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The Collapse of the Bardi Company1

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The Collapse of the Bardi Company1 1 Primary Source 2.5 THE COLLAPSE OF THE BARDI COMPANY1 Banking and commercial trade on an international level began to develop in Europe in the thirteenth century. These two sectors began to especially thrive in many Italian city-states, which boasted innovative trading strategies and banking systems. Merchants and bankers in Italian city-states lent capital throughout Europe, and used sophisticated means of book- keeping and currency exchange to establish their reputation as a major banking and trading area. Two of the major banking and trading firms in Italy at that time were the Bardi and Peruzzi companies. They expanded their overseas financial networks and resultant influence until their eventual collapse in the early 1300s, on the eve of the Black Death. The following excerpt reflects the anger and dismay of an Italian upon the bankruptcies suffered by the most powerful financial institutions in Italy. He places most of the blame on the failure of King Edward III to pay back his loans to the companies. While the excerpt reflects a disastrous event, it also illustrates the growing commercial exchanges and trade that were knitting together the regions of Europe. The excerpt can be found here. THE FAILURE OF THE BARDI (1345)2 In January of the said year 1345, the Company of the Bardi, who had been the greatest merchants of Italy, failed. And the reason was that they had lent money (as had the Peruzzi and others) to Edward, King of England, and to the King of Sicily. So much that the Bardi were found to have owing them from the King of England, between capital and interest and gifts promised by him, 900,000 gold florins;3 and this, on account of his war with the King of France, he could not pay. And the King of Sicily owed 100,000 gold florins. And to the Peruzzi the King of England owed 600,000 gold florins, and the King of Sicily 100,000 gold florins. Whence it came about that citizens and foreigners alike failed, to whom the Bardi alone were indebted for more than 550,000 gold florins. And in turn many other smaller companies and individuals who had their property in the Bardi and in the Peruzzi and in the other bankrupts, were ruined, and on this account failed. By this failure of the Bardi and the Peruzzi, and Acciajuoli, and the Bonaccorsi, the Cocchi, the Antellesi, the Corsini, those of Uzzano, the Perondoli, and other small companies and individual manufacturers who failed in these times, and especially by the burdens of the commune and by the excessive loans made to the kings (of which mention has already been made, but not of all because there are too many to count), was our city of Florence brought to greater 1 Charles W. Colby, (Ed.), Selection From the Sources of English History Being a Supplement to Text-Books of English History B.C–A.D., 1832. (London and Bombay: Longmans, Green, & Co., 1899), 96-97. 2 The writing of Giovanni Villani, an Italian historian and official, who lived in the late thirteenth and early fourteenth centuries. The financial crash ruined him. 3 The gold coin that constituted the main form of Italian currency in the Middle Ages. It weighed 54 grains, or 3.5 grams. 2 ruin and distress than ever before; if the reader considers well, the damage caused by such great loss of treasure or the money lost by our citizens, and through avarice loaned to the kings. O! cursed and greedy wolf, full of the vice of avarice, reigning in our blind and mad citizens of Florence, who through lust of gain from the kings gave their property and others’ money in loan only to lose power and sway, and to strip our Republic of all might; so that no specie4 remains among our citizens save among certain manufacturers or money lenders, who with their usury consume and sweep together booty from the scattered poverty of our citizens and destroy it. But not without cause do the hidden judgments of God come upon states to punish sins committed, as Christ in his own words says, “Ye shall die in your sins,” etc. The Bardi gave up their possessions to their creditors and settled with them for 9s. and 3d. in the £ which did not actually return 6s. in the £. And the Peruzzi compounded for 4s. in the £ on their possessions, and 16s. in the £ on the debts of the aforesaid kings; and if they had received their due from the kings of England and Sicily or a part of it, they would have remained lords of great power and wealth. Let this suffice, and perhaps I have said too much about this shameful business, but one ought not to conceal the truth, because notable things as they occur are recorded in order to give posterity warning, that it may be the better on its guard. 4 That is, cash money. .
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