Published by EH.Net (July 2022).

Francesca Trivellato. *The Promise and Peril of Credit: What a Forgotten
Legend about Jews and Finance Tells us about the Making of European
Commercial Society*. Princeton: Princeton University Press, 2019. xiv + 405
pp. $32.95 (paper), ISBN 978-0691217383.

Reviewed for EH.Net by Arthur Wilson, Finance Department, School of
Business, George Washington University.



This book is a gem. Francesca Trivellato has produced a multifaceted
exploration of the complex relation between evolving Christian ideas about
Jews and the development of modern commercial society.

The book begins with an obscure reference in a once popular but long
forgotten compilation of maritime laws, by Etienne Cleirac of Bordeaux.
Even so, the author then broadens the discussion to address some of the
most foundational debates in the history of economic thought.

\”The first (debate) is the question of what constitutes ‘the economy’ as a
field of inquiry and what is included in the canon we use to access this
field, a concern that has become particularly relevant in light of the
impact that the digital revolution on the study of Europe\’s past. The
second is the relationship between what we might call \”practices\” and
\”representations\” and the tendency some scholars have had to pit the two
against each other. Finally, the third is the perennial question of
periodization, which Jewish history and Christian prejudice toward Jews
bring into sharp relief, especially when, as I do, we examine a singular
but mutable figure, the Jewish usurer, across several historical periods.\”
(p. 7)

After introducing the bill of exchange in chapter 1, Trivellato returns in
the next chapter to that 16th-century merchant manual that recounts the
legend that Jews originated Marine Insurance and the Bill of Exchange. Both
parts of the legend are false, but the Bill of Exchange side of the story
persisted for hundreds of years, evolving over that time to fit the
anti-Semitic or philo-Semitic agendas of various commentators. Like facets
of a diamond, this evolution provides a panoramic view of European
attitudes toward commerce and Jews and what were sometimes thought to be
Jewish characteristics.

Emblematic of the second debate, Trivellato shows there was a wide gulf
between what was said about Jews and actual documentation of what Jews were
or were not doing. Indeed, Christian merchants accused of using
questionable practices were accused of Judaizing. No Jews need be present.
In the hands of some critics, to be called \”a Jew\” became shorthand for
engaging in devious or dishonest commerce.

Along these lines, Trivellato notes that Cleirac cited an earlier source
that makes no mention of Jews. Accordingly, in that source, and in a draft
version of his manuscript, he initially attributed the invention of Bills
of Exchange to Florentines – Guelfs and Ghibellines. In the published
volume, Cleirac attributed the invention to Jews. The change, possibly due
to the publisher, is unexplained. (p. 41)

The Bill of Exchange was near the heart of European private finance from as
early as the 13th century to well into the early 20th century. It served at
least three functions: as a device for remittance, as a device to obtain or
extend credit profitably despite usury restrictions, and as a device to
speculate on foreign exchange. It was widely used and very controversial.

Part of the controversy was in the many ways bills could be used. Another
part of the controversy was in the meaning and scope of usury *per se.*

Some features of the Bill of Exchange lent themselves to diverse
interpretations. Unlike gold or silver coins, Bills were generally created
by merchants for merchants, rather than by or for governments. Their
utility hinged completely on the trustworthiness of the parties involved.
Also, Bills could be used in transactions involving two, three, or four
parties, depending on how they were intended to be used. To the
uninitiated, Bills of Exchange were mysterious.

If a medieval banker were to openly offer interest on deposits, that would
be considered usury. Explicitly charging interest on loans would again be
considered usury. The Bill of Exchange allowed a work-around. Medieval
merchant bankers could buy bills in one place (shifting purchasing power
from A to B), sell them in another (shifting purchasing power from B to A),
and make a profit – like making a loan with interest, albeit with exchange
rate risk in the mix. Was this usury? While some bill combinations were
problematic, individual bills were generally acceptable to the Church.

In fact, usury was not always well defined, as the author discusses in
chapter 3. There were at least two difficulties. On the one hand, as
Catholic theologians tried to define good and bad finance, it became
apparent that subtle distinctions were needed. Depending on the context and
author, usury referred to either a suite of bad financial practices, or
specifically to charging interest on loans. On the other hand, it was
sometimes easier to say that usury was what the Jews were thought to have
done.

Current thinking is that the Bill of Exchange evolved gradually from
diverse Mediterranean, perhaps Arab origins. For a time, some Italian
writers conjectured that it originated in Florence. For authors hostile to
Jews, like our Bordeaux-based merchant manual author, Etienne Cleirac,
writing in 1647, in “Us et coustumes de la mer…” the notion that the Bill
of Exchange was a Jewish invention played into the conceit that it was a
device to separate naive Christians from their money. For more sympathetic
authors, like Montesquieu nearly a century later, the notion that the Bill
of Exchange was a Jewish invention indicated a special genius of Jews for
commerce which allowed them to link Europe to the Americas, Asia, and
Africa in trade.

Of course, anti-Semitism was not new in Bordeaux in 1647, as discussed in
chapter 4. Consider Iberia in 1391. Egged on by a rabble-rousing priest,
pogroms in multiple Iberian cities killed many Jews and induced others to
run to the nearest church to get baptized to fend off the murderous mobs.
Afterwards, despite the obvious duress, the church chose to accept such
baptisms of these “New Christians”, sometimes called *conversos*, expecting
them to live life just as the “Old Christians” did, changing much more than
just their religion. Within a few years, New Christians were being told to
change much of their distinct culture – diet, dress, language, and more, as
if Old Christians could not distinguish between liking bagels and being
Jewish.

Old Christian concerns that the New Christians were secretly Jewish, and
would revert, were widespread. With these forced conversions, many of the
earlier restrictions on Jewish commercial activity were no longer binding
on New Christians. The blurring of boundaries must have been palpable. One
response by Old Christians were the “Purity of Blood” statutes –
promulgated in the mid- 15th century to exclude New Christians from certain
roles based on their lineage – to restrain this blurring. Later in the
15th century,
inquisitions in Spain, and then Portugal were begun – to ferret out
relapses among the New Christians. Many such New Christians left Iberia if
they could. By 1492 the remaining Jews in Spain were expelled, scattering
in all directions, with many fleeing to Portugal. In 1497 the Jews who had
fled to Portugal were forcibly baptized.

Perhaps, over time, this scattering may also have facilitated
trans-national Sephardic trading networks. In any case, in the mid-16th century
the King of France welcomed many of these Portuguese New Christians to
southwestern France, where the King promised safety if the New Christians
kept up (Christian) appearances. The royal hope was that these New
Christians would quicken the merchant activity of Bordeaux, which they
presumably did, to the profit of the King. Meanwhile, Calvinist
Protestantism in the form of the Huguenots also spread across France,
taking root in Bordeaux as well.

Writing in Bordeaux, Catholic Etienne Cleirac would have had a front row
seat to the complex religious and political interplay of 16th-century
Bordeaux. This was a time of political unrest in France associated with the
Huguenots and eventually civil war. This was also a time when old status
hierarchies based on nobility or religion were breaking down. Merchants no
longer had to be members of guilds. Central government court reforms meant
that cases involving nobles acting as merchants would increasingly be
considered in merchant courts. Bills of Exchange were equally legally
enforceable regardless of the status of plaintiffs or defendants. Finally,
after more than a century of living as Christians due to forced
conversions, the New Christians were increasingly assimilated – hard to
distinguish from Old Christians. Old Christians like Cleirac might have
felt increasingly uneasy. How could one avoid trading with those seemingly
\”devious\” Jews if they appear to be Christian? As Trivellato notes:

“Fears that Jews and Christians could become indistinguishable permeated
European Christian culture at large during this period. The regime of
toleration that prevailed in seventeenth-century Bordeaux heightened rather
than quelled fears about the porousness of the boundaries between Jews and
Christians. There, more than in any other city of the kingdom, a small but
proactive group of New Christian merchants was at once visible and
invisible. Whether valued or condemned, their economic activities were not
confined to a separate corporate body, with its own place in the
hierarchical society of the time. They walked the same docks as other
merchants and sat in the same church pews as other Catholics. For Cleirac
and his readers, the lack of precise boundaries between Jews and non-Jews
mirrored the erosion of age-old divisions between merchants and noblemen at
a time when a major restructuring of the legal and social order, and the
place of commerce within it, was underway in France.” (p. 84)

Cleirac\’s legend of the invention of the Bill of Exchange by Jews was
taken up and repeated in the subsequent merchant literature, as documented
in chapter 5, until a century later when the hostility (if not the legend)
was deflected by a different interpretation, by the philosophe Montesquieu.
He accepted the idea that Jews invented the Bill of Exchange but celebrated
that invention as a watershed event for commerce as a modernizing and
civilizing force in Europe.

Montesquieu was writing at a time when status-based hierarchies were
breaking down further. While commerce might be a modernizing force, it did
not liberate the Jews. Nor did Montesquieu call for full equality.
\”Montesquieu never pursued these questions because, as even an admirer of
his views on Jews admitted, he was fundamentally not interested in Jews as
such, but only to the extent that they provided him startling examples of
the relationship between intolerance and proselytism.\” (p. 138)

In the period leading up to the French Revolution (chapter 6), both views
of commerce and the role of Jews were expressed, with multiple variations.
Christian views were often more favorable toward the Sephardic community in
Southwestern France and less favorable toward the Ashkenazi in Northeastern
France, who were generally less assimilated. While supporters of
Montesquieu argued for \”doux commerce\” to drive tolerance, others
continued to focus on usury broadly construed and indeed seemed to blur the
distinction between usury (associated with the Ashkenazim) and commerce
(associated with the Sephardim).

Trivellato also disputes the conventional wisdom that the \”commercial
utility\” of the French Sephardic community drove or supported
emancipation, noting that even supporters generally did not make that
argument, arguing instead for removing restrictions that limited Jews’
economic activity, encouraging Jews to participate more in other areas,
such as agriculture, and less in commerce. Trivellato notes: \”Amid the
\’cacophony of arguments\’ marshaled in favor of emancipation, the virtues
of commerce were never used as weapons by pro-Jewish advocates.\” (p. 157)
Indeed, it would seem that the relative assimilation by Sephardim, and the
continued hostility toward the Ashkenazim even after the French revolution,
as indicated by the \”infamous decree\” resulting from the Napoleonic
\”Assembly of Jewish Notables\” better explained the path of emancipation.

The legend of the Jewish invention of the Bill of Exchange is most
frequently explored in French literature. In chapter 7, Trivellato explores
the spread of the legend outside of France, where the legend seemed to have
had less purchase. In Britain and the Low Countries, hostility toward
Jewish participation in commerce seemed to revolve around financial markets
rather than Bills of Exchange. \”Overall, the legend met with considerable
scepticism in England.\” (p. 171) In Central Europe, similar hostility and
scepticism were combined even without comparable financial markets. In
Italy, writers seemed more inclined to credit Florentines with inventing
Bills of Exchange.

In the final chapter, the author explores how the legend and the history
influenced some major 19th-century writers on commerce and \”modern
capitalism\” – Sombart, Weber, and Marx. For differing reasons, all three
appear to have accepted the 16th century as a decisive turning point in the
beginning of modern capitalism. All three were aware of the legend. Marx
seemed to see Christians thoroughly adopting supposedly Jewish commercial
practices: \”The practical Jewish spirit has become the practical spirit of
the Christian people,\” he wrote – or in other words, all ‘Christians have
become Jews,’ not only some of them.\” (p. 202) Sombart evidently saw Jews
as a driving force of Western capitalism during the Medieval period, only
to be superseded by Christian merchants and enterprises. Whereas Sombart
overstated the Jewish role in modern capitalism, Weber seemed to minimize
it. Medieval historians pointed out that many of the new commercial
developments pointed to by Marx, Sombart, and Weber were already seen in
the high Middle Ages.

So what can we say about the canon we might use to access \”the economy\”
as a field of study? Certainly, the canon shifts as the focus shifts.
Cleirac\’s compilation of maritime law and recounting of what became a
legend were once foundational. Nowadays, few economic historians who have
not read this book would have heard of him. The Bill of Exchange was once
central to Western commercial practices. Now it and its history are much
less important. Conversely, the so-called digital revolution, which allows
access to many more types of documents, calls forth more of an
interdisciplinary approach to economic history and the history of economic
thought.

Concerning the gulf between \”practices\” and \”representations\” of Jewish
commercial activity, the practice of defining usury as what Jews were
thought to be doing, with little empirical support for what they were
actually doing, nor even a clear definition of usury, is a shameful part of
history. We can and should do better.

Concerning the issue of periodization, in this context, it seems clear that
those who see sharp boundaries over time are overstating the changes as
they occur. Medieval attitudes toward Jews and toward commerce persisted
well into the \”modern\” era.

Still, I have a few quibbles. Although the book’s appendices include
excellent bibliographies of some other sources, and the endnotes are
extensive and generous, a standard bibliography would make that content
easier to access. Second, it would be fascinating to learn more about the
Franciscan friars who seem to have had an outsized role in defining
Christian commerce and Jewish usury (p. 16). Finally, a more extended
discussion of how 17th-century Bordeaux fit among the other commercial
centers of the era, like Amsterdam or London, would more firmly anchor that
setting. Even so, these quibbles are minor.

As I noted above, this book is a gem. I learned a great deal from it.
Economic historians, intellectual historians, and cultural historians would
all find it valuable, both for general knowledge, and especially for
sub-fields like Early Modern Economic History and Religious and Jewish
Studies. I recommend it highly.



Arthur Wilson is Associate Professor in the School of Business, George
Washington University. His publications include “Put-Call Parity, the
Triple Contract, and Approaches to Usury in Medieval Contracting,” with
Geetae Kim (*Financial History Review*, 2015).

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