A crocodile whose main body is concealed below the water?

What is the Hansa?

That was the question king Edward IV asked the representatives of the Steelyard in 1469. And he had a good reason to ask, because tensions between the English and the Hansa had escalated, ships were captured, and people got killed. He wanted to know who to negotiate with and in particular, who could sign a binding agreement that would put an end to this.

The answer he got was not very satisfactory:

Quote: “the Hansa Teutonica is not a societas: (a company) for it knows neither a common ownership of goods nor shared ownership of the good, since in the Hansa Teutonica there is no joint ownership; nor is it a company formed for certain commercial transactions, since in the Hansa Teutonica each individual makes transactions for himself, and the profit and loss falls on each individual…

It is also not a collegium (a college)….since it is formed from separate cities. It is also not a universitas (a corporate body), because…for it is required that it has property, a common treasure, a common seal, a common syndicus and a recognised leader.

“the Hansa Teutonice is … a firm alliance of many cities, towns and communities for the purpose of ensuring that commercial enterprises on water and on land have the desired and favourable success and that effective protection is provided against pirates and highwaymen, so that the merchants are not deprived of their goods and valuables by their raids.”

Yep, me neither. And for most of history, historians have remained as befuddled as king Edward IV about the nature of the Hansa.

This being the History of the Germans Podcast, ambiguity is nothing we are afraid of. Let’s step into the debate and be wrong on every count…

Hello and welcome to the History of the Germans: Episode 119 – What is the Hansa?

That was the question king Edward IV asked the representatives of the Steelyard in 1469. And he had a good reason to ask, because tensions between the English and the Hansa had escalated, ships were captured, and people got killed. He wanted to know who to negotiate with and in particular, who could sign a binding agreement that would put an end to this.

The answer he got was not very satisfactory:

Quote: “the Hansa Teutonica is not a societas: (a company) for it knows neither a common ownership of goods nor shared ownership of the good, since in the Hansa Teutonica there is no joint ownership; nor is it a company formed for certain commercial transactions, since in the Hansa Teutonica each individual makes transactions for himself, and the profit and loss falls on each individual…

It is also not a collegium (a college)….since it is formed from separate cities. It is also not a universitas (a corporate body), because…for it is required that it has property, a common treasure, a common seal, a common syndicus and a recognised leader.

“the Hansa Teutonice is … a firm alliance of many cities, towns and communities for the purpose of ensuring that commercial enterprises on water and on land have the desired and favourable success and that effective protection is provided against pirates and highwaymen, so that the merchants are not deprived of their goods and valuables by their raids.”

Yep, me neither. And for most of history, historians have remained as befuddled as king Edward IV about the nature of the Hansa.

This being the History of the Germans Podcast, ambiguity is nothing we are afraid of. Let’s step into the debate and be wrong on every count…

But before we…..ahhh, I can feel it. You have your finger over the 30 second forward button. Are you sure this is a good idea. Remember last week when you did that and found yourself in the middle of the horrific rendition of Oh Tannenbaum.  Just think about what else I could do. No, I won’t. I should probably apologize for that singing. It was cruel and like all real cruelty, somewhat unintentional. I knew it would be quite bad, but listening to it again once the episode had been published, I realised just how godawful it was.

At which point I have to express my gratitude to all of you who – instead of running away horrified – have decided to go to patreon.com/historyofthegermans or to historyofthegermans.com/support and contributed to the show. Your commitment to swap chocolate croissant for mental nourishment goes beyond what could reasonably be demanded. Your names will appear here soon, though for now I want to thank Stefan A. Ole F., Friso B. and Albert V. who have already signed up.

So, what is the Hanse?

To answer that it may be useful to look at the Hansa in comparison to other European trading organisations, in particular the world of Mediterranean trade, i.e., Venice, Genoa, Pisa, Florence etc.

Both operated in geographically closed oceans, the Mediterranean and the Baltic.  They transported goods over longer distances.

But pretty much everything else was different.

Mediterranean trade was mainly in high value, low weight goods, spices, silk, incense, carpets, glass coming into Western Europe in exchange for silver as well as more pedestrian goods like wine, salt, grain, olives and fish. The Baltic trade was predominantly in bulky everyday goods, herring, rye, stockfish, cloth. The only luxury items were furs and beeswax, though these were still quite bulky.

The med traders sailed on galleys who would be rowed wherever the helmsman pointed her at, whilst the Hansards sailed on sailing ships that could not really go upwind, making arrival times and sometimes even arrival locations somewhat unpredictable.

The cities around the Mediterranean were in constant competition with each other. The Venetians would attack a Genoese galley with the same fury as a Muslim one, or maybe with even more vigour. Within the Hansa the cities cooperated if they found common grounds. And those who did not agree would either not send a delegate to the Hanseatic diet or if the delegate was already there, the delegate would not vote. After that, those who had walked away would be left alone, unless they would proactively undermine the effort of the majority, at which point they could be excluded.

Venice and Genoa conquered their trading posts along the Mediterranean and incorporated them into their maritime empires. Some of these, like the islands of Corfu and Crete were sizeable in themselves. In the later stages, Venice would become a significant land-based sate as well as a maritime republic.

None of the Hanseatic cities pursued a similar policy. When they went outside their own territory, they did that through their Kontors, which were embedded into the trading centres of Bruges, London, Bergen and Novgorod. They did go to war, and as we have seen quite successfully. But they usually tried to avoid it. And it was never to gain territory, but to force the princely rulers to confirm privileges and trading rights.

Another major difference was the relative size of trading firms. In Italy great trading firms emerged with representatives in all the major centres, from Cairo to Bruges. The owners of these firms became immensely rich and dominated politics until gradually transitioning to princely rulers, like the Medici in Florence or the tight oligarchies in Florence and Genoa.

The Hanse world on the other hand was mainly one of medium-sized merchants where well-educated ambitious men could rise to the highest positions in their city, whilst sometimes the sons of successful merchants find themselves relegated to the lower ranks if they lacked the skills required.

This is the factual bit.

What the discussion has been about for the last almost 200 years is why it was what it was. A state like Venice is easy to understand with a modern mindset. The Hanse is not. As the English would say, it is a crocodile where you can only see a small part with the main body and the terrifying jaw is hidden from view. And that is why everyone has been interpreting this thing in their own way, reflecting more their contemporary perceptions than the reality at the time.

In the 19^th century the Hanse was seen as German purely nationalist endeavour. Led by the mighty city of Lübeck the Hansards formed an organised military power that dominated the North Sea and colonised the Baltic all the way up to Estonia, Sweden and even Finland. That narrative fit neatly into Kaiser Bill’s idiotic ambition to building a German navy rivalling Britain. And on top of that it provided a bit of colonial tradition, another thing it was felt the nation sadly lacked.

This notion was then supercharged during the nazi regime, where the Hansards were painted as German Übermenschen who together with their fellow Teutonic Knights turned the people of Prussia and along the Livonian coast into slaves providing the foodstuff needed to feed the Germans back home.

After the war, two schools of thought emerged. In east Germany the Hanse was given the Marxist-Leninist treatment, setting them up as bourgeois proto-capitalist, constantly suppressing the uprisings from the lower classes.

In west Germany something rather weird happened. The Hanseatic archive of Lübeck had been brought to safety in east Germany and was later transported to the Soviet Union. That made it hard to access for western scholars. As a consequence, the research about the Hanseatic league in the West stagnated. In the absence of new research, the pre-war findings kept being repeated. I sometimes stumble reading books and papers from the 1980s and 90s about the Hanseatic League because they do sound a feel quite different, quite antiquated.

The archives returned to Lübeck in the early 1990s and gradually a new wave of research began to emerge. Many a beloved story was put under intense scrutiny, like the story of Klaus Störtebecker we talked about last week.

This research focused more on the cooperative and international component of the Hanse. In the public perception the Hanse turned from a German nationalist project to a predecessor of the European Union. Andrus Ansip, prime Minister of Estonia celebrated the country’s entry into the European Union by saying “the EU is a new Hansa”. A new Hansa was formed as a marketing association between Hanseatic cities from Belarus to the United Kingdom.

For what it is worth, the Hanse never had the equivalent of a European council, a European Parliament and the European Commission which makes all this as believable as the idea that Charlemagne was some sort of lovechild of Adenauer and de Gaulle.

Looking at the current iteration of historical writing, we are moving into the next stage, the Hanse as a network. When I first read that I thought – yes, this is inevitable. We have tried naval superpower, the Germanic Übermensch, Marx and Fukuyama’s end of history. The natural next step is the Hansa as an early ebay, amazon or Alibaba.

But let’s park the cynicism and let me take you through the logic of the Hansa as a Network. I rely here mainly on Carsten Jahnke, Justyna Wubs-Mrozewic and David Abulafia, the sources you find in the show notes.

Let’s begin with the challenges the Hanseatic merchants faced. The first one is simply distance. Let’s assume you are based in Lübeck and you trading between Novgorod and Bruges. That means you set off for Bruges to buy the cloth. Then you take the cloth to Novgorod where you sell it. You use the proceeds to buy fur which you then bring to Lubeck for sale. That is about 6,500km, which on a cog going at 3 to 4 knots per hour and not always in the right direction can easily take a year. Medieval ships could not go to windward so merchants could find themselves stuck in harbour or blown to places you never wanted to go to in the first place.

It was also extremely risky. On the one hand there are the risks of pirates, confiscation of goods by the local ruler, shipwreck etc. Plus, you have all your eggs in one basket, this one set of goods you are travelling with. If they are lost or damaged you will be destitute, and so will your family.

These extreme events are one thing, but there is also a of less dramatic but equally serious problems. What if the cloth you brought along from Bruges was not what the Novgorodians find fashionable anymore. What of you bring the furs to Lübeck just when a whole fleet is coming in with Norwegian furs, what if city of Bruges is on fire just when you arrive with the beeswax.

Around the turn of the 14^th century the Hanse trade changed. Up and coming merchants were still criss-crossing the Baltic with their own wares. But established merchants would settle down in one place and trade across multiple markets. They would buy space on one ship going to Novgorod, on another going to Bergen, whilst buying goods coming in from Narva or Stockholm to be forwarded to London.

This system diversified the risk but had other challenges. The merchant could ask the shipper, the captain and owner of the ship, to sell the goods and buy new ones. But how would he be sure that the shipper will not screw him over. Alternatively, he could send an apprentice to travel with the goods. But the apprentice will ask for detained instructions which at the time of arrival may already be obsolete.

And this does not solve the problem of information discrepancy between the locals and the person trading into this port. You still do not know whether you have the fashionable colour of cloth.

But we do know that this system worked, because otherwise we would not have a podcast series about the Hanseatic League.

So, it may be worth to look at an individual merchant to understand how it might have functioned.

Bernd Pal was such a merchant. He had based himself in Reval/Tallin, though he was originally from Lübeck.  His father had been an important merchant in Luebeck who traded with England and Bergen. The Pal family had been in Lubeck for a long period of time and some had risen to become members of the city council. Amongst the wider family are merchants in Wismar and Dulmen in Westphalia.

He was born in 1437 and in 1444, i.e., at the age of just 7 he moved to Tallin to be apprenticed to a merchant in Tallin. He is likely to have already learned to read and write as well as some basic maths at one of the city schools that had been gradually replacing the monasteries as places of learning.

In 1454 he gets admitted to the society of the Black heads, the Schwarzenhäupter. That was the association of the unmarried merchants, which comprised those who had been born and bred in Tallin as well as foreign merchants. He is now 17 and his career is taking off.

He is a lucky guy because he has some seed financing. His father had remarried and under Lubeck Law he had to set aside some money for the children of his first marriage in lieu of inheritance. Having been admitted to the guild of merchants his guardians in Lübeck pay him the 800 Lubeck Mark he was owed.

And he gets going immediately. He trades in the classic Hanseatic merchandise, cloth and herring. Since nobody yet knows him as a honourable merchant, he needs to have guarantors, one of whom may have been the merchant where he had been an apprentice. And another connection is made. He is appointed as the representative of Thomas Grote, a member of the city council in Lübeck.

Three years later he goes to Novgorod for a season where he is likely to meet more Hansards from different cities. These connections seem to have come in useful when he gets going properly in around 1460. The size of his operations keeps going and so is his standing inside Tallin. He is made treasurer of the society of Black Heads.

His father died in 1469 and so Bernd Pal returns to Lubeck where he quickly gains a foothold. With the help of his extended family, he is admitted to the fraternity of St. Anthony and that of Saint Laurent. He is made the guardian of one of his nephews who had – like him – left for Livonia as a minor.

He keeps trading on the route from Novgorod via Tallin and Riga to Lübeck and then onwards to London and Bergen. In 1477 or 1488 he moves back to Tallin. He is now 32 and at that age he should have been married. But for whatever reason that never happens. Despite his promising start in Tallin, he does not progress to the upper echelons. Because he remained unmarried, he cannot be admitted to the Great Guild, the natural progress for a successful merchant. He also does not gain access to any of the other fraternities or societies where merchants get together. His business continues at roughly the same scale he had reached when he was in his late 20s. He died in 1503, aged 66, probably after having had a mild stroke a few years earlier.

When he died, the value of his inheritance came to 1,506 Lübeck mark.

In other words, Bernd Pal was an mid level merchant who did preserve the money he had inherited but failing to reach the level of success his father had achieved.

But despite his modest profile he had a number of companies with important partners as well as a dense network of friends and colleagues across the Baltic.

Thanks to his family connection he was close to the Greverade family in Luebeck who were a large and very successful clan of merchants. Bernd Pal had a merchant company with Hinrich Greverade II the head of that family group and the founder of one of the earliest banks in the Hanseatic market. This company traded herring and silver between Luebeck, Tallin and Narva.

Then he had a second company that did the whole route from Bruges to Narva which he ran with two other partners, one of whom was based in Bruges. Then he had a company with again another partner trading weapons, another serving the Danzig-Tallin route trading hops and butter and hemp. And finally a last company again with another cousin trading with Bergen.

But that was not all. Beyond the partners in his company, there were other merchants he was in constant contact with. And these were quite a few. When he was in Lübeck he had 15 trading associates in Tallin, 5 in Dorpat and 5 or 6 in Narva and smaller numbers in Danzig, Stockholm, Novgorod, Bergen op Zoom and Antwerp.

That kind of network meant that Bernd Pal was capable to procure pretty much any merchandise you could ask for from these various locations. That is great, but you have to remember that it was quite rare that a customer would go to a merchant and ask him to get a few tons of herring or wood or whatever shipped. That process was simply too time consuming given the distances.

What happened much more often was that merchants would send wares to a place in the hope that there would be demand. And that is where the networks like the one Bernd Pal maintained come in handy.

First up, it means you can send wares to your business partner in say Antwerp and have him sell it there on behalf of the company. Your partner is a local with local connection and a good understanding of what price can be achieved. So, he should be able to get a good deal on the merchandise.

But then Antwerp was a long way away and how could you be sure that your business partner kept his goods and the company’s goods neatly separated, professionally stored and selling them at the same price. That is where these various other associates come in. They re expected to keep an eye on your business partner, making sure he stays on the straight and narrow. And mostly that is what Hanseatic merchants did. The constant social control, the knowledge that if you let down your trading partner, he will hear about it worked.

The other thing that these associates and partners were extremely helpful with was the exchange of information. Every time a merchant would send goods to his partner or associate, he would enclose a letter. These letters would not contain just news about the other merchants in the town but also general information about the state of the market, whether there was a shortage of hops, whether the church of St. Mary urgently needed wood for repairs, whether there were pirates out in the sound, whether there is a new tax regime. And to close some gossip about family affairs, who is marrying who, who died, who was negotiating with who about marriage etc., etc. basically the content of the Financial Times with Hello magazine inside.

These letters produced a constant and robust flow of information. Hanseatic merchants were busy all-day collecting and processing information that they would then feed back into the network. The system had a lot of redundancy as the same information may be distributed by several members of the network. And that is exactly what made the system faster and more resilient. If Bernd Pal was waiting for news from Narva, there were six ships coming down to him in Tallin and whichever was the fastest would bring the information. And even if one of them was blown of course or God behold sank, the news would still get through. Yes – exactly like the internet. The information is copied and then sent though multiple routes to the recipient.

What that also meant is that the larger one’s network, the better the information, the higher the chance of making good money. So, every merchant was constantly trying to grow the network. And how do you do that?

If information is the currency that keeps the network going, you have to have good information so that people want to join your network. And as you grow your network, your information becomes better and so a forth and so forth.

But this isn’t Twitter. These guys do not just send messages back and forth for likes and retweets, they are traders. They want to see some business in return for all that letter writing. So, to maintain the network merchants also need to occasionally send trades to associates who are not their primary business partners.

Another way to increase the strength of the network was to join the various merchant clubs and fraternities. Being a member of the confraternity of St. Anthony or St. Laurentius does not just mean you get to worship in the church. It also means you are invited to the dinners and meetings where people will talk shop, because if you write letters all day, talking shop is second nature. Other famous merchant associations were the Artushof in Danzig and my personal favourite, the Circle in Lübeck. If you get in there you are made, but you have to have made it to get in.

Again, there is no free lunch, if you want to receive information, you also need to share information, and so it flows and flows.

The last leg to becoming a seriously successful merchant is to get on to the city council. That is where you get all the really juicy information. Will there be a naval expedition to put down pirates, has the King of England really decided to strike back, will the duke of Burgundy cave on the question of privileges in Bruges – that is the sort of information that makes and saves fortunes.

The difference that made was significant. Another Tallin merchant, Hans Selhorst who did make it all the way into the city council and became a major player in the Great Guild and all the other societies left behind 8,177 Lübeck Mark or 5.5x more than Bernd Pal when he passed away.

But it was still only 5.5x. If you think about the gulf in wealth between a Medici and an average Florentine trader or Jakob Fugger and his colleagues, then 5.5x does not appear a huge multiple.

The reason for the relatively small differential might have again been the structure of the Network. Because one needed more than one, ideally more than 5 associates in each city, even relatively small merchants would gain the occasional piece of business from the #1 trader in another city.

It also meant that an ambitious and aggressive player could not just open a branch in another city and thereby expand his share of the value chain. The branch manager would never be allowed into the important societies, let alone on the city council, meaning he would never get the juicy gossip. Plus, the existing associates would likely cut off any merchant who pursued such aggressive tactics.

That meant ambitious merchants could not build trading empires with branches everywhere from Venice to Bergen and Narva to Antwerp. It also forced a level of honesty amongst the merchants. Sending false information or mishandling your trading partners goods would be easily picked up by their fellow merchants and they would inform the other party. Such a merchant would be excluded from the broader network and his business would operate at a massive information disadvantage. The honourable Hanseatic merchant isn’t honest because he fears God, or because he has a conscience, he is honest because the downside of dishonesty is too large.

These particular features of the network explain a couple of other particularities of the Hansa too.

Because each merchant was in a symbiotic relationship with other merchants in other cities, the cities were prone to cooperate rather than fight each other. And where the co-operation would be harmful to an individual city the way to deal with it was by simply not coming on the Hansetag, the Hanseatic Diet where the issue would be discussed. And if that happened, the cities that were keen to take action would pretend nothing was amiss, at least as long as the dissenters did not proactively undermine the initiative.

There wasn’t an official list of Hanseatic cities, no capital, no foundation treaty, no common seal or permanent bureaucracy. Even the Hanseatic diets were only attended by a few dozen cities at best, never the famous 77 full members and 200 smaller members. Decisions of the Hanseatic Diet weren’t binding. And that wasn’t only in case the city had not sent a delegate. A delegate was completely within his rights to declare that he could not vote on this decision as he did not have an explicit instruction to do so from back home. Afterwards the city in question would convey its answer to the diet, which could be that they would not participate in whatever initiative was proposed.

Why such a loose structure? Imagine the diet chooses to go to war with England over the Merchant Adventurers breaking the rules of the game in the Baltic. That may be the right decision for Gdansk, Stralsund and the Wendish cities. But for Cologne or Bremen it could be fatal. They depend on the English trade and have no beef with the Merchant Adventurers in the Baltic. In the original Hanse system, they could just pretend nothing happened and that would be that. If they were forced to participate, the situation could quickly spin out of control ending with Cologne or Bremen leaving the League. Once key staging posts in the network are lost, the whole weakens until it finally collapses. And that is pretty much what happened when this situation arose in 1469.

It all links up. The network effect is what created the co-operative model of a loose federation of cities, cities that were inhabited by medium-sized individual merchants who had no territorial ambitions, a structure that was so fundamentally different to the situation in the Mediterranean which was dominated by city states that were themselves controlled by large international trading houses who slowly but surely turned into princes.

As I said before, I really like this theory about how the Hansa worked. The only thing that stops me in my tracks is that it sits so neatly in the historiography. Maybe we are again projecting our world onto the rather malleable word of trading in the Baltic during the High Middle Ages. Wouldn’t have been the first time.

From first time to next time, next time we will look at the years following the wars with Denmark and the Victual Brothers. The Hansa is at the height of its powers. But storm clouds are gathering, first all the way east in Novgorod, but then the herring moves…. I hope you are going to join us again.

Before I go just a big thank you again to all my Patrons who kindly keep this show on the road. I really, really appreciate your generosity. And if you want to join, there is still a chance to grab one of the unlimited patron subscriptions at patreon.com/historyofthegermans or historyofthegermans.com/support.

And finally, bibliography. I would like to add a few works to our usual list, in particular:

Jahnke, Carsten: Die Hanse | Reclam Verlag

Jahnke, Carsten: Netzwerke in Handel und Kommunikation an der Wende vom 15. zum 16. Jahrhundert am Beispiel zweier Revaler Kaufleute. Netzwerke (hansischergeschichtsverein.de)

Justyna Wubs-Mrozewicz and Stuart Jenks, eds. The Hanse in Medieval and Early Modern Europe. The Northern World: North Europe and the Baltic c. 400–1700 AD: Peoples, Economies and Culture 60. Leiden: Brill, 2013. vi + 296 pp. $171. ISBN: 978-90-04-21252-7. | Renaissance Quarterly | Cambridge Core

The Boundless Sea: A Human History of the Oceans The Boundless Sea (wolfsonhistoryprize.org.uk)