How the cnetre of european banking Moved from Florence to Swabia.

Jakob Fugger had been dubbed the Richest Man Who Ever Lived, but there are many more contenders, my favorite being an African, Mansa Musa, the ninth mansa of the Mali empire whose generous gifts during a visit to Mecca in 1324 triggered a currency crisis.

That is something Jakob Fugger would never have done. He never was a flamboyant banker who impressed his contemporaries with lavish displays of wealth. He was actually fairly dull. If anyone in the firm of Fugger was flamboyant, it was the chief accountant.

So if Jakob is a bit of a pale shadow, the story of what happened in the world of European Finance between 1480 and 1520 is anything but boring. Within just 40 years the heart of the banking industry moved from Florence and Venice where it had held sway since it was invented and moved north, into a medium sized Swabian city, Augsburg. That is as if JP Morgan, Goldman Sachs and Morgan Stanley closed their doors and in their stead some local players from Scandinavia or Mexico took over the financing of the Global economy.  

I am not kidding, something like that really happened back in the late 15^th century.

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Transcript

Hello and welcome to the History of the Germans: Episode 194 – The Fuggers of Augsburg, which is also episode 10 of Season 10 “The Empire in the 15^th Century”

Jakob Fugger had been dubbed the Richest Man Who Ever Lived, but there are many more contenders, my favorite being an African, Mansa Musa, the ninth mansa of the Mali empire whose generous gifts during a visit to Mecca in 1324 triggered a currency crisis.

That is something Jakob Fugger would never have done. He never was a flamboyant banker who impressed his contemporaries with lavish displays of wealth. He was actually fairly dull. If anyone in the firm of Fugger was flamboyant, it was the chief accountant.

So if Jakob is a bit of a pale shadow, the story of what happened in the world of European Finance between 1480 and 1520 is anything but boring. Within just 40 years the heart of the banking industry moved from Florence and Venice where it had held sway since it was invented and moved north, into a medium sized Swabian city, Augsburg. That is as if JP Morgan, Goldman Sachs and Morgan Stanley closed their doors and in their stead some local players from Scandinavia or Mexico took over the financing of the Global economy.  

I am not kidding, something like that really happened back in the late 15^th century.

Before we start I would like to thank s a, James L., Arlene A., John F., Nicolay, JayM, Nick R., and Leendert v.d.P. who have signed up on historyofthegermans.com/support and whose generous contributions keep this sow on the road and advertising free. Thanks to all of you.

And with that, back to the show.

Last week we talked about the Grosse Ravensburger Handelsgesellschaft, the largest trading company north of the Alps before the emergence of the Fugger and Welser of Augsburg. This company had its heyday in the 1450s, but by the end of the century it was in decline and it closed down in 1530.

The Grosse Ravensburger Handelsgesellschaft explicitly refrained from doing banking business. That was down to their rather stringent interpretation of the ban on taking interest that was laid down in the old testament. The words of Leviticus 25:36-37 must have stuck in their minds, where it says: quote “Do not take interest or any profit from them, but fear your God, so that your countryman may continue to live among you.”

This attitude towards banking activity was deeply engrained in most of Europe and seems to have been particularly deeply entrenched in the Holy Roman Empire. During a time when bankers from Florence, Venice and Rome were commissioning the masterpieces of the early renaissance, there were no bankers east of the Rhine river. Attempts by Italians to establish in Lübeck had long failed.

But all this is about to change dramatically. By 1500 the great Italian banking houses, the Pazzi, Pitti and above all, the Medici had closed their doors.  In their stead bankers from the Free city of Augsburg, the Fugger, Welser, Hochstaetter and many more had taken control of European banking, building up fortunes beyond imagining, the kind of money that buys crowns and entire countries.

How it was possible that these provincial cloth merchants from a place for which the Florentines didn’t even have maps or trade manuals could unseat the likes of Lorenzo the Magnificent is a complex story. Some of it is about banking, much is about mining and politics, but mostly, it is about accounting. Oh, I can feel your urge to press stop now and search for something more exciting, but trust me, this is going to be very exciting.

Banking in the 15^th century

Before we get to Jakob Fugger and his colleagues and competitors, we need to dig a little deeper into banking practices in the 15^th century.

A basic banking business model works roughly as follows.

The bank collects deposits from customers. The customers receive interest from the bank, usually at modest rate. The bank can then go and take these deposits and lends the money out to companies or individuals. From them they do receive interest that is higher than the interest they pay on deposits. It is this difference between the interest income from the loans and interest cost they have to pay the depositors that banks make money. Modern banks do a lot of other things too, but this is still the core of a banking business.

If you go back to Leviticus, it is pretty obvious that all these lending activities that form the core of the banking business model are disallowed. The old testament god was seemingly no economist. If he had been he would have known that banking is essential to make an economy grow as it channels idle funds from savers to be used by energetic entrepreneurs.

The way the medieval bankers and some friendly theologians got around the problem was through the instrument of the bill of exchange. We did encounter this already in episode 120 Money, Money, Money where we took a deep dive into banking in the Hanseatic League.

A bill of exchange is in the first place a way to transfer money between two far away places without having to carry bags of gold or silver, but it is also a loan.

Say you are a trader in Florence and you have shipped spices to a business partner in London who is expected to pay you £100 for these spices. You can go to your banker in Florence and say, what will you give me here and now if I instruct my partner in London to pay your branch in London £100. The answer depends on the exchange rate between Florins and British pounds, which is say 5:1. That means our Florentine trader gets 500 florins from his banker, cash in hand. The banker gets a handwritten note from the trader instructing his business partner to pay the banker’s London branch £100 sterling. And since the journey to London is long, the payment date is set for in 3 months. This note is then despatched to London, and on the day set out in the instruction the banker’s branch manager goes to the business partner and presents this document, called a bill of exchange. And assuming the business partner honours the order, the branch manager receives £100.

That sounds like a nice move by the banker. He hands over 500 florins today and gets his money back in a different currency in a land far, far away and as far as we can see for no monetary benefit. But hang on a minute. What is the exchange rate for pounds into florins in London at that point in time? Aha, it is 5.35:1, turning £100 into 535 florins. So if the branch manager sends the money back using the same process in reverse, the banker finds himself having made a profit of 35 ducats in six months, that is a neat 14% return. Nice. But how can the banker be sure that he would make that profit. The answer is, he cannot. There is a risk that the exchange rate in London at that point has moved to 4.9:1 and he would even have made a loss for all his troubles.

And that is why the theologians say, such a transaction does not involve a guaranteed profit aka interest. The banker’s profit is down to taking the exchange rate risk and is hence legal, even though what had actually happened is that our trader has just received a loan of 500 ducats. And here is the rub, the banker never took much of a risk that the exchange rate would move hard against him. Raymond de Roover, the historian who literally wrote the book on the Medici bank and hence 15^th century banking had analysed the exchange rates between the various banking centres in Europe, namely the Italian cities and London, Bruges, Lyon, Geneva and Barcelona and concluded that the spread between the exchange rates in Florence and London was always  wide enough to ensure that losses were extremely rare. Returns could vary dramatically from 3% to 26%, but over time this levelled out to above 10%.

This is how Florentine bankers could do commercial lending without ending up in the seventh circle of hell where the usurers lie with their purses around their necks in the burning hot sand of a desert, swatting away the heat and the flies, their parched tongues sticking out like that of on oxen.

This kind of lending structure was not only attractive in terms of revenues, it also carried moderate risk, at least by the standards of its time. A bill of exchange usually had some sort of commercial transaction underpinning it. In all likelihood the business partner in London had received some merchandise from his Florentine counterpart that was behind his willingness to pay out the £100. And hence it was likely that he had the funds from selling the merchandise, and even if not, the bill of exchange could be protested in court. This was an extremely rapid court procedure which led to immediate seizure of property, giving the bank access to the merchandise in question or other collateral.

As time went by, these bills of exchange developed further ever more complex variants, some of which involved fictitious transactions and so-called dry bills of exchange which looked increasingly like straightforward loans.

Being straightforward loans, they not only attracted the ire of the church, they were also riskier. If there wasn’t a commercial transaction behind it, what collateral could the bank access in case either the payor, i.e. the London businessman or the drawer, i.e., the Florentine spice trader failed to pay.

And that gets us to the highest risk lending in the late Middle Ages, the lending to sovereigns, the princes, kings, and emperors.

This sounds counterintuitive to modern ears. We live in a world where lending to the sovereign, i.e, buying government bonds is the lowest risk form of lending. The 10 year government bond rate in most developed word countries is even called the risk-free rate.

The reason for that is three-fold. For one, modern states have the ability to tax their citizens in order to pay back any debt. Modern states have fiat currencies, meaning they can print dollars, Pounds, Euros to their heart’s content to pay back their creditors and finally markets have confidence that the governments will use net new debt predominantly to fight imminent crises or fund investment in future growth. I will not go into a discussion of whether these assumptions are still true, I leave this to experts like Kenneth Rogoff and Adam Tooze to elaborate on.

But what I can say is that none of these applied to the kings of England, the dukes of Milan or the dukes of Burgundy, who happened to be the main borrowers from the Florentines.

They were all constrained in their ability to raise taxes, in England due to Parliament and elsewhere due to the political power of the cities and nobles. Money was precious metal which is hard to print, and whilst states could and did devalue their currencies often, that was usually accompanied by a loss of confidence. And finally, most of the borrowed funds went into inconclusive warfare or the splendour of their courts.

One infamous incident was when King Edward III of England looked at the 900,000 gold florins he had borrowed from the banking houses of the Bardi and Peruzzi and just simply said ‘Nah, I am not gonna pay that back – followed by – and what are you gonna do about that pal? Going bust is what they did, triggering a depression in the Florentine economy that lasted a decade and opened the way for the Medici.

One last point I had not quite realised before was the way medieval bankers funded themselves. Some of the money they lent out came from their own capital, but not that much. They did take deposits and they did promise a fixed interest to the depositors. That would be outright usury in the definition of Leviticus. But it went on all throughout this time. Why?

For one, nobody was supposed to know. These depositors were usually very rich individuals whose deposit agreements weren’t made public. Secondly, most of them were churchmen. The Rome branch of the Medici focused on two businesses, transferring money for the papacy and collecting deposits from the cardinals. And finally, when push comes to shove and a bank was going down, the depositors were happy to get at least their principal back. So when anyone asked whether they were receiving any interest for their deposits, they simply said, no sir, never. I truster messer Medici to invest it in his good works.

The Decline of the Italian banks

And this gets us straight to the Medici, the unimaginably rich bankers who filled Florence with some of the greatest artworks ever conceived and who married their daughters into the French royal family – twice.

But did you know that during the heyday of the family, the time of Lorenzo the Magnificent, the Medici bank was already at best limping along and that by 1494, two years after his death, it closed its doors forever.

Under Lorenzo’s grandfather, Cosimo the Elder, the Medici bank was a financial colossus that bestrode the European markets, dominating the financial centers of Florence, Venice, Rome, Geneva, Lyons, Bruges and London aka all of them. What happened?

Some of it were external events outside of the family’s control.

In 1463 war broke out between Venice and the Ottoman empire which cut off trading with Asia and saw many Venetian trading posts going up in flames. Their merchants perished, galleys sank to the bottom of the sea and wares were detained. The Venetian bankers who had financed said trading posts, merchants, galleys and wares tottered, but the crisis sucked in banks across the whole Italian peninsula, including several storied Florentine houses. The Medici had limited direct exposures, but the defaults reduced the availability of deposits and caused a severe recession in Florence. As de facto rulers of the city the Medici had to divert funds to sponsor public works for the unemployed.

Another setback was the decline in the availability of English wool. The Florentine economy was only partly banking. It was mainly built on making the most desirable textiles, specifically brocades, velvet and damask as well as high quality woolen cloth. For the latter they needed English wool. But that was hard to get since the war of the Roses devastated the country and a deliberate policy had been introduced to produce cloth in England, rather than just export the raw materials. Production of cloth dropped throughout the second half of the 15^th century.

The next severe blow came in 1478 in the form of the Pazzi conspiracy. This had been a plot to unseat the Medici sponsored by pope Sixtus IV, he of the Sistine chapel. There is no time to describe this in full here, but check out episode 146 of the History of Italy Podcast to hear an amazing story. What matters here is that though the Medici prevailed and the conspirators were either killed or exiled, the result was that the bank lost the papacy as a client. Given the Roman branch had at times accounted for more than half of the profits of the bank, that was a serious blow.

On top of these matters outside of management’s control came some internal issues.

The Medici bank was a  holding company of its many branches. Each branch was run by a partner who held a material stake in the business of the branch and enjoyed significant autonomy. When Cosimo the Elder was still in charge, he kept a close eye on the goings on in the different markets. His grandson, Lorenzo the Magnificent had no interest in banking at all. He was a gifted politician and diplomat, but digging through account books that wasn’t his style.

And when the cat is asleep, the mice dance on the tables. The branch managers in Bruges and Milan were particular culprits. They had lent vast amounts to the Sforza dukes of Milan, the duke of Burgundy and Edward IV of England. All of these funds prove impossible to collect upon. The Yorkist Edward IV and Richard III were wiped out in the War of the Roses and the new Lancastrian king, Henry VII saw no reason to honor their debts. Charles the Bold of Burgundy had an unfortunate encounter with a halberd in 1477 putting an end to his repayments.

The fundamental difficulty with all these exposures was that there was no real collateral the Medici could access in case of default. These were sovereign authoritarian states and the courts would not dare seizing the property of their ruler to pay some Italian moneybag.

And whilst the branch managers were clearly out of their depths, there was also an inevitability to these outcomes. Once a bank had lent to a powerful prince, any future decision became a political one. Refusing to increase the exposure upon demand could be seen as a hostile move and could lead to refusal to repay the existing loans. So bankers ended up throwing good money after bad, until there was nothing left.

And finally, Lorenzo’s focus on politics meant that he used the bank’s resources for political aims, not as a way to generate profits.

When the Italian wars begin in 1494 with the invasion by the French king Charles  VIII, the whole of the Italian peninsula is thrown into turmoil. The Florentines expelled the Medici and read the last rites over the already shrunken Medici Bank. The Medici did return to Florence as grand dukes, but their bank was gone for good. There were other famous Italian banking families, the Chigi, Borromini and Strozzi to name just three. But none of them created a pan-European dominant network like the Medici.

The disappearance of the Medici bank and the other Italian houses left a vacuum. And into this  vacuum stepped a handful of families from southern Germany who took a very different approach.

Augsburg in the late 15th century

So why Augsburg? Hard to say, because there was nothing super special about the place – at least in the 1460s and 70s.

Augsburg is one of the oldest cities in Germany, having been founded by the Romans, and a regional center since at least the days of Trajan. It had been the site of the battle on the Lechfeld in 955 (episode 6 if you want to go all the way back) and had remained an important city throughout. Augsburg differed from the other Swabian Free Imperial cities in as much as it was the seat of a bishop. So it took until 1316 before the status of Augsburg as a free and imperial city was confirmed by Ludwig the Bavarian.

In 1450, Augsburg was one of the larger cities, but still smaller than Nürnberg or Ulm. It was a trading center that benefitted from easy access to the Brenner Pass and from there to Venice. But it had not yet become dominated by the great merchant houses. Augsburg main business was the production of Fustian, that same material that had made the Ravensburger rich.  For at least the first half of the century much of Augsburg’s Fustian was exported by the Ravensburgers rather than the Augsburg merchants. Socially the city was divided between the patricians, the old families and the guilds, which included the guild of merchants. Politics were volatile, uprisings of the exploited weavers frequent. In the 1460s the city made some disastrous political decisions which ended in a siege that they withstood. However, the lands surrounding the city were devastated and Fustian production declined.  A charismatic populist turned himself into an autocratic master of the city and was beheaded in 1478.

Compared to Ulm which was the recognized leader of the various city leagues of the 14^th and 15^th century and Nürnberg with its prestige as the home of the imperial regalia and its flourishing trade in metals, Augsburg was a bit of an also-ran.

The Höchstetter

But someone must have put something into the water, because by around 1480 Augsburg gets on a roll. And this is not just one family, but several who got involved and then gradually took over the world of finance.

The Höchstetter were one of the most prominent families in town. They had originally been ministeriales in the service of the Hohenstaufen. In the early 15^th century they show up as traders in Flemish and other foreign cloth. This, rather than the Fustian, remained the core business for the family for a very long time. They were amongst the first Augsburg families to set up shop in Antwerp. The head of the family Ambrosius Höchstetter had his training in Bruges and must have realized that Antwerp was about to overtake the once dominant Bruges and became the most important trading hub in Northern europe.

Other Augsburg families followed in their wake which gave the southern German firms a head start over the Italians and the Hansards who had insisted on staying in Bruges long beyond its prime.

Antwerp gave the Höchstetter the opportunity to build out relationships with Portugal. This great seafaring nation had realized that they were better off transporting the spices, silks and other luxuries from Asia to Flanders from where it could be easily distributed across European markets, rather than forcing traders to make their way down to Lisbon. Still the Höchstetter saw a point in having a branch a factory as they would call it in Lisbon itself where they got involved in the funding of the great expeditions.

Though pioneers in the Antwerp and Iberian markets, the Höchstetter only became seriously rich in the slipstream of the most famous of the Augsburg merchants and bankers, the Fugger.

Fugger origins

The Fugger were resolutely not patricians. Their ancestor, Hans Fugger had come from the village of Graben a few miles from the gates of the city. When he arrived in 1367 he was already a man of sufficient wealth to be listed as a tax payer. The entry in the tax register has kept puerile historians giggling for century, as the scribe spelled Fugger as F u c k e r.

And as bad as this joke is, I am afraid it is the only one this family has ever made. This is a dour bunch if ever there was one. Nose to the grindstone and go. I guess becoming the richest man who ever lived requires some sort of effort.

Interestingly, in the first century of the Fuggers in Augsburg, it was the women who really pushed the family forward. We know this because Augsburg held the most detailed and complete tax records of any German city. Every three years the wealth of every citizen was assessed and the tax level set for the subsequent period.

So when Hans Fugger arrived, he was assessed as having 22 florins, not bad for a country bumpkin, but nothing compared to the 1,806 florins he amassed in the 30 years he had lived in the city. When he died in 1408, his wealth stood at 2,020 florins. His widow, Elisabeth took this and over the following 25 years more than doubled it to 4,980 florins, at which the Fuggers had risen to position 27 of the Augsburg taxpayer hierarchy. Her sons, Jakob and Anton kept going and in 1448 are assessed as having a joint fortune of 10,800 florins, making them the top five taxpayer.

The Fugger of the Roe

Then the brothers fell out and they split up their businesses. The family of Andreas became the Fuggers of the Roe named after the roe deer on their coat of arms. Their business really went gangbusters under the leadership of Andreas’s son Lukas. Lukas wealth jumped from 2,588 florins in 1472 to 17,200 florins in 1492. Lukas ran a classic trading house together with his brothers. One brother was dispatched to Milan, another to Venice and a third was working the axis Nürnberg to Frankfurt an der Oder, and his son-in-law was based again in Antwerp. Their business was in textiles, spices and silks, wares they imported from Italy and Flanders to be distributed into the empire.

In 1480 the Fugger of the Roe got involved in finance. The step from merchant to banker was not a wide one. Merchants handled bills of exchange all the time and were familiar with the exchange rates and spreads as much as the bankers they dealt with. And the network of branches they had across Europe allowed them to transfer not just their own money, but also to send other people’s funds. As Raymond de Roover said, if you scratch the surface of a merchant, you find a banker and if you scratch the surface of a banker, you find a merchant.

One of these loans, 9,600 florins given to the city of Leuven in the Low Countries became his undoing. The city had given security in the form of tax revenues, but when it came to paying, they did an Edward III. They said ‘Nah, I am not gonna pay that back – followed by – and what are you gonna do about that pal?

What Lukas did was sue them before the council of Brabant and even before the imperial court. He won all the cases, he even got the city put under the imperial ban. Still they did not pay and by that time the firm of the Fuggers of the Roe was already bankrupt. And bankruptcy at this time meant that there was no way members of the family could get back into the standing of merchants. Lukas’ descendants ended up working as goldsmiths and artisans or as employees in their more successful cousins’ firm.

The Fuggers of the Lilly

Talking about the cousins, the family of the Fugger of the Lilly, they continued the tradition of the competent widows. Jakob the elder, the uncle of Lukas died fairly young, leaving behind a brace of sons and a widow, Barbara Bäsinger. She took over in 1462 with 6,600 florins and built it up in a much steadier, less spectacular way to 15,971 florins.

But in 1492 she was not the only Fugger in the book of taxable individuals. There were her three sons, Ulrich with 16,691 florins, Georg with 13,971 florins and Jakob with 11,971 florins. Put together, the family had plus minus 58’000 florins and had become the richest in Augsburg.

Initially their business encompassed the full gambit of the late 15^th century, meaning a lot of textiles, woolen cloth, silk, a bit of Fustian but also spices and other luxuries imported from Venice. They didn’t do anything fundamentally different.

They did dabble in financial business too, lending sums of a few thousand to bishops or managing the money transfer from German dioceses to Rome.

The business was run by the three brothers, Ulrich, Georg and Jakob as a joint enterprise. They had signed a formal agreement of association that spelt out the relative participations and obligations of each of them. Ulrich and Georg are often dismissed as less significant than their youngest and more famous brother Jakob, but they were obviously gifted entrepreneurs who had propelled their firm to the top of a thriving city.

Jakob Fugger, the one everybody called the Rich had started his career in Venice where the firm of Fugger had acquired a chamber at the Fondaco dei Tedeschi, the house of the German merchants in Venice. There he learned the tricks of the trade, in particular about double entry bookkeeping that was spreading at the time. Venice was one of Italy’s great banking centres which must have allowed Jakob Fugger to gain an understanding of this business that, as we have heard, did not yet exist in the German lands.

Things changed for the house of Fugger in 1485 when they began a commercial relationship with Sigismund of the Tyrol. Sigismund was a member of the House of Habsburg and a remarkably silly man. His motto was laudanda est voluntas”, which is best translated as “at least I tried”. What he tried was to burn through as much money as could possibly be burned through by a single man. His court entertainments, mistresses and number of illegitimate children were legend. Then war, as we know, is much more expensive than debauchery. Sigismund excelled in this as well, fighting his neighbors and even started a war with the Republic of Venice, a state infinitely larger and infinitely more powerful than him. His debts were piling up and piling up.

He sounds like a nightmare customer. What could possibly make the dour and penny-pinching Fuggers wanting to lend to him. Did they not know about the Bardi, the Peruzzi and the Medici bank’s problems lending to princes. And for heaven’s sake, their cousins, the Fugger of the Roe had just been bankrupted by a sovereign loan.

How can you lend to someone like that? The answer was silver. Tons and tons of silver that were dug up in the mines near Schwaz, a few miles from Innsbruck. By the late 15^th century Schwaz had become the largest silver mine in europe. Given silver was money, it is a sign of Sigismund’s utter incompetence that he ended up in serious financial calamity. His courtiers and an Augsburg patrician, Georg Gossembrot were stripping poor Sigismund bare.

Getting involved here was a high risk undertaking. Sigismund was obviously volatile and his rapacious councilors will seek any opportunity to screw the Fuggers.

So they travelled with double belt and braces. They started with a loan of 3,000 florins, a minor sum for Sigismund who was in debt to the tune of 60,000 florins to the Baumgartner family of Kempten and a similar amount to several others. As security the Fuggers received a share in the output of a mine in Schwaz. The way this worked was that the mining operator had to sell their output at a fixed price to Sigismund as lord of the Tyrol. This fixed price was well below the market price one could achieve in Venice, Frankfurt or Antwerp. So what Jakob Fugger received from Sigismund as security was the right to purchase a certain amount of silver from the Schwaz mine at that discounted price.

And that was surprisingly solid collateral. Sure, Sigismund could set aside this right and tell the miners in Schwaz to sell him the silver rather than the Fuggers. But to do that, he would need ready cash, and ready cash is what Sigismund never had. And he could not raise ready cash from others because nobody would lend it to him if he was screwing his bankers.

That was one line of defense. The second one was to lend to the mining operators. Mining was and is a hugely capital intensive business. Drilling shafts and building the machinery to send people down and bring the ore up, the smelters and so forth were extremely expensive. As the Fuggers provided funding for these activities, they made the operators dependent on them. That way the operators would have an incentive to hand over the silver to the Fuggers rather than Sigismund should problems arise.

And thirdly, they established strong relationships with the Tyrolian estates who did control the county ever since the days of Margarethe Maultasch (episode 152).

And then there were the interest rates. A customer like Sigismund would be considered un-bankable  today, forcing him to go to a loan shark. The difference between a bank and a loan shark isn’t a moral one but an economic one. The bank prices on the expectation the principal will be paid back at some point, whilst the loan shark knows his customer will never be able to pay back the principal. A loan shark cares solely about the interest. If the interest covers capital within the next few months or a year, then everything beyond is pure profit even if there is never any repayment of the loan. Sigismund was someone who would never be able to repay the loan. Hence the Fuggers charged him like a loan shark.

And that is where it gets really clever. The loans to Sigismund never mention any interest, only the amount of silver to be collected in Schwaz and the fixed price. Sigismund was far too grand to want to find out what the market price for silver in Venice or Antwerp was. Hence he had no idea by how much the Fuggers and his other bankers were taking him to the cleaners for.

Nor do we, at least not exactly. The accounts detailing the profit and Loss of these trades did not survive and obviously silver prices fluctuate. But given Sigismund’s lack of creditworthiness and the usual rates of 10-15% in commercial lending, we are looking at 30, maybe 40%. So if the Fuggers can collect for 2 and a bit years, all subsequent silver deliveries are pure profit.

As their collateral strengthened, lending ever larger sums became possible. They had started with 3000 florins in 1485, in 1487 they advanced 14,500 florins, six months later a further 8,000 florins and in 1488 we move into an entirely different dimension. The Fuggers lent Sigismund 150,000 florins for his war against Vencie. In 1490, Sigismund’s debt to the House of Fugger stood at 268,00 florins. That is an astronomical sum, 6x the family’s wealth and nearly 13x the company’s capital.

So where did the funds come from? The Fuggers were taking deposits at a fixed interest. At this point the depositors are mostly members of the commercial elite of Augsburg related to the Fuggers, the Meutlin, Imhof, Rem, Rehberger etc. Arguably the fact that the other Augsburg families had been successful too, had become a key factor in the ability of the Fuggers to make loans on that scale.

Sigismund’s reign of Tyrol did not survive the utterly predictable defeat in his war with Venice. At this point things could have gone seriously pear shaped for the Fugger. The dukes of Bavaria were in a pole position to take over, in particular since Sigismund had no legitimate children. Since the Fuggers had no commercial ties to the Bavarians, they faced a tough time holding on to their rights to purchase the silver. But they were lucky and Sigismund abdicated in favor of his cousin Maximilian, the son of emperor Friedrich III and himself future emperor and grandmaster of the game of dynastic marriages.

Maximilian was a genius diplomat and a competent military commander, but his financial resources were similar to Sigismunds. He now owned the largest silver mines in europe, but he had no ready cash so he still needed the Fuggers in order to monetise them. The relationship between the Fuggers and the Habsburg became near symbiotic. The Augsburg bankers would lend ever larger sums to Maximilian and later his grandson Charles V, and in return would gain more and more mining rights and other privileges across the ever expanding Habsburg empire.

Whilst Tyrolian silver was starting the family off in the world of mining, this was not even close to the most important business they ran. The other metal they got their eyes on was copper. They acquired some rights in Tyrolian copper mines before they came in contact with a mining engineer called Hans Thurzo. Thurzo had acquired mining rights in a place called Neusohl in modern day Slovakia but needed funds to start digging, to build a smelter etc. In 1494 Thurzo and Fugger agreed to form a joint company to exploit the mine for a period of 16 years.

As we have heard in episode 153 on the city of Nürnberg, there were huge amounts of money to be made in copper through something called the Saiger process. This was a process by which the silver contained in the copper ore could be separated out, tripling or even quadrupling the value of the ore. Thurzo had learned the secrets of the Saiger process that Nürnberg merchants had protected for almost a century. And he intended to apply it in his new mine. By smelting the ore on site, rather than back in Nürnberg, production costs were much lower. Unsurprisingly the mine in Neusohl became instantly hyper profitable.

Only a year after opening, the Thurzo-Fugger company bought another mine, in Carinthia, and named it the Fuggerei and then a third one in Thuringia, at Hohenkirchen and another near Neusohl again. In Mark Haeberlin’s brilliant book about the Fuggers he gives lots of numbers of how many hundredeweights of copper they had dug up and smeltered, but I will not bore you with those. Let’s just give you an idea of how important this became. The total investment in Hungarian mining had risen to over a million Hungarian florins by 1502. The silver extracted from the copper made the Fuggers 2 million Hungarian florins. About 40% of Europe’s copper came out of the Thurzo-Fugger mines producing probably another 2 million florins in profit.

When Jakob Fugger bought the imperial crown for Charles V against competition from Francois Premier of France and King Henry VIII of England, the total bribes paid came to 851,918 florins, most of which was financed by the House of Fugger.  

The Fugger covered almost the entire value chain. Not only did they control the production of copper and silver in their own mines and to a large degree in the Tyrolian mines as well, they also managed the distribution. They built roads to transport the copper and silver, either to Venice or via Leipzig to Lübeck where it was put on ships and brought to Antwerp.

There are other businesses, including the often quoted business with the papacy. That was a small part of their activities compared to the massive mining operation. But they did transfer money between the German dioceses and Rome and funded the upfront payments newly elected bishops had to pay to St. Peter. One of these was the fees the archbishop of Mainz had to pay and that he hoped to recover through the sale of indulgences. Here the Fuggers again helped out handling the cash transfers, getting them involved in the business that so enraged Martin Luther.

But again, that was only a side hustle for them. The big bucks were in the mining business.

We have now gone on for almost 40 minutes and have not really talked about Jakob Fugger and his contribution to the firm’s success. That is odd, since he is probably one of the most recognizable figures of late 15^th early 16^th century Germany. But he is also a rather boring individual. He was one of these people who were obsessed with generating profits to the exclusion of anything else. Sure he did his fair share of patronage of the arts and he built himself an impressive townhouse. But he was no Cosimo the Elder who spent 600,000 florins on embellishing Florence, on Bruneleschi’s cupola of the Duomo or Donatello’s David whilst making himself the de-facto ruler of his city. Jakob Fugger did not aspire to rule Augsburg. His abiding legacy apart from awe-inspiring wealth is the Fuggerei, the oldest social housing project in Europe which is still going strong today.

What he was good at was making money. Biographers tended to argue that his huge loan to Sigismund was his great innovative move that elevated him to the pantheon of great CEOs. But that is hard to sustain. For one, he did not do that alone, but together with his brothers, nor was he the first to go all out on a particular prince. Nor was the particular system of collateralization entirely new. Where he differed was in the scale of his operations.

His true genius, if he had one, lay in the management of his sprawling empire. Remember, one of the reasons the Medici Bank failed was that branch managers in London, Bruges and Milan had made reckless loans. That never happened under Jakob Fugger or his successors. The accounts of the firm of Fugger were maintained by Matthaeus Schwarz, one of the great practitioners of double-entry bookkeeping. And accounting was really hard in this financial system that did not use outright interest but these weird exchange-rate differential based ways to compensate for capital and the silver price based payments in Tyrol. Estimating the profitability of silver production in Neuholz is made complicated when the end product is shipped across europe, mixed with silver from different locations..etc., etc…

Fugger also sent trusted lieutenants out to audit his branches, he rarely let a branch manager stay in one place for too long, but swapped them around the network, so they found it harder to cook the books. Basically he ran his shop like a modern business.

And as always with great geniuses, a big chunk of their success was down to being in the right place at the right time.

The first piece of luck was that the mines of Schwaz were still on an upward trajectory. The volumes produced kept going up and up. Had they dried up earlier, the House of Fugger would likely have gone down with them.

Then there was the luck of Sigismund’s lands being taken over by Maximilian who turned out to be such a massive winner for his dynasty and the Fuggers. When we talk about the Habsburgs next season, you will see in what deep dudu they had been in the 1480s. Their capital in Vienna was occupied by their enemies and the idea they could rise to becoming a European superpower was utterly preposterous.

The next unbelievable struck of luck was the discovery of the route to India. As it happened, the Indians, Chinese, Japanese and Koreans had zero interest in any of the boorish products of europe. The only way the Portuguese could pay them for the spices and silks they wanted, was with silver, a metal that was exceedingly rare in Asia. And guess who had all the silver in the world, the Fuggers. And where did they operate from – Antwerp. So the Portuguese went to Antwerp. Copper was another metal that was in demand in Asia, which again the Fuggers owned a huge amount of.

But where copper really came into its own was in military hardware. The barrels of cannons and pistols were made of bronze, which in turn is an alloy made from copper, tin and other elements like zinc, aluminum or silicon.

War was everywhere in the late 15^th and early 16^th century and it was fought with guns. And for guns you needed copper and for copper you needed Jakob Fugger. Fugger founded a consortium with the remaining other major copper producers that created a European monopoly. Being the sole provider of copper was not only great for price gauging, it also further tied down the firm’s largest debtor the house of Habsburg. If you did not pay the Fuggers, you did not get copper and no copper meant no guns and that meant no war.

This system was so watertight it survived Jakob Fugger by more than a century. His nephew and successor, Anton Fugger became arguably even richer than Jakob. His descendent continued the firm, though it did split at some point. The Fuggers are still around today as a princely family with great castles in Bavaria.

As it happened we did not get to talk about the other great Augsburg family, the Welser and their forays to Venezuela. Nor did we talk about Matthaeus Schwarz, history’s most flamboyant accountant who had a book of portraits of himself in his various outfits produced by an Augsburg artist.

That will have to be woven into next week’s episode when we are looking into what they did with all the money. We know Jakob Fugger didn’t do much exciting stuff, but his contemporaries were very much into art and culture, the southern German renaissance of Schongauer, Burgkmaier, Grunewald, Holbein and of course Dürer. I hope you will join us again.

Rothenburg ob der Tauber and the Ravensburger Grosse Handelsgesellschaft

Amongst the few perks the head of the General State Archives of Baden enjoyed were the occasional inspections of libraries across the country. It allowed for journeys away from the office and occasionally came with the invitation to dinner at the splendid castle or monastery.

And in 1911 few could rival with the honor of being invited to Schloss Salem, the home of Prinz Max von Baden, heir to the Grand Duchy. It is likely that Dr. Karl Obser – who held the post as head of the archives in that year – did enjoy his time in this stunning baroque abbot’s palace not far from lake Constance. But he was there not just for pleasure but also for work.

Though Salem had once been one of Southern Germany’s greatest Cistercian monasteries and had hence held a vast library and archives dating back to the 12^th century, most of that material had long been shipped up to Karlsruhe. Therefore, expectations to find something exciting were modest.

But Dr. Obser was clearly a thorough archivist and left no shelf untouched or bookcase unopened. In an attic room with a broken window, he came across a drawer that must have been left open a long time ago as it had become home to a family, most likely to generations of families, of sparrows. Still Dr. Obser saw a few sheets of paper underneath the nest and investigated.

What he discovered were 1,825 sheets of paper holding the accounts of the Great Ravensburg Trading Company from 1450 to 1526. He had stumbled upon the most significant documentation of late medieval trading in the Free Imperial cities ever found.

The Great Ravensburg Trading Company was the largest single firm in Germany before the houses of Fugger and Welser reached their peak in the 16^th century. Its accounts are a unique window into the way long distance merchants operated in this period, what wares they traded and what they thought was acceptable and what was unacceptable behavior.

This as well as the story of Heinrich Toppler, the dominant politician of Rothenburg ob der Tauber is what we are going to look into in this episode.

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Transcript

Hello and welcome to the History of the Germans: Episode 193: The Trade and Tribulations of the Free Imperial Cities, which is also episode 9 of Season 10: The Empire in the 15^th century.

Amongst the few perks the head of the General State Archives of Baden enjoyed were the occasional inspections of libraries across the country. It allowed for journeys away from the office and occasionally came with the invitation to dinner at the splendid castle or monastery.

And in 1911 few could rival with the honor of being invited to Schloss Salem, the home of Prinz Max von Baden, heir to the Grand Duchy. It is likely that Dr. Karl Obser – who held the post as head of the archives in that year – did enjoy his time in this stunning baroque abbot’s palace not far from lake Constance. But he was there not just for pleasure but also for work.

Though Salem had once been one of Southern Germany’s greatest Cistercian monasteries and had hence held a vast library and archives dating back to the 12^th century, most of that material had long been shipped up to Karlsruhe. Therefore, expectations to find something exciting were modest.

But Dr. Obser was clearly a thorough archivist and left no shelf untouched or bookcase unopened. In an attic room with a broken window, he came across a drawer that must have been left open a long time ago as it had become home to a family, most likely to generations of families, of sparrows. Still Dr. Obser saw a few sheets of paper underneath the nest and investigated.

What he discovered were 1,825 sheets of paper holding the accounts of the Great Ravensburg Trading Company from 1450 to 1526. He had stumbled upon the most significant documentation of late medieval trading in the Free Imperial cities ever found.

The Great Ravensburg Trading Company was the largest single firm in Germany before the houses of Fugger and Welser reached their peak in the 16^th century. Its accounts are a unique window into the way long distance merchants operated in this period, what wares they traded and what they thought was acceptable and what was unacceptable behavior.

This as well as the story of Heinrich Toppler, the dominant politician of Rothenburg ob der Tauber is what we are going to look into in this episode.

But before we start – ah, no, today I cannot be bothered. You already know how and why to help the show on historyofthegermans.com/support. So all I want to do is celebrate those amongst you who have already taken the plunge, namely: Edgars Z, Georg W.(D), Ben G., Paul M., Oblomov, Wade S., Tracy M. and from the other side of the galaxy, Lord Vader.

Ravensburg, and you are very much forgiven if you cannot place it on the map, is today a town of 50,000 in the far southeastern corner of Baden-Württemberg between Friedrichshafen, home of the Zeppelins, and the city of Ulm and its majestic church tower. If you have heard of it, it may be because of Ravensburger, the publisher of puzzles and boardgames, but you would not have associated it with any great mercantile or commercial activity.

Nevertheless, in the 15^th century it housed the headquarters of a company that held a near monopoly in the trade between Spain and the empire and in certain wares, namely linen and a special cloth variously called barchent, bombast or fustian.

Before we get into Ravensburger and the Grosse Handelsgesellschaft, we need to put the whole region into the context of the free imperial cities of the 15^th century.

Most people associate the idea of free imperial cities with Hamburg, Bremen, Lübeck, maybe Cologne, Frankfurt and Nürnberg. These were indeed free cities, but they are geographical outliers. There were hardly any north of the Main River. Few of the Hanse cities were free and imperial cities, in part because they weren’t in the empire, like Danzig, Riga or Reval, or because they were never given immediacy, like Stralsund, Wismar and Rostock.

In actual fact the highest concentration of free imperial cities was in a corridor from Nürnberg to Lindau and then from Rottweil to Heilbronn. These include places that epitomize the idea of the German medieval towns, like Rothernburg ob der Tauber, Dinkelsbühl, Nördlingen, Schwäbisch Hall, Schwäbisch Gmünd, Memmingen, Kaufbeuren, Kempten, Lindau and Ravensburg. The largest amongst them were Nürnberg, Augsburg and Ulm, with Regensburg being the easternmost outpost and Strasbourg and Offenburg the ones furthest West.

Which begs the question, why are they all concentrated in this area?

That goes back, again, to the Hohenstaufen. Many of these places, like for instance Rothernburg ob der Tauber, Nürnberg, Dinkelsbühl, Schwäbisch Hall and Schwäbisch Gmund were founded by the early Hohenstaufen as a line of defence for their duchy of Swabia against the House of Welf. If you want to catch up on that conflict, go back to episodes 45 following, the reign of Konrad III.

When the Welf lost their possessions in Swabia and Bavaria, the military significance of these places for the imperial dynasty diminished. Still these foundations enjoyed sponsorship by the Hohenstaufen, turning into the economic heartland of their territory. For instance Schwäbisch Hall became one of the biggest financial contributors thanks to the salt brine that poured out of the local sources. This saline solution had a concentration of 4 to 8%, making it the largest and most effective source of salt in the region. The city also specialised in minting the Heller, one of the smallest coins, worth half a Pfennig. A German expression to say that someone had paid his dues in full, is “Auf Heller und Pfennig” = all down to the smallest fraction.

Politically these cities were tossed into an interesting situation when the Hohenstaufen fell between 1250 and 1268. They had been founded or controlled by the imperial family, either in their function as emperors or in their function as duke of Swabia. With the duchy of Swabia having disappeared, they had only one feudal overlord left, the emperor. Which made them de facto free imperial cities, though the formal recognition happened sometime between the reigns of Rudolf von Habsburg and Ludwig the Bavarian.

Another inheritance from the Hohenstaufen period were the elites, the patricians. They were in the main descendants of the ministeriales, the serf knights that made up the garrisons of the castles. Their ranks were occasionally refreshed by new arrivals either poor people climbing the ladder or by patricians from other cities moving across. These patricians socialised in their own drinking halls and religious confraternities. Membership in those often granted access to the city council and facilitated shared commercial endeavours. Over time many patricians abandoned mercantile activity and lived the life of minor nobility, including the castles, the jousting and the ostentatious clothing.

Below them ranked the artisans. They ranged from very wealthy, specialised trades which served high class customers like gold and silversmiths, spice and wine merchants, sword makers and miners at the top and the weavers usually at the bottom. The more common crafts in the middle like smiths, tanners, butchers, dyers, tailors, bakers, carpenters, clothmakers, retailer and saddlers, they often formed guilds to promote their interests. In some places, the patricians prevented them from organising themselves, because guilds tended to demand involvement in city politics, which often ended up in bloody conflicts.

Being a free imperial city is nice, because it means you are effectively free to do what you want, without having to deal with a territorial prince. But it is also a dangerous position to be in, because the institution that is supposed to protect you and that you pay some taxes to, the empire, is often unable to provide defence against rapacious dukes and bishops.

I guess that many of you will at some point visit Rothenburg ob der Tauber, and if you have not put it on your list, you should. It is the mother of all cute half-timbered cities in Germany, its Plönlein house making twice daily appearances on social media and its city wall still forming the outer perimeter of the place.

But in the 14^th and 15^th century, Rothenburg was anything but cute, nor were their elites or neighbours.

The dominant figure in the city’s history was Heinrich Toppler. If you drive up to Rothenburg, you may come past the Topplerschlösschen, arguably the first summer house built by a commoner since the days of ancient Rome.

Toppler had been mayor of Rothenburg between 1373 and 1407, though not continuously since the constitution of the city limited terms to one year and prohibited contiguous terms, like the consuls in ancient Rome.

It is not quite clear how Toppler became immensely rich. He was born to a relatively new family, his grandfather had come into town from the countryside and made some money trading in cattle and pork, enough to buy a house in the best neighbourhood. Heinrich’s father was admitted to the city council and Heinrich himself joined him there with his brother and brother-in-law sometime in the 1370s.

In 1380 he married Barbara Wernitzer, the sole child of the then richest man in town. He clearly invested this money wisely. His fortune increased from 2,000 gulden in 1370 to 31,000 gulden in 1407. But what exactly he did is a bit unclear. The debt register of the city of Rothenburg mentions only small debts owed to him. That suggests for one, that he wasn’t a banker and secondly, that his mercantile activity too was limited. Otherwise, he would have owed or owned a lot more trading debt.

He seemingly focused on real estate, of which he accumulated vast quantities, sometimes out of bankruptcies at very moderate prices. All this took place during a time when the city of Rothenburg was expanding its territorial footprint dramatically. Not through military conquest but usually by acquisition. Local nobles who had fallen on hard times sold lands and rights to the city to pay back loans or other debts. To what extent the astute patricians outsmarted the local nobles in their financial dealings in order to acquire their lands is up to speculation. But what is not up to speculation is that by 1480 the city had built a 62 km long border defence around their 350 square km territory. This defence consisted of three walls and two ditches; the walls being constructed mainly of impenetrable hedges. There were nine towers where travellers could enter the protected lands of Rothenburg after having paid their dues and had their wares inspected.

Given Toppler was mayor during the time and the engine behind the territorial expansion, it is not unfair to assume that he picked some of the juiciest pieces for himself. Though we would today regard such behaviour as illegal, it was not part of the accusations levelled at him later in life, and they put all sorts of things to him.

Toppler was not only the main administrator of Rothenburg in this period, he was also its main military commander and diplomat. And this time, the 14^th and 15^th century, was turbulent for most of these cities. The local princes were on the rise, trying to gobble up smaller cities, like the counts of Wurttemberg did as we heard in last week’s episode. At the same time the nobles, former vassals and ministeriales of the Hohenstaufen were reeling from the aftereffects of the Black Death that had undermined their financial viability. Some turned to banditry, some became mercenaries and others joined knightly associations. These associations, like the St. Jörgenschild, became regional powers.

To deal with these threats, Toppler negotiated the participation of Rothenburg in the Schwäbische Städtebund, the league of Swabian cities. City leagues had been explicitly prohibited by the Golden Bull but nevertheless formed at regular intervals as cities pulled together to push back the princes and the knightly associations.

Toppler established a particularly close relationship with king Wenceslaus the Lazy who turned from a foe of the cities to its champion. Episodes 163 and 165. Thanks to Toppler’s astute management of affairs, Rothenburg and the bund itself managed to avoid severe repercussions following the defeat at the battle of Döffingen in 1388, which Toppler had participated in.

Shortly after King Wenceslaus the Lazy was deposed in 1400, Toppler went into retirement. His relationship with the new king, Rupprecht of the Palatinate was not what he had with Wenceslaus.

In that period, he began forming a broader network into the other cities in the area. After his first wife had passed away, he married a lady from nearby Nördlingen in 1392, who was in turn related to several important patricians in Donauwörth, Augsburg and Munich. In 1405 he married his son and his daughter into two of the major families of Nürnberg.

During Toppler’s absence from the levers of power, Rothenburg ran into politically hot water. By 1406 the Swabian League, that alliance of mutual support amongst the cities had largely been dissolved. Rothenburg as one of the northern cities was most at risk from its two neighbours, the Hohenzollern Burggrafen of Nürnberg and the prince bishop of Würzburg. Both disliked the territorial expansion of Rothenburg and just generally would have liked to gobble up the wealthy city.

Rothenburg had so far managed to play these two adversaries out against each other, but that game came to an end in 1406. The Burgraf provoked the city by citing it before his own imperial court in Nürnberg. Rothenburg rejected the authority of the court of the Burggraf and in return cited the Burggraf in front of their own lawcourts. Result: happy lawyer, anxious citizens. King Ruprecht of the Palatinate who had the say in such matters sided with the Burggraf and threatened to put the city under the imperial ban.

At which point the city council called Toppler back in the hope he could resolve the situation. Toppler did two things. One was that he prepared for the now likely military confrontation. He ordered provisions to be brought into town and reinforced the city fortifications. And then he tried to find allies. Finding those amongst the various largely defunct city alliances prove difficult. So in his despair, he sent his brother as a delegate to king Wenceslaus, the deposed king, in the hope of getting some help from there. Wenceslaus had been trying to get back onto his throne for a while, had found some supporters, but as we know from the previous season on the Reformation before the Reformation, his personal failings, aka the constant boozing, and his weak hold over Bohemia made all these ideas just pie in the sky. But pie in the sky was all the only sustenance Toppler could muster.

On July 17^th, 1407, the Burgraf, who had agreed some sort of profit sharing with the Bishop of Würzburg, attacked Rothenburg. He broke through the fortifications that surrounded the territory and captured the outlying castles. But when he got to the city, the inhabitants were forewarned. As we mentioned many times before, capturing a city before firearms were invented, worked either by surprise, or required a long siege, starving out the defenders. Thanks to Toppler’s foresight, the city was ready for the onslaught and well provisioned.

That dawned on the Burggraf, and he was willing to negotiate.  6 weeks after his invasion the two side signed a ceasefire. The ceasefire left Rothenburg with a number of onerous obligations. However, the peace agreement signed 4 months later after mitigation by king Ruprecht was a lot more favourable to the city. The Burggraf was not given any money to cover the cost of his army which left him in financial difficulty. The city and was released from the imperial ban but had to bear the destruction of its castles, lands, and crops. So, just a big waste of money, with a side dish of famine.

But there seem to have been some side agreement. Because seven weeks after the peace treaty Heinrich Toppler was thrown in jail. There was a trial, though we have no documentation of what he was explicitly accused of. His enemies had captured three letter that proved that he had negotiated with king Wenceslaus, which could be seen as high treason against king Ruprecht of the Palatinate. There may have been other accusations, such as that he was trying to make himself a dominus, a dictator of the city. There is a legend that he gambled with the Burgraf over ownership of the city, an idea that come from his coat of arms that showed two dice.

And in a totally uncorrelated sequence of events, the city received an imperial court order that Toppler’s massive fortune was to be handed over to the king, a king they called Ruprecht of the empty pocket behind his back,

On an unknown day Heinrich Toppler died in prison, either decapitated or simply left to die of thirst. His body was brought to the church of St. Jakob where he was buried in the chapel he had built for his family. Having had premonitions that things may go badly, he had sent most of his moveable fortune to his children in Nürnberg. His descendants survived the purge and established families that thrived well into the 17^th century, not in Rothenburg though, but in Nürnberg. His summer house, the Topplerschlösschen passed through several patrician families in Rothenburg and is still in private ownership, but it can be visited.

What we can take from this story are several things. One, that these patrician elites across these free imperial cities were often connected through links of marriage. And that families occasionally moved from one place to another, acquiring citizenship and standing fairly quickly. That not all patricians were merchants, in fact many lived lives as warriors and diplomats rather than as traders. And finally, that politics were cutthroat, leaving even the most competent of mayor’s dead in a cell, when political exigencies required it.

Which now gets up to the main topic of today’s episode, the Grosse Ravensburger Handelsgesellschaft.

Ravensburg as mentioned earlier lay at the southernmost end of this corridor of free imperial cities established by the Hohenstaufen. And it was not even a Hohenstaufen foundation. Ravensburg was established by the Hohenstaufen’s enemies, the House of Welf. But when Welf VI made Frederic Barbarossa his heir, Ravensburg, like all of his Swabian property passed to the imperial family and when they fell, became a free imperial city.

But then, as now, Ravensburg was a much smaller place then Constance or Ulm, and a less advantageously located one to boot. Constance lay at the connection between the upper and the lower lake where a bridge crossed over into Switzerland, the only bridge for a long way in either direction. Ulm was the last navigable point on the Danube, making it the ideal stopping off point for an East-west trade all the way to Hungary. Ravensburg lay inland on one of the many trade routes in the region, not exactly the obvious choice for the by far largest trading firm in the whole of the German lands.

The year of foundation for the company is usually given as the year 1380. However, the reality is more likely a gradual transition rather than a one-time agreement.

At the heart of the early phase are three individuals, Henggi Humpis who was from Ravensburg originally, Rudolf Mötteli from Buchhorn, modern day Friedrichshafen on the lake Constance and Lütfried Muntprat from Constance. The Mötteli family acquired Ravensburger citizenship in 1375, whilst the Muntprat came in no earlier than 1411.

All three families had been trading for a long time before they joined forces. They benefitted from the main trading routes of the region, of which there were basically four main ones.

The first was the transalpine route across the Gotthard, Simplon and Splügen passes to Milan and from there to the main Mediterranean ports of Genoa and Venice. Then there was a land route west via Constance, Zurich, Berne, Geneva, Lyon and from there into southern France or Spain. An eastern route followed the Danube from Ulm, all the way to Vienna and Hungary. And finally, there was the Northern route to Frankfurt, Cologne, Antwerp and Bruges.

The challenge for these trading houses was the same we encountered in our discussion about the Hanseatic League. Merchants who wanted to scale up could no longer travel with their merchandise as had been the case in the early Middle Ages. They stayed at home in their counting houses and kept an eye on the wares that flowed back and forth across their network of correspondents and clients. And once that is the business model, two things matter more than anything else, trust and information.

Merchants need to know what goods are in demand at the destination and what prices are at the point where they want to procure them. And they need to trust the people who act on their behalf, the apprentices or shippers who travel with the goods and the agents who buy or sell the goods on their behalf.

In the Hanse system, this problem was solved through an elaborate surveillance operation. Each merchant would have several correspondent agents in each city that he or she would trade with. These correspondent agents would not only keep an eye on the market, but also on the behaviour of the other correspondents. That way a merchant would know fairly quickly if say the creditworthiness or honesty of one of his agents was placed in doubt. And the higher a merchant rose within their city, the more access he would gain to information. As a member of the city council, he would hear about the state of negotiations with kings and princes, where pirate activity was most intense and what would be done about it etc. And finally, long standing relationships, intermarriage and the fact that Hanse traders all spoke Low German created trust between the participants in that network.

The downside of that model is that it keeps the average size of the firms comparatively small. If every merchant has to split their orders amongst several agents to maintain the surveillance system, neither of these agents can become dominant. And vice versa. If you want to dig into this system and its underpinnings, check out the season on the Hanseatic League, specifically episodes 119 and 120.

The southern German trading system was built on a very different model, a model developed earlier in Italy. The great Italian firms relied heavily on networks of agents employed directly by the firm, and most often members of the family. These agents held a stake in the firm and were hence incentivised to procure accurate information and try to achieve the best possible prices.

The main constraints to this model were the number of family members and trustworthy business partners one could recruit. That is likely one of the reasons the three firms of Humpis, Mötteli and Muntprat joined forces in Ravensburg in the early 15^th century. They all had been extremely successful merchants, but growth has hit a wall as they had run out of individuals they could send out as their representatives. By pooling their resources, they could establish a much larger network of agents than they could set up individually. Another key benefit was that the combination reduced competition, increased pricing power with suppliers and customers and reduced risk.

This was a real company, meaning the partners would put in capital in the form of cash or wares and would in return receive dividends proportionally to their share of the capital. Membership quickly expanded beyond the three families, bringing in roughly 40 to 90 further usually smaller partners. They came from all over the place, from Wangen, Isny, Lindau, Memmingen, Costance, Biberach, Ulm, Nördlingen, Freiburg and Fribourg as well as Lucerne. Most partners were active in the company, often as agents abroad. They would get their expenses covered and received an additional bonus based on their trading performance.

The company would do a full account of the books every three years to determine the dividend payments and bonuses. This happened under the supervision of the three regents, effectively the management board. This is again a difference with the Hanse, where the accounts were only done once, upon the death or bankruptcy of the merchant.

One of the regents tended to be in Ravensburg at the headquarters on Marktsrasse 59 where the books were kept, whilst the other two were travelling, inspecting the counting houses or accompanying particularly valuable shipments.

Which gets to the question, why did they choose Ravensburg instead of the much larger and better positioned Konstanz where the Muntprat family came from. The answer lies most likely in the more stable political situation. Following the great Church Council that had lasted 4 years from 1414 to 1418, Constance experienced a prolonged period of internal conflict between patricians and artisans and between the major families. Ravensburg had found a more stable balance between patricians and artisan interests that kept disruptions to a minimum. 

In terms of trading goods, one of the key products were textiles, namely linen and what is called barchent or fustian. Linnen is made from flax, which grew all over the area north of lake Constance. Barchent as it is called in German or fustion as it is known in England was a heavy, hard-wearing cloth made with a cotton weft and a linen warp. Meaning that on a loom, the vertical yarn is made from linen and the horizontal yarn that is the one that travels back and forth, is made from cotton. The advantage of that technique is that fustian was hard wearing and at the same time more flexible than pure linen. And we still wear a type of fustian, which we call Denim.

In other word, this was not a top end luxury product, but a very useful one, specifically for the working classes from Flanders to Saragossa. Another advantage was that it could be produced on small looms by peasants during the winter months, providing them with an extra income.

I have not found an analysis of how well this was working out for the peasants making the Fustian or linen. But historically this kind of piece work was a form of pretty merciless exploitation. And given that in case of the fustian, the buyers were also delivering the cotton, the labourers were almost completely dependent upon these merchants.

So, margins in this business must have been pretty good. What further helped margins was that in some markets, like for example Barcelona and Saragossa the Ravensburgers gained a monopoly on these kinds of textiles. But shipping it all the way to Flanders and Hungary where they had competition seemed to have worked as well. The Handelsgesellschaft established strict quality controls for their textiles that ranked the product into three levels and were marked with one, two or three crowns.

The other export from Ravensburg was paper. One of Germany’s earliest paper mills opened in 1407 and was again held to high quality standards, making it popular and competitive with the Italian luxury paper Gutenberg had insisted upon.

The return shipments concentrated more on luxury items, for example from Spain silk, rabbit furs, wool, pearls, coral, olive oil, almonds, dates, figs, raisins, cumin, wine, indigo, and very importantly sugar and saffron. Sugar, usually purchased in Spain and Saffron from Spain and Aquilea in Italy became one of the hallmarks of the Ravensburger Gesellschaft. Again, their seal of quality was widely recognized and commanded a significant premium.

At some point they even opened a sugar factory near Valencia.  In Italy they again bought spices and fruits, but also weapons, nails and other metalwork, which Milan was particularly famous for. On their returns from Flanders, they brought the fine woolen cloth that was in demand all across Europe. And they participated in the great local trades, the copper, tin, pots and pans from Nürnberg and Bohemia and they went to the fairs of Nördlingen and Frankfurt.

Their trade was not just operating on a hub and spoke basis. They would ship Spanish products directly to Cologne or Antwerp and buy textiles in Bourg-en-Bresse for sale in Spain.

It was a truly pan-European operation on a scale few northern trading houses could compete with. There is again a map of their trading network on this episode’s webpage, the link to which you find in the show notes. It made its partners, in particular the three founding families immensely rich. To put that into context. Heinrich Toppler at his peak was worth about 31,000 gulden. The Möttelins capital in the society was 150,000 gulden, the Humpis brought in 131,000 gulden and the next one down had 100,000, so the company as a whole accounted for many multiples of what the King of Rothenburg possessed.

Which gets us to the question why the company ultimately dissolved in 1530. As always, there are many reasons.

One was that after the death of one of the founders, Henggi Humpis, several members fought over the post of regent, the board membership. And this was not a polite fight with occasional harsh words, this could get physical with attempted kidnappings and incarcerations of the clients of the other side.

But by that time several original members, including the extremely wealthy Mötteli family had already left the company. They had disagreed on strategy in Spain and went to St. Gall where they founded a new organisation. Meanwhile competitors like the Diesbach-Watt families and later the Vohlin-Welser from Memmingen competed aggressively. In 1477 another group of Partners left to set up their own shop that became known as la Chiqua, the little Ravensburger Company.

Another fatal blow came with the shift in trading patterns during the age of exploration. Vasco Da Gama found a way to India, disturbing the route spices moved and after Columbus sugar production moved to the Caribbean.

But the true weakness was the inherent conservatism. The Great Ravensburg Trading Company was very much still a medieval institution. When one of their associates opened a printing press in Saragossa, the first in Spain, some of the partners objected to the point that they left. And the company observed the strict ban on usury the church still insisted upon. That barred them from any outright banking activities except for money transfer and letters of credit. When the Fugger and Welser with their willingness to fund the great princes and emperors and their expansion into the new world come on to the scene, the Ravensburger stood no chance.

In around 1530 the Great Ravensburg Trading Company appears to have ceased to operate. Some of the founding families kept staying in trading, but mostly they turned into landed gentry, having converted their mercantile wealth into castles and manor houses.

 Which begs the question, how come the accounts of the society were found covered in bird droppings in the home of Prinz Max von Baden in 1911. As it happened, the last accountant of the company did take all the old account books with him when he shut up shop on Marktsrasse 59 in Ravensburg.  He kept them at home, probably out of sentimentality, something his son and grandson shared. At least to the point that when said grandson joined the Cistercians at the great monastery of Salem, he took the papers along and deposited them in the monastery archives. There they were registered as “useless old trading documents” and put into a drawer in a dark corner. And when that drawer was opened by accident or on purpose, the swallows moved in. And thanks to their care, we now have this extraordinarily detailed account of a late medieval trading operation, a truly unique document.

In the faint hope that this podcast will not end up in a dusty corner of the internet, covered in AI bird droppings, I would appreciate any help you can give the show. That does not necessarily mean financially by going to historyofthegermans.com/support, but also by leaving a review, a comment on social media or Spotify, YouTube or whatever you can think of could bring in new listeners.

See you again next week when we may or may not talk about the richest or maybe not the richest man who ever lived.

Three components that make a territory in the HRE successful

The counts, dukes and ultimately kings of Württemberg had risen to the top by winning the genetic lottery. Their eldest sons tended to be competent, some even extremely so, their wives brought in dowries and sometimes entire counties, and they ruled for long enough that the next generation took over when they were ready.

But all that falls apart in the 15^th century. They are suddenly afflicted with the disease of dynasties; states being inherited by babies and buffoons, some of them managing to be both. That would normally be the death nail for a noble House, but not this time.

The Landtag, the Estates of Württemberg step in to protect the fledgling state, deposing buffoons when necessary and ruling on behalf of the babies. This is one of the lesser known and even more extraordinary political histories in europe and well worth listening to.

And as a bonus we also investigate why the region around Stuttgart, Mannheim, Karlsruhe and Freiburg has become a hub of technology and precision engineering, an area where there was no coal, no mining or any other natural advantage – except for the wine – no seriously, it was the wine.

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Transcript

Hello and welcome to the History of the Germans: Episode 192: Württemberg, or How to Build a Success, which is also episode 8 of season 10 – the Empire in the 15^th Century

The counts, dukes and ultimately kings of Württemberg had risen to the top by winning the genetic lottery. Their eldest sons tended to be competent, some even extremely so, their wives brought in dowries and sometimes entire counties, and they ruled for long enough that the next generation took over when they were ready.

But all that falls apart in the 15^th century. They are suddenly afflicted with the disease of dynasties; states being inherited by babies and buffoons, some of them managing to be both. That would normally be the death nail for a noble House, but not this time.

The Landtag, the Estates of Württemberg step in to protect the fledgling state, deposing buffoons when necessary and ruling on behalf of the babies. This is one of the lesser known and even more extraordinary political histories in europe and well worth listening to.

And as a bonus we also investigate why the region around Stuttgart, Mannheim, Karlsruhe and Freiburg has become a hub of technology and precision engineering, an area where there was no coal, no mining or any other natural advantage – except for the wine – no seriously, it was the wine.

But before we start let me uncork a Nebuchadnezzar of gratitude for all the patrons who keep this show on the road by signing up on historyoftyhegermans.com/support. And specifically I want to thank: Christian Wencel, Carrie, Jakob of the CrookedShade with a big apology for the delayed response to his super-nice message, Andreas, Lin, Stuart Eaves and Kurt who have already signed up.

And then I wanted to point you to another independent history podcast. Daniele Bolelli’s History on Fire has been around for neigh on a decade but has not lost its footing. Daniele is a university professor, so everything is meticulously researched and sourced. And then there is the drama! He looks for the places where history and epic collide, there is always a lot of passion, humor and immersive storytelling, with a sprinkle of martial arts. His recent episodes are about D’Annunzio in Fiume and it made me hold my breath. The show is History on Fire, and you find it where you have found this show.  

And with that, back to the History of the Germans.

Last week we did not get very far on our journey upriver on the Rhine. We went from Heidelberg via Mannheim to Karlsruhe and Baden-Baden. We passed Speyer without a glance at the largest Romanesque church in the world, but then we had given it almost an entire episode in July 2021, that was episode 25 – Konrad II and the Construction of an Empire.

Since we have quite a long journey ahead, we will not spend time climbing up to the castle of Hohenbaden – destroyed by the French – or investigating the remains of Baden’s Roman baths. Instead, we head straight down south. As we get slowly pulled upriver, we can already see in the distance one of the tallest buildings in Europe, the cathedral of Strasburg. The one tower we can see stretching to 142 meters had only just been completed. As of right now, i.e., the year 1454, this is not the tallest tower in Christendom. That would be Lincoln cathedral, and when that collapsed in 1549, it was St. Mary’s in Stralsund, which fell in 1647, leaving this solitary tower as the tallest thing on earth, until in 1847 Hamburg built St. Nikolai, followed by Rouen, Cologne, the Washington Monument, the Eiffel tower and so forth and so forth until the Burj Khalifa in Dubai.

Strasburg was by far the foremost economic hub of the area, a key element in the wine trade shipping barrels to England, Scandinavia and even Poland and Russia. It was the place Gutenberg went to make his millions from pilgrim’s mirrors and soon one of the largest centers of printing and publishing in Europe.  Nearby Colmar too was a great trading city and its Unterlinden Museum still holds some of the most magnificent late medieval, early renaissance paintings you will ever see. And in case you are planning your summer holiday, the food is beyond divine.

But that is well known. What is a lot less well known is that the food on the other, the German side of the river is a least as good. Just 60km east from Strasbourg cathedral lies Baiersbronn, a small town of 15,000 souls that can boast two 3 Michelin star restaurants, one 2 star, and in the surrounding area another 4 one- star places, and then much more important, 4 Bib Gourmands. That is more than Chicago. If you do not know what a Bib Gourmand is, look it up, it will change your life for the better.

Given that few restaurant guides have made it down from the 15^th century, we do not know where our hungry crew would have gone, but almost certainly the food had been heavenly even then. This is the warmest and most fertile part of modern-day Germany, and, if you add in Alsace, probably the agriculturally richest part of Northern Europe. And as such it was able to sustain fairly small political structures that in other areas would have been subsumed by larger neighbors. We talked about the 101 members of the Schwäbischer Reichskreis last week. Many of these were located in the upper Rhine area, the Black Forest and north of Lake Constance. Where we are now are the lands of the bishops of Strasburg, one of the larger and richer bishoprics, the cities of Strasburg, Offenburg, Colmar, Freiburg and Basel, as well as various counts, abbots and knights.

The big power looming over all of them was the House of Habsburg whose ancestral home is not far in the Aargau in modern day Switzerland. This area between Freiburg and Constance was known as further Austria and the Habsburgs held on to it until Napoleon passed it wholesale to the Grand Dukes of Baden.

Further up the Rhine lies the mighty city of Basel, where the great church council, the successor to the Council of Constance had just closed down in 1449. Whilst we covered the Council of Constance extensively in episodes 171 to 174, we have only touched upon the one in Basel when we came to the end of the Hussite wars in episode 183. And with good reason, Basel was not much of a success. We will certainly look at their modest efforts to sort out the decaying catholic church when we get to the season on the Reformation.

For now, we leave this free Imperial city in our rear-view mirror as we continue up the gradually narrowing Rhine, until our journey is rudely interrupted by waterfalls. These are not exactly the Niagara Falls, but at 23 meters height and a water flow of 600 cubic meters, it makes for a decent enough tourist attraction. What it also does is make the citizens of Schaffhausen rich, as we have to unload all our gear and hire local mariners to take us further.

And ever moving forward towards our next stop, Constance, we see looming on our left, the Hohentwiel, once home to the dukes of Swabia whose power had now vanished so completely. Further on, in the midst of the Untersee, the lower lake, rises the monastery of Reichenau, the place where the undisputedly most artistically significant 10^th century illuminations had been produced. But now, this once rich and powerful imperial abbey that controlled the entire surrounding area had fallen on hard times and the day when the bishop of Constance took it over was not far.

There is no need to describe Constance to you, I did this before. So, after a brief rest we are now turning up north to meet the family that will soon take over the Hohentwiel and much of the land to the North, the Counts of Württemberg, soon Dukes of Württemberg and ultimately Kings of Württemberg.

The Counts of Württemberg were in almost every conceivable aspect the direct opposite to the margraves of Baden. That even begins with the family background. The margraves of Baden can trace themselves reliably back to the House of Zähringen, i.e., back to 962, and arguably even beyond. And they have the title to show for it. They became margraves as margraves of Verona in the 11^th century, they had to drop Verona, but they kept the margrave. A margrave was well above a mere count, automatically a direct vassal of the emperor and hence an imperial prince.

The House of Württemberg may have had some august lineage. There are some archeological remains in their ancestral castle in Untertürckheim near Stuttgart that indicate a close link with the Salian house, Konrad the Red and then Otto of Worms, mentioned in dispatches during episodes 6 and 22.  

But once the Hohenstaufen had taken over the duchy of Swabia, these early Württemberger counts were kept well below the line of sight of history or may have died out altogether. I will post a map on the website which shows the possessions of the Hohenstaufen up until 1250. And that shows quite clearly that the area they were based in was Hohenstaufen heartland. The castle called Hohenstaufen was just 50km to their east, and Waiblingen, the place they named themselves after, is just on the other side of what is today Stuttgart.

In other words, the Württemberger had been sucked into the imperial vortex and failed to be seen as loyal vassals worthy of sponsorship as the House of Baden had been. So, all throughout this period, they kept their head down, fortified their castle, took on some minor role in the Hohenstaufen administration and waited for their opportunity.

That opportunity came in 1245 when emperor Frederick II was excommunicated and an anti-king, Heinrich Raspe was sponsored by the pope (episode 89 following).

Ulrich I of Wurttemberg teamed up with several other Swabian nobles to take advantage of the situation. When Konrad IV, the son of emperor Frederick II went to confront Heinrich Raspe in battle, Ulrich I and his friends, all of whom had nominally been vassals of the Hohenstaufen, left the camp, leaving young Konrad hanging out to dry.

Ulrich lost no time expanding his territory at the expense of King Konrad IV. It is important to understand how that worked. We are not in the modern age, where a conqueror would attack an enemy stronghold, defeat its garrison and replace it with a new garrison.

In the Middle Ages, all these Hohenstaufen strongholds were held by vassals or ministeriales, not by soldiers subject to military command. Under the feudal law arrangements of the time, a vassal was supporting his lord voluntarily, based on an oath given when he received his fief. But this oath was not unconditional. It could be adjusted or even disregarded if the lord failed in his obligations.

The ministeriales were in principle unfree serfs trained in warfare, meaning they served under command, not voluntarily. But many of these families of ministeriales had been sitting on their castles for generations. They trained like knights, they lived like knights, they married like knights, and they looked like knights, so they were knights. And as knights, they too assumed they had the freedoms of vassals.

What that meant in practical terms was that any vassal or ministeriale who gets attacked, has the option to swap sides, or at least can make an argument that it was legitimate to swap sides. For most of the Hohenstaufen period few, if any, Swabian vassals and ministeriales did take the option to swap sides and join one of the many enemies of the ducal family. They knew that they could rely on support from the dense network of other vassals and ministeriales. They also knew that if they surrendered prematurely, the king or emperor may come down later and throw them out of their castle.

In 1246 this scenario changed fundamentally. First up, the Fronde of nobles led by Ulrich von Württemberg comprised many of the vassals a Hohenstaufen supporter would have expected to come to their aid in case of an attack. And then Frederick II died in 1250. His successor in the role of duke of Swabia was Konrad IV who went to Italy in 1251 never to return. The duchy was left in the tiny hands of 2-year-old Konradin. In other words, retribution for abandoning the Staufer cause became a remote risk.

That is why so many Ministeriales and Vassals opened the gates to their otherwise hard to penetrate castles to Ulrich and his friends. In this period Ulrich acquired the two main seats of the family, Stuttgart and Urach, one by marriage and the other by purchase. But most of his territory, he gained by convincing the local vassals and ministeriales to recognize him, rather than the baby duke Konradin. In 1254 Konradin, or more precisely his regents, accepted the gains he had made in exchange for recognizing Konradin as duke.

Ulrich I ruled the county of Wurttemberg for a further 11 years, until 1265 – continuously expanding his territory.

This was not the first and certainly not the last time that an ambitious man seized an opportunity to build a princely domain. But for it to become a political structure that endured in the family until 1918 and in its name until today, a couple more things are needed.

First up, you need to win the genetic lottery. And not just once and not just in one way. For the next couple of generations, the family needs to produce competent offspring. But it is not enough to have at least one competent child per generation, but that child also has to be the eldest son. And he needs to live for a very long time to make sure his successor is old enough and well trained to take over smoothly. Then that son needs to marry a woman from a family that is losing the genetic lottery, i.e., is dying out. Which puts the whole thing at risk. What happens when these less successful genes percolate within the rising family, cutting down either reproduction or competence? And then there is Mr. Mendel mixing things up anyway.

You can see how becoming a major territorial dynasty is harder than it looks. The typical staying time is around 10 to 15 generations, which is 250 to 400 years.

There is obviously not a lot that one can do about these genetic preconditions. But there are a few options that make success more likely.

Then they set up a system that prevented the division of their territory between their sons. They signed an endless number of family compounds where they committed themselves not to split themselves into insignificance. Their northern neighbors, the counts of Hohenlohe, who had started out in a much stronger position in the 12^th century, managed to cut up their territory into more and more sperate entities.

You can today walk from the capital of the principality of Hohenlohe-Niederstetten to their cousin’s main residence in Hohenlohe-Weikersheim in a comfortable 90-minute stroll, and in the meantime you can spot their summer palace along the way. And if you find this too far, you can visit the princely state of Hohenlohe-Bartenstein, another cousin, in an even shorter 60-minute walk.

The next item on the – how to become a king in the empire checklist – is choose your targets wisely. The vagaries of dynasties dying out, power balances shifting and imperial influence rising and falling, there is a huge temptation to seek acquisitions long way from home.

But that should be avoided. The most successful approach is one of block and tackle. You tackle your neighbor, capture some of his castles and lands, and then you block. Block, block, block, and then forward tackle, and again, block, block, block, block, block, block, block, block, block, block, and again tackle. And by doing that rather than jumping all across the playing field, picking up territories here and there, you end up with a contiguous piece of land that is much easier to defend. It also raises your profile amongst the other great landowners, the abbots and abbesses. They do require an advocate, a Vogt who protects them against marauding soldiers and greedy neighbors. A powerful lord who happened to be around a lot is a great choice as Vogt.

So, how did the Württemberger do?

First up, they mostly lived and ruled for a very long time. Ulrich I – 24 years, his successor, Ulrich II – 14 years, Eberhard I – 46 years, Ulrich III – 19 years, Eberhard II: 53 years and Eberhard III – 25 years. That is pretty impressive. But what is even more impressive is that they were all pretty competent.

They established primogeniture very much from the days of Ulrich I. There were situations where younger brothers wanted a division of the territory, but for now that could be avoided.

Then the Württemberger either deliberately or by chance placed hardly any of their male offspring into church roles. So, if an older brother got knocked out in the game of whack-a-mole, the younger one and his sons could take over.

As for the game of block and tackle, they did well, at least in their core territory. Their lands became a coherent block around the cities of Stuttgart, Tübingen and Urach. They even built a defensive border against the Palatinate, the Württembergische Landgraben. Border defenses were rare since lands were usually too fragmented for such efforts to make sense. They existed around major free Imperial cities like Rothenburg ob der Tauber and Schwäbisch Hall, but rarely around princely territories. This wall also acted as a customs barrier, which was one of the count’s most important sources of funds.

From the late 13^th and then again in the late 14^th century their progress south ran into an even larger and even more coherent political entity, the house of Habsburg.

With the north blocked by the Palatinate and the east by the Bavarians, they looked west, leapfrogging the Badenian cousins and digging into Alsace. Lorraine too came into view, until in 1397 count Eberhard IV married Henrietta, sole heiress of the county of Mömpelgard, or Montbéliard.

That territory, between Besancon and Mulhouse had once been part of the kingdom of Burgundy and therefore part of the Holy Roman Empire. By 1397, when the House of Württemberg took it over, it was half imperial and half subject to the Dukes of Burgundy, causing no end of complications. Montbéliard will remain under Württemberg control until the French Revolution.

If this was the first deviation from the game plan for total domination, things got derailed further when the family no longer won the genetic lottery. Yes, there was still at least one extraordinarily competent heir to come, but what was needed is consistency. Not every one of them had to be a genius living until he was sixty. It is more important to keep the babies and buffoons to a minimum. Spoiler alert – lots of babies and buffoons coming up.

The calamities started with the early death of Eberhard IV, the husband of Henriette of Mömpelgard. Their sons were both minors, so Henrietta led a regency government that was dominated by the local nobility. Once her sons had grown up, they proceeded to split the territory into two, one centered on Urach, one centered on Stuttgart.

Count Ulrich V of Wurttemberg-Stuttgart is the same one we met last week, the one who was defeated in single combat at the battle of Seckenheim. Following this misadventure, Ulrich V and his state were essentially bankrupt but at least not dead.

His brother Ludwig II lasted 9 years as the sole ruler of his half of Württemberg. Then he died leaving behind two sons who were minors. So, regency fell to his wife, Mechthild of the Palatinate, the sister of our friend Friedrich der Siegreiche and driving force between the foundation of Freiburg and Tübingen university. In 1453 her eldest son reached maturity. But since he suffered from epilepsy, he was considered unable to rule. So, the regency continued.

In this vacuum of an incapacitated ruler in Urach and a bankrupt one in Stuttgart stepped Friedrich der Siegreiche. He exerted influence through his sister, the regent in Urach and through his financial hold over the bankrupt Ulrich V. Württemberg was again at risk of being sucked into the vortex of a more powerful state, this time the Palatinate.

Cometh the time, cometh the Landtag. At this crucial point it is not a man or woman that gets up to protect the independence of Württemberg, it is an institution. And this institution is the Landtag, the estates of Wurttemberg.

To explain, we have to look at one more criterion for a successful territorial state, the sense of communal purpose, or you can call it territorial nationalism. In principle a territorial state is nothing other than a collection of properties that happen to be under the control of one person. But as these territories developed, some rulers managed to instill a sense of belonging to their territory. Much of that came into being during the 14^th and 15 century and it lasts until today. Germans who identify as Hessen, Badener, Sachsen, Hannoveraner or Preussen are referencing a territory created not by geography, ethnology or ancient culture, but a random collection of lands owned by a single family. And it is a strong sentiment. My grandfather, who was from Baden would every year celebrate the battle of Königgraetz in 1866 as the last day you were legally allowed to shoot at Prussians.

And Württemberg was one of the territories that developed such a sense of belonging and territorialism earlier and stronger than many others. That was in part a function of the contiguous territory.

It had also something to do with the interior structure of Württemberg. Other than their neighbors in Baden, the Württemberger liked to have cities. They liked the economic power they brought. And since most of their income came from customs stations along the main North-South trading route from Italy to the Rhine, they had an interest in their prosperity.

Many of these cities had become free imperial cities after the Hohenstaufen had fallen. So, to incorporate them into Württemberg over time, the counts waged war against them. Where they succeeded, the peace settlement often included the right of the cities to participate in the state decisions. So, from 1316 onwards we know that 8 cities sent their delegates to the Landtag, the meeting of the estates of Württemberg to “advise and support the count”.

The strategy towards the nobility was the opposite. The counts tried at any time to suppress them, to force them to become subjects rather than vassals, and where that failed, left them outside the operation of the state.

The Landtag became the glue that kept Württemberg together during this period when the land was divided between the two lines and ruled by ineffective counts.

And they really stepped into the limelight in 1457 when the epileptic count Ludwig II of Württemberg-Urach died. His younger brother Eberhard V was now count, but only 12 years old. His uncle Ulrich V of the Stuttgart branch became his guardian and de factor ruler of the combined entity. But in reality, he was a puppet of Friedrich of the Palatinate. And if you remember the episode on the Palatinate, such a scenario could easily end in the sudden demise of young Eberhard V and a takeover of Württemberg first by Ulrich V and then by the Palatinate.

To push back the Palatinate, the Landtag staged a coup. Against the wishes of his guardian, the representatives of the cities declared Eberhard V of age. Ulrich failed to raise the resources to suppress the Landtag and had to withdraw.

Eberhard V called im Barte turned out to be one of the most competent of the family. He fostered economic activity, founded the university of Tübingen, married an immensely rich Italian heiress and reformed the bureaucracy. On the negative side of his accounts stood the expulsion and arrest of the Jews in Württemberg.

His main objective was to reverse the division of the territory. In 1482 he achieved that by making a deal with the son of Ulrich V and heir to the Stuttgart branch. The two territories would be rejoined. The childless Eberhard im Barte would run it until his death and afterwards the whole would go to the son of Ulrich, called Eberhard the younger. Under Eberhard im Barte Württemberg reached an extent and wealth that not only rivalled but superseded many duchies. So, in 1495, Eberhard im Barte was elevated from count to duke, and with that the duchy of Württemberg was born. The duchy was made indivisible, and succession was based on strict primogeniture.

And within the duchy the Landtag, the Estates of Wurttemberg gained an important role. They were consulted on decisions over war and peace, and most importantly they held the right to approve new taxes. They were even granted the right to resist the duke in case he breached any to the arrangements.

In terms of membership, there were 14 abbots of the main monasteries, 30 knights and nobles and 120 representatives of the cities. The voting was not by estate, so the prelates, the nobles and the commoners each have one vote, but by all representatives together. That and the unwillingness of nobles and abbots to pay taxes shifted the power in the assembly towards the commoners, mainly patricians in the cities.

Eberhard im Barte died in 1496 a year after the creation of the duchy. His heir was, as agreed, Eberhard the younger, the son of Ulrich V. This Eberhard was no longer younger, he was in fact already an old man, 49 years, when he took over. When he had handed over control of his share of the duchy to Eberhard im Barte he had not only gained the right to inherit the whole but also a generous annual pension. Free from dealing with boring admin tasks he went travelling, picking up expensive habits at the courts of France and Burgundy.

When he took over in 1496, he was remarkably ill-suited for the management of a complex duchy in the crossfire of Habsburg and princely interests. And given his love of bling, he almost instantly clashed with the Estates, the Landtag.

He demanded more money, for his court, his mistresses and an army. The Landtag refused. Words were had, and then, in a completely unprecedented move, the Landtag deposed the duke Eberhard II of Württemberg. The state apparatus, the councilors, administrators, bureaucrats and armed forces agreed. Eberhard II fled to Ulm, appealed to the emperor to put this rebellious rubble under the interdict. The emperor responded by siding with the Landtag and installing a new duke, Ulrich I, who was, again, a minor. But instead of having a regency council made up of nobles, it was a government made up of members of the Landtag, some prelates and nobles but manly commoners who ruled the duchy until young Ulrich was 16.

Ulrich started out as a great hero, gaining victories in the War of the Landshut Succession in 1504 that restored all the losses the duchy had sustained during the Mainzer Stiftsfehde.

But things then gradually went sideways. Ulrich, like many Renaissance princes, enjoyed the good life and felt compelled to show off. His spending on feasts and feuds drained the coffers of the state. In 1513, he had to give major concessions to the Landtag to get them to approve another tax.

This tax then triggered a revolt. This revolt, called the revolt of the poor Konrad, spread like wildfire across the land of Württemberg. To suppress it, he had to again seek help from the Landtag. By then a subsection of the Landtag, a group of roughly sixty interconnected patrician families had formed an association they called the Ehrbarkeit, best translated as the Honorables.

The Ehrbarkeit was willing to bear the cost of the military campaign and pay off all the duke’s debts, in exchange for some massive concessions. On July 8, 1514, duke Ulrich signed the Tübinger Vertrag, the Magna Carta of Swabia. In it he guaranteed the Landtag’s rights to decide taxes. They were given influence on decisions over war and peace, and they could refuse the sale of any ducal territory. Citizens of Württemberg were given the right to due process, and the right to emigrate.

Ulrich did one more thing to cement the new order. In 1515 he went out hunting with his equerry Hans von Hutten. Von Hutten had married one of Ulrich’s mistresses. And when the duke demanded that Hutten would take a back seat in the marriage, Hutten refused. Hutten resigned his role as equerry and planned to leave Stuttgart with his wife. Ulrich invited him to come on one last hunting trip to reconcile their differences. Hutten could not refuse and arrived in light hunting gear, whilst the duke showed up in full armour. Once they reached the forest, the duke sent away his staff and then went after von Hutten. He chased him around a tree, striking him with his sword seven times, five of which in the back. Then he strung him up with his own belt.

That was the scandal that broke the camel’s back. 18 of his vassals revoked their oaths, his wife left him. Hutten’s family sued him in the imperial courts. The poet Ulrich von Hutten, a cousin of the victim, wrote immensely powerful satirical pamphlets about the duke. Ulrich was placed under the imperial ban, and in 1519 the Swabian League invaded Württemberg and duke Ulrich had to flee into exile. He stayed there until he was restored by force of arms in 1534. For 15 years the duchy was again ruled by the Landtag, led by commoners, members of the Ehrbarkeit. When Ulrich returned, he had to confirm the rights of the Landtag and the Ehrbarkeit.

A political structure with a duke constrained by the tax raising authority of the estates was not that unusual. Most territorial states had these. So did in fact France and obviously England.

Where Württemberg differed was a) in the composition of the estates, i.e., being dominated not by the nobility, but by the cities and even at some point peasants and ordinary people, b) in the fact that it retained full control over taxation even during a time when most others succumbed to absolutism. And c) it differed in the sense that it granted rights directly to ordinary citizens.

The rest of Württemberg’s history, which I am sure we will touch upon as we go through the next few centuries were dominated by the conflict between duke and Ehrbarkeit. Dukes tried to suppress it or get past it through imaginative financial shenanigans, but in the end all of these attempts failed. The Landtag and within it the power of the Ehrbarkeit stayed on, until 1805.

Which gets me to the third topic for today. We talked about what it takes for somewhat obscure nobles to become important imperial princes, we talked about how a territory developed its own identity and political structure beyond being just a collection of rights in the hand of one man. And finally, we are now going to talk about the reasons for the economic success of Württemberg.

If you ask any Brit to name a German city other than Berlin or Munich, Stuttgart comes up fairly often. Which is odd, because neither the clubbing scene nor the Christmas markets are much different to the rest of the country. The Cannstatter Wasen may be almost as old and almost as large as the Octoberfest, but few people outside Germany, arguably outside Swabia, have heard of it.

The reason Baden-Württemberg is so well known is the extraordinary cluster of high-end manufacturing in the place. Porsche, Mercedes Benz, Bosch, ZF Friedrichshafen, SAP, Heckler & Koch as well as dozens and dozens of engineering and technology companies are based here. Why there are there today is self-evident. There is a skilled workforce, some excellent technical universities, physical infrastructure and suppliers of key components nearby. The companies are competing fiercely against each other, spurning each other to become better and better, whilst serving a customer base that demands to drive safely at 130 miles around corners.

But the question remains, why did they come here? Yes, Benz patented the first Motorcar in Ladenburg near Mannheim and Gottlieb Daimler together with Wilhelm Maybach created effective engines and later motor cars in Stuttgart. Ferdinand Porsche had worked at Daimler in Stuttgart before he set up his own firm in the city.

But inventor’s personal affinity to a location is rarely enough for industry clusters to emerge.

If you look at the early industrial centres in europe, they are often driven by natural resources, water energy in the English Midlands, coal and iron ore in the Ruhr, Wallonia and Lorraine. Mining in particular can be a catalyst, as it had been in the Ore mountains, in Saxony and Thuringia. And that is not just because of the material they dig up, but also the technologies required bring about specialisations and skills that can be deployed elsewhere. Neither Baden nor Württemberg had much, if any coal, mining or came in early enough to take advantage of water-based energy.

Another driver can be capital. Large cities tended to be places full of rich people, some of whom were willing to support entrepreneurs. So, you find industry springing up in Cologne or Berlin. But Stuttgart, Mannheim, Heidelberg and Karlsruhe were all mid-sized towns, not metropolis full of venture capitalists.

What the region could call upon were the universities, not just the old foundations in Heidelberg, Freiburg and Tübingen but also the technical universities in Karlsruhe, founded in 1825 and Stuttgart founded in 1829.

The Tübinger Vertrag had guaranteed due process since 1514, and the rule of law was further strengthened in the comparatively liberal constitutions of the post Napoleonic period. As we talked about before, the rule of law is an important facilitator of economic growth, reassuring investors that they can get their money back and entrepreneurs that they will be benefitting from the fruits of their labours.

Some argue the fact that Baden and Württemberg were mid-sized state made careers in politics and military unattractive. Ambitious people who wanted to change the world would not find a large enough stage in Karlsruhe or Stuttgart. Hence, they directed their efforts into areas like science and engineering where territorial borders are largely irrelevant.

And finally, we have or may have another major contributor to the success story, one very close to my heart – wine. If you compare maps of ancient wine growing regions and areas of technological innovation in Baden- Württemberg, you see a very clearly discernible overlap.

This triggered two scholars, Thilo Huning and Fabian Wahl, from the universities of York and Vienna to investigate why that may be the case. They produced a paper just 2 months ago, arguing that winegrowing had a material impact on modern economic development in Baden-Württemberg.

I will put a link to the article in the show notes for this episode, but here is what I understand to be their line of argument:

The first point is that in areas where wine was grown, the tradition of sharing inheritance equally could be retained. We should remember that parents have always tried to love each of their children equally and that leaving all the assets to just one on the grounds of seniority and gender is unnatural. This idea is only adopted out of necessity. So, in regions where productivity per acre is low and hence dividing the farm between several children would make each of them unviable, that is where primogeniture takes hold. Henry the Fowler introduced primogeniture in the kingdom of East Francia not out of spite for his younger son, but in order to preserve the viability of his state. The same goes for the counts and dukes of Württemberg.

In the winegrowing areas of Baden and Württemberg we find mostly equal inheritance rights. The issue with winegrowing is that it is extremely labour intensive, seven to eight times greater relative to grains. And wage labour is fairly scarce in the wine industry because vines can be easily and permanently damaged if the pruning, ploughing, and hoeing operations are badly carried out. Hence these had to be family businesses. Moreover, wine is as much about quality as it is about volume, meaning that relatively small plots, if well-tended, can sustain a family. Which in turn means, there is less need to establish primogeniture, forcing younger siblings to fight for themselves.

The labour intensity and egalitarian inheritance rules resulted in a higher population density in wine-growing areas at the dawn of industrialisation. This provided the necessary excess labour force, that was also flexible enough to go back to the vineyard when an entrepreneurial venture had failed.

As an aside, wine was also a very expensive commodity, allowing merchants in the wine-trading cities to make huge profits and build up significant capital. That capital could then be mobilized as venture capital.

Available flexible labour and capital are important factors, but there is something else wine-growing areas benefit from.

Winegrowing is a gamble, creating the need to share the risks. You have a perennial plant that takes decades to reach top quality production, meaning you have no flexibility in terms of crop. If climate changes or markets shift, you cannot nilly willy replace vines with rye. So, when times are tough, you have to take it on the chin. But since your neighbours go through the same hardship, wine-growing villages developed a closer sense of community and an ethos of mutual support.

And that also manifests in the good days. Whilst growing grapes itself is not capital intensive, a wine press, the barrels and cellars are. Wine growers have always and still often do share these costs in the form of collectives. This requires co-ordination, compromise and the development of trust between the members of the society.

In other words, in wine growing areas society is more collectivists, a place where people are willing to co-operate and share resources, both in good and in bad times.

These attributes create trust in individuals and in the community as a whole. Trust is one of the most valuable commodities. When trust is absent, society wastes valuable resources on verification, monitoring, and enforcement mechanisms that could otherwise be directed toward productive activities. All these costs fall away when people trust each other, making the allocation of resources much more efficient. The world bank estimates that 60-80% of the wealth of developed nations is made up of social and institutional capital, i.e., in the trust that individuals and institutions are broadly acting fairly. Now that figure is heavily disputed, but it is not a long shot to believe that a tradition of working collectively and supporting each other makes challenges easier to overcome and saves tons of money on lawyers, forensic accountants, party donations and lobbyists.

Our two scholars, Thilo Huning and Fabian Wahl, are scientists. They deal in facts, not beliefs. So, they measured the correlation between wine growing and economic activity in Baden-Württemberg down to the level of the individual municipality. They collected data on wine growing in the 9^th and 17^th century as well as at meteorological conditions and compared those to population density, density of firms, nighttime luminosity, distribution of rare given names and various control variables.

I am not very good with the Greeks they come up with, but their conclusion is quote: “This study underscores the role of wine in the shaping of modern Southwest Germany.”

Bingo. So, if you want to lay the foundations of economic growth in a wine-growing area of your choice, get yourself a few bottles and bask in the glow of general goodness. You get the same feeling by the way if you sign up on historyofthegermans.com/support.

And with that, see you next week.

The rise from minor principality to Grand Duchy

What is it like to be a prince? Well, not quite what it is set out to be, in particular when you are a smaller prince, not in stature, but in land.

The margraves of Baden are such princes. In the 15^th century their main territory, a slither of South-West Germany, just 60km long was too small to play on the European, even on the German stage, but too big to escape the need of massive palaces and warfare.

What makes Baden so fascinating is that despite its handicap, it managed to become a medium sized state, one half of Baden-Württemberg. The way there was a long one, involving friendship and loyalty to the death, piratical princesses, alchemy, someone called the Türkenlouis, a sun-shaped city and some skilled diplomacy.

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Transcript

Hello and welcome to  the History of the Germans: Episode 191 – The Margraviate of Baden, also episode 7 of season 10 – The Empire in the 15^th Century

What is it like to be a prince? Well, not quite what it is set out to be, in particular when you are a smaller prince, not in stature, but in land.

The margraves of Baden are such princes. In the 15^th century their main territory, a slither of South-West Germany, just 60km long was too small to play on the European, even on the German stage, but too big to escape the need of massive palaces and warfare.

What makes Baden so fascinating is that despite its handicap, it managed to become a medium sized state, one half of Baden-Württemberg. The way there was a long one, involving friendship and loyalty to the death, piratical princesses, alchemy, someone called the Türkenlouis, a sun-shaped city and some skilled diplomacy.

But before we start the usual plea for support. Making this show has gone from being a hobby and side hustle to being my obsession and even main occupation. If I want to keep it up and avoid having to set up an additional income stream from piracy, I need your support. There are various options on historyofthegermans.com/support to protect shipping in the English Channel. Special thanks from the Coastguard go to John S., Brian – Gutenberg’s apprentice, Sasha Sirota,  Elliot W. J., Michael Dane from Australia, Conor G., Charlie J. and Zachary Levine. By the way, if you are a supporter and you want your full name read out or me saying something silly, send me a note.

And with that, back to the show

After last week’s detour into the history of the German universities, we now alternate back to our journey through the Holy Roman Empire in the 15^th century. We are travelling back down to where Mannheim does not yet exist and resume our journey up the Rhine River towards Basle.

As we do this, we are entering one of the most fragmented parts of this ancient political structure that had once been the stem duchy of Swabia, one of only 5 duchies that existed in Henry the Fowler’s kingdom of East Francia.

In the 500 years since Henry’s reign, the duchy of Swabia had been divided into smaller and smaller principalities.

The first time in the 12^th century when it broke up into three entities, the Hohenstaufen duchy of Swabia, the duchy of Zähringen in the Southwest and the lands of the Welf in the East.

Frederick Barbarossa and his successors consolidated the Welfish and the Hohenstaufen lands and penetrated the territory with castles and cities. In 1218 the Zähringen dukes died out and their vast territory was distributed amongst the mighty cities like Zurich, Berne and Basle, the Habsburgs and various offshoots of their own family as well as their vassals.

The next atomization happened when in 1268 the House of Hohenstaufen fell under the executioner’s axe.

And as in the case of the Zähringer, it was the cities, the Habsburgs and a brace of more or less powerful counts who seized what had once been the power base of the emperors of the High Middle Ages. In 1521 the imperial constitution recognized 101 different princes, cities and immediate lords in Swabia, more than in any other of the imperial circles.

These 101 territories varied dramatically in size and economic power. The dukes of Württemberg were by far the biggest, accounting for about a quarter of the population, followed by the Margraves of Baden with 8% and the bishopric of Augsburg with 4%, and everybody else was even smaller than that, with the abbey of Heggbach with 600 inhabitants bringing up the back.

Which gets us to the question, how did this work? What room to act did you have as one of these entities? What were sensible policies to follow? How do you come out on top?

There are several ways to approach this issue. One would be to follow chronologically every move of every one of these players, shuffling villages and abbeys back and forth to trace the growth or contraction of each of these territories. This is what I did in my first draft of this episode. But then I read the following sentence out loud: “it is highly likely that even before Rudolf I’s marriage to Kunigunde von Eberstein, property belonging to this family, which had risen from a noble rank and was mainly based on fiefs from Speyer and the inheritance of the Counts of Lauffen, came to Baden. Rudolf also acquired Liebenzell and Alteberstein, today’s Ebersteinburg.”. And that is when I realised that there are various ways of getting rid of listeners, even such loyal listeners as yourselves. 35 minutes of that kind of stuff, and I will be all alone shouting into the podcast ether.

So, I came up with another idea.

We did know who came out tops, the dukes of Württemberg and the Margraves of Baden, because the state is now called Baden-Württemberg. And whilst the dukes of Württemberg are a fascinating subject, the rise of the margraves of Baden was a lot steeper, meaning we may be able to learn more from them.

And we will not go through all the acquisitions and divestments that got them there. That would sound like reading the land registry out loud. If that is of interest, there is a great map available on a website called LEO-BW that shows the territorial expansion of the margraviate of Baden up until 1796. I have put a copy of it in the Maps section of the historyofthegermans.com website, the episode artwork and in the transcript to this episode for you to look at. That should cover this, leaving us with a lot of room to discuss potential strategies for success.

Economic development

The first thing a prince could do is also the most sensible thing to do, he could develop the economy of his territory.

And the margraves of Baden could look to a very successful set of precedents in their own family. They were one of the cadet branches of the dukes of Zähringen. The Zähringer ruled a territory in what is today Switzerland as well as the furthest South West corner of Germany. There they founded important cities, namely Berne, Freiburg in Germany and Fribourg in Switzerland and promoted the growth of Zurich, Murten, Burgdorf, Offenburg, Villingen Schaffhausen and many others.

However, their descendants in Baden were not that interested in the foundation of cities. That may be down to the fact that these cities had a habit of asserting their independence once their economy got going. Mainz, Worms Speyer and the mighty Strasburg all had thrown out their bishops, whilst Freiburg, ungrateful as it was, had kicked out their local count and put themselves under the protection of the Habsburgs.

There was an established opinion that the margraves of Baden had founded Stuttgart in 1219. They did own the stud farm that gave the city its name for a while, but that does not mean they founded a city there. No evidence of a foundation has been found and the originator of that thesis has become subject of some controversy. It would have been so deliciously ironic if that had been true, but probably isn’t.

As a consequence, the margraviate featured just one urban settlement, Pforzheim, which in the 15^th century was one of the main residences of the margraves. Pforzheim is today best known as a centre for jewellery and watchmaking. But that only came about when in 1767 the margrave established  a jewellery and watch manufacture in an orphanage. Most of the period between the 15^th century and 1767, the city was left to fend for itself.

Then there is the Weinordnung of 1495, that prohibited the dilution of wine with all kinds of cheap ciders and fruit alcohol and established fines for the use of sugar, sulphur and poisonous substances. A Reinheitsgebot before the more famous beer purity law of 1516. The margraves claim it was the first of its kind, but there was already an imperial order in 1487 and the more meaningful imperial regulation that came in 1498.

Loyalty

If the House of Baden was not hugely successful in promoting economic activity, there was one thing they were excelling at – loyalty, specifically loyalty to the House of Hohenstaufen. The idea being that loyal vassals were rewarded with more fiefs and could expect favourable imperial court decisions in the regular disputes with neighbours and cousins.

They were there right from the word go! Margrave Hermann III fought with Konrad of Hohenstaufen in his civil war against emperor Lothar III and followed him on the ill-fated second crusade. His son, Margrave Hermann IV accompanied Barbarossa to Italy, fought with him before Milan and at the catastrophic battle of Legnano. He too came along on an ill-fated crusade, the third one, where he also died. The next margrave, Hermann V fought for Philipp of Swabia in these civil wars and joined the Frederick II when he showed up at Constance in 1212.

But the title of most loyal and most romantic of paladins must go to margrave Friedrich I. Barely 18 he followed his best friend and liege lord, Konradin, duke of Swabia and grandson of Frederick II to Southern Italy. Beaten at the battle of Tagliacozzo in 1268 they were imprisoned together in the Castello de Ovo in Naples. Legend has it that the two friends were playing chess when they were told that the king of Sicily had condemned them both to death. They heard the message, looked at each, and resumed their game. This whole story, including this scene became a bit of a cornerstone of German national mythology which also developed some rather unexpected homoerotic undertones. Tischbein painted the scene in 1784. Look at the picture, and you will get what I mean. 

So, was it worth it? Well, the last bit that ended with young Friedrich decapitated on the market square of Naples certainly did not. But on the other hand, it could have been the by far most rewarding bet in medieval history. Because Friedrich was not only the heir to the margraviate of Baden, he was also the grandson of the last Babenberger duke of Austria, aka, the golden boy in Tischbein’s picture was in play to become duke of Austria. He did not have the cards though; king Ottokar of Bohemia had already occupied the duchy. But if Konradin had succeeded in Sicily and then returned to the empire like his grandfather had done, thrown out Richard of Cornwall and been crowned King of the Romans, well then the new king would have supported his best mate’s claim on Austria. And if that had happened, then it would have been bye-bye Habsburg and all hail the Badenian emperors.

Ok, that did not work out and instead of world domination, we have a tragic tale of friendship and chivalry. But that does not mean  that a century of loyalty had gone unrewarded.  The core of the Baden lands, that stretch on the eastern shore of the Rhine from Bruchsal to Baden-Baden was at least in large part given in compensation for services rendered. They also were able to expand their traditional homeland way upriver between Freiburg and Basle, the area still called the Markgräflerland, and they acquired the county of Sponheim, quite a way further north, along the Nahe River.

When the Hohenstaufen fell, the margraves of Baden took over much of what they had held on behalf of the imperial family as their own and added a few bits and pieces, though they were nowhere near as successful in this grab and run as the Habsburgs or Württembergers had been.

Military prowess

So loyalty, sort of tick, but not a huge one. They did all right, but not massively so. Hence, if you cannot get it by charm, can you get it by force of arms?

Well, they tried, once, in 1462 in a conflict that involved almost everyone we have met so far. What I am talking about is – of course – the Mainzer Stiftsfehde.

I have mentioned it several times before, but there was no point in trying to describe it unless we have all the protagonists around the table. That we do now, so here it goes.

On May 6^th, 1459 the archbishop of Mainz, Dietrich Schenk von Erbach passed away. He had led the archdiocese for 25 years, 25 years during which they lost again lands and rights to the landgraves of Hesse who had now pushed through Mainz territory almost all the way to the gates of Frankfurt. 

When the cathedral chapter proceeded to elect a new archbishop, two candidates were put up, Diether von Isenburg and Adolf von Nassau. Diether von Isenburg gained the upper hand, 4 against 3 votes. He then asked the pope, who was – drumroll – Pius II, formerly Aeneas Silvio Piccolomini, author of fruity prose, friend of the podcast, but also now a conservative hardliner. Piccolomini demanded that Isenburg submits to him, not only as it concerned his activity as shepherd of his sizeable flock, but also in his role as Prince Elector. Isenburg remained non-committal, but Pius II thought he had won and gave him the pallium together with a bill for 10,000 gulden, twice the usual papal tax on newly appointed bishops.

That payment became the crunch point. After his predecessors had lost so much of Mainz territory and income,  the new archbishop did not have the money for the standard fee, let alone a double fee.

It also did not help that another papal condition was that he should wage war against the count Palatine. That Isenburg did, not realising that his opponent was none other than Friedrich der Siegreiche, Frederick the Victorious, who was, well, victorious.

That lost battle further reduced the resources of the archbishopric. Which is why Isenburg now outright refused to pay the papal fee. At which point Pius II deposed him and promoted his erstwhile rival, Adolf von Nassau to the archepiscopal throne.

Great result. We now have again two contenders for the most senior prince electorship in the empire, a principality that was already in trouble. So the sharks start circling.

Isenburg secured the support from the city of Mainz, and in an interesting 180 degree shift, the help of his erstwhile enemy, Friedrich der Siegreiche of the Palatinate. Friedrich’s change of allegiance had not come out of a deep conviction on points of canon law, as you can imagine but was brought about by the promise of valuable archepiscopal territory, namely Lorsch and Heppenheim.

Meanwhile Adolf von Nassau too is busy offering generous rewards to nobles willing to support his cause. He was particularly successful amongst the neighbours of Friedrich who feared the continued strengthening of the Palatinate. Duke Ulrich V of Wurttemberg signed up, the bishop of Speyer, Nix von Hoheneck signed up, and then there was the question of whether the Margrave of Baden would sign up too. This Margarve, Karl I, was a sensible, calculating man. He knew the Palatinate was militarily and economically much stronger than his territory. But the margravial family had just hit a temporary pinnacle of power. One of his brothers was the archbishop of Trier, and another the bishop of Metz.

And then news came that Friedrich of the Palatinate was also involved in another, equally sizeable feud in Bavaria, and had left his lands with an army to go to Landshut.

That was it, now or never. Karl von Baden had an alliance of Württemberg, Trier, Speyer, Metz and half of Mainz to go after their overbearing neighbour in the north, who was also out of the country. So, let’s do it.

They gathered their army of allegedly 8,000 and invaded the Palatinate. As per standard procedure, they got busy burning down towns and villages, believing the Count Palatine was away. You can imagine their surprise when they came to the village of Seckenheim, now a part of Mannheim and encountered 300 palatinate riders and 2,000 infantry and the man himself.

It was time to fight. The Badenians called up their 700-800 knights, whilst Friedrich received reinforcements of 300 armoured riders from Mainz. The battle was fierce and lasted all day. As was becoming more common, the deciding factor was the infantry, specifically the militia of Heidelberg who targeted the horses and fought the knights on foot. But there was still good old chivalry going on. The commander of the invading force, duke Ulrich of Württemberg refused to accept the defeat and kept on fighting ferociously. He was then called up for single combat by a knight called Hans von Gemmingen. Ulrich was defeated and taken prisoner, as were margrave Karl von Baden and his brother, the bishop of Metz.

They all had to pay huge ransom and Karl von Baden had to hand over parts of his county of Sponheim and take his city of Pforzheim as a Palatine fief. There was a rematch in 1504 at which Baden was more successful, but that was the end of their ambition to conquer lands.

The true loser in all that was the city of Mainz. A few months later Adolf von Nassau managed to convince some citizens to open the gates to his army. His soldiers pored in, killed a lot of people, including the brother of Johann Fuss, the printer. The next morning Adolf called up 800 citizens, including Johannes Gutenberg and tells them to leave. The city was stripped of its autonomy and rights and was from then on no longer a free imperial city.

But this is not the end of the martial history of the margraves of Baden. They never had the resources to fight a major war, but once they divided their already small lands even further, into Baden-Baden and Baden Durlach that was completely out of reach.

Though they could not fight on their own behalf, they could do so on behalf of others. One who went down this route was Ludwig Wilhelm, Margrave von Baden-Baden. Though he was a reigning prince, he spent his entire life in the service of the Austrian Habsburgs. He fought at the siege of Vienna in 1683 and rose through the ranks during the Ottoman wars, becoming Imperial Field Marshall and supreme commander in the Great Turkish war in 1689. In 1691 he won the battle of Slankamen that secured Hungary for the Habsburgs. All this happened against the simultaneously occurring war of the Palatinate Succession where French troops deliberately devastated South West Germany, and amongst others destroyed Ludwig’s home in Baden-Baden. To save his lands he transferred to the Palatinate front and handed over command in Hungary to his cousin, Prince Eugene of Savoy, who promptly won the battle of Zenta that ended the great Turkish War making Eugene, not Ludwig into a great Austrian hero. Ludwig, affectionately called the Turkenlouis remained in imperial service and was given huge amounts of money, the booty from his wars and a rich heiress. All that was enough for him to build the vast palace of Rastatt, the first of the great baroque German palaces modelled on Versailles.

Splendour

If there is one trait that defines these principalities in the empire, than it’s one-upmanship. Sure, if you are a successful general, by all means go and build yourself an enormous castle, you literally earned it. And yes, if your cousin, successor and rival builds himself an even larger and even more splendid palace in Vienna, aka the Belvedere, then it is a blessing to be dead before it is finished.

But not all imperial princes can be great war heroes. In fact very few were. That did not stop them spending vigorously. The house of Baden has its fair share of tales of profligacy, two of which are quite extraordinary.

The first involves margrave Eduard Fortunat of Baden-Rodemachern (1565 to 1600). Despite his name Fortunatus, he was not a very fortunate man.

Let’s start with his father, Christoph, margrave of Baden-Rodemachern had been the second son of the margrave of Baden-Baden. To avoid another division of this already minuscule territory, Christoph agreed to get an annual pension and a few villages around Rodemachern. If you won’t find it on the atlas, it is because it is now called Rodemack, and is one of the Plus Beaux Villages en France, but not exactly a metropolis. In 1564 he married Cecilia of Sweden, daughter of king Eric XIV. How come a man with a glorious title but not more income than an English squire married a Swedish princess? The only case I can think of went the opposite way, the king of Sweden marrying a German Olympic hostess.

Well, as it happens, Cecilia was a bit of a wild child, having trysts with her brother in law and racking up astounding debts. A margrave with no cash and no questions was a suitable marriage candidate for a promiscuous princess, in fact he was the only marriage candidate.

Unsurprisingly, Cecilia preferred the royal courts of europe to Rodemachern, which explains why Eduard Fortunat was born in London and why Elisabeth I was his godmother. To fund her lifestyle at court his mother employed pirates challenging Hanseatic trade. But this side hustle  wasn’t enough to pay for it all and so she piled up debt on a staggering scale. It went so far that her husband had to flee to avoid getting put into debtor’s prison. Well, he still ended up there when he tried to sneak back into the country. He was only released when Elisabeth I covered his debts to avoid a diplomatic clash with Sweden. Cecilia, her husband and son had to leave and moved to Stockholm. There she expanded her pirate fleet and converted to Catholicism. It is all very chaotic, which is why her husband and son left and returned to tiny Rodemachern. When little Eduard is 10, his father died. His mother showed up 4 years later with the Spanish ambassador in tow, giving birth to a girl shortly afterwards.

Everyone in the little castle of Rodemachern is broke. Ceclia’s income from Sweden has been cut because she tried to have her brother, King John killed, which is just not the done thing. The scandal about the little girl also does not help. The Ambassador buggered off. Still, Eduard Fortunat adds a nice palace on his village hill.

Things suddenly brighten up when young Eduard inherits the much bigger margraviate of Baden-Baden. Ok, Baden-Baden is also deep in debt and profoundly mismanaged, but at least bigger than Rodemachern. So it is party, party, party all the way, until Eduard Fortunat’s habits collide with financial realities. His debts are such that most of the income of the margraviate goes straight out to the big bankers, the Fuggers and Welsers. At that point he asks the Fuggers whether they want to buy the margraviate, but they turn him down. So he goes to Brussels to live with mum who seeming had found someone willing to lend her some more cash.

In Brussels our not very fortunate Eduard Fortunat meets Maria von Eicken, a lady of some wealth and beauty, but not of equivalent status to a margrave. He initially tried to fool her into a fake marriage to get hold of her money but not grant her the status of margravine. But she figures it out and pressures him into an official marriage on Schloss Hohenbaden. Where he appears reluctantly and wearing slippers.

And he had a point. This mesalliance – and his profound mismanagement- was taken as the reason for Eduard’s cousins, the Margraves of Baden-Durlach to occupy his territory.

At which point he comes up with a great new plan. He had met two Italian alchemists who had promised him to turn base metal into gold. He takes his last funds and puts them up in one of his few remaining castles, at Yburg near Baden-Baden. Turns out making gold is hard, but they were able to make poison. So they hatch another plan – to poison the Baden-Durlach cousins and take over their margraviate in return. That, I am afraid, that did not work out either. The whole sorry tale comes to an end in 1600 when Eduard the unfortunate, has an unfortunate fall.

A sad story, which now needs to be followed by a more positive, if equally profligate one.

In 1709 the margraviate of Baden was still divided between two the lines, the House of Baden-Baden living in the massively oversized palace in Rastatt, and the Baden-Durlachs who resided in a in the small township of Durlach. Today it takes about 10 minutes to cross either of these states on the motorway.

They were tiny and after the 30-years war, followed by the War of the Palatinate Succession and then the War of the Spanish Succession, all of which involved troops marauding across the Badenian lands, their economies were all pretty much wiped out.

In the case of the margraves of Baden-Durlach, all their homes and castles had been burned down by the French.  That is why the new margrave, Karl III Wilhelm decided that he needed a new palace. And he called it Karl’s rest, Karlsruhe in German. I guess the name rings a bell, but if you have never been there, let me explain it to you.

Karlsruhe is the most absolutist city design you can imagine. It was built entirely from scratch. At its centre stands the Schlossturm, the castle tower. From the tower, 32 roads emerge in a straight line, like rays from a sun, reflecting the 32 sections on a mariner’s compass. Three quarters of the alleys go out into the vast hunting forest, whilst in the southern quarter, 8 avenues adorned with buildings stretch out like a fan. Wherever one is in the designed city, one can see the castle tower, the seat of the ruler, a true sun king, only that this king was a mere margrave.

The original design did not designate space for a town hall, nor did the concept recognise any form of representation of the estates. Baden Durlach was so tiny, its cities had shrunk to mere towns and its nobility had been subjected, so that absolutist rule found little resistance.

But again, there is that disconnect between baroque ideal and economic reality. Karl III really wanted to be an absolutist ruler, a benevolent one who moves his little statelet forward, but an absolutist ruler all the same. But when it came to filling up his grand design with actual people, he realised, he needed to give them incentives. Money he did not have, nor was there any industry or  university yet. All he could offer was, freedom. So he gave them religious freedom, freedom of opinion, press freedom, within limits of curse, but still, freedom.

So, despite its uberauthoritarian design, it is not an oppressive structure. The palace surrounding the Schlossturm is of course vast, it had to be. The cousins down in Rastatt had just added the Fasanerie to their already immense Schloss and the bishop of Speyer had hired the greatest of German baroque architects, Balthasar Neumann to build his residence at Bruchsal, a mere 25km north, whilst the gigantic block that is the Mannheimer Schloss loomed another 30km further on.

 The right man at the right time

Ok now you say, thanks, this is all very amusing, but how did these little margrave with their tinpot statelets and oversized palaces acquire a territory that stretched 260km from Mannheim to the gates of Basel, including most of the Black Forest and the cities of Heidelberg, Mannheim, Karlsruhe, Offenburg, Freiburg and Constance.

There are two ways to tell this story, one is about diplomatic genius, and the other is about being in the right place at the right time.

Let’s do the hero story first.

When Karl III of Baden-Durlach, the founder of Karlsruhe died in 1738, the title went to his grandson, Karl Friedrich who was just 10 years old. He did take over officially in 1746, but most what he did was having a great time, fathering children and losing money playing cards. In 1751 he got married and it seems his wife straightened him out.

From now on he took an interest in the wellbeing of his lands that held roughly 90,000 people. And she got him interested in the latest development in philosophy, sciences and economics. She herself corresponded with Voltaire, received Herder, Goethe, Klopstock Gluck and Wieland at her court.  He in turn struck up friendships with the Physiocrats and went to Paris to meet Mirabeau. Pierre Du Pont de Nemours briefly acted as chief minister for Baden.

Karlsruhe became another of the centres of enlightened absolutism in the German lands. He banned torture in 1767 and serfdom in 1783, 30 years after Frederick the Great, but at least he did it. After all some of his colleague were selling troops to the Brits to suppress the American Colonies at the same time.

And then Karl Friedrich inherits. In 1771 the last of the margraves of Baden-Baden shuffles off his mortal coil, and according to a century old arrangement, his lands are reunited with those of his cousin. That now more than doubles the size of his little state to roughly 200,000 peoples.

20 years later the French Revolution and with it the revolutionary wars begin. And Baden, on the Rhine, just across from Alsace was straight in the firing line.

At which point we have to introduce another hero, Sigismund von Reitzenstein. He was a lawyer who had studied at the university of Göttingen and joined the Baden administration in 1788 where he quickly rose up the food chain. Just as an aside, he would later reform the university of Heidelberg along the lines of Göttingen and Berlin as we discussed last week.

In 1796 things came to a head. This is the War of the First Coalition and things are moving back and forth. The French have made gains, but they have also experienced reversals of fortune. Napoleon is an unknown general being given command of the ragtag army of Italy. Jourdain and Moreau are attacking along the Rhine. Baden has to make a choice, stand with the Austrians or submit to the French.

Baden signs a ceasefire with France. Reitzenstein negotiates a separate peace with the French. Not a great one, Baden was to give up its territories on the left bank of the Rhine, about 10% of their total and pay 2 million in compensation. His prince refused to sign it. But a few month later, after the Austrians had caved under Napoleon’s onslaught, he signs on the dotted line.

Meanwhile Reitzenstein had moved to Paris as the envoy of the margraviate of Baden. And whilst there he made many friends, convinced them of Karl Friedrich’s enlightened convictions and general amenity towards the French. At home Reitzenstein kept pushing for ever closer alignment with the French, preventing Baden from joining the war of the Second Coalition, as for instance Württemberg had done.

And in 1803 in the Reichsdeputationshauptschluss the rewards poured in. Baden received territory of the dissolved prince-bishoprics of Speyer and Strasburg as well as several abbeys, and – drumroll – the whole of the Palatinate on the right bank of the Rhine, including Mannheim and Heidelberg. And to top it off, Karl Friedrich received the Electorate of the Palatinate as well.

But that wasn’t all. Reitzenstein, who had been ill for a while returned to Paris in 1806 and negotiated the real coup,  a marriage between the heir of Baden and Stephanie de Beauharnais, Napoleon’s adopted stepdaughter. That marriage only came about in 1807, but in advance of it, Baden received the Breisgau, former Austrian lands in the southwest, including the city of Freiburg. Then the counties of Leiningen and the principality of Fürstenberg. And all the prince bishops and abbeys, places like Constance, St. Blasien and St. Peter that lay in between, they were all incorporated into Baden. When Karl Friedrich died in 1811, his state had over 900,000 inhabitants, up from 90,000 when he set out 73 years earlier.

Reitzenstein did one more thing to protect the state he helped create. In 1813, after the battle of Leipzig, he convinced the new margrave to withdraw his troops and join the anti-French coalition. That was late, but not too late. And definitely not too late for a prince who was also Napoleon’s son-in-law.

Within this story, there is an epilogue. The allied forces demanded that the new margrave divorced his wife, Stepahanie Beauharnais. He refused, not out of love, but out of common decency, which could have resulted in the restitution of land to the deposed counts and princes. Baden was saved by his sister, wife of Zsar Alexander of Russia who intervened on his behalf and the general reluctance to return to the tiny states pre-Napoleon.

Stephanie de Beauharnais had no surviving son. One boy was born but was declared dead soon after. Then, in 1828, a young man appeared in Nurnberg who said he had been raised in total isolation in a darkened cell. Some claimed that this man, who was given the name Kaspar Hauser, was in fact the son of Stephanie de Beauharnais who had not in fact died and was hence the true heir to the Grand Duchy – something for a whole episode I think.

All these stories about diplomatic genius and daring marriages are however only half the story. The underlying reason Napoleon reorganised the states of the Holy Roman Empire was to create entities that were large enough to provide him with viable auxiliary forces, but too small and too divided to stand up against him. And for the South-West, Baden was not just the natural, but the only option to create such a state.

Let’s go through the other principalities in the area. First up, the bishops and abbots are a no go for obvious reasons. Then there is the Palatinate. But the Electors Palatinate had inherited Bavaria in 1777. Bavaria had already gained significantly, so that adding the South West would have made Bavaria far too big.

A major expansion of Württemberg would in principle have been possible. However, the current duke, Friedrich had joined the Second coalition, was the son in law of king George III of England and Napoleon did not like him. Friedrich was an extraordinarily tall and even more extraordinarily obese man, prompting Napoleon to say that he was put on earth to test how far human skin can stretch. Friedrich in return wondered how so much poison could be contained in so small a head as Napoleon’s. No, that was not an option.

The next contender would be the house of Hohenzollern-Sigmaringen. Apart from being a tiny state, this was the Hohenzollern family, linked to the king of Prussia, which also did not work.

And finally, the largest landowner in the south of what is now Baden were the Habsburgs. The area was called Further Austria after all. Giving them more land was explicitly not the plan.

So, by a process of elimination, the Margrave of Baden was the only viable option if Napoleon wanted a medium-sized state in the South-West ruled by a client king, or more precisely a client Grand Duke. Sure Reitzenstein’s diplomacy, Karl Friedrich’s affinity to the French enlightenment,  his granddaughters being the wife of Zsar Alexander and the marriage of Stephanie de Beauharnais were helpful, but I am wondering how crucial.

So, here we are. How do you rise from having a tiny statelet squeezed between powerful neighbours and the need to keep up with the palace-building Joneses: be in the right place at the right time, and then do not muck it up.

Next week we will take a look at another one of Baden’s powerful neighbours, Württemberg and follow up on a theory I recently read about how this region, the ancient stem duchy of Swabia became one of Europe’s centres of innovation. Prepare to be amazed.

And in the meantime, why not catching up on some of the topics we touched upon today, namely:

How the Hohenstaufen rose to become dukes of Swabia in episode 43 – All Change, All Change and then how Barbarossa settles the conflict between his family and the Zähringer in episode 50 “Barbarossa Begins”. .

I often guide listeners to episode 91 – the Hohenstaufen Epilogue to relive the end of Konradin and the House of Hohenstaufen, but there is another story that involved the margraves of Baden, the sad story of Frederick II’s eldest son, Henry, the King in Brackets, episode 81.

Then there is the fall of the Zaeringer, the struggle over Austria and the rise of the Habsburgs we discussed in episode 140: Rudolf von Habsburg and the Golden King.

I hope you enjoy those, and if it makes you want to support the show on historyofthegermans.com/support, you know where to find it.