Money and Promises by Paolo Zannoni

Author:Paolo Zannoni
Language: eng
Format: epub
ISBN: 9781804542781
Publisher: Bloomsbury Publishing Plc
Published: 2024-01-18T00:00:00+00:00

Exchange Fairs

Bills of exchange solved a lot of problems, but they also caused a lot of headaches. Clearing many debts due in many different places and at different times required all sorts of ad hoc processes and arrangements. In order to simplify matters, merchant bankers set up exchange fairs, which were regular gatherings of merchant bankers not only to trade goods, but also to clear bills of exchange. The first exchange fairs were held in the Champagne region, in the north east of the Kingdom of France, in the ancient towns of Troyes, Provins, Bar-sur-Aube, and Lagny.

We have lots of contemporary accounts of how these fairs worked. They were basically a co-operative venture between rulers and merchants: the counts of Champagne guaranteed the attendees’ physical security and their equality before the law, and established a legal system for the enforcement of contracts and the protection of rights; and in exchange, the merchants contributed to the royal treasury and to the local economy.

The early exchange fairs were held a few times a year in Champagne according to a fixed schedule: the May fair was held in Provins, the ‘hot fair’ in June in Troyes, etc. Participants in the fairs bought and sold commodities such as silk, spices, leather and cloth, but mostly they were there to clear bills of exchange. The debts the merchants could not clear were settled with coins or re-issued to be dealt with at the next fair.

Over time, the fairs became rather more formalised, expanded and began to move around, first from Champagne to Bruges, and then to Cologne and Geneva, and by 1420 they had established themselves firmly in Lyon, the ancient capital of the Gauls and a well-established centre of trade in luxury goods. Merchant bankers had long since realised that they could profit more, and more easily, from trading bills of exchange than trading luxury goods. Lyon became not just a centre for commodities trading, a market for goods, but a true financial centre, a market for currency exchange.

And it was to Lyon that our old friend Benedetto di Gondola, the Ragusan merchant with his heavy-laden argosies, went to clear his debts.

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