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The extent of the trade in farm money and its buyers

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In the 16th and 17th centuries, a total of 737 sales of farm money were recorded in the three small towns of the Pardubice estate. Most of them were made in Bohdanec (57.5%); in Dasice, it was 30.5% and 11.9% in Tynec. The size and number of farm holdings in each town played an important part in this. The high percentage of sales in Bohdanec might have been caused by financial possibilities connected to the large output of local beer which was supplied to the part of the estate north of the Elbe River until the beginning of the Thirty Years’ War.

In the first half of the 16th century, there were surprisingly few documented sales which was caused by the gradual introduction of the administrative books by the estate and by the fact that in the oldest period many records were made only retrospectively and mutual claims were not registered in detail. Almost a half of the sales was recorded after 1650. It is mainly orphan books which reveal the increasing number of these transactions. The amounts of purchased repayments reached their maximum in the second half of the 17th century when the buyers were mostly holders of the farms whose farm money was purchased. In (mysh'm, ze tarn neni velke I) land transfer registers, most sales were recorded in the second half of the 16th century. The number of sales decreased afterwards, which was due to the few preserved registers of patrimonial duties. The higher number of recorded sales is also reflected in large amounts of purchased repayments in these periods. The amount of purchased money ranged from one kopa (a bag of threescore groschen) to 454 kopas. The highest sums were paid in the last quarter of the 16th century and in the first half of the 17th century.

Three groups of buyers participated in the money trade to varying extents. The first group was holders of the tenant farms whose farm money was purchased. The second one was buyers who did not hold this tenant farm or it was not recorded about them, which means a third party. The last group was institutions. The farm holders predominated after 1650 - from that date, they bought more than half of the farm money sold. The amount of purchased money ranged from 1.33 to 370 kopas and the paid amounts varied from 0.67 to 165 kopas. Buying up farm money became a more common way for tenant farmers to pay off their own farm holdings more quickly and cheaply and it also reduced the indebtedness of tenant farms. It is clear from the records that farm holders had a right of first refusal to buy out farm money, which they did more and more frequently. An institution or a third party buyer purchased the money only after the farm holder refused to do so, either because he did not want to, or because he did not have sufficient cash (Vs Pee, bk. no. 336, fol. 206v, 1710, fol. 337v, 1731, fol. 616r, 1713; bk. no. 327, fol. 167v, 1646, fol. 348r, 1662; bk. no. 282, fol. 574r, 1582).

Institutions participated in about one third of sales, mostly in the last quarter of the 16th century. In general, they bought out larger amounts and on average they had a higher proportion of the purchased sums than of the number of sales. The most common institutions which bought farm money were local towns and villages (in almost half of the cases). Church endowments constituted one third of buyers, but unlike towns and villages, these for the most part were not local. The proportion of towns and villages was larger until 1675, afterwards church endowments started to participate in this trade much more. The growing activity of church endowments was connected to the gradual consolidation of their property in the second half of the 17th century (Pumpr 2010, p. 294nn). It was also supported by landlords who secured the right of first refusal after farm holders. The next institutional creditors were guilds from Bohdanec, chiefly butchers (9) and tailors (7). The final frequent buyers were found only in Bohdanec - a literary brotherhood (church choir) (6) and a hospital which surprisingly appeared only once (Vs Pee, bk. no. 319, fol. 79r 1594, fol. 194v, 1591; bk. no. 336, fol. 506v, 1706, fol. 703v, 1692; bk. no. 283, fol. llOr, 1588; bk. no. 279, fol. 207r, 1561).

The share of third-party buyers on the whole decreased, although not evenly. They were represented more strongly between 1551 and 1575 and then between 1601 and 1625. Third parties were later replaced by other groups of buyers who had the right of first refusal, that is by farm holders and probably institutional buyers, mainly church endowments and apparently also towns and villages.

The group of third-party buyers also included orphans for whom the farm money was purchased as a form of appreciation of the cash which had remained on the farm holding after their father’s death or of invested orphan money. This practice was supported by landlords who stated in their decree that farm money ‘was better purchased for our poor orphans, whose money would have lain in chests otherwise’ (Kalousek 1905, p. 378n). Out of 13 cases of purchasing farm money for orphans, only four occurred in the 17th century. The trade in farm money on behalf for orphans in general was certainly bigger. Farm money in surrounding villages was bought for orphans from towns and at the same time farm money in towns was purchased for orphans from villages.

In the group of third-party buyers, there are also individuals for whom purchasing farm money was a strategy for investing or saving surplus cash. In the 16th century, some buyers appeared repeatedly, particularly in the town of Bohdanec. Some of them were presumably involved in the lucrative brewing of beer which they supplied to inns across a designated area. The profit and cash they made in this way could have been invested afterwards, for example in buying out farm money. However, landlords gradually restricted brewing by the inhabitants of Bohdanec until it ended completely at the beginning of the Thirty Years’ War. Involvement in the trade with demesne fish, which reached far beyond the borders of the estate to approximately 100 km-distant Prague, represented a rather more short-term investment (Vs Pee, bk. no. 315, fol. 64r, 1562).

The profitability of purchasing farm money is reflected in the percentage of purchased money to money paid out in cash. Prochazka states that this figure ranged from 15% to 70% of the purchased amount (Prochazka 1963, p. 352). On the Straznice estate at the turn of the 16th century, it was between 8% and 40% (Mainusova 1965, p. 4). On the Pardubice estate, this range was even wider than Prochazka suggested - from 11% to 92.7%. Chocholac indicated that the paid amount was around one third of the purchased sum in several Moravian localities before the Thirty Years’ War. Based on an analysis of one locality, this ratio decreased even more after the war, due to the shortage of cash and uncertainty over repaying shares on farm holdings (Chocholac 1999, p. 128). If the first half of the 16th century is not taken into account, the average percentage of purchased money to money paid out in cash gradually decreased. After 1650, it was common that farm money was purchased for one third of its real value on average. The sample did not prove that this percentage was influenced by the type of buyer or the purchased amount. Judging from the average values, it seems that it was more profitable to sell the farm money to a third party or to relatives who were represented mainly in the group of farm holders. The seller could usually expect a higher share of the sold amount from them than from the other two groups of buyers. Nevertheless, the differences are not significant.

Conclusion

The trade in farm money was connected to the exchange of farm holdings and mainly to the specific system of repayments. It was a sale of claims on tenant farms guaranteed in the land transfer registers. The seller sold their farm money which they were entitled to on a farm holding. The sellers needed to obtain cash quickly in order to cover various expenses related to worsened social, health, and economic conditions. During the 17th century, they were probably more motivated by prolonging the repayment of farms and by the necessity to wait sometimes even decades to be paid their own share of the inheritance. The sellers therefore preferred to obtain at least a part of their share immediately. Buyers usually purchased farm money for a third of their value. If the buyer was the holder of the farm where the money was purchased, they could deduct the whole amount from the repaid amount as if they had paid it themselves. In other cases, the buyer expected repayment of the whole purchased sum and considered it an investment. The security of claims was tied to regular payment of repayments which was heavily influenced by the economic situation of tenant farms. It can be assumed that during the Thirty Years’ War and in the second half of the 17th century the farm holdings had very low reserves and were unstable. Any fluctuations caused by crop failure, death of livestock or other disasters disrupted the economic balance of the farm and made it impossible for tenant farmers to meet their liabilities. This instability was probably a reason why third-party buyers participated less in this trade. It was the third-party buyers and institutions who risked the irretrievability of the investment. In contrast, the number of buyers-farm holders who reduced the indebtedness of their homestead in this way increased. From this point of view, it seems logical that landlords aimed to oversee these transactions. Landlords supported the practice of farm holders’ and institutions’ purchasing farm money by invoking their right of first refusal and they also tried to prevent third-party buyers from undertaking risky financial operations.

References

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