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Product Details
| ISBN-13: | 9780253032164 |
|---|---|
| Publisher: | Indiana University Press |
| Publication date: | 02/27/2018 |
| Series: | German Jewish Cultures |
| Pages: | 248 |
| Product dimensions: | 5.90(w) x 8.90(h) x 0.60(d) |
| Age Range: | 18 Years |
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CHAPTER 1
Amsterdam: A Center of Credit
In her memoirs, Glikl bas Juda Leib (also known as Glückel of Hameln), a Jewish female merchant of Hamburg, relates that her husband traveled for business to Amsterdam twice a year. Though in her narrative she is more concerned with her daughter's prestigious wedding to the Ashkenazic Cleve family, she mentions in passing that in three weeks in Amsterdam her husband was able to earn half the dowry for their daughter. By that time, the last quarter of the seventeenth century, Amsterdam had long assumed its position as the commercial and financial center of Europe and the world. In 1701, an observer stated: "Amsterdam is the place where very nearly all the bills payable within Europe are drawn, remitted or otherwise discounted and traded." Instead of providing special privileges to distinct merchant groups like many other early modern commercial cities, Amsterdam had "created inclusive institutional arrangements to protect all merchants, regardless of their origin, wealth, religion, or economic specialization." By the early seventeenth century, Amsterdam had replaced Antwerp as the center of trade in bills of exchange; stable exchange rates made the city an attractive, and in certain periods, even the only possible place for such trading. Throughout the seventeenth century, merchant-bankers of all denominations gravitated to Amsterdam, a trend that continued for much of the eighteenth century.
This chapter is the departing point for our journey to the east. When exploring the role Jewish merchants, brokers, and entrepreneurs played in the emergence of the modern economy, I move away from central European Court Jews, who are often perceived as the precursors of the Jewish economic elite in modern Europe. Rather, I examine the role of a hitherto neglected group of Jewish economic actors. Ashkenazic merchants and brokers involved in the trade in bills of exchange in Amsterdam did inhabit an important place in trade and credit operations across Europe, even though they played a relatively minor role in international banking in Amsterdam during the eighteenth century. They assumed a central position in integrating diferent European markets, especially those in central and eastern Europe.
Unlike in the Sephardic world, the operations of these Jewish merchants and brokers were heavily rooted in Jewish familial and ethnic networks. Francesco Trivellato argued in her work on Sephardic Mediterranean networks that familial and ethnic networks did not generally play a major role and that especially in the long-distance trade trust was rather governed by "social norms, legal customs, and rules for communication." However, the example of Amsterdam's Ashkenazic traders shows the persistent importance of ethnic- and family-based networks among Ashkenazim, though they obviously did not operate outside and apart from general commerce and banking. Despite the fact that the literature on Jews in early modern commerce features Sephardic merchants more prominently, the importance of Amsterdam's Ashkenazic merchants and brokers and their commercial networks for the expansion of trade and the provision of credit toward central and eastern Europe cannot be overestimated.
By the eighteenth century, central and eastern Europe had integrated considerably into the west European credit market. Thus, Amsterdam was also a stronghold of merchant banking, financing large parts of central and east European trade via bills of exchange, which were not only an instrument of payment for goods but also a commodity in and of themselves, commonly used for credit operations. Notably, Amsterdam's time did not last; the shift from Amsterdam to London as the international center of finance was already fully under way in the second half of the eighteenth century. Yet the Dutch city did remain the backbone of credit and trade in bills of exchange for northern, central, and eastern Europe until the last quarter of the eighteenth century.
Jewish merchant bankers — Sephardim and Ashkenazim alike — were prominent in Amsterdam's merchant and banking community, yet they were neither the wealthiest nor did they run the largest merchant and banking houses in the city. None of them could compare in wealth and trade volume to the most affluent Christian houses. Nevertheless, Ashkenazic merchants, brokers, and a few bankers constituted a crucial link to the general banking world of Amsterdam as providers and brokers of credit for Jewish and non-Jewish merchants in central and eastern Europe.
When Amsterdam rose to be the center of commerce and finance in the early modern world, it also stood out as one of the most tolerant cities in Europe. After breaking from Spanish rule in 1581, the Reformed Church soon became the "privileged" church in the newly formed Dutch Republic. Although there were legal restrictions on public worship, especially for Catholics, personal freedom of religion was mostly honored by the state; these environs of liberty drew many religious refugees to the Dutch Republic in general and to Amsterdam in particular. The first Portuguese New Christians to settle in Amsterdam sought new commercial opportunities, but profited equally from the city's religious freedom. They arrived as Christians, but in the first decades of the seventeenth century an increasing number of them declared their return to the Jewish faith. Over the first two decades of the seventeenth century, these Portuguese Jews founded three diferent Jewish congregations. By 1616, Amsterdam's city council recognized the right of Jews to practice their religion publically. Around the same time, the first Ashkenazic Jews began to settle in Amsterdam, though in much smaller numbers than their Sephardic brethren. Following the Thirty Years' War (1618–1648), the Khmel'nyts'kyi uprisings in the Polish-Lithuanian Commonwealth (1648–1650) and the war be- tween Sweden and Poland (1655–1660), larger numbers of Ashkenazic immigrants poured into Amsterdam. In the main they were not welcomed by Amsterdam's Sephardim, who encouraged them as well as poor Sephardim to leave the city, partly by allotting money for their re-emigration to Poland and Germany, partly by sending them to Dutch colonies such as Curaçao. Nevertheless, a large number of Ashkenazim stayed in Amsterdam.
Organizationally, the first Ashkenazim were dependent on and marginalized within the Sephardic community until they became a fully independent community in 1639. The split into a German Ashkenazic and a Polish Ashkenazic congregation ended in 1673 when municipal authorities called for uniting the two. The community continued to grow, eventually outnumbering the Sephardic population in Amsterdam. Despite unceasing attempts on the part of the government and the Sephardic community to keep poor Ashkenazim away from the city, the number of Ashkenazim grew from about 3,600 at the beginning to about 22,000 by the end of the eighteenth century.
Over the seventeenth and early eighteenth centuries, Amsterdam had turned into a center of Jewish life for both Sephardim and Ashkenazim. It became a center of rabbinical and intellectual debate as well as a center for printing Yiddish tomes, with authors, publishers, printers, and book dealers traveling to and from the city. For about a century and a half Amsterdam grew into one of the most important hubs for Sephardim and Ashkenazim in terms of intellectual exchange, print, business, social encounters with Christians, and Jewish involvement in commerce and financing.
Despite this plethora of activity of Ashkenazim, historical research has paid little attention to the history of Amsterdam's large Ashkenazic population in general and to their commercial activities in particular. It was particularly those Ashkenazic merchants and brokers who built and maintained the commercial connections on the European continent and who kept the credit flowing to central and, indirectly, eastern Europe. Many Sephardim and most Ashkenazim in Amsterdam remained rather poor; the number of wealthy Jewish families was small. Out of about 3,000 Sephardim and 10,000 Ashkenazim in 1743 only 442 earned more than 800 guilders a year, most of them as merchants, brokers, and money changers, or from interest on capital. Out of these 442 only 159 were Ashkenazim. While they were indeed excluded from some occupations, Jews were free to engage in international commerce, securities trade, maritime insurance, banking, and some branches of industry. Many specialized in the distribution of Indian goods across Europe, although they were excluded from trading certain goods, or acted as intermediaries between English importers and continental merchants; goods from Spanish and Portuguese colonies were handled primarily by Sephardim. Jews were active in commerce and in international exchange services. In the exchange trade they created novel ways of financing both business and government activities, but were rather hesitant about moving into banking proper. In 1760, 60 registered and many more unregistered Jewish brokers of bills of exchange were active in the city; Ashkenazim were more prominent among the latter. Illustrative of the disparity in number of non-Jews to Jews is the fact that a letter of sixty-one Amsterdam and Rotterdam bankers to the State General on matters of the circulation of inferior coins in 1746 bore the signature of only one Jewish banker: Tobias Boas. Three years later, the breakdown difered in a petition to withdraw a resolution that prohibited the payment of a commission to merchants importing precious metals: that bore the signature of forty-one Christian and thirty-eight Jewish merchants, among them Benjamin, Samuel, and Berent Symons, Philip Levy Gompertz, and two members of the Keijzer family.
Jewish merchants were heavily involved in commerce, especially the import of stones and metals, in brokering and the exchange trade, but hardly in banking proper. Their important role in the exchange trade can also be gleaned from the fact that the 1753 edition of Isaac LeLong's De koophandel van Amsterdam (The Com- merce of Amsterdam) includes a calendar noting the hour of the starting and ending times of Shabbat; he explained that commerce with Jews was so widespread that a Christian had to be aware of when Shabbat began on Friday night and ended on Saturday night. Among those so vividly involved in exchange trade was the Symons (Pollack) family.
The Symons Family
The Ashkenazic community in Amsterdam had only a few wealthy members whose families were active in international trade and finance. Benjamin and Samuel Symons (Pollack), two brothers whose ancestors had lived in Amsterdam since the early seventeenth century, were primarily involved in trading diamonds and bills of exchange but also provided other financial services. The Symons family belonged to the community's small affluent elite, although the volume of their business activity was incomparable to that of the most affluent Sephardic merchants and bankers. In 1743, Benjamin Symons was listed as one of the ten wealthiest taxpayers in the Ashkenazic community, with an annual income of 2,500 guilders; the wealthiest community member was registered with an annual income of 8,000 guilders. Benjamin Symons also used his wealth to benefit the community. In 1757, he and his wife Martha donated a curtain to cover the Torah Ark (parohet) as well as covers for the bimah, from which the Torah is read, and the amud, the lectern, from which the prayer is led. We know little about the family's involvement in communal afairs, but its economic status does suggest some communal influence. Benjamin Symons served as one of the officers (parnas) of the Ashkenazic burial society (?evrah Kadisha). The prominent family never made it into the ranks of the best-known Ashkenazic families in Amsterdam, such as the Gompertz, Nor- den, or Keijzer families, but its commercial activities did span from the Ottoman Empire, Russia, and the Baltic in the east through all of central Europe to England, Italy, France, and as far as Suriname in the west. After Benjamin Symons died in 1763, his sons Abraham and Emanuel joined the firm and became partners with their uncle Samuel Symons six years later. In the following decade, when the com- pany operated under the name Benjamin & Samuel Symons & Sons, it was Benjamin Symons's son Abraham who traveled to Warsaw and Danzig and took over the business in central and east central Europe. Emanuel Symons extended the family's business to the Mediterranean. In their attempts to consolidate and extend their business, their choice of marital partners played a central role. The central economic tool in their commercial endeavors was the trade in bills of exchange.
The Role of Bills of Exchange in Central European Commerce
Institutional conditions to facilitate commerce varied greatly between Amsterdam in the west, central European cities in the Holy Roman Empire, and eastern Europe. Formal institutions of commerce were of crucial importance for transregional trade, especially in the case of bills of exchange, which by the eighteenth century were considered the most important means of facilitating this trade. Though bills of exchange had existed since the Middle Ages, they became more suitable for long-distance trade and the provision of credit in the early modern period with the general acceptance of the system of endorsement. Endorsing the back of a bill of exchange allowed for its transfer from one merchant to the next before the bill was due (see figures 1.1 and 1.2). After considerable resistance it was slowly accepted in central Europe from the mid-seventeenth century on. Leipzig allowed its usage in 1682; Danzig (Gdansk), one of the most important commercial cities on the Baltic Sea, ratified their practice only in 1701, even if merchants in central Europe had already used it for many decades. Endorsement allowed a bill of exchange to circulate beyond its initial signatories, providing greater flexibility in the trade in bills of exchange. Because there were neither international banks nor international courts that could enforce debts against foreign agents, bills of exchange proved the most effective means to transfer funds or loans abroad. Moreover, the flow of bills of exchange helped establish international currency exchange rates, as they determined the demand for national or territorial currencies.
The endorsement came into usage later in central and eastern Europe than in western Europe; similarly, specific regulations regarding bills of exchange and the quotation of exchange rates were introduced later by a century or more. Depending on the geographic location, codifying regulations regarding exchange law grew an urgent necessity. Often these regulations were part of city or fair regulations, but by the seventeenth century, commercial centers in central Europe had begun to introduce particular municipal exchange regulations, although there was a clear time lag between cities in the west and those further east. Thus, Frankfurt am Main introduced an exchange regulation in 1578, Hamburg in 1601, and Nuremberg in 1621, whereas cities further east followed more than half a century later: Riga in 1671, Breslau in 1672, and Leipzig in 1682. Only in the eighteenth century were exchange regulations introduced into general state laws: in Prussia this happened in 1724 and in Russia in 1729.22 Other innovations in commercial law followed.
Introducing the joint liability rule was of even greater importance, and it was fully developed by the eighteenth century. Veronica Aoki Santarosa indicated that the joint liability rule "put in place a formal mechanism that linked otherwise distinct personal networks" in eighteenth-century France. With long chains of transmission and long distances between the issuer and the payer of a bill, the former had to be sure that the latter would honor his bills of exchange. The joint liability rule added an additional incentive to discipline the payer. It ensured that in a case of default, all endorsers as well as the issuer and payer "could be held liable for the full amount of the bill." Once a payer refused to honor a bill of exchange and a notarial office recorded a protest, the holder of the bill of exchange could demand payment from any endorser or from the issuer by drawing a re-exchange bill or by suing. Whoever received a demand of payment could turn to another endorser with the same claim. Moreover, when a protest was issued, copies of it had to be distributed to all endorsers and to the issuer, thereby endangering the reputation of a defaulted payer.
(Continues…)
Excerpted from "The Jewish Economic Elite"
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Copyright © 2018 Cornelia Aust.
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Table of Contents
AcknowledgmentsNote on Spelling, Transcription, and TranslationIntroduction1. Amsterdam: A Center of Credit2. Frankfurt an der Oder: Central European Middlemen3. Border Lands: Legal Restrictions, Army Supplying, and Economic Success4. Praga: A Stepping Stone5. Warsaw: The Rise of a Jewish Economic EliteConclusionAbbreviationsBibliographyIndexWhat People are Saying About This
The importance of Cornelia Aust's work goes beyond regional history and fits beautifully into transnational and interregional models that are so appropriate to the topic of Jewish economic history. She provides an understanding of how Jewish merchants could prove so vital to both the feudal and emerging capitalist economics of Eastern and East Central Europe through original research and mastery of all the relevant literature.
Cornelia Aust has written an extremely important and innovative book which promises to make a major contribution to our understanding of the history of the Jews in modern Europe. She succeeds in presenting not only the broad structures of family and business networks, but also the fascinating human stories of those who constituted them.