Prison Bound?

The article provides empirical evidence on the use of two types of security in medieval finance: conditional hostageship and the community responsibility system. Both exposed guarantors to imprisonment or confiscation. Evidence from Dordrecht shows the former was frequently applied but was not very disruptive. However, the latter community responsibility system did lead to reprisals against merchants. It was used to provide the ruler with loan guarantees: Dordrecht's travelling citizens acted as collateral, and thus played a crucial role in enabling the ruler to create sovereign debt. The city's willingness to provide this financial service for many centuries, while exposing its merchants to reprisals in the process, must be seen in the context of Charles Tilly's model of an ongoing exchange where cities provided financial services and rulers compensated them with political and economic privileges.