"A SEMINAL WORK ON THE PRACTICE OF BANKING" (PALUMBO-SIDOLI)
4to (210x156 mm). [8], 82 [i.e. 80] pp. Collation: ¶4 A-K4. With the printer's device on the title page. Woodcut decorative initials. Roman and italic type. Issue A with the omission in pagination of pp. 65/66. Modern stiff vellum with gilt title on the front panel within a gilt frame. Two tiny holes repaired on the title page not affecting the text. A good copy.
Rare original and most complete edition, dedicated to Ivan Fernandez de Velasco, governor of the State of Milan. This is one of the earliest printed treatises on in-house banking procedures (cf. E.L. Jäger, Die ältesten Banken und der Ursprung des Wechsels, Stuttgart, 1879, pp. 48-64).
Zerbi, a Milanese business man and an expert in public and private financial matters, proposed during his stay at the Spanish court to king Philip II the establishment of a public bank in Madrid modelled on the Banco di San Giorgio of Genoa. But his project did not find a fertile soil in Spain. Back in Milan he presented his plans to the city of Milan and obtained in 1593 the concession for the establishment of the Banco di Sant'Ambrosio.
In the same year he published a first draft of his innovative ideas in the Dialogo del Banco di S. Ambrosio and in the following year a treatise on bills of exchange with the title De grossi interessi dei cambi tra la R. Ducal Camera, la Città di Milano e i negozianti. The expected success of the Banco di S. Ambrosio, however, failed to appear (according to Zerbi because of the only partial realization of his plan). This induced him to publish Del Banco di S. Ambrosio proposto all incita città di Milano in two books, which can be seen as a first statement of his activities and new projects, which was expanded into its definitive version in four books in the present Discorso, in which he solicited the city authorities to concede to the Banco the right to issue shares and thus to stimulate more citizens to invest their money in the Banco. The statues of the Banco di S. Ambrosio date from 1601 and its activities are traceable until the beginning of the nineteenth century. The Banco was probably the second public bank to be established following the Banco di Rialto in Venice (founded between 1584 and 1587) and its early activities are generally considered to be the first important steps toward modern banking (cf. A. Cova, Il Banco di Sant'Ambrogio nell'economia milanese del XVII e XVIII secolo, Milan, 1972, pp. 23-41).
Zerbi had the important position of "ragionato generale" in the bank, and his duties were among others to establish the amount of money disposable for investments, to calculate the profits and distribute them among the depositors and to control the book-keeping.
The four parts of the Dialogo are written in form of a dialogue between Zerbi himself and Francesco Negri, his father-in-law (seen as future client of the bank). In the first dialogue (or day), the author explains the reasons for the creation of the Banco and its practical benefits. In particular, he explains the economic advantages of the cartulario, an official register book in which payments made by citizens to the Banco were recorded. In modern terms, registering with the cartulario is like opening a checking account, which does not pay interest on the capital but allows the holder to pay by means of a poliza, a sort of cheque to bearer. The advantage for the city of Milan is that, since most payments between citizens are made this way, the bank's capital never leaves its coffers and can be used for public works.
On the second day, Zerbi discusses the advantages of the luoghi, i.e. the shares that the citizens can buy in quantities and at prices determined by the bank, and which allow them to collect, on a quarterly basis, half of the interest that the city of Milan pays to the bank on the capital lent. The other half of the interest is reserved for the payment of the bank's employees. A special type of luogo is the multiplo, which has a term of five years and has the advantage that the interest earned is added to the initial capital. With regard to the legal nature of this type of participation, it is made clear that the relationship between the subscribers and the Banco is that of a corporation or, as it was called at the time, a compagnia.
The third part is devoted to the bills of exchange and the economic benefits that they bring to the city of Milan. The Banco finances the city both by concluding bills of exchange contracts and by purchasing municipal revenues. A large part of the dialogue is also devoted to dispelling any doubts about the legitimacy of the exchanges offered by the bank, stressing the complete absence of the speculative attitude typical of private lenders. Finally, the fourth dialogue is devoted to the composition, minting, value and exchange of coins (cf. C. Beretta, Un fervente propagatore dei principii della banca moderna vissuto a Milano nel secolo XVI, Milan, 1924, passim).
"The only edition of a work of the greatest importance in the history of Italian Renaissance finance and the development of public banking. The book appears at the heart of an expansion phase of manufacturing and trading in Milan. New credit tools and new forms of organized lending were fostering strong economic growth starting from approx. 1570, giving rise to the development of wealth as well as triggering new political and social dynamics. The expansion cycle was supply-led as it emerged from a reform of the financial system. Trading of merchandise had developed and accumulation of capital from private, wealthy families was seeking investment opportunities. Throughout Northern Italy, professional moneylenders, brokers as well as new credit institutions -Monti and public banks such as Banco San Giorgio in Genoa and Banco di Rialto in Venice- were channelling resources into new productive loans in a more systematic and specialized fashion. Milan was not marginal to the trend and the new Banco di S. Ambrogio, originally founded in 1447, played a relevant role in the city's economic rise at the end of the 16th century. The reformer of the bank, or the author of the present treatise, Giovanni Antonio Zerbi (1562-1601), was a leading merchant from Milan and a great expert in public and private finance. As he reports in the introduction of the Discorso, he had studied the operations of foreign and Italian banchi and monti -above all the Casa di San Giorgio founded in 1408 and administered by the Genoese republic- and had already advised Filippo Il of Spain to start up a similar institution in Madrid to finance public spending. Unheeded, in 1593 he published in Milan -then a territory of the Spanish crown governed by Juan Fernandez Velasco- his recommendations in a short work titled Dialogo intorno al banco de S. Ambrosio, where he outlined his vision on the organization and operating principles of a modern bank. The work was also a defense of his project against the advocacy efforts of his critics. Zerbi's project encountered the favour of the authorities and of the Governor -dedicatee of the work- and the reformed bank started its new course on the day before Christmas of the same year executing transfer entries, or 'cartulario'. Only four years later, in 1597, the Banco di S. Ambrogio was able to expand its business into money lending to the community, acquiring bills of exchange and collecting fiscal revenues, hence positioning itself as the emerging institution in the Milanese world of finance. Almost one century after Busti's defense of Monti di Pietà, the social and theological debate over the ethical use of credit had made a major leap, fostered by the growing fiscal need of States and communities. The assimilation of fiscal revenues to the benefits of property, in fact, had paved the way to public interest loans, while canon law was acknowledging the benefit of the new institutions. Although money lending exercised by Jews remained highly controversial -actually, the publication of Pio V's bull of banishment Hebraeorum Gens (1569) as well as the bull In eam pro nostro against exchanges (1571) played an important role in shifting financial powers-, Catholic bankers were conceptually legitimizing money lending. Fundamental to the progress were contemporary contributions in favour of currency exchange (carrying an interest) published by Davanzati in 1588 or the efforts made by Scaccia or Della Torre to develop a doctrine on bills. Zerbi's Discorso is divided into four giornate (chapters) and is an agile dialogue between the author himself -the administrator of the banco- and his father in law -a possible future client- about the economic advantages of the operation and its credit tools. Details of the financial practices of the Banco cover a wide array of subjects with descriptions of transfer entries, deposits, interests, issuing of shares, association, exchange rates, coinage and monetary systems. The Banco di S. Ambrogio managed to substitute loans offered by private bankers until. approx. 1630" (M. Palumbo-E. Sidoli, eds., Books That Made Europe. Economic Governance and Democracy from 15th to 20th century, Brussels, 2016, p. 74).
Edit 16, CNC35889; Biblioteca Nazionale Braidense, Le edizioni del XVI secolo, II: Le edizioni milanesi, Milan, 1981, no. 508; BMSTCItalian, p. 743; G. Bologna, ed., Le Cinquecentine della Biblioteca Trivulziana, I: Le edizioni milanesi, Milan, 1965, no. 508; L. Cossa, Saggi bibliografici di economia politica, Bologna, 1963, p. 31, no. 40; F. Predari, Bibliografia enciclopedica milanese, Milano, 1857, p. 606; R.H.I. Palgrave, Dictionary of political economy, London, 1913, III, p. 690.
