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Warrantors, promissory notes, entries in town books

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Due to such high reliabilities, warrantors for credits rarely play a role in Pyre’s merchant book. There were only two situations in which Pyre used a warrantor. A promissory note, on the other hand, was much more common.

Johan Pyre’s merchant book constitutes a valuable example of the prevalence of promissory notes in the Hanseatic sphere. A detailed analysis of his documentation offered only scarce evidence of using a promissory note or a demand for payment. Pyre called those papers ‘letters’ (‘breyve, breyffe’). The most interesting case, where a promissory note was used, occurred in 1437: Pyre paid 100 Mark Pr. to Tomas Schenkendorp for a promissory note issued by Nychawes Otten, which had initially been issued to Hynryk van den Berge. This transfer of the promissory note is the first known example of such a procedure.

However, transferred duties are relatively often present in Pyre’s merchant book. Due to its convenience, this pattern emerged especially often with business partners who did not travel to Gdansk and therefore could use promissory notes to move capital from afar.

The use of promissory notes must have drastically exceeded the cases in which Pyre registered them. How they were employed can be seen with the promissory note which remained in Pyre’s book and helped to identify his name (Orlowska, 2020/2, 66v). Said note is not mentioned anywhere in the book. The transaction connected to the note can be identified (Orlowska 2020/2, 67r 1) but Pyre did not consider the use of a promissory document noteworthy. Thus, the use of promissory notes and transferred promissory notes was such an ordinary occurrence that it often did not even make it into our sources. This could cause an illusion of their rarity and create an image of a credit-unfriendly Hanseatic League.

The other method to guarantee the payment was to register a debt in the town books. In the case of Pyre, who was commercially active for 35 years and involved in the multiple credits and loans, there is only one mention in the town books as, in 1442, Vincentius Schulte confessed in front of judges that he owed Pyre 64 Mk. Pr. (Liber scabinorum, 1435, ff. 359v). The conditions of payment were very generous, as the first rate of 24 Mk. Pr. was expected to be paid after more than a year, at Easter of next year, the second and third should also be paid at following Easter, respectively. Vincentius Schulte was not mentioned in the merchant book of Johan Pyre nor was he very well known in Danzig as he is mentioned only twice in the town books. These two factors - the limited relation and the very unusual scheme of repayment spread over three rates and three years - could be the argument for the choice of credit guarantee.

Regarding the land register, Pyre mentioned having three entries in this register. However, the entries from the 15th century were erased in the book of land register which is the reason why we cannot confront his notes and entries from the land register (Grulkowski 2009).

Life annuities

Pyre acquired an annuity for life three times. All transactions were made in summer and autumn of 1453, two years before his death, probably when he struggled with health problems. In all those cases mentioned, the life annuities were paid out in money. On the other hand, the purchase price was not covered in coins but in goods. Therefore, those annuities can be considered as a delayed payment for goods sold by Pyre.

The first transaction entailed two purchases of one bale of cloth each which Peter Bemen bought on June 24 and July 12 (Orlowska 2020/2,68r 5,6,67v, 5-6). The total value of both bales was 865 Mk. Pr. Peter Bemen promised to pay 100 Mk. Pr. per year, each on St Martin, November 11. The interest rate was set at 12.12%. Pyre noted that the annuity was secured by an entry in the town ground book so that Peter Bemen’s real estate functioned as collateral. This runs in parallel with the currency flow in Prussia because the sum noted in official town sources had to be expressed in good Mk. Pr. (as opposed to the lower quality variety of the poor Mk. Pr.) which Pyre mentioned in his notes. For his convenience, he also wrote down the amount in poor Mk. Pr. which was more commonly used in mercantile practice.

The second transaction is worth analysing because the annuity was not fixed during the initial purchase but rather agreed upon as the payment was due (Orlowska 2020/2, 68r 8, 67v, 8). On August 2, 1453, Jacop Vligen bought 12 pieces of Russian wax from Pyre which cost 476 x/i poor Mk. Pr. minus 4 x/i Schilling Pr. After the first rate of 150 poor Mk. Pr. had been paid, Vligen and Pyre agreed on a life annuity. 22914 poor Mk. Pr. should be converted into an annuity sum with an interest rate of 11.33%. The annuity was to be paid to Pyre in rates of 26 Mk. Pr. The due dates were not specified. Similar to the case above, the house of the debtor served as collateral, recorded in the town book as a guarantee. The remaining 97 Mk. Pr. minus 4 Vi Schilling Pr. were paid by regular means.

The last transaction was initiated on September 8, 1453: Leyffart Blomendael bought one bale of Merdesches worth poor 215 Mk. Pr. (Orlowska 2020/2, 67r 3, 65v, 3). In this case, the payment in the form of an annuity was also agreed upon later. Pyre wrote down neither collateral nor the height of the rates or their due dates. Yet, he noted that he was paid 15 Rhein Gulden (ergo 17.5 Mk. Pr.) on St Michael in 1455. Below that, he remarked that 27 Mk. Pr. were still due. If this was the annuity rate or a different debt, it cannot be determined due to the brief note. Thus, we cannot determine the interest rate.

Furthermore, in this entry, Pyre clearly defined what a life annuity is: ‘when I am dead, it shall be dead, too’ (‘wan yk deft sye, soe sal ed ok dot syen'). He states the central concept of an annuity for life: it ends with the death of the recipient. The interest rate of two of those life annuities was 12.12% and 11.33%. Thus, they were set significantly above the interest rate common in Gdansk in that period, which was approximately 8.3% (Grulkowski 2009). On the other hand, this fits the pattern which C. Kardasz identified for annuities for life - i. e. a higher age resulted in higher interest rates (Kardasz 2013). In addition, Pyre had a strong stance in the negotiations since all those annuities were agreed upon as payments for already existing debt and he could just as well have demanded immediate payment from a debtor in line with the original contract.

As a result, we can observe that Pyre never paid for the purchase of life annuities in hard currency, instead, they were used as a form of payment that Pyre used as an indirect exchange for his merchandise. As most of the time this kind of payment had not been written into Pyre’s original note but came up over the course of a business venture, the reasons for this change should be better investigated. They might simply reflect a temporal lack of liquidity of the relevant business partner.

Wedderlegynge

The wedderlegynge constituted the typical form of passive income in the Hanseatic League and was also a form of loan given to a young merchant in order to allow him to run his own business, in most of the aspects similar to comenda (Cordes, 1998). This traditional form of business was implemented by two partners, one of which purely offered capital (socius dormiens) while the other took the holdings of the wedderlegynge with him to travel and trade. The partners usually contributed in equal parts to the capital of the venture. Since the socius dormiens did not take part in the activities, merchants mainly employed this type of capital investment in their later years. They were even employed by people who were no merchants at all. This was largely due to the low risk of such an investment.

Four instances of tuedderlegynge can be identified in Pyre’s merchant book. Atypically, they were formed in the first phase of his activities, rather than as a capital investment at a higher age. The founding capital of those tuedderlegynge differed a lot: 29.5 Mark Pr., 82 Mark Pr. and 150 Mark Pr. In one case, the founding capital cannot be reconstructed. In three cases, neither the duration nor the profits can be determined. The wedderlegynge with Steven van Ummen constitutes the exception from this rule: his business with Pyre was already documented in 1421. It lasted until 1425, id est five years. Over the course of those five years, van Ummen and Pyre made 213% of the profit.

 
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