Money & Markets
The Receipt
In 1519 the crown of the Holy Roman Empire went to auction between kings, and the winning bid came from a commoner. Four years later, with the emperor stalling on the debt, Jacob Fugger sent him what history remembers as the world's boldest invoice.
Augsburg, 1519–1523 · Jacob Fugger
What actually happened
The election cost roughly 850,000 florins in payments to the seven prince-electors; Fugger provided about two-thirds, and the electors accepted only his letters of credit. The banker's paper was the currency of the bribe. Charles V won the crown.
When Charles's jurists then advanced anti-monopoly proceedings aimed at the great merchant houses, above all Fugger's, the old banker wrote to the emperor directly. As the family chronicle records the letter of April 1523: 'It is well known that Your Imperial Majesty could not have gained the Roman Crown save with mine aid.' The proceedings faded; the debt was honored.
Fugger died in 1525 with a fortune estimated at around two percent of Europe's economic output, a scale no private banker has matched since.
The longer arc
Fugger's money was already reshaping Europe before the 1519 election. His loans had helped Archbishop Albrecht of Mainz pay for a second bishopric bought from Rome, and the two men then arranged an indulgence sale across Germany structured so half the proceeds paid off Fugger's loan and half funded the new Saint Peter's Basilica. The Fugger-financed preacher running the sales campaign, Johann Tetzel, provoked Martin Luther into posting his Ninety-Five Theses in 1517, meaning the same banker who bankrolled the emperor's election two years later had already helped trigger the Reformation.
Fugger spent part of his fortune founding the Fuggerei, a walled housing complex in Augsburg built in 1521 for the city's poor, charging a token rent in exchange for daily prayers for the Fugger family's souls. It still operates today under close to the same terms: residents pay under one euro a year and are asked to say three prayers daily, making it the oldest social housing project in continuous use anywhere in the world. The banking empire around it did not last nearly as long; the family's fortunes declined over the following century as Habsburg debts went unpaid.
The play to remember
The play.
Real power is being un-defaultable. Fugger didn't just lend to the system.
He made himself the system.
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