Eastern Business Practices and Medieval European Commerce

Author(s): Alfred E. Lieber

Source: The Economic History Review, New Series, Vol. 21, No. 2 (Aug., 1968), pp. 230-243
Published by: Wiley on behalf of the Economic History Society
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 Commerce'
EasternBusinessPracticesandMedievalEuropean
BY ALFRED E. LIEBER

tT HE merchants of Italy and other European countries obtained their first

education in the use of sophisticated business methods from their counter-
parts on the opposite side of the Mediterranean; most of whom were
Muslims, although a few were Jews or Christians. One obvious result is the large
number of words of Eastern origin-mainly Aramaic, Arabic, or Persian-which
were introduced into the commercial terminology of medieval Europe. Some
examples of these terms (whose European usage was not necessarily identical
with their original connotation) are: douane, arsenal, magazine, traffic, tariff,
risk, fondaco, sensal, galega, aval, and maona.2From the seventh century A.D. on-
wards, the Arabs not only extended their military conquests but also succeeded
in developing long-distance trade and international commerce on a scale which
surpassed anything known before. A host of new institutions and instruments of
commerce therefore confronted the merchants of Venice, Gaeta, Amalfi, and
Bari when, in the eighth century, they once more ventured across the sea in
search of trade.
Conditions in the Islamic world of that time were extraordinarily favourable
to the rapid and unhindered growth of commerce. The fact that the merchant
republic of Mecca was the cradle of Islam pervaded all institutions and, from
the beginning, secured for the merchant a great deal of influence on the affairs
of state.3 Many learned men had, at some stage of their careers, earned a living
as merchants.4 Islam is perhaps the one great religion which affords the merchant
a highly honoured place in society, and even the theological terminology of the
Qur'Jncontains a number of words borrowed from the commercial usage of the
time.5
Among the Muslims, international trade was particularly stimulated by the
pilgrimage to the holy places in Arabia, on which a great body of men converged
each year from all over the world. Many of these pilgrims fulfilled their religious
obligations and at the same time marketed their local products along the route,
returning home with foreign goods on which they hoped to make a handsome
profit. Here was a unique opportunity for merchants from far-distant lands to
meet and exchange information. It not infrequently happened that a merchant,
tempted by the description of some place hitherto unknown to him, continued
on his journey after the pilgrimage was over; sometimes even settling down in
I Paper read at the Third International Economic History Conference, Munich, I 965.
2 Cf. F. Edler, Glossaryof MediaevalTermsof Business,Italian ser. I 200-I 6oo. The Mediaeval Academy
of America (Cambridge, Mass., I934), sub voce; and G. B. Pellegrini, 'L'elemento arabo nelle lingue
neolatine con particulate riguardo all' Italia', in 'L'Occidente e l'Islam nell' alto medioevo', Settimane
di StudiodelCentroItalianodi Studisull' Alto Medioevo,xii (Spoleto, I965), ii, 697-790, with notes on relevant
literature.
3 H. Lammens, La Mecquea la veillede l'Higire (Beirut, I 924).
4 G. Wiet, 'Les marchands d'epices sous les Sultans Mamlouks', Cahiersd'Histoired'EgPte, 7th ser.
(I955), p. I30, and n. 323 thereto on p. I46, with relevant references, especially from al Sakhawl,
Al Dau' al ldmi'(Cairo, I 353-5).
5 C. C. Torrey, The CommercialTechnicalTermsin theKoran(Leyden, I 892).

230

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 EASTERN BUSINESS 23I

the new country.' From there he would write to members of his family, or to
business friends, requesting them to supply him with merchandise for which he
had found a market; or he might ship home such goods as he felt could be sold
there at a profit.
Business was generally conducted through the medium of brokers or agents,
who were well versed in the trading usages of the place. It was essential to obtain
advice concerning the trustworthiness of local merchants, since sales were often
on credit, or goods were purchased for future delivery.2 These brokers sometimes
enjoyed a semi-official status. According to Muqadassi, writing in the tenth cen-
tury:
In Egypt imposts are heavy, especially at Tinnis, Damietta, and the Nile bank.
Now, concerning Slzatawicloth, it is impossible for a Copt to weave any unless the
stamp of the sultan has been placed upon it. Nor can it be sold except through
the intermediary of brokerswho have been entrusted with this function and the
sultan's officer writes down what has been sold in his notebook.3
Ibn al Balkh!, the fourteenth-century Persian geographer, describes the handling
of cloth at Kaziran, in the province of Fars, in earlier times and tells how the
brokers also had to testify to the quality of the goods:
There is an inspector who oversees on behalf of the treasury and there are the
brokers who set a just price on the cloth, sealing the bales with a stamp before
they are delivered over to the foreign merchants. In time past it was all after this
wise. The brokers would make up the bales of the Kdziriin! cloth, the foreign
merchants would come and buy the bales as they stood thus made up, for they
placed reliance on the brokers, and in any city to which they were carried the
certificate of the Kdziruinlwas merely asked for and the bale would thus be sold
at a profit without being opened [for examination]. Thus it often happened that
a load of Kdziruinlbales would pass from hand to hand ten times over, unopened.4
The greatest contribution of the Muslim world to medieval economic life was
the development of commercial methods based on writing and recording. This
was made possible by the high degree of literacy of the Oriental merchant of that
time, which, in its turn, was encouraged by the fact that relatively cheap writing
1 A typical example is provided by the career of Abu Muhammad b. Mu'dwiya al Marwani, a direct
descendant of the first 'Umayyad Khalif of Spain. He studied hadithin Cordova, his native city, and in
295/908 left for Egypt to continue his studies there, finally making the pilgrimage to the holy places.
However, instead of returning to Spain, he continued his journey to Baghdad, Kfifa, Basra, and Ubulla,
and thence to India, earning his living as a merchant. He must have been quite successful, since he had
amassed a fortune of 30,ooo dindrswhen he finally decided to go home. He then lost all his property in a
shipwreck, and when he arrived in his native city, after an absence of thirty years, he took up teaching.
(Mus'ab al Zubayri, Kitdb Nasab Quraysh,ed. E. Levi-Provencal, Cairo, I953; E. Levi-Provencal, 'Le
Kitab Nasab Quraysh de Mus'ab al Zubayri', Arabica,I, I954, 92-5.)
2 Dimishq!, Kitdbal ishdraila mahdsinaltffdra(Cairo, I 3 I 8), p. 52; trans. H. Ritter, Ein ArabischesHand-
buchderHandelswissenschaft: Der Islam, VII (9 I 6), 70 f. M. Talbi, 'Les courtiers en vetements en Ifriqiyah
au IXe-Xe siecle d'apres les Masd'il al-samdsira d'al-Ibyani', Journal of theEconomicandSocialHistoryof
the Orient, v (I 962), I 60-94.
3 Muqaddasi, DescriptioImperiiMoslemici,ed. M. J. de Goeje, BGA, III, 2nd edn (Leyden I 906), 2 I 3;
trans. in R. B. Serjeant,-'Materials for a History of Islamic Textiles up to the Mongol Conquest', Ars
Islamica,XIII-XIV (1948), 95.
4 G. Le Strange, Descriptionof theProvinceof Fars in Persia at theBeginningof theFourteenthCentury,Royal
Asiatic Society Monographs, XIV (I 9 I 2), 56. For similar arrangements at the coral fisheries of Marsa al
Kharaz, see Ibn Hauqal, KitdbSaratal ArI, text, ed. J. H. Kramers, BGA, II, 2nd edn (Leyden, I 938),
75; trans, J. H. Kramers and G. Wiet (Paris, I964), p. 71.

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232 ALFRED E. LIEBER

materials had long been available in this part of the world. Egypt had papyrus,
and paper was made in Samarkand from the end of the eighth century. Slowly
the use and manufacture of paper spread westwards until, by the end of the
eleventh century, the papyrus industry was reduced to manufacturing rope, after
flourishing for 3,500 years.' The comparative literacy of the merchants, together
with the development of a law-merchant, meant that large-scale commercial
operations could now be conducted from the counting-house, whereas previously
the merchant had had to be constantly on the move. This change is clearly evident
from the Arabic papyri and papers and especially from the documents of the
Cairo Geniza, which date from the tenth to the thirteenth centuries.
The tenth-century Responsa,or legal opinions, of Sa'adia Gaon, the head of the
Jewish Academy at Sura, in Iraq, show how widespread and generally accepted
the habit of book-keeping had then become in that part of the world. The fact
that Sa'adia wrote his decisions in Arabic rather than Hebrew lends weight to
the assumption that his opinions were not based on the customs of the Jewish
community alone but reflected the spirit of the commercial world of his time.
One decision concerns a claim against the heirs of a merchant who had died.
The heirs produced his ledgers and accounts, which had been examined by re-
sponsible persons and found to be correct. They then demanded that the other
party produce their books, in order, as Sa'adia put it, to establish the truth "in
accordance with business practice in commercial intercourse".2 In another de-
cision, concerning a dispute between two men who had been partners over a
period of ten years, Sa'adia ruled that annual accounts had to be rendered of all
sales and purchases, profit and loss, and outstanding credits and liabilities.3
This ability of the Oriental merchants to read and write played a still more
important part in the development of superior methods of payment and of finan-
cing international trade. The simplest of these instruments of payment was known
as sakk in Arabic and cekin Persian.
The word sakk originally denoted an order or a document. One of the earliest
appearances of this term is in Ibn 'Abd al Hakam's book The Conquestof Egypt,
which was compiled in the ninth century but refers to events of the year 64I,
when vouchers were issued to the population of Medina for grain which was
shipped from Egypt.4 These vouchers were bought up and traded in by the
merchants instead of being redeemed by the recipients.5 In the ninth and, parti-
cularly, tenth centuries, payment by issue of a written order on a banker was a
1 Ya'qfibl, 'Kitdb al Bulddn', text, ed. M. J. de Goeje, BGA, vii (Leyden, I892), 338; trans. G. Wiet
(Cairo, I937), p. I95. Ibn Hauqal, op. cit. text pp. I22 f, trans. p. I2I.
2 'Sh'are Zedek', iv, 5, I3, p. 74b; trans. A. Kaminka, in J. Winter and A. Wunsche, Geschichteder
RabbinischenLiteraturwahrenddes Mittelaltersund ihrerNachblfitein der neuerenZeit, II (Trier, I894), 39 f.
J. Mann, 'The Responsa of the Babylonian Geonim as a Source of Jewish History', Jewish Quarterly
Review,n.s. x (I 9 I 9-20), 326.
3 E. E. Hildesheimer, Rekonstruction eines Responsumdes R. Saaqja Gaon zum jiudischenGesellschaftsrecht
(Frankfurt, I 926), pp. 5 I f.
4 Ibn 'Abd al Hakam, TheHistoryof theConquest of Egypt,NorthAfricaandSpain,knownas theFutz7hMisr,
ed. C. C. Torrey (New Haven, I 922), p. i66. For further refs. see A. Dietrich, 'Al Djar', Encyclopaedia
of Islam, 2nd edn, II, 454.
5Jacob mistook these vouchers for bills of exchange (G. Jacob, 'Die altesten Spuren des Wechsels',
Aiztteilungendes Seminars fur Orientalische Studien,Berlin, I 925, 280-I). This
Sprachen,xxviii, Westasiatische
led A. Steiger ('Aufmarschstrassen des morgenlandischen Sprachguiter', VoxRomanica,x, I948-9, 58 ff,
and Originand Spreadof OrientalWordsin EuropeanLanguages,New York, I963, pp. 68 ff) and 0. Spies

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 EASTERN BUSINESS 233
feature of everyday life, at least in the Eastern part of the Islamic world. For this
service the banker normally deducted one dirhamfor each ndr, a charge equi-
valent to 5 per cent or more.' In Baghdad the Khalif and his courtiers made use
of these orders for various purposes, such as bestowing gifts of money on their
minstrels; the terms ruq'a and kha~ttbeing used as well as sakk. However, even
these orders were not always honoured, and it is recorded that, in the tenth
century, the poet al Sill once requested the Khalif ar Rddi to pay him in hard
cash, and without the intermediary of a banker.2 According to Ndsir-i-Chosrau,
the Persian traveller, the merchants of eleventh-century Basra were not accus-
tomed to pay in cash. Every merchant kept an account with a banker or money-
changer, on which he issued payment-orders for his purchases in the bazaar.3
Ibn Hauqal, the famous tenth-century geographer, earned his livelihood by
trade in the course of his extensive travels. In North Africa he joined a caravan
of Iraqi merchants from Kfifa, Baghdad, and Basra with whom he visited Auda-
gusht in the western Sudan. Here he saw what he terms a sakk, for the amount
of 42,ooo dcndrs,which had been issued at Sijilmdsa, a town fifty-one days' jour-
ney to the north of Audagusht. In this case, the sakk had been confirmed by a
notary, presumably on account of the sum involved and of the distance between
the place of issue and the place of payment. This document appears in fact to
have been a sight-draft for which the Persian word suftaja was generally used.4
Firuzabadd, a fourteenth-century lexicographer, defines this term as follows, in
his Qdmfis:"Suftaja ... That he gives capital to somebody who has capital in the
land of the giver, who thus profits from the security of the way."'5
From the eighth century on, the suftaja as a draft, which was sometimes also a
true bill of exchange, came to play an ever more important part in economic life.
Business no longer had to be transacted only in cash, nor was there further need
for the risky and expensive transportation of large amounts of cash from place
to place. Moreover, the use of the suftaja does not appear to have been limited
to large-scale transactions. From the few Arabic papyri and papers which have
so far been edited, it is already clear that the suftaja was widely used in com-
mercial practice. A fragment of an Egyptian account-book dating from the be-
ginning of the tenth century contains entries relating to various bills of exchange
amounting to I 65 dcndrs,as against only I 6 dcndrsin cash.6
The 'Abbdsid financial administration was not slow in making full use of the
suftaja for transferring funds between the provincial treasuries and Baghdad. In

(Orientalische im Abendland,Braunschweig, I949, pp. 22 f) to quite unwarranted conclusions

Kultureinfluisse
regarding the connexion between sakk, bill of exchange, and cheque, and the Oriental roots of the last-
named; see below.
1 W. Fischel, Jews in theEconomicandPoliticalLife of MedievalIslam, Royal Asiatic Society Monographs,
XXII (I937), 2I.
2 A. Mez, Die RenaissancedesIsldms (Heidelberg, pp. 446 ff. As Sfill, Akhbdrar Rddf billdh wa'l-
I922),
Muttaqfbilldh;trans.M. Canard (Algiers, pt i, p. 8i.
I946-50),
3 SeferNameh,Relationdu Voyagede .AassiriKhosrau,annotated, trans. and publ. by C. Schefer (Paris,
i88i), p. 86.
4 Ibn Hauqal, op. cit. text pp.
6o, 99; trans. pp. 58, 97 f.
5 R. Grasshoff, Das Wechselrecht Studie uiberdie Herkunftdes Wechsels
der Araber.Eine rechtsvergleichende
(Berlin, I899), pp. I9, 8i.
6 A. Dietrich, 'Arabische Papyri aus der Hamburger Staats- und Universitatsbibliothek', Abhand-
XXII, 3 (Leipzig, I937), 36 if.
lungenfuirdie Kundedes Morgenlandes,

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234 ALFRED E. LIEBER

925 'Ali ben'Isd, the Inspector of Egypt and Syria, sent his chamberlain to
Baghdad carrying suftajas to the amount of I47,000 dindrs; in 928 the central
treasury received bills of exchange from the provincial treasuries at Ahwdz, Fars,
Kirman, and Isfahdn to the amount of goo,ooo dirhams;l and a few years later
the wazir Muhammad b. Muqla obtained 30,ooo dcndrsin suftqajsfrom the Ikh-
shid in Egypt.2
The suftaja was not always a sight-draft, and the services of a banker were
frequently necessary for its negotiation as a bill of exchange, especially if con-
version of currencies was involved. The central 'Abbdsid treasury, which was
always in pressing need of cash, especially at the beginning of each month when
it had to pay the troops, tried to exact advances from the bankers on the suftajas
it held, which had not yet matured. The important part played by bills in the
'Abbdsid finances at the end of the tenth century, when the economy was in a
precarious state, can be judged from the following extract from a contemporary
history:
Moreover, what glory is there in a bill drawn on a commercial house being ac-
cepted in enemies' country? If this is to be considered a source of pride, then the
merchants are more powerful than the viziersin East and West; as they draw bills
for vast sums on their correspondentsand they are taken more readily than [bills
for] tribute and land-tax.3
The use of bills of exchange to transfer large sums of money from place to place
was not limited to the Islamic parts of the East. In T'ang China an extensive
trade in tea developed between the south of the country and Ch'ang An, and
from their sales in the capital the tea merchants acquired large amounts of cash
which had to be transferred to the south. The provincial authorities were faced
with a similar problem, since they regularly had to convey tributes and gifts to
the imperial court. These transfer difficulties were solved for both parties by the
merchants depositing their money with "memorial-presenting courts", the name
given to the liaison offices maintained in the capital by the provincial authorities.
In return, the merchants were issued with vouchers, which promised them re-
imbursement in designated provinces. These vouchers became known as "flying
money". Such drafts were also used by other merchants outside the tea trade.
By the year 8i2 the system had been taken over by the central administration,
which reimbursed merchants in the provinces for funds they had lodged in the
capital. At first a charge of I0 per cent was levied for this service; this was, in
fact, considerably less than the cost of transporting large quantities of copper
coins. However, the government soon became so interested that the merchants
should make use of this system that they issued the drafts free of charge.
This transfer system was developed in China at a time when large numbers of
1 Miskawaihi, in The Eclipseof the 'AbbdsidCaliphate,ed. and trans. H. F. Amedroz and D. S. Margo-
liouth (Oxford, I920-I), text I, I46, i86 f; trans. iv, I63, 2I0 f. Fischel, Jews in theEconomicand Political
Life, p. I9.
2 Ibn Sa'id, Kitdbal Mughrib,ed. L. Taliquist (Leyden, I899), p. 32.
3 Amedroz and Margoliouth, op. cit. text iii, I 38 f; trans. VI, I43.
4 D. C. Twitchett, FinancialAdministration underthe T'ang Dynasty (Cambridge, I963), pp. 72 ff. Lien-
sheng Yang, Moneyand Creditin China: A ShortHistory (Cambridge, Mass., I952), pp. 5I ff. S. Baldzs,
'Beitrage zur Wirtschaftsgeschichte der T'ang-Zeit (6I8-906)', MSOS, Xxxv (I932), Ostasiatische
Studien,33 ff.

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 EASTERN BUSINESS 235

Muslim merchants were arriving there to trade. Thus it was possibly in China
that the Persians first became aware that the draft could be used for transferring
government funds.
The Chinese had a plentiful supply of paper and, having invented block-
printing, it was a logical step forward for them to issue paper money, which first
appeared at the end of the tenth century. Since paper money was the first ex-
ample of Chinese printing with which the European travellers came into contact,
it was minutely described by them; and the Muslim merchants trading in China
must have handled it from the time that it was issued.' Nevertheless, paper
money made no immediate impression outside China, and even the Muslim
merchants did not introduce it into their own domains. In I294 the Mongols
in Persia issued notes which were called by the Chinese term ch'ao and were
printed in Chinese and Arabic characters, but these had to be withdrawn as
fast as they appeared.2 It would seem that such a development could not take
root in the absence of a strong central government and healthy financial ad-
ministration.
For financing foreign trade the Muslim world either used partnerships-which
were often family affairs-or else the mudIraba, which was also known as the
qirad. The mu~d1raba, which has much in common with the commendaof medi-
eval Europe, was already a feature of the Meccan caravan trade in pre-Islamic
Arabia. This was a financial arrangement whereby the investor bore all the losses
of the venture, whilst the net profits were divided between the investor and the
agent in a prearranged proportion. The capital could be put up either in goods
or cash, and it was usual for a merchant to be entrusted with capital from several
investors on each journey.3 Jews living in Muslim lands clearly understood the
shortcomings of their own 'isqa, which resembled the Byzantine chreokoinonia
rather than the qirJd,in so far as it did not exempt the agent from responsibility
for loss of capital, except in case of shipwreck. The Jews therefore came to make
general use of the qiradin their business dealings. This fact was acknowledged by
the Jewish courts, which agreed to deal with disputes arising out of qirddagree-
ments; Moses Maimonides, in a responsum referring to such agreements as "the
qirddof the gentiles".4
Merchants also joined forces in order to obtain a hold on the market in some
commodity. Such were the Kdrimi, a group of merchants which dominated the
spice trade between Egypt and the East for nearly 300 years, from the middle of
1 Yang, op. cit. pp. 52 ff. T. F. Carter, TheInventionof Printingin Chinaandits SpreadWestward,2nd edn,
revised by L. C. Goodrich (New York, I955), pp. I03 ff. Marco Polo, The Descriptionof the World,ed.
and trans. A. C. Moule and P. Pelliot, I (I938), 238 ff. Pegolotti, La practicadella mercatura,ed. A. Evans
(Cambridge, Mass., I 936), pp. 2 I ff. Ibn Battfita, Travelsin Asia andAfrica, trans. and selected A. A. R.
Gibb (I929), p. 284.
2 Carter, op. cit. pp. I 70 ff. K. Jahn, 'Das iranische Papiergeld', ArchivOrientdlni,x (I938), 308-40.
3 Waqidi, Kitdbal Maghdzz, ed. M. Jones (i 966). Further references in Lammens, op. cit. pp. I 25 f.
S. D. Goitein, 'Commercial and Family Partnerships in the Countries of Mediaeval Islam', Islamic
Studies:Journalof theCentralInstituteof IslamicResearch,Karachi,iii (I964), 3I5-37. H. R. Idris, 'Commerce
maritime et Kirad en Berberie Orientale d'apres un recueil inedit des Fatwds medievales', JESHO,
IV (i96i), 225-39. D. Santillana, Istituzionidi dirittomusulmano malichita,conriguardoancheal sistemasciafiita
(Rome, I 926-38). The similarity between qird and commenda is stressed in II, 323-34, particularly p. 324.
A. L. Udovitch, 'At the Origin of the Western Commenda: Islam, Israel, Byzantium ?', Speculum,xxxviI
(I962), I98-207.
4 Udovitch, op. cit. pp. 200 f. Goitein, 'Commercial and Family Partnerships', p. 3i8.

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236 ALFRED E. LIEBER

the twelfth to the middle of the fifteenth centuries. Their powerful organization,
which included trading-posts complete with storehouses, living-quarters, and a
mosque, might well be compared with the Hanse.1 We do not know, however,
whether each of these merchants traded on his own or whether they had joint
financial arrangements.2
By the early Middle Ages, throughout Byzantium and a great part of the
rest of the Eastern world, including India and China, foreign trade was being
conducted at controlled frontier markets, or at specifically designated open
ports, through which all foreign maritime commerce was channelled and in
which the foreign merchants were housed in a special quarter. These ports were
supervised by imperial officials who collected Customs dues and who also exer-
cised a right of pre-emption in order to ensure the supply of luxury goods to
the court.3 In the tenth century, Byzantium concluded several treaties with the
Russians, which included commercial clauses in favour of the Russian merchants.
In the treaties of 907 and 945 it was even stipulated that Russians arriving with
merchandise were to be entitled to a monthly allowance, as well as to the provi-
sions and stores needed for the journey home and for the maintenance of their
ships.4
When, in the eighth century, Italian merchants again began regularly crossing
the Mediterranean Sea, they first visited Constantinople, with which they still
had political ties. Here they made their initial contacts with the Eastern trading
system and later benefited from the example of the Russians. The Venetians were
the first to obtain definite trading privileges in exchange for promises to supply
various services and military assistance. The terms were laid down in the Chryso-
bulls, the first of which dates from 992. That of I082, which granted the Vene-
tians extensive territorial concessions, then served as a model for their relations
with the Crusader states.5 Similar concessions in Constantinople were granted
to the merchantsof Pisa in I I i 2, to those of Genoa in I I I5, and possibly also to
those of Amalfi.6 In the ninth century Italian merchant ships also began to fre-
'E. Quatremere, 'Masdlik al Absdr fi mamdlik al amsdr', Noticeset Extraits (Paris, i838), XII, 638 ff;
XIII, 212 ff.W. J. Fischel, 'The Spice Trade in Mameluk Egypt', JESHO, I (I957-8), I57-74. S. Labib,
al wustd. Majallat al-jam'jyyaal-Misriyyalil dirdsdtal ta'rikhnyya
Al tijdraal Kdrimiyyawa tijdratMisrfi'l 'u7sur
(Cairo, I952). Wiet, op. cit. pp. 82-I47. E. Ashtor, 'The Kdrim! Merchants', Journal of theRoyalAsiatic
Society (I 956), pp. 45-56.. C. Cahen, review, Arabica,iII (I 956), 339. S. D. Goitein, 'The Beginnings of
the Kdrim Merchants and the Character of their Organisation', JESHO, i (I957-8), I75-84; and in
Studiesin IslamicHistoryand Institutions(Leyden, I 966), pp. 35i-6o.
2 Wiet, op. cit. pp. 86, io2, calls them a corporation, as does Fischel, 'The Spice Trade', pp. I64 ff.
3 0. Franke, Zur Geschichte in China,SB. Preussische Akademie der Wissenschaften,
derExtraterritorialitdt
Phil. Hist. Klasse, XXXI(I935). J. Kuwabara, On P'u Shou-keng,Memoirs of the Research Department
of the Toyo Bunko, no. 2 (Tokyo, i928), pp. I-79; no. 7 (I935), pp. I-Io4. R. S. Lopez, 'Silk Indus-
try in the Byzantine Empire', Speculum,xx (I945), I-42; and 'Du March6 Temporaire a la Colonie
Permanente. L'6volution de la politique commercial au moyen-age', AnnalesE.S.C. iv (I949), 389-
405.
4 F. Ddlger, RegestenderKaiserurkunden des OstrdmischenReichesvon565-i453 (Munich, I924-65), pt I:
Regesten von565-I1025 (Munich, I 924); Pt II: Regesten vonI025-I204 (Munich, I 925). TheRussianPrimary
Chronicle, ed. H. S. Cross and 0. P. Sherbowitz Wetzor (Cambridge, Mass., I953), pp. 64 f, 74 ff.
It is likely that the Bulgarians were the first to obtain trading privileges in the Byzantine Empire,
when Theodosius III signed a peace treaty with the Bulgarian Khan Tervel in A.D. 7i6 (Ddlger, op. cit.
no. 276, p. 33; Lopez, 'Silk Industry', pp. 3I ff).
5 H. F. Brown, 'The Venetians and the Venetian Quarter in Constantinople to the Close of the I 2th
Century', Journal of HellenicStudies,XL (I 920), 68-88.
6 R. Janin, Constantinople Byzantine,2nd edn (Paris, i964), pp. 245 ff.

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 EASTERN BUSINESS 237
quent Muslim ports, particularly in North Africa, and merchants from Amalfi
are known to have traded in Cairo at the end of the following century.' Such
visits became more frequent in the eleventh and twelfth centuries, when the
transport of Crusaders greatly increased the volume of shipping to the Near
East, while the merchants of Genoa and Pisa in particular often journeyed to
North African ports.2
Each foreign merchant arriving in a Muslim port had to clear his goods
through the Customs, which was known as the diwdn in Arabic, while its store-
house was the makhzen. (These two terms later came into everyday use in medi-
eval European commerce as, respectively, dohana,dogana, or douaneand magasin
or "magazine".) Trade was supervised by a well-organized bureaucracy, which
kept extensive records in Arabic. In the diwdn, for example, particulars of the
merchants who arrived and of the goods they brought were entered in elaborate
registers.
As the revenue from external trade increased, the official attitude to foreign
merchants perceptibly altered, and their visits came to be tolerated and even
actively encouraged. The special quarters provided for them now constituted an
intrinsic part of the established trading system. They consisted of one or more
buildings, or even, as in the Crusader states, of a whole district of a town. Here
the foreign merchants were provided with full facilities for their commercial and
social life, including their own houses and places of worship. They lived accord-
ing to their own customs and their own laws, administered by officials sent out
from their home towns. This system of trading by Europeans in the East calls to
mind nineteenth-century trading arrangements of a similar nature: in Turkey
under the capitulations, and in the treaty ports of China, with their foreign
concessions.
It was during their stay in Eastern lands that the merchants from Italy and
elsewhere in Europe obtained their first insight into advanced methods of com-
merce.3 The question which now arises, as to how far the Europeans adopted
these methods for their own use, can only be answered by individual considera-
tion of the various institutions and instruments of commerce.
During the later Middle Ages certain Italian port-cities themselves began to
provide special lodgings and storehouses for foreign merchants, which they
named fondaco, after the Arabic term funduq, long in use in the East, which was
itself derived from the Greek pandoclzeion.4The primary aim of the Italians was,
however, to ensure that the external trade of their foreign visitors passed through
their own hands, although in this only the Venetians were successful. The German

1 C. Cahen, 'Un texte peu connu relatif au commerce oriental d'Amalfi au Xe siecle', Arclivio Storico
perle Province n.s. xxxiv
Napoletane, (I953-4), reprint,i-8.
2 A. Schaube, Handelsgeschichte der romanischerVolkerdes Mittelmeergebiets bis zum Ende der Kreuzziige
(Munich, I906). A. E. Sayous, Le commerce a' Tunis depuisle XIIe sieclejusqu'a la fin du XVIe
des Europe'ens
(Paris, I 929). E. H. Byrne, GenoeseShippingin the Twelfthand Thirteenth Centuries(Cambridge, Mass., I 930) .
3 C. Cahen, 'Douanes et commerce dans les ports mediterraneens de 1'Egypte medievale d'apres le
Minhadjd'Al Makhzfmi',JESHO,VII (1964), 2 I 7-3 I 4.
4 W. Heyd, UberFundaundFondaco,Bayerische Akademie der Wissenschaften, Hist. Klasse, v (i 88o),
6I 7-27. W. Heyd and F. Raynaud, Histoiredu commerce du Levant,I (Leipzig, i885-6), I29 ff. Schaube,
op. cit. pp. I22 ff. G. Millet, 'Sur les sceaux des commerciaires byzantines', MdlangesG. Schlumberger, II
(Paris, I924), 303-27, esp. pp. 3I8 ff; Lopez, 'Silk Industry', pp. 25 ff; Pellegrini, 'L'elemento arabo',
pp. 697-790, and discussion with Lopez, pp. 833-44.

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238 ALFRED E. LIEBER

traders in Venice were limited to the Fondaco dei Tedeschi, but even there they
enjoyed no rights of self-administration.'
In I I84 Ibn Jubayr, a Muslim from Spain, visited Acre, which was then one
of the main Crusader ports, and noted that the Christian clerks were keeping the
Customs records in Arabic.2 There is no doubt that a number of the European
merchants and officials, who might well have been illiterate in their own verna-
cular, acquired at least a working knowledge of written Arabic in the course of
their service abroad. Some valuable insights into the business methods of the time
have been provided by what is probably the oldest existing commercial corre-
spondence of medieval Italy. This consists of seven letters from Muslim merchants
or officials in Tunis to various merchants in Pisa, written in Arabic between
the years I 2oo and I 202. The Pisans had fled from Tunis following the events of
August I 200, when two armed Pisan ships, the Orgogliosa and the Incoronata,
attacked and plundered three Tunisian merchantmen in the port of La Goulette.3
While in the Eastern world the services of a broker were mandatory for the
foreign merchant in his dealings with the Customs authorities and with local
traders, the appointment of a dragoman and broker for the local Italian com-
munities was, by custom, subject to Italian approval.4 The brokers, who were
known as simsdr in Arabic, were organized in powerful guilds. The institution
was taken over by the Italians, together with its name, and although the first
reference is to a censarius,in Genoa in I I54, henceforth the brokers were gener-
ally known as sensali.5 In Venice the Germans had to transact all their business
through the sensali, on whose appointment, however, they had no influence.6 One
function of the brokers was to sell some of the imported goods by auction, or
halqa, the Arabic term passing into the Italian language as galega.7
1 The oldest document relating to the Fondaco dei Tedeschi is dated 5 Dec. i228 (H. Simonsfeld,
Der Fondacodei Tedeschiin Venedigund die Deutsch-VenezianischenHandelsbeziehungen, Stuttgart, I887, I, I
f; II, 8 f).
2 Travelsof Ibn Jubayr, text, ed. W. Wright and M. J. de Goeje, E. J. W. Gibb Memorial Series, v
(Leyden, I907), 302; trans. R.J. C. Broadhurst (I952), p. 3I7. M. I. Amari, Diplomi Arabi di R. Archivio
Fiorentino,I st ser. no. xi (Florence, I863-7), pp. 38-42. M. L. de Mas Latrie, Traitdsdepaix et de commerce
(Paris, i866-72), Introduction, pp. i88 ff.
3 Amari, op. cit. I st ser. nos. XIV-xx, pp. 48-64. de Mas Latrie, op. cit. Introduction, pp.48 ff. Sayous,
op. cit. pp. 52 f, I43-7-
4 In Nov. I207 Ahmad ibn Tamim, a citizen of Bougie in North Africa, wrote to Lamberto del
Vernaccio asking him to obtain a sealed letter from the Council of Pisa to the Director of Customs at
Bougie, recommending Tamim for the post of interpreter and broker to the Pisans at the local Customs
office. Tamim stresses the fact that, according to custom and privilege, the appointment could be made
only with the consent of the Pisans. (See Amari, op. cit. Ist ser. no. xxv, pp. 75 if.)
5 In the documents published by Amari, the term dalll is used in those from North Africa (Ist ser.
no. xxv, pp. 75 ff, and no. xxxviii, pp. i69 ff); simsar is used in that from Egypt (Ist ser. no. XL,
pp. i84 ff); and sanseriis found in that from Venice (2nd ser. no. XLII, pp. 347 f). L. Goldschmidt,
'Ursprunge des Maklerrechts. Insbesondere: Sensal', Zeitschriftfir dasgesamteHandelsrecht, xxviii (I 882),
I I5-30. Edler, op. cit. p. 269. Schaube, op. cit. pp. 76i ff. Cahen, 'Douanes', p. 238 f.
J. van Houtte, 'Les courtiers au Moyen Age', RevueHistoriquede Droit Franqaiset Etranger,4th ser. xv
(I936), I05-4I, has cast doubt on the origin of the broker as a public institution and considers him to
be essentially a commercial intermediary, subject to private law. This paper should be read bearing in
mind the strictures of R. S. Lopez expressed in 'Sensale del Medio Evo', NuovoRivistaStorica,XXII (1938),
Io8-i 2.
6 Simonsfeld, op. cit. II, 23 ff. From the fifteenth century an appointment as sensal was often a sinecure,
and both Giovanni Bellini and Titian held such appointments for life. Edler, op. cit. p. I 3 I.
7 Amari, op. cit. 2nd ser. no. XXIX, pp. 295 ff, 405. de Mas Latrie, op. cit. Introduction, pp. i92 ff.
Edler, op. cit. p. I3I. G. B. Pellegrini, 'Il fosso caligi e gli arabismi pisani', Atti della AcademiaNazionale
dei Lincei,XI (Rome, I956), I54. Cahen, 'Douanes', p. 24I.

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 EASTERN BUSINESS 239
Despite the fact that the Europeans acquired a detailed knowledge of the
highly developed methods of payment and of financing foreign trade that were
current in the East, they were slow to adopt these methods for their own use.
This must be ascribed, in the first place, to the relative illiteracy of the Euro-
pean merchants, as compared with their Eastern colleagues. Until well into the
twelfth century few of the merchants knew Latin, the language of practically
all European commercial instruments of that time. Moreover, written Italian
developed only slowly, and had, in addition, to displace French, although few
of the merchants succeeded in mastering that language.' As a result, the scribes
obtained a powerful hold over the economy, which they were subsequently
reluctant to surrender. At the end of the thirteenth century Pisa counted 232
scribes, Genoa 200, and Florence 6oo, although by this time the number of
literate merchants on the European side of the Mediterranean Sea was steadily
increasing.2
In the latter part of the thirteenth century the European merchants started
to make increasing use of informal payment orders, often including such instruc-
tions in their correspondence, and this practice became widespread in the four-
teenth century.3 The early European banks, however, insisted that payments, or
transfers of money between accounts, be made by word of mouth in the presence
of both parties; the transactions were then entered in the books of the bank,
1 The problem of the literacy of the medieval European merchant is bound up with the availability
of reasonably priced writing materials-Italian paper-making started only at the very end of the thir-
teenth century-and with the development of a certain degree of literacy in the general population. The
oldest extant business documents written in Italian consist of two parchment leaves from the account
book of a Florentine banker for the year I 2 II. These are, in fact, the oldest existing documents in the
Florentine dialect, and possibly even in the Italian language (A. Castellani, 'Frammenti d'un libro di
conti de banchierifiorentinidel I 2 I I', Studidi FilologiaItaliana,XVI, I 958, I 9-95). Their existencedoes
not, however, imply that a knowledge of Latin, or of the art of writing, was widespread among the mer-
chants, and Pirenne has certainly exaggerated in this respect (H. Pirenne, Les Villes du Moyen Age,
Brussels, I92 7, pp. 20I ff; and 'L'instruction des marchands en Moyen Age', Annalesd'HistoireEconomique
et Sociale,I, I 929, I 3-28). Even in Venice a knowledge of writing was by no means general in the twelfth
century. At the beginning at least, the scribes and notaries were always clerics. The services of a notary
were essential for every important business transaction because, even if one party could write and under-
stand Latin, the other usually could not.
The position of the scribes and notaries in the world of commerce was reinforced by the fact that part
of the capital, particularly in the maritime trade, was invested by ordinary citizens who had no other
connexion with business. Thus, even in the thirteenth century, every Genoese merchantman had to have
a scribe on board, as a member of the crew, whose registers were considered as notarial records. Venetian
and Barcelonan vessels even had to carry two such scribes (Byrne, op. cit. pp. 59 ff; W. Ashburner,
The RhodianSea Law, Oxford, I 909, pp. cxxxvii ff).
The clerical monopoly on education was broken only slowly, particularly in north-west Europe. Not
until the end of the thirteenth century did the Lubeck merchants begin to keep their own accounts, and
then in dog Latin (F. R6rig, Grosshandelin HansischeBeitrdgeCzur deutschenWirtschaftsgeschichte,Breslau,
i928, pp. 2I7-42; and 'Mittelalterund Schriftlichkeit',Die Weltals Geschichte,
XII, I953, 29-4i). As late
as the beginning of the fourteenth century, the third Schra of Novgorod stated that a priest was to be
attached to the "Peterhof ", the German factory. Apart from conducting the official correspondence and
keeping the records, he was bound to help the merchants with their private correspondence, against pay-
ment (W. SchlUter, Die novgoroder Schra in siebenFassungenvomXIII-XVII. Jahrhundert,Dorpat, I9I4).
For a review of the whole problem see also H. Grundmann, 'Litteratus-illitteratus. Der Wandel einer
Bildungsnorm vom Altertum zum Mittelalter', ArchivifurKulturgeschichte, XL (1958), i-65.
2 D. Herlihy, Pisa in theEarly Renaissance. A Studyof UrbanGrowth(New Haven, I 958), pp. i0 f.
3 The oldest letters extant to include such informal payment-orders are two from the head office of the
Cerchi Company in Florence to Giachetto Rinucci in England, dated 24 March i290-I and 23 June
i29i respectively. See A. P. Usher, The Early Historyof Deposit Bankingin Mediterranean Europe (Cam-
bridge, Mass., I 943), pp. 79 f.

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240 ALFRED E. LIEBER

which were equivalent to notarial registers.' Instruments similar to cheques con-

sequently only began to be used in Europe in the late seventeenth century, when
they were at first known as "drawn notes". The term "cheque" is of later date
and originally denoted the counterfoil of an exchequer or other bill; its purpose
was to prevent forgery or alteration. Later still the name appears to have been
applied to any bill, note, or draft possessing a counterfoil.2 The theory that the
term "cheque" represents the Persian form c'ekof the Arabic word sakk is, of
course, at complete variance with these facts, which indicate that the theory of
the Oriental origin of the European cheque should be completely discarded.3
The bill of exchange of medieval Europe appears, on the other hand, to owe
a great deal to the Muslim world. The term aval is clearly derived from the
Arabic hawala, another name for the suftaja, which, as already mentioned, was
often a bill of exchange. The Islamic hawala did not necessarily contain an ex-
change element, since the interest was defined as a payment for avoiding trans-
port risks. The medieval European merchant had, however, to conform with the
Church's doctrine on usury. He therefore went a step farther and introduced the
element of foreign exchange, which served to camouflage the payment of interest.
This made the exchange contract an integral part of the medieval European bill
of exchange; a fact which led Usher to contend that the mercantile bill of ex-
change, which first appeared in Europe in the fourteenth century, was a dis-
tinctly new instrument of commerce.4
The commendais another institution which appears to have been decisively in-
fluenced by Arab commercial practice. With the commenda,the agent was not
responsible for loss of capital, provided that he had followed his instructions,
whilst the investor's liability was restricted to the capital he had put up. Each
received a prearranged share of any net profit resulting from the common ven-
ture. The commendarelationship between investor and agent thus differs essen-
tially from that of the Byzantine chreokoinoniaand the Jewish 'isqa, but closely
resembles that of the Islamic qirJd or mu1ddraba. Although the oldest commenda
contract preserved dates only from the year I072, there is evidence that over a
much longer period of time this was one of the chief methods used by the Italians
to finance commercial ventures overseas. The qirJd was, however, used by the
Muslims centuries before the Italians made contact with them. It is thus reason-
able to assume that the provisions of the commendawere influenced by Islamic
commercial practice, although we have no proof that this was actually the case.5
1 Luca Pacioli, A Treatiseon Double Entry Bookkeeping(Venice, 1494), section ix, treatise i i, ch. 24;
trans. P. Crivelli (I924), pp. 70 ff. A. P. Usher, 'The Origins of Banking: The Primitive Bank of Deposit,
200-I 6oo', Economic HistoryReview,IV(I934), 4I 0 ff. R. de Roover, Money,BankingandCreditin Mediaeval
Bruges (Cambridge, Mass., 1948), p. 262; and 'New Interpretations of the History of Banking', Cahiers
d'HistoireMondiale,II (I954), 38-76, esp. pp. 54 i.
2 OxfordEnglish Dictionary,sub voce.R. D. Richards, 'The Origin of the Cheque', Banker,IX (i929),
29-36. W. Holdsworth, A Historyof English Law, viii (n.d.), i90, n. 2.
3 E. Littmann, MorgenldndischeWdrterin Deutschen,2nd edn (Ttibingen, I 924), p. i i 6. J. H. Kramers,
'Geography and Commerce', in The Legacyof Islam (Oxford, I93I), p. I02. Steiger, 'Aufmarschstrassen',
p. 6i; and OriginandSpread,pp. 69 f. Spies, op. cit. p. 23.
4 Usher, Early Historyof DepositBanking,p. 74. de Roover, 'New Interpretations', p. 49: "The bill of
exchange, in the Middle Ages, was literally a bill of exchange, that is, an instrument which served to
implement an exchange or cambiumcontract."
5 R. S. Lopez and I. W. Raymond, Medieval Tradein the MediterraneanWorld.Illustrative Documents,
trans. with introduction and notes (I955), pp. I74-84. The earliest mention in Italian sources of the

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 EASTERN BUSINESS 24I

The mahona,a method used to finance certain Genoese colonial ventures, also
appears to have been influenced by the Muslim world. The first recorded mahona,
known as the "mahonaof Ceuta", dates from I235 and was, as were all the later
Genoese mahonae,the sequel to a successful naval expedition undertaken by the
city government. The Genoese were invited to invade Ceuta by its Almohad
ruler, who wished to oust the Berbers who had seized the city and damaged
Genoese property and goods. In the peace settlement, the financial undertaking
to compensate the Genoese, backed by a lien on the Ceuta Customs revenue,
was termed ma'i7na.This Arabic expression denoted, among other meanings,
assistance, or aid, but also an extraordinary contribution for an expedition against
the infidels, demanded by a ruler when the state coffers were empty. It is doubt-
ful whether the Genoese understood the subtleties involved in the use of this term,
rather than one which unambiguously denoted reparations for damages, but each
side had achieved its purpose.
All the claims for damage suffered at Ceuta were inscribed in a special register
in Genoa, called the mahona.These claims were freely transferable, as is shown
by the notarial records. It is not known, however, whether, in the case of Ceuta,
the mahonesi, or those registered in the mahona, has formed an organization.'
After subsequent ventures, those who had shared in the expenses of equipping
the expedition, as well as those who had suffered damage, were included among
the mahonesi.They were organized in a corporate body, which also became known
as the mahona.The mahonaof Chios was granted certain privileges in the con-
quered territories of Chios and Phocea, which it retained for over 200 years, from
its formation in I 347 until the final conquest of Chios by the Turks in I 566. Other
Genoese mahonaewere those of Cyprus, in I374, and of Corsica, in I378.2 This
organization of the mahonesias a corporate body for the exploitation of newly
acquired territories was a purely Genoese development. The mahonaof Chios
already possessed some important features of the great joint-stock ventures of the
sixteenth and seventeenth centuries, including the free transferability of the
shares.
In Venice, as Lane has shown, the name maonawas given to the combination
formed by all the shareholders in the charter party of a fleet for the purpose of
pooling their resources for the joint purchase of certain commodities. The first
reference to a Venetian maona dates from the year I 505, but the term has not
yet been found in official Venetian records. These maonaeresembled many of the
early joint-stock companies as regards the nature of their activities, their manner
of enlisting capital, and of dividing the profits and their limited liability of a sort.

commenda,or rogantia,as it was commonly called in Venice, is in a document dated 25 October 976. See
W. Silberschmidt, Die Commenda Entwicklungbis zumXIII. Jahrhundert(Wurtzburg, I 884).
in ihrerfriihesten
Udovitch, op. cit. Goitein, 'Commercial and Family Partnerships'.
1 R. di Tucci, 'Documenti inediti sulla spedizione e sulla Mahona dei Genovesi a Ceuta (I 234-1237)',
Atti della SocietdLiguriedi StoriaPatria, LXIV (I935), 27I-340. R. S. Lopez, Studi sull' EconomicaGenovese
nel MedioEvo (Turin, I 936), pp. Ii ff. Amari, op. cit. p. xxv. R. Dozy, Suppldments aux DictionnairesArabes,
ii (Leyden, i88i), I92. In most Mediterranean Arab ports today the word md'u7na signifies a large
barge or lighter. I intend to deal separately with the evolution of this term which, in the form md'un,
appears in Sura cvii of the Qur'an.
2 H. Sieveking, GenneserFinanzwesenmit besonderer der Casa di S. Giorgio,i (Freiburg,
Berficksichtigung
I898-9), 43 f, I77 ff. R. Cessi, 'Studi sulle "Maone" medievale', ArchivioStoricoItaliano,LXVII, pt I (1919),
50 ff. R. S. Lopez, Storiadellecoloniegenovesinel Mediterraneo(Bologna, I938), pp. 338 ff.

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242 ALFRED E. LIEBER

However, their potentialities were never fully developed, because the charter
parties were always limited to one year.1
In Florence, a company formed in I435, for the promotion of shipping ven-
tures with the assistance of the city government, was known as the Magona
Vecchia.It chartered three galleys from the consuls: two for voyages to Flanders
and England and one to Constantinople. The contract was for a period of five
years and the Magona was to receive a loan of I5,000 florins during the first
three years. The loan was to be financed by the imposition of additional Customs
duties at Florence and Pisa and was repayable after the expiry of the contract.
The names of the participants, or details of the internal structure of the Magona
Vecchia,are not known.2
This survey of the influence of the East on the commercial practices of medi-
eval Europe cannot end without some consideration of the transmission of the
Arabic numerals and of their application to commercial accounts.
It is well known that these numerals originated in India, while the earliest
example of the use of the zero comes from Indo-China and place-notation was
devised in China. Muslim scholars then imported all three from India, a fact
which has always been acknowledged in the Muslim world where the numerals
are known as "Indian" and not Arabic, as is the habit in the West.3 This system
of numerals was used by Muslim scholars for scientific purposes but, contrary
to general belief, it was certainly not adopted by the Muslim merchants of the
time. The Arabic papyri and papers and the documents of the Cairo Geniza
show that Greek numerals, or the letters of the Arabic or Hebrew alphabets,
continued to be used in commercial life. This may well be related to the fact
that, since Arabic and Hebrew are written from right to left, it was difficult for
the Eastern merchants to accustom themselves to a system of numerals written
from left to right.5 Such a system would, on the other hand, be a natural choice
1 F. C. Lane, 'Family Partnerships and Joint Ventures in the Venetian Republic', Journalof Economic
History,IV (I944), I78-96, reprinted in F. C. Lane, VeniceandHistory (Baltimore, I966), pp. 36-55, esp.
pp. 46-52. Idern, AndreaBarbarigo,Merchantof Venicei4i8-i449, Johns Hopkins University Studies in
Historical and Political Science, ser. LXII, no. I (I944), p. 92.
2 M. E. Mallett, TheFlorentineGalleysin theFifteenthCentury(Oxford, I967), pp. 46, 86-7.
3J. Needham, Scienceand Civilisationin China, III (Cambridge, I959), 5 ff, 146 ff. D. E. Smith and
L. Karpinski, The Hindu ArabicNumerals(Boston, I9I I). G. Cede's, 'A Propos de l'Origine des Chiffres
Arabes', Bulletinof theSchoolof Orientaland AfricanStudies,VI (I930-2), 323-8. G. Jacob, Der Einflussdes
Morgenlandes auf demAbendlandvornehmlich wihrenddes Mittelalters(Hanover, I 924), pp. I 6 ff.
4 One of the oldest algorismic works in which Hindu numerals are used is the Kiitdbfi usal hisdbal hind,
written by K-ashydr ibn Labbdn, probably about the year A.D. iooo. The zero is also used throughout
this work. See M. Levey and M. Petrucek, Kiishydribn Labbdn-Principles of Hindu Reckoning(Madison,
1965), pp. 3, 7 f
The dislike of the Hindu numerals is vividly described in the oldest extant Arabic arithmetic book,
written in Damascus in A.D. 952-3, in which the author suggests that they be replaced by the first nine
letters of the Greek alphabet. See A. S. Saidan, 'The Earliest Extant Arabic Arithmetic: Kitdb al Fusil
fi al Hisqb al Hindli of Abli al Hasan, Ah.mad ibn Ibrqhim al Uqlidisi', Isis, LVII (I 966), pp. 475-90.
5 On p. I of his book Leonardo still writes the "Indian figures" from right to left, probably because
they were shown to him in this way by his Arabic teacher (II LiberAbbacidi LeonardoPisano, ed. B. Bon-
compagni, Rome, i857, p. I). Thereafter he always writes them from left to right, except for fractions,
which he places to the left of the whole numbers.
On the rare occasions that the Arabs did make use of these numerals, they wrote them in the correct
sequence, i.e. from left to right, as in PER, no. 798, a papyrus from Fayyiim dating from A.D. 873/4,
where the year (260 H.) is written in Arabic numerals (J. von Karabacek, PapyrusErzherzog Rainer,
Ffihrerdurchdie Ausstellung,Vienna, I 894, pp. 2 I 6 f). In Kfishyar ibn Labbdn's work the figures are also
in the correct order.

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 EASTERN BUSINESS 243

for Europeans. This was clearly grasped by Leonardo Pisano's father, who was
the scribe of the Pisan factory at Bougie in North Africa. Pisano brought his
young son to Bougie to learn the abacus and become acquainted with the nine
Indian figures. Later, Leonardo travelled on business around the Mediterranean
and, after studying the different systems of numerals in use in Byzantium, Egypt,
Syria, Sicily, and Provence, came to the conclusion that none of these equalled
the Indian system.'
The knowledge that Leonardo had been brought up in North Africa and,
particularly, the fact that he had travelled as a merchant have presumably en-
couraged the fallacious idea that the Eastern merchants had long made use of
the Arabic system of numerals.2 Thus, in general, Leonardo is merely credited
with assisting the transmission from East to West of an established system of
reckoning. In fact, following his father's lead, he was the first to realize the general
possibilities of a system hitherto used for scientific purposes only. One of his
avowed aims in writing his Liber Abbaci, which he completed in i202, was to
demonstrate the suitability of this system for general purposes, including com-
mercial arithmetic and accounting. He even set out a model account, comparing
the use of the Arabic numerals, which he arranged in columns in the margin,
with the customary Roman figures placed in the text.3
Despite Leonardo's propagation of the use of the Arabic numerals, the zero,
and place-notation in everyday life, at least two centuries were to elapse before
the system was firmly established in Europe, and it took longer still to pass into
general use in the Muslim world, to which it was reintroduced by Europeans.4
Jerusalem

1 Leonardo was not, of course, the first European to draw attention to the Indian numerals. Gerbert,
the later Pope Sylvester II, had already described them at the end of the tenth century, albeit without
the zero, and in the first half of the twelfth century al Khwarezmi's treatise on arithmetic was translated
by either Adelard of Bath or Robert of Chester, under the name Algoritmide NumeroIndorum.
2 See Singer's statement that Leonardo learnt the use of the Indian system of numerals from Arabic-
speaking colleagues (C. Singer, 'East and West in Retrospect', in A Historyof Technology, ed. Singer et al.
ii. Oxford, I956, 766). Nor does de Ste Croix prove his contention that Leonardo's father and his col-
leagues were using the Arabic notation well before the end of the twelfth century (G. E. M. de Ste Croix,
'Greek and Roman Accounting', in Studiesin theHistoryof Accounting,ed. A. C. Littleton and B. S. Yamey,
I956, pp. 64 ff), although it is clear that Leonardo's father perceived the importance and utility of the
new system.
3 Liber Abbaci,p. 22. de Ste Croix rightly states that the disposition of figures in columns constitutes
the first step towards bilateral form accounting, with a visible distinction between debit and credit
entries (op. cit. pp. 64 ff).
4 From the beginning attempts were made to discredit the use of the Arabic numerals, on the illogical
grounds that they were more likely to be falsified than Roman numerals. Indeed, rubric i02 of the
A.D. i299 statutes of the Florentine Arte del Cambio, the guild of the money-changers, instructs the
money-changers not to use Arabic numerals in their accounts.
It must, however, be admitted that the advantages of place-notation were not so evident at that time,
since neither the coinage nor the weights and measures were according to the decimal system.

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