The money changer’s bench
One may wonder why the Museum of the National Bank of Belgium placed a wooden table right in the centre of the main exhibition hall where the history of money is told. The answer is quite simple, the bench belonged to a money changer. The owner of the bench did not only change money, as his profession might suggest, he also acted as a banker. Money changers found their way to the cities of the Low Countries in the Late Middle Ages. If you only think about the enormous variety of coins in circulation, it becomes quite obvious money changers played an important role in the economic life of a medieval citizen. You could find them in the neighbourhood of city gates, the market square or the townhall. Easy to find for foreign merchants and travellers who had to pay them a visit in order to change their money into local currency. Just as banks today, money changers received a commission on their transactions.
The money changer’s functions
On the one hand the money changer was a private businessman but on the other hand he also had a public function. Hence, he was closely controlled by the authorities. He actually had two main tasks: as a public officer he had to withdraw all forged and clipped coins and as a private businessman he was mainly involved in changing different coin types. The first task was particularly important to ensure a sound circulation of money. Only money changers had the right to buy abrased or debased coins at metal value. This coined metal was further sold to goldsmiths or mintmasters. To obtain a lucrative job as money changer was not an option for everybody, as one had to meet high requirements.
In spite of all control measures installed by the authorities, it will have occurred that money changers abused their specialized professional knowledge and the ignorance of their clients for their own benefit. Money changers were obliged to check and change the coins in front of their clients and to put the most recent coinage proclamation at their disposal. Governments usually tried to ban the circulation of foreign coins within their territory, or, if this was impossible, to exclude the worst and regulate the rate of exchange of the rest. Manuals and illustrated placards list the permitted coins, their appropriate weight and fineness and their official rates of exchange in local currency. Of coins that were not allowed to circulate only the weight and fineness were mentioned. If coins below standard were presented to the money changer, he had to cut them into pieces in front of his client. It is obvious the money changer had to work with rightly gauged weights and scales.
Italian financial jargon
From the 13th century Lombards, Italian bankers from Lombardy, exported their financial knowledge as well as their financial jargon to the Low Countries. A striking example is the word “banco” that made an international career. Banco referred initially to the bench or table money changers used for their business but is now internationally used to refer to an institution that deals in money and provides other financial services.
Security and safety measures are predominant today, but if we have a close look at the changer’s bench we realise there’s nothing new under the sun. To prevent robbery or clients prying about in the inner part of the bench, the tabletop is extendable. So, clients had to step backwards when the money changer wanted to open his banco to look for the correct change.
The 16th-century bench or table which can be seen in room 4 of the Museum contains six small drawers and a well protected safe hidden in a double bottom. When not in use the bench was locked up with a key. A money changer did not limit his activities to checking and changing coins. Reputed for his strict safety measures he also received deposits from clients who wanted to leave their coins in a well guarded bench. In exchange they received a handwritten certificate of deposit. Instead of retrieving money to pay a creditor, this certificate could be used as payment within a limited circle of acquaintances. This certificate does not yet have all the qualities of a banknote, but it is most certainly an early example of paper money. The collected deposits were gradually used to offer loans to interested merchants and thus money changers became bankers. It was most certainly a story of learning by trial and error. If the banker did not take a workable cash reserve into account and gave too many loans he could not repay the demands of his depositors and bankruptcy was looming up, much to the discontent of his clients.
Where does the word bankruptcy come from? To find the answer we have to turn back to the banco or the money changer’s table. If he granted too many loans according to his deposits, he was no longer allowed to practise his profession. In order to make clear to all (potential) clients the banker lost all credit his table was broken into pieces. Such a broken table is called “banco rotto” in Italian, hence the English bankrupt.
The least we can say about this wooden bench is that it has a history. It served as a working tool for a money changer and a banker and it’s drawers contained numerous gold and silver coins. And as the table is still in perfect condition it’s owner was most probably a careful banker who was never confronted with bankruptcy.
- Huiskamp M. & de Graaf C., Gewogen of Bedrogen: het wegen van geld in de Nederlanden, Rijksmuseum Het Koninklijk Penningkabinet, Leiden, 1994.