Financial Innovation and Resilience by Lilia Costabile & Larry Neal

Author:Lilia Costabile & Larry Neal
Language: eng
Format: epub
ISBN: 9783319902487
Publisher: Springer International Publishing

2.3 A Real Innovation in the International Financial Market: From asiento to factoría

The system of asientos (short term loans at high interest rates) was gradually replaced by a new instrument, the factoría, a contract that did not include an interest rate (like the asiento), but only a percentage, a commission, because the lender (theoretically) did not take the risk of providing or managing capitals for the Royal administration on which he anticipated sizeable differences.11

It was with Giovanni Giacomo Durini, Marc’Antonio Stampa, Marcellino and Cesare Airoldi, and Giovanni Battista Crotta that the Milanese financiers achieved in the seventeenth century by statute the position of factores reales, the ‘cúspide de las actividades financieras’ linked to the Spanish crown (Sanz 1989, p. 34). In those years neither the war nor the finances were going well for Spain with new revolts in Portugal and Catalonia supported by the French in addition to the ongoing revolt of the Netherlands. The Genoese lenders to Spain were gradually disappearing in favour of the Portuguese. On 2 January 1640 Giovanni Giacomo Durini drew up the first contract of factoría signed by a Milanese. It implied the provision of 140,000 ducats to the Real Hacienda. Differently from the asiento the factoría did not imply an interest rate but a commission that was fixed at 2 per cent, which remained unvaried for 20 years.12

According to the letter issued in 18 May 1640 from the Magistrato Ordinario, the factoría was something new: ‘era cosa nuova che la Regia Camera habbi a pagare tal fattoria non essendo a nostra notizia sin hora usata cotal forma.’13 The Magistrato manifested concern about the factoría because it was still an uncommon innovation. Despite the initial scepticism, however, the contract spread. The factorista was an operator who worked in close contact with the central administration. He worked in practice for the Royal Chamber as he managed the money on its behalf. His role was more important than the simple asientista and benefited from more privileges.

Along with Durini, who thanks to his performance as factor of the Duchy of Milan was named Earl of Monza, Marcellino Airoldi also began to operate as factorista.14 In 1649 Marcellino’s activity enabled his brother Cesare to obtain the office of General Treasurer of the State, which was then transferred to his grandchild. Marcellino Airoldi was undoubtedly the most influential banker of the Milanese market in that period. His commission provided to the state’s coffer about a half million lire (De Luca 1997, p. 75). His first contract of factoría was drawn up in 1643. Others then followed in 1644, where he anticipated the sum of 300,000 lire for the payment of bills of Naples; another one in 1645 in which he lent 445,000 lire ‘per servizio urgenti di sua Maesta’ (for urgent needs of His Majesty). In the contract signed in 1645 he provided Vienna with 200,000 lire ‘per soccorrere il Sacro Romano Impero’ (for supporting the Holy Roman Empire), along with another sum of 216,500 lire.

Marco Antonio Stampa was another notable Milanese financier.

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