The highly profitable and risk-free nature of this arrangement led the Fuggers to quickly develop it elsewhere. This arrangement meant that if Siegmund was unable to meet his repayments, the Fuggers would simply get paid in bullion. More practically, the loan was secured with a mortgage on the archduke’s prize Schwaz silver mines. The loan was significant in establishing a binding relationship with powerful people. The man responsible for this diversification of the family business was Jakob Fugger and the first transaction was a loan of 23,627 florins to Siegmund, Archduke of Tyrol, in 1487. The family’s success during the latter years of the 15th century brought them lucrative business with the Hapsburgs, the Austro-Hungarian family whose lands extended across Europe and who supplied a succession of Holy Roman Emperors for four centuries.
It was a move that brought a corresponding rise to power and notoriety. Originally cloth merchants based in Augsburg, Germany, the Fuggers moved on from dressing aristocratic weddings to lining aristocratic pockets. If Luther’s words provided the spark for the Reformation, it was the Fuggers who provided much of the fuel. By October 1517, the extraordinary reach and power of the Fugger banking family was threatening not only the integrity of religion, but the very foundations of European society. But he also had a very particular organisation in his sights.
When Martin Luther published his 95 theses 500 years ago this month, so the story goes, his general target was the corruption of the church.
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