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Francesco Sassetti and the Downfall of the Medici Banking House

Published online by Cambridge University Press:  24 July 2012

Florence Edler de Roover
Florence Edler de Roover
Affiliation:
MacMurray College
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Extract

Among the close associates of Piero di Cosimo de' Medici and his illustrious son, Lorenzo de' Medici, no one was more trusted by both father and son than Francesco Sassetti, their business partner and general manager. Yet Sassetti is virtually unknown to English readers. Like the Medici, he belonged to a noble Florentine family whose wealth originated in trade and was later re-invested in landed property in the city of Florence and the surrounding country.

Type
Research Article
Information
Business History Review , Volume 17 , Issue 4 , October 1943 , pp. 65 - 80
Copyright
Copyright © The President and Fellows of Harvard College 1943

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References

1 Warburg, A., “Francesco Sassettis letztwillige Verfuegung,” Gesammelte Schriften, vol. i (Leipzig: B. G. Teubner, 1932), p. 130.Google Scholar

2 Roscoe, William, The Life of Lorenzo de' Medici (London, 1847), Appendix X, p. 425.Google Scholar

3 Florence, Italy, R. Archivio di Stato: Carte Strozziane, Series II, no. 20: Libro segreto di Francesco Sassetti, 1462-1472.

4 For these comparisons, for the tables, and for numerous ideas in the succeeding pages, I am indebted to my husband, Raymond de Roover, assistant professor of economics at Wells College, who refuses to have his name appear in the by-line where I think it belongs.

5 Machiavelli, Niccolo, The History of Florence, Book VIII, chap, vii, p. 400 of Bohn translation (London, 1854).Google Scholar

6 Very important evidence on the disagreement between Sassetti and Tani in matters of business policy is given by Warburg, A. in a long footnote to his article, “Flandrische Kunst und florentinische Fruehrenaissance,” Gesammelte Schriften, I, 375f.Google Scholar

7 Grunzweig, Armand, Correspondance de la filiale de Bruges des Medici, Part 1 (Brussels, 1931), pp. xxxii–xxxv.Google Scholar

8 Another portrait of Francesco Sassetti by Ghirlandaio is in the Jules S. Bache Collection, given to the people of the State of New York in 1937 and now on exhibition at the Metropolitan Museum. This painting shows Francesco in his middle or late forties with his eldest son Teodoro, then a boy.

9 Hamilton, Earl, Money, Prices and Wages in Valencia, Aragon, and Navarre, 1351-1500 (Cambridge, Mass., 1936), pp. 60Google Scholar (chart 4), 62, 106 (chart 11). Cf. Nef, John U., “Silver Production in Central Europe, 1450-1680,” Journal of Political Economy, vol. XLIX (1941), pp. 575–591CrossRefGoogle Scholar. In Florence, the value of the fiorino largo d'oro in oro in silver currency, that is, in lire di piccioli, increased from £5 18s. in 1482, when it was first coined, to £6 10s. in 1490, £6 18s. in 1499, and £7 in 1503. This increase in value is apparently attributable either to the depreciation of the silver currency or, more likely, to a steady rise in the market ratio between gold and silver.

10 Machiavelli, loc cit. Adam Smith also attributes the fall of the Medici banking house to the improper conduct of the branch managers. He quotes the example of the Medici in order to prove that government enterprises lead to extravagance and are doomed to failure, and that the character of ruler is inconsistent with that of merchant (An Inquiry into the Nature and Causes of the Wealth of Nations, Book V, chap, ii, part 1).