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Credit

As the Hanseatic merchants have rarely noted the cash transactions, most of the entries in Pyre’s account book describe credit transactions. He used a variety of credit forms such as cash credits, trade credits, annuities, and so-called tuedderlegynge. The loan was described either with some form of verb ‘lenden’ (‘lend’) or with the adjective ‘schuldich’ (‘due’). However, it occurred very often that the credit transaction was not explicitly described but can be interpreted from the merchant’s remarks.

Cash credit

Pyre mentioned cash credit he granted or received in more than 130 instances. The sums varied a lot, from just half a Mark to up to nine hundred Mark Pr.1 Usually, no collaterals were involved, neither in the form of deposits nor with warrantors. The omission of securities might be due to the fact that all those credits were granted within existing business relationship. Nevertheless, promissory notes could have been used in addition (which will be explained below). A significant fraction of Pyre’s credit transactions was processed in foreign currencies. We can assume that some monetary loans could have been granted to permanent business partners when they suddenly needed a specific currency. The paybacks were either in the same currency or in Mark Pr. Therefore, in some transactions, the credit in foreign currency evolved into currency exchange.

Unfortunately, it is not possible to deduce the interest rate in spite of the notable number of mentions in his book because Pyre did not use to add information regarding the loaned and the paid back sum, and the complete dates when the credit was granted and cleared.

Credit in commodities

In Pyre’s merchant book, we can observe that he used to lend and borrow not only coins but also commodities. The description of such transaction is very similar to the description of cash credits. In 1423 he noted ‘Item noch Hans gelent 500 clesemes, ed stont 30 '/2 mk. Item noch gelent 1 gulden sware krone [ed stont] 6 ferd' (‘Furthermore, I lent Hans 500 [furs], it was 30,5 mk. Furthermore, I lent [him] 1 gold heavy crown, [it was] 6 ferd) (Orlowska 2020/2, 3r 10). Such transactions could occur similarly to the transactions regarding foreign currencies, when particular merchandise was needed, that the merchant did not own. Consequently, in 1445, Pyre should provide wax to Bernd Pynyg but he was not able to purchase enough wax before the delivery so he borrowed one piece of wax from Hynryk Vosse ‘Item soe lende my Hynryk Vosse 1 stucke masses, dat Bernd Pynyg untffenk [...]’ (Orlowska 2020/2, 82v 5). As it happened with currencies, the return could be done with the same merchandise or later paid up, converting a loan into a simple sale.

Trade credit

An even significantly larger portion is the trade credits. While Pyre only explicitly noted that a payment was done on borrow (‘tho borge’) in five transactions (Orlowska 2020/2, fol. 68r 1, 71r 7, 91r 13, 106r 9, 107v 6), analysis of the source, however, demonstrates that most of the sales and purchases were done by borrowing. Thus, the number of implicit trade credits constituted the majority of entries in Pyre’s merchant book.

There are only roughly 25 records per year in which any date is mentioned, however, it is usually the day of payment. Only in 71 transactions (ca. two per year) both the date of the transaction and of the payment were recorded.

The spread of the payment periods is huge and varied between 14 to 289 days. The median was 99 days, the average 115. If the payment should be done in two rates, the first payment was, on average, due already on the 71st day, the second on 138th day. However, there were only six fully described cases of payment with two rates so that the analysis of this type of payment has to be done very prudently. Even if we examine all the cases with two requitals, including those where the day of the payment was not noted, there is no pattern regarding merchandise or the size of a transaction. The only pattern that can be observed is that the business partners were usually living in Gdansk which probably made the split payment easier as no additional effort or cost of money transfer arose.

Within these 71 transactions, for which both the date of transaction and payment were noted, 11 partners are named twice, seven of them traded additionally with the same merchandise so that ceteris paribus a comparison can be made. The hypothesis was that the development of the transaction should have influenced further transactions: the more punctual the repayment was the better conditions should be offered in the second transaction. This assumption turned out to be false. Neither the price of the merchandise nor the length of the payment period changed in favour of the punctual partner or got worse for partners that were very late with their first payment. The only exception is the monger Herman van Eymken, who bought oil twice. As for the first transaction made in 1448, the amount was small and the payment period very short as it spanned only over 21 days. One year later, he bought threefold and the payment period was extended to 283 days. Furthermore, in the second transaction, his surname was also noted while, in the first one, he was described only by his given name and occupation (Orlowska 2020/2, fol. 77r 7, 75r 9). However, it has to be admitted that all partners with the exception of monger van Eymken were Pyre’s long term partners and thus trust could have been established and, therefore, the delayed repayment had no influence on the relation.

The current date of a payment was documented in approximately every tenth note (Orlowska 2020/2 fol. 68r 7, 69r 5, 74r 5, 75r 1, 76r 1,2, 106r 6). The analysis of these seven cases has not revealed any patterns other than that the requital was never on time. The payment periods varied from 57 to 218 days, the requital was late by at least eight days with a maximum of 333 days (14-222%). Even very late remunerations were not higher than the sum named in the loan transaction therefore the delay in repayment was not punished with an additional fee.

The payment scheme of these seven transactions reflects the majority of the cases, however, in some cases, the debts were paid before the due date. The date of debt clearing was much more determined by the presence of the debtor, or one of his partners, in Gdansk than by any calculations. Therefore, dates were seen rather as indices than as strict terms. Sometimes, this ambiguity is obvious by the definition of the date. In a number of transactions, Pyre noted that the payment (or delivery) should be done in spring with the ‘first open water’, when the water is free from ice (‘toe betalen op ed vorjar met den eyrsten oppen water', Orlowska 2020/2, 83r 12). The further case, in which this term was used, shows quite clearly the understanding of payment dates as Pyre noted ‘to be paid on Easter, with the first open water’ (‘op Ostern betalen med dem eyrsten open water', Orlowska 2020/2, 84r2). This is one of the reasons why Easter was the second most popular payment date and was chosen 75 times. Nearly as popular as Easter was Pentecost which was mentioned 72 times, followed by the date of the only annual fair of Gdansk - St Dominic (August, 4), that was chosen 70 times. St Michael’s Day (September, 29) was the most popular date in Pyre’s business, chosen 84 times, and the second popular date of clearing, St Martin’s Day (November, 11) selected 64 times.

Often, credit was also repaid in different rates than initially agreed upon, usually divided into more but smaller rates. In addition to the local currency, Mark. Pr., payments were often made in foreign currency or in different currencies at the same time. Pyre’s descriptions of such payments clearly demonstrate that the use of coins was purely conceived in the amount of precious metals. As we could prove, he was able to quantify the gold content of the coins as he correctly appraised the price of gold coins of rapidly changing quality. He often just noted the type of metal and their converted value in Mark Pr. Rates were often cleared with debts of other merchants thus a debtor paid his dues by having one of his own debtors pay them. The debt clearing could include multiple stages. Despite this convolution, the portion of debts paid was very high so that very few credits in the merchant book remained unpaid. This demonstrates the enormous importance of reputation and credibility to a Hanseatic merchant.

 
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