How credit worked in practice

Land as security

In a society where most wealth consisted of land and the rights attached to it, credit was above all land credit. The Historical Dictionary distinguishes several medieval forms of pledge. In the older Satzung (ältere Satzung) the creditor received possession and use of the pledged land, collecting its income until the debt was repaid. In the younger Satzung the debtor retained possession and management, while the creditor held a security right that he could enforce in case of default. A third form, the Eigentumspfand, was a sale with a right of repurchase: the creditor received the property by a deed of sale, while a separate deed obliged him to return it on repayment. The Historical Dictionary notes that redemption within the agreed periods often proved difficult, with the consequence that indebted noble families lost entire lordships to wealthy cities.¹ This observation describes, in a single sentence, the mechanism through which Zurich built its territory (see section VIII).

The Gült had a feature that distinguishes it from the modern mortgage with personal liability: only the burdened property was liable, which left the debtor’s other assets beyond the creditor’s reach. If the annual rent was not paid, the creditor could enforce against the land, but not against the debtor’s other assets.² This limitation protected peasant families from personal ruin and made the rent attach to the land whoever owned it. When the land was sold, the buyer took it with its burdens. Over generations, many farms in the Zurich countryside accumulated layers of rents owed to different holders: the Grossmünster chapter, the Fraumünster, the hospital, urban families and rural notables.

Documents, courts and registers

A credit system built on annuities required documents, which in turn required a system of authentication. The Gültbrief or Zinsbrief was a sealed charter, usually drawn up before a court or a lord, recording the land burdened, the amount of the rent, the dates of payment, the price paid and, in the case of redeemable rents, the conditions of redemption. In the countryside these instruments were sealed by the lords of the court or, increasingly, by the bailiffs whom the city appointed in its acquired territories, whereas in the town the council or the city’s judicial officers sealed them. The Historical Dictionary notes that from the sixteenth century territorial authorities regulated the private market in Gülten by requiring notarial documentation and public registration. Rates, it adds, standardised at 5 per cent in money.³ The origins of those later registers lie in the fifteenth-century practice of sealing and recording rents before public authorities.

Litigation over debts formed a large part of the business of the city courts. For Zurich, Anzidei refers to around 3,000 loan entries from 1376 to 1436 in the civic records of debt enforcement (Eingewinnerverzeichnisse), which concern Jewish lending alone. Of these only about sixty exceeded 100 gulden.⁴ The small size of the typical claim is a reminder that late medieval credit was a matter of everyday life, embedded in the economy of households and workshops and continuously supervised by the courts of the city.

The Zurich Richtebrief, the city’s oldest surviving collection of statutes, which survives in a codex of 1304 compiled by the town scribe Nikolaus Mangold and draws on earlier versions around 1250, 1281 and 1291, already regulated lending.⁵ According to Anzidei, it obliged Cahorsins and Jews to lend silver and pennies against pawns or sureties on pain of a penalty of half a mark.⁶ The obligation to lend is striking. It shows that the town regarded the credit services of these groups as a public utility which the privileged lenders could not simply refuse to provide, so that their licence to lend at interest was balanced by a duty to lend.

Credit between merchants, and credit for the Church

Beyond land credit and pawnbroking, late medieval Zurich knew the ordinary forms of commercial credit: sales on credit between merchants, advances by cloth merchants to weavers, and deferred payment at the fairs. The commercial network of Zurich merchants, described in Chapter A.III, linked them with the great Upper German trading houses and with the fairs of Geneva, Frankfurt and Zurzach, where accounts were settled and debts carried over from one fair to the next. Merchants of this period seldom recorded interest explicitly, because the price of a sale on credit included the cost of waiting. Whether this was usury in disguise was a question the canonists debated.

Religious institutions were among the largest creditors of the late medieval economy. Endowments for anniversary masses (Jahrzeitstiftungen) were typically funded by the purchase of annuities, so that the chapter, abbey or parish church that received the endowment became the holder of a rent secured on land.⁷ The great Zurich foundations, the Grossmünster chapter and the Fraumünster, as well as the hospital and the mendicant convents, thus accumulated extensive portfolios of rents in the town and its hinterland. The secularisation of these holdings after 1524 transferred much of this capital to public administration and made the Reformed city one of the largest creditors in the region, a development that belongs to Part B but that rests on the foundations laid in the fifteenth century.

Notes

1. HLS, “Grundpfandrecht”, by Anne-Marie Dubler and Christina Schmid-Tschirren, https://hls-dhs-dss.ch/de/articles/047937/2007-03-20/. ↩
2. HLS, “Gült” (as above), which states that “not the debtor personally, but exclusively the encumbered property is liable”. ↩
3. HLS, “Gült” (as above). ↩
4. Anzidei, “Zürich, die Juden und das Geld” (as above). ↩
5. “Richtebrief”, German Wikipedia article as mirrored at de-academic.com, https://de-academic.com/dic.nsf/dewiki/1183108 (consulted for orientation; the article states that the codex contains about 350 paragraphs in six books). ↩
6. Anzidei, “Zürich, die Juden und das Geld” (as above), which paraphrases the relevant provision of the Richtebrief. ↩
7. HLS, “Renten” (as above), which lists anniversary endowments to churches among the main types of land-based annuities. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.