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

Alas, it was not to be. In England, in Burgundy, in Venice — the main markets for alum — monarchs and merchants were not as impressed as they had once been by the threat of excommunication. It was hard to feel that what you had been doing in good conscience all your life had suddenly become a mortal sin. They employed local theologians to argue the case against the papal monopoly. A sin (like a monopoly) is always a sin, these wise men decided, even if the profits from it, at least as far as the pope was concerned, were indeed being used to pay the Hungarian king to fight the Turks. In Bruges, Tommaso Portinari counseled and counseled rash Duke Charles of Burgundy, begging him to impose the alum monopoly throughout his dukedom and ban sales of the mineral from any source other than the Medici bank. Offered a cut on profits, the duke at first agreed. But however rash he might have been, Charles recognized the signs of rebellion when he saw them. The local merchants, both importers and end users, were furious. The wool trade was at risk, they said. In the end, the duke backed down. Turkish alum continued to arrive in the port of Bruges.

When planning production at the mines in Tolfa and Ischia, the monopolists had imagined they would have the market entirely to themselves. They aimed to meet the entire European demand in just a few years. So when the threat of excommunication failed to stop the Venetians and Genoese from dealing in Turkish alum, the sudden glut caused by supplies from both sources made it hard to maintain old prices, let alone increase them as the monopolists had planned. Bulk buyers of alum in London and Bruges formed associations and lobbies to increase their negotiating power. The papal percentage on incomes from sales had to be halved, which soon meant less money to fund the Hungarian king.

To make matters worse — at least as far as the Medici bank was concerned — this venture into merchandising alum represented another blow to the already-precarious balance of trade and movement of money among the bank’s various branches. Here was yet another product moving north from Italy. Once again cash would have to be collected in London and Bruges and sent south. Why couldn’t the alum have been discovered in the Cotswolds, for heaven’s sake, to replace the wool the English were now so reluctant to sell? That would have been so convenient. Unwisely, in return for its rights of monopoly, the bank had agreed to pay the pope his cut on whatever was mined before the product was shipped and sold.

Given the tensions between the Bruges and Rome branches of the bank, particularly since Giovanni Benci’s death in 1455, the problems arising from the alum monopoly were predictable enough. As always, Bruges and London were slow to send money down to Rome. As always, Tornabuoni, in Rome, was impatient, suspecting as he did that Bruges and London were squandering the incomes from alum sales in loans to dukes and duchesses. An employee from the Rome branch was sent north to see what was going on. Then the pope sent his own negotiators to tackle the duke. But if there was one thing Tommaso Portinari loathed, it was interference. Papal spies! he complained in a letter to Lorenzo de’ Medici. If I can’t counsel the duke, what chance has a bishop got?

As the years pass, the situation deteriorates. A Florentine galley sinks. The cargo is lost. Then two galleys arrive simultaneously from Genoa and Venice, bringing Turkish alum. At this point, the port of Bruges is warehousing a three-year supply of the mineral all at once. Needless to say, the price collapses. More and more, the alum deal comes to assume the function of a chimera; if only the bank could really impose this monopoly, everything would be okay. But in the meantime, there are shipping costs and warehousing expenses and very little income. On March 18, 1475, Tornabuoni tells Lorenzo de’ Medici that between paying the producers and the papal dues and the galleys, the bank is actually losing money on alum. Meantime, there was the Volterra affair.