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1. Concept and emergence Although merchants and artists had always traded in works of art, an art trade as such only developed in connection with the formation of an art market. As distinct from a system of art patronage (Patron), an art market means that prices for works of art are set in a free play of supply and demand, and that artists are producing for anonymous cohorts of purchasers rather than for a specific, known commissioning client with whom they have reached agreement on such matters as …

1. Early modern period The term bank goes back to Middle Latin bancus, which is the term for a money-changer’s table ( bancherii). Key features of bank activity are the granting of credit (with the help of property and investment capital), payment on behalf of creditors, and exchange. It was only in the course of the late Middle Ages that various categories of banking formed in Italy: international merchant-bankers, local exchangers and bankers as well as pawnlenders (Middle class). Out of these there developed such institutions as public exchange banks and the pawnbrokers ( monti di …

All credit institutions that issue banknotes are called banks of issue. A special form of bank of issue is the central bank or central bank of issue, which, as protector of the currency in a currency realm, possesses a monopoly on the issuing of bank notes and functions as a reserve bank (banks’ bank).The earliest banks of issue were run in the 17th century by the London goldsmith bankers, who issued deposit certificates and later “goldsmith notes” for their customers’ deposits. Since in general fewer notes were redeemed than issued, the goldsmit…

Banknotes in the form of slips of paper or bank slips were not means of payment in the Early Modern period but simply a promise of payment by the bank that had brought them into circulation. They became popular in the mid-17th century when the London goldsmiths first offered a wide range of modern banking services. Merchants and aristocratic landowners maintained an account with the goldsmith, which they used both for overdraft credit and for transfers.The so-called goldsmith bankers discounted bills of exchange, IOUs and state papers (Discount), i.e. they cashed cred…

1. ConceptCredit derives from Lat. credere (“believe”, “trust”) and means the release of a good for use in the present in exchange for a claim to a compensating payment in the future. Credit presupposes the confidence of the credit-giver ( creditor) in the capacities (ability or willingness to pay) of the credit-taker (debtor). Credit is not to be equated with money; rather, money is, alongside produce (credit in kind) the object of credit. In history as in the present, distinctions of credit can be…

1. Concept and origins The lottery (from Italian lotto, French  lot, “share,” “lot”) developed as a game of chance (Gambling) in the early modern period. Before this, it was customary in cities of northern Italy in the 14th and 15th centuries for public offices to be awarded by sortition, with lots drawn from a leather bag. The method of casting lots was also used to decide which subscribers to the municipal debt should profit from the distribution of interest, if there was insufficient for all to benefit…

Pawning was the most important form of small-scale credit for all social groups, helping to bridge shortages of cash and food during the annual cycle of agricultural production. The poor needed credit simply to survive, and might pawn a blanket, while the rich offered jewels as collateral for luxury consumption. Credit in exchange for collateral in the early modern period was most commonly offered by Jews, who, as “unbelievers” and social ousiders, were forbidden to join the craft guilds and to …

1. Definition Gold standard and gold currency are connected terms in the history of money (see Money, theory of), but with different definitions. A gold currency exists when the unit of currency in a country (e.g. pound or mark) is expressed as a fixed amount of gold. This can take two forms: circulating gold currency and gold exchange. In the first case, gold coinage (Coin) predominates as the main currency in circulation, which otherwise consists of silver token coinage (with limited term of val…

Discount (Ital. sconto) is a special form of interest, which is derived from the nominal value of a credit paper, should the latter come to be cashed before the due date. Preconditions for discounting were, first, the transferrability and disposal of credit instruments (bills of exchange, bearer notes, promissory notes) and secondly the legalization of the requirement of interest with the setting of the maximum level of interest. The latter occurred for the Habsburg Netherlands with an imperial ma…

1. Definition The term  capital mobility denotes movements of monetary capital (portfolio investments, credit; see 2.-3. below) and production capital (direct investments; see 4 below). Prior to the second half of the 19th century, there were no national economies with central monetary control (Bank of issue); therefore in our period the term does not refer to capital exports and imports of entire national economies but to capital transfers between geographically separated business locations, especially between different financial and trade centers. Michael North 2. Trade In…

In the early modern period, besides banknotes, which are promissory notes of the bank of issue, there was another form of paper money, so-called government paper money. Either this was issued by the state and given a compulsory rate as legal tender, or the state obligated itself to accept the money at the treasury at face value for certain payments such as taxes. Since the states frequently used this means of funding – for instance for financing war (War, financing of) – there was a danger of pa…

A check (British Engl. cheque, Fr. chèque) is a written bank deposit instruction by which the signatory commissions his or her bank or a public institution to pay out the amount of money indicated on the check from his account to another person . The development and dissemination of the check was part of the elaboration of cash-freepayment transactions in the late Middle Ages and early modern period. The word check derives etymologically from Ital. scacco (“treasure”), as does Engl. “exchequer,” which in turn goes back to Arab. sakk, a type of payment instruction [1. 555].Deposit instruct…

The term “Hypothekenbank” refers to a German financial institution that provides real-estate loans guaranteed by a mortgage and issues long-term bonds to finance such instruments (Mortgage). The Prussian “Landschaften” (“Regionals,” i.e. publicly owned mortgage banks) of the 18th century can be considered the first Hypothekenbanks. The first regional bank was founded in 1770 in Schleswig, which had been severely affected by the Seven Years’ War, in an effort to improve rural credit. Additional e…

1. Definition Generally speaking, the capital market is understood as a market for long-term asset-backed securities (capital), while the money is a market for short-term funds. Historically, however, the two have only rarely been sharply distinguished; therefore the expression “financial market” was coined as a common umbrella term. While the demand of trade for short-term credit (maturity in three months or less) was met on the money market by means of bills of exchange (Bill of exchange) or end…

The Baltic area was and still is a zone of productive trade relationships. Here various language groups – Teutons, Slavs, Balts, and Finno-Ugrians – lived together since time immemorial; in the Middle Ages, but in part not until the early modern period, these groups developed into states and nations (Eastern Europe, with map). What bound them together was trade, which as early as the 8th century was based on exchanging finished goods from Western Europe for raw materials from the North and East.…

Deposit banks are credit institutions in which money is “deposited” (Latin,  deponere) at interest and which offer their clients various banking services (Bank). The money-changers of Genoa may be considered the first deposit banks. Even prior to 1200, they accepted deposits ( depositum regulare), maintained accounts for these depositors, provided their clients with overdraft loans and made cashless payments with credit vouchers and debits. In the 13th century, most northern Italian cities and those of Aragon followed suit, and in the 14…

1. Definition and reference frameA money economy is an economic system (Economy, political) that, in contrast to natural economies and bartering, operates with money as a general medium of exchange. Here money fulfills three economic functions (see Money, theory of). First, it serves as a universal medium of exchange, making it possible to conclude transactions involving all kinds of goods. Second, it can be used as a means of storing value, so that transactions can be made at any point in time. Fin…

1. BegriffAllgemein versteht man unter K. den Markt für langfristig verbriefte Forderungen (Kapitalien), während der Geldmarkt der Markt für kurzfristige Gelder ist. In der Geschichte sind beide jedoch nur selten genau voneinander abzugrenzen; daher hat sich als gemeinsamer Oberbegriff die Bezeichnung »Finanzmarkt« herausgebildet. Während der Kreditbedarf des Handels auf dem Geldmarkt mit Hilfe des Wechsels bzw. des Wechselindossaments (Indossament) und der Diskontierung (Diskont) kurzfristig (Fälligkeit bis drei Monate) gedeckt wurde, ent…

1. AllgemeinVon S. kann man sprechen, wenn beim Kauf oder Verkauf eines Gutes die Ausnutzung von zeitlichen Preis-Unterschieden angestrebt wird. Vor diesem Hintergrund liegt jedem Handel ein gewisses S.-Element zu Grunde; jedoch unterscheidet sich der Spekulant vom Händler dadurch, dass es ihm in erster Linie um das Weiter- bzw. Hochtreiben von Preisen geht [6]. Zur S. gehört außerdem, dass Konsument, Produzent oder Händler ihr Verhalten in Erwartung einer Preisveränderung anpassen, indem sie Käufe oder Investitionen entweder hinausschieben oder vorziehen.Entsprechend ken…

Die P. gingen aus der Gruppe der Kaufmannsbankiers (engl. merchant bankers) hervor. Als solche bezeichnet man diejenigen Handelshäuser, die Handel und Bank-Geschäft miteinander verbanden. Dies war zum ersten Mal bei den toskanischen Handelsgesellschaften des 13. Jh.s der Fall. Firmen wie die Bonsignori und im 14. Jh. die Acciaiuoli, Bardi und Peruzzi kombinierten nicht nur Fernhandel und Wechselgeschäft, sondern dienten auch als päpstliche Kollektoren kurialer Gelder, Steuerpächter und Kredit-Geber der Fürsten. An diesem Dienstleistungsprofil der Handelsgesells…