Twenty-Nine Galleys

In the summer of 1346, the Republic of Genoa needed a fleet in the Aegean and had no money to pay for one.

This was not an unusual predicament. Genoa in the fourteenth century was at war with Venice, riven by factional politics at home to a degree that made stable government nearly impossible, and permanently short of cash. What it had instead of a treasury was a financial technique, and the technique was to sell the war.

The mechanism was well established. A syndicate of private citizens would fit out, arm, and man a fleet at their own expense, and in exchange they would receive the right to recoup their investment — with profit — from whatever the expedition produced: prizes, tribute, revenues, conquered territory. The investors were, in effect, buying shares in a military venture. Genoa's whole public finance ran on variants of this idea. Its funded debts, the compere, were secured on specific tax revenues, divided into transferable shares, and traded among citizens; in 1407 they would be consolidated into the Casa di San Giorgio, one of the first great public banks in Europe and an institution that would eventually govern territories in its own name. Genoa did not have a state that raised money. It had a market that raised states.

The syndicate of 1346 raised twenty-nine galleys. Command went to Simone Vignoso, an experienced and hard-headed Genoese naval officer whose official instructions concerned the suppression of Turkish piracy and the security of Genoese interests, and whose actual intentions were considerably more specific.

The fleet arrived off Chios in the summer and demanded the island's submission. The Chians refused, and Vignoso settled down to a siege.

It was not a long one. He landed, invested the town, and cut the aqueduct — the standard and almost always decisive move against a walled Aegean port, where the water comes from the hills. Then he opened negotiations, and on 12 September 1346 the Chian authorities capitulated on terms.

Those terms deserve close attention, because they governed the island for the next two hundred and twenty years and because they explain why Genoese Chios worked when so many Latin regimes in Greek lands did not.

The Greek inhabitants were guaranteed: the retention of their Orthodox faith and their Orthodox bishop; the retention of their property; their own courts, under their own customary law, for cases among themselves; personal liberty; exemption from military service outside the island; and the continuity of local custom generally.

In exchange, they accepted Genoese sovereignty — and, decisively, they surrendered the regalia, the state revenues. Which meant the mastic.

Vignoso then sailed north and took Phocaea with its alum works, completing the set. Genoa now controlled both halves of the eastern Mediterranean's most valuable monopolies: the resin that only Chios produced, and the mordant without which Europe could not dye cloth.

And Genoa now had a problem, because it had acquired all of this with other people's money. The investors wanted their capital back, with the profit they had contracted for. The Republic owed them 203,000 Genoese lire, and did not have it.

What was invented in 1347 to solve that problem is the reason a small Aegean island appears in the history of the modern corporation.