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The Medieval Super-Companies: A Study of the Peruzzi Company of Florence.

Reviewed by Thomas W. Blomquist

Professor Edwin Hunt in this study of what he terms the medieval "super-companies" undertakes a re-examination of the Florentine international business enterprises of the Bardi, Peruzzi and Acciaiuoli in the first half of the fourteenth century. In point of fact, however, his work focuses almost exclusively upon the Peruzzi Company, which he uses as a "model" of the "super-company" phenomenon. The fundamental source upon which the analysis is based is Armando Sapori's edition of the surviving Peruzzi books (I libri di commercio dei Peruzzi, Milan, 1934). Inevitably an overlap with Sapori's work is bound to exist but the author reads the Peruzzi accounts with the advantage of his own experience in international business and the benefit of research carried out since Sapori worked.

Professor Hunt distinguishes the "super-companies" from other contemporary business organizations on the basis of their "heroic" involvement in commodity trading, particularly in the grain trade of the Peruzzi with Angevin Naples and the Bardi dealings in English wool. Throughout he stresses the opinion that finance was secondary, to commodity trading, arguing that the big three were "required" to be big since only unusually large-scale enterprises - in terms of capital and personnel combined with a sophisticated organization - could marshal the resources necessary to secure from princes the licenses and/or monopolies to traffic within their jurisdictions.

In Part I, chapters 1-4, the author examines the "Anatomy of the Medieval 'Super-Company.'" Chapter 1 covers the early involvement of Peruzzi in international trade and commerce in the thirteenth century prior to the formation in 1300 of the first of seven consecutive partnership arrangements that, until 1343, constituted the corporate existence of the Peruzzi Company. Insofar as lineage and company were related, Hunt concludes that the two were not synonymous: while Peruzzi indeed controlled the Company, a majority of the extended family pursued careers in politics, the church and the military. Chapter 2 is given over to an examination of the nature of the Company's business, again stressing the Angevin connection, but also looking at grain distribution throughout the Mediterranean and Italy, the marketing of Florentine cloth, the business in northern Europe and the development of ties with the papacy. Chapter 3 is devoted to the Company's structure, which was centralized under a Chairman who was invariably head of the Peruzzi family. Sixteen resident managers of branch offices abroad reported to the Chairman, who also directly ran five subsidiary companies in Florence dealing respectively with banking, merchandise and real estate, cloth manufacture, charitable contributions and one that looked after special loans such as those made to the Hospitilars. Chapter 4 consists of a careful analysis of Peruzzi accounting methods. Hunt concludes that whether they conformed to a rigid definition of double-entry or no, they were close enough to employing double-entry balancing procedures to allow the home office to measure the general performance, at least until the later years, of the various segments of the organization.

Part II, chapters 5-9, is a chronological overview of the Company's fortunes from the inception of the First Company in 1300 through the collapse in 1343 and its aftermath. The Company enjoyed its greatest prosperity in the years 1300-1324. Once again, Hunt hammers home the importance of the grain-for-cloth trade with the Angevins as the critical source of profit. Storm warnings were looming, however, and the Company was experiencing difficulties as early as 1325-1335. When the 1331-1335 Company's books were finally drawn up in 1343, it was with the notation that the Peruzzi had "lost more than it gained." What had gone wrong?

Professor Hunt attributes the decline to a conjuncture of interrelated negative events. He points out dislocations in the grain trade, the loss of papal business, political turmoil in Florence, troubles in France, and a decline in the Company's capitalization as variables effecting the Company's fate. Indeed, somewhat ironically, given his emphasis on size as a determinant of "super-company" status, Hunt finds that in the final analysis the companies were underfunded in terms of the scale and complexity of the business that they had generated. Hunt is emphatic in debunking the still widely held view, derived from Giovanni Villani's statement that the English king, Edward III's, default on loans of 600,000 and 900,000 florins to the Peruzzi and Bardi respectively caused the failure of the "super-companies." Hunt places the net losses to the Peruzzi in England at roughly [pounds]10,000 or less; a setback to be sure, but, had all other things been equal, a manageable one. He further notes that even while the Company was undergoing bankruptcy proceedings in Florence, its English branch continued to do business with the English crown.

Professor Hunt has produced a valuable re-assessment of the history of the Peruzzi and placed the Company firmly within the context of late-medieval economic history. Particularly readers lacking a command of Italian will be grateful for his efforts.

Thomas W. Blomquist is Professor of History at Northern Illinois University. His major research interest is the economic and social history of thirteenth-century Lucca. His most recent publication is The "Other Tuscany:" Essays in the History of Lucca, Pisa and Siena during the Thirteenth, Fourteenth, and Fifteenth Centuries, co-edited with Maureen F. Mazzaoui (1994).
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Author:Blomquist, Thomas W.
Publication:Business History Review
Article Type:Book Review
Date:Jun 22, 1995
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