Milan to 1430

 

Before 1393, Borromeo and Giovanni, sons of Filippo di Lazzaro, had established an active business in Milan that was to last until at least the mid-1450s. Much of their initial success came from the profits of office in the administration of the Visconti dukes. Giovanni was for some time Treasurer General of the city and his nephew and adopted son and heir Vitaliano was also ducal Treasurer at various times between 1418 and 1430.[1] He and his uncle made loans to the Visconti in anticipation of taxation and in return obtained widespread privileges, fiefs and estates, most notably around Lake Maggiore, to the north-west of the city.

 

 

Florence

 

Another branch of the family, the descendants of Bartolomeo di Francesco, settled in Pisa soon after the expulsion from San Miniato and by 1395 Ludovico, Francesco and Piero di Bartolomeo had their own company there. The partnership was dissolved when Francesco moved to Genoa in 1404 and around 1409 Ludovico and Piero were allowed to return to Florence. This important Florentine branch of the family has largely been ignored by genealogists and historians and it is hard to place it correctly in the family’s genealogical tree. In 1420 Piero Borromei was Treasurer of Bologna, following a loan of 15,000 florins to Pope Martin V, and in the same year he was dealing with iron mines in Elba.[1] The Florentine Catasto of 1427 shows Giuliano di Piero with assets of about 21,000 florins and Tommaso di Matteo [?] with less than 2,400.[2] Corporate activities in Florence continued in the names of Piero di Bartolomeo and Gabriello di Lodovico, then of Gabriello, followed by Gabriello and Benedetto di Lodovico and eventally, after 1425, of Antonio (?di Lodovico). During these years there may have been yet another Borromei company there, in association with Antonio Corbinelli. Piero di Bartolomeo also became a partner in Galeazzo di Borromeo Borromei & co. of London, which had recently been established by the Venetian branch of the family.

 

 

Venice

 

Alessandro di Filippo Borromei had already created a company in Venice by 1395, in partnership with Domenico d’Andrea, a Venetian citizen of Sienese origin. By 1422 he had a new partner, Lazzaro di Giovanni, who was originally from Volterra in Tuscany. During the 1420s, it was this branch which showed the most signs of vitality. Around 1420 Galeazzo, nephew of Alessandro di Filippo, created two companies in the north of Europe, in Bruges and London, both in partnership with Antonio di Francesco. Unfortunately hardly anything is known about them, nor about Alessandro’s activities in Venice.[1] However, they must have been very successful, because in the Florentine Catasto of 1427 Alessandro was the fourth richest man in the city, being assessed at 57,000 florins, 50,725 of them in luoghi of the Monte Comune (shares of the public debt) and the rest in houses, shops and pieces of land. At his death in 1431, his three nephews, Galeazzo, Antonio and Giovanni, inherited all this wealth, along with shares in the Venetian, Bruges and London companies. In the mid-1430s the Venetian branch of the family also established its own company in Florence, under the name of Galeazzo and Giovanni di Borromeo, and this was to last until the late 1470s. After Galeazzo’s death in 1438, both companies in northern Europe were re-formed in the name of his nephew Alessandro, with Antonio di Francesco still as a partner. Galeazzo had also established a company at the papal court in partnership with Tommaso Spinelli who in 1435 was in Basel, where the Great Council of the Church had just opened. On Galeazzo’s death the company passed to his nephew, Borromeo di Antonio. Profits of 7,937 cameral florins were made between 1437 and 1441, but compared to those enjoyed by the Medici they were relatively small.

On the death of Alessandro di Filippo in 1431, two new partnerships were created in Venice, both with Lazzaro di Giovanni, one in the name of Alessandro’s nephew, Antonio di Borromeo, the other with Antonio’s son, Borromeo. Gabriello Borromei was still working in Florence in 1438, whereas other members of this branch of the family were active elsewhere, notably Gabriello’s cousins Giuliano and Alessandro di Piero who in 1433 were employees of Tommaso Spinelli in Venice.

 

Milan from 1430

 

By the 1430s the most significant developments were in Milan, however. Vitaliano Borromei and his Milanese partners had undertaken their foreign operations before then through the companies of the Venetian branch of the family, but around 1434, they decided to expand. Vitaliano was no longer Treasurer of the Duchy, an activity which had undoubtedly brought him wealth and prestige but which also made it difficult for him to use his resources for other ventures. A single cash loan to the Visconti had cost him almost £20,000 imperial of Milan , for example.[1] So the Milanese branch of the family decided to open its own companies in the north of Europe in Bruges and London and then, just a year or two later, in Barcelona . The Borromei Bank Research Project focuses on the activities of the two companies in London and Bruges, from 1436 to 1439 and does so because of the survival in the Borromeo-Arese family archive of two ledgers, one for Bruges for the year 1438 and the other for London for the years 1436 to 1439.[2]

 

 

 

Filippo Borromei & co. of Bruges and London [1]

 

The first company was established at Bruges, under the name of Vitaliano’s teenage son, Filippo, hence its name, Filippo Borromei & co. It opened for business on 1 January 1435 and, according to the contract establishing it, was to last for five years. The initial capital was £3,000 flemish which was entirely provided by Count Vitaliano Borromei. But the profits were to be divided between Vitaliano (75 per cent), Paolo di Antonio da Castagnolo of Florence and Giovanni di Michele Micheli of Lucca (12.5 per cent each), and it was they who had to go to Bruges.[2] Towards the end of 1435 Giovanni Bindotti moved from Milan to London and began organizing the imminent opening of a branch there. During the first months of his stay he seems to have kept all the accounts in a small ledger, his ‘quadernetto’, until 8 March 1436 when Giovanni Micheli moved to London from Bruges and took over the management of the bank. It was clearly a branch of the company at Bruges and again in the name of Filippo Borromei: both ledgers record the transfer of £1,600 flemish (or 16,000 flemish écus), equivalent to £1,431.17.1 sterling at an exchange rate of sterlings 21 5/12 per écu, from Bruges to London. As the money came from Bruges, the initial capital of £3,000 flemish must have been used to establish both banks, and cannot be taken as the capital for Bruges only. From the ledgers it is also clear that at the end of each year all the profits from the London branch had to be transferred to Bruges, where they were then credited to the Profit and Loss account of the main bank.[3] Around 1436-37 a third bank called Filippo Borromei & co. was founded at Barcelona, but as no ledgers, contracts or other material concerning this bank have survived in the Borromei archive, it is not known whether it had complete autonomy from the Bruges-London banks or from the main company at Milan.[4] The same strategy of founding a main company in Bruges with a branch in London was also adopted by other Italian families: for example the Bardi, the Salviati and the Medici. Before opening their bank in London in 1446, with a capital of £2,500 sterling, the Medici had been operating through an office in London financed and staffed by the Bruges branch.[5]

            It is not our purpose here to provide a detailed analysis of the operations of the two Borromei banks and their respective roles in trade and exchange between north-western Europe and the Mediterranean world and within north-western Europe itself. To some extent we have already done that in recently-published and about-to-be published articles.[6] More will be said below about how the bank in Bruges was run; how and by whom the ledger was kept; principles and problems of translation and calendaring; and the use of the search tools. For the moment our current findings can be summarised as follows, remembering that work on the London ledger is still in progress and that the two banks must be seen as one operating unit.

 

 

Account Holders (Clients) [1]

 

The company at Bruges was initially a success, although to see it functioning solely at Bruges would be a mistake. It did a considerable amount of business at the great fairs at Antwerp and Bergen-op-Zoom, and at Middleburg and its outport Arnemuiden. The Borromei rented a house in Antwerp for six months of the year where they and some of their Italian clients stayed at fair time. In Bruges they dealt extensively with other Italian companies or individuals resident there, such as Ubertino de’ Bardi & co., Goffredo Rapondi, Girolamo Lomellino, Lorenzo di Niccolò di Zanobi & co., Simon Francesco Maggiolini and Lorenzo Damiani & co., and above all with Alessandro Borromei and Antonio di Francesco & co., a branch of messer Antonio Borromei and Lazzaro di Giovanni in Venice. They are referred to in the ledger as ‘li consorti’ whilst the Bruges bank’s other main clients, Filippo Borromei & co. of London and of Barcelona were known as ‘i nostri di Londra’ and ‘i nostri di Barzalona’ respectively. Obviously the bank also had contacts with the main company at Milan, Filippo Borromei and Alessandro and Paolo da Castagnolo & co. (which we have called simply Filippo Borromei & co. of Milan in the database) and with Count Vitaliano himself, who seems to have had a lively interest in the purchase of hunting dogs in England which were they sent overland to Italy via Bruges. On the main European money market at Venice, major exchange operations were conducted with Cecco di Tommaso and brothers and above all with messer Antonio and Lazzaro di Giovanni who are referred to as the ‘Borromei of or at Venice’.

            These were not their only correspondents, bankers with whom they did business in other European centres. At Venice they also dealt with Agnolo di Zanobi Gaddi & co., Cosimo and Lorenzo de’ Medici & co., Arrighino Panigarola, Niccolò Ranghiadore and various member of the Corner family. Their main correspondents in Florence were Bernardo da Uzzano and Bianco d’Agostino & co., Giovanni Rucellai & co. and Francesco Ventura & co., whilst in Genoa, Milan’s main outlet to the sea, they used various members of the Fornari family and Oddo Raù, originally from Pisa. For ecclesiastical clients access to the papal curia was of vital importance and in 1438 it was at Bologna, where the Borromei Bruges sent bills to Francesco Boscoli and Giovanni da Uzzano & co. rather than to Borromei Borromeo & co., surprisingly. Yet in some ways their contacts outside Italy are more interesting. One of the clearing houses for the settling of accounts between northern and southern Europe was the fairs at Geneva. Here the bank used Guglielmo da Marliano, Arrighino Panigorola (again) and Giovanni Panigarola and brothers whilst at Basel Bernardo da Uzzano and Diego degli Alberti & co. and Cosimo and Lorenzo de’ Medici & co. remitted and accepted bills of exchange from and for them. In southern France, or perhaps more accurately the lower Rhône valley, the chief centres for exchange were Avignon and Montpellier. At Avignon, the Bruges’s bank’s correspondents were Bernardo and Matteo Ricci & co., who handled in part the exchange from London via Bruges to pay Sir Thomas Rempston’s ransom to Tanneguy du Chastel, and Jacopo Ventura & co., whilst at Montpellier they dealt with Bernardo Ventura and Giannozzo Buccelli & co. Finally a great deal of business was done with Iberia and especially but not exclusively with Barcelona. In addition to Filippo Borromei & co. of Barcelona, bills to and from Bruges were taken up or paid by Giovanni Buzacherino and Giovanni della Seta, Pere and Ramon Grau, Joan Riba and Giovanni Ventura & co. The bank also had correspondents in Seville (Gabriello delle Banche and Giovanni Provana & co. and Jacopo Grillo) and in Valencia (Piero Buzacherino, Andrea da Casale, Cecco di Tommaso and brothers and Michele dalla Vecchia), whilst two important contacts, Joan Cardona and Francesc Dezpla were simply described as Catalans. Finally, at Cologne, they used Antonio de’Rossi for both local and international business.

Through these extensive contacts and like most other Italian banks in north-west Europe, the Borromei were able to conduct their exchange and commercial operations across western and southern Europe, from the Guadalquivir to the Rhine and from Palermo to Middleburg, Antwerp, Bergen-op-Zoom, Sluys, Bruges and London. The one notable absence was a direct link to Paris, but given the political turmoil of the 1430s that is perhaps hardly surprising. What the Bruges ledger shows, however, and fairly uniquely at the moment, is the importance of the facilities the bank offered its local account holders. They were from  north-western Europe and  can best be split into two groups. The first came from the Bruges and other cities and towns in the Low Countries, from the Rhineland and from South Germany, with several major companies from Augsburg and Ulm having factors  based in either Antwerp or Bruges. The second were the English or perhaps better the Londoners, who did not come to Bruges itself but traded to the fairs at Antwerp and Bergen and to Middleburg. The activities of both these groups and of the Borromei in the wool trade between Calais and Antwerp and Malines/Mechelen and in fustian and madder to Iberia and England, have been studied in detail in our three recent articles and will not be enlarged upon here. What must be stressed is that both in Bruges and, to a much greater extent in London, the Borromei had local clients with whom they traded and to whom they offered both banking and credit facilities.

 

Trade and Exchange, Profits and Losses

 

Trade and exchange between northern Europe and the Mediterranean world were by far the largest part of the bank’s business, however, with exchange to and notably from Venice predominating. At first both banks made quite healthy profits but from 1437 onwards there was a quite dramatic shift, with Bruges suddenly moving heavily into the red, as the following figures show.

 

              

                 Figure 1. Profits and Losses, London and Bruges, 1435-38

 

Since the two banks operated as one unit, it is best to consider their profits and losses together, which produces these figures.

 

 

Figure 2. Combined profits and losses, 1435-38

 

There can be no doubt that the Borromei’s northern operation was running at a considerable loss, even when the profits from London are taken into account. Why?

            As ever, there are no easy answers to this question. Until such time as the London ledger has been fully entered on the database and the accounts it holds properly analysed, an element of speculation must always be involved but, at present, two possible explanations can be offered. The first takes into account the turmoil in Bruges in the 1430s. From 1429 onwards Philip the Good, duke of Burgundy, faced severe monetary and political problems in his northern territories as well as with their main trading partner, England. The imposition of the bullion ordinances at the Calais Staple in that year led to increasingly bitter cross-Channel disputes that were one of the main reasons behind the duke’s abandonment of England for France at the Treaty of Arras in 1435. Before then, and in retaliation for the bullion ordinances, he had imposed a ban on the sale of English cloth in all his territories[2] and following the siege of Calais in 1436 there was an almost complete interruption in the wool trade. Commercial disputes with England were not to be resolved until 1439 and the bullion ‘wars’ continued for a further three decades. Within Flanders there was civil war. Bruges rebelled in 1436 against the duke’s attempts to introduce a unified system of government for his northern territories. The revolt was almost inevitably crushed and the city had to pay the enormous indemnity of £480,000 flemish to regain his ‘pleasure’. This came at a time of severe famine in 1437-38 and against a background of monetary confusion. Duke Philip’s manipulation of the currency for his own profit had led to a widespread distrust of his coinage and in 1433 he had been forced to agree to monetary reform. The gros vierlander was introduced as a common currency throughout his northern territories and Philip had to agree to maintain monetary stability for the next 20 years. The value of the coinage was severely deflated, with new gold and silver coins 6.1 and 7.0 per cent stronger than those of 1428. To attract money to his mints the duke imposed strict bans on the export of bullion from his lands and cut his seignorage to a minimum. Eventually, and probably by 1437, the re-coinage proved a success but there are signs in the Borromei ledger of continuing uncertainties, with references to ‘old’, ‘bad’ and ‘good’ money.[3]

Yet, if the Borromei’s profits were severely affected by these circumstances, then so should those of other companies, and they were not. Bernardo Portinari was sent to Bruges by the Medici in 1436 to settle outstanding debits and ‘to inquire about local customs with respect to trade as well as to bills of exchange, and to find out the strength and the credit standing of the principal foreign merchants residing in Bruges, especially the exchange dealers’. His report must have been favourable, because he returned to Bruges to act as an agent for the Medici and then became an active partner in the bank they founded there in 1439. It was soon making good profits: £670.1.5 flemish in 1439-1440, £498.16.4 flemish in 1441, £302.0.0 flemish in 1442 and £538.7.6 flemish in 1443.[4] Political upheaval, famines and monetary revaluation did not mean heavy losses for the Medici in the late 1430s and early 1440s[5] and other reasons must be sought to explain the Borromei’s failures, if failures they were.

The losses in 1437 could have simply been the result of bad management and it is quite possible that in 1438 a desperate and unsuccessful attempt was being made to recoup them by gambling on the exchange market. But, as we have argued elsewhere, there were sound commercial reasons behind for the very obvious losses on exchange that year. The Borromei were willing to borrow heavily from their chief correspondents in Venice, Cecco di Tommaso and brothers and, most notably, from messer Antonio Borromei and Lazzaro di Giovanni, in order to finance their export trade from England through London, Sandwich and Southampton. De Roover, in his classic study of the Medici bank, argued that trade between northern and southern Europe was constantly unfavourable to the north, in terms of the balance of payments. The Italians found ready buyers for their exports of luxury goods and raw materials vital for cloth industry but were hard pressed to find goods of equal value for export. They were no longer interested in Flemish cloth, since their own manufacturers could supply Italian needs. But English wool was still needed by the lanaiuoli of Florence and Milan and this they still bought, although in much reduced quantities compared with those of the late fourteenth and early fifteenth centuries. Bruges was still essential link point between south and north for the Italian merchant-bankers because credits could be raised through this great financial centre to pay for the wool exports from England. But far more was earned from the sale of imports in both Flanders and London and the profits of exchange than was actually needed to buy the wool. The imbalance of trade between north and south was permanent and in the long run could only be settled by the export of bullion from Flanders to the south.

This, in brief and over-simplified, is de Roover’s thesis.[6] The evidence from the two Borromei ledgers suggests a slightly different argument. The companies in Bruges and London were indeed involved in the export of wool to the Mediterranean but even more so in the export of English cloth, not the traditional heavy broadcloths but the lighter and cheaper streits, chiefly manufactured in Essex and Suffolk. De Roover did not take these cloth exports into account and these two ledgers strongly suggest that he should have done so. The value of the Borromei’s exports from England far exceeded profits made from the sale of imports between 1436 and 1439. Money had to be moved by way of exchange to England via Bruges and the 1438 ledger shows how this was done. Credit was raised in Venice and from Filippo Borromei & co. of Barcelona and then transferred to Filippo Borromei & co. of London by way of exchange to cover the costs of buying exports. These were then sent mainly to Italy, where the wool and cloth could be sold at substantial profits, as Fryde has shown.[7] Nor was there any need for the transfer of specie, gold or silver in either coins or bars, to settle supposed deficits. The Bruges ledger shows that this could be done by using a hitherto little or unknown written instrument, which we have called the ‘letter of advice’[8] By it the merchant-banker asked his foreign correspondent to make one party in, say, Venice, creditor and the other debtor on a certain date and at a specific exchange rate. The writer of the letter was often one of the parties involved although that was not always the case. There are in the Bruges ledger 204 such letters of advice to a total value of £22,745 15. 8 flemish. This compares with 1,233 bills of exchange to the value of £95, 563 flemish, where the Borromei acted as one of the four main parties, deliverer, taker, payor or payee.[9] Venice (£38, 732 flemish) and London (£16, 634 flemish) were the main destinations from which bills were received and to which they were sent. The majority of them were clearly commercial transactions, rather than bankers making their returns through exchange and re-exchange, that is, sending money to Bruges and then immediately sending the same sum back to profit from exchange rates that, again, always seemed to favour southern Europe against the north, as de Roover has argued.[10]

            These preliminary analyses of the commercial and financial operations of Filippo Borromei & co. of Bruges suggest a slightly different mode of operation from those of the Medici. Bruges was the staging post for the transfer of credit to London to pay for profitable English exports. This was bound to mean losses for the company which could not be offset by the profits from the sale of imports in Bruges, where the market for Mediterranean goods was very limited in 1438; from commission on exchange and commercial transactions undertaken for its clients and participants; and from the local trade in fustian, madder and wool bought at Calais and sold to clothiers from Antwerp and Malines/Mechelen. Such losses seem to have been acceptable to the Borromei Milan, providing substantial profits could be made in Italy from the sale of English wool and cloth. None of this can be proved, of course, until the ledgers of the main company at Milan have been fully investigated and even they may not provide a final answer since the libri segreti have not survived. The theory also presupposes what can be seen in action, the very close relationship between the Borromei of Milan and the Borromei of Venice who also had banks in Bruges and London. Had other ledgers survived for Filippo Borromei of Bruges, especially those for 1439 (libro azzurro) and 1440 (libro bianco); that for London for 1440-41; any of the ledgers for the first bank at Barcelona; and then for the second series of banks at Bruges, London and Barcelona from the mid-1440s onwards, then it might have been possible to test this theory. They have not and so theory it must remain, albeit an attractive one.

 

 

Closing and Re-opening the Banks

 

The Bruges bank ceased trading at some time in 1440 and the London bank closed with or shortly after it. Biscaro argued that it was the losses on exchange to Venice that caused the closure, but most Italian banks did not last beyond the time set out in the contract establishing them, unless it was extended by mutual agreement. A completely new contract with different partners was often drawn up and this is exactly what happened with the Borromei banks at Bruges, London and Barcelona.[1] The staff of the London branch, Giovanni and Niccolò Micheli, Felice da Fagnano and Alessandro da Palastrello appear in the English Views of Hosts trading in the city in the early 1440s and the ledger of Antonio Della Casa & co. at the Papal court contains accounts for Filippo Borromei & co. of Bruges, London and Barcelona in 1441 and 1442. This suggests that they may have still been working for the Borromei, on an informal basis. Biscaro states that at the beginning of 1441 Felice da Fagnano, Count Vitaliano’s brother-in-law was the representative of the company in London, with Vitaliano’s illegitimate son Giovanni alias Prevosto Borromei as the representative of the company in Bruges.[2] Vitaliano may himself have been in financial difficulties in Italy in these years, since he had to sell large parts of his estates in 1444.[3] But he still thought it worthwhile to re-found and re-structure the banks in Bruges, London and Barcelona. By contracts dated 12 March 1443 Vitaliano established two new and separate companies, one in Bruges and the other in London, to be open for business on the 1 January 1444[4]. The company at Bruges, Prevosto e Alessandro Borromei & co., had a capital of £19,200 imperiali. This contract was again for five years (1444-1448), but was probably renewed, in the name of Prevosto only, as the company lasted until 1457. Count Vitaliano again provided the capital and was entitled to 66.6 per cent of the profits, whilst the remaining third was to be divided between Prevosto and Alessandro di Piero Borromei of the Florentine branch of the family, who were sent to Bruges where Alessandro had already worked for the previous company.[5]

The London company had a very similar capital: £19,076.16.4 imperiali. Apart from the initial contracts there is very little surviving information for either of the companies, but they do seem to have worked separately, possibly to avoid the situation that had occurred in 1440 when the closure of Bruges led to the simultaneous closure of London. The bank was known as Felice da Fagnano & co. Felice, whose sister had married Vitaliano and who had been previously involved in the management of the Bruges company, was the manager. Profits had to be divided between Vitaliano, who was to have two thirds, and Felice and Alessandro da Palastrello of Piacenza one third between them. Palastrello had also worked for the previous company in London. All that can so far be said about new company is that in 1448 Vitaliano was thinking of closing it due to bad management but that it was not dissolved until 14 March 1452.[6]

There was a similar restructuring at Barcelona and on 1 January 1445 a new company was established there with a capital of 6,000 milanese florins provided by Vitaliano, who was to have two thirds of the profits, with Arrighino di Ambrogio Pozzobonello taking the other third. They each had a representative in Barcelona, respectively Taddeo di Ardizio Vismara and Francesco di Arrighino Pozzobonello. Initially the company was an accomandita in the name of the two factors but well before the end of the contract, on 20 June 1446, the agreement was reshaped. Vitaliano’s son, Filippo, was now to play a much more important role in the management of the bank. There had been disputes and litigation between the original partners, and Vitaliano had become increasingly distrustful of Vismara.[7]

The person who seems to have been blamed for the apparent failure of the Bruges bank between 1435 and 1440 was its manager, Paolo da Castagnolo. Other members of staff survived and were promoted but by 1445-46 he was no longer a shareholder in the main company at Milan nor was he employed by the Borromei in any other capacity.[8] Winding up the affairs of Filippo Borromei & co. of Bruges and of London was presumably a complex business and the ledgers would have been scrutinised with great care. That, as Biscaro noted, is probably why they have survived and why we are able to discuss them here, 500 years later.

 

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