Tag Archives: medieval merchants

Medieval Bills of Exchange

Last week there was a question in the comments from Ellen Hawley who wanted to know how the innkeepers who stored and organised the transport of goods on behalf of merchants were paid by those merchants. I touched on this subject a bit when we were looking at how ransoms for prisoners of war were paid, but there is more to be said on the subject.

Banking in the fourteenth century was fairly sophisticated, even if two Florentine banks had gone bust lending money to Edward I and Edward III. Italian banks and Italian merchants were the most advanced in their business dealings, but we have to go back to the Templars in twelfth-century France to understand where the idea of how to make payments over large distances and in different currencies without physically moving lots of money arose.

Moving large amounts of coins was rarely a good idea in the Middle Ages. It was incredibly difficult to protect a train of slow-moving pack animals or carts from robbers and bandits. Even small amounts of money were vulnerable, as Chaucer discovered when he was robbed on three separate occasions when he was carrying money to pay men working for Richard II. This is not to say that real money and jewels weren’t transported around Europe and the East because they were. In 1328 a large amount of money was sent from the papal court in Avignon to Lombardy to pay the army there. There was a guard of 150 cavalry, but they were attacked and half the money was stolen and some of the cavalry were captured by the bandits and had to be ransomed.

Since it was so risky, another way had to be found to make payments across large distances. Somewhat surprisingly, we have to go back to the Templars and the Crusades. Although the Templars were active in protecting pilgrims and fighting in the Crusades in the holy Land, in England, France and Italy one of their primary functions was providing secure storage for important documents and precious objects. Although monasteries in general were fairly secure, the Templars were soldiers as well as monks. If I had to give my precious objects to someone, I think I’d prefer them to be in the care of men who were able to fight to protect them, rather than simply rely on the strength of monastery walls and doors.

The Crusades, however, meant that wealthy men needed to be able to access some of their money while they were in the East.  Not only did they have to feed the soldiers in their retinue, but they also had to replace lost or damaged equipment and horses. They also had to live in a certain style.

Fortunately, the Templars could help them. The Templars had preceptories all over Europe and in the East. A preceptory was a headquarters. Temple in London is where the English one was located and Le Temple is where the French equivalent was built in Paris. These were built like fortresses and were very secure. Wealthy men could deposit money in one of them and receive a letter of credit allowing him to receive the same amount in the local currency (less administration charges and interest) at any preceptory in Europe or in the Holy Land. This meant, of course, that the Templars made a profit on the transactions.

The records kept by the Templars were very thorough and everyone trusted them, with good reason. They even had a treasure ship off the coast of the Holy Land from which kings and nobles could make emergency withdrawals whilst on campaign. They were also able to make loans.

Since men from across Europe were involved in the Crusades, it’s not a surprise that the Templars became involved in the activities of Italian merchants and bankers who were interested in trade across Europe and in the East.

By the beginning of the fourteenth century, however, the Templar’s great wealth proved too tempting and Philippe IV of France destroyed the order in that country. The Florentine bankers had learned what they needed to do to fill the gap and came up with bills of exchange.

Bills of exchange allowed a person in one country to pay someone in a different country and in a different currency. They were also a form of loan on which interest was charged. Since charging interest was illegal, it was usually hidden in the administration fees, commission and exchange rates. Money didn’t have to be transferred just between branches of the same bank, but could also be transferred between different banks. The banks were not banks as we know them today. As far as I can discover, the only banks were Italian, but they operated all over Europe.

Bills of exchange weren’t always practicable. Sometimes the rate of exchange in one place made it too costly to buy a bill of exchange and silver, gold or precious stones had to be transported from one place to the other, because, despite the cost and risks involved, it was the cheaper option.

Bills of exchange weren’t just used by merchants, but also by people on business for the papal court. Men in the service of the kings also used them. Bills of exchange could only be used between locations that had more or less equal amounts of money in the branches of the bank. If the difference between them was too great, coins would have to be transported from one place to the other.

It wasn’t a perfect system, but it allowed innkeepers in France to be paid in their local currency by a merchant in England.

The Templars: History and Myth
by Michael Haag
Cathedral, Forge and Waterwheel by Joseph Gies and Frances Gies
Power and Profit by Peter Spufford

April Munday is the author of the Soldiers of Fortune and Regency Spies series of novels, as well as standalone novels set in the fourteenth century.

Available now:




Filed under Fourteenth Century, Medieval Commerce, Medieval Monks, Thirteenth Century, Twelfth Century

Medieval Couriers

In the fourteenth century you couldn’t post your letters into the nearest postbox and expect them to be delivered within a few days. Postboxes and the postal service that went with them were nineteenth century inventions. If you wanted to send a letter, you had to pay someone to carry it. For most people, that didn’t really matter, since they lived near everyone they knew or might need to communicate with and could either visit them or send a servant. There were, however, some people for whom being able to get a letter to the other side of the country, or even the other side of Europe, was very important and some of them developed reliable means of doing so.

Probably the best medieval postal service was developed by Italian merchants. European trade was dominated by merchants from Florence, Venice and Genoa. This meant that their goods were transported all over Europe. Initially, they travelled with their wares, but around the middle of the thirteenth century the businesses of the great merchant houses got to be so large that that was no longer possible. As soon as they had to trust their goods to other people, the merchants needed to have some kind of courier service in place to carry messages back and forth about the progress of their goods, the cost of tolls on the route, and the prices the goods could be expected to fetch when they reached their destination. They also needed to be able to send messages to the people carrying their goods should their original plans change and to their customers.

The solution was to set up courier services made up of men and horses who could travel quickly up and down a single route. For about a hundred years each of the great merchant houses had their own messengers, but it was a very expensive undertaking. In 1357 seventeen Florentine companies joined together to provide a single service. Their goods were all following the same routes, more or less, so it made sense to co-operate in this one area. They set up the scasella dei mercanti fiorentini and it wasn’t long before merchants in other places followed suit.

This postal service was expensive because it required many couriers and even more horses. Each route had several couriers with changes of horses available to them along the way. There were thousands of letters to be carried each year, so the men were kept busy. The main routes from Florence went to Barcelona and Bruges. The latter could be by way of Cologne or Paris. From Barcelona the couriers could cross the Mediterranean by ship or cross Spain and go into Portugal. From Bruges they could cross the Channel to London.

Obviously, the length of time that it took for a letter to get from its sender to its recipient varied according to the time of year, the weather and the condition of the horses and riders. The merchants in Florence, however, expected to be able to get a message from Florence to Paris (700 miles) in twenty to twenty-two days, to Bruges (800 miles) in less than twenty-five days and to London (1,000 miles) in less than thirty days. This last didn’t really take into account the unpredictability of crossing the Channel at the best of times and these speeds were probably more wished for than achieved.

It wasn’t just merchants who needed a courier service for their letters. The church had one too. Letters were constantly going between clerics in England (and other countries) and the papal court in Avignon (later Rome). Letters also went between the papal court and the secular rulers of Europe. These also used couriers to carry letters between themselves and those of their subjects they wished to communicate with.

Possibly the most famous courier of the fourteenth century (although not for being a courier) was Geoffrey Chaucer. In October 1360 he was paid nine shillings by Lionel of Antwerp, in whose retinue he was serving, to carry letters from France to England, presumably announcing Lionel’s imminent return. Doubtless he carried other letters while he was still a lowly member of Lionel’s household.

Power and Profit by Peter Spufford
The Time-Traveller’s Guide to Medieval England by Ian Mortimer
The Life of Geoffrey Chaucer by Derek Pearsall

April Munday is the author of the Soldiers of Fortune and Regency Spies series of novels, as well as standalone novels set in the fourteenth century.

Available now:




Filed under Fourteenth Century, Medieval Life, Medieval Travel