Germany

Imperial Finance

By Frederick's reign, imperial finances were a joke. He had his own lands, but they were inadequate to the task. The imperial crown had by this time only income from imperial cities plus taxes on the Jews. Both of these were either pledged to creditors or were given to imperial officials. It's worth explaining each of these.

When a king was broke, which was often, he would borrow money from merchants or banks or even cities or bishops. The creditors, though, needed some assurance that they would get their money back, for the nobility were notoriously bad risks. Rather than being put on a payment plan, or pledging collateral, a common device was for the ruler to turn over certain types of income for a set number of years. Thus, for example, a duke might have the tolls from a river, or the income from a mine. He would give to his creditor the right to collect the toll, or to exploit the mine, for five years or ten years or whatever. Essentially, the ruler would give away future income for ready cash now. The creditor, merchants especially, took the deal in part because they thought they might wring more money out of the source than the ruler anticipated, thus turning a profit.

Obviously such a practice, if carried out on a wide scale, would eventually leave the ruler bereft of income, and in fact this is the situation in which many German nobles found themselves toward the end of the 15^th century. They found themselves in a perpetual scramble for money.

So it was with the Holy Roman Emperor. With regular income almost non-existent, Frederick relied on various one-time devices. He sold titles and patents of nobility to those selfsame wealthy merchants. He sold judicial rights, which means he forfeited the right to hear legal cases in a particular area. The personl holding such a right received a portion of the fines levied by that court. Frederick also granted exemption from military service, especially to imperial cities.

By such efforts, which were unprecedented in scale but not in nature, the Emperor was able to keep a respecteable court and to wage war against Burgundy and Hungary. The crown paid a price, though, for the imperial officials gained a reputation for greed, and Frederick was resented for using the courts to extract every last penny.