The Spice Islands as depicted by Magellan in his 1518 argument that they actually lay within Spain's global sphere of influence - versus Portugal's claim to them. Portuguese dominion is on the left, Spain is on the right.In Part 1 we briefly saw that the sovereign Magellan sailed for, although correctly titled ‘King of Spain’ and (from July, 1519 on) as ‘Holy Roman Emperor’, was in fact a Fleming, born and raised. Charles V’s administration was of course dependent on financing in order to function – as all governments are and were. Expeditions like Magellan’s required real capital to fund them and that capital had to be sourced, either borrowed from merchant bankers or allocated from some existing revenue source.
As with most investment decisions taken today, a request for financing from the king meant that there had to be a reason for the funding. In this post we look at both the perceived purpose of this voyage (discovering a new route to the spice markets and plantations of Southeast Asia) and the financial backing of this venture to see yet another aspect of Flemish contributions to Ferdinand Magellan’s success.
A famous Italian author of the time, Ludovico Guicciardini, captured the essence of this connection between the Flemish, the Portuguese, the spice trade and finance in 1560:
Vasco da Gama's route across the bottom tip of the African continent to reach the spice emporiums of Calicut in India is of nearly equal importance as Columbus' westward voyages.
Vasco da Gama's route across the bottom tip of the African continent to reach the spice emporiums of Calicut in India is of nearly equal importance as Columbus' westward voyages.[One] of the notable advantages which ha[s] made the city of Antwerp so great, rich, and famous, began about the year 1503-1504, when the Portuguese, by marvelous and amazing navigation, and with warlike equipment, having, just before, occupied Calicut, made a treaty with the king of that region. They began to transport spices and drugs from India to Portugal and then to carry them from Portugal to the fairs in this city [Antwerp].
These spices and drugs were formerly brought by way of the Red Sea to Beirut and Alexandria, and from these places carried by the Venetians to Venice to supply Italy, France, Germany, and other Christian provinces. But once this commerce had been intercepted by the Portuguese, and they had sent an agent to Antwerp in the name of their king, little by little this trade attracted the Germans.
First the Fuggers, the Welsers, and Hochstaetters became interested, and perhaps before all of these Nicholas Rechtergem, already mentioned, who was the first to make an agreement at Antwerp with the agent of the king of Portugal concerning spices, and the first to send them from here [Antwerp] to Germany, where, not yet knowing anything about the new voyage of the Portuguese, the Germans were so astounded that they doubted the quality of said spices, and suspected that they were adulterated. This was because the Germans had been accustomed to furnish the people of these lands with the same drugs which came overland from Venice. At this time there were several honorable families of Spaniards in this city, such as those of Diego d’Aro [de Haro]…
Thus about the year 1516 all the foreign merchants who had been living at Bruges, one after the other…came to this place [Antwerp], with no less damage to Bruges than great profit and advantage to Antwerp.[i]
Spices to Europe were a Venetian monopoly until Vasco da Gama's return from India around Africa in 1499. Once in Venice, spices were shipped to Bruges, for further wholesaling and distribution into northern Europe. The Spice Trade
It is important here to recall that it was only twenty years before Magellan’s departure – in 1499 – that Vasco da Gama had broken the Venetian-Arab monopoly on spices.[ii] By sailing to India by way of rounding the Cape of Good Hope, da Gama broke the Venetian-Arab monopoly on the distribution of Asian spices to Europe. Instead of hundred-pound sacks sent on a sea journey from the emporiums of India and then large camel caravans traveling at 2 miles an hour across the Arabian deserts to Mediterranean ports and a final dash avoiding pirates before reaching Venice[iii], bulk cargoes in the hundreds of tons could be tran-shipped across the Indian Ocean and, after rounding Africa’s southern tip, sail up around the western coast of Africa before docking in Lisbon.
It is important here to recall that it was only twenty years before Magellan’s departure – in 1499 – that Vasco da Gama had broken the Venetian-Arab monopoly on spices.[ii] By sailing to India by way of rounding the Cape of Good Hope, da Gama broke the Venetian-Arab monopoly on the distribution of Asian spices to Europe. Instead of hundred-pound sacks sent on a sea journey from the emporiums of India and then large camel caravans traveling at 2 miles an hour across the Arabian deserts to Mediterranean ports and a final dash avoiding pirates before reaching Venice[iii], bulk cargoes in the hundreds of tons could be tran-shipped across the Indian Ocean and, after rounding Africa’s southern tip, sail up around the western coast of Africa before docking in Lisbon.
Modern historians often view this event coming as it did at a chronologically convenient point (the year 1500) but also signaling the beginnings of European predominance globally.[iv]
Even though da Gama’s trip had taken three years to complete, and he had lost all but one ship (and the European goods that they had brought to trade sold in India at roughly 10% of their cost), the profits on the spice cargo made huge profits for investors – 60 times the cost of the expedition or over 4,700% return on investment.[v] The pepper that Da Gama purchased in Calicut, India for 3 ducats per hundredweight (which was already marked up by the Chinese, Malay, and Indian traders at each leg of the journey before it came to market in Malacca), was sold in Portugal for 80 ducats per hundredweight.[vi] In the context of broader trade numbers, at least 1,000 tons of pepper were imported annually into Europe.[vii] Moreover, it was not so much used as a casual confection, but more critically as a preservative for Autumn-slaughtered livestock, especially as the meat spoiled and rotted into the Spring.[viii] So the potential for great riches from a new channel of access to not only pepper but cloves, mace, nutmeg, and the rest[ix] was truly unimaginable.
Even though da Gama’s trip had taken three years to complete, and he had lost all but one ship (and the European goods that they had brought to trade sold in India at roughly 10% of their cost), the profits on the spice cargo made huge profits for investors – 60 times the cost of the expedition or over 4,700% return on investment.[v] The pepper that Da Gama purchased in Calicut, India for 3 ducats per hundredweight (which was already marked up by the Chinese, Malay, and Indian traders at each leg of the journey before it came to market in Malacca), was sold in Portugal for 80 ducats per hundredweight.[vi] In the context of broader trade numbers, at least 1,000 tons of pepper were imported annually into Europe.[vii] Moreover, it was not so much used as a casual confection, but more critically as a preservative for Autumn-slaughtered livestock, especially as the meat spoiled and rotted into the Spring.[viii] So the potential for great riches from a new channel of access to not only pepper but cloves, mace, nutmeg, and the rest[ix] was truly unimaginable.
Meet The Fuggers
Trade and finance have always had a symbiotic relationship. In early modern Europe, no less, trade was not only the engine of economic growth but also the primary source of taxes for the royal treasury. Since the royal treasury of young Charles V was seemingly always in need of extra cash, merchants who could extend loans to the sovereign, found trading privileges easier to come by.[x]
The most successful merchants of the Rennaissance were also bankers. At the pinnacle of early modern merchant bankers was the House of Fugger.[xi] The man who ran the Fuggers merchant banking house in the early 1500s was the third generation of that family to do so, Jakob Fugger.
Jakob Fugger as painted by Albrecht Durer between 1518 and 1520 - exactly the time when Magellan was preparing for and departing on the first leg of his circumnavigation.The capital that the Fuggers had available to lend to European rulers was derived from trading profits. One large source of that profit at the Fuggers derived from their control of the European distribution of the pepper trust for Venice.
Sometimes called “Jakob the Rich”, Fugger was a German merchant banker with extensive pan-European ties. Fugger had factors in most major European cities whose location was recognized as “Fugger’s”.[xii] Jacob Fugger himself was stationed for long periods in Brugge, had a key postat Antwerp and frequently traded in merchant caravans with Bergen, Bristol and Lisbon.
An excerpt from the "Trachtenbuch" (Book of Achievements) of Matthias Schwarz. Schwarz joined Fugger's business in 1516 at the age of 19. The picture here shows Jakob Fugger telling Matthias Schwarz what to enter into the books.For merchants connected to the court at this early stage in his reign – and in 1519, when Ferdinand sailed for the East, Charles V was only 19 – financing was an immensely profitable undertaking. “The Fuggers are said to have averaged profits of more than 50 percent per annum during the early 1520s, but as the demand [from the Hapsburgs especially] for credit rose, their [the Fuggers’] own funds proved inadequate and they began to borrow money at the Antwerp bourse rate of 6-8 percent, to which they, as creditworthy bankers, were entitled.”[xiii]
The Fuggers in today’s parlance, arbitraged the low cost of money based on their networks and reputation and lent it out at very high rates (with assets to back the cost of the loans, no less) to needy rulers. The Hapsburg royal family, of which Charles V of course was a member, had long depended upon the Fuggers for loans. Loans were provided much like pawnshops do so today: with something of value as collateral.[xiv] Often the collateral were gems, valuable paintings, or even land.[xv] If hard, transportable goods were not available as collateral, Charles V resorted to an asiento, or the right to collect certain taxes normally due to the Emperor.[xvi] Regardless of the property against which these loans were made, repayment was required in quarterly installments and “normally to be repaid in Antwerp at one of the quarterly fairs.”[xvii]
Were it not for a spectacular and opportunistic malaguetta pepper windfall on the West African coast by a Portuguese trading ship in 1485[xviii], Lisbon might have remained a backwater. But the arrival of this unexpected source of spices drew in Jakob Fugger. His arrival – and subsequent conferences with the Portuguese King and his advisors included a cartographer with deep ties to Antwerp, a Flemish wife, and a belief in a western route to the Spice islands: Martin Behaim (about whom I will write more in a future post). This visit also established a Fugger post at Lisbon (with monopoly rights to the pepper trade). The man who Jakob Fugger appointed to be his factor at the Lisbon post was Christopher de Haro of Antwerp.[xix]
Part 3 of this series will discuss Christopher De Haro of Antwerp and other Flemish contributions to Magellan's preparation for the world's first circumnavigation. Part 4 will detail the individual Flemings in the expedition.
Albrecht Durer's and Johannes Stabius' depiction of the world circa 1515, just before Magellan's circumnavigation.Endnotes
[i] Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially pp. 186-187.
[ii] Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially p. 196.
[iii] “Venice at this time was not only Europe’s chief market place, but also its greatest shipbuilding center, its foremost transport agent, and one of the leading manufacturing communities, rivaling Ghent.” Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 160.
[iv] For a recap of the historiography around this seminal turning point in history, see Peter Rietbergen, “Westerse geschiedschrijving en niet-wsterse geschiednis, onmogelijkheid of noodzaak, of wel: Europa in de ‘Vasco da Gama-era’” in Tijdschrift voor Geschiednis, 111e jaargang, aflevering 4, 1998, pp.533-544.
[v] Charles Corn, The Scents of Eden: A History of the Spice Trade, (New York: Kodansha, 1999), p.xxiv
[vi] Richard Humble, The Explorers, (New York: Time-Life, 1978), p.104. I have searched vainly for a more authoritative source and would welcome any suggestions on where that might be found.
[vii] Peter Spufford, Power and Profit: The Merchant in Medieval Europe, (New York: Thames and Hudson, 2002), pp. 380-381. Spufford says that at the end of the 14th century – 100 years before Magellan – the Venetians imported 500 tons of pepper annually and the Genoese and Catalans a further 200 tons each.
[viii] See the clearest explanation of this in Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 157.
[ix] “Spices such as clove[s], cinnamon, nutmeg, ginger, and numerous drugs such as rhubarb, cassia, agaric, dragon’s blood, mummy, senna-leaf, colocynth, scammony, tutty, mithridate, and treacle.” See Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially p. 196.
[x] See, for example, the string of translated documents online relating to Charles V’s constant borrowings from King Henry VIII in 1517 here: http://www.british-history.ac.uk/report.aspx?compid=93638 'Spain: 1517', Calendar of State Papers, Spain, Volume 2: 1509-1525 (1866), pp. 286-289. URL: http://www.british-history.ac.uk/report.aspx?compid=93638 Date accessed: 31 October 2009.
[xi] The Fugger family website: http://www.fugger.de/en/1_geschichte.htm
[xii] Albrecht Durer, the famous painter, wrote in 1520, a year after Magellan’s departure: “I have been into Fugger’s house in Antwerp. He has newly built it in very costly fashion, with a noteworthy tower, broad and high, and with a beautiful garden. I also saw his fine horses.” From Durer’s “Travel Diary,” in W.M. Conway, Literary Remains of Albrecht Durer, (Cambridge: University Press, 1889), quoted in “A Painter’s Travels” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), p. 230.
[xiii] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.72.
[xiv] For a fascinating glimpse into this process see the excerpt of a letter from the Emperor Maximilian I to Paul Von Liechtenstein, dated September, 1511, and the ‘collection letter’ from Jakob Fugger to Charles V in 1523, from J.Stieder, Das reiche Augsburg, (Munich, 1938), in Mary Martin McLaughlin (trans), “The Hapsburgs and the Fuggers”, trans. In James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.175-181
[xv] See the excerpt of a letter from the Emperor Maximilian I to Paul Von Liechtenstein, dated September, 1511, and the ‘collection letter’ from Jakob Fugger to Charles V in 1523, from J.Stieder, Das reiche Augsburg, (Munich, 1938), in Mary Martin McLaughlin (trans), “The Hapsburgs and the Fuggers”, trans. In James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.176-177. Maximillian pawned both the crown jewels (p.176) as well as “the four best chests of treasure, including our robes of investiture” (p.177).
[xvi] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.68.
[xvii] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.68. Interest rates that Charles V was charged on these loans could be as low as 12% per annum and as high as 100% per annum – such as immediately following his defeat at the Battle of Metz in 1552!
[xviii] The captain of the ship for the equivalent of a few hundred dollars in trade goods netted a profit of $4 million. See Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 166.
[xix] Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 167.
[i] Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially pp. 186-187.
[ii] Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially p. 196.
[iii] “Venice at this time was not only Europe’s chief market place, but also its greatest shipbuilding center, its foremost transport agent, and one of the leading manufacturing communities, rivaling Ghent.” Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 160.
[iv] For a recap of the historiography around this seminal turning point in history, see Peter Rietbergen, “Westerse geschiedschrijving en niet-wsterse geschiednis, onmogelijkheid of noodzaak, of wel: Europa in de ‘Vasco da Gama-era’” in Tijdschrift voor Geschiednis, 111e jaargang, aflevering 4, 1998, pp.533-544.
[v] Charles Corn, The Scents of Eden: A History of the Spice Trade, (New York: Kodansha, 1999), p.xxiv
[vi] Richard Humble, The Explorers, (New York: Time-Life, 1978), p.104. I have searched vainly for a more authoritative source and would welcome any suggestions on where that might be found.
[vii] Peter Spufford, Power and Profit: The Merchant in Medieval Europe, (New York: Thames and Hudson, 2002), pp. 380-381. Spufford says that at the end of the 14th century – 100 years before Magellan – the Venetians imported 500 tons of pepper annually and the Genoese and Catalans a further 200 tons each.
[viii] See the clearest explanation of this in Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 157.
[ix] “Spices such as clove[s], cinnamon, nutmeg, ginger, and numerous drugs such as rhubarb, cassia, agaric, dragon’s blood, mummy, senna-leaf, colocynth, scammony, tutty, mithridate, and treacle.” See Ludovico Guicciardini, “Antwerp, The Great Market” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.185-201, especially p. 196.
[x] See, for example, the string of translated documents online relating to Charles V’s constant borrowings from King Henry VIII in 1517 here: http://www.british-history.ac.uk/report.aspx?compid=93638 'Spain: 1517', Calendar of State Papers, Spain, Volume 2: 1509-1525 (1866), pp. 286-289. URL: http://www.british-history.ac.uk/report.aspx?compid=93638 Date accessed: 31 October 2009.
[xi] The Fugger family website: http://www.fugger.de/en/1_geschichte.htm
[xii] Albrecht Durer, the famous painter, wrote in 1520, a year after Magellan’s departure: “I have been into Fugger’s house in Antwerp. He has newly built it in very costly fashion, with a noteworthy tower, broad and high, and with a beautiful garden. I also saw his fine horses.” From Durer’s “Travel Diary,” in W.M. Conway, Literary Remains of Albrecht Durer, (Cambridge: University Press, 1889), quoted in “A Painter’s Travels” in James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), p. 230.
[xiii] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.72.
[xiv] For a fascinating glimpse into this process see the excerpt of a letter from the Emperor Maximilian I to Paul Von Liechtenstein, dated September, 1511, and the ‘collection letter’ from Jakob Fugger to Charles V in 1523, from J.Stieder, Das reiche Augsburg, (Munich, 1938), in Mary Martin McLaughlin (trans), “The Hapsburgs and the Fuggers”, trans. In James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.175-181
[xv] See the excerpt of a letter from the Emperor Maximilian I to Paul Von Liechtenstein, dated September, 1511, and the ‘collection letter’ from Jakob Fugger to Charles V in 1523, from J.Stieder, Das reiche Augsburg, (Munich, 1938), in Mary Martin McLaughlin (trans), “The Hapsburgs and the Fuggers”, trans. In James Bruce Ross and Mary Martin McLaughlin, eds., The Portable Renaissance Reader, (New York: Penguin, 1982), pp.176-177. Maximillian pawned both the crown jewels (p.176) as well as “the four best chests of treasure, including our robes of investiture” (p.177).
[xvi] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.68.
[xvii] William Maltby, The Reign of Charles V, (New York: Palgrave, 2002), p.68. Interest rates that Charles V was charged on these loans could be as low as 12% per annum and as high as 100% per annum – such as immediately following his defeat at the Battle of Metz in 1552!
[xviii] The captain of the ship for the equivalent of a few hundred dollars in trade goods netted a profit of $4 million. See Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 166.
[xix] Charles McKew Parr, Ferdinand Magellan, Circumnavigator: His Life and Explorations, 2nd ed., (New York: Thomas Y. Crowell Co., 1964), p. 167.
Copyright 2009 by David Baeckelandt. All rights reserved. No reproduction permitted without my express, written permission.
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