Friday, October 17, 2014


[Indian press is quite proper; certain words and expressions are forbidden. But a distinguished German business dynasty enabled me to overcome the taboo. Even otherwise, the Fuggers have a fascinating history. This column was published in Business Standard of 10 July 2001.]


In what is now south Germany, the Romans founded a city called Augusta Vindelicorum in 15 BC: today it is known as Augsburg. There, to Georg Fugger and Regina Imhof, was born a son named Anton, later known as Anton Fugger I, on 10 June 1493. The city of Augsburg celebrated his 500th anniversary in 1993.  K S Mathew meant to publish a book on the Fuggers for that event, but managed to finish it only in 1997. Still, the book (Indo-Portuguese Trade and the Fuggers of Germany, Manohar) is four years old, and would not normally attract notice in this column, but for two reasons. First, evidently no editor cast a beady eye on the book before it went to the press; so it reveals some very interesting, exciting and even shocking facts. And second, since no editor applied his skilled pen to it, it is not written in the most felicitous of styles.
Anton’s great-grandfather, Hans Fugger, came to Augsburg from a small village called Graben in 1367 and set up a loom on Kreuzgasse. He had to pay an admission fee to the local weavers’ guild. His arrival is recorded in the tax register of Augsburg with the entry: “Fucker advenit.”  He married Klara Widolf. She died; so he married Elisabeth Gfattermann. After this marriage he prospered: he had fifty looms, three houses in Augsburg, and a number of carriages carrying clothes to the shops.
He had two sons, Andreas and Jakob. Andreas’s son Lukas was granted a coat of arms with a golden deer on blue background by Emperor Frederick III of the Holy Roman Empire. So his descendants came to be called Fuggers of the Deer. But their fortunes declined; later they were found to be living in Warsaw, where they were called Fukiers.
In 1473, Emperor Frederick III was going to Trier to marry his son Maximilian to Maria, the daughter of Charles the Bald of Burgundy. On the way he bought some fine clothes from Ulrich, son of Jacob, Hans’s younger son. As the Emperor was not carrying any money, he gave Ulrich a coat of arms with a lily on gold and blue background, so his descendants were called Fuggers of the Lily.
By the time Jakob (hereinafter Jakob I) had his seventh son, he was running out of names, so he called his son Jakob (hereinafter Jakob II). Jakob II went to Venice and learnt double entry bookkeeping as well as the use of Arabic (originally Indian) numerals. That was immensely useful to him when it came to making money.
To make money, he made his way to Innsbruck, now in Austria, where lived Archduke Sigismund, Frederick III’s grandson. He had 40 illegitimate children (and no legitimate one); no wonder he was hard up. So Jakob II lent him money, and got the silver mines of Schwaz nearby. But at last Sigismund’s breeding activities outran his resources; he had to abdicate, and his cousin Maximilian took over. This was the Maximilian for whom his father had bought fancy clothes from Ulrich in return for a coat of arms. He was the same age as Jakob II, and they got on famously. Maximilian soon became the Holy Roman Emperor, and began to feel the itch to make a war every once in a while. In 1492 he wanted to fight France and Venice, so he made over the copper mines of Tyrol to the Fuggers. In 1496 he wanted to invade Italy, so he made over silver mines. In 1508 he began a ten-year war with Italy; to finance it he had to mortgage his Crown lands.
It was not only emperors who borrowed from the Fuggers. They had a branch in Rome; the Pope deposited a hundred thousand ducats in it in 1507. But then in 1509, a delicate problem arose. Melchior von Meckau was king of a small principality called Brixen in Germany; he also happened to be a Cardinal. He died, leaving 152,931 florins with the Fuggers. He could have made so much money only by selling indulgences; in which case half the money would have belonged to the church. The Fuggers’ capital was only 198,931 florins; if they had to pay Melchior’s money to the Pope, they would be bankrupted. So Jakob sought Maximilian’s help. Maximilian issued a decree prohibiting the transfer of the money to Rome, and saved Jakob. Later in 1515, Albrecht, the Elector of Brandenburg, another principality, was Archbishop of Mainz as well as Magdeburg; but before he could get the insignia of Archbishopric, he had to pay the curia in Rome. So he borrowed the money from the Fuggers.
Maximilian’s problem was that he was called the Holy Roman Emperor, but he was stuck in Austria; the Italians would not let him go to Rome and be crowned by the Pope. So in 1508 he declared himself Roman Emperor Elect at Trent. But that was a bit of a fudge. So in 1511 he thought of a clever stratagem: he decided to become Pope himself. Jakob I swallowed his plan and lent him 3 lakh ducats to bribe the Cardinals. Maximilian did not become Pope; maybe he found better use for the money.
Soon, however, Maximilian was at the receiving end. He was aging, and he wanted his grandson Charles to succeed him as Holy Roman Emperor. For this, Charles had to be elected by the Electors of Germany. King Francis I offered them 3 million livres if they would elect him. Maximilian died in 1519, and Francis doubled the bribe he was offering. But the Fuggers organized a consortium of financiers which bailed out Charles, and made him Emperor.

When Vasco da Gama discovered the Cape route to India in 1498, it became possible for the Portuguese to get spices from India without paying Arab and Venetian intermediaries. But the voyages were very expensive; and the risk of loss of ships was high. The King of Portugal turned to the big businessmen of Europe for finance. Amongst them, the Fuggers had an advantage: they possessed copper and silver mines, and monetary metals were the only commodity for which there was abundant demand in India. So in 1515,  Jakob I began to sell copper to the King of Portugal, and to take pepper in exchange, which he sold in Germany, Bohemia and Hungary. The Fuggers were involved in Portugal’s India trade till the end of the 16th century. They even had an agent in India, Ferdinand Cron, who lived in Goa from 1587 till 1624. But gradually Portugal’s India died as the British overwhelmed the Portuguese and the Spaniards and as the overland trade revived; and with it, the Fuggers’ involvement with India too died out.