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A New Look at the Dealings of the Bardi and Peruzzi with Edward III

Published online by Cambridge University Press:  03 March 2009

Edwin S. Hunt
The author is a doctoral student in the History Department of the University of Cincinnati, Cincinnati, Ohio 45221.


The Bardi and Peruzzi of Florence became in the early fourteenth century the largest merchant-bankers ever seen in medieval Europe. Their collapse in the 1340s has been attributed by most historians to huge losses on loans to Edward III of England. This article explores some flaws in the conventional explanation and shows that the firms lacked the resources to have made loans on the generally accepted scale. It also suggests means by which the companies could have recovered at least part of their advances to the king without the results appearing in government ledgers.

Copyright © The Economic History Association 1990

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1 Villani, Giovanni, Storia de Giovanni Villani (Florence, 1587), book 12, chap. 54, pp. 862–63. In addition to the English losses of 1.5 million florins for the two companies, Villani cites repudiations by the king of Sicily of 200,000 forms and severe property damage in Florence stemming from the uprising of September 1343.Google Scholar

2 It should be noted that Edward III, unlike Philip of Spain in the sixteenth century, never specifically repudiated his debts to the Italian companies. His commissioners disputed the amounts and scaled them back sharply after a series of audits, but the final acknowledged debts were simply never paid. For a detailed account of these proceedings, see Russell, Ephraim, “The Societies of the Bardi and Peruzzi and Their Dealings with Edward III, 1327–45,” in Unwin, G., ed., Finance and Trade under Edward III (London, 1918), pp. 93135.Google Scholar

3 Sapori, A., La crisi delle compagnie mercantile dei Bardi e dei Peruzzi (Florence, 1926). Sapori's calculations and conclusions from them appear on pp. 7477, where he actually shows a total of 535,000 forms. Later he adjusted the figure to 594,000 tlorins after reconsidering the sterling-form exchange rate (see fn. 6).Google Scholar

4 Fryde, E. B., “Public Credit, with Special Reference to North-Western Europe,” The Cambridge Economic History of Europe (Cambridge, 1963), vol. 3, p. 460.Google Scholar

5 Fryde, E. B., William de Ia Pole (London, 1988), p. 88.Google Scholar

6 For the sake of simplicity, the data will be presented in only two currencies, the Florentine form and the English pound. The commercial relationship between the form and the English pound varied, but there was an “official” rate fixed at one form equals three shillings, that is, £1 equals 6.67 forms, which was used in transactions between the companies and Edward 111 during the late 1330s and early 1340s. Some scholars have argued that the fixed rate created advantages for the companies while others contend that Edward benefited. Because the fixed rate applied to transactions in both directions, the net effect on any of the parties was probably small; in any case, because of its consistent use in the period under review, the fixed rate is appropriate for this study. See Prestwich, Michael, “Early Fourteenth-Century Exchange Rates,” The Economic History Review, 2nd series, 32 (Summer 1979), pp. 470–82.Google Scholar

7 Fryde, E. B., “Deposits of Hugh Despenser the Younger with Italian Bankers,” in his Studies in Medieval Trade and Finance (London, 1983)Google Scholar, Item III, p. 347.Google Scholar

8 Lopez, R. S. and Raymond, I. W., Medieval Trade in the Mediterranean World (New York, 1955), pp. 370–71Google Scholar; Sapori, La Crisi, p. 218.Google Scholar

9 Power, E., The Wool Trade in Medieval English History (Oxford, 1941), p. 43.Google Scholar

10 Bischoff, J. P., “Pegolotti: an Honest Merchant?” The Journal of European Economic History, 6 (Spring 1977), pp. 103–8.Google Scholar

11 Sapori, La crisi, p. 216.Google Scholar

12 Reynolds, R. L., “Origins of Modern Business Enterprise: Medieval Italy,” this JOURNAL, 12 (Fall 1952), p. 365.Google Scholar

13 Fryde, E. B., “Loans to the English Crown, 1328–31,” English Historical Review, 70 (Spring 1955), p. 208, reprinted in Studies in Medieval Trade. Here Fryde cites many kinds of royal revenue used to pay the Bardi—sale of surplus royal victuals, land revenues, fines, fees, and a share of the indemnity paid by the king of Scotland under the peace treaty terms, as well as cash from the treasury.Google Scholar

14 Fryde, E. B., “Parliament and the French War, 1336–40,” in Studies in Medieval Trade, Item V, p. 265.Google Scholar

15 Fryde, “Loans to the English Crown,” p. 204.Google Scholar

16 Fryde, “Public Credit,” p. 436.Google Scholar

17 Yver, G., Le Commerce er les marchands dans l'Italie méridionale au xiiie et au xive siècle (Paris, 1903); see especially chap. 6, “Les opérations des compagnies fiorentines.”Google Scholar

18 Fryde, E. B., “The Financial Resources of Edward III in the Netherlands, 1337–40,” Revue Belge de Philologie et d'Histoire, 45 (1967), pp. 1146, 1153, 1159; reprinted in Studies in Medieval Trade.CrossRefGoogle Scholar

19 Sapori, La crisi, p. 216.Google Scholar

20 de Roover, R., “The Story of the Alberti Company, 1302–1348, as Revealed in its Account Books,” The Business History Review, 32 (Spring 1958), pp. 5159. Cash on hand was insignificant in seven out of eight statements over a period of 25 years. The exception was a depressed year when cash equaled 10 percent of assets.Google Scholar

21 Sapori, A., Studi di storia economica medievale (Florence, 1947), p. 278.Google Scholar

22 Sapori, A., I libri di commercio del Peruzzi (Florence, 1934). This book is mainly a transcript of the remnants of the Peruzzi accounts for the period beginning in 1335, but provides balances and allocations of losses from the “old company” of 1331–35. Summaries of assets appear on pp. 112 and of liabilities on pp. 190–197, 318.Google Scholar

23 Sapori, La crisi, p. 106.Google Scholar

24 Fryde, “The Financial Resources of Edward Ill.” Italian lenders to Edward III during the period from 1337 to 1340 included, among others, the Portinari and Bonaccorsi of Florence, Bartholomei of Lucca, Pisani of venice, and Leopardi of Asti.Google Scholar

25 Renouard, Y., Les Relations des papes d'Avignon er des compagnies commerciales et bancaires de 1316 à 1378 (Paris, 1941).Google Scholar

26 Yver, G., Le Commerce dans l'halie méridionale, chap. 6; Sapori, Libri di commercio dei Peruzzi, pp. 8, 193.Google Scholar

27 Vilani, Storia, book 11, chap. 89, p.754.Google Scholar

28 Sapori, Libri di commercio. My analysis of the Peruzzi libro segrero sesro shows that 19 of the 21 shareholders reduced their net loans to the company from 14,077 forms in July 1335 to 1,151 forms in July 1343. No opening balance appears for the two remaining shareholders, but their 1343 balances reflect borrowing from the company of 9,129 forms.Google Scholar

29 Sapori, A., Srudi di sroria economica (Florence, 1955), vol 2, pp. 665–78. From the data presented, the annual profit of the Peruzzi between 1300 and 1324 can be calculated at an average of around 13,000 forms, with a peak of 18,000 forms in 1308/10.Google Scholar

30 Sapori, La crisi, p. 78.Google Scholar

31 Villani, Storia, book II, chap. 93, p. 758.Google Scholar

32 Lane, F. C. and Mueller, R. C., Money and Banking in Medieval and Renaissance Venice (Baltimore, 1985), vol. 1, pp. 6264Google Scholar, and Goldthwaite, R. A., “Local Banking in Renaissance Florence,” Journal of European Economic History, 14 (Spring 1985), pp. 3738, 48.Google Scholar

33 Renouard, Y., Les Relations des papes, pp. 134, 138; Fryde, “The Financial Resources of Edward III,” pp. 1169–70.Google Scholar

34 On at least two occasions the king urged his collectors to repay the Bardi as promptly as possible because they had promised to re-lend the money to him (Calendar of Close Rolls, 1337–39, pp. 294 and 309).Google Scholar

35 Fryde, “The Financial Resources of Edward III,” pp. 1143–44, 1159, 1162.Google Scholar See also Fryde, E. B., “Materials for the Study of Edward Ill's Credit Operations, 1327–48,” Bulletin of the Institute of Historical Research, 22 (1949), pp. 105–38.CrossRefGoogle Scholar

36 Calendar of Patent Rolls, 1334–38, p. 506, and 1338–40, p. 123. By these orders the king exonerated his sheriff from claims relating to the imprisonment and seizure of valuables of all foreign merchants, except the Bardi and Peruzzi.Google Scholar

37 Fryde, E. B., “Italian Maritime Trade with Medieval England (c. 1270–c. 1530),” Studies in Medieval Trade and Finance, Item XIV, p. 301.Google Scholar

38 Fryde, E. B., “The Wool Accounts of William de Ia Pole,” Studies in Medieval Trade and Finance, Item IX, p. 14.Google Scholar

39 Hughes, D., A Study of Social and Constitutional Tendencies in the Early Years of Edward III (London, 1915).Google Scholar

40 Ibid., p. 94.

41 Fryde, “The Financial Resources of Edward III,” p. 1, 162.Google Scholar

42 Becker, M., Florence in Transition (Baltimore, 1989), vol. I, pp. 202–7.Google Scholar

43 Lyon, M., Lyon, B., and Lucas, H., The Wardrobe Book of William de Norwell, 12 July 1338 to 27 May 1340 (Brussels, 1983).Google Scholar

44 Ibid., pp. cix–cx.

45 Becker, Florence, vol. I, pp. 150–72.Google Scholar

46 Ibid. As early as the 1320s the Bardi held at least 30,000 forms, over 10 percent of the commune's public debt (pp. 78–79), and as late as 1344 were still lending “sizable sums” to the treasury (p. 158).

47 Sapori, La crisi, p. 174.Google Scholar

48 Ibid., p. 193.

49 Brucker, G., Florentine Politics and Society (Princeton, 1962), p. 18.Google Scholar

50 De Roover, “The Story of the Alberti Company.” p. 29.Google Scholar

51 Russell, “The Societies of the Bardi and Peruzzi,” p. 127.Google Scholar

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