Primary Sources: Business relationships among Hanseatic merchants

Commentary by Nick Szabo in italics.

A bill of exchange drawn by Lübeck on Danzig, 1378

Dunning letter for a bill of exchange, 1411

Member abuse of group credit rating, 1462

Ban on interethnic credit and agency in Novgorod, c. 1295


A Bill of Exchange Drawn By Lübeck on Danzig, 1378

"Poundage" were taxes raised from merchants by towns, as part of treaty organizations formed by towns to combat piracy.

To the honourable gentlemen, the mayor and councilors of Danzig, their loyal freinds.

First, our respectful greetings, dear friends. We ask you out of the 1,000 marks which you have collected as poudage in your sector, as you recently told us by letter, to pay the bearer of this letter, our burgess Heinrich Richboden, as soon as he presents this letter to you, 60 Prussian marks, which we have received from him in the form of a draft. You will thereby do us a great service.

May God keep you, as we pray.

Written at Lübeck , on the day of the Blessed Pope Calixtus [14 October] under our seal.

The council of the town of Lübeck .

source: Hanserezesse, 12, no. 181, p. 194.


Dunning Letter for a Bill of Exchange, 1411

Letter addressed by Peter Karbow from Venice to his partner Hildebrand Veckinchusen in Bruges. This letter succinctly and tactfully reminds the correspondent about future business, and perhaps personal, relations, the integrity of the supply chain, and invokes kin altruism.

Friendly greetings! May I remind you, dear Hildebrand, about the 1,000 ducats which, as I wrote to you, I borrowed from Hans Reme of Augsburg: I informed you that you must pay him for this on 19 March. I beg you for the sake of our friendship to pay him punctually, as I have given him guarantees and also letters with our company's seal on them. If he should lose by this, I would have to compensate him, together with my associates -- I further inform you that a week ago I dispatched spices to the value of 10,000 ducats, namely Indian and Arabian ginger, nutmeg, mace, clovers and whatever else I could get on favorable terms: I shall dispatch further consignments within the next week. For this I need money, unless I am to leave the amber rosaries, the cloth and ermine [in pawn] until St. James's Day. In addition I have paid out 12,000 ducats in cash since Christmas, and every day I receive more bills of exchange from [our partner] Hans von Mynden.

Dear Hildebrand, may God help us so that we can carry on for another year and so things turn out as I have written to Sievart [Hildebrand's brother, in business in Cologne and a partner in the Venetian enterprise]: I said that I was confident that with God's help I should be able to present as favorable a balance-sheet as the last one.

We must bear in mind that we must not give up our trade in rosaries, because even if they are slow to sell, one get's a year's credit with them. I cannot write more about this. Farewell in Christ. Written on 19th January.

Concerning the shipment of furs which you sent me, I make the total 2,000 pieces. They were supposed to be lynx, but they turned out to be a very inferior variety. Let me know what has happened.

Peter Karbow

Source: W. Steda, Hansisch-venetianische Handelsbeziehungen im 15. Jarhundert (1894) no 4. p. 126.


Member Abuse of Group Credit Rating, 1462

North German merchants traded under the brand name of their Hansa, a large association of merchants which by 1462 had become formalized as an association of merchant-run towns. A big ongoing debate among the merchants was whether the association should forbid its members from purchasing on credit. Three hypotheses, not mutually exclusive, for why such bans were deemed necessary: (1) Free riding on the collective reputation. The Hansa also sometimes took responsibility for the debts of its members, leading to free riding on this collective benefit as well. (2) The Hansa needed to obtain for its members permission, "privileges", from local authorities in order to trade. Such authorities probably did not wish to subsidize the costs of enforcing such credit. (3) Hidden credit exposures create risks down the supply chain, exposing other merchants to these risks.

Here the governing council of the German Hansa is lobbied by one of its overseas branch groups (Kontor) to regulate abuse of credit. Letter from the London Kontor to the Hanseatic Diet, 1462.

The Kontor begs you in your wisdom to take measures to deal with the abuse which the merchant in London encounters every day, namely that cloth may be bought from the English on credit at a higher price than if one paid cash or in kind...This is an evil practice, and all too often it leads to spurious and dishonest merchants coming from the Hansa to London, buying on credit and then absconding, so that respectable people are swindled out of their due, and because of which we are harassed in many towns. It also has the result that the English Commons accuse the merchant in Parliament so that he cannot get his priveleges confirmed. It would therefore be good to suppress buying on credit and to allow payment only in cash or in kind so that business and businessmen remain honest.

Source: Hanserezesse, II 5, no. 263/49, p. 190.


Ban on interethnic credit and agency in Novgorod, c. 1295

Ban on credit transactions declared by the Novogorod Kontor in the second article of its regulations. See commentary above. Credit and agency are relationships which require a high degree of trust; sustaining such relationships across ethnic lines would have been particularly expensive. Merchant associations typically formed along ethnic partitions, and reinforced such partitions.

No German may purchase goods from the Russians on credit. Anyone who does so shall pay the sum of 10 marks for every 100 marks' worth of goods aquired on credit.

A fine of 50 marks will be imposed on any German who enters into any form of trading partnership with the Russians or who accepts goods from them by way of commission. The same penalty will be imposed on anyone entering into partnership or accepting a commission for handling Italian, Flemish, or English merchandise.

Source: Urkundenbuch der Stadt Lübeck, I, p. 703