50 ITALY - CREDIT 



The luoghi di Monte given to the depositors undoubtedly constituted 

 a land security of the first value, so that the Monte dei Paschi appears to 

 have been really the first land credit institute recorded in history. 



§ 2. Analogy between the monte dei paschi 



AND THE SILESIAN LANDSCHAFT FOUNDED IN 1 769. 



About a century and a half later, to be exact in 1767, the merchant 

 Biiring presented a proposal to Cramer, Minister of Frederic II of Prussia, 

 for the formation of an association among the noble landlords of Silesia, 

 offering a collective mortgage on all the land of its members to the capitahsts 

 of Breslau and binding itself to provide every landowner, on his request, 

 with money up to the amount of the value of half his property by means 

 of the issue of land bonds, called Pfandebriefe. 



Historians of banking institutions agree in tracing the origin of the 

 land credit system to the Silesian Landschaft, founded at Breslau in 1769, 

 in accordance with Biiring's proposal. But it is easy to find many ana- 

 logies between the Prussian Landschaft and our Monte dei Paschi. 



Frederick of Prussia endowed his institution with 300,000 thalers, equal 

 to 1,126,000 frs.; Ferdinand II of Tuscany gave security of 200,000 scudi, 

 equal to 1,176,000 frs. The Breslau Institute was in fact an association 

 of Silesian landowners, the Monte de' Paschi, became, by virtue of the se- 

 curity demanded by the Grand Duke, substantially an association of Sie- 

 nese citizens. Both institutes acted as intermediaries between lenders 

 and borrowers. The Landschaft issued land bonds of a value not exceeding 

 1,000 thalers, nor less than 25 thalers; our Institute divided its nominal 

 capital in luoghi di Monte of a hundred scudi each, of which portions of not 

 less than 25 scudi each might be sold ; both the Silesian land bonds and 

 the luoghi di Monte bore half yearly interest; but, unlike the former, which 

 could be freely negotiated, the luoghi di Monti orAy gave right to interest 

 and were not transferable. It is further to be noted that while the debt- 

 ors of the Prussian association might or might not return the capital 

 lent, as they pleased, provided they paid their interest regularly, the 

 debtors of the Monte, according to the rules of the year 1624, had to 

 pay off their debt immediately at the end of the 3^ear, though they 

 might obtain a delay, which in no case might exceed five j'ears, with 

 fa .-ilitations for payment in instalments (i). 



In the present fever of historical research and exegetical analysis, it 

 has seemed to us not inopportune to show the points of contact and the 

 resemblances bet^veen our glorious institute and the Geiman land credit 



(i) These analogies and resemblances were pointed out for the first time in the clear re- 

 port of a Sienese Municipal Commission charged to present concrete proposals for the reform 

 of the Monte de' Paschi ; cf. the work, " SM/nc^-fimawew/o d«/ monti riuniti diSiena," Siena, 

 Sordomuti Press, 1862, pp. 5-6. 



