The Setting

MARINE INSURANCE AND BILLS OF EXCHANGE

Insurance policies and bills of exchange were unknown to ancient Roman jurisprudence and are the posthumous invention of Jews, according to the remarks of Giovan[ni] Villani in his universal history.

THOUSANDS HAVE READ this passage since it first appeared in print in 1647, yet we still do not know what to make of it. The statement is patently false: Jews invented neither marine insurance nor bills of exchange. Nevertheless, for nearly three centuries, it captured the imagination of a great many authors — some famous and others today regarded as inconsequential but once read widely. My aim in this book is twofold: to demonstrate that this tale of origins was once so well known that it can justly be called a legend and, by understanding its significance and reverberations, to shed new light on Europe's cultural and intellectual entanglements with economic modernity. The quotation claiming that Jews invented marine insurance and bills of exchange is lifted from a compilation of maritime laws assembled with commentary by a provincial French lawyer, Étienne Cleirac, published in Bordeaux under the title Us et coustumes de la mer (Usages and Customs of the Sea). Forgotten as much as the story it relays, this volume, as we will see, was a seventeenth-century publishing success. In this and the next two chapters, I peel back the layers of each historical and textual reference made by Cleirac in the three lines cited above and in the longer segment of commentary — roughly seven pages of printed text — to which they belong. In so doing, I unlock the explicit and, even more crucially, implicit meanings that contemporary readers would have gleaned from this narrative. I begin by describing the characteristics of the two financial instruments that Cleirac invokes, marine insurance and bills of exchange, in order to make clear what his audience would have known about them. Chapters 2 and 3 will then review the bewildering assortment of citations that Cleirac weaves into this tale of origins, including his false attribution of it to the medieval Florentine chronicler Giovanni Villani (d. 1348).

Cleirac's prose is undisciplined even by period standards, as the short excerpts included in the next several page indicate (and they are the least meandering in his commentary!). It is for this reason that I parse his words almost one by one. My exegesis will show that out of a hodgepodge of citations, which range from St. Paul to Matthew Paris, from French chroniclers to Jesuit theologians, from Dante to Ariosto and beyond, his consistent preoccupation emerges: how to distinguish good from bad creditors, and good from bad credit instruments, in an increasingly impersonal market. The legend that Cleirac committed to the printed page proved to be a gripping, if inadequate, answer to the thorny problem of where to draw the line between illegitimate and appropriate credit relations, a problem that the commercial revolution of the Middle Ages had raised and the further diffusion of new credit instruments in the sixteenth century had made impossible to avoid.

My interpretative practice is loosely indebted to symptomatic reading, that is, a reading modality that urges critics to unveil the latent meanings that lie beneath the surface of a text. In so doing, I uncover a powerful discourse that drew from Catholic definitions of usury and adapted them to a seventeenth-century reality in which marine insurance and bills of exchange were widely used. The result, as I will elucidate, had a seductive rhetorical purchase.

Why Marine Insurance and Bills of Exchange?

The passage quoted at the opening of this chapter, which sums up the legend of these financial instruments' Jewish origins, appears in Cleirac's commentary on the first article of the Guidon de la mer (The Standard of the Sea), a set of maritime rules promulgated in Rouen in the mid-to late sixteenth century and reprinted in Us et coustumes de la mer. The Guidon, as the title of its first article — "On the contracts or policies of insurance: Their definition, conformity, and differences from other maritime contracts" — suggests, was devoted to marine insurance. It made no mention of bills of exchange. It was Cleirac who linked the two credit instruments to one another. His argument was historically baseless but had its own logic: after inventing bills of exchange, he claimed, Jews also had to invent marine insurance in order to protect the value of the assets they had left behind — value on which they expected their bills of exchange to be drawn.

Marine insurance and bills of exchange were among the most prized byproducts of the commercial revolution of the twelfth and thirteenth centuries, which, unlike the industrial revolution that followed half a millennium later, was propelled by institutional more than technological change. They made it easier for investors to conduct their business without leaving their home base and formed the connective tissues of European long-distance trade. At the same time, both marine insurance and bills of exchange became the objects of intense theological and canonistic debates concerning usury.

No single person or group invented either of these instruments. Both went through a long period of incubation and incremental evolution, which reached maturity in the sixteenth century. Three trends characterized this formative period in the history of European commercial credit instruments. First, although marine insurance and bills of exchange were designed to facilitate transactions conducted at a distance, considerable variations existed in the local norms that regulated their issuance and use. These variations inevitably generated uncertainty. Second, while marine insurance and bills of exchange became more and more standardized, ordinary, and common over time, they also increased in complexity and sophistication. These developments rendered them opaque in the eyes of the uninitiated. Last, by the...