Medici Money: Banking, metaphysics and art in fifteenth-century Florence

Despite this exemplary strictness, in 1466 Pope Paul II declared that the Church, in alliance with the Medici bank, would now operate a monopoly on the sale of alum throughout Europe. After salt and iron, alum was the most important mineral of the time. Without it, the cloth trade could hardly have functioned. But how could the Church justify such a flagrant breach of its own laws? The profits from this ambitious commercial venture, said the Holy Father, would go toward a new crusade against the Turks. This made the monopoly not only legal but virtuous. It was a case of the desirable end justifying the otherwise-sinful means. A dangerous precedent for a religious organization.

Here are the circumstances. The annual European market for alum was worth something in excess of 300,000 florins, almost ten times what the king of England owed the Medici bank. Only a very small amount of the mineral was actually mined in Christendom, on the island of Ischia at the northwest entrance to the Bay of Naples. The quality of this deposit was poor, so poor that in some northern European markets its use was banned, because potentially harmful to the wool it was supposed to treat. Hence most alum had to come from mines in the Gulf of Izmir, on the eastern shores of the Aegean, now under the control of the Turks, and hence Islam. These mines had been developed for the most part by the Genoese, who thus controlled most of the trade in alum, paying taxes and customs duties to the Turks and thus helping to finance the constant Turkish expansion into Christendom, through Eastern Europe.

In 1460, the Italian merchant Giovanni da Castro, whose father had been a close friend of Pope Pius and who had recently escaped from creditors in the Eastern Mediterranean to live under the pontiff’s protection in Rome, discovered a huge deposit of high-quality alum in the mountains of Tolfa, northeast of Rome. Understanding the importance of the discovery, Pius at once declared this barren area of land to be Church property. Castro would mine and refine the alum and the Church would market it, thus gaining a huge income for themselves and taking away a huge income from their enemies, the Turks.

To market the mineral on a wide scale, however, both credit and commercial expertise were necessary. Hence in 1466, Pius’s successor, Paul II, decided to make a contract with the Medici bank that allowed them to use their Europe-wide trade network to sell whatever the Italian mine produced. At the same time, Pope Paul announced that any merchant found to be purchasing Turkish alum would be punished with excommunication, since buying from the Turks what could be bought from the pope amounted to aiding the attack on Christendom. All this came as very bad news for the Venetians, who had recently taken over from the Genoese the concession to work the alum mines in the Gulf of Izmir.

In 1470 the papal monopoly was firmed up by establishing an alum producers’ cartel with the owners of the mine in Ischia and with the king of Naples, to whom those owners paid a duty on whatever they produced. Under this agreement, the entire volume of alum mined and refined for the European market would be controlled by the Church in such a way as to keep the prices as high as possible, a sort of fifteenth-century OPEC. Only a year after signing up to the cartel, however, the Medici and Pope Paul pulled out when it became clear that Ischia would never be a dangerous competitor, and this for the simple reason that wool manufacturers much preferred the better-quality alum from Tolfa.

At first glance, such a coup seems to put the Medici bank in a league of its own. They now have sole rights to sell one of the most important industrial products of their time. Those rights are backed up by the threat of excommunication. In Rome, Giovanni Tornabuoni is absolutely convinced that all the bank’s problems are now solved. This is the dream deal that everybody has been looking for, the deal that will take all the tedium and risk out of banking and allow important people like himself and Tommaso Portinari to spend more of their time building up their libraries, commissioning paintings, attending lavish functions at court, and, in general, behaving more like their Medici masters.