune
during the period caused by the payment of large subsidies to allies
and salaries and expenses to mercenary troops. Nor does it fit in well
with Villani's statement that the mint was coining 350,000 to 400,000
florins per year, a figure that Sapori does not challenge. And the
cloth industry was probably vibrant, although much smaller than
Villani claimed.40 As mentioned earlier, the cloth industry in Florence
36
Villani's population estimate of 90,000 does have the support of most demo-
graphic historians.
37
See comments in Chapter 6 on H. Hoshino's dispute with Villani's estimates of
textile production.
38
39
Ibid., 112-13.
40
Villani's statement that 200 shops produced 70,000 to 80,000 cloths per year
results in an average production of 350 to 400 cloths per shop, about three
times the average that Hoshino found in his meticulous searches of the records
of the wool guild. Also, in examining the guild's register, Hoshino discovered
that there were 626 matriculants registered in 1332, which would mean that
was probably receiving English wool through the Bardi and Peruzzi,
so that it could make more of the superior product, for which there
would have been an eager market in 1336 andl337, due to the En-
glish embargo on wool exports to Flanders.
To recapitulate, Villani's enthusiastic assessment of the level of
business activity in Florence during 1336-8 appears exaggerated, and
Sapori's explanation of how the level could be so high is unsatisfac-
tory. But even if Villani's figures were somewhere near the truth, they
would not lead to the conclusion that there was plenty of spare cash
available for investment, because his estimates of the cost of the war
and the taxes raised leave little in reserve. Nor would government
borrowing have added significantly to the money supply. In medieval
Europe, such borrowing had about the same effect as taxation, re-
moving cash from the private sector and redirecting it for public
purposes. A government's ability to create money was very limited,
as only very low-value billon coins were fiduciary tokens, so that it
could not borrow and simply manufacture the funds for repayment,
as modern governments do. The preponderance of money coined at
the mints was of an intrinsic worth close to the face value of the coins.
Again, there was no evidence of inflation at this juncture; on the
contrary, prices of most comestibles were comfortably below average
for the entire period, a fact that perhaps contributed to the sense of
well-being expounded by Villani.41
Finally, even if there had been surplus cash available, very little of
it seems to have found its way into the Peruzzi's coffers. The surviv-
ing records of the company show no significant additions to the de-
posit balances of its shareholders or outsiders at this time. The only
evidence of possible large deposits appears in the form of two ex-
pense items that might be of interest. The first is a series of entries
crediting a Mazzo di Scrafana of Palermo with several amounts be-
tween September 1338 and September 1341, described as per merito.42
If the expenses were interest at the usual rate of 7 percent, they would
there were about 300 shops at the typical arrangement of two matriculants per
shop. He concluded that there were more shops, but less total production than
Villani estimated. See Hoshino, Arte delta lana, 203.
41
See La Ronciere, Prix et salaires, 821-35; // Biadaiolo, 95. Possibly Villani's atti-
tude was colored by the two consecutive good harvests of 1336 and 1337, a rare
event in the 1330s. Good crop years had a remarkable effect on Florentines
during this period; mingled with chronicler Lenzi's reports on prices in 1321
was a sonnet of fulsome praise to God for the bumper harvests at that time
(169-70).
42
/ libri, 185. The term per merito is an unusual one in / libri and might mean
service, but Edler's Glossary, 179, defines the term as interest on a loan.
indicate a loan of about li.16,500 in 1338. The second is an item that
forms part of a long entry, described as li.53,159 "in cash given at
various times to several persons."43 At least part of this payment may
have been interest, but it is impossible to estimate the size of the
relevant deposits because the expense covers the period 1335-41. If
it were all interest at 7 percent, the deposits concerned might be at
least li. 100,000, equivalent to £10,000. These two possible deposit
sources, if real, would have been a help in funding the Peruzzi's En-
glish loans.
Other possible sources are depositors in southern Italy, Avignon,
and Flanders. Wealthy individuals in southern Italy had long depos-
ited surplus cash with the super-companies, but there is no evidence
that individuals in that country had large caches of unutilized funds
to invest, even if special inducements had been offered, which they
had not.44 The same comment applies to the princes of the church at
Avignon and elsewhere who would also be disinclined to lend money
for use against the king of France, a powerful patron to many of them.
The papal treasury itself was definitely not a source. As mentioned
earlier, the quantity of money transferred by the Bardi and Peruzzi
for the papacy was not impressive, and the policy of popes John XXII
and Benedict XII was to avoid borrowing from or lending to their
Italian financiers.45
Merchants in Flanders and Brabant might have had an accumula-
tion of lendable cash because the embargo had prevented their buy-
ing wool, and they might have been prepared to lend some to power-
ful Italian concerns if they could be sure of retrieving the funds when
the embargo ended.46 In addition, some money may well have been
transferred from the company's branch in Paris to minimize the
43
Ilibri, 181.
44
There is only one instance in / libri of interest paid to anyone at a rate higher
than 7%. For reasons unknown, the company paid Iacopo di Bartolo Bardi 15%
on a small deposit in 1339 (see 173).
45
As noted in Chapter 2, annual transfers from England, the most important coun-
try handled by the super-companies for the papacy, averaged only 12,000 flor-
ins per year for the Peruzzi between 1332 and 1337. Transfers dropped sharply
thereafter, due partly to papal caution and partly to lower revenues caused by
the war with France. For papal policy on deposits and borrowing, see Renouard,
Les relations, 188-90. The only continuing exception to the no-deposit policy
occurred in Bruges, where deposits were allowed to accumulate to pay for vest-
ments destined for the court at Avignon.
46
They would not have been an acceptable source of funds for the Peruzzi, judg-
ing by their later dealings with Edward III. They were extremely predatory and
demanded interest approaching pawnbroker rates of 1% per week. See Fryde,
"Financial Resources, 1337-40," 1155, for examples.
company's assets there that would be vulnerable to seizure by the
French king. All of these sources may have helped finance the En-
glish lending, but only partially, given the large amount needed and
the even larger amount sought by the Bardi.
A substantial portion of the funds must therefore have been raised
in England itself. A small part we know came from repayment of a
debt of £1,333 by the prior of the Hospitalers in England.47 Another
part may have been received from Italian and other foreign firms
eager to get their cash out of the reach of the English king's agents.
Still another part might have been obtained from English merchants.
Fryde has established that William de la Pole amassed a good por-
tion of the huge sums he raised for the king by mobilizing the sur-
plus funds of numerous smaller English merchant concerns. 48 If a
parvenu merchant from Hull, however gifted, could do this, why could
not a prestigious international firm also do so, at least among the
merchants of London? In his excellent analyses of the documents
and procedures of Edward Ill's administration, Fryde has pointed
out that possession of letters obligatory under royal seal gave a credi-
tor the best possible guarantee of repayment and that such letters
were often pledged as security for borrowing.49 The Peruzzi had ob-
tained letters obligatory for £28,000 by September 2, 1337, and while
there is no evidence that the Peruzzi pledged any of them, the mere
existence, let alone the use, of these letters would have made the
company's borrowing in England much easier.50
There is one further piece of indirect support for the argument
that England was a significant source of funds for the super-compa-
nies' loans to the crown. This is the well-documented fact that En-
gland suffered severe price deflation and currency shortage in the
late 1330s and early 1340s. Among the reasons advanced for this situ-
ation are the exports of specie by the king to help pay the expenses
of his expeditions and subsidies to his allies.51 If the super-compa-
nies' loans to the government had been sourced from abroad, the
47
I libri, 195. The money was received in the London branch on May 1, 1337, and
recorded in Florence on July 1, 1337.
48
Fryde, William de la Pole, 30-2.
49
Fryde, "Materials," Section A, 115-17.
50
CPRE III 1334-8,517.
51
Other reasons include the excessive price of gold in England and normal coin
wastage not made up by imports of silver. See N. J. Mayhew, "Numismatic Evi-
dence and Falling Prices in the Fourteenth Century," Economic History Review 2
series, 27 (1974): 1-15; Mavis Mate, "High Prices in Early Fourteenth-Century
England: Causes and Consequences," Economic History Review 2, series 28 (1975):
1-16; Prestwich, "Exchange Rates," 470-82; Waugh, England of Edward III, 76-89.
effect on the English economy would have been inflationary, or neu-
tral at the least, had all their loans been used exclusively for foreign
payments. The severity of the deflation suggests that the Italian su-
per-companies as well as the English merchants borrowed locally to
a considerable extent to secure cash for the king.
Although the royal lending to date imposed a great strain on the
company's resources, it was perceived as short term and manageable,
with specific repayment dates. Additional advances to the government
between October 1337 and March 1338 were modest and partly con-
ditional upon receiving licenses to export wool.52 At this level, the
company hoped to be able to roll over its accounts with the crown
and with its creditors, gradually reducing the amounts with the cash
flow generated by its share of the wool trade allowed by the king. In
short, the company hoped to repeat its experience with the Angevin
kingdom in southern Italy. Unfortunately, Edward's grand money-
raising scheme with the English Wool Company came to grief early
in 1338, and he was obliged to look elsewhere for finance for his
plans to invade France.53 At the same time, the English king was pre-
sented with a splendid opportunity when the Flemish cities, led by
Jacob van Artevelde, rose in revolt. Edward's representatives quickly
reached agreement that Flanders would remain strictly neutral in
exchange for England's lifting the wool embargo. Shipments began
to flow from stores held in Dordrecht in early March.54 But the king
needed money more than ever and was prepared to offer to those
who could provide it huge quantities of wool. He promptly chose the
Bardi and Peruzzi, concluding an agreement with them on March
11, 1338.55
This agreement initiated the second phase of the company's deal-
ings with Edward III. Although it was modified somewhat in a new
indenture two months later, its essentials were unchanged and repre-
sented a commitment vastly greater than anything the company had
52
The licenses required the companies to pay both the higher rate of duty (30s
per sack) imposed on foreign merchants and a loan of 20 shillings per sack (see
Fryde, William de la Pole, 72). The Peruzzi evidently took advantage of the
opportunity (see CPRE III 1334-8, 543; CCRE III 1337-9, 191, 200, 207, 217).
53
For further information on the complex story of the English Wool Company
and its collapse following the conference at Gertruidenberg in December 1337,
see Fryde, William de la Pole, especially Chaps. 6 and 7; E.B. Fryde, "Edward Ill's
Wool Monopoly of 1337: A Fourteenth-Century Royal Trading Venture," History
new series, 37 (1952): 8-24; and Loyd, The English Wool Trade, Chap. 5.
54
Henry S. Lucas, The Low Countries and the Hundred Years' War, 1326—1347 (Ann
Arbor, MI, 1929), 269-72.
55
CCR E III 1337-9, 400. Giovanni Baroncelli and Tommaso di Filippo Peruzzi
signed for the Peruzzi Company.
56
ever undertaken before. Briefly, the two companies jointly agreed
to lend the king £15,000 for his journey to the continent and a fur-
ther £20,000 after his arrival there. The king would cause 4,000 sacks
of wool to be placed at the disposal of the companies to fund the first
£15,000 and give the companies the responsibility to sell a further
16,000 sacks after his arrival. Part of the proceeds of the sales would
apply against the later debt, but the main recovery of this and previ-
ous debts was to come from the assignment of £30,000 to the compa-
nies from the tenth and fifteenth of the clergy and laity. To enable
the companies to meet their marketing commitments, the king prom-
ised a monopoly on the wool sales on the continent until August 1,
1338. And as a further incentive, he gave the companies the right to
sell 2,000 sacks of their own wool duty free and compensation for
any damages inflicted by the king of France on their property in that
country.
The companies had negotiated a very good deal for themselves,
but they were well aware of the risks involved. Fryde has accused the
companies of naivety as well as cupidity at this point, commenting
that the companies had placed "excessive trust in the king's prom-
ises."57 The companies had good reason to believe that their market-
ing skills and connections were equal to the task of disposing of the
vast quantities of wool required by the agreement, but they realisti-
cally anticipated the probable antipathy of the English merchants
that had now been bypassed. The Peruzzi firm was especially cau-
tious. Not content with simply relying on the Bardi's long and suc-
cessful experience in dealing with the English crown, the company
took the unprecedented step of allowing its chairman, Bonifazio, to
leave his post at the center of operations in Florence and take per-
sonal charge of the venture in Flanders and England. This was a stag-
gering decision for a company with important widespread operations,
the control of which depended so heavily on the close attention of a
dictatorial chief at the center in Florence. It was clearly a tribute to the
importance attached to the successful management of the English ven-
ture, rather than an act of desperation, as suggested by Russell.58
Both Sapori and Russell erroneously put the year of Bonifazio's
arrival in London as 1339.59 He apparently did spend time in Brabant
and Flanders, which might have been necessary to establish confi-
56
The modified version is dated May 11, 1338 ( CCR E III 1337-9, 412).
57
Fryde, "Public Credit," 460.
58
Russell, "The Societies of the Bardi and Peruzzi," 112, 123.
59
Ibid., 112, 123; Sapori, La crisi, 61. Here, Sapori stated that Bonifazio went to
Brabant in July 1338 and stayed there until October 1339 before going on to
London. Fryde repeated this comment in "Financial Resources," 1158.
2 oo History of the Peruzzi Company
dence in the company's new direction, given the Peruzzi's long-stand-
ing policy of consistent support for the count of Flanders and his
liege lord, the king of France. But he may have reached England as
early as the spring of 1338, which would have allowed him to be on
hand for the framing of the agreements of March 11 and May 11,
even though he was not a signatory to either document. He defi-
nitely was in England close to that time, because a letter in the Patent
Rolls established him as a resident of England in June.60 The timing of
Bonifazio's appearance in that country is important, because his early
arrival means that he was in control of the operation from the start.
The problem faced by Bonifazio was to feed cash to the English
government with meticulous care, making sure that refunding was
available from previous advances. He had to provide enough loans
to maintain the company's standing with the crown but ensure that
as little as possible was new cash. First, as we have seen, the company
simply did not have access to the amounts of money agreed upon;
and second, Bonifazio and his colleagues were well aware of the fate
that befell the Ricciardi and Frescobaldi when they became overly
committed in England. According to Fryde, the Bardi and Peruzzi
together produced the initial £15,000 for the king by July 10, just
prior to the king's departure for Antwerp.61 During April and May,
the government made several commitments to the companies that
executed parts of the March and May agreements and that may have
directly or indirectly helped them make these and later payments.
The orders included assignments of £18,000 to the Bardi and £12,000
to the Peruzzi out of the clerical tenth and the lay tenth and fifteenth,
as well as commands to customs officials to pay £4,483 and to permit
the companies to export substantial quantities of wool.62
From here onward, the record becomes murky and unreal. Fryde
has reckoned that in the two months between the king's arrival in
Antwerp on July 22 and Michaelmas (September 29), the two compa-
nies paid the king's receiver in the Netherlands the astonishing sum
of £71,522.63 Why they should have felt obliged to lend such a large
60
CPRE III 1138-40, 100. The entry, dated June 3, 1338, granted protection and
safe-conduct to three members of the Peruzzi firm, including Bonifazio, noting
that they are "dwelling in the realm." Numerous subsequent entries in the
Calendar of Patent Rolls and Calendar of Close Rolls include Bonifazio among the
members of the Peruzzi Society.
61
Fryde, William de la Pole, 89. The Peruzzi's contribution was £5,979, in line with
its agreed proportion of 40%.
62
CCRE III 1137-9, 349 (April 5), 355 (April 15), 373 (May 11), 418 (May 24),
421 (May 2).
63
Fryde, William de la Pole, 89-90. He notes further that the loans were "counter-
balanced for the time being only by very scanty receipts from the king."
amount when their agreement called for further loans of only £20,000
is unclear. Where they were able to obtain this money in such a short
time is not even mentioned. To put the size of the loans in perspec-
tive, the £86,500 reportedly advanced to the king between May and
September corresponded to about 575,000 gold florins, equivalent
to almost double the Florence commune's annual budget at the time,
even using Villani's generous estimates.64 The Peruzzi's 40 percent
share would have been equivalent to li.346,000, an amount greater
than its entire foreign branch assets just three years earlier. The cost
of carrying these new loans, to say nothing of the previous ones, would
be over li.24,000 per annum, an amount greater than the company's
entire profit in all but its very best years.65 The official English records,
so painstakingly analyzed by Fryde, are incompatible with the records
and capability of the companies. How can they be reconciled?
The possible sources of funds described earlier would have been
largely exhausted by the end of 1337. Could the companies have gen-
erated additional funds through the creation of credit, lending money
like modern banks through the use of fractional reserves? On the
basis of today's criterion of a capital-to-loans ratio of 8 percent, the
Peruzzi, even with its 1335 equity of only li.52,000, could tolerate
total lending of li.650,000 or £65,000. However, the Peruzzi Com-
pany was not a bank, but primarily a marketing company, to which
such ratios would not apply. More important, the creation of credit
on a significant scale did not occur in medieval Europe. Lane and
Mueller point out that deposit taking was merely a means of circulat-
ing capital and that real credit creation was a local phenomenon con-
trolled by money changers dealing with people they knew. 66
Goldthwaite's investigations into the economic effects of banking in
a somewhat later period revealed that some banks held less than 100
percent reserves some of the time but that the effect of fractional
reserves on the Florentine economy was insignificant.67 Day adds that
"the creation of credit, the classic function of banking institutions,
was considered an abuse of public confidence."68 He notes that the
use of fractional reserves by deposit banks did not occur until a some-
what later period. And, according to de Roover, bank money was not
64
Villani, Storia, Book XI, Chap. 92, set the budget for 1338 at 300,000 florins.
65
The figure used here assumes that the Peruzzi would pay its normal rate of 7%.
66
Lane and Mueller, Money and Banking in Venice, Vol. 1, 62-4. Later (79) they
emphasize the role of deposit bankers in creating credit but go on to explain
that deposit and transfer banking were not important in Florence (81-2).
67
Richard A. Goldthwaite, "Local Banking in Renaissance Florence," Journal of
European Economic History 2 series, 14 (Spring 1985), 37-8.
68
John Day, The Medieval Market Economy (Oxford, 1987), 150.
2o2 History of the Peruzzi Company
used extensively as a means of war finance until the sixteenth cen-
tury.69
Another possible source of credit, discounting bills of exchange,
was not regularly practiced as a means of raising cash, and in any
case, since the bills originated in routine trade, they would not have
produced anything like the volume needed.70 Postan mentions the
assignment of debts as a substitute for cash, whereby someone con-
tracting an obligation would "set over" debts due to him in settle-
ment, thus avoiding the use of coin.71 But he suggests that the larger
Italian houses would not have used this device often in England; and
again, the amounts could not have been material. Finally, given the
huge and inconvenient mass of coin that would have been repre-
sented by the loans, and in a foreign country as well, could the com-
panies have made part of the advances in some form of scrip or prom-
issory notes? Day refers to the use of scrip money among merchants
in times of a sudden decline in monetary stocks.72 The mobilization
of so much cash so quickly presented acute physical problems of col-
lection, movement, and rational deployment, and the use of scrip
would have given the companies additional time to secure the cash.73
But Fryde makes no mention of such instruments in his exhaustive
examinations of the receipt and issue rolls.
The only remaining possible way to reconcile the records with re-
ality is that the companies gave the king promises instead of money
on several occasions in this period. In his analysis of receipt and is-
sue rolls' procedures, Fryde acknowledges that the enrollment of
loans on the receipt roll did not mean that the money had actually
been been received by the government in cases where the officials
were prepared to recognize the debt but were unable to repay at
once.74 In the summer of 1338, this would obviously have been the
most common situation. Fryde goes on to say that the officials had to
69
De Roover, Medieval Bruges, 321. This use first occurred in the Venetian Republic.
70
The limitations on the use of bills of exchange for credit purposes, as described
by Spufford, Money and Its Use, 255-9, were discussed in Chapter 5.
71
Postan, Medieval Trade, 41. De Roover also notes that debts were assignable
(Medieval Bruges, 51, 54, 68 nl4), but that the "setting off applied to bills of
exchange.
72
Day, Market Economy, 95.
73
A useful illustration of logistics of hurriedly moving coinage is given by Sumption,
Hundred Years'War, 569. Here he describes the frantic mobilization of cash to fund
reinforcements for the siege of Calais in the spring of 1347, noting, "At Westminster,
the cash was being laden onto the pack animals as soon as it was received."
74
Fryde, "Materials," Section A, 128-9. In a footnote he quotes from McFarlane
that the object of enrollment "was to entitle the creditor to repayment, not to
prove that the amount had been received by the Exchequer."
be convinced that everything was in order before they enrolled a
loan but that they could not be certain with regard to secret loans. At
that time there were many such loans, which, he notes, were prob-
ably disliked by the officials, because they could not be sure whether
the money had really been advanced by the financiers and could not
control the way in which the funds were spent.75 Specifically, Fryde
writes, "When in the summer of 1338 the exchequer refused to rec-
ognize in this way a number of secret loans by the Bardi and Peruzzi,
this so seriously alarmed the two societies that they threatened to
cease to advance money to Edward III and, after repeated royal or-
ders, the exchequer finally yielded and entered the loans in ques-
tion on the receipt roll."76 Thus, many of the recorded loans may not
have been paid in at the time indicated, so that such loans, as well as
the so-called loans that were really "gifts," did not involve any trans-
fer of funds from the companies to the Exchequer.
If part of the loans attributed to the companies had been deferred
or unpaid, then the possibility arises that the firms might have gained
enough time to provide new loans from funds generated by the re-
payment of old ones and by the sale of wool. The mere addition of
all moneys advanced over a period of time does not inform as to the
peak lending at any one point because it does not factor in the repay-
ments. Funding fresh loans by repayments of old ones creates the
impression of very large totals in the same way that Emperor Toussaint
l'Ouverture of Haiti is said to have created the impression of having
a large army - by marching the same troops by the reviewing stand
over and over again in different uniforms. Repayments were surely
being made, even if late, and the goal of the company managers was
to match their advances as closely as possible with their receipts. That
they did not entirely succeed is evident, but the gap between loans
and repayments over the longer term is not nearly as wide as sug-
gested by the data in published sources. As will be shown later in this
chapter, Fryde's detailed analysis of the period from May 1338 to
March 1340 in his unpublished dissertation reveals a surprisingly small
deficit in the Peruzzi Company's dealings with the English crown.77
One potential source of additional money for loans to the king is
suggested by an item that formed part of an extraordinarily long entry
of expenses in the Peruzzi accounts between 1335 and 1341 - t h e
dispatch of a fast ship from Barletta to Rhodes.78 Sapori has proposed
75
Ibid., 113. 7 6 Ibid., 129.
77
Fryde, "Edward Ill's War Finance," 333-5.
78
I libri, 181. The item translates, "li.203 for the cost of an armed bare that was
ordered from Barletta to Rhodes in October, 1338, to make known to our asso-
ciates the news of the war by the King of England on the King of France."
2 04 History of the Peruzzi Company
that the reason for the order was to rush the news of Edward Ill's
retreat from Buironfosse so that the Rhodes branch would have time
to take measures to head off panic on the part of its depositors.79
Fryde echoed Sapori's comment, saying that the ship was sent "to
warn their factors in time against the danger of damaging rumours."80
But Edward's failed campaign took place in 1339, not 1338; the late
summer and early autumn of 1338 was taken up with a stately progress
from Antwerp to Coblenz and back to Brabant in a successful but
costly attempt to gather allies.81 Then why should the Peruzzi send at
substantial expense a fast ship to a minor branch, and why Rhodes?
The answer must lie in the fact that the grand master of the Hospitalers
resided there. 82 Two probable reasons for urgent communication
come to mind. The first is the fact that the only important news on
the war with France at that time was Edward's acceptance of the vicar-
generalship of the empire from Emperor Ludwig, the pope's arch-
enemy. The Peruzzi would have wanted to reassure the Hospitalers
that this action of the company's new royal client did not affect its
relationship with the papacy. The second is a request for money to
help the company in its hour of need. A year earlier, Edward III had
commanded the prior of the order in England to pay the Peruzzi all
moneys due to it; perhaps the prior had not paid and needed prod-
ding, but more likely the Peruzzi were asking for additional funds.83
The king's grand and expensive travels on the continent were in-
creasing the pressure on the companies to find more money, some
of which may have been made possible by a flurry of orders to cus-
toms between August and November 1338 to permit the export of
large quantities of wool.84 Some of these provided for outright grants
of wool, which, for the Bardi and Peruzzi, totaled 2,513 sacks, 45
cloves, worth £17,221 after deduction of costs.85These generous grants
79
Sapori, La crisi, 66. Sapori also corrected a garbled account of the incident
given by Peruzzi in Storia commercio, 454, which had included a wrong date.
so Fryde, "Financial Resources," 1158-9; repeated in William de la Pole, 90.
81
See Lucas, The Low Countries, 290-3, for a colorful description of this diplomatic
initiative.
82
Although the grand master, Helion de Villeneuve, lived in Europe between 1319
and 1332 mending the order's finances, he was well settled in Rhodes by 1338,
where he was described as "a very old and stingy man, who amassed great trea-
sures," See Anthony Luttrell, "The Hospitallers at Rhodes, 1306-1421," in A
History of the Crusades, ed. K. Setton III (Madison, WI, 1975), 290-1.
83
CCR E III 1337-9, 186. The order was dated October 4, 1337, and would have
referred to money owed in excess of the £1,333 repaid in April of that year and
noted earlier in this chapter.
84
See, e.g., CPRE III 1338-40, 441, 458, 460, 462, 499, 505, 545, 547, 561, 565, 570.
85 Fryde, "Financial Resources, 1337-40," 1162. Fryde says, "Between August and
of wool to his main financiers only partly reflected Edward's despera-
tion during this period. He pledged the Great Crown and other valu-
able objects, and borrowed large sums under onerous terms from
the Portinari, Vivelin of Strasbourg, and several merchants of
Malines.86 The earl of Derby, the king's cousin, stood surety for the
latter loan and was later held hostage for several months pending
settlement of the debt.
Fryde has described Edward's wool transactions as being completely
out of touch with reality, but his promises to the Bardi and Peruzzi in
Antwerp at the end of November were the stuff of cloud-cuckoo-land.
There, he solemnly committed to gifts of £30,000 to the Bardi and
£20,000 to the Peruzzi, to be paid promptly, along with substantial
awards to the wives of company officials and the daughter of
Bonifazio.87 The companies knew that the agreement was a charade,
as they were well placed to understand the extent of the king's pre-
dicament. They no doubt cheerfully accepted the promises on the
basis of the leverage they might provide in their later dealings with
the monarch.88 At this point, the companies were undoubtedly fully
stretched but were managing to keep solvent.
Back in Florence, the long, costly war with Mastino seemed to be
dragging on to a successful conclusion, when, in December 1338,
Venice signed a separate peace treaty without warning, leaving Flo-
rence exposed and without hope of victory. The companies, deeply
committed to the war and participating in its direction, quickly real-
ized that they could not recover their investment by the seizure of
Lucca and reluctantly concluded peace with the Scagliero on Janu-
ary 24, 1339. Not much is known about the following two years, but
clearly the Bardi and Peruzzi, victims of two disastrous campaigns,
faced serious problems. Sapori asserted that the companies' ability
November 1338 Edward ordered the government at home to deliver 12,400 sacks
to the Bardi and Peruzzi, Pole, Duivenvoorde and Monte Florum [the king's
agent in the Netherlands]." The number of sacks eventually granted was 9,303,
of which the Bardi and Peruzzi share was 2,513 (see note 3 on that page).
86
Ibid., 1154-5. The Portinari was a family of Florentine exiles resident in the
Netherlands.
87
CPR E III 1338-40, 195. The entry is noted as "vacated because these bonds
were revoked and not delivered." The order, however, was reinstated in June
1339 (CPfl E III 1338-40,387,392).
88
These enormous gifts were supported by letters obligatory, and the Bardi did
not yield possession until the final settlement with Richard II in 1392. The
letter obligatory for the £30,000 was one of the four such documents given up
by the Bardi at that time. See Alice Beardwood, Alien Merchants in England,
1350 to 1377 (Cambridge, MA, 1931), 4-9 and App. A.
to repair their situation was hindered by the deterioration of com-
merce in general, with trade with northern Europe virtually cut off
by land and sea.89 There was a very bad harvest in 1339, followed by
famine and pestilence in 1340. The city vented its frustration with
Venice by passing an act in March 1340 forbidding trade with Venice
and her territories in the Levant, which of course redounded to the
disadvantage of the companies.
In such grim times, there was no alternative for the companies but
to trim sail and retreat, as Sapori put it, into a "modest life in har-
mony with the European economic and political situation and with
the conditions of their city exhausted by the expense of an unsuc-
cessful war."90 Fryde too noted a sharp falloff in new loans from the
companies to Edward III, commenting that between Michaelmas 1338
and February 1340 their loans to the king were "a mere £28,376."91
Nevertheless, the companies managed to maintain substantial and
vigorous business throughout their entire theater of operations. In
England, as discussed, a part of the loans committed in the autumn
of 1338 was probably not actually paid in until later, so that the drop
in new loans executed was not as steep as the £28,376 figure sug-
gests. Also, the companies were successful in shipping a very large
quantity of wool to Italy in the years 1338-40, estimated to be at least
7,365 sacks.92 The flow of so much quality wool must have helped
Florentine manufacturing and maintained the companies' position
as cloth suppliers to southern Italy. And although the trade embargo
against Venice may have inhibited the flow of goods, Genoa would
have been happy to fill the void. There is no evidence to suggest that
the grain trade in that territory suffered unduly.93
The records left in the Peruzzi's accounts are not very revealing
as regards the extent of the concern's business during 1338-40, but
they do reflect considerable activity and travel around the branches
by partners and factors.94 There was even travel in and out of Paris,
indicating that the Paris branch was still able to do business, al-
89
Sapori, La crisi, 115. 90 Ibid., 117.
91
Fryde, "Financial Resources, 1337-40," 1159.
92
Fryde, "Italian Maritime Trade with Medieval England," Recueils de la Societejean
Bodin$2 (1974): 301.
93 Yver, Le commerce. In spite of the lack of complete registers, Yver says on 319
that enough survived to prove that the association between the super-compa-
nies and the court was as active and prosperous as ever, right up to 1340. Also,
he reports that King Robert continued to pledge jewelry and gold plate for
loans from the Peruzzi as late as 1338 (see 390).
94
See Chapter 3 regarding the abundant evidence of the monitoring of the
company's business in Florence and abroad.
95
though not without risk to company employees. Most definitely,
there is no evidence to suggest any panicky cutbacks. The long list
of expenses incurred between 1335 and 1341 are mainly of a rou-
tine nature, including interest, brokerage commissions, office sup-
plies, fixtures, fines, and entertainment 96 Likewise, the account of
warehouse rents during that period reflects routine renewals at un-
changed rates, giving no indication of contraction.97 And although
there were staff reductions, they occurred gradually.98 In short, the
evidence suggests prudent husbanding of resources, more in the
sense of skillfully riding out a storm, rather than preparing for even-
tual liquidation.
The English venture, which had been started with the object of
recovering the Peruzzi's fortunes, was of course now the company's
biggest problem. But despite the acknowledged reduction in the scope
of the firm's loans to the king, the latter continued to favor both the
Peruzzi and the Bardi. Edward's drastic order of May 6, 1339, revok-
ing all assignments except those relating to Scotland and to the Bardi
and Peruzzi illustrates dramatically how high the companies remained
in the king's regard.99 The reinstatement of the lavish promises to
the companies and the wives of their personnel noted earlier was
followed by an omnibus confirmation ceremoniously attested before
an array of nobles that full satisfaction was to be given on all assign-
ments and moneys due.100 Nevertheless, both companies continued
to back away gently from further commitments. They still managed
to keep in the king's good graces by agreeing to some new loans, but
at this stage the entries in the Patent Rolls and Close Rolls show that
William de la Pole had become the predominant financier to the
crown.
The year 1340 began in much the same vein, with the companies
95
Two Peruzzi factors were imprisoned in the Chatelet in 1340 because of the
company's loans to the king's enemies, but they were later released and their
trading licenses restored (see Davidsohn, Firenze, Vol. 6, 642).
96
Ilibri, 181.
97
Ibid., 180.
98
See Table 10.
99
CPRE III 1338-40, 255. Despite the unequivocal language of this order exclud-
ing the Bardi and Peruzzi, along with supporting evidence from subsequent
orders and actions, some historians have surprisingly interpreted it as meaning
that the king was repudiating the Bardi and Peruzzi loans. See Peruzzi, Storia
commercio, 471; Marvin B. Becker, Florence in Transition, Vol. 1 (Baltimore, 1967),
97.
100
CPRE III 1338-40, 391. The statement, dated August 4, 1339, also noted fears
for the solvency of the companies.
seemingly more intent on collecting against old commitments than
making new ones. The Patent Rolls and Close Rolls are studded with
entry after entry giving orders, repeat orders, and countermands re-
garding the disposal of various quantities of wool and payments due
from promised taxes. Following his inconclusive campaign around
Cambrai and the Thierache in the autumn of 1339, the king began
preparing for 1340 by negotiating a military and economic alliance
with the Flemish towns. This he cemented by declaring himself king
of France from Ghent in an elaborate ceremony on January 26.101 On
his return to England in February, he pressed the companies for new
commitments for his next incursion into the continent in June of
that year. New undertakings were eventually formalized in two agree-
ments.102 The first, dated May 28, provided that the companies would
advance 2,000 marks per month of twenty-eight days for one year,
totaling 26,000 marks in all for the upkeep of the king's household.
In return, they were assigned the first year's proceeds from the ninth
of sheaves, fleeces, and lambs from Gloucester, the second year's from
Wiltshire, plus the clerical tenth.103 In the second agreement on June
10, the companies agreed to pay three important royal debts on the
continent, two of which involved the release of the earls of Derby
and Northampton from their pledges as hostages of the merchants
of Malines and Louvain, respectively.104 In compensation, the two firms
were to receive the first year of the ninth from six counties and the
archdeaconry of Lincoln, estimated to be worth £20,915, plus the
second year of the ninth from fifteen counties due for levy in 1341.
As further incentives, the companies were awarded "gifts" (10,000
marks for the Peruzzi) and the promise of speedy accounting, the
latter evidenced by a flurry of writs on June 15 and 16.105
Despite the king's remarkable naval victory over the French at
101
Sumption, Hundred Years'War, 300-3. For a thorough account of the campaigns
of 1339 and 1340 in the Low Countries and Gascony, see 239-369.
102
The data for the two agreements shown in this paragraph are mainly from Fryde,
"Edward Ill's War Finance," 570-83.
103
The infamous "ninth," which was a tax in kind on agricultural produce, was
similar to a clerical tithe. But it was complex, inequitable, and extremely un-
popular, and its yield was well below expectations (Fryde, William de la Pole,
145-50). Until that time, the yields of Edward Ill's various direct tax levies had
been remarkably close to assessments. See W. M. Ormrod, "The Crown and the
English Economy," in Before the Black Death, ed. B. M. S. Campbell (Manchester,
1991), 149-83.
104
The earl of Derby was Edward Ill's cousin, Henry de Grosmount, who later
became duke of Lancaster. He was thus a very important hostage.
105
CCR E III 1339-41, 418-20.
Sluys on June 24, his promises, so easily offered, were very slowly
delivered. The Bardi and Peruzzi were therefore equally hesitant in
executing their side of the bargain, notwithstanding the fact that the
victory at Sluys greatly reduced the risk involved in shipping wool
to Flanders and Italy. They did deal with the account that the king
seemed to regard as the most important, paying off his debt of
£10,500 to Simon de Mirabello, regent of Flanders and stout sup-
porter of Edward III and the Flemish leader Jacob van Artevelde.106
The companies were unprepared, however, to make any other pay-
ments until they received some of the promised revenues, and these
were not forthcoming; the Peruzzi did not even pay its share of the
Mirabello commitment until November.107 For lack of funds, the king
was forced to abandon his siege of Tournai, and on September 25
he concluded a truce with France in the village of Esplechin. As a
result, the two earls were obliged to return to Malines and Louvain
as hostages.
This phase of the Peruzzi's operations in England came to a sud-
den end on October 3, 1340, with the death of Bonifazio in London,
allegedly of a broken heart.108 The chairman had obviously been
under continuous stress since his assumption of the leadership of
the company, but his efforts to rescue it had been showing some signs
of success. To be sure, the Peruzzi remained substantial creditors of
Edward III, but Bonifazio had maintained a balancing act that en-
abled the company to control its exposure. Although there is no fig-
ure indicating exactly how much was still owed by the king at that
time, the record shows that both the Bardi and Peruzzi had succeeded
in obtaining substantial recoveries of their advances. Fryde has as-
sembled tables giving the details of payments received by the two
companies between May 1338 and March 1340. The total of these
payments was £66,000 for the Bardi and £38,000 for the Peruzzi,
£104,000 in all.109 During a slightly longer period, the amount re-
106 Mirabello, better known in the Low Countries as Simon van Halen, was also one
of the guarantors of Edward Ill's debts in Brussels (Lucas, The Low Countries,
429). And despite his close connections with Edward III, he remained on good
terms with Louis, count of Flanders, a loyal supporter of King Philip of France
(438). He was also well known to the Peruzzi, having followed Donato di Pacino
as general receiver of Flanders in 1329 (Kittell, Ad Hoc, 207).
107
Fryde, "Edward Ill's War Finance," 592.
108 While reluctant to refute the "official" Villani version, Sapori suggests that
Bonifazio may have died of a recurrence of a throat ailment, for which he had
had surgery in 1335 {La crisi, 61).
109
Fryde, "Edward Ill's War Finance," App. B.
2io History of the Peruzzi Company
portedly advanced by the companies was £86,000 by the Bardi and
£40,000 by the Peruzzi, for a total of £126,000.110 These data show
the difference between company advances and receipts to be signifi-
cant but bearable for the Bardi and remarkably small for the Peruzzi.
Fryde notes that the Peruzzi receipts may have been overstated by
some £1,600, but even allowing for this item, the gap between re-
ported Peruzzi loans and repayments over the critical period May
1338 to March 1340 was a mere £3,600. m And taking into account
hidden interest in the loan totals and profit from 3,621 sacks of wool
exported during that time, the Peruzzi company may have actually
improved its cash position by as much as £8,600.112
Earlier in this chapter, we found that the Peruzzi had run up cred-
its to the English government totaling £26,000 by late 1337. Allow-
ing for the £8,600 improvement just cited, the company's net cash
drain from the start of lending to Edward III would have been re-
duced to £17,400 by the spring of 1340. This is, of course, a rough
and incomplete analysis, but directionally it is appropriate. It sug-
gests a cash deficit in early 1340 in the range of £15,000 to £20,000,
a substantial sum and one that could not be borne indefinitely, but
not immediately overwhelming. And the deficit is unlikely to have
changed much by the time of Bonifazio's death in October 1340.
The king was in no position to repay old debts, and the companies,
as we have seen, were prepared to honor their new commitments of
May and June 1340 only partially and with much delay. The Bardi
and Peruzzi even fell short in carrying out their promise to fund the
king's household expenses.113
There is reason to believe that Bonifazio remained in England all
this time because he judged that the company's survival depended
upon the successful management of the English venture. Clearly, he
110
Ibid., 333-4. The official schedule and receipt and issue roll numbers from
which these figures are derived are given in Vol. 2, 175-6, nn424, 425. They
date back to November 1337, but very little money was loaned between that
time and May 1338. The totals exclude promises of "gifts" amounting to £72,000
during the period but do include certain less obvious elements of hidden inter-
est, such as £4,917 reflected in letters obligatory but not reported as received
by the king's agents (see 332).
111
Ibid., 335. The £1,600 is the difference between losses claimed by the Peruzzi
on certain wool deliveries and the losses apparently allowed.
112
This very rough calculation reflects the hidden interest of £4,917 mentioned in
note 103, plus £7,242 profit on the exported wool (3,621 sacks at £2 per sack),
minus £3,600. The source for the number of sacks is Fryde, "Edward Ill's War
Finance," Vol. 2, 173, n399.
113
See Chapter 8 for further discussion on this issue.
The critical years, 1335-1340 2 11
went there in the first place to launch the Peruzzi into the heavy
financing phase of the joint venture, not to salvage a company facing
disaster. Possibly he felt that only he knew how to deal with the En-
glish nobility, having lived in that country for several years in the
1320s. On this basis, he may have reasoned that there were talent
and experience aplenty in the company to run the bread-and-butter
businesses in Italy and the Mediterranean but that the audacious
English enterprise required the full and direct attention of the chair-
man. Whatever his rationale, he abrogated his central responsibility,
delegating the management of the total business to a leading part-
ner, presumably his brother Pacino.
The results of this key organizational decision must be judged as
mixed. The figures cited suggest that the Peruzzi had been more suc-
cessful than the Bardi in recovering their advances and that England
may have been the right place for him to be stationed. But the cost to
the organization as a whole must have been high, as indicated by the
confused state of the accounts in Florence and the continued ad-
verse trend in the overall business. Nevertheless, despite the stresses
of the past three years and lack of central direction, the Peruzzi Com-
pany was still a going concern. Several more blows were required to
bring this mighty organization to its knees.
8
The collapse, 1340-1343
The news of the death of Bonifazio reached the company's head-

quarters in Florence on October 25. On the following day, those share-
holders resident in Florence met and agreed to appoint as chairman
Bonifazio's brother, Pacino di Tommaso, changing the name of the
company for the third time in four years.1 Pacino faced the unenvi-
able task of taking charge of a company that was fighting for its very
survival.
The new chairman was a very different type of leader from his
brother. Unlike Bonifazio, who was inclined to take bold initiatives
and whose interests lay abroad, Pacino appeared to be cast in the
conservative mold of his father Tommaso. His were the "ink-stained
fingers" that compiled the Assets and Secret Books of the Sixth Com-
pany.2 His preoccupations were with local politics rather than for-
eign ventures, and he showed no interest in rushing to England to
take up where Bonifazio left off. Thus, for the second time in succes-
sion, the appointment of a new chairman was accompanied by a sharp
change in the direction of company policy.
The effect of the new management priorities was promptly felt in
England, although the London branch headed by Giovanni Baroncelli
continued to do its utmost to maintain the company's position there.
For the first time, the Peruzzi began to back out of its obligations.
Following England's truce with France, the Bardi and Peruzzi agreed
to secure the release of the earls of Derby and Northampton within
fifteen days of the receipt of 500 sacks of wool promised by the king's
council.3 The sacks had not arrived by the time the king had returned
to England in November, which exonerated the companies from this
liability. They were given £1,000 from the ninth but still felt unable
1
/ libri, 1. The name of the company became Pacino di Tommaso de'Peruzzi e
compagni.
2
Ibid. Sapori confirms this fact in his introduction and on photocopies of the
manuscript pages.
3
CCR E III 1339-41, 639-40. The indenture was dated October 19, between
Bonifazio's death and the date the news reached Florence.
The collapse, 1340-1343 213
to oblige, as the amount required to release Derby had risen to
£10,000. They were accordingly relieved of this responsibility and
replaced by the Leopardi Company of Asti, which had a branch in
Malines.
In commenting on this humiliating withdrawal, Fryde has noted
that "the Bardi and Peruzzi, which of course were capable of paying
this great sum, felt probably that the burden would be too great." 4
The statement is only partially accurate. The reduced interest in pur-
suing the English venture stemmed importantly from the change in
Peruzzi leadership and even more from a new preoccupation of the
Bardi Company with Florentine affairs. On All Saints' Day of 1340,
just one week after Pacino's elevation, sixteen members of the Bardi
family spearheaded a coup against the ruling signoria. The plot was
nipped in the bud due to a leak by one of the conspirators, and the
Bardi participants were fortunate to escape. The company did its best
to dissociate itself from the conspiracy but could not help being seri-
ously distracted by it.
The motivation of the plotters is not easy to discern. Villani appar-
ently saw this eruption as just one more episode in the long-running
conflict among the three main classes in Florence - the magnati, the
popolo grasso, and the popolo minuto.5 Sapori argued that such simplis-
tic divisions did not fit the facts, noting that the capitalists often sup-
ported each other regardless of origin, citing the close collaboration
between the magnati Bardi and the popolani Peruzzi.6 The plot, he
believed, had Ghibelline tendencies, with a wide range of adherents
drawn from all sectors of society disaffected by famine, plague, and
the policies of the /wjfro/ane-dominated Guelf government. Moreover,
he suggested that the Bardi plotters were driven by the desire for a
new political orientation toward Emperor Ludwig, which would en-
able them to annul the huge debts owed the company's depositors in
Naples and Avignon.
Professor Sapori's diligent researches have provided much valu-
able information and insight for this study, but his judgment in this
instance lacks its usual acuity. In support of this startling statement,
Sapori has argued that family and company were effectively one and
4
Fryde, "Edward Ill's War Finance," 599.
5
As discussed in Chapter 1, the magnati were a number of old, large, and violent
families designated as dangerous to the commune in 1292 and subject to re-
strictions on their qualifications for public office, among other things. The popolo
grasso were, of course, the wealthy merchant families currently dominating
Florentine politics, and the popolo minuto were the artisans.
6
Sapori, La crisi, 118. Further comments attributed to Sapori in this paragraph
are drawn from ibid., 121-6.
the same, emphasizing that the Bardi family members dominated the
firm, overriding the minority outside shareholders, including the
powerful Taldo Valori. He treated with scepticism the company's at-
tempts to dissociate itself from the conspiracy, in particular its termi-
nation effective October 31 of Piero di Gualtieri Bardi, the only plot-
ter who had been a shareholder.7 He also noted that five of the Bardi
plotters had deposits in the company.
The argument that the family owners of the Bardi Company helped
engineer the plot to repudiate their debts is out of character with the
history of these merchants. It requires them to be so ruthless that
they would trash their great company and its hard-earned reputation
for fair dealing; so irresponsible that they would turn their backs on
their associates, their employees, and their clients; and so naive as to
expect that they could get away with such outrageous behavior. Sapori
has also exaggerated the fusion of company and family. To be sure,
family members controlled it, but the company, like the Peruzzi Com-
pany, was a separate legal entity subject to specific laws of the com-
mune, responsible to all of its shareholders, employees, and custom-
ers. It was not a plaything to be disposed of at the whim of the family
circle. Furthermore, it was not at all unusual for large Florentine
families to be divided on political issues. As we have seen, the Peruzzi
broke up into Guelf and Ghibelline branches during the previous
century, and the Cerchi, Frescobaldi, and the Bardi themselves split
into Black and White factions in the early part of the fourteenth cen-
tury. Seen in this light, the termination of Piero's partnership can be
construed as a repudiation of the conspiracy by the segment of the
family that controlled the company. The fact that five of the plotters
were depositors in the company is irrelevant; a company that accepted
deposits from affluent people of all political stripes could hardly refuse
members of its own family.8 Finally, the financial condition of a com-
pany that was able to survive a further five years was not so desperate
as to require such extreme measures.
The Peruzzi, as usual, maintained a low profile throughout. No
family members were involved in the sedition, nor did any of them
actively press for reprisals, given their close business relationship with
the Bardi. Eventually, fines were imposed on the conspirators, rather
than confiscation, and commercial life in Florence returned to an
uneasy calm. Back in England, the joint venture continued as be-
7
Ibid., 127. October 31 was, of course, the eve of the attempted coup.
8
Two members of the family, Bartolo di Gualterotto and Bindo di Iacopo, main-
tained substantial deposits with the Peruzzi (I libri, 2, 183, respectively). One,
Iacopo di Bartolo, had a small deposit briefly (173).
fore, but with increased caution. A stream of repeated orders from
the government to various county collectors of the ninth of sheaves
to accelerate payments to the Bardi and Peruzzi seemed to attest to
the companies' continued unwillingness to advance more funds with-
out a quid pro quo from the crown.9 One pair of entries in the Close
Rolls is particularly instructive. The first, dated April 1, 1341, ordered
the treasurer to pay the Bardi and Peruzzi sums from various coun-
ties totaling £10,500 13s 4d, which the companies had paid to cer-
tain individuals in connection with the ransom of the earls of Derby
and Northampton.10 The second entry made it clear that the compa-
nies had yet to make the payment.11 The companies did eventually
pay up and were reimbursed, including an allowance for the suffer-
ing and imprisonment of certain of their employees who were held
hostage along with the earls.12
Later entries in the Close Rolls suggest that the companies had
again been lending faster than they had been receiving reimburse-
ments. One order dated June 14, 1341, noted that the Bardi Com-
pany was still owed £2,370 on its share of the 26,000 marks the two
companies had advanced over the previous year for the king's house-
hold expenses and demanded that certain counties pay up.13 The sec-
ond order was a very long one on the same date acknowledging that
the companies had advanced a total of £29,257 "or thereabouts" for
a variety of purposes, including the £10,500 to Simon van Halen
(Mirabello).14 The king urged the receiver of the subsidy of the ninth
to deliver to the Bardi and Peruzzi all money received from a list of
counties, as well as £2,000 from the triennial tenth of certain other
counties. The order insisted on rapid payment because the compa-
nies had recovered only £6,492 of these advances. But the implica-
tion from these statements that the companies had given away a fur-
ther £25,000 to the English government defies logic and fact. Under
the circumstances obtaining in 1341, the companies' branch manag-
ers would not have been given the authority by their masters in Flo-
rence to lend additional money on this scale even if they had access
to such quantities, which is doubtful. Moreover, Fryde repeatedly cites
9
CCR E III 1339-41, 573, 591, 592, 593, 611. These orders are all dated between
November 1340 and late January 1341.
10
CCR E III 1341-3, 59. The sums assigned were from fines collected by the jus-
tices of the counties named.
11
Ibid., 117.
12
Fryde, "Edward Ill's War Finance," 604-5. The Peruzzi claimed £3,772 but re-
ceived £3,389.
13
CCRElll 1341-3, 164.
14
Ibid., 171.
evidence that all merchants, including the Bardi and Peruzzi, were
careful to avoid advancing funds without solid assurance of repay-
ment in cash or wool.15 And the companies were even delinquent in
delivering the promised 2,000 marks per month for the king's house-
hold expenses; the official receipts of the Keeper of the Wardrobe
add up to less than one-third of the total due.16 As a result, we can be
confident that a large part of any new loans would have been promptly
repaid or funded by receipts from old debts carried over from 1340.
Possibly the total outstanding credits to the king had risen, but not
by much.
It is worth reiterating that the Peruzzi Company was very much a
viable business during this first half of 1341, despite Villani's com-
ments that the firm was in dire straits at least a year earlier. 17 Villani
stated that the Peruzzi was unable to meet the claims of creditors in
England, Florence, and elsewhere and lost its status in the commune.
To this, Sapori sensibly responded that the company could not have
refused such claims without provoking bankruptcy proceedings. 18
There was some alarm and embarrassment, he admitted, but they
were not widespread, adding that the Neapolitans, whom he described
as the best-informed capitalists in Europe, did not begin to pull back
their deposits until 1342. Finally, the Peruzzi maintained status in
the commune, as Pacino continued to receive appointments to high
office.
In mid-1341, Florence was again threatened with a crisis. Mastino
della Scala, faced with a rebellion in Parma and other problems, de-
cided that Lucca had become too difficult to defend and returned to
his old idea of selling it. Cunningly, he offered it simultaneously to
Florence and Pisa, knowing that the acquisition of Lucca by Pisa would
menace Florence's trade routes and hence be unacceptable to the
Florentines. They accordingly prepared to fight and in July 1341 sus-
pended the constitution and deputized a group of twenty citizens
with full power for one year to offer Mastino 250,000 florins and to
recruit mercenaries at a cost of 30,000 florins per month. If this new
upheaval weren't distraction enough for the Peruzzi, the Twenty re-
15
Fryde, "Edward Ill's War Finance," 606-9, 628.
16
Ibid., 624-5. The Keeper's receipt rolls show only £3,552 as having been re-
ceived from the Bardi and £1,593 from the Peruzzi, for a total of £5,145 out of
the £17,333 promised. More may have been advanced to the king while he was
abroad in 1340, but there is no record of any such receipts.
17
Villani, Storia, Book XI, Chap. 87. The dates referred to in this passage are not
indicated. The previous chapter touches on 1338, but the context of this one
suggests a period around Edward Ill's unsuccessful campaign of 1339.
18
sponsible for conducting the negotiations and war included their new
chairman, Pacino. Although no Bardi was allowed to serve, Taldo
Valori effectively stood for the Bardi Company on the committee.
Iacopo Acciaiuoli was also a member, so that all three super-compa-
nies were represented in this powerful body.
Unfortunately, the Twenty was also an inexperienced, incompe-
tent, and corrupt body of men, and their campaign was an inevitable
failure. The Florentine forces tried to relieve Lucca, but were crushed
by Pisa on October 2. The Twenty were accused of fraud by a popu-
lace that was angered and frustrated by defeat but were not subjected
to an official enquiry until later.19 Overlaying this unsatisfactory po-
litical situation was a fundamentally depressed economic environ-
ment. The severe famine in 1339-40 was followed by a plague said by
Villani to have cost some four thousand lives.20 After 1340, the
Florentine economy was characterized by acute depression, high food
prices, low wages, and general suffering, which persisted until 1347.21
Funding to continue the war began to dry up as a result of this weak-
ness. In November 1341, the gabelle was so reduced by low volume
that an attempt was made to establish direct taxes and create new
offices for the purpose.22 Merchants who won the auctions for vari-
ous gabelle farms found that they lost money on them. Then the
artisans began to fail, as credit from the large merchant companies
became scarce, depriving the former of the means to acquire raw
materials. And the super-companies were directly affected in their
international business; for example, all three were subjected to law-
suits in Sicily when the Florence Commune reneged on large debts
for grain purchases there in 1341-2.23
The military defeat had indirect consequences that were even more
damaging to the super-companies. On October 13, Benedict XII
awarded a contract to the Nicolucci Company of Siena to receive
and transfer all apostolic collections from Hungary, Poland, Roma-
nia, and Italy.24 The loss of this strategic business, especially the Ital-
ian transfers, to an obscure Siennese organization was a shock to the
super-companies and to Florence, as this action was a repudiation of
both. The Acciaiuoli, which continued to be entrusted with the now
19
Villani accused them of giving most of their thoughts to enriching themselves
and their friends. Storia, Book XI, Chap. 130.
20
Quoted in Brucker, Florentine Politics and Society, 9.
21
La Ronciere, Prix et salaires, 458.
22
Sapori, La crisi, 138. The dispositions of the law, however, were not carried out.
23
Trasselli, "Nuovi documenti," 191.
24
minor flow of collections from England, remained the only Florentine
company still doing business with the papacy. Papal business, as has
been noted repeatedly, was valued less for its modest contribution to
company profit than for the indirect benefits that it conferred. The
papal collection network fit comfortably with and enhanced the com-
panies' own financial networks. Being entrusted with the Curia's fi-
nances was not only a mark of papal favor, but also a declaration of
faith in the companies' solvency by a very conservative adjudicator.
Being dropped by the papacy was to the super-companies akin to a
modern corporation's loss of its rating by Moody's and Standard &
Poor's.
The reasoning behind Benedict's decision was partly financial and
partly political. In the financial sense, it was typical of the papal trea-
sury to change bankers whenever it had reason to believe that there
was risk of insolvency among them. The entanglement of the Bardi
and Peruzzi in the wasting English campaign and their deep involve-
ment in the disastrous defeat at the hands of Pisa were sufficient evi-
dence to make the Curia wary. But the abruptness of the change and
the abandonment of its policy of spreading its risks among larger
institutions at some cost in efficiency were clearly intended as a po-
litical message to the Florentines. The fact that other Florentine com-
panies, much sounder and more competent than the Nicolucci, were
passed over indicates that the papal insult was directed at the
commune's regime.25 Although Benedict's action was likely influenced
by continuing pressure from the French king, it was mainly moti-
vated by frustration with the repeatedly demonstrated ineptness of
Florence's leadership.26 Had the Florentines beaten Pisa on October
2, it is doubtful whether the papacy would have made such an abrupt
change, if any, in its financial arrangements.
After the battle, the commune set about desperately to find help.
The first of its great allies, the papacy, had made its attitude clear. Its
other traditional source of support, the Angevin kingdom, was bogged
down in yet another campaign in Sicily and was undisposed to pro-
vide any assistance. The signoria sent a long missive to King Robert
later in October that attempted to put him in the position of either
coming to Florence's aid or renouncing his protection of the city.27
The king, well informed about the commune's desperate plight, was
25
The Alberti Company, which later became official banker to the papacy, is an
example.
26
The French did their best to influence the Avignon popes against England and
its allies, and were often successful (see Mollat, The Popes of Avignon, 251).
27
not moved by this veiled threat and sent an embassy to Florence in
November with the demand that he be given the possession of Lucca.
Only on this condition, which he is alleged to have believed would
be unacceptable to the Florentines, would he move his forces north. 28
To his surprise, the Florentines acceded with alacrity.
From this point, the story becomes extremely hazy, with three dif-
ferent versions of what happened. It is clear that Robert changed his
mind about the possession of Lucca and sent no troops at all, but it is
unclear when he made this decision known. According to Villani,
the reaction to Robert's refusal came in the spring of 1342, when a
secret delegation of certain leaders opened negotiations with Em-
peror Ludwig of Bavaria.29 The emperor in this version promised that
if Florence would receive one of his vicars, he would order armed
aid and have the German mercenaries withdrawn from the Pisan army.
The signoria as a whole, Villani said, disapproved of such contacts as
contrary to the interests of the Guelf party and the church but failed
to disavow them before Robert got wind of the negotiations. He flew
into a rage at such perfidy, causing many of his barons, prelates, and
other wealthy men to rush to redeem their deposits with Florentine
merchant-bankers, precipitating the collapse of many companies.
In a word, Villani claimed that the maneuvers of a few misguided
citizens provoked the failure of the Peruzzi and Acciaiuoli and even-
tually the Bardi companies.
The Villani scenario, largely accepted by most historians, has been
hotly challenged by two of them. Sapori argued that the priors of
Florence dispatched a regular embassy to Ludwig, who ordered that
a force of fifty knights and his vicar be sent to Florence. 30 This action
was enough to upset Robert and cause him and the capitalists of his
kingdom to withdraw their deposits. It was therefore not an ill-
founded suspicion of King Robert that provoked the crisis but the
official politics of the commune. The bankers, although in control
of the public offices, blamed the politics. Realizing the significance
of the disaster they had wrought, they promptly dismissed the em-
bassy of the emperor. But they were too late, and as the alarm of the
Neapolitans spread throughout Italy and abroad, the companies had
to start refusing withdrawal requests as the run overwhelmed their
resources. They were spared immediate collapse when Walter of
Brienne, duke of Athens, assumed control of Florence.
The essential difference between Sapori's version and Villani's is
28
29
Ibid., Chap. 138.
30
that the former describes the negotiations with Ludwig as overt by
the whole signoria rather than a covert effort by a few of the leading
citizens. The end result, the run on the Florentine merchant-bank-
ers, was the same in both cases. The third version, which appears in a
recent study by Michele Luzzati, does not quarrel with the fact that
there was contact with Ludwig or that Robert knew about it, but de-
nies that Florence's "perfidy" caused the avalanche of withdrawals.31
Luzzati points out that, during May 1342, the Florentines weighed
the pros and cons of Ludwig versus Robert and opted clearly for the
latter. They wrote to Robert on May 22 that they intended to take
Walter of Brienne into their service as capitano diguerra and expressed
hope that Robert would pledge aid, recognizing that Walter was one
of his envoys.32 On June 1, as noted by Villani, they elected Walter as
their leader and so informed Robert.33
King Robert and his wealthy subjects, in Luzzati's view, had no
reason to fear that Florence would opt for his enemy Ludwig and the
Ghibellines and desert its traditional allies. They therefore had no
reason to rush to remove their deposits. Luzzati notes that Villani is
the only source for the claim linking the plot to the company fail-
ures, adding that Villani's list of companies bankrupted included the
Cocchi, which had been in the hands of creditors' syndicates since
April 1, long before the Neapolitan run could have started. 34 Another
problem Luzzati finds with Villani here is that the latter attributed
the Peruzzi collapse to the Ludwig plot after already having blamed
Edward III back in 1339-40, using much the same terms.35 In fact,
Villani's own company, the Buonaccorsi, was the only one to flee
Naples. The firm suddenly closed down on June 1, 1342, and disap-
peared from both Naples and Avignon, leaving a host of angry de-
positors. Thus, Luzzati concludes that Villani attempted to exon-
erate his company by creating a linkage between the Ghibelline plot
31
Luzzati, Villani e Buonaccorsi, 62-9.
32
Walter of Brienne was a French nobleman who was also styled duke of Athens,
an empty title since his father had been driven from the Byzantine duchy of
Athens many years before. Walter was brought up in the court of King Robert
of Naples and married into his family.
33
Villani, Storia, Book XII, Chap. 1.
34
Luzzati, Villani e Buonaccorsi, 65.
35
Ibid., 65-6. Luzzati aptly observes that the terminology in Book XI, Chap. 88,
regarding the Peruzzi in 1339-40 and again in Book XI, Chap. 138, in 1342 is
the same: "Fallirono di pagare . . . con tutto che non si cessassono per le loro
grandi possessioni ch'aveano in Firenze e nel contado, e per la loro grande
potenza e stato ch'aveano in commune."
and the collapse of so many firms and diverting the blame to the
Florentine government.36
Luzzati's argument is persuasive; the sudden disappearance of a
company of the size and stature of the Buonaccorsi would obviously
have created deep concern in the minds of all depositors in southern
Italy. Probably, many of them did withdraw their funds, while others,
buoyed by the appointment of Walter of Brienne as military com-
mander and later as dictator of Florence, may have been persuaded
to keep their money with the super-companies for a while longer.
Moreover, it is difficult to accept the idea that even the rather dim
political leadership of Florence should have been so wrongheaded
as to enter into really serious negotiations with the emperor. Ludwig
was no longer a friend of England. He had unceremoniously dropped
Edward III as his vicar in June 1341 after having formed an alliance
with King Philip of France. And although this action should have put
the emperor in better odor with the Avignon papacy, it would have
made him an even greater threat to Robert. But whatever the real
story, the events of mid-1342, following the loss of the papal busi-
ness, left the big Florentine companies hanging on the ropes. It is
quite possible that the Peruzzi and others would have failed at that
time were it not for the relief afforded them by the new dictator.
At this point it would be useful to step back from the narrative of
external events and look again at the internal workings of the Peruzzi
Company. Despite the turmoil in Florence that was rocking the com-
pany to its foundations, business in the branches appeared to carry
on, a tribute to the partially decentralized management system de-
scribed in Chapter 3. The only evidence of discontinued operations
was the closing of the tiny Chiarenza branch in 1342.37 The branches
in England and Bruges were of course exceptionally busy. Naples
and Sicily, while no longer the dominant centers of the company's
business, were still very active. Even the Paris branch remained open
until the end in 1343, as did Avignon, where profitable business with
individuals in the court continued after the cancellation of the papal
transfer operations.
There can be little doubt, however, that the size of the company's
active workforce was steadily shrinking, a clear signal that its overall
operations were in irreversible decline. Specific numbers are diffi-
cult to establish, but a valid approximation can be obtained by comb-
36
Ibid., 71.
37
Peruzzi, Storia commercio, 420.
ing through the salary records and expense entries in the Peruzzi
accounts to identify the dates on which named individuals were owed
salary or expense.38 Additional sources are the Close Rolls and Patent
Rolls that often name specific officers of the English branch, albeit in
anglicized forms that are sometimes difficult to relate to their Italian
originals.39 By these means, it is possible to construct three series of
figures over the eight-year period between 1335 and 1343 that can
provide insight into the decline of employment in the company. These
are shown in Table 10.
The number of employees reported for the base year 1335 includes
salaried factors and sons of shareholders working for the company
without apparent salary, as shown in Table 4, but excluding the
drapperia "partners." The second column represents the number of
employees and shareholders' sons identified as being in the
company's employ up to the years indicated. The third column gives
the total number of employees that might have been working each
year - that is, the total number from the previous year adjusted only
for identified new hires, deaths, and departures. This is undoubtedly
an excessive number, given the chaotic state of the salary ledger. As
described in Chapter 3, the salary entries in the Secret Book were
obviously of a "catch-up" nature, dealing with arrears of up to eight
years. They show twenty-six employees due salary up to July 1, 1343,
all of whom were on board for the entire period. But the fact that all
others were due salary only up to earlier dates cannot be construed
as meaning that they left the company on those dates, because other
sources show that they were still employed in subsequent years. At
the same time, the records are much too sketchy to permit the as-
sumption that all personnel not specifically designated as having died
or departed actually remained on board until 1343. Hence, there is
need for a fourth column, which reflects the notion that some people
remained in the company's employ but had their salary recorded
elsewhere, while others not reported as departed had, in fact, done
so.40
The resulting "probable" series is imprecise but provides a rea-
38
I libri, 303-18, provides the salary data. Expense entries are scattered through-
out the books, but Sapori's list of factors employed (Storia Economica, Vol. 2,
718-29) is a helpful guide.
39
See note 23, Chapter 9, for an example.
40
Certain employees, such as those seconded to the drapperia, some sharehold-
ers' sons, and others known to be working for the company did not appear in
the salary ledgers. Some are known to have died or left the company. The "prob-
able" column therefore tries to take into account the likelihood of both unre-
ported people and unreported "wastage."
Table 10. Total number of Peruzzi Company employees,
1335-43
Positively Possible
Year identified maximum Probable
1335 96 96 96
1336 94 95 93
1337 86 94 90
1338 80 94 85
1339 72 87 77
1340 64 80 72
1341 57 76 66
1342 50 70 58
1343 40 69 47
sonable guide to what was happening to the company during this

period. It was definitely downsizing, especially after 1339, but it was
doing so gradually by attrition rather than by massive cuts. It also did
very little hiring, adding only seven apprentices over the eight years,
all but one before 1340. Interestingly, the company did not attempt
to cut costs by reducing salaries or terminating its senior employees.
There is not one reported instance of a salary reduction, while there
were numerous cases of increases, and at the end, nearly all salaried
personnel were long-service employees. All of this suggests that the
company felt a strong sense of responsibility toward its people.
What parts of the business bore the brunt of these staff reductions,
which amounted to one-third of the total workforce by 1340? Cer-
tainly England did not suffer until the very end, and even after bank-
ruptcy there were at least six sons of shareholders still in the country.
The smaller branches in the Mediterranean were probably allowed
to run down. There is evidence to suggest that employees who died
in Sardinia or departed from Tunis were not replaced. 41 The Paris
branch was downgraded after 1337, as was that of Avignon after 1341,
and undoubtedly some reductions occurred in the large branches in
southern Italy and Sicily. But the biggest cuts had to come from the
place with the most people - Florence. The areas of operations most
likely to have suffered were those relating to recording and control,
as suggested by the disorderly state of the accounts, but some of the
company's basic merchandising and grain trading business must also
have been dropped. The one exception to the cutbacks was wool trad-
41
Ilibri, 309, 312.
ing, given the very large quantities of English wool controlled by the
company. For the other businesses, it was probably a matter of doing
more with less, bearing in mind that the "less" still amounted to a
very large organization.
Over this same period, the shareholders' investment in the com-
pany was gradually declining. Data are available for each of the part-
ners' personal accounts with the company, year by year, and these
are presented for 1335 and 1343 in Table A6.42 They show that cer-
tain family members increased their deposits with the company, while
others decreased theirs. On balance, the Peruzzi family increased its
investment by li.23,000, from li.27,000 to li.50,000. The nonfamily
shareholders nearly all decreased their investments, most ending up
in a net borrowing position. The only significant investors were the
Baroncelli; at the other end of the spectrum, the Soderini brothers
were heavy borrowers. Overall, the nonfamily shareholders reduced
their investment by nearly li.48,000, dropping the grand total for all
shareholders by li.25,000. These figures further undermine the ar-
gument that Florence was the main source of funds for the company's
English venture.
By 1341 the company's greatest structural weakness had become
the lack of coordination and control from Florence. With things go-
ing from bad to worse in Italy and with the chairman preoccupied
with political affairs, the decentralized branches more or less had to
fend for themselves. The Florence headquarters was obviously un-
able to put any more money or effort into the English operation, so
that the branch was left with considerable latitude in the conduct of
its affairs. Fortunately, the managers in England appeared to main-
tain a reasonably cordial relationship with their government coun-
terparts, as royal orders continued to stream to the treasury, customs
officials, and tax collectors to expedite payments to the Bardi and
Peruzzi in fulfillment of agreements. Unfortunately, the responses to
these demands were dilatory, as evidenced by frequent repetition of
the orders. For example, because the subsidies from the ninth of
fleeces promised in 1340 were inadequate, the king awarded the com-
panies 20,000 marks, of which 15,000 marks should be paid in the
form of 1,199 sacks of wool. The first order was dated June 14, 1341,
42
This table shows the personal balances from the company point of view. Thus,
the positive numbers are amounts owed to the company by the shareholder, i.e., bor-
rowings by the shareholder and accounts receivable to the company. The nega-
tive figures are amounts owed by the company to the shareholder, i.e., shareholder de-
posits with the company. The grand total of negative li.39,115 agrees with the bal-
ance of the first line of Table 5 "Advances to/borrowed from shareholders."
and was followed by two more on June 26 and July 15, repeated with
certain elaborations on October 2, on March 15, 1342, and on April
28.43 Finally, on August 20, the king urged the treasurer to pay one
portion of this debt speedily, noting that the Peruzzi cannot give the
king any money unless the assignment is paid.44
Throughout the fifteen months from mid-1341 to the autumn of
1342, when company fortunes were deteriorating almost everywhere,
the memoranda in the Patent Rolls and Close Rolls create the impres-
sion that the English had not grasped the significance of the events
on the continent. They must have been aware of the papal decision
to take its transfer business away from the Bardi and Peruzzi, although
theoretically the Florentines had not lost the papal accounts in En-
gland until October 1342.45 They must also have known of the in-
creasingly strained relations between Florence and its protector, King
Robert. Politically, these developments and the city's brief flirtation
with Emperor Ludwig might have been welcome to Edward III, as
they brought the Florentines more firmly into his camp. They may
well have accounted for the courteous tone and continued support
reflected in the kingdom's official orders, despite the fact that the
Bardi and Peruzzi were no longer pulling much weight as financiers
to the crown.46 Notwithstanding the seemingly endless procrastina-
tions, some money and considerable wool did change hands during
this period of relative peace leading up to Edward's brief campaign
in Brittany. The end result was probably a slight reduction in the
king's debt to the company because there was no more money to
lend, and the Florence head office was pressing for remittances to
ease its own plight.
Back in Florence, Walter of Brienne was unable to reverse
Florence's military fortunes, and Lucca fell to Pisa on July 1, 1342.
Despite this setback, the confused and discredited leadership of Flo-
rence decided to follow the usual practice of the commune in times
of crisis and increased Brienne's powers by making him dictator for
43
CCR E III 1341-3, 172, 401; CPRE III 1340-3, 247, 263, 285, 454.
44
CPR E III 1340-3, 507. The order dealt with the portion of the debt to be funded
by the appropriation of fines collected by county justices, a source increasingly
used by Edward at this time.
45
The Acciaiuoli Company was used as late as April 1342 (Renouard, Les relations,
134, 138).
46
But speculations on political motivations are very risky in this complex environ-
ment. Ludwig had revoked Edward's vicarship the previous year in a move to
placate the French. And Walter de Brienne was no friend of the English, hav-
ing commanded French forces against them and their allies in the campaigns
of 1339 and 1340 (see Sumption, Hundred Years'War, 273, 310-11, 355).
one year. The duke had excellent credentials as a relative of King
Robert and a friend of both the old and new popes. He was also well
known to the Florentines, having served with distinction as vicar of
duke Charles of Calabria when the latter was the city's dictator in the
1320s. The leading merchant families knew and trusted him, while
the lower classes were so disenchanted with the rule of the Twenty
that they were ready to try anything. So broad was Brienne's support
that he was able to get his appointment extended to dictator for life
on September 8, 1342.
His first acts brought welcome relief to the super-companies and
merchant-bankers. In October, he reinstated the Bardi plotters of
1340, secured peace with Pisa by renouncing claims to Lucca for fif-
teen years, and granted immunity to all troubled companies from
creditor claims for three years.47 These actions did not necessarily
mean, however, that the duke was a puppet of the great merchants.
Sapori aptly suggests that these acts were all aimed at restoring peace
and prosperity to the city. The return of the exiles was essential for
peace among the citizens, the settlement with Pisa was necessary to
terminate a wasting and hopeless war, and the debt moratorium was
needed to head off financial chaos.48 Given time, Brienne felt that he
could bring back a modicum of prosperity to the city and regain the
confidence of King Robert and his barons. In another confidence-
building maneuver, he took the unusual step of appointing a judge
with veto power over the syndicate charged with handling the bank-
ruptcy of the Buonaccorsi.49 The purpose of this and subsequent ac-
tions, Luzzati argues, was to prevent the syndicate from engaging in
the usual Florentine tactic of excluding foreign creditors from shar-
ing in the disposition of the fallen company's assets.50
These measures, enlightened as they may have been, came too
late to restore the faith of foreigners in Florentine enterprises. On
October 15, the new pope, Clement VI, eliminated all Florentine
companies from participation in papal transfer transactions, appoint-
ing another obscure firm, the Malabayla of Asti, as collector for En-
47
The immunity was decreed specifically to the company of Taddeo d'Antella,
but was extended to all other companies in difficulty, provided that they gave
adequate warning to their creditors.
48
49
Luzzati, Villani e Buonaccorsi, 48-9. The Buonaccorsi did not enter formal bank-
ruptcy until November 7, more than five months after the flight from Naples.
50
Ibid., 52. Foreign creditors were expected to make the bulk of their recoveries
from assets located in their own locality. King Robert had already ordered the
sequestration of all of the Buonaccorsi's assets in his kingdom and appointed a
bankruptcy commission as early as June 9, 1342 (see Yver, Le commerce, 322).
51
gland. During the same week, Edward III appointed a commission
of oyer and terminer under Robert Wodehouse to "examine all ac-
counts of the Bardi and Peruzzi touching wool, jewels, money, and
other things of the king received as well beyond seas as within, for
which they should account."52 This is the first official evidence of a
change in attitude of the English government toward the two compa-
nies. An earlier commission established in 1340 at the request of
Parliament had as its brief an audit of the accounts of all merchants
having done business with the king, including Monte Florum (the
king's agent in the Netherlands), and Norwell, Keeper of the Ward-
robe, and was not threatening to the Bardi and Peruzzi.53 For the
Neapolitan creditors, Brienne's debt moratorium was a double-edged
sword, keeping the companies viable, but unassailable. And his at-
tempt to obtain equal treatment for foreign creditors brought little
comfort to those depositors familiar with the deviousness and tenac-
ity of Florentine bankruptcy syndicates. Thus, increasing numbers of
depositors are likely to have withdrawn funds from even the largest
firms, especially after January 1343, when King Robert, the Peruzzi's
old and valued friend over thirty-four years, passed away.
The honeymoon of Brienne and the super-companies was brief.
Recognizing that the financial status of the city was indeed desper-
ate, he suspended on November 20 all assignments for loan repay-
ments that were to come from gabelle revenues. This decree was es-
pecially burdensome to the shareholders of the super-companies,
who were important contributors to the war loans, and offset much
of the advantage of the moratorium against their creditors. His great-
est sin against the wealthy seems to have been his attempt to reorga-
nize the administration of the commune with the object of increas-
ing his revenues by much more rigorous application of existing laws.
His minions conducted surveys of property holdings, enforced pen-
alties for infractions formerly honored in the breach, and generally
created difficulties for many of those who had been his original back-
ers.54 Whether Brienne actually squandered much of these revenues
in festivities inappropriate for the time, as suggested by the chroni-
51
Renouard, Les relations, 205. The Malabayla were also appointed transfer agents
for all Christianity, following the Curia's unsatisfactory experience with the
Nicolucci. The Malabayla also proved inadequate to the task (ibid., 200).
52
CPREIU 1340-3,558, dated October 19, 1342. A further order in January 1343
(ibid., 588) broadened and deepened the inquiry, increasing the size of the
commission and extending the audit back to July 1326.
53
Ibid., 87.
54
See Becker, Florence in Transition,Vo\. 1, 150-72, for a useful account of the ad-
ministrative innovations introduced by Brienne.
clers, is not clear. But he did manage to antagonize enough of the
grandi and popolani to provoke no less than three plots against him.55
The Peruzzi family and company actively supported the Brienne
regime and, along with the Bardi, played an important part in the
formulation and execution of its foreign policy.56 Unlike the Bardi,
however, the Peruzzi remained loyal to Brienne virtually to the end.
While the Bardi joined the main conspiracy headed by Bishop
Acciaiuoli, the Peruzzi and, surprisingly, the Acciaiuoli clan only be-
came reconciled with the plotters after the rebellion had commenced.
Sapori and Luzzati have voiced the suspicion that the Peruzzi leader-
ship was motivated by the desperate situation of the company, which
was likely to lose its protection from creditors under a new govern-
ment.57 This is a reasonable supposition, given that their allies in this
affair, the Acciaiuoli and Antellesi, were also in dire financial straits.
In any event, the Brienne dictatorship fell after several days of
rioting and was replaced on August 3, 1343, by a commission of four-
teen citizens, seven magnati and seven popolani, presided over by
Bishop Acciaiuoli. The members were almost all directors or share-
holders of companies and included Ridolfo Bardi and Simone
Peruzzi.58 The commission, with full powers to rule until the end of
September, appointed six men, again split evenly between important
magnati and popolani families, to run collectively the office of the
magistracy (podestd). Although historians have varied in their opin-
ions of this new regime, it does appear to have been much more
relaxed in its application of the law than its predecessor and to have
favored the interests of the powerful capitalist families.59 The nomi-
nations for the October-November period for the priorate and the
principal administrative and justice offices promised more of the
same, being strongly loaded with magnati representation. This was
too much for the rising new families, artisans, and working classes.
They erupted in revolt on September 24 and, after two days of de-
55
Sapori, La crisi, 150-1. Sapori makes it obvious that he does not accept Villani's
claims concerning Brienne's behavior.
56
Becker, Florence in Transition, Vol. 1, 150.
57
Sapori, La crisi, 152; Luzzati, Villani e Buonaccorsi, 54. Luzzati added that the
Bardi, being in a sounder financial condition, could afford to risk the uncer-
tainties of a new regime.
58
The Peruzzi Company itself had no direct representative on the commission;
Simone, the family's ace diplomat and a major depositor in the company, was
still not a shareholder.
59
Sapori, La crisi, 155-6, is cautious in his evaluation, suggesting that the govern-
ment lacked a sufficient period of calm in which to work out its policies. Becker,
in Florence in Transition, Vol. 1, 172-81, is highly critical.
structive fighting, triumphed. The burning and looting that accompa-

nied the conflict included the destruction of a great deal of Bardi prop-
erty, reckoned by Villani to have cost that family 60,000 florins.60
The rebels promptly formed a new priorate that excluded the
magnati but included some of the old popolani families along with the
men from the rising new families of entrepreneurs, the so-called novi
cives. This government restored the old legal norms, recognized the
public debt, and began to reorder the public accounts. This return
to normal standards left the Peruzzi and other vulnerable compa-
nies, including the Acciaiuoli, unprotected from the claims of their
creditors. On October 27, 1343, the company took the initiative of
submitting itself "to the will of its creditors," declaring bankruptcy
and depositing its books with the commune rather than waiting for the
inevitable creditors' lawsuits.61 The Sixth Company had endured for eight
years, three months, and twenty-six days. The Peruzzi companies overall
had existed without interruption for at least fifty-one years.
The Peruzzi Company ceased to exist - or did it? The head may
have been severed in Florence, but as we shall see in the following
chapter, the body parts continued to function for several more years
in England and probably elsewhere. In any case, it is clear that the
company was not brought down by any specific events in England,
despite the claims of Villani and the initial declaration of the bank-
ruptcy syndicate.62 Most of the entries in the Patent Rolls and Close
Rolls between January and October 1343 dealt with the specifics of
the continuing audit of the Bardi, Peruzzi, and other foreign compa-
nies.63 Although the Peruzzi in Florence may have been discouraged
by the progress of the audit, the entries themselves were nonthreat-
ening technical instructions, and the branch managers persisted in
pressing their case with vigor. The company's continued good stand-
ing with the English government is evidenced by the fact that the
name of Tommaso Peruzzi was included in the list of people acting
as mainpernor to John Portinari.64 The arbitrary treatment of the
Peruzzi by the king did not commence until 1345, long after the firm's
declaration of bankruptcy, and even then, as we shall see, it may not
have been as heavy handed as it seemed.
60
Villani, Storia, Book XII, Chap. 21. 61 Sapori, La crisi, 160.
62
This declaration will be discussed in more detail in the following chapter.
63
CPRE III 1340-3, 588; CCRE III 1343-6, 45, 46, 59, 99, 160.
64
CCRE III 1343-6, 106, 117, 224, 236. The unfortunate Portinari nevertheless
languished several months in Flete prison despite these repeated orders to re-
lease him.
9
The aftermath
The situation following the bankruptcy as reported is replete with

anomaly and even contradiction. In the first place, we are told that
the declaration of bankruptcy came as a stunning surprise to the
Florentine community and to company insiders alike. Sapori firmly
backs this version of events, citing Villani's dramatic exclamations of
surprise and arguing that as a practicing merchant, former share-
holder, and brother of a current shareholder, Villani would have been
"in the know" if anyone was.1 He adds that the actions of the Peruzzi
shareholders were atypical of the shrewd Florentine businessmen that
they were - continuing to buy and sell property openly instead of
taking steps to move their personal assets out of reach of their credi-
tors and naively submitting the company's books to the commune
instead of getting out of town.
Sapori's arguments are impressive but not really credible. Shock
was indeed probable at the passing of this mighty institution, but not
surprise, and certainly not to the shareholders who, as we have seen,
were close to the business. Sapori claims that the myriad small trans-
actions simply overwhelmed the bookkeeping system, rendering im-
possible a general accounting that would have produced a coherent
statement of the condition of the company. It is true, as was made
clear in Chapter 4, that the books had fallen into disarray, but the
managing shareholders had every reason to realize that the company
was in extreme difficulty. They were obviously aware that the busi-
ness had paid only one tiny dividend since 1324 and that the 1331-5
company had made a loss, even though the accounts for that period
had not been finalized. Even those partners uninvolved in the deci-
sions to cut staff could not have helped noticing the steady decline in
the number of employees. And it defies belief that they did not know
of the problems in England, the loss of the papal business, and the
withdrawal of deposits in Naples. They also understood that the
company's survival beyond late 1342 depended upon the Brienne
1
230
The aftermath 231
moratorium and that this stay of execution had lapsed with the com-
ing to power of the new democratic government in September 1343.
Sapori himself recognized that once legality and normality had been
reinstated by this government, those companies that owed their sur-
vival to an exceptional regime could not be sustained one more day.2
It is possible that Villani had indeed been surprised. As shown in
Appendix V, he had plenty of problems to distract him. He faced
criminal charges in connection with the bankruptcy of the
Buonaccorsi Company a year earlier, and his brother Matteo's wife
had been imprisoned because of Matteo's debts. Also, he may not
have been as "in the know" as his writings suggest. His reputation in
the community had been sullied by the suspicion that he had taken
bribes while in public office and by his litigious tactics in defending
himself. His relationship with his brother Filippo was strained by a
long-standing family dispute. His connections to the Peruzzi Com-
pany and his knowledge of current conditions may therefore have
been slight. And yet, as we have seen, his writings reflect his suspi-
cions over the health of the company as far back as 1339, when he
claimed that because advances to Edward III of 135,000 marks (over
600,000 florins) had not been repaid, the Peruzzi Company was de-
faulting on its payments.3 Again in 1342, he stated that the Peruzzi
had failed to honor payment obligations, using exactly the same
words, but this time ascribing the cause to the withdrawal of deposits
in Naples as a result of the commune's flirtation with Emperor
Ludwig.4 These statements lack the ring of truth not only because of
the use of identical wording, but also because either situation should
have provoked the immediate bankruptcy of the Peruzzi at the time.
Whether Villani was misinformed or had some special motive for
making these remarks is unknown. One piece of evidence, however,
does point to possible genuine concern about the company; in 1339
he appears to have withdrawn a deposit he had with the Peruzzi.5
This seemingly inordinate attention to Villani's writings and their
motivations is warranted because the public record on the Peruzzi
bankruptcy is equally mystifying, leaving the impression that we are
being presented with a charade. Shortly after the bankruptcy filing,
2
3
4
Ibid., Chap. 138. See also note 35, Chapter 8, this volume.
5
Ilibri, 176, 228. These pages reflect the last entries relating to a deposit Villani
had kept with the Peruzzi for several years. They show interest accrued up to
July 1339 and a cumulative deposit total of li.249 sll d6. There are no entries in
his personal account or charges in the expense section of the books beyond
that date, suggesting that the deposit had been withdrawn at that time.
the creditors chose delegates to examine the books. These quickly
reported that the major portion of the liabilities consisted of huge
sums of money due from debtors in England, France, Sicily, and other
parts of the world, sums that could not be recovered because of the
war.6 This blanket statement is curious on two counts. The first is the
cavalier acceptance of the nonrecovery of these allegedly huge
amounts on the flimsy excuse of a "war" that was far from active at
the time. It should not have interfered with returns from England
and certainly not from southern Italy as long as the branch organiza-
tions remained in place. Sapori suspected that the declaration was
meant to divert the blame for the bankruptcy on foreign sovereigns,
deliberately failing to mention that the company was also owed sub-
stantial sums by the commune. These debts came to light publicly
two years later.7 The second oddity is that in the surviving Peruzzi
Assets and Secret Books, there is no mention of advances of any kind
to the commune or to any monarch except King Federigo of the is-
land of Sicily.8
Sapori's supposition that the examining delegates were anxious to
direct the blame to the foreigners is reasonable to a point. But it fails
to explain why creditors anxious to recover their money should have
given up so easily on the foreign debts. A more likely rationale is
that they quickly found that most of the receivables from the kings
had been financed by borrowings from abroad and decided that any
repayments would be seized by the foreign creditors. If true, this
would throw further doubt on Villani's assumption, already chal-
lenged in Chapters 7 and 8, that most of the financing of the Peruzzi
loans to Edward III came from Florentine investors. At any rate, the
creditors' syndicate promptly determined that all of the Peruzzi as-
sets available in the commune would be allocated only among
Florentine creditors.
Another puzzling event was the flight of Peruzzi shareholders af-
ter having apparently remained in Florence for a month after the
collapse. On November 26, Filippo Villani was declared a fugitive
6
Sapori, La crisi, 162. In this case, "Sicily" meant the Angevin kingdom of Naples,
which still held to the name, despite its acknowledged loss of the island since
1302. Sapori mistakenly said that the money was due from creditors instead of
debtors.
7
Ibid.
8
Ilibri. The only references to commune loans relate to small payments made on
behalf of factors (78, 89, 91, 129) or collection of interest payments from such
loans on behalf of a few individual shareholders (337-9, 355).
The aftermath 233
for having left the city, and his example seems to have been followed
by most of the other shareholders. This assumption is supported by
the publication of a safe-conduct for a list of twenty-two Peruzzi share-
holders and eighteen factors on June 4, 1345.9 The announcement
stated that the individuals concerned would be free to reenter the
city to defend themselves against charges of having transferred com-
pany or personal assets beyond the reach of the syndicate. Share-
holders were of course personally liable for the debts of the com-
pany. Some of the names were of men from the foreign branches,
but others, including chairman Pacino di Tommaso, were residents
of Florence who must have fled the city at one time or another. What
is strange is that so many shareholders, including the leader, were
allowed to slip out of town when their objective must have been to
frustrate the creditors.
The tortuous proceedings of the bankruptcy court and the legal
adaptations of the commune to the collapse of the super-companies
have been amply described by Professor Sapori, but the two main
accords deserve some additional comment.10 The terms of the first
agreement, published in March 1345, established that creditors would
receive four soldi (s4) per lira (i.e., 20 percent) and would retain the
right to the remaining si6, which were to be obtained from the kings
of England, France, and Naples.11 This arrangement must have been
greeted with derision by most of the Florentine creditors who sought
more tangible redress. It is very likely, therefore, that the safe-con-
duct offered to the Peruzzi Company people in June 1345 was de-
signed to encourage them to reveal and disgorge additional personal
assets for the benefit of the claimants in return for restoration of
their legal status. The cooperation of Peruzzi shareholders and fac-
tors was also essential to locating and wringing out maximum value
for the creditors from the company books.
The second agreement, announced in June 1347 and ratified by
the priorate of the commune on September 6 of that year, reflected
the results of the efforts to assemble additional assets for the credi-
tors. Claimants were offered two choices. The first was to receive s3
d3 per lira in addition to the previously agreed s4 in exchange for a
quitclaim releasing the company and its shareholders from any fur-
ther liability for the bankruptcy. The alternative was to accept the
9
10
Ibid., 158-206.
11
Ibid., 167.
earlier accord, settling for s4 only, but retaining the right to seek the
remaining si6. The agreement was underwritten for the company by
ten shareholders, six from the family and four from the outside. 12
The dispositions cited in the agreement were to have been carried
out within four months for creditors from Florence and six months
for those from outside the city. Unfortunately for the claimants, this
timetable does not seem to have been met, as they registered com-
plaints to the syndicate in November 1348 and again in October
1349.13 By this time, the plague had disrupted proceedings further
by causing the death of many of the people involved. Not all the
creditors accepted the 1347 accord, especially foreigners and eccle-
siastics, who continued to press their claims individually and collec-
tively against the commune itself, using all the considerable forces at
their command. This is further evidence that much of the company's
funding for its English venture was drawn from foreign sources. The
commune was apparently able to resist most of these claims by stall-
ing and creating new legal criteria, but settled some in cases where
the real threat of reprisal dictated special treatment. 14
The princes and institutions of the church were conspicuous among
the special pleaders, and a number of them, including Pope Clem-
ent VI, did evidently secure a modicum of satisfaction.15 But papal
support for a claim by the Hospitalers was not powerful enough, or
perhaps was not vigorous enough to achieve success. In Chapter 5,
we saw that the Hospitalers purportedly had accumulated by 1343 the
staggering sum of 360,000 florins in deposits with the three super-
companies, which Anthony Luttrell linked to this papal-supported
petition.16 Such a claim should have attracted special notice and ex-
traordinary effort on the part of the papacy, but there is no evidence
of either. A further half-hearted revival of the claim occurred in 1351,
but it too petered out. The conclusion from this evidence, or lack of
it, was that the greater part of any deposits lodged by the Hospitalers
with the super-companies had been routinely passed along to the
papal treasury. The Hospitaler claim referred to here more likely
related to the more modest but still significant debt of £3,000 ac-
12
The Peruzzi family members who signed for the company were Pacino di
Tommaso (the chairman), Donato di Pacino, Ottaviano di Amideo, Berto di
Ridolfo, Lepre di Guido, and Bartolomeo di Giotto. Outside shareholders were
represented by Gherardino di Tano Baroncelli, Baldo di Giovanni Orlandini,
Guccio di Stefano Soderini, and Filippo Villani (La crisi, 168-9).
13
Ibid., 169.
14
Ibid., 182-201.
15
Ibid., 198-9.
16
A. Luttrell, "Interessi fiorentini," 319.
The aftermath 235
knowledged as owed by the Peruzzi to the English branch of the or-
der in 1344.17
There are great gaps in the record, unfortunately, so that it is im-
possible to make even a wild guess at the extent of the losses that
drove the company into bankruptcy. In view of the fact that the ini-
tial settlement was made while the shareholders were still in hiding,
one can reasonably surmise that most of the distribution of s4 on the
lira would have come from company assets. Thus, it can be assumed
that there were enough net realizable assets remaining to cover one-
fifth of the liabilities. But this does not yield a figure, and even if it
did, the figure would be incomplete, as much if not all of the foreign
data had been omitted. With regard to the final settlement, we can
be sure that some of the money came from the personal property of
the shareholders, but how much is a mystery. Moreover, it appears
that the creditors did not even obtain full satisfaction for the distri-
bution promised under the agreement, because the disposal of as-
sets took place in a depressed market.18
Although there are no figures to guide historians to an estimate of
the size of the company at the time of its bankruptcy, it is possible to
arrive at a rough order of magnitude from the material that has been
presented throughout this study. We know the balances at July 1, 1335,
reported in Chapter 4, and we know from the review of the final
eight years of the company's history that its business was generally
shrinking. Loss of papal revenues, Naples deposits, and French busi-
ness would result in lower balances in each of the branches concerned,
and the decline in number of personnel would suggest reduced lev-
els of business throughout the organization, including Florence. The
great unknown is the size of the English branch, which would have
been much larger than in July 1335. Overall, the increase in the En-
glish branch may have been greater than the declines elsewhere, but
not by much. The Peruzzi business in total at bankruptcy is therefore
likely to have been about the same as in 1335, although its makeup
would have been radically changed.
The foregoing account of the post-bankruptcy events lends strong
support to the argument advanced in Chapter 4 that a significant
part of the surviving Peruzzi accounts was written after the bankruptcy
and under the direction of the syndicate. The author of these books
was Pacino di Tommaso, the last chairman. Many of the postings in
17
CCR E III 1343-6, 356, records that the prior of the Hospitalers in England
prosecuted the execution of a recognizance of £3,000 made to him by the Peruzzi
in chancery in March, 1344.
18
these books were of a catch-up nature and many more were dated
July 1, 1343. It must be remembered that Pacino was an important
participant in the political firestorm that engulfed Florence from July
into October of that year, and he is unlikely to have found the neces-
sary time and tranquility to have posted more than a fraction of these
entries. From October 27 onward, the company books were in the
hands of the commune and out of Pacino's control, but several of
the entries recorded events that took place well after that date. More-
over, the fact that Pacino's name headed the list of shareholders
granted the safe-conduct of June 1345 suggests that he was absent
from Florence for much of the time between November 1343 and
June 1345. It is therefore reasonable to assume that Pacino under-
took the task of assembling the data and completing the accounts
over the two years from mid-1345 to mid-1347.
If these speculations are anywhere near the truth, then the pur-
pose of preparing the accounts would have been to help establish
the basis for the 1347 settlement. Such a supposition is supported by
the fact that so many of the entries dealt with adjustments of expense
between the company and shareholders. In Chapters 3 and 4, I com-
mented on these, expressing disbelief that shareholder-managers
should have received no compensation for their efforts and expense
in the company's service, especially in foreign branches. I suggested
that this anomaly may be explained if the entries are understood as
adjustments enforced by the bankruptcy court. It is probable that
the company did normally reward its working shareholders by pay-
ing the living costs of themselves and families and other expenses.
But in a bankruptcy accounting, such perquisites would have been
reversed as easily identifiable shareholder assets to which the credi-
tors could legitimately lay claim. Again, if the accounts had been pre-
pared to meet the limited objectives of the bankruptcy court, then
they may not have been intended "to lead up to a comprehensive
financial statement or balance."19 They would therefore not be an
appropriate basis for judging whether the Peruzzi Company employed
double-entry accounting.
Although the Peruzzi Company closed its doors on October 27,
1343, several of the branches appear to have continued operations
well beyond that date. The news would have taken considerable time
to reach some destinations; local legal formalities would have to be
observed, inventories disposed of, and local creditors dealt with, if
not satisfied. Of the nineteen factors included in the list of people
19
This is one of the criteria advanced by de Roover for double-entry accounting
noted in Chapter 4, this volume.
The aftermath 237
offered safe-conduct in Florence in June 1345, thirteen were men
whose last known positions with the company were in foreign loca-
tions, suggesting that they had not yet returned from abroad.20 The
English branch remained fully operative, as the company men there
struggled loyally to extract as much as possible from the crown, along-
side the members of the still-functioning Bardi Company. The long-
enduring truce of Malestroit of January 1343 had permitted at least a
partial restoration of the king's finances, creating a constructive en-
vironment for settling his most pressing debts. During 1344 and early
1345, the orders recorded in the Patent Rolls and Close Rolls reflected
some transactions in the wool trade, but dealt mainly with claims
from the Bardi and Peruzzi challenging various findings of the audit
commission.21 The tone of these orders was not only correct, but even
sympathetic, presenting the complaints in detail and commanding
the commission to review the disputed accounts and report.
The situation changed suddenly in June 1345, when, coincident
with the renewed outbreak of hostilities with France, the king or-
dered the arrest of six members of the Peruzzi Company and their
detention in the Tower of London.22 Although the Latin-English ver-
sions of the names are difficult to decipher, five of them are identifi-
able as members of the Peruzzi or other shareholder families.23 What
appears to have happened is that all but one of the previous mem-
bers of the branch organization had been sent home and replaced
by a team of shareholders' sons or nephews who were mostly new to
England but experienced company operatives nonetheless. After the
incarceration, there followed a peculiar and seemingly contradictory
series of orders. First, in March 1346, the prisoners were required to
remain in the Tower because of debts allegedly owed by the company
to the kingbut were permitted to come and go freely to do business in
the city.24 Then in July of the same year, the treasury was ordered to
20
Sapori, La crisi, 161. The locations of the men in the list can be found in / libri
or more easily in Sapori, Storia economica, Vol. 2, 718-29.
21
CPRE III 1343-5, 274; CCRE III 1343-6, 372, 406, 421-2, 438, 500.
22
CCRE III 1343-6, 581.
23
The names reported are Thomas Philipp (Tommaso di Filippo, shareholder),
Robert Thomasy (Roberto di Tommaso, factor), Andrew called Amyday (An-
drea di Amideo, factor), all from the Peruzzi family; Angelus Sutheryn (Angnolo
d'Albizzo Soderini, a factor transferred from Paris), Peter Symon (Piero di
Simone de Giovanni Orlandini, factor), and Andrew Forcet (the Italian equiva-
lent should logically have been Andrea Forzetti, but there is no record of a
Peruzzi employee of that name in England).
24
CCR E III 1346-9, 53-4. The constable was also ordered to give the prisoners
"decent chambers for their stay."
certify how much the Peruzzi owed the king and the king owed the
Peruzzi.25 In the same month, the government granted three com-
pany members protection so that they could not be sued by credi-
tors, as they were bound "in great sum" to the king.26 This protection
was repeated in March 1347 and February 1348 in order that suing
creditors might not "pre-empt the crown's prerogative of priority."27
Meanwhile, on April 20, 1347, the king ordered Walter de Chiriton
to hold back three-quarters of the profit of the mint to pay for the
king sums due to a number of persons and "for other sums to the
merchants of the society of the Peruzzi or others for money lent to
the king for the time when William de Northwell, William de Cusancia
and William de Edyngton were keepers of the wardrobe."28 And on
the same day a long indenture was enrolled between the king and
Walter de Chiriton and Gilbert de Wendlyngburgh testifying that these
men have undertaken, among other things noted in the indenture,
"to discharge the king of £20,000 due by him to the society of the
Peruches or other debts lent to him when Sir William de Norwell,
Sir William de Cusance and Sir William de Edyngton were keepers of
the wardrobe, for which bills were made under the seals of those
keepers."29
These various documents indicate that during the period following
the Peruzzi bankruptcy, the English government was attempting to work
toward some sort of agreement with the company while holding its credi-
tors at bay on the manifestly false pretense that the Peruzzi owed the
king money. Overall, the company's recoveries were probably skimpy,
but it may have received a useful sum for the £20,000 receivable it sold
to Chiriton via Canaceon. Selling such obligations at a discount was
apparently fairly common, especially if they were backed by letters obliga-
tory from the crown. Fryde offers numerous examples of large-scale dis-
counting of various types of government debt instruments during this
period and cites Chiriton as one of the leading brokers.30 The discounts
were deep, perhaps 90 percent, but even at that rate, the remainder in
ready cash would have been considerable for the Peruzzi.31 The only
25
Ibid., 143. 26 CPRE III 1345-8, 151.
27
Ibid., 257; E III 1348-50, 6.
28
CCR E III 1346-9, 204. Chiriton was a London merchant and farmer of the royal
customs 1346—9.
29
Ibid., 260. Wendlyngburgh was a merchant. A memorandum added to the roll
states that the indenture was previously made to Matthew Canaceon, a Malines-
based Asti merchant, three years earlier and transferred to Chiriton and
Wendlyngburgh with Canaceon's consent.
30
Fryde, William de la Pole, 184-5, 192-6, 204-5, 207.
31
Fryde cites evidence that royal debts were often acquired at 2s to 2s 6d in the
pound.
The aftermath 239
amount actually known to have been collected by the Peruzzi was £100
given to Roberto di Tommaso on August 20, 1352, acknowledged as
"in part payment of a greater sum in which the king is bound."32
How much money the Peruzzi actually lost in its dealings with
Edward III is unknown. Although Fryde has acknowledged that the
losses between early 1338 and 1340 were modest, he has also asserted
that "much more serious losses appear to have been suffered by the
two firms [Bardi and Peruzzi] as a result of loans advanced in 1340-
42 »33 w e have seen, however, that both companies were unwilling to
extend credit in those years and unable to do so thereafter. The Close
Rolls entry of 1352 confirms that a significant sum remained unpaid,
but the net loss to the Peruzzi, while serious, cannot have been over-
whelming. Toward the end of Chapter 7,1 estimated that the Peruzzi's
net loss on its transactions with the English king by early 1340 was in
a range of £15,000 to £20,000. The records since that time suggest
that the Peruzzi had gradually chipped away at that amount by means
of wool sales, repayments, and the discounting of the £20,000 receiv-
able. In addition, there were the clamoring creditors mentioned in
the rolls who presumably were left to a large extent unsatisfied.34 The
total amount owed to the creditors is unknown, and the extent to
which the super-companies financed their English operations from
local sources is a matter of disagreement among scholars.35 But the
total sum due to the creditors cannot have been insignificant. In all,
therefore, the company's final loss in England may have been in the
neighborhood of £10,000, or even less.
As noted at the end of Chapter 1, the Peruzzi family persisted and
even prospered after the debacle. Various members were active in
the business world, most notably Simone di Rinieri, grandson of
Pacino, who was especially successful. Two Peruzzi even appeared in
England in the 1370s, but unfortunately their claim to fame was a
32
CCR E III 1349-54, 505. The entry included a note that Roberto came to the
Chancery on September 16 to acknowledge the deed. This is the last entry in
the rolls concerning the Peruzzi Company.
33
Fryde, "Edward Ill's War Finance," Vol. 1, 335.
34
One important creditor appears to have been the Hospitalers in England, who
in the end were owed £3,000 by the Peruzzi (CCR E III 1343-6, 356), as dis-
cussed earlier in this chapter.
35
For example, Postan thought that much of the capital employed by Italian com-
panies originated from domestic sources (see Medieval Trade and Finance, 339-
40). But Prestwich said that in England "the Italians' role as deposit bankers
was not considerable" (see "Italian Merchants in England," 96). Fryde's investi-
gations give support to Prestwich's conclusion, but Fryde also warned that lack
of evidence does not necessarily mean lack of deposits (see "Deposits with Ital-
ian Bankers," 359).
serious default on a wool transaction.36 And the family remained an
element to be reckoned with in Florentine politics as befitted its
wealth and status, even though it never regained the political po-
tency it enjoyed in the first half of the fourteenth century.37
Why was the family not utterly ruined financially by the collapse
of the company, as would be expected under the doctrine of unlim-
ited liability of shareholders and their immediate families and heirs?
One reason is that not all branches of the family were owners of the
company, although there were shareholders in most branches.38 An-
other is that the losses were of course shared by the many nonfamily
partners. But probably the most important reason is the skill with
which the family members directly affected managed to shield their
assets from prying creditors. As we have seen, most of the sharehold-
ers appear to have fled the city and arranged to shift property into
safer hands. Such action seems to have been standard practice in
Florence at the time, and many of the transfers would have been
within the law.39 At any rate, the Peruzzi were successful and, as early
as 1348 and 1349, were again buying land.40
Superficially, the comments in the foregoing paragraph may be
construed as suggesting that the family easily sacrificed the company
in order to maintain its own well-being. To be sure, given the stark
choice between the survival of the company and the preservation of
the family's position, the priority would inevitably go to the latter.
But the Peruzzi family's tie to the company bearing its name was a
strong one emotionally. The family shareholders were not merely
investors, prepared to abandon the business when it proved unprof-
itable. As we have already seen, they increased their investment in
the company between 1335 and 1343. Had their interest been strictly
economic, they should have closed it down in 1336, when it must
have been clear that the business was steadily losing money. Instead,
they took a huge risk, investing time, talent, and money in the En-
glish venture in a vain attempt to restore the company's viability.
36
George A. Holmes, "Florentine Merchants in England, 1346-1436," Economic
History Review 2 series, 13 (December 1960): 202.
37
According to the 1427 catasto (a well-known tax survey), the Peruzzi clan was
among the best favored in Florence, owning 1.1% of the total wealth of the city.
See David Herlihy and Christian Klapisch-Zuber, Tuscans and Their Families: A
Study of the Florentine Catasto of 1427 (New Haven, CT, 1985), 100.
38
See Figures A1-A3.
39
Jones, "Florentine Families," 202. Some transactions were illegal. Jones notes
that the Antellesi concluded fictitious sales to elude creditors, but Sapori de-
nied that the Peruzzi used this device.
40
Ibid., note 164.
The aftermath 241
Moreover, they stayed with the venture long after it was obvious that
it was not a success and, after the bankruptcy, exposed their own kin
to physical hazard in an attempt to salvage what they could from the
wreckage. The company and family were closely entwined, and the
final separation was reluctant and no doubt traumatic.
A word needs to be said about the fate of the other super-compa-
nies. The Acciaiuoli failed at the same time as the Peruzzi but was
able to offer its creditors a more generous settlement of slO per lira,
or 50 percent.41 Little more is heard of the company in England, but
family members maintained an important presence in Naples. Niccolo
Acciaiuoli, who began his career as a company employee in Naples
in 1331, stayed on after the collapse and eventually became grand
seneschal of the kingdom. As such, he was a man of great influence
and wealth in both Naples and Florence, capitalizing on the contin-
ued trade links between those two polities.42 But there is little further
to be reported about the company itself.
The Bardi Company had a much longer history. Finally brought
to its knees in April 1346, it agreed to a surprisingly swift settlement
of s9 d3 per lira, or 46.25 percent, in August of the same year. The
execution of the agreement took much longer and Sapori reports
that in April 1348 the bankruptcy syndicate was still busy.43 In En-
gland, the Bardi Company branch continued in business after the
collapse and then reorganized itself in 1357 under Philip de Bardi.44
For the next three decades Philip, and then his son Walter after 1362,
led a company of merchants and bankers that operated on a surpris-
ingly substantial scale. For example, the company held very large
deposits from Earl Richard of Arundel, who also bought up at a dis-
count a sizable amount of the Bardi's old royal debts.45 Moreover,
Walter de Bardi was also master of the mint for both Edward III and
Richard II at a time when the coinage was almost entirely concen-
trated in the Tower, putting him in close contact with the royal ad-
ministration. He executed the final settlement of 1392, whereby all
obligations on both sides were recorded and surrendered to the Ex-
41
Ibid., 193. The settlement was also fairly prompt, being formalized on March
23, 1345.
42
Sapori, Storia economica, Vol. 1, "Lettera di Niccolo Acciaiuoli a Niccolo Soderini,"
133-53. See also Abulafia, "Southern Italy," 377.
43
44
Beardwood, Alien Merchants in England, 4.
45
C. Given-Wilson, "Wealth and Credit, Public and Private: The Earls of Arundel,
1306-97," English Historical Review 106 (January 1991): 1-26. Deposits attained
the level of at least 23,700 marks in the 1360s and 1370s (19); the largest loan
discounted was one from the Bardi of £5,853 (11).
chequer for cancellation. Beardwood calculated that the net amount
then due by the king to the company, recognizing repayments be-
tween 1345 and 1391 and sums owed by the Bardi, was £31,422.46
The sum of 3,000 marks was originally granted by Richard II in con-
sideration of the annulment but never materialized, although assign-
ments worth £600 were recorded along with an annual pension for
Walter.47 Perhaps the king's treasurers decided that adequate justice
had been done, bearing in mind that the Bardi total claim included
Edward Ill's 1339 "gift" of £30,000. Taking that fact into account, the
Bardi losses on its transactions with the English monarchy could be
considered as close to zero. This is far too optimistic, given the losses
the Bardi suffered from the rejection of expenses in the past and
from the receivables sold to others at a discount. But here again, the
net injury inflicted on the Bardi Company by its English business was
not very great and clearly nothing like the calamitous 900,000 flor-
ins (£135,000) proclaimed by Villani.
Back in Florence, the Bardi remained a very large and prosperous
family after 1350. Brucker cited it as "the wealthiest and the largest
family in Florence" in 1364.48 By 1427, the Bardi had fallen to second
place behind the Strozzi, but was still enormously wealthy, holding
2.1 percent of the total net taxable capital of the city.49
In sum, then, although the main families associated with the su-
per-companies undoubtedly suffered severe damage to their economic
well-being and their social standing as a result of the debacle of the
1340s, they seem to have recovered both with remarkable swiftness
in the years following.
46
Beardwood, Alien Merchants in England, 8-9 and App. A. The total debts to the
king registered in the documents proffered by the Bardi totaled £93,947, and
the payments by the king and the sums owed by the Bardi totaled £62,525.
47
Ibid., 9.
48
Brucker, Florentine Politics, 21 n83.
49
Herlihy and Klapisch-Zuber, Tuscans and Their Families, 100.
Conclusions
We have seen in the course of this study that the super-companies,

unlike their smaller brethren, were separate and distinct from their
eponymous families, despite their close connections. Here, the con-
siderable mingling of company and personal affairs involved not
merely family members, but all owners and, to a lesser extent, even
the employees. Nonfamily members had the same access to the
company's resources as did the Peruzzi family partners. If Giotto de'
Peruzzi seems to have taken excessive advantage of his position in
the company between 1315 and 1335, as reported in Table 6, so did
the Soderini brothers between 1335 and 1343 (see Table A6). And if
many members of the Peruzzi family remained wealthy after the crash,
so did many of those of the other shareholders. 1
We have also noted that the super-companies did not attain their
great size through the normal process of gradual growth over an ex-
tended period.2 In the case of the Peruzzi at least, they were created
large to satisfy two special needs - large-scale supplies of foodstuffs
and raw materials for the burgeoning industrial cities and large-scale
cash for the ambitious rulers who controlled those commodities. For
the Peruzzi and Acciaiuoli, the grain trade of southern Italy was the
principal target and reason for being super-companies. The Peruzzi
Company was not involved on the same scale in the other great com-
modity of medieval commerce, wool, until late in its history, while
the Acciaiuoli was never a significant participant. The Bardi Com-
pany, the largest of them all, was unique in being a major player in
both trades over a considerable stretch of time.
The wool trade, in itself, did not require the exclusive engage-
1
Prominent Florentine families of the fifteenth century included the Baroncelli
(see Goldthwaite, Building Florence, 306; De Roover, Medici Bank, 199), the Soderini
(see De Roover, Medici Bank, 105; Herlihy and Klapisch-Zuber, Tuscans and Their
Families, 101 n i l ) , and the Orlandini (see De Roover, Medici Bank, 318).
2
Contrast the Peruzzi evidence with the more normal gradual accretion of capi-
tal experienced by the Medici Bank between 1397 and 1451. See De Roover,
Medici Bank, Chaps. 3 and 4.
243
244 Conclusions
ment of highly capitalized companies. Many small enterprises oper-
ated very successfully in this business. Large size became necessary
only when rulers (Edward I and Edward III) determined to restrict
the right of participation to those firms prepared to grant them large
loans. The grain trade of the early fourteenth century was different
in that it entailed the movement of vast quantities of a low-value ma-
terial into a number of markets where both demand and price were
extremely volatile. Small traders could and did participate at the
fringes, but serious involvement required deep pockets and sophisti-
cated organization in addition to the capability of satisfying the con-
trolling ruler's need for cash.
Both of these businesses were lucrative. The case for the wool trade
has been easily made by Fryde's analyses and the actual earnings re-
ported by the Bardi Company in 1330-2.3 The grain trade is more
problematic because there are no direct reports of results and be-
cause profit margins were thin and prices volatile. It could, in fact,
be argued that the grain trade was not really profitable at all and that
the super-companies sought the grain monopoly as a means to se-
cure the monopoly over the sale of cloth in southern Italy. But this
thesis requires the strained assumption that the super-companies were
willing to risk lending large sums to a spendthrift ruler to obtain the
right to invest still more cash in a treacherous unrewarding business
and thus secure the golden apple of a medium-sized cloth market.
Again, the Bardi records show the total cloth business (not just for
southern Italy) to have been attractive but not outstandingly reward-
ing. Large-scale grain trading was therefore likely to have been worth-
while in itself. For the Peruzzi it was undoubtedly healthy at least
through 1324, judging by the overall profits reported by the com-
pany. The luster of the grain trade appears to have faded only from
the late 1320s, when the intervention of various governments in pric-
ing and procurement reduced both the scope of the business and
the companies' room for maneuver within it.
Although the emphasis here has been appropriately on commod-
ity trading, it is also important to acknowledge the enormous spread
and variety of the super-companies' operations. One aspect of this
fact that may have escaped the reader's attention is the amazing
breadth of expertise required by the men who had to deal with op-
erations of such geographic and product-line diversity.4 The compa-
3
See Table 7.
4
The word "men" is used advisedly. Although there are numerous entries in the
Peruzzi accounts involving women, often as property owners, all shareholders
and employees were male.
Conclusions 245
nies had to have a corps of shareholder-managers and employees
who were multilingual and numerate; knowledgeable in currency ex-
change systems, accounting, banking, legal systems, and logistics;
expert in judging the quality and types of cereal grains, wines, spices,
wool, tissues, dyes, precious metals, and stones; and who were per-
sonable, politically astute, enterprising, and physically courageous.
Probably no modern corporation demands such a broad array of tal-
ents and acquired skills, for the scope of the super-companies' activi-
ties would be equivalent to something like those of Cargill, J. P. Mor-
gan, and a modern trading company combined.
Three further conclusions can be drawn from this study, two of
which are obvious and one less obvious. The first is the disposal
of the myth that the super-companies were destroyed by their irra-
tional dealings with Edward III. The myth has been fostered not only
by Giovanni Villani's emotional and biased account, but also by
the incompleteness and complexity of the surviving records and the
history of earlier Italian companies, such as the Ricciardi and
Frescobaldi, which did succumb to the reversal of their fortunes in
England. Historians such as Sapori, Beardwood, and Fryde have
recognized that English losses were not the only reason nor even the
principal reason for the downfall of the Bardi and Peruzzi, but their
conclusions were contradictory. They exonerated Edward III from
maliciously reneging on his debts but accepted a level of losses
on those debts that would have crushed the companies as early as
1339.
We have seen that the Peruzzi Company was heading on a down-
ward path toward bankruptcy before it became involved in any way
with the English crown. We have also seen that the company's En-
glish branch, although being audited, was still functioning more or
less normally long after the head office in Florence ceased to exist.
Finally, we have seen that the losses in England were significant,
though not overwhelming, and were only one of several determi-
nants contributing to the firm's demise.
This leads to the second conclusion and the demolition of the
second myth, the exaggerated size and power of the super-compa-
nies. Careful examination of the Peruzzi business has shown that while
the super-companies were very large indeed for their time, they were
by no means the behemoths of historical fable. The magnification of
their size has been nurtured by the oft-noted Bardi asset total of
875,000 florins in 1318, which has lured otherwise perceptive au-
thors into making meaningless comparisons with unrelated data, such
as the purchase price of certain territories or Edward Ill's annual
246 Conclusions
5
revenues. More important, the illusion of huge resources conjured
up by this number has enabled historians to accept as a matter of
faith the assumption that the companies had the financial strength
to endure for years the freezing of massive amounts of money in un-
productive loans to the English king. By studying the Peruzzi Com-
pany so closely, we have ascertained that a large part of such assets
were widely scattered and reflected obligations rather than power.
We have also discovered that the company had limited resources avail-
able on the eve of its English enterprise.
The less obvious conclusion that is drawn from this investigation
is that the medieval super-company disappeared permanently with
the dissolution of the three Florentine examples in the 1340s and
that this was an important development. Up to that point, large Ital-
ian companies had evolved, prospered, collapsed, and been replaced
by even larger organizations. After the 1340s, however, no new en-
terprises emerged even approaching the stature of the super-compa-
nies. As we have seen, members of the Bardi, Peruzzi, and Acciaiuoli
families later operated successful businesses, but these were but a
shadow of their predecessors. A few new companies rose to impor-
tance, most notably the Alberti, which reacquired the papal monopoly
for Florence, but again they were only a pale imitation of the super-
companies.6 Even the heavily capitalized and highly profitable Medici
Bank of a century later failed to match the size and reach of the four-
teenth-century giants, despite its impressive manufacturing activity
and substantial branch network.7 This famous firm, although the larg-
5
See Brucker, Florence: The Golden Age, 88-9; Sapori, Storia economica, Vol. 2, 688;
Fryde, "Public Credit, "455; Renouard, Les relations, 60; Bolton, Medieval English
Economy, 340; Kaeuper, War, Justice, and Public Order, 44, n84. Most of these com-
parisons were described in Chapter 4, this volume.
6
The Alberti employed a total of only nineteen factors - ten in Florence, six in
Avignon, and three in the branches of Naples and Barletta. See De Roover,
"The Alberti/' 26-7. De Roover also notes in Medieval Bruges, 39, that the larg-
est company of Lucca, the Guinigi, consisted in 1372 of twelve factors and seven
shareholders spread over a number of small branches. In 1381, the number of
factors had dropped to seven.
7
De Roover, Medici Bank. That company's capital was as high as 72,000 florins at
the opening of the 1451 partnership (65-6), and profits averaged more than
18,000 florins per year between 1435 and 1451 (69-70). It had three manufac-
turing partnerships, eight foreign branches (83), and fifty-seven factors (95).
Although a large company, it was smaller than the Peruzzi, except in its manu-
facturing endeavors, and it focused more on international banking than on
trading.
Conclusions 247
est and geographically most extensive of the Florentine companies
of the fifteenth century, did not enjoy a dominating position in Flo-
rence or in the foreign cities in which it had branches. 8
Why did no new super-companies emerge? Part of the answer must
come from reexamining why they appeared in the first place. At the
beginning of this chapter, I had concluded that a few Florentine com-
panies grew to the extraordinary size they did, and needed to do so,
because of the opportunities presented by growing populations and
cash-hungry rulers who controlled concentrated commodity sources.
But in the late 1340s, two great changes took place, eliminating the
effect of these criteria on business organization.
The first was the Black Death of 1347-50, which drastically reduced
the population of western Europe, initially wreaking greatest havoc
in the cities, especially the thriving, overcrowded cities of Italy. There
is, of course, evidence of significant population decline in various
parts of Europe, notably in Tuscany, well before 1348.9 This trend
may well have contributed to the erosion of the profitability of the
super-companies' grain trade from the 1330s onward. But the Black
Death was overwhelming in its sudden and devastating impact. Al-
though estimates vary, Florence is said to have lost between one-third
and one-half of the population that Villani had set at 90,000 in 1338.
Demographers have given similar ranges of population losses for most
other cities. Moreover, repeated outbreaks of various forms of the
plague over the years ensured that population totals would remain
depressed. Florence's numbers persisted in a range of 50,000 to
60,000 throughout the rest of the fourteenth century.10 The result of
this new fact was a greatly reduced grain trade. To be sure, food pro-
duction in the areas surrounding the cities was also reduced by popu-
lation loss, but the amount needed to make up for shortfall was nor-
mally much less than before. And in those years when large-scale
imports were necessitated by famine, they were organized by the
municipalities.11 As a result, the grain trade was no longer the rou-
tine volume business it used to be and no longer required exception-
ally large private organizations to manage it.
8
Richard A. Goldthwaite, "The Medici Bank and the World of Florentine Capi-
talism," Past 6sPresent 114 (February 1987): 3-31.
9
Herlihy and Klapisch-Zuber, Tuscans and Their Families, 60-92.
10
Ibid.
11
For example, La Ronciere, Prix et salaires, 563, reports a strikingly large value of
wheat imports paid by the Florence commune in 1374-5.
248 Conclusions
The change in the second criterion was a break in the connection
between the export demand for the great cash crops and the needs
of the rulers that controlled them. In the case of Naples, Queen
Johanna, successor to King Robert, was at least as financially profli-
gate as her predecessor, but the strategic importance of her grain
resources had diminished due to the drop in population. In England,
however, the value of the wool crop persisted as demand for this com-
modity actually appeared to have increased in the years following
the Black Death. English wool exports in the 1350s and 1360s reached
levels not seen since the beginning of the fourteenth century and
continued robustly into the 1370s.12 Their decline thereafter was at
least partly compensated by rising cloth exports. But the administra-
tors of the English crown had become much more adroit in their
handling of the king's finances, obviating the need for continuous
financing by private companies, domestic or foreign. William
Edington, bishop of Winchester, after his assignment as Keeper of
the Wardrobe, became Edward Ill's treasurer between 1344 and 1356,
and then chancellor from 1356 to 1363. During this extended pe-
riod, he reformed the government's bookkeeping and financial in-
formation systems and its customs procedures, greatly improving the
control of expenditures and enhancing revenues.13 Thus, he gradu-
ally brought order into the financing of Edward's military campaigns,
eventually releasing the government from the grip of private finan-
ciers.14 Thereafter, the king's activities in France were less demand-
ing of cash, and his needs could be managed on a reasonably orderly
basis.15 To be sure, Edward III and his successors continued to have
frequent recourse to borrowing, but never again on the previous scale
and never again with such concentration on one or two lenders.
The disengagement of the Florentine companies from the English
12
E. M. Carus-Wilson and Olive Coleman, England's Export Trade (Oxford, 1963),
charts, 122 and 138.
13
Ormrod, Edward HI, 86-90. Ormrod points out that, by the 1360s, the Exche-
quer was able to draw up statements of royal income and expenditure, "a feat
unimaginable in the 1330s."
14
Fryde, William de le Pole, 193. Customs were particularly productive, with the
total revenue from that source exceeding £112,000 in 1353-4, a record for the
reign of Edward III, and continuing at a very high level for the next few years.
See J. H. Ramsay, A History of the Revenues of the Kings of England, 1066-1399
(Oxford, 1925), 214-29.
15
See G. L. Harriss, King, Parliament, and Public Finance in Medieval England to 1369
(Oxford, 1975). And from 1352, Harriss notes, "War finance was henceforth to
be dependent wholly on parliament and controlled by the Exchequer" (328).
Conclusions 249
monarchy may have been, as Professor Goldthwaite has suggested, a
two-way street, as the Italians increasingly sought sources of wool
closer to home and concentrated their efforts in the Mediterranean
area.16 The Florentine merchants had by no means abandoned the
English wool trade, and there is evidence of their considerable con-
tinuing activity in that field between 1350 and 1376.17 They had clearly
lost position, however, and yielded the business, especially after 1376,
to the now-dominant English merchants. In addition, the flow of
credit, over which the Florentine had enjoyed such control, seems to
have changed direction, moving from seller to buyer instead of from
buyer to seller.18 This was not necessarily a universal phenomenon,
but it is noteworthy that the two Peruzzi defaulters of 1375 cited in
Chapter 9 had acquired a large quantity of wool on credit from mer-
chants of Lincolnshire.19 Overall, the combination of all of these
changes in commercial environment and the withdrawal from royal
lending made a super-company with a large branch in London an
anachronism.
A final and important reason for the nonrecurrence of super-com-
panies in medieval Europe has to do with the nature of the compa-
nies themselves. As we saw in Chapter 3, the super-companies required
an immense managerial effort to keep functioning coherently. They
had become, as Goldthwaite has aptly observed, "abnormally large
by standards of business organization of the time."20 The communi-
cation and reporting technologies, barely adequate at the best of
times, were simply not up to coping with the continuous disruptions
caused by pestilence and extended warfare over the super-compa-
nies' market area. The increase in transactional costs cited by Munro
was part of the problem, insofar as it altered trading patterns and
distorted the super-companies' traditional markets.21 But super-com-
panies had been living with rising transactional costs since the be-
ginning of the fourteenth century, and the continuing accretions
merely reflected one of the additional adverse effects of an increas-
ingly hostile environment with which smaller and nimbler organiza-
tions proved better able to cope. The main problem was that the
effort and risks of running a super-company were no longer in bal-
16
Goldthwaite, Renaissance Florence, 46, and idem, "The Medici Bank," 18.
17
Holmes, "Florentine Merchants," 201-2.
18
Postan, Medieval Trade and Finance, 9-11.
19
Holmes, "Florentine Merchants," 202.
20
Goldthwaite, Renaissance Florence, 45.
21
Munro, "Industrial Transformations," 133-48.
250 Conclusions
ance with the potential rewards. In short, the game was no longer
worth the candle.22
The game had also become much less interesting to investors badly
burned by the multiple failures of the 1340s. Wealthy families were
increasingly attracted to enjoying the fruits of their labors and put-
ting their money into the adornment of their residences. They be-
came more concerned about the safety of their investments and
evolved into a rentier class, finding a ready outlet for their funds in
the financing of the city's public debt. By 1427, the wealthiest seg-
ment of the city's population invested around one-third of its assets
in public debt, leaving only one-third in commerce and industry and
the remaining third in land.23
A last word needs to be said about the men who built the super-com-
panies. I have attributed the possibility of super-companies to a unique
confluence of population dynamics, commodity resources, and the cash
needs of incipient nation-states. But the actuality of super-companies came
about from the efforts of a handful of men with the vision to grasp the
implications of the opportunity presented to them and the energy and
skill to seize it. In the case of the Peruzzi, Filippo seems to have been
such a man. His nephew Tommaso may not have been as gifted but
possessed the administrative skill and an enormous capacity for work
that kept this cumbersome giant of an organization functioning for al-
most thirty years. The rarity of the talent and single-minded effort re-
quired to create a company of great size is evidenced by the fact that
nearly a century had passed before the organizing genius of Cosimo de'
Medici raised the Medici Bank to its great heights. As soon as he passed
away, the company went into decline. But the next true super-company
did not emerge until the beginning of the sixteenth century. Then, Jakob
Fugger found the same combination of forces - key commodities in great
demand (silver and copper in this instance) and ambitious princes in
need of cash -which he converted into Europe's last preindustrial su-
per-company.
22
The practice of partible inheritance also limited the family company's ability to
amass capital for growth (see Goldthwaite, "The Medici Bank," 9-10), but the
disinclination of the surviving brothers and sons to perpetuate the family busi-
ness as a common property was decisive. The size and longevity of the Medici
Company was a consequence, Goldthwaite notes, of the fortuitous combination
of a series of exceptionally able men and the premature deaths of the less gifted
heirs (12).
23
Herlihy and Klapisch-Zuber, Tuscans and Their Families, 101-3. See especially
the upper chart 4.2 on 102.
Appendixes
I. Genealogical charts of the Peruzzi Family

II. Peruzzi Company Balances at July 1, 1335
III. Peruzzi Company and Shareholder Data
IV. Exchange rate trends
V. Giovanni Villani, his background and reliability
25 1
Ubaldini di Peruzzo—1150
Peruzzo—1190
Guido—1203
Amideo—b. 1221
I
m. FILIPPO—d. 1303 ARNOLDO—d. 1292
I I I I r I
Chiaro m. GUIDO AMIDEO TOMMASO GIOTTO ARNOLDO PACINO
I I
m. Simone* PACINO OTTAVIANO* BONIFAZIO PACINO DONATO* RINIERI
Figure Al. Peruzzi family until the mid-fourteenth century. Names in full capital letters indicate Peruzzi Company shareholders. Names
in underlined full capital letters indicate company chairman at one time or another The "m." indicates the honorific title messer. The
asterisk indicates died in the 1348 plague.
m. FILIPPO
I I I I I I 1 I I I
Chiaro Bandecco Biero GERI Piera Tano PERUZZO m. GUIDO noname m. AMIDEO
aka Lepre
I I I I I I P I
Chiaro m. Simone* Pierro Pera Bandecca Francesco Andrea Napoleone Agnoletta Francesca NICCOLO OTTAVIANO
I
I
I
I I I I I I I I I I
Chiaro Rinieri Filippo* Bonino Giovanni Alessandro* LEPRE PACINO Piero no name
Guido
Figure A2. Early genealogy of the Filippo branch of the Peruzzi family. Names in Full capital letters indicate Peruzzi Company sharehold-
ers. Names in underlined full capital letters indicate company chairmen at one time or another. Names in italics indicate Peruzzi com-
pany factors. The "m." preceding a name indicates the honorific messer. The asterisk indicates died in the 1348 plague.
ARNOLDO—d. 1292
I I I I
Donato Amideo TOMMASO GIOTTO ARNOLDO PACINO
T T T T T
Bellodine m. RIDOLFO Bartolomea Giachimotto Lepre Tano Filippa Beatrice Zanobi DONATO* Cantellina
T T T T T ^n i
BONIFAZIO PACINO* Marghareta Maddalena Lifa Amideo Roberto Ridolfo Filippo Rinieri*
I I I I I I I I I I I
Lodovico Donato Francesco ROBERTO Tommaso Ugo Margherita Francesco Tommasino Gherardo Giotto
Figure A3. Early genealogy of the Arnoldo branch of the Peruzzi. Names in full capital letters indicate Peruzzi Company shareholders.
Names in underlined full capital letters indicate company chairmen at one time or another. Names in italics indicate Peruzzi company
factors. The "m." preceding a name indicates the honorific messer. The asterisk indicates died in the 1348 plague.
I I I I I I I I
Giovanetto Piero Bartolomeo Arnoldo Guido RINIERI FILIPPO m.IACOPO SALVESTRO DONATO BENEDETTO
Mea Guglielmo
r i i |—• i
Francesco Bartolomeo TOMMASO Iacopo
i r i i I I i I I
Dionini Nicolo Francesco Simone Margherita Giovanni Luigi Arnoldo Francesco Giovanni Francesca Pacino
I I
Niccolo Benedetto Rinieri Giovanna
Appendix II: Peruzzi Company Balances
at July 1, 1335
Table Al. Detail of "others" balances at July 1, 1335

(lire a fiorino)
Nonshareholder Peruzzi
Simone & heirs 12,972 (12,972)
Others 893 9,356 (8,463)
Total 893 22,328 (21,435)
Hospitalers
Florence Accts 12,193 28,636 (16,443)
English Accts 12,832 12,832
Total 25,025 28,636 (3,611)
Other church 208 22,260 (22,052)
Raugi family 484 16,892 (16,408)
All other 4,102 14,103 (10,001)
Grand total 30,712 104,219 (73,507)
Note. In this analysis "assets" are receivables to the company

or loans to the individuals, and "liabilities" are the opposite.
It highlights some useful information: (1) Non-shareholders
of the Peruzzi family, especially Simone, were significant
investors in the company. (2) Although the Hospitalers were
net investors in the company in the Florence books, their
large English borrowing (recorded separately from the
English branch and controlled in Florence) largely balanced
the Order's position with the company. (3) Other church-
men, mainly bishops and abbots, were significant investors
in the company. (4) the Raugi family, former shareholders,
continued to invest in the company.
256
Peruzzi Company balances 257
Table A2. Detail of Peruzzi branch balances at
July I, 1335 {lire a fiorino)
Cyprus3 10,943 736 10,207

Bruges6 — 593 (593)
England0 — 20,674 (20,674)
Parisd 21,610 46,290 (24,680)
Avignon6 29,568 59,568 (30,000)
Pisaf 14,906 20,768 (5,862)
Veniceg — 11,481 (11,481)
Rhodesh 6,480 18,802 (12,322)
Naples1 74,092 120,960 (46,868)
Barlettaj 30,124 32,997 (2,873)
Majorcak 13,709 — 13,709
Sicily Trade1 37,191 43,083 (5,892)
Loan"1 62,434 — 62,434
Total 99,625 43,083 56,542
Sardinia" 16,108 430 15,678
Tunis0 11,706 6,039 5,667
GenoaP — — —
Chiarenzap — — —
Total Branches 328,871 382,421 (53,550)
Note. Because Cyprus, Bruges, and England branches provide essentially

only net assets or liabilities, the figures give no indication of the level of
activity of the branches and decidedly understate it.
a
Closing date November 30, 1336; mainly balance of unstated cash, good
debts, and merchandise, less payables. Currency is the bezant converted
at B 1 = s6 d6.
b
Closed September 1, 1335; balance of unstated payables less good debts
and cash. Currency is libbra grossi tornesi converted at £GT 1 = li.30.
c
Closed August 15, 1336; balance of unstated payables less good debts and
cash. Currency is £ sterling converted at £ 1 = li.10 slO.
d
Closed September 1, 1335; assets are good receivables from unstated
number of debtors, and liabilities are payables to twenty-two creditors.
Currency is £ buoni tornesi converted into florins at an average of £BT 2
slO = fl 1, which were in turn converted to £ at rates ranging between fl 1
= 30s and 31s.
e
Closed mostly August 15, 1335, but additional assets to October 15, 1335;
assets are eighty good receivables plus a cash transfer, and liabilities are
payables to eighty-one creditors. Currency is the florin converted at fl 1 =
30s 3d to 31s.
f
Closed September 5, 1335, for assets and July 26, 1335, for liabilities.
258 Appendix II
Assets are sixty-six good receivables plus cash, and liabilities are twenty-
eight payables. Currency is the florin converted at fl 1 = 30s.
g
ClosedJuly 21, 1335; liability figure is a net of payables to eleven credi-
tors less good receivables from twelve debtors and cash. The gross asset
and liability figures are given in local currency in the entry. Currency is
Venetian grossi manchi converted at £VGM 1 = li. 15.
h
Closed July 22, 1335, for liabilities, but asset closings occurred up to July
1, 1336. Liabilities are excess of amounts payable to fifty-one creditors
over receivable from 114 good debtors, with details of each given in local
currency in the entry. Assets are later closing entries for additional cash
received attributable to the old company and confirmation of 50 addi-
tional good debtors. Currency is the bezant converted at B 1 = s4 d8.
'Closed July 20, 1335, for liabilities and December 10, 1335, for assets.
Liabilities are payables to eighty-eight creditors and assets are money due
from 137 good debtors plus household goods and cash. Currency is the
Neapolitan ounce converted at oz. 1 = li.8.
JClosed July 25, 1335, for liabilities and December 19, 1335, for assets.
Liabilities are payables to twenty-four creditors and assets are 102 good
debts plus household goods, merchandise, and cash. Currency is the
Neapolitan ounce converted at oz. 1 = li.7 sl8.
k
Closed September 22, 1335; assets are cash, good debts, and merchan-
dise less payables. No details given. Currency is libbra maiolichini
converted at £M 12 = li.17.
'Closed at September 1, 1335, for liabilities and December 6, 1335, for
assets. Assets are receivables from sixty-eight good debtors plus cash, and
liabilities are payables to thirty-nine creditors. Currency is the Sicilian
ounce converted at Soz. 1 = li.6 s5.
m
Closed at March 1, 1335, but accounted in Florence on April 9, 1343.
Represents several loan contracts made with King Frederick up to June
30, 1335. Currency is the Sicilian ounce, converted on April 9, 1343, at
Soz. 1 = li.5 slO. The choice of the conversion date is curious, as is the
rate, which reflects a stronger Florentine currency at a time when it was
weakening. Possibly the loans were actually settled by the date indicated
at a lower amount, and the accountants chose the conversion rate as the
means to reflect the shortfall.
"Closed September 1, 1335, for liabilities and November 25, 1335, for
assets. Liabilities are payables to five creditors; assets are receivables from
sixty-five good debtors plus merchandise and cash. Currency is libbra
d'anfusini converted at £A 12 = li. 14 sl4.
°Closed September 1, 1336, for liabilities and November 24, 1336, for
assets. Liabilities are payables to twenty-one creditors and assets are
receivables from fifty-four good debtors, plus merchandise and cash.
Currency is the bezant converted at B 1 = s6.
p
Although the Peruzzi had branches at Genoa and Chiarenza at this time,
no balances were reported.
Source". I libri di commercio dei Peruzzi, 7-10 for liabilities and 191-6 for
assets.
Appendix III: Peruzzi Company
and Shareholder Data
Table A3. Summary of capital and profit, 1300-35
Est. Annual
Capital return (%)a Avge. annual
Company (li.) A B profit/(loss) (li.)
1 (1300-08) 124,000 15.4 11.0 23,000c
1A (1308-10) 130,000 20.0 18.0 27,300d
2 (1310-12) 149,000 14.5 13.5 21,800e
3 (1312-19) b 118,000 14.0 11.0 16,500
3 (1319-24) 118,000 16.0 14.5 20,300
4 (1324-31) 60,000 N/Af 3.0 4,000
5 (1331-5) 90,000 N/A NMFs (9,700)8
6 (1335-43) N/A N/A N/A N/A
a
Rates of return: Column A represents A. Sapori's calculations. Column B is
"real" rate of return reflecting compounding.
b
Interim closing. The company did not dissolve until 1324.
c
Sum of dividends (lire a fiorino):1308, 124,000; 1314, 49,600; 1319, 25,548
(seems to include an unstated amount of sales of property and interest on
cash tied up); 1324, 2,138; 1339, (5,706). The total was li.195,580, which
divided by 8.5 years = li.23,009 (rounded to li.23,000).
d
Reflects dividends of li.52,000 in 1310 and li.2,700 in 1312.
e
Reflects dividends of li.43,061 in 1312 and li.620 in 1319.
'Results were not known, but Sapori suspected that they were not good, given
the fact that the Peruzzi were prepared to open the next company with much
increased outside shareholding, sacrificing majority control. However, there
was a distribution of li.26,518 in 1338 from accumulated collections of bad
debts, which would indicate that the business was close to breakeven when the
accounts were made up in 1331. A later distribution of li.9,787 took place in
1345 as a result of a payment from Warden Abbey in England, but this occurred
after the company had been declared bankrupt.
^Reflects operating loss of li.38,678 at July 1, 1335, as determined in Table 5.
There is no meaningful figure (NMF) for a rate of return on the loss for the
period 1331-5.
Sources'. A. Sapori, Studi di Storia Economica, Vol. 2 (Florence, G. C. Sansoni,
1955), 665-78.
/ libri, Secret Book of Giotto d'Arnoldo, and Secret Sixth Book.
259
Appendix 111
Table A4. Summary of shareholdings in the Peruzzi
Companies, 1300-43
Peruzzi family Outsiders

Companies Number % total Number % total Total3
1300-8
No. shareholders 7 41 10 59 17
Subscription (li.) 74,000 60 49,000 40 123,000
1308-10
Subscription (li.) 71,000 55 57,500 45 128,500
1310-12
Subscription (li.) 79,000 54 68,000 46 147,000
1312-24
Subscription (li.) 68,000 59 48,000 41 116,000
1324-31
Subscription (li.) 34,000 58 25,000 42 59,000
1331-5
Subscription (li.) 37,500 42 51,000 58 88,500
1335-43
Subscription (li.) NA NA NA
Subscription totals are slightly less than total capital shown in Table A3
because a small amount, ranging between li. 1,000 and li.2,000, was
attributed to the Charity Account.
Source. A. Sapori, Studi di Storia Economica, Vol 2, 665-70.
Company and shareholder data 261
Table A5. List of shareholders of the Peruzzi Companies, 1300-43
{shareholdings in lire a fiorino)
First Company, May 1, 1300, to October 31, 1308

Giotto di Arnoldo Peruzzi 11,000
Tommaso di Arnoldo Peruzzi 11,000
Arnoldo di Arnoldo Peruzzi 11,000
Rinieri and Filippo di Pacino di Arnoldo Peruzzi 11,000
Filippo d'Amideo Peruzzi and sons 26,000
Geri di Filippo Peruzzi 4,000
Subtotal Peruzzi 74,000
Banco di Gianni Raugi 10,000
Tano and Gherardi di Micchi Baroncelli 13,000
Catellino di Manghia degli Infanghati 7,000
Gianni di Manetto Ponci 5,000
Bencivenni di Folco Folchi 4,000
Uguccione Bonaccorsi Bentacorde 3,000
Ruggieri di Lottieri Silimanni 3,000
Giovanni Villani 2,000
Giovanni di Ricco Raugi 2,000
Subtotal non-Peruzzi 49,000
Charity company 1,000
Total 124,000
First Company (A), November 1, 1308, to October 31, 1310
Guido and Amideo di Filippo Peruzzi 18,000
Rinieri, Filippo, and Iacopo di Pacino Peruzzi 20,000
Tano and Gherardo di Micchi Baroncelli 14,500
Catellino di Mangia degli Infanghati 8,000
Filippo Villani 3,000
Total 130,000
262 Appendix III
Table A5. (Continued)
Second Company, November 1, 1310, to October 31, 1312

Rinieri, Filippo, Iacopo, and Salvestro di Pacino Peruzzi 24,000
Ridolfo di Donato d'Arnoldo Peruzzi 4,000
Tano and Gherardo di Micchi Baroncelli 14,500
Ghrardo di Gentile Bonaccorsi 4,500
Stefano di Uguccione Bencivenni 3,500
Total 149,000
Third Company, November 1, 1312, to October 31, 1324
Rinieri di Pacino d'Arnoldo Peruzzi 7,000
Filippo di Pacino d'Arnoldo Peruzzi 7,000
Iacopo di Pacino d'Arnoldo Peruzzi 6,000
Salvestro di Pacino d'Arnoldo Peruzzi 4,000
Ridolfo di Donato Peruzzi 4,000
Tano di Micchi Baroncelli 8,500
Gherardo di Micchi Baroncelli 6,000
Gherardo di Gentile Bonaccorsi 4,500

Total 118,000
Fourth Company, November 1, 1324, to June 30, 1331
Guido di Filippo Peruzzi 4,500
Amideo di Filippo Peruzzi 4,500
Salvestro and Donato di Pacino d'Arnoldo Peruzzi 5,000
Ridolfo di Donato Peruzzi 2,000
Catellino di Mangia deglli Infanghati 4,000
Total 60,000
Fifth Company, July 1, 1331, to June 30, 1335
Amideo di Filippo Peruzzi 5,000
Pacino di Guido di Filippo Peruzzi 5,000
Donato di Pacino d'Arnoldo Peruzzi 3,500
Donato di Giotto d'Arnoldo Peruzzi 4,000
264 Appendix HI

Baldo di Gianni Orlandini 4,000
Geri di Stefano Soderini 4,000
Guccio di Stefano Soderini 4,000
Giovanni di Stefano Soderini 3,750
Francesco Forzetti 4,000
Piero di Bernardo Ubaldini 2,500
Total 90,000
Sixth Company, July 1, 1335, to October 27, 1343
(shareholdings unknown)
Giotto di Arnoldo Peruzzi
Bonifazio and Pacino di Tommaso Peruzzi
Donato di Pacino d'Arnoldo Peruzzi
Tommaso di Filippo di Pacino Peruzzi
Berto di Ridolfo di Donato Peruzzi
Donato di Giotto d'Arnoldo Peruzzi
Niccolo and Ottaviano d'Amideo di Filippo Peruzzi
Pacino and Lepre di Guido di Filippo Peruzzi
Gherardo di Micchi Baroncelli
Giovanni and Gherardino di Tano Baroncelli
Baldo di Gianni Orlandini
Filippo Villani
Geri, Guccio, and Giovanni di Stefano Soderini
Ruggieri di Lottieri Silimanni
Francesco Forzetti
Stefan di Uguccione Bencivenni
Sources: A. Sapori, Storia economica, Vol 2, 665-70; / libri, Secret Book of

Giotto (436-41), for the first four companies, and the Sixth Company
books for the Fifth Company (276-90) and the Sixth Company (1). The
order in which the shareholders are presented has been taken from these
sources.
Table A6. Changes in company loan balances due (to)/from
shareholders, July 1, 1335 to July 1, 1343 (lire a fiorino)
July 1, 1335 July 1, 1343 Change
Peruzzi family
Giotto and heirs 8,216 9,989 1,773
Bonifazio, Pacino, and heirs (10,507) (11,398) (891)
Donato and Salvestro di Pacino 6,442 857 (5,585)
Tommaso di Filippo di Pacino (5,649) (1,751) 3,898
Berto di m. Ridolfo (1,817) (2,193) (376)
Joint heirs of m. Ridolfo (4,284) (18,930) (14,646)
Donato di Giotto (295) 6,102 6,397
Niccholo and Ottaviano di
m. Amideo (12,646) (21,099) (8,453)
Guido and heirs (6,761) (11,718) (4,957)
Total Peruzzi family (27,301) (50,141) (22,840)
Non-Peruzzi shareholders
Gherardo di Micchi Baroncelli (11,487) (13,909) (2,422)
Giovanni and Gherardino di
Tano Baroncelli (9,224) (3,034) 6,190
Baldo di Gianni Orlandini (2,179) (1,363) 816
Filippo Villani (461) 2,656 3,117
Geri, Ghuccio, and Giovanni
di Stefano Soderini 5,100 24,788 19,688
Ruggieri di Lottieri Silimanni 684 5,348 4,664
Francesco Forzetti 1,149 7,396 6,247
Stefano di Uguiccione Benciveni 448 3,552 3,104
Catellino di Mangia degl'
Infanghati 5,221 9,686 4,465
Piero di Bernardo Ubaldini (1,065) 964 2,029
Total non-Peruzzi (11,814) 36,084 47,898
Grand total (39,115) (14,057) 25,058
Source: I libri, individual accounts in the Secret Book of the Sixth

Company.
Appendix TV: Exchange rate trends
Table A7. Currency effects on Angevin wheat export tax, 1300-40
Carlins Florins Soldi di piccioli

Years per florin3 per oz.b per florin0 per oz.d per bu.e
1300-10 13 4.6 50 230 2.5
1310-15 13 4.6 57 262 2.9
1315-20 13 4.6 65 299 3.3
1320-30 14 4.3 66 284 3.1
1330-5 13 4.6 60 276 3.0
1335-40 12 5.0 62 310 3.4
a
Exchange rate from P. Spufford, Handbook of Medieval Exchange, 63.
b
Column 2 divided by 60. There are 60 carlins to the ounce.
c
Exchange rate from P. Spufford, Handbook, 3-4.
d
Column 3 multiplied by column 4.
e
Column 5 times 12 divided by 1,100. This assumes a "normal" tax of 12
oz. per 100 salme (one salma equals approximately 11 Florentine bushels).
This rate, however, could and did vary considerably - from as little as zero
to as much as 30 oz.
266
Table A8. Exchange rate index - Florentine florin versus various silver-based currencies, 1300-45
Florence Naples Siena Pisa England Venice France Genoa

Years Soldi Carlin Soldi Soldi Sterling Grossi Gr. tn.a Soldi
1300-5 100 100 100 100 100 100 100 100

1306-10 106 100 106 107 90 100 N/A 117
1311-15 114 100 112 115 100 N/A 110 126
1316-20 126 104 118 116 110 105 104 132
1321-5 132 111 132 120 110 100 108 141
1326-30 132 108 132 124 110 100 104 153
1331-5 120 100 120 118 117 100 100 147
1336-40 124 92 126 120 115 100 100 147
1341-5 130 86 132 124 105 75 104 110
P. Spufford,
Handbook,
Page nos. 3-5 63 50-4 42-5 200 85-6 186 110
Note: These indices are derived from very rough averages of the rates quoted in Peter Spufford's
Handbook of Medieval Exchange and are thus intended as approximations indicating general direction
rather than an attempt at scientific precision.
a
Gross tournois. French exchange rates in sous/denier are too volatile to index.
Appendix V: Giovanni Villani,
his background and reliability
The most frequently quoted contemporary source of information on the

Peruzzi and other great Florentine companies is Giovanni Villani. By and
large, he is regarded as a reputable and knowledgeable chronicler of com-
mercial affairs of the period. Jakob Burckhardt, in citing the 25 million
florins in treasure reportedly left by Pope John XXII at his death, said the
amount would be incredible on any less trustworthy authority."1 Armando
Sapori, while disputing some of Villani's claims, has supported most of his
figures. He, along with Robert Lopez, regarded the chronicler's 1338 statis-
tics on Florence as substantially accurate. Villani's reputation rests on a
prominent business and political career in Florence spanning a period of
almost fifty years. It is also buttressed by the fact that much of his data are
supported by official records and the commentaries of others.
There are, however, dissenting opinions. German scholars, such as Werner
Sombart, are so critical that Sapori has labeled them as obsessively suspi-
cious of any data from any Florentine chronicler.2 But a less critical German
historian, Robert Davidsohn, disputes some of Villani's claims, such as the
one accusing the Franzesi Company of inducing Philip IV to devalue his
currency.3 And the challenges of more recent scholars cannot be easily
brushed off. Guillaume Mollat and Yves Renouard indeed found Villani's
estimate of John XXII's treasure incredible, setting it at only 750,000 flor-
ins.4 Michele Luzzati has charged that Villani deliberately distorted the story
of the 1342 deposit withdrawals in Naples to exonerate his company, the
Buonaccorsi (discussed later). Hidetoshi Hoshino has struck at the heart of
Villani's Florentine statistics by persuasively challenging the latter's claim
that 80,000 cloths were produced per year.5 John Henderson discovered
that even Villani's figure for charity distributions by Orsanmichele was greatly
exaggerated.6 And my own inquiries in this study have uncovered much
questionable data, the most serious being his statement of the vast sums
supposedly owed to the Bardi and Peruzzi companies by Edward III.
Given the conflicting opinions on Villani's reliability, a review of his per-
sonal history would be worthwhile. Villani is believed to have been born
around 1280, although one source gives the date as early as 1276.7 He be-
1
Burckhardt, Civilization Renaissance, 98. 2 Sapori. La crisi, 77.
3
4
Mollat, The Popes of Avignon, 14.; Y. Renouard, Les relations, chart C opposite 32.
5
Hoshino, L'Arte della lana, 203.
6
Henderson, "Piety and Charity," 152.
7
G r e e n , Chronicle into History, 11.
268
Giovanni Villani 269
gan his business career with the Peruzzi in 1300. Luzzati indicates that he
served briefly as a factor in Bruges before attaining partnership status, but
as is shown elsewhere, this would have been a most unusual progression; in
any case, the Peruzzi records confirm that he was a shareholder of the 1300
company to the extent of li.3,000. This fact establishes Villani as a young
man not only of means but also of social position.
In 1308 Villani withdrew his shareholding and was replaced by his younger
brother Filippo, who served the company as partner and manager until its
demise in 1343. Giovanni retained ties with the Peruzzi, as he was put in
charge of a major Peruzzi property in Siena until 1312. There is a lacuna in
his business history between 1312 and 1322, but it is likely that he had some
connection with the Buonaccorsi Company because his relatives were closely
involved with it and because we know from a 1322 family document that he
was a partner in that year. The document was an agreement among the four
Villani brothers - Giovanni, Filippo, Matteo, and Francesco - to pool their
surpluses for the maintenance of their father. What is interesting about this
agreement is the web of cross-company connection that it discloses within
the family. Filippo was a partner and Francesco a factor of the Peruzzi;
Giovanni was a partner and Matteo a partner-employee of the Buonaccorsi.
During most of this period and on up to 1331, Giovanni was very active
politically. He held many prestigious offices, including the priory (three
times) and was often consulted on a wide range of affairs. In 1331, however,
he was alleged to have taken bribes on his leaving the office of chamberlain
of the Mura, overseer of the completion of the third set of walls around the
city. Although he does not seem actually to have been formally convicted,
his legal delaying tactics caused his reputation to suffer, and from 1331
onward he was rarely in the limelight and his name appeared in affairs of
only minor importance. His attitude shows up in Chronicles X and XI, which
are studded with laments about "perfidious Florentines." His personal and
commercial relationships were also clouded by extensive litigation with his
brothers over the 1322 agreement already mentioned.
The company with which he was most closely associated, the Buonaccorsi,
was large and important, but was not among the movers and shakers of Flo-
rence at the commune level. It derived much of its influence from its strong
position with King Robert in Naples and later Walter of Brienne, who became
dictator of Florence in 1342-3. Thus, the Buonaccorsi and its representa-
tives were regarded as "outsiders." Luzzati describes the company as a new-
comer established in 1307, although there were references in Neapolitan
state documents, which mention the Buonaccorsi as far back as 1278.8 What-
ever its origins, the company expanded rapidly throughout the 1320s and
became probably the fourth-largest concern in Florence. Unfortunately, it
appears to have become overextended, and on June 1, 1342, its representa-
tives quietly disappeared from Naples and Avignon, leaving substantial debts.
From this point onward, the stories of the Buonaccorsi and Giovanni
Villani are closely intertwined. The company was to be cited by the Flo-
rence tribunal on September 1, 1342, but was saved by the advent of Walter
of Brienne as despot. Bankruptcy was formally acknowledged on November
7, but Brienne appointed a judge and a foreign noble with veto power over
8
Yver, Le commerce, 292, for example.
270 Appendix V
the bankruptcy syndicate, forestalling action. This unusual procedure was
designed, Luzzati believes, not to save the Buonaccorsi, but to enable the
Neapolitan creditors to share in the disposal of the company's Florentine
assets. All these delays suited Villani, who feared criminal prosecution for
fraud in connection with the bankruptcy. Eventually, the case was processed,
and on February 4, 1346, Villani was incarcerated. The final concordat be-
tween the commune and the company, which also annulled penal sentences
to the shareholders, was reached on March 29, 1349 - too late for Giovanni
Villani, who died of the plague in 1348.
Did these dramatic events in the life of Villani the businessman influ-
ence the writings of Villani the chronicler? We know one instance in which
they did and can suspect that there were others, especially during his late
years. Referring to the Naples deposit withdrawals already mentioned, Villani
stated that they were provoked by a plot by the commune in May-June 1342
to enlist the help of Emperor Ludwig and the Ghibellines in its struggle
with Lucca. This desperate, ill-advised action, he asserted, angered the pa-
pacy and the king of Naples causing a run on the deposits of all Florentine
banks and contributing to the collapse of many of them, including the Bardi
and Peruzzi. Luzzati has challenged this construction by showing that one
of the companies Villani said was ruined by the withdrawals was the Cocchi,
which had already been in the hands of its creditors before the withdrawals
were alleged to have taken place. In fact, the only company to have fled
Naples was the Buonaccorsi. Finally, he notes that Villani is the only source
of the Ghibelline plot story and concludes that Villani felt the need to cre-
ate a diversion from a dangerous truth by pointing a finger at the com-
mune. 9
This little history also suggests that Villani may not have been the well-
informed insider that he would have his readers believe. Since 1331, his
connections, never powerful, were weakening, and his relations with his
brother Filippo were becoming strained. For example, S. L. Peruzzi has
noted that Filippo, as one of the executors of the estate of John XXII at
Avignon, was an impeccable source for Villani's estimate of the value of the
papal treasure at John's death.10 But, as we have seen, Villani's figure was
wildly off the mark.11 His estimates of the Bardi and Peruzzi losses on their
loans to Edward III are probably the stuff of rumor emanating from the
bankruptcy syndicate's first look at the Peruzzi books. He was actually in
prison at the time of the Bardi collapse.
Overall, most of his figures appear to be exaggerations on close inspec-
tion, but this does not mean that they are worthless or misleading. And
some, such as his estimate of Florence's population, have stood up to the
test of modern analysis. His great contribution is his brilliant attempt at a
macroeconomic analysis of his city. His figures may be exaggerations or
9
But see 219-20, this volume, for Sapori's version of events, which confirms
Florence's flirtation with Ludwig.
10
Peruzzi, Storia commercio, 1 64.
11
Peter Partner, however, sensibly warns us to view all medieval papal statistics
with caution, as they are often incomplete. See P. Partner, "Camera Papae: Prob-
lems of Papal Finance in the Later Middle Ages," Journal of Ecclesiastical History
4 (1953): 55-68.
Giovanni Villani 271
even rough guesses, but they provide a compendium of medieval urban
amenities and consumption patterns, along with a sense of their relative
importance, if not their absolute size. And in general, despite their short-
comings, his chronicles are usually directionally apt and provide valuable
insights into the attitudes of the commercial elite of fourteenth-century
Florence. They deserve to be treated with respect, albeit with caution.
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Index
Abulafia, David, 39n, 46n, 70 banking (see also Edward III, financing;
Acciaiuoli, company, 1, 4, 39-40, 47, 61, papacy, money transfers; Peruzzi
135, 217, 243; bankruptcy of, 229, Company, banking and lending), 3,
241 48,201
Acciaiuoli, family, 33, 90, 94, 228, 246; Barcelona, 55, 87
Acciaiuolo, 186; Iacopo, 217; Bardi, company, 38, 39, 60, 106, 148,
Niccolo, 241 164, 237; bankruptcy of, 1, 242;
accountants, training of, 5, 104-5 charitable donations of, 83; English
accounting, (seealsoFeruzzi Company, venture with Peruzzi, see Peruzzi
accounting anomalies, etc.); Company, joint venture with Bardi;
accruals, 110, 113; bad debts, 106; exaggerated size, 121, 245-6; factors,
closing, 109, 156-7; double-entry, 12, 88, 96; in England before joint
101-3, 109, 122, 123, 236; fixed venture, 60, 162,199: in England
assets and depreciation, 114; after joint venture, 241-2; papal
inventory valuation, 169; receiv- business, 81, 175; profitability of, 65,
ables, 110-11; religious invocations, 78, 116, 165, 167, 169-70, 172, 244
108; single-entry, 102-3; units of Bardi, family, 11, 14, 33, 94, 214, 229,
account, 7, 111 242, 246; 1340 coup attempt, 12,
Acre, destruction of, 22 213-14, 226; Piero di Gualtieri, 214;
Adimari family, 25, 30-1 Ridolfo, 228, Walter, 241-2
Alberti, company (see also de Roover, Barletta, 49-50, 87
Raymond), 96, 99, 136, 218n, 246 Baroncelli, family, 25, 92, 130, 224,
Alberti, family, 33, 90 243n; Gherardino di Tano, 234n,
Alexandria, 55, 134 264, 265; Gherardo di Micchi, 32,
Altopascio, battle of, 26, 28, 32, 158 97, 168, 185n, 261-4, 265; Giovanni
Anagni, 24, 131 di Tano, 97, 198n, 212, 264, 265;
Ancona, 50 Tano di Micchi, 32, 168,185n, 261-3
Angevin kingdom of southern Italy (see Beardwood, Alice, 242, 245
Naples, kingdom of) Bencivenni, Stefano, 262-4, 265
Antellessi, company, 228, 240n Benedict XI, pope, 130
Antwerp, 200, 204, 205 Benedict XII, pope, 168, 187, 196, 217-18
Aragon, 46, 71, 163 Bentacorde, Uguccione, 25, 135, 261-2
arithmetic: abacus, 104-5; arabic system, Biada, "six of the," 50-2
104, 112; roman numerals, 104, 112; Biadaiolo, il libro del, 51n, 52, 166
Artevelde, Jakob van, 198, 209 bills of exchange, discounting of, 202
Arundel, Earl Richard of, 241 Black Death, 3, 6, 28, 35, 234, 247, 252-
audits, by English government, 102, 227, 5,270
229,237,245 Black-White dispute, see Florence
Avignon (seea/so Peruzzi Company, Blomquist, Thomas, 18, 19
branches), 28, 30, 31, 34, 54, 62, 66, BoltonJ. L., 121
72, 97, 121, 269, 270; depositors at, Bonaccorsi, Gherardo di Gentile, 97,
213, 220 119, 184,262-4
285
286 Index
Boniface VIII, pope {see also Philip IV), Constantinople, 55, 87, 134
24, 127, 129, 131 cotton, 56-7
Bonsignori, company of Siena, 38, 43, credit, 202; change of flow, 249 ;
47,62 creation of, 139, 201
bookkeeping, see accounting crisis" of early fourteenth century, 2-3, 6
Borsook, Eve, 33 currencies, 177-9, 257-8, 266-7; English
Brabant, 45, 67, 145 pound valuation, 7, 192; florin
Bresc, Henri, 56 valuation, 7, 111, 118n
Brienne, Walter of, 28, 118, 219-221, customs duties, 191, 200, 204
225-6, 227, 230, 269; downfall of, Cyprus {see also Peruzzi Company,
228 branches), 57, 84
Brittany, 225
Brucker, Gene, 121 Datini, Francesco, 96; company of, 145n
Bruges {see also Peruzzi Company, Davidsohn, Robert, 19, 221, 268
branches), 145; Peruzzi lawsuit, 81, Day, John, 202
170; Peruzzi loan, 146, 161 Delia Faggiuola, Uguccione, dictator of
Buonaccorsi, company, 40, 70n, 84-5, Pisa, 26, 152
94, 119, 175; bankruptcy of, 220-1, Delia Scala, Mastino (a.k.a. Scagliero),
226, 231, 268-70; history of, 28, 186, 193, 205, 216
269-70 depositors and deposits, 97, 201, 214
Burghersh, Henry, 150 Derby, earl of (later, Henry, duke of
Lancaster), 61, 205, 208, 212-3, 215
Calabria, duke Charles of, 140, 158-60 Despenser, Hugh the Younger, 61, 85,
Calendar of Close Rolls, 66, 148, 149-50, 86, 150-1, 161-3, 186, 189
192, 207-8, 215, 225, 229, 237, 239, de Roover, Raymond, 41, 91-2, 97, 100,
272 110, 201, 202n, 246n; on Alberti
Calendar of Patent Rolls, 66, 133, 148, Company, 7, 96, 113, 115; on criteria
192, 207-8, 222, 225, 229, 237 for double entry, 103, 236n
Caltabellota, Peace of, 47, 68, 133 dividends, see Peruzzi Company,
capitalization of companies {see also dividends and profit allocations
Peruzzi Company, capital), 68, 76 Donati, family, 36; Corso, 24, 129
cash and cash flow, 65, 68, 74, 140, 154, dowries, 31
172, 198,200
Castracani, Castruccio, 26, 27, 152, 156- Edler, Florence, 78
7 Edington (or Edyngton), William, 238,
Catalonia, 41, 55, 58, 129, 144 248
Cavalcanti, family, 130 Edward I, king of England {see also
Cerchi, Vieri, 24 Ricciardi, company, English opera-
Charles of Anjou, later Charles I, king tions), 58-60, 85, 244
of Naples, 43, 46, 175 Edward II, king of England, 60-1, 71, 85,
Charles II, king of Naples, 47, 127, 86, 148n, 150, 160, 161-2, 167, 189
134-5 Edward III, king of England, 34, 61, 64-
Charles IV, king of France, 160 5, 72, 73, 150, 168, 227; European
Charles of Valois, 24, 129, 133 campaigns of, 197, 204, 208, 225;
Chiarenza, 87, 134, 221 financing, April 1336 to April 1340,
Chiriton, Walter de, 238 188-90, 196n, 201-3, 204-5, 206,
Clement V, pope, 62, 131, 135, 137, 207; financing, May 1340 to 1345,
147n 208-10, 215-16, 224-5, 239;
Clement VI, pope, 121, 187n, 226, 234 financing, general, 1, 244, 248;
commodity trading {see also ), 3, 74, 244, letters obigatory of, 197, 205n, 238,
247 239, 241-2; myth that he caused
Compagni, Dino, 24 Bardi and Peruzzi bankruptcies, 6,
companies {see also multinational 220-1,245,268
companies): confusion with families, England {see also Peruzzi Company,
11; legal status, 76; types of, 38 branches): government of, 197, 215,
Index 287
224, 229, 248; Italian merchants in, 136,152, 216-17, 218, 219, 225-6
43, 58, 197, 202; merchants of, 38, Folchi, Folco, 25, 156, 137n, 261-262
58, 197, 199, 216, 249; taxes, 208, Forzetti, Francesco, 56, 86, 96, 129, 168,
224-5; wool embargo on Low 264, 265
countries, 191-2, 195, 198; wool France (see also Peruzzi Company,
trade (see also Peruzzi Company, wool branches), 40, 130, 199; relationship
trade), 3-4, 34, 40, 42, 48, 57-61, 65, with papacy, 187, 218
142, 145-6, 148-51, 178, 194-5, 204, Franzesi, company, 130, 268
237, 243-4, 248-9 Frescobaldi, company, 38, 40, 48, 59-60,
English Wool Company, 191, 198 148, 245; bankruptcy of, 60, 85, 136,
exchange rates, 7, 177-9, 257-8, 266-7 200
Frescobaldi, family, 11, 214
factors (see also Bardi, company; Peruzzi Fryde, E. B., 190, 238, 244; on Bardi
Company), 77, 88; compensation, Company, 65, 121; on Bardi and
90-2; expense advances, 92; loyalty Peruzzi companies, 199, 200, 201-3,
of, 88, 96; training of, 94 205, 206, 209, 210, 213, 215, 239,
famine, 130, 206, 213, 217, 247; of 245; on Peruzzi Company, 204, 210
1315-17, 3; of 1329, 56, 165-6, 173
Federigo III, king of Sicily, 86, 118, 182, gabelles, see Florence, taxes
232 Genoa (see also Peruzzi Company,
financing of monarchies (see also Edward branches), 55, 58, 206
III), 64-5 Ghaddi, Taddeo, 32
Flanders (see also England, wool Ghent, 208
embargo; Peruzzi, Donato di Ghibellines, 14-15, 20, 47n, 130, 168,
Pacino), 41, 145; count Guy of, 127; 213,220-1,270
count Louis of, 81, 99, 161, 170, 189, Giotto, artist, 31-2
200, 209n; indemnities to France, gold-silver ratio, 176-9, 197n
146, 160; merchants of, 58, 64, 196, Goldthwaite, Richard, 59, 201, 249,
205, 208; revolts, 72, 130, 133, 146, 250n
161, 198; textile industry of, 44, 57, grain (see also Florence, grain markets;
65,67,82, 142, 172, 191 Naples, grain trade; Orsanmichele;
Florence: bankruptcy court of, 110, 118, Peruzzi Company, grain trade; Sicily,
120, 229, 232-4, 236, 240, 241; Black- grain; super-companies, grain
White dispute, 24, 73, 129-30, 135; syndicate;): export markets, 49;
borrowing, 159, 186-7, 193, 195, 217; grano ciciliano, 51-2, 166; transport
commercial development of, 41, 44- costs, 52
5, 270; commission of Fourteen, 228; Guelfs, 14-15, 19, 20, 45, 134, 168, 213,
contadoof, 18, 20, 45, 143; economy 219
in 1330s, 193-5, 201; flood of 1333, guilds, 14; bankers, 18, 23, 30; finishers
169-70, 173, 175, 193; grain market and merchants (calimala), 17, 30, 82,
of, 45, 48, 49-54, 65, 130, 141-2, 142n, 170; wool (lana), 66, 82, 171
166-7, 169-70, 217, 247; internal
politics of, 12, 23-4, 30, 133, 159, Henderson, John, 268
227; negotiations with Ludwig of Henry III, king of England, 43, 58
Bavaria, 219-21; relationship with Henry VII, emperor, 26, 28, 71, 134,
Naples (see also Robert, king of 135, 136-7, 140, 151
Naples), 64, 73, 133, 140-2, 152, Henry, duke of Lancaster, see Derby, earl
219-21; relationship with the papacy, of
73, 217-18, 221; relationship with Hoshino, Hidetoshi, 142-3, 171-2,
Venice, 186, 205, 206; taxes, 156, 194n,268
159, 186, 193-4, 217, 227; textile Hospitaler order, 70n, 72, 87; grand
manufacturing, 67, 133, 144, 149, master of, 204; Peruzzi Company
163, 194-5, 206; Twenty, rule of, accounts with, 83, 85, 107, 113, 122,
216-17, 226; war with Lucca, 28, 73, 150-1, 234, 239n, 256; Peruzzi
186-7, 205; war with Pisa, 26, 73, Company loans to, 134-5, 136-9,
288 Index
189, 197, 235; Rhodes conquest, Mirabello, Simon de (a.k.a. Simon de
134-5, 137, 150 Halen), 209,215
Hundred Years' War, 1, 72 Mollat, G., 187,268
Montaperti, battle of, 15
Infanghati, Catellino, 25, 97, 120, 184, Montecatini, battle of, 26, 152
261-3, 265 Monte Florum, Paul de, 227
innkeepers (oste), 65, 68, 99 Montpellier, 66, 99
insurance, 67-8 multinational companies, 2, 8
intelligence gathering, 73-4 Munro, John, 174-5, 249
interest (see also Peruzzi Company,
accounting for interest, interest Naples, Angevin kingdom of (see also
paid), 64, 138; dono di tenpo, 91-3; Florence, relations with; Peruzzi
Company, branches; Robert, king of
James II, king of Aragon, 22 Naples; super-companies, grain
Johanna, queen of Naples, 121, 248 syndicate), 21, 27, 47, 55, 218, 269;
John XXII, pope, 28, 62, 138, 147, 150, depositors in, 138, 182, 213, 216,
168, 188n, 196, 268, 270 219-20, 227, 230, 231, 268, 270;
Jones, Philip, 18, 240n export tax, 50, 70, 134, 175, 266;
grain trade of, 4, 40, 42, 48, 53, 141,
Kaeuper, Richard, 59, 121 173, 175, 176, 243-4, 247; relation-
Kedar, B. Z., 55, 71 ship with super- companies, 46-7,
48-9, 53-5, 70, 141; textile trade of,
Lane, Frederic, 101; and Reinhold 3, 48-9, 244
Mueller, 178-9, 201 Nicolucci, company of Siena, 217, 218
Lansing, Carol, 37 Northampton, earl of, 208, 212, 215
Lenzi, Domenico, 141, 166, 195n
Leopardi, company, 213 Orlandini, Baldo, 89, 168, 234n, 243n,
loans, see Bruges; Edward III, financing; 264, 265
Hospitaler order; Peruzzi Company, Ormrod, W. M., 6
lending policy; Peruzzi Company, Orsanmichele: confraternity of, 23, 30,
loan balances with Edward III 165, 268; grain market of, 45, 51,
Lopez, Robert, 268 165,193
Lucca (see also Ricciardi, company of; Ottokar, Nicola, 20
Florence, war with), 26, 28, 152, 216-
17, 225, 226; moneychangers of, 18 Palermo, 50, 56, 83
Ludwig of Bavaria, emperor, 158-9, 186, papacy (see also Bardi, company;
204,213,219-21,225,270 Florence; France; Peruzzi Company,
Luttrell, Anthony, 137, 139n, 234 papal business; Peruzzi Company,
Luzzati, Michele, 220-1, 226, 228, 268-70 branches, Avignon ), 24, 129;
importance to super-companies, 61,
magnati designation, 23, 24, 25, 33, 213, 62, 187, 217-18; Italian crusades, 47;
228-9 money transfers of, 53, 62, 138-9,
Majorca, see Peruzzi Company, 147, 196, 226; politics of, 72, 221
branches Paris (see also France; Peruzzi Company
Malabayla, company, 226 branches; Peruzzi Company, Paris
Malines, merchants of, 213 lawsuit), 21; parlement of, 11 In,
Manfredonia, 49 187-8
Mazzaoui, Maureen, 57 partners, see shareholders
Medici, bank, 6, 80, 96, 174n, 243n, partnerships, see companies
246-7, 250 Passerini, family, 23; Luigi, 6, 13-14, 19,
Medici, family, 16 27,31,35
Melis, Federigo, 103, 114 Pegolotti, Francesco, 57, 65, 84, 87, 90,
merchant-bankers, 2, 219-20 96
Milan, 144 Peruzzi, Arnoldo di Amideo, 15, 19, 21,
mints, 194-5 22,23,25-6,31,77, 128
Index 289
Peruzzi, Arnoldo, d'Arnoldo, 7, 26, 77, 89, 100; overhead costs, 116, 145,
135,261-2 155, 174; papal business, 131, 187,
Peruzzi, Bonifazio, 92, 190, 264, 265; 204, 217-18, 235; Paris lawsuit, 89,
career of, 89, 117, 148, 167, 189, 192; 111, 187-8, property ownership and
death of, 34, 74, 97, 209-11, 212; in leases, 27, 69, 107, 114, 174, 207;
England, 33, 34, 80, 84, 86, 88, 97, rate of return, 132, 151, 153, 157,
161, 162-3, 173, 199-200 164, 259; role of chairman, 25, 83,
Peruzzi, chapel, 31-3 89, 100; secret books (see also
Peruzzi Company: accounting anoma- Peruzzi, Giotto, secret book of), 34,
lies, 117-20, 122, 235-6; accounting 77, 105, 106, 108-23, 212, 222, 232;
for interest, 114, 116, 157, 195-6; subsidiary books, 105-8, 113, 116,
accounting systems, 5, 98, 103, 105- 117, 169, 180-3; wool trade (see also
23, 223, 230; assets book, 34, 77, England, wool trade), 34, 133,
106-23, 212, 232; banking and 167,172-3, 174, 189, 191, 198, 199,
lending, 69-70, 173, 183; bankruptcy 206, 224, 239
of, 1, 5, 35, 104, 110, 116, 179, 183, Peruzzi Company, branches, 55, 79, 83,
216, 229, 230-41, 245; bankruptcy 84, 99, 100, 113, 129, 134, 144, 221,
negotiations, England, 237-9; 224, 233, 236; in Avignon, 81, 86, 89,
branch accounts of, 106, 113-14, 145, 147, 151, 183, 221, 223, 235; in
116, 121, 138, 180, 193, 206, 257-8; Bruges, 72, 86, 89, 129, 145-6, 161,
capital, 25, 68, 114, 116, 128, 136, 182, 221, 269; in Cyprus, 87, 129,
153, 156-7, 167, 180, 184, 256, 259- 134, 144; in England, 84, 85, 86, 89,
65; charitable donations, 83; 236; 97, 129, 145, 148-51, 162-3, 182,
control systems of, 29, 84, 100, 115, 189, 221, 222-3, 232, 235, 237, 245;
167, 223, 224; corporate reorganiza- in Genoa, 144; in Majorca, 55, 71,
tion of 1300, 5, 25, 68, 128-9; 87, 134; in Naples and Barletta, 85-
creditor claims, 216, 228, 232-5, 6, 87, 89, 129, 133-4, 136, 140, 144,
238-9; debt collection, 106, 111, 114, 163, 180, 182, 183, 206, 221-2, 232,
131, 164, 209; deposits, 68, 108, 113, 235; Paris, 72, 86, 129, 145, 146-7,
121, 158, 162, 180, 193, 195-6, 224, 151, 182, 186, 187- 8, 192, 196, 206-
230; dividends and profit allocations, 7, 221, 223, 232, 235; in Pisa, 129,
71, 117, 119, 131-2, 138, 153, 164, 144; in Rhodes, 87, 114, 129, 134,
184, 230, 259; early operations, 21; 138, 145, 151; in Sardinia, 55, 87,
early lending in England; 188-9, 198; 134, 223; in Sicily, 71, 86, 89, 96, 118,
employee relations, 14, 207, 221-4, 168, 195, 221, 223, 232; in Tunis, 55,
230, 237; English venture with Bardi 87, 129, 134; in Venice, 89, 129, 144
Company, 4, 34, 39n, 86, 179-80, Peruzzi Company, shareholders, 22, 25,
190, 191-3, 198-201, 203, 205, 207, 68, 77, 110, 112, 120, 151, 164, 188,
214-16, 218, 224, 230, 231, 234, 237, 223, 234, 259-60; access to company
240-1; expense and salary accounts, assets, 92-3, 155, accounts of, 113,
117, 118, 120; factors (employees), 116, 149, 157, 195, 224, 265; as
12, 82, 86, 88, 94, 113, 146, 174, managers, 85-9, 94, 96-7, 161, 226;
207n, 221-4, 233; factors, compensa- compensation of, 92-4, 119-20, 236;
tion of, 90-2; general merchandis- list of, 261-4; turnover of, 132, 135-
ing, 145, 174, 183, 223; grain trade, 6, 156, 158, 168, 184-5, 189-90, 212
51,53, 163, 164-7,223,243; Peruzzi Company, subsidiary "compa-
Hospitalers, see Hospitaler order; nies," 78-83; compagnia della
interest paid, 132, 155, 207, drapperia, 78-9, 81-2, 172, 222;
intercompany operations, 145, 183; compagnia della limosina (charity), 79,
lending policy, 190-1, loan balances 82-3, 260, 261- 4; compagnia della
with Edward III, 192, 210, 239, 245; mercanzia, 78-9, 80, 81; compagnia
logo and seal, 14, 76-7; management della tavola, 78-9, 80, 81
policies, 84-6, 163, 167, 185-90, 212; Peruzzi, Donato di Giotto, 93, 99, 117,
manufacturing, 80, 82, 99, 170-2; 263-4, 265
organizational structure, 4, 5, 75, 77- Peruzzi, Donato di Pacino, 89, 120, 156,
29° Index
161, 209n, 234n, 263-4, 265; as 167; policies of, 85, 96, 116, 148, 173
receiver general, Flanders, 81, 99 Peruzzi, S. L., 34, 270
Peruzzi, family, 35, 214; corporation and Pessagno, Antonio, 60
fund of, 20, 23, 37, 154; early history Philip IV, "the Fair," king of France, 21n,
of,14-19; geneology, 13, 252-5; non- 24, 72, 127,146, 160, 268; dispute with
company activities, 12; political Boniface VIII, 130-1, 135
influence of, 5, 19, 20, 24, 26, 33, 35, Philip VI, king of France, 168, 209n, 221
36; post-bankruptcy situation of, 35- Pinto, Giuliano, 141-2
7, 239-40, 242, 243, 246; relationship Pisa (see also Florence, war with; Peruzzi
with Peruzzi Company, 4, 5, 37, 224, Company, branches), 66
240-1, 243; social status, 16, 20; Pistoia, 28, 133, 152, 156-7, 159
sources of wealth, 17-19 plague of 1347-50, see Black Death
Peruzzi, family, various members: Pole, William de la, 38, 197, 207
Amideo di Filippo, 16, 26, 96, 261-3; Ponci, Gianni, 25, 128n, 135, 261
Bartolomeo di Giotto, 234n; Berto di popolo grasso, popolani, 2 3 - 4 , 25, 3 3 , 151,
Ridolfo, 234n, 264, 265; Bireo di 213,228-9
Filippo, 26, 152; Chiaro di Filippo, popolo minuto, 213
15, 26, 27; Donato d'Arnoldo, 32; Postan, M. M., 202, 239n
Filippo di Pacino, 86, 96, 185n, 261- Prato, 27, 133
3; Geri di Filippo, 261; Giovanni di Prestwich, Michael, 239n
Giotto, 152, 160; Guido di Filippo, priorate, 23
15, 26, 96, 158, 261-3, 265; Iacopo di profits, s^Bardi, company, profitability;
Pacino, 16, 156, 261-2; Lepre di Peruzzi Company, dividends and
Guido, 234n, 264; Niccolo di profit allocations
Amideo, 264, 265; Ottaviano di Provence, 41, 46, 53
Amideo, 26n, 234n, 264, 265; Pacino Puglia, 45, 48, 51, 130, 166
di Arnoldo, 15, 21, 22, 35, 77, 128;
Pacino di Guido, 26, 81, 158, 263-4; Ragusa (Dubrovmik), 50, 55, 87, 134
Ridolfo di Donato, 96, 97, 262-3; Raugi, family, 256; Banco, 25, 128n, 135,
Rinieri di Pacino, 184, 261-3; 168, 261-2; Giovanni, 261-3
Roberto di Tommaso, 239; Salvestro Renouard, Yves, 41, 175, 268
di Pacino, 120, 262-3, 265; Simone Rhodes (see also Hospitaler order), 72,
di Rinieri, 35, 36, 239; Zanobi di 87, 107, 114; Peruzzi Company fast
Giotto, 26 ship to, 84, 204
Peruzzi, Filippo di Amideo, 19, 24, 25-6, Ricciardi, company of Lucca, lln, 38, 40,
27,28,31,37,77, 130, 190,261; 43, 57, 245; bankruptcy of, 62, 85, 200;
career of, 15, 16n, 20, 22, 23, 96, English operations, 48, 58-9, 88
127, 250 Richard I, king of England, 43
Peruzzi, Giotto d' Arnoldo, 15, 32, 77, Richard II, king of England, 205n,
89, 261-4, 265; career of, 23, 27, 29- 241-2
31, 96, 134, 167-8, 173, 184, 188; Robert, king of Naples,175, 226n, 248;
death of, 34, 117, 185n, 189-90; debt as friend of Peruzzi, 27, 28, 30, 53,
to company, 152-5, 170, 243; secret 134, 168; as protector of Florence,
book of, 7, 16n, 18, 157 135, 137, 140, 152, 158-9, 218-21,
Peruzzi, Pacino di Tommaso, 34-5, 120, 225-6, 269- 70; death of, 227
264, 265; as chairman in bankruptcy, Romagna, 45, 53, 135, 141
233, 234n, 235-6; career of, 89, 97, Rome, 127, 129, 131, 158, 175
117, 211, 212-3; political connec- Roulx, Delaville le, 137
tions, 216-17,224,236 Russell, Ephraim, 199
Peruzzi, Simone di Chiaro, 15, 16n, 26,
35, 190, 256; career of, 27-8, Salvemini, Gaetano, 16
186, 228 San Gimignano, 27, 28, 29
Peruzzi, Tommaso d'Arnoldo, 37, 77, 89, Sapori, Armando, 41, 43, 68, 89, 95, 97,
190, 261-3; career of, 23, 27, 28-9, 116, 167, 194, 206, 241, 268; on
33, 130, 168, 250; death of, 31, 164, Bardi coup, 213-4; on Brienne
Index 291
dictatorship, 226, 228; on Ludwig of with Naples, see Naples; resources of,
Bavaria, 219-20, on Peruzzi Com- 4, 55, 64, 182, 201- 4, 239, 244
pany, accounts, 7n, 95, 110, 112, 115,
121, 131-2, 156, 157-8, 199, 204, Tagliacozzo, battle of, 46
212n, 216, 259; on Peruzzi Company, Talamone, 56
bankruptcy, 230-3, 240n taxes, see Florence, taxes; Naples, export
Sardinia {see also Peruzzi Company, tax
branches), 45, 141 Templar, order, 21, 22, 72, 135, 137
Scali, company, 38, 160; bankruptcy of, textiles {see also Flanders, textile
40-1, 62, 81, 147n,160,162-4 industry of; Florence, textiles;
Scali, family, 16 Naples, textile trade),143, 171
Scotland, 168, 192,207 transaction costs, 173-5, 249
shareholders {see also Peruzzi Company, transport costs {see also grain, transport
shareholders), 76; access to company costs), 63, 65-6, 174
assets, 92-3; unlimited liability of, Trasselli, Carmello, 118n
20, 76, 110, 154,240 Tunis, see Peruzzi Company, branches
Sicily {see also Peruzzi Company,
branches), 55-6, 71, 130; grain of, Ubaldini, Piero, 97, 120, 168, 184, 264,
56, 166, 217, revolt of 1282, 46 265
Siena, 14, 28, 47n, 50, 176, 269 Usher, Abbot, 108
Signa, 66
Silimani, Ruggieri, 25, 87, 185n, 261-3, Valori, Taldo, 84, 162, 214, 217
265 Venice {see also Peruzzi Company
Soderini, brothers, 224, 243; Geri, 89, branches), 43n, 55, 141, 177-8, 205-6
97, 168, 264, 265; Ghuccio, 89, 168, Villani, family, 20; Francesco, 269;
234n, 264, 265; Giovanni, 89, 168, Matteo, 231,269
264, 265 Villani, Filippo, 81, 132, 147, 185n, 231,
southern Italy, see Naples, Angevin 232, 234n,261-4, 265, 269, 270
kingdom of Villani, Giovanni, 25, 129; as Florentine
Spain, 163, 183 economist, 1, 48, 133, 144, 166, 169,
Spiglati, Bandino, 25, 128n 193-5, 201; as Florentine historian,
Spufford, Peter, 118n, 177, 267 7, 14, 16, 23-4, 130, 141, 213, 217,
Strayer, Joseph, 146 219-21, 229; as Peruzzi Company
Strozzi, family, 33, 90, 242 shareholder, 21n, 127, 131-2, 261;
Sumption, Jonathan, 6 biography, 268-70; credibility of,
super-companies, 1-2; bankruptcy of, 216, 231, 245, 268-71; on Peruzzi
219; breadth of expertise, 244-5; Company bankruptcy, 230-1; on
centralization versus decentraliza- super-company loans to Edward III,
tion, 84-6; competition, 63, 94; 1,231-2,242,268,270
correspondence and couriers, 74, 83, Villaret, Foulkes de, 137, 139
98; definition and description of, 2- Villeneuve, Helion de, 139n
3, 38-40; disappearance of; 6, 246-
50; exaggerated size, 4, 245-6; grain Warden Abbey, 119, 149-50, 164, 259
syndicate in Naples, 3, 141, 173; Wardrobe Book of William de Norwell, 73
losses on loans to Edward III, 1, 4, Wardrobe, Keepers of, 216, 227, 238, 248
242; merchandising operations of, 3, Waugh, Scott, 6
62; office of the chairman, 77-8, 83; Wodehouse, Robert, 227
papal business {see also papacy), 53, wool, see England, wool trade; Peruzzi
61, 187, 221, 225; politics of, 5, 71, Company, wool trade
98; problem of France-England
disputes, 71-2; reasons for emer- Yamey, Basil, 101
gence, 42, 45, 244, 247; relations Yver, Georges, 39n, 70, 140-1, 173

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This book breaks new ground by focusing on the Florentine "super-

companies" of the early fourteenth century in their own right. The

© Cambridge University Press 1994

First published 1994

A catalogue recordfor this book is available from the British Library

Library of Congress Cataloguing in Publication data

ISBN 0 521461561 hardback

List of tables, figures, and map page ix

Part I Anatomy of the medieval super-company

Part II History of the Peruzzi Company

Anatomy of the medieval super-company

One of the problems in analyzing the very large medieval Italian

Much of the literature on Florentine economic history of the first

Years Soldi per bu. Years Soldi per Bu.

only a small operating margin after direct costs to generate enough

The medieval super-companies, like most companies of significant size,

-Co. della - Sicily - Cyprus

Special - Paris - Majorca

Figure 1. Organizational structure of the Peruzzi Company, July 1, 1335.

Annual Salary lire a fiorino Non-Peruzzi Peruzzi Total

referred to earlier. The salaries of Peruzzi family members, cluster-

July 1335 1331-43

Grand Total 80 8 88 NMF NMF NMF

The third means of control was rotation of personnel from location

Table 4. Personnel effectively working for the Peruzzi

In modern terms, this is a small number for a business organiza-

Table 5. Account positions at July 1, 1335 (lire a florino)

Item Assets Liabilities Balance

GRAND TOTAL 742,247 780,210 (37,963)

Unidentified, net (715)

ages of constantly changing relationships into a statistical measure

History of the Peruzzi Company from its

Table 6. Balances owed company by

These balances for a considerable period greatly exceeded Giotto's

The Fourth Company, formed effective November 1, 1324, marked a

1330-1 1331-2 1330-2

Source: R. S. Lopez and I. W. Raymond, Medieval Trade in the

Table 8. Balances at June 30, 1335 (lire a fiorino)

Assets Liabilities Balance

Loans to/deposits from:

Equity 37,963 90,000 (52,037)

Table 9. Assets and liabilities of major foreign branches (lire a fiorino)

Assets Liabilities Balance

Sicily - Trading 37,191 43,083 (5,892)

Paris 21,610 46,290 (24,680)

"Rhodes, Cyprus, Majorca, Sardinia, Tunis, Venice, and Pisa.

The collapse, 1340-1343

The news of the death of Bonifazio reached the company's head-

sonable guide to what was happening to the company during this

structive fighting, triumphed. The burning and looting that accompa-

The situation following the bankruptcy as reported is replete with

We have seen in the course of this study that the super-companies,

I. Genealogical charts of the Peruzzi Family

Table Al. Detail of "others" balances at July 1, 1335

Assets Liabilities Balance

Other church 208 22,260 (22,052)

Raugi family 484 16,892 (16,408)

All other 4,102 14,103 (10,001)

Grand total 30,712 104,219 (73,507)