Fortune Magazine, Dec 7 1998, p 128
Among the most successful and long-lived portals in business history were
the great fairs held in the Champagne region of France in the 12th and 13th
centuries. For about 200 years they were the places to do business in
Europe. All the Continents good, the silks and oils of the south, the furs
and grains of the north, came here to be sold and bought. These were
wholesale markets, not retail, but they were the Comdex of mediaeval
business-to-business commerce; everyone who was anyone had to come.
The fairs, there were six, lasted two months each, and the secret of their
commercial dominance was what happened in the second month, when the
selling of goods died down and was replaced by a settling of accounts.
According to Fernand Braudel, the great historian of early capitalism, "The
originality of the Champagne fairs lay less in the superabundance of goods
on sale than in the money market and the precocious workings of credit on
display there. Financiers and bankers, mostly Italian, set up tables and
exchanged currencies, bought and sold short-term credit instruments, even
did a little arbitrage. Double-entry bookkeeping hadn't been invented yet,
but just about every financial instrument known today (except those that
bring down hedge funds) had been.
The fairs eventually declined, partly because new land and sea trading
routes opened up, but their central role in finance persisted long after
they ceased to be the centre of trade in goods. That suggests, Braudel
says, that the fairs became portals not because they aggregated stuff but
because they provided an efficient mechanism for performing transactions
and obtaining financial leverage.