What were the effects of the crises of 1340 on society in Florence?
The Peruzzi family was an old Florentine merchant family. Its members had been involved in commerce, textiles, and banking since the early 13th century.[1] The late medieval period was one of economic growth and Florence’s domestic clothmaking industry grew tremendously, as did its involvement in the international trade of wool and grain to feed its rising population.[2] Brilliant Peruzzi patriarchs were able to capitalize on this growth and expand their company’s industrial scope and international contracts into the 14th century. Lending to cash-hungry European monarchs who needed money to wage war allowed companies like the Peruzzi to secure lucrative trade monopolies in vital commodities like high quality English wool.[3] The growing strength of the Peruzzi company encouraged international investors from across Europe to deposit large sums of money to the company with the promise of lavish returns from guaranteed interest payments of 8%. At its height in 1308, the company had a total capital of 124,000 lira a fiorno and in 1335 it had assets of 742,247 lira a fiorno.[4] In other words, the company, its Peruzzi leaders, and Florence itself were rich.
However, the company was not invincible. From 1336-1338, Florence was trapped in a bloody and expensive war with Verona, a rising power in the region. As the debt piled, Florence settled to pay Lord Mastino of Verona 250,000 florins for the province of Lucca which alarmed the state of Pisa to the south and once again trapped Florence in another expensive, bloody war. Due to the abolition of direct taxation, the Florentine government paid for these wars by loans from citizens and companies. By the 1330s, companies were themselves not in a position of strength either. The European-wide growth that fed the Florentine corporations was slowing by the 1330s and a famine hurt the valuable grain trade. The Peruzzi company took a risk and leant Edward III of England hundreds of thousands of florins during his failed campaigns against France in the 100 Years’ War. In 1341, Florence suffered a terrible defeat at the hands of the Pisans and Pope Benedict XII shortly removed the Peruzzi as the collectors and transmitters of Papal revenues.[5] Trust in the ability of the Peruzzi and the other major companies was shaken and it would take just one person to start a bank run.
The following events would go on to send a shockwave across the whole of Renaissance Florentine society and touch every one of the commune’s citizens. The upper-class elites, the poor and working class, and the middle-class merchants and artisans were all hit by the shockwave. They each suffered through it in different ways; whether it was social, physical, or mental. However, the crises of the 1340s would be a paradigm shift in wealth and the city’s management of its debt. Bold reforms by the government of Florence led to the socioeconomic rise of many lower-level merchants in the aftermath of the crisis, which helped fill the vacuum left by the weakened elites. Thus, even after a terrible crisis, Florence was able to survive and partially recover its wealth through the economic growth of a new class of citizens.
[1] Edwin S. Hunt, The Medieval Super-Companies: A Study of the Peruzzi Company of Florence (New York: Cambridge University Press, 1994), 19.
[2] Hunt, The Medieval Super-Companies, 44-45.
[3] John M. Najemy, A History of Florence, 1200-1575 (Malden, MA: Blackwell Pub., 2006., 2006), 116-117
[4] Najemy, A History of Florence, 113-115.
[5] Najemy, A History of Florence, 132-135.
