"Trade can scarcely if ever be pleasing to God".
The influence of the papacy on medieval trade was subtle in some regions and more marked in others. The practice of trade was originally frowned upon by the church but as commerce advanced, doctrinal legislation had to become more lenient.
One of the fundamental institutions of the commercial revolution was credit , and some of the strongest legislation provided by canon law was about the practice of usury . No gain was to be made on any loan. However this view changed and diversified during the medieval period as canons drew a distinction between business and distress loans. Thus allowing money changers to develop banking further.
As can be imagined the papal states were very rich. This can be seen by the papal contributions to the crusades, for example in 1462 in the crusades against the Turks. The papacy and Venice contributed 100,000 ducats, Naples contributed 80,000, Florence 50,000 and Sienna 15,000. The revenue was derived from fees, legal expenses, but also from papal taxation. Revenue was collected from each metropolitan province of the church. These revenues increased with the growth of masses and other improved conditions.
A papal collector was appointed to whom the money was paid. These monies either went straight to the papal bankers. These were the Bardi in the fourteenth century, then the Alberti and lastly the medici. As N.J.G. pounds states, this transmission of papal taxes to Rome was " An obligation that caused them no little trouble and inconvenience because of the unbalanced nature of the medieval trade between Italy and North Western Europe". Here the influence of the papacy within a certain trade becomes even more apparent. The wool fleece is the chief commodity and the links are seen in different ways.
The Italian bankers serving as the collectors of papal taxation, deposited vast amounts in banks to be paid out when the Pope demanded. In the mean time it could be used by the bankers at will. By the end of the twelfth century templars were serving as bankers to the kings of England and France. Lending money they were in the process of transferring to Rome. For example England saw the potential when Henry III contended for the crown of Sicily using Italian loans. Likewise Edward I borrowed money for the crusades and afterwards, when on the throne he still used the banks. The link with the wool trade came when the Italians came to collect the debts. Unable to take the money out of England, moey was converted into wool fleece. Wool was the best English commodity and one of the best in Europe. Sharing the title with Spain. Italian wool was of very poor quality.
The main wool producers were the monastic houses. So money stayed within the church. The wool fleece was either taken straight to Florence or shipped to Flanders where it was made into coarse Flemish cloth, to be reprocessed once it was brought to Italy. Thus making the papacy a 'player' in one of the main trades of medieval Europe.
The papal influence therefore had its foundations in papal taxation and the need to change the currency of the tithe into ducats.
The movement of papal taxation and the contributions of the papacy to the wool trade created subtle influences on certain figures, mainly money men. For example Jacob Frugger, who collected papal tax in Poland and Hungary. For Frugger the profits arrived through the favourable exchange rates between local currency and the ducats paid out in Rome. Gies argues that the papacy helped create the first capitalist. The connections with the wool trade, the subsequent strength of the market and the location of key transaction towns are demonstrated by the personal investment in the trade by the bankers. For example Giovanni di Bicci de Medici, in 1402 he opened a wool shop in Florence and by 1408 he had opened a second.
Therefore it could be suggested that ultimately the papacy had a crucial role in southern trade, these influences being most apparent in the wool trade and banking circles. The papacy was a money man .