General rules and turnover

Chapter X General rules and turnover As all things in the world follow a certain natural order, they need to be handled accordingly. This especially concerns the more vital things, such as trade, which is intended for the preservation of human kind, as we already established. Therefore, trade and the trader need to be managed as the natural order demands to meet the aim, i.e. wealth. The way something is managed varies depending on the quantity of the assets and the capital at one’s disposal at a given moment. The conduct of a very rich man differs from that of a reasonably rich man or that of a man whose capital is not that great. Some men are capable of handling a large fortune, whereas some can manage only smaller amounts. This is why those who are wealthy and venture into many and large business operations need to employ higher mental capacities and explore ideas of the highest order. It is fair to say then: “The bigger the vessel, the bigger the worries.” One should refrain from venturing into big businesses, relying solely on information conveyed by sailors or passengers or some reckless persons because a sailor’s mind is dull and his inclinations are of a lowly nature, so that after a pint in the tavern or if he buys a loaf of bread on the square, he believes you will appreciate the information that it would be a clever idea to trade in wheat and wine in that area. No trader, regardless of the size of his business, should rely on information from such persons or purchase large quantities of either wine or wheat, but should

instead listen to other traders, explore all the possibilities and decide on the matter as his common sense dictates. A wonderful thought by Lactancius should be kept in mind which he wrote it in the second volume of On Religion: “Every man needs to rely on himself, especially in those things that give purpose to his life, and to try to employ his senses and his own judgment to explore and understand the truth, instead of to trust other people’s fallacies and thus be mistaken as if not having a mind of his own. God endowed everyone with enough wisdom to explore that which is inconceivable and judge that which can be conceived.” Each mind has the capacity for common sense that is to be used for exploring the world and ideas. Nonetheless, there are some who refuse to think but rather choose to merely confirm other’s thoughts without critical consideration, and as such are guided by others like sheep. Many claim that “advice is obsolete in trade, ” and I consider this to be reality. Whereas advice is welcome in all other matters, in municipal administration, public life and economy, it is not allowed in trade. For example, let us consider searching for a lucrative opportunity and ordering the merchandise. For one, if you want advice, it should be sought from another trader. Y ou can choose to explain everything about your situation or to withhold some details. If you reveal everything to him, you risk being distracted in some way, but if you share only some details with him, he might advise you poorly. If you ask for advice from a man who is not a trader and who, for the most part, does not understand your principles, which are a result of your talent and experience, he will cast doubt on your plans and visions and you will find

reason to believe it is a reasonable doubt which will eventually result in your idea being utterly stifled. And indeed, a trader needs to have great experience so as to be able to not only reason but also assess. The capacity is evolved from experience, and as a fine soldier can promptly spot the best site for his army to rest as opposed to where they will most likely be attacked and defeated and which direction is best to carry out a successful attack etc., a trader, to whom you outline the situation, can also be able to warn you of potential problems, damage you might suffer, etc. Thus, the trader must plan ahead and neatly put his business operations in order. The money must not be invested in one business only but rather in a few safe ventures. I observed that the Florentines were particularly fond of such a business strategy. Mind you, I speak in general terms because this became a customary practice among others as well. Hypothetically, let us assume that I am a rich merchant prince in Florence and I decide to merge my business with Altovitis who runs a business in V enice. For investing two thousand of my money in their company, I am entitled to one quarter of the profit, and when the time comes, the capital will be divided according to a majority vote. In addition, I invest a thousand gold coins in a company in Rome, one in Avignon and in a silk manufacturing workshop. Apart from this, in line with the assets I hold, I keep six thousand gold coins for trading operations I will personally conduct where and when I see fit, depending on the opportunities that will arise. In conclusion, when investing in various businesses and operating in a safe and orderly fashion, one cannot fail. Losses in one domain are repaid by victories in

another. If the money was not invested in this way, I would be compelled to exploit every opportunity and as a result I would have a number of inferior debtors or would bow to greed and eventually become corrupt and fail. On the other hand, if my assets are cleverly distributed and invested they are safe because every company has managers who are appointed to oversee this but, nevertheless, they are limited in terms of their authority and the capital at their disposal. The little money they are in charge of, they handle with great care, either because they were not yet given their directions, or because the sum is insufficient. Therefore, this is a reasonable, effective and safe practice for those who are very wealthy. Those whose assets are mediocre, i.e. around four thousand gold coins, must operate in a different mode. The capital of this value must not be divided, but rather maintained as a whole. An exception can be made in terms of entering into a limited partnership with four or five hundred gold coins when there is the possibility of withdrawing, frequent auditing and profit distribution, because if the practice is such, the money you invested is back in your possession on a regular basis. Ragusan merchants are very accomplished in this kind of business practice and I would heap praise on them at this point if I did not think it would raise objections and be attributed to my patriotism. They deserve to be commended because the commodities they trade in, such as silver, gold, pewter, copper, wax, crimson cloth, pelt, etc., are very convenient. I would also praise them for their resourcefulness, if it were not for one flaw – as soon as their capital increases, they engage in construction works to build gardens,

vineyards, etc., but outside the town more than within its walls where they erected palaces of breathtaking beauty. Be that as admirable as it indeed is, I must concur with St. Paul: “I sing you praises for everything, but for this I cannot.” This is especially intended for those whose income is barely adequate for abundantly providing their family with all they need. I have given them a word of warning, for such rampant buildings are merely a liability in terms of defense. On many occasions in history, towns were yielded to the enemy for plunder and devastation only to preserve the luxuriant palaces. If people were in fear for their peace, as in the time of Augustus, many a city would be fortunate if they enforced the prohibition of any building outside the city walls, with the exception of dwellings made of rushes. T o return to the subject of our discussion, let us turn to the issue of those who have a small sum at their disposal, not exceeding 500 gold coins. Such a sum should neither be invested in limited partnerships nor in different enterprises, but one should rather put strong personal effort into multiplying that amount, otherwise it would eventually be expended. If capital is not being turned over it remains small and limited and hence insufficient. T o those who are destitute, no job should be considered too mean and they must not be ashamed of conforming with the times, as T ragicus warns: “It is only proper to be compliant with the time.” In such circumstances, one must not find it humiliating to live in somebody’s house and do a servant’s job for them, or do any low and insignificant but honest job because, as Seneca claims: “Whatever fate might lay down for a poverty-stricken man, I do not consider shameful.” The only aim is to start earning

a decent and honest living. Moreover, we believe that dwelling in somebody else’s abode is by no means disgraceful but, on the contrary, very beneficial for a trader. In Italy, people often say that he who is not a good man will not be a good soldier, and that who has not learnt to be a good servant will never become good in commanding. Boetius says as follows: “If someone knows not how to be a student, he can never become a good teacher for he is afraid of learning and not ashamed of ignorance.” Many servants have risen to honorable positions, but only a few men have become good teachers despite being inferior as students. In spite of being endowed with an admirable mind as well as strength, Hercules was never ashamed of being a servant to Aeuristeus. Seneca makes a mention of this, in Megara’s words addressed to Licus: “If it were not for perilous commands, how would virtue come to the surface?” Even today, the Genovians, V enetians and Florentines still have this practice, and in my childhood years it was customary even in my country. I witnessed many noblemen requiring their own children to serve their servants in order to acquire this skill from an early age, for we craved it much more at that time than today when our earnings are greater and so is our courage. I observed those children being trained by the servants to do such lowly jobs such as tending horses or sweeping floors. Florentines strongly held to the custom of keeping them together. If there are no servants, sons raised in this tradition are not ashamed of any job, no matter how low it might be. I have encountered impoverished mature traders who do not refrain from engaging in carriage rental, acting as a middleman, or inn keeping and other similar jobs, and some of them had succeeded in

restoring their previous status and had ten thousand gold coins at their disposal, but I will mention no names out of politeness and to hinder any vanity or dejection my praise could cause. As it often happens, after misfortune befalls them, poverty-stricken Genovians or Catalonians commit themselves to piracy, whereas Florentines opt for becoming middlemen or artisans and thus earning their living. Nature directs everyone to their natural objective – those of a high spirit, of a low spirit, artisans and manual workers, and so must a poor man do everything to improve his circumstances by honorable means. In his pursuit of lucrative trading opportunities, a trader must be gifted with strong common sense, for the mind is as brilliant as it is creative and resourceful. In the words of Boetius: “Only a vastly inferior mind employs only that which has already been used, instead of something that still waits to be contrived.” And Aristotle said: “There is nothing sophisticated in supplementing that which has already been discovered.” One should pursue business opportunities which are suitable and profitable in the given area and are befitting one’s personal inclinations, financial assets and are viable. T raders who take this into account earn great profits and prove to be of sound mind. In a letter to Lucilius, Seneca warns: “The primary evidence of a mind’s serenity is the ability to halt and be alone with oneself, ” as well as another point: “It is in the nature of a fastidious stomach to desire a taste of various things.” It is a mistake to raise queries endlessly because it bears no fruit, but rather the contrary occurs. Firstly, rarely, if ever, do business deals based on such information prove to be successful.

Secondly, if they do succeed, the timing is so inconvenient for the person involved that eventually they fail... Information obtained in this manner is useless for those who query and are in constant pursuit, for their pursuit never ends. For example, a trader transports wool from Catalunya to V enice. He is experienced and skilful so he does this job with natural ease and enjoys trust and respect. Upon his arrival in V enice, he observes that the middleman sells wool to wool traders allowing for a very extended deadline and he assumes that this is more profitable than wholesale. He decides to do the same and when he realizes that manufacturing woolen cloth is also very lucrative, he ventures into that business as well. This does not satisfy him completely so he makes further enquiries about where that cloth is sold in the East. If he learns that it sells well in Constantinople, this is where he transports it. Thus, he pursues one opportunity for profit after another, first he learns of them and after brief consideration he puts his ideas into practice. Such people are foolish for putting the cart before the horse. I advise you to maintain your thoughts and keep your trading practice focused, and to avoid aspiration to own the world and gain all profits because the market is to be shared. An old popular saying warns: “One who craves all things, dies infuriated” and hence, he who covets all the profit will eventually lose it all. Therefore, it is only proper to be content with the income generated by trading with the merchandise in your possession at the designated location and allow others to have the same opportunity to profit. One drop runs deep and penetrates the stone, but only after they have clashed repeatedly thousands of times. All those whose

endeavor it is to amass a great fortune in the shortest time are in great danger of soon becoming poor. If you desire wealth, live long and acquire assets little by little. Furthermore, the trader must thoroughly explore what kind of merchandise proves most lucrative for his business. Some are very fortunate in trading in metals, some in food supplies, slaves, petty things, spices, etc. For some, the East is the best choice, for some the W est or North, some earn big profits when they invest in limited partnership, some do best on their own. Hence, to each his own. The study of Ptolomeis’s calculus in Astrology is proof of this. In terms of our innate abilities, we are inclined to various things, especially in the beginning. A prudent trader will also be sensitive to whether the time has come to switch to a different enterprise. In case of a manifestly constant decline in profit due to too many traders working with the same commodity, he must know how to remove himself efficiently. The trader must never avoid being clear and honest when accepting or declining a business deal. One must also desist being covetous and should rather carefully consider the matter before responding to the offer. If you give your word, you must not break that promise because people, and traders in particular, are as good as their word and if they go back on it they do not deserve to be considered honest men, or traders, for that matter. Y ou should be in command of yourself and do not commit yourself to major and numerous business ventures. Do not make continual attempts to seize every bird in the bush for many a man has failed in major enterprises and none in smaller.

T ransport by sea or land is always hazardous to a certain degree and therefore should be employed as the means if the value of the merchandise does not exceed five hundred gold coins and one thousand gold coins, respectively, depending on the kind of the ship, i.e. its loading capacity, and regardless of the assets at one’s disposal. The trader should not be bothered with involvement in court practice as well as fill any municipal or administrative posts, for duties of this kind are nothing but baneful for a trader who is then nothing but a mere clerk. The trader should strive to gain credit as widely as possible, but should not take advantage of it unless absolutely necessary. When supplying the merchandise, insist on examining it first to be certain you are not purchasing the goods the other party did not manage to sell. When negotiating a deal, make sure you clearly voice your terms and employ reason when making decisions. Do not befriend others for the sake of vanity. Gladly learn what others are engaged in and what business deals are being agreed upon, otherwise you will remain uninformed. Gather news from all around you. Do not be discouraged if misfortune befalls you and do not confide in everybody, especially if they cannot be of any assistance. Fight that mishap and do not be defeated. Remember the words of Virgil: “Fortune always tends to the brave, and ignores the fearful.” Acquire merchandise of good quality and sell it at a fair price. If profit is generated, your prices are appropriate. Do not wait until the final hour in belief that: “It’s better to sell than to wait and lament.” Do not burden yourself with interests in the hope

of bigger profit, unless you suffered a mischance. If possible, maintain your focus on one venture because, as Croats say: “ A rolling stone gathers no moss.” T rade in goods that are not perishable, and avoid commodities such as wine, cheese, horses, etc. I say this not on a whim but to urge caution. If you partner somebody, you must be loyal and honest and treat him with tolerance and respect. Be attentive in everything you do, but do not exaggerate and do not display this quality excessively. There are consistent and clever minded people who operate effortlessly and prudently, at the right time and in an orderly manner, with ease and simplicity, and their results are decent and positive. Some people are frivolous, mindless and unintelligent. They possess no charisma and a character which they compensate with wild gestures, waving and flailing their limbs and head. Doctors and scholars argue that whatever one is deprived of, nature compensates this in some other respect. Therefore, if the speaker has a tendency to such gestures, that is a clear sign of their mind’s weakness and nothing more. If done effortlessly, all jobs such as dictating, speaking, trading, playing, serving, dancing, etc., manifest the excellence of one’s mind. Those who find it demanding evidently have a muscular and watery brain, and are incompetent and crude. Thus, the trader must be accomplished in writing and trading and everything else, and these skills can be acquired if one adheres to the rules and customs and puts them into practice as discussed in this book. If a trader is commissioned by another trader, he should not decline the request because no harm will be done and, moreover, each letter of request might contain useful news so the outcome

of such contact could be very beneficial. As this discussion could continue endlessly, and the laws of trade are not final since they are not enforced as permanent but are altered daily, there is no point in saying: “Last year someone did this with that merchandise and it sold well at this place and I intend to do the same.” If the information is not corresponding but is contradictory, the business can only fail. Therefore, the trader must deal with this on a daily basis, with two principles in mind, as already mentioned. Let us now bring to an end the talk on this subject matter as we do not wish this discourse to be long-winded and as it is due time for another topic.