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From Near-Default to Debt Restructuring: the Inventive Methods of the Duke of Brabant and His Council around 1313-1320 for the Salvation of the Princely Finances

par Kusman, Pierre-David ;De Meulemeester, Jean Luc
Editeur scientifique Nigor, Giampiero
Référence (2016.: Prato), Le crisi finanziarie. Gestione, implicazioni sociali e conseguenze nell’età preindustriale - The Financial Crises. Their Management, Their Social Implications and Their Consequences in Pre-Industrial Times, Selezione di ricerche =A Selection of essays. FONDAZIONE ISTITUTO INTERNAZIONALE DI STORIA ECONOMICA “F. DATINI” PRATO (Atti delle “Settimane di Studi” e altri Convegni, 47), Firenze University Press, Firenze
Publication Publié, 2016-01-01

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Résumé :

This essay is a first attempt at thoroughly describing a debt-restructuring process in the Late Medieval Low Countries with regard to the princely finances. Between 1313 and 1320, the duke of Brabant John III (1313-1355) was minor and accordingly submitted to a regency council. In the second regency council of July 1314, the town delegates gained the majority of the seats. The duke was severely indebted to foreign creditors because of the ambitious politics of his predecessors, John I (1268-1294) and John II (1294-1312) who both had to finance war (to win the duchy of Limburg) and territorial expansion. Direct taxation revenues obviously did not suffice for this purpose; therefore the dukes of Brabant had to borrow high sums mainly from Piedmontese and Tuscan bankers. From 1314 on, the political delegates of the cities, the nobility and the clergy agreed to contribute to the princely debt but only for a tiny 12% of the total sum in exchange for stronger political representation at the ducal court and the management of the princely finances. New control institutions were created so that the domanial incomes would be put to good use. Strikingly enough, no historian has ever contrasted the modesty of the financial contribution of the so-called Brabantine Estates with the enormous political advantages gained. In this paper, we argue, contrary to Stasavage, that not only city-states, but also small principalities had the ability to create effective monitoring institutions of the public debt thanks to the instrumental role of financial experts surrounding the duke of Brabant such as merchants and Italian bankers but, more unexpectedly, members of intermediary groups such as brokers and moneychangers. Moreover, we show that this debt-consolidation process proved quite successful as the duke defaulted on only 37% of the total debt.