Thursday, July 30, 2015

“The Richest Man Who Ever Lived”

By Edward Chancellor

Modern German bankers have somewhat tarnished reputations. In the past decade, when they weren’t snapping up subprime securities on Wall Street, they busied themselves lending to the Greek government at rates only slightly above their own government’s matchless credit. It wasn’t always this way. Some 500 years ago, the bankers of southern Germany were the most powerful in Europe, models of prudence and ruthlessness, and a vital source of funds for the Continent’s warring dynasties.

A contemporary chronicler wrote of the greatest of their number— Jacob Fugger of Augsburg—that “emperors, kings, princes and lords have sent to treat with him, the Pope has greeted him as his well beloved son. . . . He is the glory of Germany.” Montaigne described the rooms in Fugger’s Augsburg palace as the most magnificent he had ever seen. Fugger died in 1525. His epitaph, probably dictated by the banker himself, claimed immodestly that he was “second to none in the acquisition of wealth . . . as he was comparable to none in life, so after death he is not to be numbered among the mortal.”

How Fugger attained this exalted position is the subject of Greg Steinmetz’s enjoyable and brashly titled biography, “The Richest Man Who Ever Lived.” Like all great fortunes, Fugger’s derived from a combination of luck and character. He was fortunate to be born into a prosperous family of merchants in a city whose position in European trade and finance was ascendant. Augsburg, in what is now Bavaria, was a “free city,” answering to no feudal overlord, well-positioned on the trade route between Italy and the Low Countries and close to the great silver and copper mines of the central Europe. The Fuggers, along with other Augsburg merchant-bankers, provided loans to local rulers secured with the produce of their mines. This was a very profitable business.

Jacob Fugger emerged as the pre-eminent financier to the house of Habsburg, the Austrian rulers who through a series of dynastic marriages came to control much of Europe—from Spain in the west to Hungary in the east, from Sicily in the south to the Netherlands in the north. The Habsburg Emperor Maximilian was chronically short of cash to fight wars, cement political alliances and pay for his family’s marriages. Machiavelli, a contemporary, said of him that “his easy nature causes him to be deceived. . . . Anyone could cheat him without his knowing it.” In other words, Fugger’s imperial client was something of a soft touch.

Read the rest here.

1 comment: