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The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells us about the Making of European Commercial Society

Author(s):Trivellato, Francesca
Reviewer(s):Wilson, Arthur

Published by EH.Net (July 2022).

Francesca Trivellato. The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells us about the Making of European Commercial Society. Princeton: Princeton University Press, 2019. xiv + 405 pp. $32.95 (paper), ISBN 978-0691217383.

Reviewed for EH.Net by Arthur Wilson, Finance Department, School of Business, George Washington University.


This book is a gem. Francesca Trivellato has produced a multifaceted exploration of the complex relation between evolving Christian ideas about Jews and the development of modern commercial society.

The book begins with an obscure reference in a once popular but long forgotten compilation of maritime laws, by Etienne Cleirac of Bordeaux. Even so, the author then broadens the discussion to address some of the most foundational debates in the history of economic thought.

“The first (debate) is the question of what constitutes ‘the economy’ as a field of inquiry and what is included in the canon we use to access this field, a concern that has become particularly relevant in light of the impact that the digital revolution on the study of Europe’s past. The second is the relationship between what we might call “practices” and “representations” and the tendency some scholars have had to pit the two against each other. Finally, the third is the perennial question of periodization, which Jewish history and Christian prejudice toward Jews bring into sharp relief, especially when, as I do, we examine a singular but mutable figure, the Jewish usurer, across several historical periods.” (p. 7)

After introducing the bill of exchange in chapter 1, Trivellato returns in the next chapter to that 16th-century merchant manual that recounts the legend that Jews originated Marine Insurance and the Bill of Exchange. Both parts of the legend are false, but the Bill of Exchange side of the story persisted for hundreds of years, evolving over that time to fit the anti-Semitic or philo-Semitic agendas of various commentators. Like facets of a diamond, this evolution provides a panoramic view of European attitudes toward commerce and Jews and what were sometimes thought to be Jewish characteristics.

Emblematic of the second debate, Trivellato shows there was a wide gulf between what was said about Jews and actual documentation of what Jews were or were not doing. Indeed, Christian merchants accused of using questionable practices were accused of Judaizing. No Jews need be present. In the hands of some critics, to be called “a Jew” became shorthand for engaging in devious or dishonest commerce.

Along these lines, Trivellato notes that Cleirac cited an earlier source that makes no mention of Jews. Accordingly, in that source, and in a draft version of his manuscript, he initially attributed the invention of Bills of Exchange to Florentines – Guelfs and Ghibellines. In the published volume, Cleirac attributed the invention to Jews. The change, possibly due to the publisher, is unexplained. (p. 41)

The Bill of Exchange was near the heart of European private finance from as early as the 13th century to well into the early 20th century. It served at least three functions: as a device for remittance, as a device to obtain or extend credit profitably despite usury restrictions, and as a device to speculate on foreign exchange. It was widely used and very controversial.

Part of the controversy was in the many ways bills could be used. Another part of the controversy was in the meaning and scope of usury per se.

Some features of the Bill of Exchange lent themselves to diverse interpretations. Unlike gold or silver coins, Bills were generally created by merchants for merchants, rather than by or for governments. Their utility hinged completely on the trustworthiness of the parties involved. Also, Bills could be used in transactions involving two, three, or four parties, depending on how they were intended to be used. To the uninitiated, Bills of Exchange were mysterious.

If a medieval banker were to openly offer interest on deposits, that would be considered usury. Explicitly charging interest on loans would again be considered usury. The Bill of Exchange allowed a work-around. Medieval merchant bankers could buy bills in one place (shifting purchasing power from A to B), sell them in another (shifting purchasing power from B to A), and make a profit – like making a loan with interest, albeit with exchange rate risk in the mix. Was this usury? While some bill combinations were problematic, individual bills were generally acceptable to the Church.

In fact, usury was not always well defined, as the author discusses in chapter 3. There were at least two difficulties. On the one hand, as Catholic theologians tried to define good and bad finance, it became apparent that subtle distinctions were needed. Depending on the context and author, usury referred to either a suite of bad financial practices, or specifically to charging interest on loans. On the other hand, it was sometimes easier to say that usury was what the Jews were thought to have done.

Current thinking is that the Bill of Exchange evolved gradually from diverse Mediterranean, perhaps Arab origins. For a time, some Italian writers conjectured that it originated in Florence. For authors hostile to Jews, like our Bordeaux-based merchant manual author, Etienne Cleirac, writing in 1647, in “Us et coustumes de la mer…” the notion that the Bill of Exchange was a Jewish invention played into the conceit that it was a device to separate naive Christians from their money. For more sympathetic authors, like Montesquieu nearly a century later, the notion that the Bill of Exchange was a Jewish invention indicated a special genius of Jews for commerce which allowed them to link Europe to the Americas, Asia, and Africa in trade.

Of course, anti-Semitism was not new in Bordeaux in 1647, as discussed in chapter 4. Consider Iberia in 1391. Egged on by a rabble-rousing priest, pogroms in multiple Iberian cities killed many Jews and induced others to run to the nearest church to get baptized to fend off the murderous mobs. Afterwards, despite the obvious duress, the church chose to accept such baptisms of these “New Christians”, sometimes called conversos, expecting them to live life just as the “Old Christians” did, changing much more than just their religion. Within a few years, New Christians were being told to change much of their distinct culture – diet, dress, language, and more, as if Old Christians could not distinguish between liking bagels and being Jewish.

Old Christian concerns that the New Christians were secretly Jewish, and would revert, were widespread. With these forced conversions, many of the earlier restrictions on Jewish commercial activity were no longer binding on New Christians. The blurring of boundaries must have been palpable. One response by Old Christians were the “Purity of Blood” statutes – promulgated in the mid- 15th century to exclude New Christians from certain roles based on their lineage – to restrain this blurring. Later in the 15th century, inquisitions in Spain, and then Portugal were begun – to ferret out relapses among the New Christians. Many such New Christians left Iberia if they could. By 1492 the remaining Jews in Spain were expelled, scattering in all directions, with many fleeing to Portugal. In 1497 the Jews who had fled to Portugal were forcibly baptized.

Perhaps, over time, this scattering may also have facilitated trans-national Sephardic trading networks. In any case, in the mid-16th century the King of France welcomed many of these Portuguese New Christians to southwestern France, where the King promised safety if the New Christians kept up (Christian) appearances. The royal hope was that these New Christians would quicken the merchant activity of Bordeaux, which they presumably did, to the profit of the King. Meanwhile, Calvinist Protestantism in the form of the Huguenots also spread across France, taking root in Bordeaux as well.

Writing in Bordeaux, Catholic Etienne Cleirac would have had a front row seat to the complex religious and political interplay of 16th-century Bordeaux. This was a time of political unrest in France associated with the Huguenots and eventually civil war. This was also a time when old status hierarchies based on nobility or religion were breaking down. Merchants no longer had to be members of guilds. Central government court reforms meant that cases involving nobles acting as merchants would increasingly be considered in merchant courts. Bills of Exchange were equally legally enforceable regardless of the status of plaintiffs or defendants. Finally, after more than a century of living as Christians due to forced conversions, the New Christians were increasingly assimilated – hard to distinguish from Old Christians. Old Christians like Cleirac might have felt increasingly uneasy. How could one avoid trading with those seemingly “devious” Jews if they appear to be Christian? As Trivellato notes:

“Fears that Jews and Christians could become indistinguishable permeated European Christian culture at large during this period. The regime of toleration that prevailed in seventeenth-century Bordeaux heightened rather than quelled fears about the porousness of the boundaries between Jews and Christians. There, more than in any other city of the kingdom, a small but proactive group of New Christian merchants was at once visible and invisible. Whether valued or condemned, their economic activities were not confined to a separate corporate body, with its own place in the hierarchical society of the time. They walked the same docks as other merchants and sat in the same church pews as other Catholics. For Cleirac and his readers, the lack of precise boundaries between Jews and non-Jews mirrored the erosion of age-old divisions between merchants and noblemen at a time when a major restructuring of the legal and social order, and the place of commerce within it, was underway in France.” (p. 84)

Cleirac’s legend of the invention of the Bill of Exchange by Jews was taken up and repeated in the subsequent merchant literature, as documented in chapter 5, until a century later when the hostility (if not the legend) was deflected by a different interpretation, by the philosophe Montesquieu. He accepted the idea that Jews invented the Bill of Exchange but celebrated that invention as a watershed event for commerce as a modernizing and civilizing force in Europe.

Montesquieu was writing at a time when status-based hierarchies were breaking down further. While commerce might be a modernizing force, it did not liberate the Jews. Nor did Montesquieu call for full equality. “Montesquieu never pursued these questions because, as even an admirer of his views on Jews admitted, he was fundamentally not interested in Jews as such, but only to the extent that they provided him startling examples of the relationship between intolerance and proselytism.” (p. 138)

In the period leading up to the French Revolution (chapter 6), both views of commerce and the role of Jews were expressed, with multiple variations. Christian views were often more favorable toward the Sephardic community in Southwestern France and less favorable toward the Ashkenazi in Northeastern France, who were generally less assimilated. While supporters of Montesquieu argued for “doux commerce” to drive tolerance, others continued to focus on usury broadly construed and indeed seemed to blur the distinction between usury (associated with the Ashkenazim) and commerce (associated with the Sephardim).

Trivellato also disputes the conventional wisdom that the “commercial utility” of the French Sephardic community drove or supported emancipation, noting that even supporters generally did not make that argument, arguing instead for removing restrictions that limited Jews’ economic activity, encouraging Jews to participate more in other areas, such as agriculture, and less in commerce. Trivellato notes: “Amid the ‘cacophony of arguments’ marshaled in favor of emancipation, the virtues of commerce were never used as weapons by pro-Jewish advocates.” (p. 157) Indeed, it would seem that the relative assimilation by Sephardim, and the continued hostility toward the Ashkenazim even after the French revolution, as indicated by the “infamous decree” resulting from the Napoleonic “Assembly of Jewish Notables” better explained the path of emancipation.

The legend of the Jewish invention of the Bill of Exchange is most frequently explored in French literature. In chapter 7, Trivellato explores the spread of the legend outside of France, where the legend seemed to have had less purchase. In Britain and the Low Countries, hostility toward Jewish participation in commerce seemed to revolve around financial markets rather than Bills of Exchange. “Overall, the legend met with considerable scepticism in England.” (p. 171) In Central Europe, similar hostility and scepticism were combined even without comparable financial markets. In Italy, writers seemed more inclined to credit Florentines with inventing Bills of Exchange.

In the final chapter, the author explores how the legend and the history influenced some major 19th-century writers on commerce and “modern capitalism” – Sombart, Weber, and Marx. For differing reasons, all three appear to have accepted the 16th century as a decisive turning point in the beginning of modern capitalism. All three were aware of the legend. Marx seemed to see Christians thoroughly adopting supposedly Jewish commercial practices: “The practical Jewish spirit has become the practical spirit of the Christian people,” he wrote – or in other words, all ‘Christians have become Jews,’ not only some of them.” (p. 202) Sombart evidently saw Jews as a driving force of Western capitalism during the Medieval period, only to be superseded by Christian merchants and enterprises. Whereas Sombart overstated the Jewish role in modern capitalism, Weber seemed to minimize it. Medieval historians pointed out that many of the new commercial developments pointed to by Marx, Sombart, and Weber were already seen in the high Middle Ages.

So what can we say about the canon we might use to access “the economy” as a field of study? Certainly, the canon shifts as the focus shifts. Cleirac’s compilation of maritime law and recounting of what became a legend were once foundational. Nowadays, few economic historians who have not read this book would have heard of him. The Bill of Exchange was once central to Western commercial practices. Now it and its history are much less important. Conversely, the so-called digital revolution, which allows access to many more types of documents, calls forth more of an interdisciplinary approach to economic history and the history of economic thought.

Concerning the gulf between “practices” and “representations” of Jewish commercial activity, the practice of defining usury as what Jews were thought to be doing, with little empirical support for what they were actually doing, nor even a clear definition of usury, is a shameful part of history. We can and should do better.

Concerning the issue of periodization, in this context, it seems clear that those who see sharp boundaries over time are overstating the changes as they occur. Medieval attitudes toward Jews and toward commerce persisted well into the “modern” era.

Still, I have a few quibbles. Although the book’s appendices include excellent bibliographies of some other sources, and the endnotes are extensive and generous, a standard bibliography would make that content easier to access. Second, it would be fascinating to learn more about the Franciscan friars who seem to have had an outsized role in defining Christian commerce and Jewish usury (p. 16). Finally, a more extended discussion of how 17th-century Bordeaux fit among the other commercial centers of the era, like Amsterdam or London, would more firmly anchor that setting. Even so, these quibbles are minor.

As I noted above, this book is a gem. I learned a great deal from it. Economic historians, intellectual historians, and cultural historians would all find it valuable, both for general knowledge, and especially for sub-fields like Early Modern Economic History and Religious and Jewish Studies. I recommend it highly.


Arthur Wilson is Associate Professor in the School of Business, George Washington University. His publications include “Put-Call Parity, the Triple Contract, and Approaches to Usury in Medieval Contracting,” with Geetae Kim (Financial History Review, 2015).He thanks Joel Blecher of the George Washington History Department for helpful suggestions.

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Subject(s):Financial Markets, Financial Institutions, and Monetary History
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):Europe
Time Period(s):16th Century
17th Century
18th Century