It is in this tradition that the Medici Bank

June 4, 2012 7:18 AM

It is in this tradition that the Medici Bank

In this day of 1429, a large crowd accompanied until its last remains the Church of San Lorenzo in Florence Giovanni "di Bicci" of Medici. Former gonfaloniere of the city (the most prestigious of the offices of justice), patron, banker, representative of one of the largest families of Florence, the deceased had known to enforce its citizens by its power and discretion. His death seems to cast a shadow on the future of the line. All eyes are now converging on his eldest son, Cosimo de Medici. At the age of forty, it will manage to preserve the interests of the family, particularly to the powerful clan of the Albizzi, masters of Florence Eduqu in prince, rich of a heritage estimated at 180.000 guilders, considerable sum for the time, the heir of the Medici is no shortage of assets to achieve. Starting with the Bank family, still modest in 1429, but three Italian branches play as relay of power and influence.

Money and politics: this is the secret of the irresistible rise of the Medici. The family is enriched in commerce and industry of wool, specialty of Florence. She started out of the shadows at the end of the 13th century by taking an active part in the life of the city. A century later, in 1378, there a Medici, Salvestro, head of the revolt of the Ciompi, workers cardeurs miserable working conditions, thus sealing an ambiguous alliance between the family and the people's Party. But the revolt was crushed. Careful, the Medici then choose to depart from the political responsibilities to focus on their business.

It is Giovanni, the father of Cosimo, which achieves this refocusing. Born in 1360, from one of the less wealthy branch of the clan, he began his career at the Bank founded in Florence by a cousin. In 1383, he became the head of the Rome branch. Ten years later, believing to have acquired sufficient experience, it creates its own establishment. The Medici Bank is born. In 1397, she left Rome to Florence. A small landing without much major Giovanni de Medici will be a powerful tool. In the late 14th century, this long been that banks have emerged in the West. The first arose in the 12th century, at trade fairs organized everywhere in Europe and found themselves at regular intervals merchants and traders from Italy, France, Germany, or England. Small to small, for practical reasons, the habit is taken no longer resolve the Exchange cash but to do so by clearing by transferring the claims of fair in fair, giving rise to show letters and notes to order written promise by which a debtor undertakes to reimburse the creditor to fixed term. The Italians Siena and Florence are quickly illustrated in these practices. Past masters in the art of changing species, transfers or compensation from one place to another to receive deposits, they create the first banks. The word comes from "banco" Italian, the bench on which the changers perform their operations.

Two centuries later, small travelling banks have changed. Become commercial companies, they bring together several partners, have branches in most business places of the Mediterranean world, and are present in all activities, the manufacture of linen to the mines through maritime trade, Exchange, transfers, deposits, loans to princes, Kings or Popes. Companies both financial and commercial, companies in fact announce our banks.

It is in this tradition that the Medici Bank. But Giovanni innovates radically. The first commercial companies had adopted a centralized structure, the parent company and different branches located abroad not only constituting a single legal entity. In one such schema, the risk was great that the failure of one of the branches results down all of the company. This is what is happening in the 1340s, period of severe economic crisis. In a few years, the four largest Florentine companies disappear. When he launches into business in 1393, Giovanni de Medici learned the lessons of these failures. Subsidiaries of the Bank will be all created as a legally independent companies but controlled mostly by the House mother of Florence and entrusted not to simple clerk but members of the main Florentine families, relatives or allies of the Medici.

When he died in 1429, Giovanni bequeathed to his son Cosme a bank which has three subsidiaries in Rome, Venice and Naples. In addition to financial and commercial operations, the establishment is a large part of its power relations that Giovanni has woven with John XXIII. The banker did indeed not hesitate to capitalize on this former cardinal turned pirate, funding his career and helping them climb to the top of the Church. Risky, the bet is paid. Just elected to the throne of St. Peter in 1410, John XXIII is the establishment

founded by Giovanni the official bank of the papacy. Family wins an additional prestige and power.

This legacy, Cosme de Mdicis will put it in the service of his personal ambitions. Passing in addition to the advice of his father, who, on his bed of death, he would have recommended "remain always in the shadow", Cosimo decides not retreating in economic affairs but to play a prominent role in Florence. Born in 1389, married in 1416 to Contessina de Bardi, descendant of one of the largest families of Florence, it will take in hand political career and career banker, blithely conflating the private interests of its customers with the common good of the city. Its power will be a few years to settle to that of the Albizzi, that worried about its growing power. The first round is won by the latter. In 1433, four years after the death of his father, Cosimo was indeed arrested. He does escape certain death only because the money paid to his captors. Exiled to Venice, it a year later a triumphant return to Florence, with the support of the Pope and many supporters that there are in the city. Once more, the money spoke.

Until his death in 1464, Cosimo exercised a de facto power on the Tuscan city. A power based on an apparent simplicity because it is that very rarely the highest expenses of the State, meaning consumed the concealment thorisera later Machiavelli, the importance attached to the patronage of artistic as the building of the dome of Florence under Brunelleschi, and the systematic elimination of political banishment or banning opponents. Despite Republican modesty that he affects on all occasions, no ignores that this is the true master of the city and all major decisions are taken behind the high Windows of the Palazzo Medici, built from 1430 by Donatello.

Based on patronage, it owes much to the Bank, which finances parents and allies, Kings and popes, painters and sculptors, parties and pressure groups. This exclusively implanted establishment in Italy in 1429, Cosme de Mdicis is a few years one of the major financial powers of the known world. Probably does it not run itself the Bank, leaving the day-to-day management of confidence men, real Director General before the time. But it sets itself the strategy. It is time that the Medici Bank becomes a real business bank in all financial markets in Europe. The three subsidiaries located in Rome, Venice and Naples, to add new Milan, Bruges, London, Geneva and Milan. Florence itself, the Bank finances and control two textile mills one of wool, of silks , exporting their production throughout Europe. The profits then come from merchanting English wool, linen Italian and Flemish Flanders tapestries, silk Italy, but the trade in spices and money, not to mention the handling of Papal finance and loans to sovereigns. In 1464, the year of the death of Cosimo, setting adds to these different trafficking a very lucrative monopoly on the export of pontifical alum extracted Tolfa, in the Lazio. Used as a fixative for dyes for wool fabrics, the ore is then sought by the European textile industry.

At the height of its power to 1460, the Medici Bank overlooking the European economy. It is thus that in instructing the Director of the subsidiary in Geneva to transfer to Lyon in 1464, Cosme de Mdicis precipitated the decline of the fair in Geneva, in return guaranteeing the success of its rival founded by Louis XI. Let us imagine for the establishment of Florence in the form of one of our modern multinational. Also although the parent that its European subsidiaries are very light structures often employing less than 10 people. Recruited in the families of the Florentine rulers, the directors of the subsidiaries have broad management autonomy. In return, Cosme de Mdicis expected of them and their families unstinting support its power over the city. The strength of the establishment then lies in the extent of its network but also in his perfect mastery financial techniques, letters of Exchange and cheques including, unknown then in most of the Europeans.

At the beginning of the years 1460, Cosme became the designated protector of the Florentines and the "Godfather" of the city. Patron, friends of arts and letters, he offered the luxury to organize, in 1439, a Council in Florence to try to bring the Orthodox Church and the Catholic Church, taking in its charge all costs, including travel of the Ethiopian delegates! "It touches the sky and its shadow extends throughout Tuscany," said then to him in Florence. At his death, his fellow confer the dignity of "father of the fatherland." His son and successor, the Goutteux, and especially his grandson Lawrence the magnificent stone will not have his wisdom: failing business, they will leave the Bank collapse, which closed finally in 1494, thereby depriving the tool which had provided the power of the clan.