Don’t want to dwell on this, because hypocrisy can be such a tired topic. Nevertheless, it’s a very succinct description of how a letter of exchange wasn’t officially seen as usury. Here, give it a gander:
‘The Church’s ban on usury and the images of usurers burning in hell troubled lenders and borrowers alike. But people needed loans and there was no point in lending without a return. It was important to find a solution that wasn’t just “a way around” the ban, but that really did not seem to be usury at all. The letter of exchange was a “most delicate invention” and “a most subtle activity,” wrote Benedetto Cotrugli in 1458 and what’s more “impossible for a theologian to understand.”
For more than two hundred years, it allowed bankers to make a profit on loans without feeling they were usurers. Foreign currencies weren’t usually held in quantity in any one town, so if someone wanted to change florins into, say, English pounds, the florins were handed over in Florence and the pounds picked up in London. Officially, travel to London took ninety days, so someone kept the florins a while before repaying since the exchange rate was always more favourable for the local currency. In London, a similar exchange deal could be made to turn the pounds back into florins, so that after ninety days in Florence again, there might be a profit of 10 to 20%.’
(source: Money and Beauty exhibit at Palazzo Strozzi in Florence)
Did you catch all of that? Today, most of the non-Muslim world doesn’t give the subject of usury a second thought, but we certainly have plenty more examples of this sort of double standard in our societies.
I doubt I’ve fully explored all the things I thought about during my short stay in Florence. Might write about other things and then come back to Money and Beauty. Who knows where this lahikmajoe blog is going anyway.
Am I the only one enjoying it so far?
I don’t know much about financial dealings back then or now,but i’m always happy to follow a blog that doesn’t know where its going…
That lack of a plan is the only plan until now.
From an article you might find interesting – I did. http://www.ams.org/samplings/feature-column/fcarc-book1
1. The early history of double-entry bookkeeping; Manzoni’s Quaderno
Double-Entry Bookkeeping is a method for keeping track of the income and expenditures of a small firm. Although the method dates back at least to Genoa in the 14th century, the first written description seems to be a 1458 manuscript by Benedetto Cotrugli (Benedikt Kotruljevic, of Dubrovnik). The mathematician Luca Pacioli included this technique in De Computis et Scripturis, part of his Summa de Arithmetica, Geometria, Proportioni et Proportionalita, printed on a Gutenberg press in Venice in 1494. Among the many translations and adaptations of De Computis was a work by Domenico Manzoni, a native of Oderzo, published in 1540 and entitled Quaderno doppio col suo giornale … : “The Double Ledger with its Journal, newly composed and organized with extreme care, following the custom of Venice.” I used a modern reprinting of the Quaderno, in Opere Antiche di Ragioneria, Milan 1911.
The Quaderno is a textbook, and, as far as I can tell, the first book to use a realistic, fully worked out example to explain how double-entry bookkeeping works, an expository technique still used today. Manzoni leads us through a year in the life and fortunes of a Venetian merchant, one Alvise Vallaresso. We learn a lot about Alvise, because Manzoni’s exposition begins with a complete inventory of the man’s belongings and possessions as they were on the first of March 1540, and continues day by day tracking every lira of income and every soldo, grosso, and picciolo of expenses of his business (and of his household; the accounts were not kept separate) until the last day of February of the next year.
A note on currency. Merchants in Venice used a system of lire, soldi, grossi, piccioli akin to the pounds, shillings and pence recently abandoned in Britain: 32 piccioli make one grosso, 12 grossi make one soldo, and 20 soldi make a lira. Thus a lira was a substantial amount of money; a rough equivalent might be $1000 in today’s currency. Another denomination is the ducato, which is 2 soldi or 24 grossi, like the old British florin. Prices are usually quoted in ducati and grossi; while the books are kept in lire, soldi, grossi, and piccioli.
On our rough scale a ducato is $100, a tenth of a lira. Even though translating this currency into dollars may be meaningless, it does give an easily grasped and accurate impression of relative costs.
A note on language. The Quaderno is written in Italian, but contains many words in their Venetian pronunciation (staro for staio, feze for fece, etc.) and in addition many words peculiar to Venetian. My reference for these words has been the Dizionario del Dialetto Veneziano by Giuseppe Boerio (Venice, 1856). In particular Boerio gives modern equivalents of the measures miro and bigonzo. For the translation of carisee and zambelotti I am indebted to Luca Molà of Warwick University, an expert on the Venetian textile trade. Thanks also to my colleague Lori Repetti for help with these questions.
In this column we will let Domenico Manzoni teach us double-entry bookkeeping as we follow Alvise Vallaresso through a busy and tumultuous year in 16th-century Venice.
Goodness trailblazer1. Not sure how you found this blog, but am pleased you did.
Thanks for this fantastic reference, and I hope you continue to contribute.
The whole topic of Double-Entry Bookkeeping is intriguing, and I wouldn’t be surprised if I found myself bringing it up again.
And we thought the mob and the government created double bookkeeping. The internet is such a vast library of info – I just googled “Benedetto Cotrugli in 1458 ” to find this column.