Francesca Odella and Cinzia Lorandini

Time and Place: Thursday, 01.07., 10:00–10:20, Room 2
Session: Economic Transactions

In the last decades, a burgeoning literature has investigated the functioning of early modern credit  markets. Scholars have provided new evidence on the embeddedness of credit relations within the  broader social, cultural and institutional milieu, showing that lenders are not profit-maximising  rational actors who merely pursue an economic interest (Muldrew 1998; Haggerty 2012; Fontaine  2014). Another strand of research has highlighted the peculiar function of notaries in contributing  to the expansion of credit markets by matching demand and supply of credit (Hoffman et al. 2000;  Clemens and Reupke 2009). Against this backdrop, we use historical network analysis to  investigate both aspects and get new insights into the social dimension of credit in the early  modern period. We analyze a dataset drawn from the private archives of a family business – the  Salvadori firm of Trento – that achieved considerable economic and social advancement in the  Prince-Bishopric of Trento in the eighteenth century (Lorandini 2015). Similarly to many other  merchants active in long-distance trade, the Salvadoris took advantage of their excess liquidity to  engage in lending activities, thus meeting the financial needs of different types of borrowers,  among them merchants, artisans, professionals, clergymen, and patricians. 

In an attempt to test some hypotheses concerning the social dimension of credit and the role of  notaries we apply Social Network Analysis not merely to visualize the Salvadoris’ credit network, but rather to formalize their social and economic logic of action/business strategy (Erickson 1997;  Brandes at al. 2012; Morrisey 2015). Specifically, we collect and merge cross-information from  several business ledgers, to re-construct the credit history of the family from the 1740s through  the 1760s, which allow us establishing the type of relationship between the lenders, the  borrowers and other subjects involved (guarantors, commercial agents and notaries). The analysis  was carried one along two viewpoints: at first, we explore the characteristics of the whole network (152 financial operation involving 208 different subjects and 329 edges) in relation to the type of subjects (borrowers, guarantor, others involved in the financial transaction). Our focus was on the  borrowers’ social proximity – in terms of kinship, social class and business relationships – to the  lender (the Salvadori firm), and we investigate whether this aspect influenced the features of  credit transactions (e.g. interest rate, size and length of loans, type of credit instrument used).

The second purpose of the study was to investigate the role of notaries as financial intermediaries  by analysing their position within the family’s credit network. A comparative analysis was  performed on two sub-networks (one for standard lending contracts and one for those mediated  by the notaries) to explore the structure of each subnetwork and its compositional elements (dyadic/triadic sets). The investigation confirms that credit networks created by notarized and  non-notarized loans are different in terms of composition (type of subjects) and network structure (dyadic/triadic relations and chains). The results support the contention that notaries’ connections  played a bridging role when social distance between actors was larger, facilitating access to and  circulation of credit. This conclusion holds however mostly for credit relations between the  merchant family and borrowers of lower social status, and less for credit relationships with the  upper echelons of the local milieu, such as aristocrats and patricians. While in the first cases, the  recourse to notaries responded to the need to enhance enforceability of the contract, in the latter  cases political motivations for granting the loans might prevail over the interest of obtaining  strong guarantees for capital refunding. The analysis of the evolution of the credit network in the  observed period confirms thus the hypothesis about the bridging role of notaries in paving the  way for the access of new classes to rising credit markets, and assesses the embeddedness of  lending relations in the social and political context of an early modern urban economy.  

Brandes, U., J. Pfeffer, and I. Mergel 2012. Studying social networks: A guide to empirical research,  Frankfurt: CampusVerlag. 

Clemens, G.B., and D. Reupke 2009. ‘Der Notar als Broker: Das Management des privaten  Kreditmarktes’, Zeitschrift für Verbraucher- und Privat-Insolvenzrecht 8, no. 12, pp. 16–22. Erickson, B. 1997. ‘Social Networks and History: a review essay’, Historical Methods 30, no. 3, pp.  149-157. 

Fontaine, L. 2014. The Moral Economy. Poverty, Credit, and Trust in Early Modern Europe,  Cambridge: Cambridge University Press. 

Hoffman, P.T., G. Postel-Vinay, and J-L. Rosenthal 2000. Priceless Markets. The Political Economy  of Credit in Paris, 1660-1870, Chicago: University of Chicago Press. Lorandini, C. 2015. ‘Looking  beyond the Buddenbrooks syndrome: The Salvadori Firm of Trento, 1660s-1880s’, Business  History, 57 (2015), no. 7, pp. 1005-1019. 

Morrissey, R.M. 2015. ‘Archives of Connections’, Historical Methods 48, no. 3, pp. 67-79. Muldrew, C. 1998. The Economy of Obligation. The Culture of Credit and Social Relations in Early  Modern England, Basingstoke-London: Macmillan.