A Genoese Merchant’s Playbook for Trade, Credit, Risk, and Family Wealth
Table of Contents
Publisher’s Note
Chapter 1. The Purpose and Government of a Merchant House
1.1 What the House Exists to Accomplish
1.2 The Reputation, Capital, and Continuity of the Family
1.3 Who May Bind the House and Who May Not
1.4 Dividing Authority Among Brothers, Partners, and Senior Clerks
1.5 The Matters That Must Always Remain in the Hands of the Family
Chapter 2. How the House Is Organized
2.1 The Principal, Partners, Factors, Agents, Clerks, and Apprentices
2.2 The Counting House and the Division of Daily Work
2.3 Separating Trade, Finance, Shipping, and Administration
2.4 Hiring, Training, Paying, and Dismissing Men
2.5 Controls Against Error, Negligence, and Theft
Chapter 3. Choosing Where and How to Make Money
3.1 Trade, Finance, Shipping, Property, and Other Uses of Capital
3.2 Judging a Market Before Entering It
3.3 Seeking High Returns Without Endangering the House
3.4 Diversifying by Commodity, City, Counterparty, and Route
3.5 When to Withdraw from a Business That Has Ceased to Be Attractive
Chapter 4. Information: The Merchant’s First Advantage
4.1 What We Must Know About Prices, Harvests, Wars, Ships, and Credit
4.2 Building a Network of Correspondents
4.3 Letters, Couriers, Codes, Copies, and Registers
4.4 Separating Reliable Intelligence from Rumor
4.5 Acting on Information Before It Becomes Common Knowledge
Chapter 5. Buying Goods and Dealing with Suppliers
5.1 Finding Producers, Brokers, and Wholesale Sellers
5.2 Comparing Price, Quality, Reliability, and Terms
5.3 Inspection, Weights, Measures, Samples, and Grades
5.4 Negotiating Purchase Contracts and Payment Terms
5.5 Maintaining Good Suppliers Without Becoming Dependent on Them
Chapter 6. Goods Worth Trading
6.1 Selecting Merchandise for Margin, Turnover, and Security
6.2 Grain, Oil, Wine, Wool, Silk, Cloth, Metals, Spices, and Other Staples
6.3 Luxury Goods and Goods of Fashion
6.4 Perishable, Fragile, Bulky, and High-Value Cargoes
6.5 Knowing When the Profit Is in the Goods and When It Is in the Financing
Chapter 7. Ships, Carriers, and the Movement of Goods
7.1 Owning a Vessel, Taking a Share, or Hiring Freight
7.2 Selecting Masters, Ships, and Carriers
7.3 Freight Contracts, Charter Parties, and Division of Responsibility
7.4 Loading, Stowage, Bills of Lading, and Delivery
7.5 Delays, Diversions, Piracy, Capture, Shipwreck, and General Average
Chapter 8. Warehouses, Ports, and Inventory
8.1 Choosing Warehouses and Custodians
8.2 Receiving and Recording Goods
8.3 Protecting Merchandise from Water, Fire, Theft, Vermin, and Spoilage
8.4 Counting Stock and Reconciling Physical Goods with the Books
8.5 How Long Goods Should Be Held Before They Must Be Sold
Chapter 9. Selling and Finding Customers
9.1 Choosing Between Wholesale, Commission, Brokerage, and Direct Sale
9.2 Setting Prices from Cost, Scarcity, Competition, and Urgency
9.3 Extending Terms Without Giving Away the Profit
9.4 Using Brokers, Agents, Auctions, Fairs, and Personal Relationships
9.5 Turning a Buyer into a Regular Customer
Chapter 10. Creditworthiness and the Judgment of Men
10.1 How to Know Whom to Trust
10.2 Family, Reputation, Property, Correspondence, and Past Conduct
10.3 Setting Credit Limits
10.4 Warning Signs Before a Merchant Fails
10.5 What to Do When a Debtor Begins to Delay
Chapter 11. Bookkeeping and the Truth of the House
11.1 The Memorial, Journal, Ledger, and Supporting Papers
11.2 Debits, Credits, and Double-Entry Accounts
11.3 Accounts by Person, Commodity, Voyage, Partnership, and Office
11.4 Closing the Books and Determining Profit
11.5 Why No Son Should Trust a Business He Cannot Reconcile
Chapter 12. Cash, Coin, and Bills of Exchange
12.1 Keeping Sufficient Cash Without Leaving Capital Idle
12.2 Coins, Their Values, and the Loss Hidden in Exchange
12.3 Bills of Exchange and Payments Between Cities
12.4 Exchange Rates, Maturities, and the Timing of Remittances
12.5 Managing the House’s Position Across Genoa, Spain, Flanders, Italy, and the Fairs
Chapter 13. Lending Money
13.1 When Lending Is Better Than Trading
13.2 Loans to Merchants, Nobles, Cities, and Princes
13.3 Security, Guarantees, Pledges, and Assignments of Revenue
13.4 Pricing a Loan for Risk, Term, and Difficulty of Collection
13.5 Never Confusing a Powerful Debtor with a Safe Debtor
Chapter 14. Borrowing and the Use of Other Men’s Money
14.1 Why a Prosperous House May Still Borrow
14.2 Deposits, Partnership Capital, Bills, and Other Sources of Funds
14.3 Matching the Term of the Debt to the Use of the Money
14.4 Maintaining Liquidity When Credit Tightens
14.5 The Point Beyond Which Leverage Becomes Folly
Chapter 15. Insurance and the Division of Risk
15.1 What Should Be Insured and What Should Be Retained
15.2 Marine Insurance Contracts and Premiums
15.3 Selecting Underwriters Who Can Actually Pay
15.4 Declaring Cargo, Routes, Ships, and Circumstances Honestly
15.5 Claims, Abandonment, Disputes, and the Danger of Concentrated Loss
Chapter 16. Partnerships, Commenda, and Joint Ventures
16.1 When to Act Alone and When to Share the Venture
16.2 Choosing Partners for Capital, Access, Knowledge, or Political Protection
16.3 Dividing Contributions, Work, Profit, and Loss
16.4 Accounts and Governance of a Joint Enterprise
16.5 How Partnerships Should End Before Friendship Does
Chapter 17. Establishing a House in Another City
17.1 Deciding Whether a Permanent Presence Is Necessary
17.2 Choosing the City, Street, Warehouse, and Local Partners
17.3 Selecting a Factor to Represent the Family
17.4 Banking, Correspondence, Books, Staffing, and Local Credit
17.5 When an Agency Should Become a Branch—and When a Branch Should Be Closed
Chapter 18. Princes, Magistrates, Customs Officers, and the Law
18.1 The Authorities a Merchant Must Understand in Every Port
18.2 Duties, Licenses, Privileges, Monopolies, and Exemptions
18.3 Maintaining Relations Without Becoming the Servant of a Faction
18.4 Gifts, Favors, Intermediaries, and the Limits of Prudence
18.5 Embargoes, Seizures, Litigation, and Appeals
Chapter 19. War, Political Upheaval, and Commercial Crisis
19.1 Reading the Signs Before a Crisis Becomes Obvious
19.2 Protecting Cash, Goods, Ships, Documents, and Men
19.3 Diversifying Exposure to Crowns, Cities, and Routes
19.4 What to Do During Runs on Credit and Failures of Great Houses
19.5 How Fortunes Are Preserved While Others Are Forced to Sell
Chapter 20. Preserving the House Across Generations
20.1 The Education Required of a Merchant’s Son
20.2 Marriage, Family Alliances, and the Interests of the House
20.3 Dividing Profits Without Dividing the Enterprise
20.4 Succession, Wills, Partnerships Among Brothers, and the Settlement of Disputes
20.5 The Reputation We Leave Behind Is Part of the Capital We Leave Behind
