The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger

by Greg Steinmetz

  When the imperial diet came together in Nuremberg in 1522, Luther was back in absentia as the main event. Frederick the Wise had refused to hand him over for trial. He had hidden the monk in Wartburg Castle in Thuringia under the alias Junker George (Junker Jörg) and made him grow a beard as a disguise. One year earlier, Charles had a chance to arrest Luther but honored his pledge to leave him alone if he attended.

  With the emperor worrying about Luther, a special committee of the diet gathered to fulfill the emperor’s postelection pledge to investigate Fugger and other bankers. The committee went over the same ground as the Hansa-inspired effort from years earlier and planned legislation to straitjacket the plutocrats. Fugger was unsure of the emperor’s protection. Maximilian had been in his pocket, but Charles was his own man. Fugger had never even met Charles. Unable to predict what Charles would do, he fought the committee on its own terms—that is, with lawyers.

  Lawyers staffed the antitrust committee at the Nuremberg diet. They knew what Rome said about monopolies. With irritating pedantry, the staff opened the hearing on the bankers by citing the Greek origins of the word monopoly—monos for one, pōlion for trade. Legal arguments gave way to venom. The committee said financiers hurt the economy more than “all the highway robbers and thieves combined.” It cited the example of Bartholomaus Rehm, an Augsburg banker who had hijacked a wagon train belonging to Fugger’s rival Hochstetter a few months earlier. After authorities arrested Rehm, he bribed his jailers and escaped. The committee declared that a textbook example of how financiers did business. First they broke the law. Then they bought their way out. Never mind that Hochstetter, himself one of the biggest bankers in Germany, was the victim in the story, or that the law already had ways to deal with crooks like Rehm. The bankers still had to be stopped.

  Fugger hired Conrad Peutinger, the best lawyer he could find. Peutinger had a law degree from Bologna and served as the city manager for Augsburg. He had previously done legal work for Gossembrot and other members of the ill-fated copper syndicate. He had also performed odd jobs for Maximilian. Years earlier, before Hutten became an agitator, Peutinger was the one who nominated Hutten for poet laureate. Peutinger’s daughter had placed the laurels on Hutten’s head. In his spare time, Peutinger pottered around Augsburg looking for ancient Roman inscriptions to translate. His collection of artifacts included the Peutinger Map, a one-of-a-kind fifth-century diagram that showed the Roman-created, trans-European road system.

  Peutinger told the diet that high pepper prices were regrettable but it was unfair to blame the bankers. The fault rested with the king of Portugal and his restriction of supply. He reminded them that there would be no pepper at all if the merchants failed to pass on their costs. As for high metal prices, they benefited society because they allowed mine operators to pay high wages. He advised them to leave the bankers alone because the market was complex and hard to regulate. Who knew what unintended consequences might arise from legislation? The committee was unmoved. With the words monos and pōlion in the forefront, they declared the bankers violated statute.

  Politics played a role. Delegates from Augsburg, Frankfurt, Cologne and other beneficiaries of big business endorsed Peutinger’s views and fought for the status quo. But they lacked the votes in the committee, where the interests of small business dominated. The group drafted legislation that limited a commercial enterprise to no more than 50,000 florins of equity and no more than three locations. If enacted, Fugger—whose equity exceeded 2 million and whose operation had hundreds of offices—would be back to selling textiles out of a back room.

  Fugger had tried to fight fair by hiring Peutinger. When that failed, he went back to the tried-and-true methods and bribed influential members of the diet to drop the proceedings. He hoped to settle the matter once and for all. He partly succeeded; the diet broke up before taking action. But to his disappointment, the chief imperial prosecutor, Caspar Marth, took up the fight. Citing Roman law, Marth ordered the bankers to appear in court and face trial. Marth lived in Nuremberg and was influenced by the Nuremberg circle who stirred the usury controversy. Marth nailed a summons for Fugger to the door of Augsburg City Hall. He wanted to embarrass the banker. It was trial by press release.

  Marth’s attack so angered Fugger that it cracked his usual calm. He was in “very bad humor,” said an imperial official. The fact that Charles still owed him money made it even worse. His temper may have explained what he did next. As he was fighting Marth in the spring of 1523, he hit Charles with a sharply worded collection notice. Fugger could not force Charles to pay and the courts were no help because Charles was chief justice. All Fugger could do was appeal to Charles’s decency and need to maintain his reputation among creditors. Given the age and Charles’s position as the most powerful man on earth, the letter shocks for its bluntness. Fugger follows protocol, but missing from the letter is the look-upon-this-speck-of-dust sycophancy found in Luther’s letter to Archbishop Albrecht. Fugger’s tone suggests his confidence that Charles would realize he needed to keep Fugger happy. But first Fugger had to slap him in the face.

  Most Serene, All-Powerful Roman Emperor and Most Gracious Lord!

  Your Royal Majesty is undoubtedly well aware of the extent to which I and my nephews have always been inclined to serve the House of Austria, and in all submissiveness to promote its welfare and its rise. For that reason, we co-operated with the former Emperor Maximilian, Your Imperial Majesty’s forefather, and, in loyal subjection to His Majesty, to secure the imperial crown for your Imperial Majesty, pledged ourselves to several princes, who placed their confidence and trust in me as perhaps in no one else.

  We also, when Your Imperial Majesty’s appointed delegates were treating for the completion of the above-mentioned undertaking, furnished a considerable sum of money which was secured, not from me and my nephews alone, but from some of my good friends at heavy cost, so that the excellent nobles achieved success to the great honor and well-being of Your Imperial Majesty.

  It is also well known that Your Majesty without me might not have acquired the Imperial Crown, as I can attest with the written statement of all the delegates of Your Imperial Majesty. And in all this I have looked not to my own profit. For if I had withdrawn my support for the House of Austria, and transferred it to France, I should have won a large profit and much money, which were at that time offered to me. But what disadvantage would have risen thereby for the House of Austria, Your Majesty with your deep comprehension would understand.

  Taking all this into consideration, my respectful request to Your Imperial Majesty is that you will graciously recognize my faithful, humble service, dedicated to the greater well-being of Your Imperial Majesty, and order that the money which I have paid out, together with the interest upon it, shall be reckoned up and paid, without further delay. I pledge myself to be faithful in all humility, and I hereby commend myself as faithful at all times to Your Imperial Majesty.

  Your Imperial Majesty’s most humble servant. Jacob Fugger

  The letter had an immediate effect. Charles wrote Prosecutor Marth and ordered him to drop his case against Fugger and the other bankers. Charles was direct: “In no way will I allow the merchants to be prosecuted.”

  The protection Charles offered Fugger showed one thing. If a businessperson becomes so hated that reformers call for his scalp, he better have the ruler in his corner. It’s a fair bet that Marth and his supporters would have thrown Fugger in jail if Charles had not constrained them. Fugger’s indispensability saved him. Maximilian had needed Fugger so desperately that it was sometimes unclear who was in charge. Charles, too, had come to realize that Fugger was a good man to have on his side. But imperial protection couldn’t save Fugger from everything. He had to fight some battles on his own.

  On August 6, 1524, less than a year after Charles called off the dogs in Nuremberg, the sun rose over Augsburg at five and the city came to life. At eight, Fugger was probably at the window watching a group of demonstrators outside city
hall. They were workingmen who, in this city of splendor, struggled to feed themselves. Thirteen hundred came to the square that day—one of every twenty Augsburgers—and they were all angry at Fugger.

  The protestors believed it unconscionable that Fugger had everything and they had nothing, that they lived on oats and he ate pheasant, that he wore furs and they wore rags. They agreed with Hutten and his accusation that Fugger became rich on the backs of the poor. But their immediate concern was something other than social equality. They were angry that Fugger sought to oust their priest, a populist reformer named Johannes Schilling. When word leaked of his attempt, they marched on city hall.

  Schilling preached at the Church of the Barefoot Monks, the Franciscan church of the city’s poor. Of the many Augsburg priests who sympathized with Luther, Schilling was the most strident. He told the congregation to ignore Rome and seek truth in the Bible. This made sense to his listeners because it offered them a more credible path to salvation than the one of indulgences, relics and Hail Marys. Egged on by Schilling, they wanted to break with Rome and, while they were at it, crush the establishment. Alarmed, Fugger wanted to run Schilling out of town.

  Schilling had numbers on his side. Nearly 90 percent of Augsburgers were either poor or close to it. But the town administrators answered to Fugger and the city’s other rich men. They stood firm and told the mob the priest had to go. The next day, the crowd returned with knives, swords and pitchforks. As tension built, Fugger faced a choice. He could stay in his palace and hope the demonstrators would leave him in peace, or he could flee to Biberbach Castle, the nearest of several fortresses that he owned in the countryside. Flight was risky because of highway robbers. Fugger could try to pay them off but, if the robbers were desperate, they might ambush Fugger’s coach, strip it of valuables and slit the banker’s throat. Another reason to stay home was the strain of the journey. By this time, Fugger, now sixty-five, was old and sick. He had outlived all six of his brothers and he was among the few in town old enough to remember a world before globes, pocket watches and syphilis. The journey might kill him. Still, the risk was worth it because, behind the thick walls of Biberbach, the protestors could not touch him. It would take cannons, which only the government had, to flush him out. As the noise in the streets grew, Fugger grabbed his cap, called for the horses and headed for his coach.

  Peutinger, the city manager and Fugger’s lawyer, negotiated with the protestors. Peutinger had been in this situation before. Three years earlier, he and the town council exiled another Franciscan priest, Urbanus Rhegius, for preaching Luther. Now Peutinger looked for compromise and offered to bring back Rhegius if the mob abandoned Schilling. The protestors held firm because they preferred Schilling. Rhegius was an intellectual. Schilling spoke from the heart. They could connect with him and his passion in a way they never could relate to the cerebral Rhegius. At Schilling’s urging, they did things like throw salt on the holy water and tear apart sacred books. Peutinger could not sway them. He agreed to let Schilling stay.

  Peutinger’s surrender was a trick. He only wanted to scatter the crowd. Three days later, the mayor reported to work in armor and the city council renounced the promise to the protestors. Like a dictator seizing the television networks to control the flow of information, the council sent guards to occupy Perlach Tower and make sure protestors sent no signals to confederates beyond the gates. It reinforced the armories and arrested some of the protest leaders. After a quick trial, it pronounced two weavers involved in the protest guilty of treason and sentenced them to death.

  The city’s execution grounds were just outside the gates. Authorities usually invited the public to watch the hangings and beheadings. Public killings had a social function. They demonstrated the consequences of criminal behavior. Such events were well-attended. But in the case of the weavers, the council feared demonstrations and told no one. It quietly beheaded the men in front of city hall before dawn and cleaned up the blood before anyone knew what happened. Fugger returned home after things calmed down and wrote a letter to his client, George of Brandenburg, the duke he befriended at the Augsburg diet. He explained the events and how he and the council had defended the true teachings of Christ.

  Historians love to study battles because they are turning points. Waterloo, Saratoga, Gettysburg, Stalingrad. Each changed the course of history. Fugger played a part in one such encounter. The Battle of Pavia in 1525 marked a shift in the Italian Wars that had been raging more than thirty years. The Habsburg victory at Pavia, financed by Fugger, cemented the family’s dominance in Europe.

  No city had changed hands more in Fugger’s lifetime than Milan. At one time or another, the French, the Habsburgs, the Swiss and, at rare intervals, even the Milanese themselves controlled it. Milan was the largest city in northern Italy after Venice. It was the hub of the Italian textile trade and a gateway to the rest of the country. Its exposed location on the plains, spreading from the banks of the Po River, made it easy to attack. Maximilian had considered it of such strategic importance that he chose the daughter of a Milanese duke for his second wife.

  Charles had taken Milan from France in 1521 and now, four years later, Francis personally took the field to win it back. He surprised the imperial mercenaries guarding the city and chased them to the walled city of Pavia. Winter was approaching and Francis thought that cold and hunger would flush them out. As supplies ran low and the mercenaries grew impatient about not receiving pay, they were about to give up when money—money from Fugger—arrived to pay and supply them. The cash kept the forces together just long enough for Charles’s commander, the marquis of Pescara, to storm out of Pavia for an all-or-nothing attack on the French.

  On February 24, the day Charles turned twenty-five, Francis led a cavalry charge only to find himself well ahead of his artillery. A century earlier, King Charles VI suffered the worst military defeat in French history when the British and their longbows killed three dukes, eight counts, a viscount and a bishop at the Battle of Agincourt. Pavia claimed fewer lives but in a significant way was more devastating because the imperial forces captured Francis. In the game of Hausmachtpolitik, this was checkmate. Pescara’s daring, not Fugger cash, won the day. But there would have been no battle without Fugger to keep the troops in the field.

  Fugger had given Charles the money after Charles brought him a new opportunity: He leased him the Almadén mercury mine in the Maestrazgo mountains of central Spain. Metallurgists used mercury to extract gold and silver from ore. The Maestrazgos, one of only two mercury sources in Europe and the largest source on earth, belonged to a religious order when Pope Leo died in 1521. The new pope happened to be Adrian of Utrecht, the former tutor of Charles V and his stand-in during the Revolt of the Comuneros. Adrian, now Hadrian VI, took the mines from the order after becoming pope and gave them to Charles. Charles, in turn, sold Fugger a three-year lease on the mines for the enormous sum of 560,000 florins. This was the deal that funded Pescara through the winter.

  Once Fugger had the lease, he sent German mining engineers to Spain to increase output. The mine yielded only modest profits despite their efforts. Fugger would have made more money if not for competition. In addition to the Maestrazagos mines, Charles owned the continent’s other mercury mine, in Idrija, Slovenia. After leasing Maestrazagos to Fugger, he leased Idria to Hochstetter. Fugger and Hochstetter colluded on silver, but they competed on mercury.

  Still, Fugger was satisfied because the Maestrazagos lease made him whole on the election loan. That’s because only half of the 560,000 florins loan total came out of Fugger’s pocket. The rest cancelled the remainder of the election debt. The financing of the imperial election had been a wild ride for Fugger. But it played out as he had hoped. With sources of income that encircled the globe and a citizenry that included 40 percent of Europe’s population, Charles, as Fugger had foreseen, turned out to be creditworthy.

  The loan for the Milan campaign helped Fugger in another way. Charles was in his palace in Valladolid
when he heard about the capture of Francis. On that same day, he signed a decree, probably drafted by Peutinger, that sanctioned the existence of monopolies in the metal industry. That wasn’t all. He also killed the investigation into big business that he had promised after becoming emperor. He notified the imperial diet that his investigators found “no unseemly nor criminal enhancement of prices in Germany or elsewhere.” He singled out Fugger and his family for leading “honest, upstanding, Christian and god-fearing lives” and praised Fugger for opposing the “Lutheran heretics.” With that, Fugger had nothing more to fear from the diet or the prosecutors.

  Fugger, in his collection notice to Charles, had asked the emperor to consider what “disadvantage would have risen thereby for the House of Austria” if he had backed Francis in the election. If Charles hadn’t considered the disadvantages before Pavia, he might have considered them afterward. Francis, now a prisoner awaiting transport to Spain, may have been thinking the same thoughts.

  In 1525, while King Francis languished in jail, Charles approached Fugger with a plan to break Portugal’s lock on the spice trade. The idea was to get to Asia, not by sailing around Africa like da Gama, but by going around South America like Ferdinand Magellan had done three years earlier when his fleet became the first to circumnavigate the globe. By approaching from the east, Spain could sail to the Spice Islands in what is now Indonesia and avoid the Portuguese controlled waters off India.