I am a young Venetian merchant in the 13th Century and I am not quite sure how this colleganza system works. Help?

by AnotherPersonAH

This is largely going to be just a quick series of questions to any Venetian experts out there about colleganze.

A quick intro for the uninitiated in Venetian economic practices so that you can understand the questions and answers - a colleganze was a form of commercial investment which was practiced in Venice around this time. It is somewhat like a loan or a join venture. An investor puts down money for a travelling merchant to invest in a voyage in return for 3/4 of their profits. Yes, I know this sounds like a bad deal for the merchant but it really is not as bad as it sounds. It was a system by which poorer merchants could actually engage in meaningful trade and find a good start for themselves as it would enable them to actually manage the costs of trading while making some money of their own. Additionally, they could take on multiple of these investments for one trip from different sources, allowing them to take home far more money than they would from a voyage otherwise.

I don't mind if you cannot answer them all - any of them being answered for me would be extremely interesting insight to me. I've been reading Lane's 'Venice: A Maritime Republic' and the economic side I found extremely interesting.

  1. Who would I meet to find a colleganza? By this, I mean what type of person in Venice was in a position to be investing money into a colleganza? Could a successful young merchant go from accepting colleganze in their youth to investing into them in their older years?

  2. Was the investor in a colleganza interested in specifically what goods I would be purchasing or were they just interested in the profit for their investment?

  3. How much money would an investor be putting into a colleganza? I understand that a merchant could and typically would accept multiple colleganza from different sources for a single voyage, but how much was each individual usually investing into a voyage? An idea of how far that money might be able to take me would be helpful too.

  4. My voyage is a bust. We get to Constantinople or Syria and there are just not the goods there to make a profit on. I do what I can to turn a profit on this voyage, but fail and return to Venice with no profits, just about breaking even. What happens now? How would an investor respond to my failure to deliver their 3/4 profit?

  5. Worse yet - on my way back to Venice I run into pirates. They take the goods and make off. The whole venture was a sunk cost for all parties involved. How do my investors respond now? If I end up being forced to repay this debt myself, how do I go about doing this? What if I am simply never capable of repaying the debt or just renege on it?

  6. What precautions were taken to prevent me accepting a multitude of colleganze, taking a voyage to a city and then sequestering away to never return? I just take the money and run. Would anybody be sent to track me down? Would I be able to return to Venice? Where would I be able to run off to having done this and be safe? Would the money I could effectively steal be worth the effort of running away with?

  7. The weather turns exceptionally sour towards the middle of autumn, or the republic finds itself at war (or even both) causing my voyage to dock up in some port away from Venice for a while, or even for the whole season or possibly 2 seasons until the seas are safe again. How does my inability to return to Venice and repay my colleganze due to unforeseen circumstances affect me or my investors? How do I manage to pay my way through the unexpected docking time - I presume living costs might severely impact my ability to return my colleganza with peak profits. How would my investors see this situation?

  8. Were there any measures to prevent me accepting a colleganze, or many colleganze and then taking that money and instead investing them into further colleganze instead of actually going on my own voyage, sort of like a pyramid scheme? Would this even be a concern if I managed to return the promised profits to my investors?

Hopefully we have some experts out there who are equipped to answer this unusually precise series of questions, but it was just on my mind. However, I never want to type the word colleganza/e in my life again after this!

KiwyCahuete

I'm not a Venetian expert but i'm working on 13th Century Mediterranean Trade, so i think i can help you on some points.

First the Colleganza (in Venice), the Commenda (in Tuscany and Spain), the Qîrad (in muslim kingdoms) and the Societa Maris (in Genova) are almost the same contracts, with the first three being the same and the Societa Maris more of a « bilateral commenda », with only two associates, one merchant and one investor.

  1. If you doesn't have any connections and you're a merchant owning a ship you would only need to spend time in your harbour, meet people who want to trade some goods and, when you agreed on the terms of the Colleganza sign it in front of a notary, or the director of the customs.

The same goes if you're not owning a ship and you want to send your goods overseas.

  1. We know three forms of Commenda, found in Barcelona. The main difference between the first two is wether or not the merchant can negociate on the behalf of the investor, or did the investor give him a price he wants for his goods and asks him to bring them back if he can't sell them at that price.

The thing is, in medieval trade, you would almost never only go to one place and then come back. Travel times to go to Constantinople from Venice could change from one to six months, depending on the weather, the pirates, the wars etc. So you would stop on multiple places and, if you had no precise indication from the investor that you have to sell his goods in Constantinople you can go from Venice with his wheat (let's say), sell the wheat in Otrante in exchange for some northern wood ; then arrive in Malta when you trade the wood for something else etc. Then when you arrive in Constantinople, who knows what can be in your ship ? As the travels were long, merchants would often change their destinations if they hear that they can sell the same merchandises at a higher price in another place (and it is not that far from where they are).

  1. The amount of money is subjective because everybody can sign on a Colleganza. As a merchant you could accept a big shipment of that Tuscany's wood which sells at high prices on the other side of the sea and get a lot of money from it ; but you also could accept a really small shipment from a artisan who's only trying to make a small return on investment or is trying his luck overseas because he can't make much more trading in Venice.

Often people would pass multiples Colleganza at the same time so their goods wouldn't all be in the same ship, offering more opportunities to make profit.

And as i'm not a Venitian expert i don't know about the money used and how much it was valued. The thing i can say however is, as Venice, Genova, Pisa, had their funduks in every big city around the sea you would find people from your republic and it would make things easier when you arrive in a foreign country.

4&5) Nothing happens to you because you're don't have any responsability about the capital while the Colleganza is active. You have to do your best, but the investor can't sue you. Same thing with pirates. Remember that you split on the profit and not on the money total ! So if there is no profit, you don't make no money and you may be broke but you don't have to repay no one.

  1. In every city where you can trade you have to register at the customs upon arriving, then you can't really move in the city as you want. In peace treaties between Pisa and the Hafsides in Tunis we see that they can go in only five harbour of the kingdom, and can't go past their funduk (located close to the harbour usually). In this funduk your nation is represented by a consul, who's reponsible for the actions of all Venetians in the city. So people would know that you're here, and you can't trade without registering so, except if you have a connection with someone and trade by the black market, it would be very difficult for you to run with the money. And you could not go back to your hometown or anywhere a Venetian consul is because you would be arrested, and people can be sent tracking you if you took money from the state or from a big family.

In 1200, multiple Pisans merchants leave Tunis without paying their debts to local merchants because they're fearing repression following attacks by Pisans pirates. The state then sends letters to both officials and unofficials in Pisa to call the merchants to come back and pay they debts. They continue sending letters for two years because they don't receive any answer.

And you could find a place to live with the money i'm sure, but i can't expand on that because my knowledge is limited on the subject.

  1. As 4&5 you don't have to repay people, so while it affects your wallet you don't have to repay people, it was only a bad Colleganza. Plus keep in mind that 1yr+ travel times are something common on the medieval Mediterranean. And i don't think you would stay more than one season in a place anyway because you would try to make some money and except if you're on a mission to buy something precise there is always a window of opportunity that makes you move.

And you don't take the sea in the middle of autumn, unless you're the most crazy adventurer of the medieval world. You take the sea between march and october, no more.

  1. Very interesting question, i'll look up for that !

Some books about it (some are french, i'm translating the titles) :

(ar/it) AMARI Michele ; I diplomi arabi del'Archivio Fiorentino

(fr) BALARD Michel ; The Mediterranean Sea on medieval times : the men and the sea

(fr) BEN ALI Fekar ; The Commenda (Qîrad) in the muslim law

(en) BRUCE Travis ; Commercial conflict resolution across the religious divide in the thirteenth-century Mediterranean in Mediterranean Historical Review n°30

(it) TANGHERONI Marco ; Commercio e navigazione nel Medioevo

(en/fr) VALERIAN Dominique ; Latin merchants in muslims mediterranean harbours : a minority confined in communautary spaces ? in Revue des Mondes Musulmans et de la Méditerranée

Bruce's and Valerian's Academia pages are frequently updated with their new articles.

I wrote this in a hurry i didn't have any book with me but i hope i could be helpful (and sorry bout that bad english of mine)