A History of Inventions, Discoveries, and Origins, Volume II (of 2)

When under the appellation of lending-house we understand a public establishment where any person can borrow money upon pledges, either for or without interest, we must not compare it to the tabernæ argentariæ or mensæ nummulariæ of the Romans. These were banking-houses, at which the state and rich people caused their revenues to be paid, and on which they gave their creditors orders either to receive their debts in money, or to have the sums transferred in their own name, and to receive security for them. To assign over money and to pay money by a bill were called perscribere and rescribere; and an assignment or draft was called attributio. These argentarii, mensarii, nummularii, collybistæ and trapezitæ followed the same employment, therefore, as our cashiers or bankers. The former, like the latter, dealt in exchanges and discount; and in the same manner also they lent from their capital on interest, and gave interest themselves, in order that they might receive a greater. Those who among the ancients were enemies to the lending of money on interest brought these people into some disrepute; and the contempt entertained for them was probably increased by prejudice, though those nummarii who were established by government as public cashiers held so exalted a rank that some of them became consuls. Such banking-houses existed in the Italian States in the middle ages, about the year 1377. They were called apothecæ seu casanæ feneris6, and in Germany Wechselbanke, banks of exchange; but they were not lending-houses in the sense in which I here understand them.

Equally distinct also from lending-houses were those banks established in the fourteenth century, in many cities of Italy, such, for example, as Florence, in order to raise public loans. Those who advanced money on that account received an obligation and monthly interest, which on no pretext could be refused, even if the creditor had been guilty of any crime. These obligations were soon sold with advantage, but oftener with loss; and the price of them rose and fell like that of the English stocks, but not so rapidly; and theologists disputed whether one could with a safe conscience purchase an obligation at less than the stated value, from a proprietor who was obliged to dispose of it for ready specie. If the State was desirous or under the necessity of repaying the money, it availed itself of that regale called by Leyser regale falsæ monetæ, and returned the capital in money of an inferior value. This establishment was confirmed, at least at Florence, by the pontiff, who subjected those who should commit any fraud in it to ecclesiastical punishment and a fine, which was to be carried to the papal treasury: but long before that period the republic of Genoa had raised a loan by mortgaging the public revenues. I have been more particular on this subject, because Le Bret7 calls these banks, very improperly, lending-houses; and in order to show to what a degree of perfection the princely art of contracting and paying debts was brought so early as the fourteenth century.

Those who have as yet determined the origin of lending-houses with the greatest exactness, place it, as Dorotheus Ascanius, that is Matthias Zimmermann8, does, in the time of Pope Pius II. or Paul II., who filled the papal chair from 1464 to 1471; and the reason for supposing it to have been under the pontificate of the latter is, because Leo X. in his bull, which I shall quote hereafter, mentions that pope as the first who confirmed an establishment of this kind. As the above account did not appear to me satisfactory, and as I knew before that the oldest lending-houses in Italy were under the inspection of the Franciscans, I consulted the Annals of the Seraphic Order, with full expectation that this service would not be omitted in that work; and I indeed found in it more materials towards the history of lending-houses than has ever been collected, as far as I know, by any other person.

As complaints against usury, which was practised by many Christians, but particularly by the Jews, became louder and more public in Italy in the fifteenth century, Barnabas Interamnensis, probably of Terni, first conceived the idea of establishing a lending-house. This man was originally a physician; had been admitted to the degree of doctor; was held in great respect on account of his learning; became a Minorite, or Franciscan; acquired in that situation every rank of honour, and died, in the first monastery of this order at Assisi (in monte Subasio9), in the year 1474. While he was employed in preaching under Pope Pius II. at Perugia, in the territories of the Church, and observed how much the poor were oppressed by the usurious dealings of the Jews, he made a proposal for raising a capital by collections, in order to lend from it on pledges to the indigent, who should give monthly, for the use of the money borrowed, as much interest as might be necessary to pay the servants employed in this establishment, and to support it. Fortunatus de Copolis, an able jurist of Perugia, who after the death of his wife became also a Franciscan, approved of this plan, and offered to assist in putting it into execution. To be assured in regard to an undertaking which seemed to approach so near to the lending on interest, both these persons laid their plan before the university of that place, and requested to know whether such an establishment could be allowed; and an answer being given in the affirmative, a considerable sum was soon collected by preaching, so that there was a sufficiency to open a lending-house. Notwithstanding this sanction, many were displeased with the design, and considered the receiving of interest, however small it might be, as a species of usury. Those who exclaimed most against it were the Dominicans (ex ordine Prædicatorum): and they seem to have continued to preach in opposition to it, till they were compelled by Leo X. to be silent; while the Franciscans, on the other hand, defended it, and endeavoured to make it be generally adopted. The dispute became more violent when, at the end of a year, after all expenses were paid, a considerable surplus was found remaining; and as the managers did not know how to dispose of it, they at length thought proper to divide it amongst the servants, because no fixed salaries had been appointed for them. Such was the method first pursued at Perugia; but in other places the annual overplus was employed in a different manner. The particular year when this establishment began to be formed I have nowhere found marked; but as it was in the time of Pius II., it must have been in 1464, or before that period10. It is very remarkable that this pontiff confirmed the lending-house at Orvieto (Urbs Vetus) so early as the above year; whereas that at Perugia was sanctioned, for the first time, by Pope Paul II. in 1467. It is singular also that Leo X., in his confirmation of this establishment, mentions Paul II., Sixtus IV., Innocent VIII., Alexander VI. and Julius II.; but not Pius II. Pope Sixtus IV., as Wadding says, confirmed in 1472 the lending-house at Viterbo, which had, however, been begun so early as 1469, by Franciscus de Viterbo, a Minorite11.

In the year 1479 Sixtus IV. confirmed the lending-house which had been established at Savona, the place of his birth, upon the same plan as that at Perugia. The bull issued for this purpose is the first pontifical confirmation ever printed12; for that obtained for Perugia was not, as we are told by the editor, to be found in the archives there in 1618, the time when the other was printed. I have never found the confirmation of those at Orvieto and Viterbo. Ascianus sought for them, but without success, in Bullarium Magnum Cherubini, and they are not mentioned by Sixtus. This pontiff, in his bull, laments that the great expenses to which he was subjected did not permit him to relieve his countrymen with money, but that he would grant to the lending-house so many spiritual advantages, as should induce the faithful to contribute towards its support; and that it was his desire that money should be lent from it to those who would assist gratis during a year in the business which it required. If none could be found to serve on these conditions, a moderate salary was to be given. He added a clause also respecting pledges; but passed over in silence that the debtors were to contribute anything for the support of the institution by paying interest, which Barnabas, whose name does not occur in the bull, introduced however at Perugia, and which the pope tacitly approved.

The greater part of the lending-houses in Italy were established in the fifteenth and following centuries by the Minorites Marcus Bononiensis, Michael a Carcano13, Cherubinus Spoletanus, Jacobus de Marchia, Antonius Vercellensis, Angelus a Clavasio, and above all, Bernardinus Tomitano, named also Feltrensis and Parvulus. This man was born at Feltri, in the country of Treviso, in the year 1439. His father was called Donato Tomitano, and his mother Corona Rambaldoni; they were both of distinguished families, though some assert that he was of low extraction, and a native of Tomi, a small place near Feltri, on which account he got the name of Tomitano. The name of Parvulus arose from his diminutive stature, which he sometimes made a subject of pleasantry14. This much at any rate is certain, that he had received a good education. In 1456, when seventeen years of age, he suffered his instructors, contrary to the inclination of his father, to carry him to Padua, to be entered in the order of the Minorites; and on this occasion he changed his christian-name Martin into Bernardinus. As he was a good speaker, he was employed by his order in travelling through Italy and preaching. He was heard with applause, and in many parts the people almost paid him divine honours. The chief object of his sermons was to banish gaming, intemperance, and extravagance of dress; but he above all attacked the Jews, and excited such a hatred against them, that the governments in many places were obliged to entreat or to compel him either to quit their territories or not to preach in opposition to these unfortunate people, whom the crowds he collected threatened to massacre; and sometimes when he visited cities where there were rich Jews and persons who were connected with them in trade, he was in danger of losing even his own life. Taking advantage of this general antipathy to the Jews, he exerted himself, after the example of Barnabas, his brother Minorite, to get lending-houses established, and died at Pavia in the year 1494. The Minorites played a number of juggling tricks with his body, pretending that it performed miracles, by which means they procured him a place in the catalogue of the saints; and to render his name still more lasting, some of his sermons have been printed among the works of the writers of the Franciscan order15.

The lending-houses in Italy, with the origin of which I am acquainted, are as follows: – The lending-house at Perugia was inspected in 1485 by Bernardinus, who enlarged its capital.

The same year he established one at Assisi, which was confirmed by Pope Innocent, and which was visited and improved by its founder in 148716.

In the year 1486, after much opposition, he established a lending-house at Mantua, and procured for it also the pope’s sanction17. Four years after, however, it had declined so much, that he was obliged to preach in order to obtain new donations to support it.

At Florence he met with still more opposition; for the rich Jews bribed the members of the government, who wished in appearance to favour the establishment of the lending-house, to which they had consented eighteen years before, while they secretly thwarted it; and some boys having once proceeded, after hearing a sermon, to attack the houses of the Jews, the Minorites were ordered to abstain from preaching and to quit the city18. It was however completely established; but by the Dominican Hieronymus Savonarola19.

In the year 1488 Bernardinus established a lending-house at Parma, and procured for it the pope’s sanction, as well as for one at Cesena, where the interest was defined to be “pro salariis officialium et aliis montis oneribus perferendis.” About the conclusion of this year he was at the other end of Italy, where he re-established the lending-house at Aquila in the kingdom of Naples20.

In the year following he established one at Chieti (Theate) in the same kingdom, another at Rieti (Reate) in the territories of the Church, a third at Narni (Narnia)21; and a fourth at Lucca, which was confirmed by the bishop, notwithstanding the opposition of the Jews, who did every thing in their power to prevent it.

In the year 1490 a lending-house was established at Piacenza (Placentia) by Bernardinus, who at the same time found one at Genoa which had been established by the before-mentioned Angelus a Clavasio22. At this period also a lending-house was established at Verona23, and another at Milan by the Minorite Michael de Aquis.

In 1491 a lending-house was established at Padua, which was confirmed by Pope Alexander VI. in 149324; and another was established at Ravenna25.

In 1492 Bernardinus reformed the lending-house at Vicenza, where, in order to avoid the reproach of usury, the artifice was employed of not demanding any interest, but admonishing the borrowers that they should give a remuneration according to their piety and ability. As people were by these means induced to pay more interest than what was legally required at other lending-houses, Bernardinus caused this method to be abolished26. He established a lending-house also the same year in the small town of Campo S. Pietro, not far from Padua, and expelled the Jews who had lent upon pledges. At this period there were lending-houses at Bassano, a village in the county of Trevisi, and also at Feltri, which he inspected and improved27.

In the year 1493 Bernardinus caused a lending-house to be established at Crema, in the Venetian dominions; another at Pavia, where he requested the opinion of the jurists, whom he was happy to find favourable to his design; and likewise a third at Gubbio, in the territories of the Church. At the same time another Franciscan established at Cremona a mons frumenti pietatis, from which corn was lent out on interest to necessitous persons; and it appears that there had been an institution of the like kind before at Parma28.

In the year 1494, Bernardinus, a short time before his death, assisted to establish a lending-house at Montagnana, in the Venetian territories29, and to improve that at Brescia, which was likely to decay, because the servants had not fixed salaries30. The same year another Franciscan established the lending-house at Modena.

In the year 1506 Pope Julius II. confirmed the lending-house at Bologna. That of Trivigi was established in 1509; and in 1512, Elizabeth of the family of Gonzaga, as widow of duke Guido Ubaldus, established the first lending-house in the duchy of Urbino at Gubbio, and procured permission for it to coin money31.

The historical account I have here given, displays in the strongest light the great force of prejudice, and particularly of the prejudice of ecclesiastics. Notwithstanding the manifest advantages with which lending-houses were attended, and though a great part of them had been already sanctioned by the infallible court of Rome, many, but chiefly Dominicans, exclaimed against these institutions, which they did not call montes pietatis, but impietatis. No opposition gave the Minorites so much uneasiness as that of the Dominican Thomas de Vio, who afterwards became celebrated as a cardinal under the name of Cajetanus. This monk, while he taught at Pavia in 1498, wrote a treatise De Monte Pietatis32, in which he inveighed bitterly against taking pledges and interest, even though the latter was destined for the maintenance of the servants. The popes, he said, had confirmed lending-houses in general, but not every regulation that might be introduced into them, and had only given their express approbation of them so far as they were consistent with the laws of the church. These words, he added, had been wickedly left out in the bulls which had been printed; but he had heard them, and read them, in the confirmation of the lending-house at Mantua. I indeed find that these words are not in the copy of that bull given in Wadding, which is said to have been taken from the original; nor in the still older confirmation of the lending-house at Savona. But even were they to be found there, this would not justify Cajetan’s opposition, as the pope in both these bulls recommended the plan of the lending-house at Perugia to be adopted, of which receiving interest formed a part. Bernardinus de Bustis33, a Minorite, took up the cause in opposition to Cajetan, and, according to Wadding’s account, with rather too much vehemence. Among his antagonists were Barrianus and Franc. Papafava, a jurist of Padua34. As this dispute was revived with a great deal of warmth in the beginning of the sixteenth century, it was at length terminated by Pope Leo X., who in the tenth sitting of the council of the Lateran declared by a particular bull that lending-houses were legal and useful; that all doubts to the contrary were sinful, and that those who wrote against them should be placed in a state of excommunication35. The whole assembly, except one archbishop, voted in favour of this determination; and it appears from a decree of the council of Trent, that it also acknowledged their legality, and confirmed them36. Notwithstanding this decision, there were still writers who sometimes condemned them; and who did not consider all the decrees, at least the above one of the Lateran council, as agreeable to justice. Among these was Dominicus de Soto, a Dominican. All opposition, however, in the course of time subsided, and in the year 1565, Charles Borromeo, the pope’s legate at the council of Milan, ordered all governments and ecclesiastics to assist in establishing lending-houses37.

Of the lending-houses established after this period in Italy, I shall mention those only of Rome and Naples. It is very remarkable that the pope’s capital should have been without an institution of this kind till the year 1539, and that it should have been formed by the exertions of Giovanni Calvo, a Franciscan. Paul III., in his bull of confirmation, ordered that Calvo’s successors in rank and employment should always have the inspection of it, because the Franciscans had taken the greatest pains to endeavour to root out usury38.

The lending-house at Naples was first established in 1539 or 1540. Two rich citizens, Aurelio Paparo, and Leonardo or Nardo di Palma, redeemed all the pledges which were at that time in the hands of the Jews, and offered to deliver them to the owners without interest, provided they would return the money which had been advanced on them. More opulent persons soon followed their example; many bequeathed large sums for this benevolent purpose; and Toledo, the viceroy, who drove the Jews from the kingdom, supported it by every method possible. This lending-house, which has indeed undergone many variations, is the largest in Europe; and it contains such an immense number of different articles, many of them exceedingly valuable, that it may be considered as a repository of the most important part of the moveables of the whole nation. About the year 1563, another establishment of the like kind was formed under the title of banco de’ poveri. At first this bank advanced money without interest, only to relieve confined debtors; afterwards, as its capital increased, it lent upon pledges, but not above the sum of five ducats without interest. For larger sums the usual interest was demanded39.

At what time the first lending-house was established at Venice I have not been able to learn40. This State seems to have long tolerated the Jews; it endeavoured to moderate the hatred conceived against these people, and gave orders to Bernardinus to forbear preaching against them41. It appears to me in general, that the principal commercial cities of Italy were the latest to avail themselves of this invention; because they knew that to regulate interest by law, where trade was flourishing, would be ineffectual or useless; or because the rich Jew merchants found means to prevent it.

The name mons pietatis, of which no satisfactory explanation has been as yet given, came with the invention from Italy, and is equally old, if not older. Funds of money formed by the contributions of different persons, for some end specified, were long before called montes. In the first centuries of the Christian æra, free gifts were collected and preserved in churches by ecclesiastics, partly for the purpose of defraying the expense of divine service, and partly to relieve the poor. Such capitals, which were considered as ecclesiastical funds, were by Prudentius, in the beginning of the fifth century, called montes annonæ and arca numinis42. Tertullian calls them deposita pietatis43; and hence has been formed montes pietatis. At any rate I am of opinion that the inventor chose and adopted this name in order to give his institution a sacred or religious appearance, and to procure it more approbation and support.

I find however that those banks employed in Italy, during the thirteenth and fourteenth centuries, to borrow money in the name of States, for which the public revenues were mortgaged and interest paid, were also called montes44. In this sense the word is used by Italian historians of much later times; and those are greatly mistaken, who, with Ascian and many others, consider all these montes as real lending-houses. These loan-banks or montes received various names, sometimes from the princes who established them, sometimes from the use to which the money borrowed was applied, and sometimes from the objects which were mortgaged. Of this kind were the mons fidei, or loan opened by Pope Clement VII. in the year 1526, for defending his capital45; the mons aluminarius, under Pope Pius IV., for which the pontifical alum-works were pledged; the mons religionis, under Pius V., for carrying on the war against the Turks; and the montes farinæ, carnium, vini, &c., when the duties upon these articles were pledged as a security. To facilitate these loans, every condition that could induce people to advance money was thought of. Sometimes high interest was given, if the subscribers agreed that it should cease, and the capital fall to the bank after their death; and sometimes low interest was given, but the security was heritable and could be transferred at pleasure. The former were called montes vacabiles, and the latter montes non vacabiles. Sometimes the State engaged to pay back the capital at the end of a certain period, such for example as nine years, as was the case in regard to the mons novennalis, under Paul IV.; or it reserved to itself the option of returning the money at such a period as it might think proper, and sometimes the capital was sunk and the interest made perpetual. The first kind were called montes redimibiles, and the second irredimibiles46. One can here clearly discover the origin of life-rents, annuities, tontines, and government securities; but the further illustration of this subject I shall leave to those who may wish to employ their talents on a history of national debts. I have introduced these remarks, merely to rectify a mistake which has become almost general, and which occasioned some difficulties to me in this research; and I shall only observe further, that the popes gave to their loans, in order to raise their sinking credit, many of those spiritual advantages which they conferred on the montes pietatis. This error therefore was more easily propagated, as both were called montes; and hence it has happened that Ascianus and others assert that many lending-houses were misapplied by the popes in order to raise public loans.

From the instances here adduced, one may see that the first lending-houses were sanctioned by the pontiffs, because they only could determine to the Catholics in what cases it was lawful for them to receive interest. This circumstance seems to have rendered the establishment of them out of Italy difficult. At any rate the Protestants were at first averse to imitate an institution which originated at the court of Rome, and which, according to the prevailing prejudice of the times, it alone could approve; and from the same consideration they would not adopt the reformation which had been made in the calendar.