HIS109Y1 Lecture Notes - Fugger

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14 Nov 2012
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Department
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Money had to come from somewhere
Crusades - were crucial to bringing in a cash money economy
Bardi
Peruzzi
Medici
Fugger
Florin
Ducat
Knights had to pay people to help them sail across during the crusade
Couldn't have a barter system would not work
Money was one thing that everyone could relate to
Crusades lasted for 100's of years - needed complex systems to ensure that you could keep the crusades
going
Trade routes needed to be developed
This created connections between southerners and the Europeans
Islamic societies, among others, had cash system
A medium of exchange was needed
Great need of cash needed instruments to accumulate the cash
A new class needed to be created to create this system
To make sure that the crusades were properly serviced, Double entry book keeping was used to keep
track of the money
This permitted the individuals to keep track of the money better
New business organizations were created
Money would need to be borrowed
Earlier in the age, people tried to acquire a lot of capital
you needed new institutions to get the money out
Merchants realized they could get rich by buying spices from Constantinople and sell them in Venice
Investors would invest in companies
The merchants would get the most return if they went to achieve to spices
Revolutionary - trust people outside of your family
Investors also realized that they could get rich by not having to leave there cities
They also realized that they could govern the cities
Cities became places of merchantable - became places of wealth and economic activity
Cities became focuses for new social and economically elite
Merchants and investors - despised barter system b/c hurt trade
Cities and towns were experiments to see if they could enhance the economic systems
Nobles - hated the merchants b/c they got rich at the nobles expense
Nobles didn't like to be dependant on the merchants
Roman law - emperor controls the cities and towns
Kings and Princes thought that they were the emperor
Roman law would end up stopping the nobles
Merchants - did fit the feudalism system
When groups are produces by change, you get revolution
How should the wealth of the nobility be distributed ?
Merchants - had significant amounts of capital - Merchants would end up loaning the capital to people
Excess capital lead to the creation of banks
Borrowing was going to be a contractual agreement
Merchants would also hide there interest - many kinds of ways of hiding interest
Banking was revolutionary
Capital began to attract capital - people would deposit there capital in the bank
Disadvantages :
1343 -1345 - Italian banks became so rich that they accumulated vast amounts of capital
Banks would lend there money to both armies in a war
English owed the Italian banks a ridiculous amount of money
English king - caused a depression as he caused the Bardi and Peruzzi banks to collapse
Black death - would end up helping restore the depression
Europeans became more susceptible to disease
The Rise of the Mercantile Economy
September-24-12
3:07 PM
Sept Lect. Page 1
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Document Summary

Crusades - were crucial to bringing in a cash money economy. Knights had to pay people to help them sail across during the crusade. Couldn"t have a barter system would not work. Money was one thing that everyone could relate to. Crusades lasted for 100"s of years - needed complex systems to ensure that you could keep the crusades going. This created connections between southerners and the europeans. Great need of cash needed instruments to accumulate the cash. A new class needed to be created to create this system. To make sure that the crusades were properly serviced, double entry book keeping was used to keep track of the money. This permitted the individuals to keep track of the money better. Earlier in the age, people tried to acquire a lot of capital you needed new institutions to get the money out. Merchants realized they could get rich by buying spices from constantinople and sell them in venice.

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