Copyright ã International
Bond & Share Society 2001
From time to time in auctions we see a
bond issued by an Italian ‘Monte’ (plural Monti) ; indeed, one auction in
Düsseldorf offered a collection of 19 different such bonds, all issued in
Florence, and dated from 1637 to 1805. What were they ?
The
‘Monti’ were financial institutions which existed from the Middle Ages right up
to the 19th century (and the name survives – the Monte dei Paschi di
Siena, which became a full bank in the 1620s, is still an important Italian
bank today). It is difficult to say when the Monti first appeared. A similar
institution existed in Freisingen, Bavaria, in 1198 ; others appeared in
Salins (Burgundy) in 1350, and in London in 1371. However, it was in Italy that
they became most numerous and powerful. Their initial inspiration came from the
Franciscan order, but later they received State backing. The earliest reference
to a Monte in Florence is 1307, but 1369 brought the formation, in both Siena
and Florence, of the first well-documented Monti. There were various types of
Monte, but much the most important was the Monte di Pieta. The earliest known
dates from 1462, when it was founded in Perugia, central Italy ;
thereafter they spread through the whole country.
The Medici family of Florence were great
promoters of the Monti, and Florence was fertile ground for their growth
(Florentine State loan stocks had been negotiable before the year 1328). In
time, certain Monti opened subsidiaries in other European countries – Brussels
in 1618, then Antwerp, and Paris in 1777. At first, the Italian Monti existed
to receive donations, requests in wills, etc, and to use these funds for
charitable purposes. However, these were inadequate to meet the demands made on
them, and the Monti di Pieta sought to accept deposits on a commercial
interest-bearing basis. This needed the approval of the Pope, and this was
given by Leo X (Giovanni di Medici) in 1515. From this point on, the charitable
aspect of the Monti became less pronounced, and the Monti di Pieta expanded
into commercial banks. They then raised loans from the public, usually to lend
to the State or Commune, for a specific purpose, against a guarantee of
interest and repayment from specified revenue of the State or Commune (such as
the salt tax). Purposes included payment of dowries by the State, finance of
grain-storage, or creating a system of pawn-shops (monte di pieta means
pawnshop today) ; one Monte, formed in Rome in 1526, was to raise funds
for the war against the Turks. Frequently the concession for a Monte was given
to members of the Jewish community.
1624
saw a reorganisation of the Monti by Ferdinand di Medici, as one result of
which, the Monti started to issue interest-bearing bonds, each for a number of
luoghi (obligations) of 100 scudi each, the number of luoghi being entered by
hand, along with the name of the holder, date of issue, etc. These are the
papers on the collectors’ market, and date form the 1630s to the early 19th
century. The Monti were either ‘vacabile’ or ‘non vacabile’ (alternatively ‘redimible’). ‘Vacabile’ meant that the
interest was paid on the bond only until the death of the lender, when the
capital was lost, while ‘non vacabile’ meant that the capital and interest
could be transferred from one person to another, and the capital could be
redeemed (by drawing lots). The ‘vacabile’, naturally, paid a higher rate of
interest.
The
difference is rather similar to that between the French rentes viagères and
perpétuelles (and indeed the rentes were created in 1522 on the same pattern as
the Monti). The certificates of Luoghi are quite decorative. Those from
Florence show the Medici coat-of-arms (with six spheres), together with loaves
of bread, although later pieces (from about 1750) have just one large
coat-of-arms of the city of Florence. They are printed by copper-engraving on
vellum, and have a paper seal embossed with the arms of Florence. Most were
issued under the authority of the Grand Duke of Tuscany, although at least one
is known issued in 1805 in the name of the King of Etruria (a puppet state
created in Italy after the Napoleonic invasion).
Reference :
Portafoglio Storico catalogue, October 1995, and Auktionhaus Tschöpe catalogue,
December 1994.
Copyright ã INTERNATIONAL BOND
& SHARE SOCIETY 2001
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