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Spotlight on Historical Collections

Yale Finance Scholar Finds Rich Rewards in Baker

Published: 04/15/2006

By the eighteenth and nineteenth centuries, transatlantic payments between the new world and Europe were typical—yet fraught with risk. "When someone in America wanted to make a payment to somebody in England, Spain, or France in the eighteenth century," says professor William Goetzmann, "they used a bill of exchange that was sent overseas and said, 'Pay to this person this amount from my account.' The only problem was that in these distances across the ocean sometimes boats didn't make it and the bill of exchange sank with the boat."

To avoid delay, he says, merchants dispatched multiple copies of the checks. The first one that arrived would be paid whether it was the first or fourth copy; all subsequent drafts were cancelled.

Goetzmann, a visiting professor from Yale who is fascinated by financial instruments as windows on technology and innovation, is using Baker Library's Historical Collections to examine transatlantic commerce and other puzzles in the history of finance from ancient times to the present. His tools: papyri dating to Hellenistic Egypt (available online through Oxyrhynchus Online), huge leather-bound volumes, and reams of documents such as financial securities.

"I'm also interested in Italian finance and the development of banking institutions in Renaissance Italy," says Goetzmann. Using heavy ledgers in Historical Collections, he's studying Baker Library's record of all financial transactions of a charitable fund, the Monte di Pieta, that existed for hundreds of years on the east coast of Italy. "These banks were created in many Italian cities as a Christian response to Jewish lending," he says.

Ledgers for the Monte di Pieta contain everything from the records of tenant farmers collecting wheat and distributing agricultural products to transactions indicating its role as a veritable pawn shop in an era of banking that relied on secured lending with objects that were portable. The Monte di Pieta functioned as a banker for the local municipal authority, and also sold annuities that appear similar to modern life insurance. "Someone would give money and say, 'My daughter is my beneficiary and I want you to pay out a certain amount of money for the rest of her life.'"

By using the leather volumes, Goetzmann says, "you actually get a very tactile sense of financial life. You can really get a sense of the role of a financial institution in an Italian city."

Contact: Historical Collections

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