Jakob Fugger (1459-1525) was one of Renaissance Europe's wealthiest citizens. His influence in royal circles continued to alter the continent's history for decades after his death. Though he was not the founder of the German mercantile and banking dynasty that bore his name, Fugger enriched it exponentially by entering into lucrative financial contracts with the Holy Roman Empire that gave him landholdings as well as profitable concessions in mining and trade.

At the time of Fugger's birth on March 6, 1459, his family was already one of the most prominent in Augsburg, Bavaria's leading city before its eclipse by Munich. Fugger's grandfather Hans had relocated from Swabia around 1367; he married well and rose to prominence in the city's weavers' guild. His textile and import business grew in profit, and established connections in Venice. Hans's two sons, Andreas and Jakob I, continued the business until disagreements forced dissolution of the partnership in 1454. Andreas's branch of the family was known as the Fugger vom Reh, or "Fugger of the Doe," because of the deer on their coat of arms. It declined considerably in stature after the business declared bankruptcy in 1499. Jakob I was more prudent with his assets, and this branch was eventually granted its own crest, a shield with a lily on it that earned them the designation "Fugger von der Gilgen."

In 1441, Jakob I married the daughter of the master of the Augsburg Mint. The third of their seven sons was Jakob II. He and another brother, Markus, were expected to enter the priesthood, but the death of their father in 1469, when Fugger was ten, altered this destiny. His mother took over the business until three other surviving sons came of age. The trading and import firm of Ulrich Fugger and Brothers, as it became known, continued to grow, but when one of the trio died in 1473, the fourteen-year-old Fugger was told to abandon his plans for the priesthood and enter the family firm. He was sent to Venice, where his brothers kept a warehouse and office in the headquarters of the Fondaco dei Tedeschi (German Guild), and studied bookkeeping there with a decided zeal. At the time, the practice of double-entry bookkeeping had recently been systematized, and Fugger began looking into the various family enterprises to determine whether or not they were profitable according to this new method of listing assets and liabilities.

Profited from Tirolean Mines

When he completed his studies around 1485, Fugger was given control of the family business interests in Innsbruck, Austria. The mountain region was booming with the discoveries of large stores of mineral wealth. In 1487 Fugger joined with a businessman from Genoa in a loan made to the rich but profligate Archduke Sigismund of Tirol. It was Fugger's first transaction with the Hapsburg dynasty, whose talent for squandering its vast resources brought both its own demise and the rise of merchant empires like Fugger's. Fugger's firm lent the Archduke 23,000 florins. The collateral for the loan was a temporary mortgage on some profitable silver mines in the region, whose extracts were customarily turned over in their entirety to Sigismund. Fugger and his brothers made an even larger loan to the Archduke the next year, and continued to receive the extracts for several more years.

The original business of Fugger's firm, which imported raw cotton from Mediterranean ports and carried it to Augsburg and other northern weaving centers by mule, still existed. However, it expanded to include silks, herbs, rare foods, and even jewels; it also controlled much of Europe's pepper market for decades. Under Fugger's savvy management, the firm ventured into copper mining in Hungary, and acquired a fleet of ships that sent their wares to Antwerp and ports in the Netherlands. Fugger's fortunes increased when the troubled Archduke Sigismund gave his dukedom over to another Hapsburg, the Holy Roman Emperor, Maximilian I. But the emperor was also a notoriously poor manager of money, and soon turned to Fugger for help. The first loan was made in 1495 to repay an army that the emperor had hired to fight one of the battles in his protracted conflict with France and Italy. This and other loans were secured with concessions for mining in Silesia, now present-day south Poland and Slovakia. Here Fugger controlled vast stores of copper, and the firm enjoyed a lucrative monopoly on the metal for several years. In its day, Fugger's enterprise--centered around present-day Banska Bystrica-was the world's largest mining operation.

Became Papal Agent for Germany

With its extensive internal courier service between ports in Italy, Augsburg, and mining districts in Eastern Europe, Fugger's firm was in an ideal position to collect payments due to the church in Rome from Germany and more remote outposts of Christianity. At the time, banking in places like Scandinavia and Poland was barely existent, and sending a financial transaction to Rome could take as long as six months. The Fugger business issued letters of credit that could be carried by papal agents and exchanged from one branch office to another. This also eliminated the dangerous practice of carrying large amounts of coinage.

By 1510, the two other Fugger brothers in partnership had died. Fugger took his four nephews-Hieronymus, Ulrich, Raimund, and Anton--into the firm, which was then renamed Jakob Fugger and Nephews. By this point Fugger was inextricably involved in the finances of the Holy Roman Empire through a number of arrangements with Maximilian, who came to view Fugger's wealth as his own personal treasury. In return, Fugger was granted landholdings, a title of nobility in 1511, and further rights as a count in 1514. A few years later, he was forced to bribe several electors-the princely rulers of various parts of the empire-in order to ensure the succession of Maximilian's grandson, Charles V, to the throne. But with the accession of Charles as Holy Roman Emperor, a deal was struck. The bribes would be repaid to the Fugger firm through an arrangement that diverted revenues due the Spanish crown, also a Hapsburg possession, from three knightly orders in Spain as well as mining ventures in mercury and silver. These were known as the leases of Maestrazgo. A Fugger representative was installed at the Spanish court to oversee the business there.

The First Office Memo

As the Fugger wealth grew, so did its list of critics. Nurnberg authorities took Fugger to court in the 1520s on charges of operating a monopoly on copper; other sharp words came from German humanist and reformer Ulrich von Hutten, a satirist and supporter of Martin Luther. Fugger was forced to hire an early version of the lobbyist/public-relations director in the form of Konrad Peutlinger, a lawyer, theologian, and humanist. Peutlinger served as chief advisor to Fugger and drafted a number of trade laws for the Holy Roman Empire, which Maximilian then signed. A problem of adherence to Christian doctrine also plagued Fugger's conscience: technically, Christians had been prohibited from charging interest, which was known as the sin of usury. Loans were usually contracted with an additional payment to be made for "trouble, danger, and expense" that circumvented the prohibition on interest; overcharging or allowing a share in profits was another common evasion of the church law. Fugger was one of several merchants of the era who pleaded with Rome to rescind the ban.

Fugger was also a prescient executive. He launched the Fugger Newsletters, considered the first business communications in history. Company correspondents from across Europe wrote of local news and developments that might affect trade and commerce; they chronicled the decline of the Hapsburg fortunes and the abuses of the Spanish Inquisition. Historians view theses daily briefs, usually written in Italian-the language of commerce at the time-as the forerunner of the popular press.

Cynicism Incited Genuine Dissent

In the last five years of his life, Fugger, now known as der Reiche, or "the Rich," came to play an increasingly important role in the conflict between church and state that would soon engulf the continent in carnage. The Fugger firm's role as the papal agent in Germany expanded with Pope Leo X's announcement, in 1517, of the sale of indulgences, the proceeds of which would be used to refurbish St. Peter's Cathedral in Rome. Indulgences were pieces of paper absolving the bearer of various sins. Johann Tetzel, a priest known as the Pardoner, began giving sermons in Germany and urged listeners to purchase their salvation and help the church at the same time. A deal was made whereby the Fugger banks, with branches across the Continent, would collect these revenues for a lucrative share. A Fugger agent who accompanied Tetzel held the key to the indulgence chest. When it was full, it was opened by an officer of the company, who them remitted the amount to the Fugger office in Leipzig, where half remained.

Some buyers of these indulgences questioned their validity, and brought them to Martin Luther, a theologian at the University of Wittenberg. He refused to authenticate them, which prompted Tetzel to object. In response, Luther composed his historic "Ninety-Five Theses" and nailed this document of dissent to the door of the Wittenberg cathedral--an act that launched the Protestant Reformation. Luther also voiced objections to Fugger and his banking deals, and mentioned his name specifically in his 1520 tract An Open Letter to The Christian Nobility of the German Nation Concerning the Reform of the Christian Estate. Excommunicated in 1521, Luther was taken in by the elector of Saxony, which caused a split in the Holy Roman Empire. Charles V then declared war on Luther and Protestantism. Fugger lent Charles funds to finance armies in this battle.

Patron of Augsburg

The great German Renaissance painter, Albrecht Durer, immortalized Fugger in a 1520 portrait that renders Fugger's taciturn personality and firm, businesslike attitude quite decisively. In his lifetime, Fugger was the great patron of Augsburg. He built several edifices in his city, including churches, and founded the Fuggerei, an almshouse originally intended to serve as a retirement home for his aged servants. Fifty cottages, designed to hold two families each, were built outside of Augsburg. The Fuggerei are considered the world's first social settlement, and survived into the twenty-first century.

Fugger died on December 30, 1525, in Augsburg. His worth was estimated at $75 million, but he left no direct heirs. The company assets were bequeathed to nephew Anton Fugger, under whom the firm remained profitable for several decades. It played a vital role in financing the Holy Roman Empire's battle against Protestantism, and ventured into trade with Spain's South American holdings as well as the slave trade that ran from Africa to the New World. But the Spanish Empire became one of its largest creditors. When King Phillip II declared Spain bankrupt in 1607, the Fugger firm foundered. It was entirely liquidated by 1640. Three aristocratic branches of the family survive: the Fugger-Kirchbergs of Oberkirchberg, the Fugger-Glotts of Kirchheim, and the Fugger-Babenhausens. Fugger's lavish private chapel in Augsburg remains. Above the crypt his epitaph states (according to his wishes) that the deceased was "second to none in the acquisition of extraordinary wealth."

Further Reading

• Crossen, Cynthia, The Rich and How They Got That Way, Crown Business, 2000.
• Ehrenberg, Richard, Capital and Finance in the Age of the Renaissance: A Study of the Fuggers and Their Connections, translated by H. M. Lucas, A. M. Kelley, 1963.