Signalling Safe-Conduct(s): The Fiscalisation of Market Access for Castilian and Catalan Traders in Flanders During the First Half of the Fifteenth Century

Abstract

This article assesses the importance of two tax controversies in conditioning market access in fifteenth-century Bruges. It looks at diplomatic posturing on the management of this market and the conditions for partaking in its trade. The theory of ‘signalling’ is applied to highlight diplomatic stances and reveal the reasoning behind policy decisions including reprisals, taxes, and boycotts hitherto absent in the literature. Diplomatic, urban legal, and fiscal sources are consulted to reveal what the Castilians and Catalans, sizeable and organised merchant communities in Bruges, perceived as an existential threat to their trade—the ‘fiscalisation’ of market access. This article takes a comparative approach, employing the theory of signalling to determine the strategies of the various actors involved and their efficacy. The Duke of Burgundy and his administration emerge from this story as the prime agent in determining this equilibrium, with the Castilians and Catalans bringing their diplomatic and economic leverage to bear to prevent it. The city of Bruges, as lobbyist and interlocutor, was involved throughout attempting to find a balance between its many merchant communities. These cases offer historical insights into strategies of negotiation when the economic stakes are high.

1. Introduction

What was the role of diplomacy in managing commercial matters in fifteenth-century Bruges, the most important international marketplace north of the Alps? This article argues that the ‘prince’ played a vital role in diplomatically determining the costs of trade through the issuance of safe-conducts and the conditions underlying them but that he did not do so in an agency void. The prince’s role was strongest in conditioning market access through the imposition of letters of reprisal or marque—legitimising the counter-seizure of goods and ships—and punitive taxes (Prétou 2021, p. 195; Møller 2017, pp. 175–200). The article reaches this conclusion by looking at ‘signals’ (a term borrowed from the field of law and economics and legal sociology) such as diplomatic brinkmanship, taxes, and maritime behaviour.

In 1421 and 1440, the Duke of Burgundy Philip the Good (r.1419–1467) took two at face value identical decisions: raising the costs of trade for the Castilian and Catalan traders in Bruges in the form of a tax on their imports. Philip imposed these taxes for acts of violence carried out by members of both Iberian communities at sea, which had damaged Hansards and Flemish commercial interests, and consequently his own economic interests. As a punishment, he made the Castilians and the Catalans pay financially for their trespasses. To contextualise these ducal interventions, it is valuable to review how scholars have tended to explain the governance of trade in the late medieval period. In the language of the New Institutional Economics (NIE), which seeks to make sense of economic development through the prism of human organisation and behavioural incentives, the ducal decisions to tax trade constitute an increase in the transaction costs of trade (a term borrowed from Williamson 1979, pp. 233–61). These transaction costs are determined by so-called institutions such as laws and kinship ties, which ideally minimise the costs of exchange. Solórzano Telechea has pointed out that maritime piracy was a major source of increased trade costs in the late medieval period, and that reprisals and escalation could have disastrous consequences to commercial activity (Solórzano Telechea 2023, p. 31; Stabel 2006, p. 102).

In order to reduce these costs to trade, North has pointed to the ‘prince’ or state as important in ensuring trade could navigate the boisterous waters of premodern commerce. Greif has looked at socially tightknit groups and merchant guilds self-organising their trade and controlling who could trade with whom (Gelderblom 2013; North and Thomas 1973; Avner Greif 2006; Williamson 1979, pp. 233–61). Gelderblom championed cities, rather than princes, as having played an important part in providing the courts and physical infrastructure that facilitated trade. In his view, autonomous urban legal institutions, not central courts, governed international trade in commercial hubs such as Bruges (Gelderblom 2013, p. 126). Princes and their central institutional arrangements, “[…] seemed to have played no role whatsoever in the governance of international trade in these cities [such as Bruges]” (Gelderblom 2013, p. 126). Dumolyn and Lambert have instead argued that all levels (urban, regional, and central or princely) were important in managing trade (Dumolyn and Lambert 2014, pp. 89–102).

One of the keys to this institutional understanding of trade, and central to this article, is diplomacy. Merchants visiting foreign territories and their lords had to negotiate for market access with the host, who in turn imposed conditions on that access. Those conditions were a result of a willingness from both sides to engage in mutually beneficial trade relationships, whilst recognising the risks associated with inviting in multiple trading groups with their own trade interests and rivalries. For a trading city such as Bruges, communication was vital in maintaining its commercial preponderance. A formal network of messengers allowed it to mobilise a pro-trade coalition in the export-oriented County of Flanders, Philip’s most important commercial asset, whilst an informal network maintained by its foreign merchant community connected its market to vital information on prices and wars. During conflict, this connectivity was useful for Bruges to make clear its intentions and pursue its goals, although it also made the city vulnerable at the hands of merchant groups who could deny the city vital market information by removing their trade (Lowagie 2009, pp. 276, 278–79, 293; 2010, pp. 53, 57–59; 2012, pp. 28, 32–33, 174–75, 178). Bruges not only dominated commercial exchange as the greatest late-medieval market-place north of the Alps but also served as a diplomatic crossroads. It brought together the commercial and political worlds of the Mediterranean, Baltic, and North Sea; Italians, Castilians, Catalans, Portuguese, English, French, and Hansards all traded with one another in the city (Stabel et al. 2018, pp. 196–267; Racine 2017, pp. 381–91). With that commercial intensity and diversity also came conflict, diverging interests, and diplomatic repercussions.

The existing literature covering the Castilian (1421–1428) and Catalan (1440–1450) tax controversies, although rich in description, does not delve into the how and why of diplomatic decisions and posturing (Paviot 1995; Finot 1899). The impact on the costs of trade of ducal taxation is also not considered. To fill this gap, this article considers two categories of transaction costs borrowed from the NIE literature: bargaining and decision costs (how much does it cost in money, time, and effort to access a market and come to an agreement about the conditions of access); policing and enforcement costs (making sure the other party credibly commits to their part of the bargain). These come to the fore here through the expenditure of resources on diplomacy by the actors involved and the necessity to adhere to fiscal measures. Actions such as the setting up of embassies and investing time in exchanging proposals and counterproposals took time, effort, and money. These institutional arrangements safeguarded mutual trust between trading partners, which then (hopefully) reduced the costs of exchange (Williamson 1979, pp. 233–61). Therefore, understanding how these decisions came to be, and which arguments were used to change that cost equilibrium diplomatically, is necessary to get a fuller picture.

Until now, however, studies on Burgundian diplomatic history have either focussed on how the Dukes recruited diplomatic agents or the dynastic scheming of their foreign policy (Van den Broeck 1979; Vaughan 1970). Commercial policy features as an aside to alliance-building in the Hundred Years War, or in preparation of a Crusade (Spitzbarth 2007, pp. 183–204; Solórzano Telechea 2015, pp. 221–44; Vaughan 1970, p. 259). For example, De Clercq et al. have shown that at least in the Catalan case, the tax controversy took place at a time when Burgundy and Aragon were cementing a crusading alliance, highlighting international power politics at play (De Clercq et al. 2015, pp. 153–71). An exception in the literature, showcasing attention to commercial diplomacy in this institutional story, is the existing work covering the set-up of Genoese trade in medieval Bruges (Lambert 2011; Braekevelt 2008, pp. 117–30).

This attention is, however, lacking for the Castilian and Catalan tax controversies, despite the fact that these issues took up 10 to 25% of the Flemish diplomatic agenda at the time, as Figure 1 and Figure 2 below show. A closer look is warranted into this flurry of diplomatic activity, which reveals the intimate involvement of both the city of Bruges and the Duke, and in the case of the Catalans also that of the Duchess. It also leads to different conclusions regarding the Duke’s involvement in managing trade in both cases, who influenced his decision-making in fiscalising market-access, and how. As a result, it allows for a test of Gelderblom’s assertion that the Burgundian dukes mostly damaged Bruges’ commercial interests, if they were actively involved at all (Gelderblom 2013, p. 18).

To address the gaps, this article applies ‘signalling’ theory as a methodological tool. Signalling posits that organising society and safeguarding the mutual trust vital to commerce is not always a function of the law but also of the identification of a ‘signal’ as trustworthy. Signalling is, thus, a means of communication to convey information about one’s commitment to certain norms and expectations. This concept can be applied historically (Posner 2002, p. 173; Curtis et al. 2016, pp. 751–74). Although not unprecedented in the commercial historiography of the Low Countries, the application of signalling has only been done marginally (Puttevils 2012, p. 40). In this article, signalling allows us to discern the prince’s economically motivated reasoning behind policy decisions so far absent in the literature. The ‘signals’ employed to this end are identified in diplomatic, normative, judicial, and fiscal sources and are compared between the Castilian and Catalan case studies.

From these case studies, it will become clear that the crucial signals are violent behaviour, as well as diplomatic posturing such as threats of boycott and taxation. This is not because law was absent in medieval Bruges but because trade disputes also had a diplomatic dimension. Publicising, shaming, and penalising transgression were employed by the Duke and the city of Bruges as a deterrent for undesirable behaviour such as maritime plunder. Conversely, threatening to take one’s trade also worked as a deterrent; this is exactly the sort of brinkmanship that the negotiations reveal the Castilians and Catalans did. This article demonstrates that looking at signals extracts the why and how of diplomatic decisions and posturing, as well as communication regarding the costs of trade.

The sources and method, and the application of signalling to the discourse around safe-conducts, will first be discussed. The article then goes through the two tax controversies separately before concluding.

2. Sources and Method

The main resource used here, the Handelingen van de Leden en van de Staten van Vlaanderen, allows us to look at the role of the Duke, Bruges, and the Castilian and Catalan merchants in these tax controversies (Blockmans et al. 1959–1981, henceforth referred to as HLS. See Vol. 1, xiii). These Handelingen are a source publication based on excerpts of accounts from cities and ducal officials, and help us identify meetings involving the Members of Flanders who featured heavily in these tax negotiations. These Members were an assembly gathering the aldermen of the major Flemish cities of Ghent, Bruges, and Ypres, as well as the rural district around Bruges. From the fourteenth century, the Members were formalised into a representative institution, dominated by the big trading and industrial centres of Flanders. This development necessitated formal bargaining sessions, with politics reduced to sets of compromises between the Duke and urban elites (Dumolyn 2008a, p. 6; Dumolyn et al. 2018, pp. 293–94). These Handelingen are useful to us because on matters of importance, internationally and economically, they reveal a reality in which the Duke and the cities engaged in regular, formalised discussions, including commercial diplomacy and the signals that resulted from it (Blockmans 1978, p. 211).

A look at this source revealed periods of commercial and diplomatic stress between Burgundian Flanders and Castile and Aragon (of which the Catalans were subjects) in the first half of the fifteenth century, with the imposition of punitive taxes on their trade. Notably, discussions concerning Castilians and Catalans dominated a growing share of total trade-related sessions after the 1410s (see Figure 1, Figure 2 and Figure 3 below). This growth is matched in the meetings as well by an increasing sense of insecurity on the part of the parties involved (Hansards, Castilians, Catalans, and Bruges) in maritime transgressions perpetrated by or victimising Castilians and Catalans. The discussions, in a relative sense, peaked in the 1420s, with the Castilian tax controversy taking up more than 20% of the Members’ trade-related meetings, before stabilising at around 10% as discussions moved on to the Catalan tax controversy. The cut-off for the analysis was set at 1450, the year the Duke decided to rescind the Catalan tax.

Figure 1. Meetings pertaining to Castilian and Catalan trade, 1390s–1440s. Source: Handelingen van de Leden en van de Staten van Vlaanderen (HLS).

Figure 1. Meetings pertaining to Castilian and Catalan trade, 1390s–1440s. Source: Handelingen van de Leden en van de Staten van Vlaanderen (HLS).

Figure 2. Meetings on Castilians and Catalans as a share of total trade-related sessions in the first half of the fifteenth century (N = 1057). Source: Handelingen van de Leden en van de Staten van Vlaanderen.

Figure 2. Meetings on Castilians and Catalans as a share of total trade-related sessions in the first half of the fifteenth century (N = 1057). Source: Handelingen van de Leden en van de Staten van Vlaanderen.

Figure 3. Trend over time. Source: Handelingen van de Leden en van de Staten van Vlaanderen.

Figure 3. Trend over time. Source: Handelingen van de Leden en van de Staten van Vlaanderen.

The Handelingen are a high-frequency compilation, although the accounts themselves are typified by their brevity. This is to be expected, given that much of the compilation was drawn up from documents related to book-keeping, which were then pieced together by researchers attempting to reconstruct the diplomatic and policy agenda of the Members and their dealings with the Burgundian dukes. As a result, linkages between various affairs are marginalised, namely the conditions underlying safe-conducts and the recurrence of tax-related discussions. Consequently, the numerically abundant data from the Handelingen are complemented by additional sources from the City Archive of Bruges. These include Louis Gilliodts-Van Severen’s source publications (Gilliodts-Van Severen 1907; Gilliodts-Van Severen 1901), and charter books such as the Roodenboek and Groenenboek A. Supplementary insights are drawn from Bruges’s civil sentence register for 1447–1453, recording judgments from the city court. The article also draws from ordinances and ducal decrees compiled in published sources, as well as from the financial information compiled in the city accounts of Bruges (Bartier et al. (1974), Cauchies 2001–2013; SAB, Stadsrekeningen, particularly those for 1419–1420, 1421–1422, 1422–1423, and 1423–1424). Gilliodts-Van Severen’s source publications assemble selections of disputes and provide a convenient starting point but are guided by perceptions of what was considered relevant in the late nineteenth and early twentieth centuries—mostly urban legal disputes and conflicts in the Bruges market on debts, privileges, and maritime violence, many involving Castilians and Catalans (Fieremans 2021, pp. 439–80; Dreijer 2021, pp. 118–38). The city’s charter books compile lists of trading privileges in full, as well as peace treaties and staple regulations organising the city’s market, whereas the Groenenboek A is a collection of sentences, usually recording cases that went in the city’s favour, thereby setting a favourable precedent (Fieremans 2023, pp. 38–39). The civil sentences register used in this article gives us insight into complaints related to Catalan maritime violence. The article also uses the Hanseatic recesses, which record gatherings, communications, and decisions taken by the Hansard cities, and in this case their stance regarding Castilian maritime violence and the resulting punitive taxation (Koppmann 1893–1897, henceforth HR, specifically volumes VII & VIII).

3. Signalling and Safe-Conducts

Fundamentally, a commercial conflict revolves around a lack of trust between trading partners (Greif 2000, pp. 251–84). Legally binding contracts are one way in which this deficit in trust can be mitigated. This article considers diplomatic signalling as a way of shaping a legal document such as the safe-conduct, behaviourally. A safe-conduct is a key indicator of diplomatic activity and a letter of safe passage granting safe access to a market, much like a modern trade agreement. They were bestowed by a prince, and offered those travelling from abroad protection while en route to or residing in the issuing polity (Van den Broeck 1979, p. 121). For the Castilians and Catalan traders under study here, they could receive two types of deals—individual safe-conducts protecting person(s) and possessions and comital privileges issued by the Duke; both were signals of trust. The latter could include a safe-conduct but it was usually a collection of articles relating to dispute resolution mechanisms, tax exemptions, and rights pertaining to the salvaging of shipwrecked vessels and lost goods. In our case, the safe-conducts were either issued on their own or included in a privilege charter as a separate article. For instance, the 1348 privileges for the Castilians include a safe-conduct in the very first article (Finot 1899, p. 55; de Larivière 2007, p. 69. Gilliodts-Van Severen 1901, pp. 8–12; Cauchies 2001–2013, p. 155, from Diegerick 1853 III, 40, no DCCLXII. The original seems to have been lost but a published transcription survives).

Individual safe-conducts, granted to solitary traders and their ship(s), tended to be limited in time. However, if they were part of a collective set of group privileges granted to a trading community, they tended to be valid for an indefinite period (Fieremans 2023, p. 153; Dumolyn and Lambert 2014, p. 96). This was the case for the Castilians and Catalans. Importantly, given that these documents were a princely competence, contesting their legitimacy or having them actively enforced in the event of confiscation or plunder was possible via princely diplomatic channels (Fieremans 2023, p. 160). These safe-conducts can be interpreted in behavioural terms:they were underpinned by the diplomatic signalling of good intent and cooperative conduct on both sides. Functioning as bargaining chips, safe-conducts symbolised the mutual interest of both parties in fostering a trading relationship. They signalled good intent with the promise of mutual profit, if exchange happened fairly. “Safe-conducts not only provided protection to travelling merchants, they also played the important role of serving as a way for foreign merchants to credibly display their commitment to fair exchange” (Smith 2014, pp. 184–85). Even if diplomatic relations reached a low point, such as the imposition of punitive taxes, continued negotiations by the affected merchants reflected a continued mutual interest in resuming the trading relationship. On the part of the Duke, the signalling commitment instead revolved around providing safety and stability for foreign traders. “Between 1250 and 1450, virtually every group of foreign traders, even those who merely intended to come to Bruges, were promised free passage and safeguards against arbitrary confiscations and arrests” (Gelderblom 2013, p. 143). It was in the prince’s interest to guarantee safe access to the Bruges market, although this also came with strings attached. This approach helps us understand the Duke’s fiscalisation, rather than cancellation, of market access in the tax controversies discussed below.

4. The Castilian (1421–1428) and Catalan (1440–1450) Punitive Taxes

The Castilian and Catalan trading communities in Bruges faced a similar commercial hurdle during the first half of the fifteenth century, with punitive taxes amounting to 5% of the value of Castilian trade and 2.5% of the value of Catalan trade. Both taxes were justified by making explicit reference to maritime violence and plunder, whilst diplomatic talks displayed a willingness, from Bruges and the Duke, to avoid what would be a damaging cycle of reprisals (the forcible seizure or damage of goods and persons in response to a previous transgression).

The Castilians and Catalans were important trading groups in Bruges, who wielded substantial economic influence already in the fourteenth century (Gilliodts-van Severen, Cartulaire de l’Ancien Consulat 1901, pp. 31, 75; Murray 2000, p. 7; Casado Alonso 2002, pp. 67–68; Casado Alonso 2002, pp. 53–54; Solórzano Telechea 2015, pp. 221–44). Taken together, they could muster at least 50 merchants in the mid-fifteenth century, out of an estimated Bruges total of 400 (Gelderblom 2013, p. 25; Stabel et al. 2018, p. 211). Furthermore, they were organised in nations, self-organised collectives of traders from the same region or city. In the case of the Catalans, they additionally enjoyed consular support at this time with self-regulating and representative powers (Bartier 1974, p. 28). As the numbers above show, they were also diplomatically active: these were important merchant communities in Bruges who were not mere pushovers at the mercy of ducal pressure. However, Castilian and Catalan market access to Bruges underwent fiscalisation in the first half of the fifteenth century (see Figure 4 below). This concept, fiscalisation, is borrowed from Pierre Prétou’s classification of the imposition of taxes by the French King on Castilian imports during the fifteenth century. This was done in an effort to secure the commercial route between Biscay and Flanders, troubled by maritime violence. The intention of this tax was twofold—to punish maritime violence and to anticipate the damages future Castilian violence would cause. The idea was to prevent reprisals by victims at sea, instead dealing with these cases and generating compensation a priori (Prétou 2021, pp. 40–41; Sicking 2015, pp. 267–68). In our cases, this fiscalisation is apparent in the diplomatic flurries relating to the Castilian and Catalan tax controversies, sparked by scenarios of violent sea robbery and resulting in the reshuffling of the conditions of their safe-conducts. The cases, thus, lend themselves to comparison; the taxes were comparable in origin and intent, and happened under the rule of the same Duke.

4.1. A Tax on Castilian Commerce: The 20th Penny

The Castilian tax, claiming every twentieth penny, or a five percent duty on Castilian imports to Bruges(such as merino wool, salt, alum, and iron) was imposed by Duke Philip the Good in 1421. He justified the tax by citing the aggressive behaviour of the Castilians since 1417 and the damage they had wrought on Flemish commerce. That was the official line. What also played a role were the complaints made by the Hansard merchants in Flanders, featuring in the agenda of the Flemish Members in the build-up to and during this tax (HLS III, 17, 25).

This Castilian tax has been treated before, notably by Jules Finot and Jacques Paviot (Finot 1899; Paviot 1995). In Finot’s case, it is limited to the mentioning of the tax still animating discussions in the 1440s, despite Philip rescinding it in 1428. With that rescindment, the Duke also suspended letters of marque that legitimated counter seizures targeting Castilian shipping. This was done at Bruges’s request, citing difficulties in applying the tax to the correct people. In other words, the wrong people were being caught in the diplomatic and reprisal crossfire (Gilliodts-Van Severen 1907, p. 693; Finot 1899, pp. 172–73). Finot’s account is brief but it does tell us that the tax controversy continued well into Philip’s reign.

Paviot went into more diplomatic depth, tracing the friction between the Flemish and the Castilians going back to at least the latter defeating the Hansard salt fleet off La Rochelle in November 1419. Bruges’s accounts confirm that Flemish merchants also suffered losses, with at least 12,000 lb gr. needed to compensate them. Additionally, the Hanserecesse mention the loss of 40 ships, resulting in a further 25 not daring to sail out. In fact, the Hansards also organised so-called ‘peace ships’, financed by an internal toll in Bruges, to secure their trade to and from the city. As a result, the Members of Flanders decided to send an embassy to King Juan II of Castile (r. 1406–1454). Crucially, Finot and Paviot wrote, the Castilian merchants threatened to leave Bruges in the event of reprisals, a ‘costly signal’ that was credible given the availability of alternative ports in Zeeland and Brabant, thereby necessitating direct diplomatic contacts at the highest level. Upon the return of the ambassadors sent to conduct the talks with the Castilian King, Bruges suggested a tax to compensate the damages caused between 1417 and 1421. This was a five percent addition, in total merchandise valuation, to the Castilians’ enforcement costs; their access and safe-conduct now depended on the payment of this supplementary fee. This tax was imposed by the Duke in 1421. Now new issues arose, relating to enforcing the tax and continued acts of Castilian maritime harassment, leading to Flemish and Hansard reprisals. Finally, in 1427, a boiling point seemed to have been reached as the Castilian King—heavily lobbied by his merchant community which now had to bring more resources to bear in bargaining for unfettered market access—instructed his subjects to cease their trading activities in Flanders. The transaction costs were unacceptable to the Castilians. As a result, and after consultations with Bruges, the Duke felt obliged to rescind the tax in 1428 (SAB, Stadsrekeningen, 1422–1423, f. 82v; 1423–1424, f. 82v; 1419–1420, 88r. On the compensation, which was initially to be raised by Flanders from its own fiscal resources, see Stadsrekeningen, 1419–1420, f. 92v-93r; HR VI, 348; HR VII, 142, 288; Paviot 1995, pp. 216–17; Fieremans 2023, pp. 159, 357–58; Stabel 2006, pp. 99–102).

The literature does not tell us the whole story, however. We know from a ducal decree that by 1418 the reparations issue was already on the Flemish commercial agenda. Moreover, the Bruges city accounts point to Flanders already footing the bill of Hansard damages suffered in Flemish waters. Whether these were directly related to the Castilians, however, is unclear. We do know that already in 1417, the Hanserecesse mention the necessity to equip ‘peace ships’ to combat sea robbers. On the Castilian issue, it would take until 1421 for all wares originating from regions under Castilian control to be subjected to the tax (see

Table 1. A timeline of the negotiations, 1420–1435. Sources: HLS III, Groenenboek A, HR VII and VIII, and Gilliodts-Van Severen (1901).

Period	Developments	Outcome	Signal
1417–1420	Castilian harassment of Hansard and Flemish trade	Anger among the Hansards, calls for restitution and threats of reprisal	The safe-conduct is imperilled
June–August 1420	Negotiations (Flanders, Castile, Hansards)	Embassy to Castile	Castilian behaviour is unacceptable
July–August 1421	Embassy report, ongoing troubles with Castilians	Policy recommendations	Hansards complaints are serious enough to provoke policy change
August 1421	Ducal tax decree	20th penny tax imposed	The middle way is chosen—taxation instead of violent reprisal
July–September 1422	Renewed embassy and tax negotiations between Bruges and the ducal administration	Redistributing the tax	The Hansards complaints have been addressed
1422–1424	Castilian safe-conduct	Renewal of the safe-conduct	Good behaviour is rewarded
March–May 1427	Castilian tax fatigue	Negotiations to rescind the tax lest the Castilians leave Bruges	‘Costly signal’: Escalation of the stakes—‘accept or lose our trade’
Summer 1428	Revision of Castilian privileges	New set of Castilian privileges and rescindment of the tax	Castilian ‘blackmail’ works

), signalling not just intent but forceful action. Castilian access to the Bruges market was now fiscally conditioned, constituting an increase in transaction costs; Flanders and the Duke felt it was necessary to make the Castilians pay for their transgressions in order to ensure proper conduct and protect both Hansard and Flemish commercial interests (SAB, Groenenboek A, f108r). It also came after the Members granted letters of marque and reprisal with ducal permission. This discomforted the Castilian traders in Bruges. Their threat to withdraw from the city soon followed. The tax was, therefore, likely viewed as a more sellable act of escalation, signalling discontent, albeit not constituting a full breakdown of commercial relations into a cycle of violent reprisals (Cartulaire de l’ancienne Estaple, 653; and Groenenboek A, f108r–108v). The decisions and motivations behind this subtle balancing act are, however, absent from the existing literature. This is important because a year earlier (1420) the Hansards had attempted to seize a Castilian ship in the Zwin (a tidal inlet connecting Bruges to the sea), which they claimed was originally theirs (SAB, Stadsrekeningen, 1418–1419, f. 82v; 1419–1420, f. 87v, 88v, 95r-95v; HR VII, 165, 231). However, the situation did not descend into violent chaos between Hansards and Castilians off the Flemish coast. Diplomatic signalling, by the Duke, Bruges, and the Castilians, played a role in this regard.

Crucially, the decision to issue the tax was made by the Duke, at the request of the Members and Bruges in particular, who convened five times over the course of 1420 to discuss an embassy sent to Castile and complaints by the Hansards about the Castilians. These complaints related to the infringement of their privileges, specifically the safe-conduct safeguarding their lives and goods in the wake of what had happened off La Rochelle and continued tensions in the Zwin inlet. They felt they were entitled to reprisal as the behavioural contract had been violated. In the spring of 1420, an agreement was reached between the Members and the Hanse, constituting a binding promise that a policy response would come. This signalled the Flemish commitment to placate the Hansards and punish Castilian transgression. Whereas the existing literature focusses on the tax as a punishment of Castilian behaviour, it is clear that the Duke’s response, and Bruges’ intercession, also involved placating interests and balancing demands. The game was, thus, afoot. In June that year, the Members reconvened with the Duke’s chancellor and Hansard representatives to discuss the content and form of the restitution. This resulted in an embassy sent to Castile (HLS III, 17, 25, 26, 27, 28; HR VII, 576). The actors involved were trying to find a compromise that would appease the angered Flemish and Hansard merchants, without chasing away Castilian trade from Bruges. A signal of anger at Castilian transgressions was transmitted, although also a willingness to prevent a cycle of maritime violence and the economic uncertainty that would entail.

Upon the embassy’s return from Castile, the emissaries submitted their report by the summer of 1421 to the Members and the Duke. This coincided with additional reports of damages done to certain Flemish skippers; a convenient reminder of the trepidations Flemish traders still had to endure (HLS III, 67). It also followed further complaints by both the Hansards and the Castilians regarding the lack of respect for their privileges, including their respective safe-conducts (SAB, Stadsrekeningen, 1421–1422, f 83v–84r). By 1422, the tax was already being raised, as evidenced by Member discussions revolving around the distribution of the income from the tax. These ranged from compensating those damaged to paying the wages of the receivers of the tax and covering the costs of the various embassies sent to Castile over the past few years (HLS III, 108, 113, 92, 96). These discussions on the implementation of the tax rather than its validity or possible repercussions are a clear indication that at least in Flanders, the ruling authorities were content with the measure and had moved on from discussing its merits and demerits to discussing redistribution and implementation. They had chosen the route of placating both damaged parties, despite continued complaints, and subjecting the collective of Castilian merchants trading with Flanders to a tax. The policy reaction was not as top heavy as the existing literature suggests; it was the outcome of squaring multiple interests. Notwithstanding the Duke’s crucial importance in taking this decision, it was a decision informed by Bruges. Crucially, the impact on the Castilians’ transaction costs either did not feature or was considered tolerable by the Duke and Bruges.

However, the tax was eventually rescinded in 1428 after the Castilian King ordered his merchants to leave Flanders in 1427 (see Table 1). So how did we get to that point? The renewal of the Castilian safe-conduct came in the immediate aftermath of the imposition of the 20th penny; continued market access was fiscally conditioned. As far as the Members and the Duke were concerned, the tax had restored the behavioural contract, which meant that safe-conducts could be renewed and re-confirmed. Indeed, it seemed that the Castilians had come to terms with the tax as a permanent rather than a temporary feature of their trade in Bruges, with an agreement being reached by the spring of 1425 in La Rochelle, signalling their formal bilateral acceptance after yet another round of Hansard complaints (HR VII, 801, 802). The tax would be a fixed feature of the Castilians’ transaction costs, and specifically their cost of enforcement in the Bruges market.

However, in 1427, the Castilian King’s consent to the tax wavered. In February, the Castilian nation threatened a departure from Flanders, citing the 20th penny as the main culprit. This signalled that in fact this tax was more than just a nuisance to Castilian commercial interests, and that it had fundamentally recalibrated their transaction costs in the city for several years now—so much so that it was worth departing Bruges. That is to say, a ducal decision pushed them to the brink. The additional cost imposed by what Bruges and the Duke thought was a necessary measure to enforce proper conduct was too much for the Castilians to bear. It constituted a fundamental threat to the viability of their trade in Flanders, and this had to be communicated one way or another—in this case the signal of diplomatic brinkmanship. Negotiations were conducted by the Members with the Castilian merchant community “in order to keep them in the country, after being ordered by their king to return shortly […].” Moreover, the Hansards complained yet again that their ships were still being harassed by the Castilians. As a result, and indicating desperation on the part of the Flemish and the Duke, an agreement in principle was achieved swiftly to discuss the abolition of the tax. What is clear, however, is that in Flemish circles an understanding existed that this was a case of either–or; either they abolished the tax or the Castilians left (HLS III, 275, 274, HR VIII, 17). The Castilians’ signal was clear; the ducal decision to tax their trade had pushed them to the brink.

It fell to the Duke’s chancellor and the Flemings to figure out how a Castilian departure could be avoided. Reports of Castilian and English harassment of Flemish commercial interests reappeared, straining relations and raising the possibility of whether arresting Castilian and English persons and their goods would be a proportionate reaction. The Members were clearly skating on thin ice. The signal this would send, right in the middle of (re)negotiations on the 20th penny, with the expenditure of scarce bargaining resources (the Castilians had already threatened to leave) to fix relations, would be explosive. Instead, it seems that a decision had been made to arrest a singular Castilian ship as reprisal rather than resort to a collective measure (HLS III, 277, 279, 282, 297). The limited form of punishment was again to prevent overly aggravating a Castilian nation that was on the verge of quitting Bruges. Using a ‘costly signal’ had its limits.

By the summer of 1428, the Castilians had leveraged their brinkmanship with a formal request for a revision of their privileges. The reason for the Castilian threats was now clear enough. Their request included a renewed safe-conduct, and of course a rescinding of the 20th penny. This was a clear example of diplomatically pushing back against an increase in transaction costs. The result was a new set of privileges for the Castilian nation. One should, however, mention a caveat; the aldermen of Bruges had insisted the 20th penny would remain in place (HLS III, 315; Cartulaire de l’ancienne Estaple, 694; Groenenboek A, f. 187v; and Cartulaire de l’ancien Consulat, 23). Bruges, perhaps, considered the tax to be vital in two respects: firstly, compensating Hansards and Flemish skippers and traders for their losses at the hands of the Castilians, thereby portraying itself as a benign manager of its market; secondly, as leverage over the Castilian nation. Alas, the final decision lay with the Duke, whose importance in decisively impacting this affair could not be clearer, and with it also proof of his importance in managing commerce.

Thus, 1428 was a watershed year. The Duke decided to rescind the tax, after initial lobbying by Bruges which itself had been pressured by Castilian threats and complaints, or negative signals, about their market access. After two years of talks, a draft trade agreement was reached in September 1428, including the privilege of Castilian consular jurisdiction in Bruges. This agreement granted the Castilian merchants the power to have their own consul adjudicate their internal commercial disputes, and had been drawn up by the Members and the Castilian ambassador. It was then proposed to the Duke, his chancellor, and members of the ducal council. The city, prince, and court of justice were signing off on an agreement that legally emancipated a group of merchants they until recently taxed on account of maritime transgressions. This was an agreement those very same perpetrators had co-authored. This was a peculiar development, indicating successful negotiating and employment of bargaining resources on the part of the Castilians. By 1430, the details had been ironed over (HLS III, 325, 326, 327, 331, 351, 428, 429, 431, 432, 433, 434, 435, 436; González Arce 2010, p. 173). The city of Bruges considered the punitive tax necessary to an extent, be it for the financial restitution of the victims or as a signal towards the Castilians to tuck their tails in for the foreseeable future. It did so while fully aware of Hansard agitation with the lack of violent reprisals (HR VII, 576, 800, 802; VIII, 63, 66).In the end, however, the city crucially agreed to table the issue with the Duke despite opposing its rescindment.

The 20th penny tax was an attempt at bringing the Castilians back into the fold of trustworthiness, after the losses they had inflicted on the Hansard trading fleet and Flemish commercial interests, whilst raising the funds necessary to compensate those damaged by maritime transgressions. This topic quickly dominated the Flemish commercial diplomatic agenda, with the Castilians and Flemings expending ample bargaining resources to get to an agreement, eventually resulting in the tax’s rescindment a mere seven years after its introduction. In this story, by looking at diplomatic signals, the city of Bruges appears as a mediator, attempting to balance the sometimes contradicting interests of its foreign merchant communities, navigating a commercial landscape ultimately shaped by the Duke’s normative and fiscal frameworks. Ultimately, however, the decision to introduce and rescind the tax remained with the Duke, although he did not act without input from Bruges and repeated Hansard complaints, as well as, crucially, Castilian brinkmanship. In fact, enforcement and bargaining costs were a part of this story, motivating policy decisions and diplomatic signals by all parties.

4.2. A Tax on Catalan Commerce: Foul Play?

In 1442, Bruges sent a rider to the Duke’s central chamber of accounts in Lille, regarding the protection of the “arrest done on the goods of the Catalans” (SAB, Stadsrekeningen, 1442–1443, f 46v). This referred to a second tax controversy, this time on Catalan imports, which played out in the 1440s (see

Table 2. A timeline of the negotiations and events, 1435–1450. Sources: HLS II and III, Finot (1899), Paviot (1995), Gilliodst-Van Severen (1901, 1907), Roodenboek, Register Civiele Sententies (1447–1453), and Sommé (1998).

Period	Developments	Outcome	Signal
1435–1436	English sea robbers harass Catalan shipping in the Flemish ‘stream’	Catalan complaints regarding their safe-conduct	The safe-conduct is imperilled
1436	‘Santa Maria de Saa’ captured by Catalans	Complaints from Flemish merchants impacted	Catalan war acts are disproportionate
August–October 1438	Letters of marque for Catalan shipping discussed	Opposed by Bruges	Bruges champions de-escalation
1438–July 1439	Aragon refuses to compensate the damages caused	Catalans advised to leave Bruges	‘Costly signal’: Escalation of the stakes—‘accept the status quo or lose our trade’
January1439–March1440	Discussions on the restitution of Flemish trade	Proposal for a 1.65% tax on Catalan trade	Merchant complaints are taken serious enough to provoke policy change
14 March 1440	Ducal decree	Tax imposed on Catalan trade	The middle way is chosen: taxation
1444	Duke Philip decrees a tax increase	Tax on Catalan trade increased to 2.5%	A unilateral act by the Duke to compensate himself
1448	Tax complaints go through legal proceedings in Bruges	Certain merchants are cleared from having to pay the tax	The net of taxation is cast too wide
1448–1450	Duchess Isabella gets involved and travels to Barcelona	Committee set up to investigate the tax	The Duke’s error will be corrected
30 January 1450	Ducal decree	Tax rescinded	Merchant complaints work

). The existing historiography on the Catalans in the late medieval Low Countries highlighted their relative ‘invisibility’ in the general literature on trade in fifteenth century Flanders (de Boer 2010, p. 246). Nevertheless, some scholars have tried to amend this problem. Desportes Bielsa, in his article on the Catalan consulate in Bruges, only mentions this tax contextually, explaining Bruges’s involvement in its negotiation by pointing out that commerce dictated the city’s policy standpoints. The Duke, in contrast, was an absent spectator only moved to action by his subjects (Desportes Bielsa 1999, pp. 375–90).The why and how of this problematic period of Catalan–Flemish trading relations are left to the side.

According to Pifarré Torres, one can discern a peak of Catalan–Flemish trade in the late fourteenth century. By 1452, however, there were only five Catalan merchants present in Bruges, not because Bruges was entering a disastrous dynamic of decline but because Catalonia itself was at a relative commercial nadir (Maréchal 1951, p. 27). Pifarré Torres places this major contraction of the fifteenth century later, after 1462, with the onset of civil war in Aragon (Pifarré Torres 2002, p. 24). In contrast, de Boer questions whether the signs or even symptoms abroad of this crisis of Catalan trade can be discerned earlier, a view this article corroborates by pointing to the punitive tax imposed in 1440. Studying the 1450s and 1460s, de Boer sheds light on issues faced by Catalan traders in Flanders, the fets (deeds or facts), revealing Duke Philip the Good, from a Catalan perspective, as a man who “does many large annoyances” and does so “contrary to every law” (de Boer 2010, p. 256). The complaints related to their rights being infringed, safe-conducts being violated, the seizure of goods, and the rejection and delay of claims of compensation. In response, an embassy was sent by Barcelona and the Aragonese King to end these “vexations”, with the focus being on the safe-conduct and an exemption from right of shipwreck. The diplomatic efforts were evidently successful, as testified by the 1461 general safe-conduct and freedom of shipwreck granted by the Duke (de Boer 2010, pp. 246–47, 256–59, 264, 268; Maréchal 1951, p. 27; Lambert 2011, p. 197). In short, the 1450s and 1460s were a period of particular stress for Catalan trade in Flanders.

This article finds that the traces of the original decline in trading contacts between Catalonia and Flanders even pre-existed the fets de Boer studied, and that this has to do with the transaction costs of their trade. There were long-running frustrations among the Catalan traders that preceded the events leading up to a tax on their trade, originating in the 1430s, related to not being exempted from shipwreck fees and arbitrary confiscations. Moreover, maritime predation and the safe-conduct were on the agenda as well. In 1435 and 1436, English sea robbers captured Catalan ships off the Flemish coast. This was in breach of the safe-conduct (1414) the Catalans were supposed to enjoy in Flemish waters, notwithstanding their recent peace treaty that had been signed between Aragon and England (HLS II (1405–1419), 340, 343, 346; Finot 1899, pp. 162, 164). Catalan trade in Flanders had clearly been under pressure for a while.

In 1438, during a session of the Members, an ‘arrest’ on Catalans was discussed. Pieter Van Campen, a merchant and Bruges alderman, had suffered from Catalan violence at sea. The arrest was opposed by Bruges, in order not to rile up a Catalan nation already facing stress. Just as in the Castilian case, Bruges signalled its willingness to act as a calming broker, underscoring its hitherto underrepresented role in these negotiations whilst underlining the Duke’s importance as key decision-maker. The case would reappear at a session of the Members in July the next year, this time summarised as “an agreement for restitution of damages by the Catalans”, and again in early 1440. The agreement encompassed a tax impacting the enforcement costs of Catalan trade. Later, a second ‘victim’ of Catalan transgressions was also named in these talks, ‘Lauwereins Noble’, otherwise identified as Laurent (le) Noble. By autumn, the Duke had ordered the Four Members to address the issue and accelerate decision-making, despite protests from the Catalan consuls in Bruges (HLS III, 696, 732, 763, 765, 781; Lowagie 2011, p. 149).The game was afoot, and a tax was about to be raised on Catalan trade.

So what had happened? In 1436, a ship called the Santa Maria de Saa, captained by a citizen of Sluis of Genoese origin, had been seized by the “Aragonese”. The vessel had left Sluis, Bruges’s outport, with a cargo of wheat and was destined for Catalonia, from whence it sailed on to Genoa. There, the captain of the ship left to continue his trade in Tunis before returning to Flanders again, the end-node. Off the Barbary Coast, however, he encountered a larger vessel belonging to subjects of the Aragonese Crown. This vessel started a pursuit of the Santa Maria de Saa, which attempted to evade an altercation. Amid the panic, it floundered on the coast, resulting in its cargo being seized and the Genoese captain’s imprisonment. The reason for his arrest was that he had been accused of carrying goods for the Moors, enemies of the Aragonese King. Word of the events reached Bruges, implicating two individuals with an interest in the venture: Laurent le Noble, who was a member of the Duke’s close circle of friends and advisors; and Pieter Van Campen, a Bruges alderman. They decided to petition the Duke for justice, resulting in a flurry of letters sent to Barcelona, demanding the liberation of their business associate and the release of the merchandise he had been carrying. The authorities in Barcelona informed the Aragonese Queen, Maria of Castile, and the King of Navarra, Joan II, both acting in the stead of King Alfonso of Aragon (r. 1416–1458), who was away on campaign in Italy. Bruges also took on a role representing Catalan interests, likely being itself directly lobbied by Catalan consuls, merchants, and diplomats in the city. It appears that no decision was taken by the Aragonese authorities regarding the restitution of damages caused by this seizure, despite letters from the Duke and Duchess demanding action. Consequently, by July 1438, Duke Philip the Good had issued letters of marque to le Noble and Van Campen. These letters allowed them to enact reprisals, a ‘costly signal’, through the arrest and seizure of Catalans and their wares in Flanders, Brabant, Holland, and Zeeland. It was at that point that the Members, led by Bruges, decided to intervene and sway the Duke to embark on a different course of action. However, they only managed to delay the formal execution of these letters to August 1438 (HLS III, 763, 765, 868; Paviot 1990, p. 122).

The letters signalled a willingness on the part of the Duke and the injured merchants to escalate the situation into a cycle of reprisal—a cycle Bruges had an interest in mitigating, just as with the Castilians, lest it spiral out of control. Again, the Duke did not take this decision in a vacuum, and faced various signals of support and opposition in the taking of this decision.

In Barcelona, the reaction to these letters sanctioning reprisal and arrest was one of panic, with another request to the King of Navarra, the co-regent, to intervene. He now provided a reason why restitution from their part was not in order; the seizure of the ship had been a legitimate act of war. In other words, the direct restitution out of Catalan–Aragonese coffers was out of the question, as it signalled a precedent that pulled legitimate acts of warfare into the realm of illegitimate maritime plunder. This line of reasoning remained uncovered and unexplained in the existing literature, although it is crucial in understanding why a decision to tax Catalan trade was made. Consequently, the Aragonese authorities ordered the Catalan merchants to leave Bruges for Antwerp, a commercial rival, as their safe-conduct had come under duress, thereby mirroring the ‘costly signal’ the Castilians had employed in the 1420s. It is in the shadow of that departure of Catalan trade from Bruges that Duke Philip created a commission to hear the complaints of le Noble and Van Campen, to estimate the damages and produce a proportionate response; that is to say, the Duke was looked upon yet again to enact a policy response. This then opened up the road to a tax to replace or accompany the letters of marque—a softer signal in intent and execution than acts of coercive maritime reprisal (Paviot 1995, p. 214; Desportes Bielsa 1999, p. 378).

Indeed, in 1440, the Catalans were subjected to a punitive tax, raising a levy on commerce coming from Catalonia (Ferrer 2012, p. 48). It amounted to a 2.5% tax on the value of Catalan imports, and had been drawn up by the aforementioned commission. By the 14 March 1440, they had submitted a report, calculating the damages incurred by the Flemish plaintiffs as amounting to between 388 and 1288 lb. gr., resulting in a decision made by Flemish authorities to raise a tax of 1.65% on the value of Catalan trade. This was an additional strain on the enforcement costs of Catalan trade in Bruges; that is, until the Duke raised his own vexations, relating to the seizure of one of his caravels, which had allegedly been captured by the ‘Aragonese’ whilst en route to the Holy Land. Citing this as justification, Philip decided to raise the duty by an additional two groats to six in the pound in 1444 (to 2.5%), to be collected over a period of fourteen years. The receivers of this tax were none other than the well-connected Laurent Le Noble and Pieter Van Campen, the injured merchants we encountered earlier, rather than an independent receiver (Finot 1899, pp. 187–89; Paviot 1995, p. 214; Others serving on the commission were well-known officials such as Pierre Bladelin and Jan De Baenst. See Dumolyn 2008b, pp. 67–92; De Clercq et al. 2007, pp. 1–31. On De Baenst, Buylaert 2005, pp. 42–43). This was a rather fortuitous—if not surprising, given the good relations between Philip and Alfonso of Aragon—turn of events for the Duke, who could now add his personal financial loss to those incurred by some of his traders (De Clercq et al. 2015, pp. 153–71).

It is doubtful this tax increase was received with optimism in the Catalan camp; it constituted the second unilaterally imposed increase to their transaction costs in the space of four years. This was not exactly a signal of mutual trust and respect.

When justifying his actions between 1440 and 1450, the Duke cited the damages claim by le Noble and Van Campen as amounting to 3800 pounds. However, the commission set up to investigate damages came with a range of 388 to 1288 lb. gr.; the two claimants were not just recouping losses. This was a disastrous signal to send to the merchants frequenting Bruges’s market. In fact, the Duke mentioned that complaints started piling up, not just from Catalans but “unanimously” from other nations, likely referring to the confusion regarding who owned what and the inadvertent targeting of non-Catalan merchants. The complaints were serious enough for the Duke to admit it endangered Bruges’ commerce. He had entered a dangerous game of commercial brinkmanship. The merchants of Bruges also complained that the ship itself involved in the original seizure, the Santa Maria de Saa, was worth no more than 188 lb. 8s gr.—only a sixth of what had been raised so far via the punitive tax. Le Noble and Van Campen had been more than compensated, angering factions in Bruges, as well as abroad and at the ducal court, who feared the damage this tax was causing to the general trading environment (Gilliodts-Van Severen 1901, 40–42; SAB, Roodenboek, f. 150v.–154v). The Duke signalled his willingness to support and enact a fiscal measure that overshot its targets to compensate injured merchants who also happened to be politically influential. Moreover, its enforcement costs were no longer just hitting the Catalans but also Bruges’ trading community in general.

In his reasoning, Philip the Good was, thus, reflecting on his past action, citing the various complaints involving the Catalans, foreign merchants, and Bruges itself, linking it to the disproportionate nature of the return the tax was producing. Curiously, looking back on the decision-making process, he offered no mention of his own involvement in the matter. This was a convenient way of focussing the ire regarding a universally unpopular and commercially disastrous tax on two individuals, rather than himself. It is particularly notable since this was the second time that Philip the Good agreed to such a fiscal measure in punishing maritime violence by an Iberian trading group.

Some of these complaints passed by the Bruges court of law. Third-party merchants were apparently caught up in the tax. For example, the receivers of the tax, le Noble and Van Campen, had claimed payment of this “right” on several sacks of saffron imported by a Pierre Clavello, who in 1447 had refused to pay it since he claimed he sourced them from Genoa, not Barcelona. Bruges’s court cleared Clavello from any debt owed to the two receivers. In another case, the Catalan Saldone Ferrier contested the amount he was supposed to pay and agreed to go to arbitration over the issue. The arbiters agreed with Ferrier, a decision confirmed by the city court (Gilliodts-Van Severen 1907873, 933; SAB, Register Civiele Sententies (1447–1453), fol. 64r-v). This tax added to the enforcement costs, in money and time (and consequently opportunity costs), of Catalan and non-Catalan merchants alike. The tax was subject to contestation, with merchants trying to avoid paying it or contesting the amount, signalling distress at a collective punishment whose net seemed to be cast wider than was originally its purpose. The potential for a boiling-over point among the impacted merchant community is overlooked without looking at these signals in detail.

Not only were the Catalans still subjected to in their view “arbitrary” arrests legitimated by the Duke, the Genoese now joined the fray of complaints, pointing at not only the tax causing collateral damage to other trading nations in Bruges but also these Duke-sanctioned reprisals. Over the course of 1443, the Members argued that ducal officers had arrested the Catalans in direct violation of their safe-conduct. It is important to note that simultaneously the Catalans were active at the home front, petitioning their King to instigate a reprisal and sequester Flemish possessions in his lands (HLS II (1419–1467), 868, 872, 878; Carrère 1967, p. 113). Both sides were diplomatically signalling a low point in mutual trust—the continued and even heightened taxation of Catalan trade and the threat of reprisal on Flemish trade interests by Aragon. These were credible ‘costly signals’ that pushed the trading relationship between Catalonia and Flanders to the brink. Moreover, these diplomatic signals attest to the Catalans (and the Castilians before them), as well as other traders, as not being mere passive consumers of ducal decisions. They actively contested Philip’s decisions.

Although individuals such as le Noble and Van Campen were believed to have a legitimate claim in demanding restitution from the Catalans, clearly the Members—with Bruges at the forefront—thought the coercive reprisals were going too far. The Duke was, to put it mildly, overstepping the bounds of proportionality. The measure was not proportionate to the damage incurred by several Flemish merchants, bordering on portraying the Duke and his officials as predatory. This was an awful signal to project. With the spectre of escalating rounds of reprisal hanging over their heads, Bruges started repeating Catalan claims that these measures were “unjust” (HLS II, 873). The signal, combining fiscal pressure with reprisals, punishing Catalans for their transgressions at sea and subjecting their access to the Bruges market, seemed to have overhit its target. These events and complaints, these signals, led to the Duke’s decision to finally rescind the tax in 1450. Such diplomatic signals, relating to transaction costs and an overbearing—if not predatory—ducal fiscal policy, are absent in the existing literature.

Importantly, it was a corrective measure that was forced by Philip’s wife Isabella’s (1397–1471) actions, whose personal relationship to the King of Aragon (her brother was married to Alfonso V’s sister) cannot be understated. Her own personal financial receiver, Paul (not Pieter) Van Campen, was one of the officials presiding over the committee that advised the abolition of the tax on Catalan trade on grounds that it was raising more funds than intended (Sommé 1998, pp. 442–43).We know from the historiography that Isabella was a formidable ruler in her own right, often acting in Duke Philip’s stead if needed, including in matters of diplomacy. In fact, we know she travelled to Aragon in 1448 (Sommé 1998, p. 443). If we combine her diplomatic pedigree and involvement of her high officers with the complaints from various merchants outlined above, it is arguable that the Duke was pressured through both formal and informal channels to annul a tax that was doing more harm than good. The signals of distress were, consequently, not just of Catalan or formal diplomatic origin.

We know the punitive tax was abolished on the 30 January 1450, preceding a period of relative recovery of Catalan trade in the period leading up to de Boer’s troublesome fets. Between 1454 and 1463, around 30 Catalan trading missions found their way to Flanders. Compare that to sixteen between 1441 and 1453, coinciding with the tax controversy. It is not surprising then that only five Catalans remained in Bruges by 1452. Surely the impact on their transaction costs by this tax played a role. Philip’s rescinding of the tax, as mentioned above, was accompanied by a long justification of why he had initially taken the decision to raise it, including a principle of consistency; a similar tool was used to punish the Castilians for their maritime transgressions. Interestingly, however, this was only raised with the decision to rescind the tax in 1450. In that justification, the Duke cited Le Noble and Van Campen’s failed attempts to claim restitution via the Aragonese authorities, implying he had the residuary duty to intervene where the Aragonese authorities had failed to do so, first via letters of marque and reprisal and then via the punitive tax. The Duke presented himself as a caring overlord, eager to help his subjects who had suffered considerable commercial damages, an injustice that imperilled trade, thereby signalling his benevolence. What is also true is that he was helping his own interests in salvaging an expensive expedition to the Holy Land, which suffered at the hands of Catalan sea robbers (Paviot 2003, p. 90; Sommé 1998, p. 442).

By now, however, Philip the Good and Flanders had twice risked the wrath of merchant communities via the imposition of punitive taxes conditioning their market access and considerably changing their transaction costs. This signalled a willingness to go to the diplomatic brink, which had almost permanently lost Flanders much of its Iberian trade. These were the wrong ‘costly signals‘ to send—a brinkmanship that forced ducal decisions to rescind both taxes. This perspective has hitherto not been considered as such. Both tax controversies involved disputes that were intimately related to the behavioural contract underpinning the safe-conducts and privileges granted to the Castilians and Catalans. Finot’s analysis of the rescindment was positive, claiming it gave a new vigour to direct commercial relations between Flanders and Barcelona until the end of the fifteenth century (Finot 1899, p. 191). It is a claim that seems difficult to reconcile with de Boer’s study of the fets, and to which this article adds a problematisation before those fets in the mid-fifteenth century, namely that Catalan commerce in Flanders in the first half of the fifteenth century was heavily troubled by tax and maritime violence. The events leading up to the tax, as well as the ‘arbitrary’ arrests, were quite the dent in the behavioural contract that existed between the Catalans and their Flemish hosts, whereby adding a fiscal condition to market access imperiled yet another stream of Bruges’ trade. Differing from the Castilian experience, however, was a duke who saw an opportunity to attach his own financial interests on a policy type he had attempted before for a similar situation. His involvement in the Catalan case appears much more forceful and opportunistic than it was for the Castilian case. Therefore, these observations clash with the characterisation of Duke Philip’s commercial policy as being defined by the absence of his initiative (Desportes Bielsa 1999, p. 377). The ‘costly signal’ of adding his own financial interest to the Catalan tax is most certainly evidence of the possibility of ducal initiative in commercial affairs.

5. Conclusions

What appears before us is a history in which both the Castilian and Catalan communities in Bruges entered a negative economic conjuncture—one flared up by maritime violence and leading to the imposition of punitive taxes that increased their transaction costs on the Bruges market. Specifically, more resources had to be expended on bargaining their access to Bruges and on coping with the enforcement of these measures through taxation.

By employing the prism of signalling, this article identifies from the sources and existing scholarship likely motives behind the imposition and rescindment of these taxes. In the case of the Castilians, the tax reflected a frustration on the part of Hansard and Flemish merchants over the damage done to their trade since at least 1417 at the hands of Castilian traders and skippers. This was a frustration that demanded action without triggering a vicious circle of coercive reprisal and counter-reprisal. The tax was, initially, acceptable to all. It was costly but credible and enforceable. Over time, however, judging by the continued diplomatic activity, including the threat of Castilian trade quitting the city of Bruges, the imposition of a five percent duty on Castilian trade was perceived as too high a collective price to pay for the transgressions of certain members within their community. The threat to leave Bruges, another ‘costly signal’, and the subsequent decision to rescind the tax in 1428 did not come out of nowhere. Diplomatic posturing, including a signal of economic blackmail, paid off for the Castilians in convincing the Duke that rescinding the tax made commercial sense.

Regarding the Catalans, a similar story of maritime violence lay at the root of the imposition of a tax on their trade. In this case, the Duke’s personal financial interests and those of some of his high officials were directly impacted, making the decision to impose a tax directly collected by them personally an attractive prospect. In short, this was a more dubious basis for the application of a policy precedent. By looking at signals of distress, both diplomatic and legal, however, it was clear that the net was cast too wide, overstepping the boundary of proportionality, leading to complaints not just from the Catalans but other foreign traders as well. This state of affairs signalled the wrong message to foreign traders frequenting the Bruges market—one of murky policy decisions and arbitrary execution.

In both cases, the usage of (‘costly’) signalling brought the Duke, as well as to an extent the Duchess, to the fore as important agents in shaping the commercial environment and fiscal conditions of trade in Bruges during these two episodes of commercial diplomacy. It does so for a rich source corpus containing clear signals of compliance, non-compliance, and distress. Although the Duke was open to consultation from Bruges and the traders, as is clear in the Castilian tax controversy, the final decision was his to take. Moreover, the Catalan case also reveals an opportunistic dimension to his policy motivation.

The application of this signalling paradigm allows us to visualise the actors, their brinkmanship through ‘costly signalling’, and the role of diplomacy in impacting transaction costs in Northwestern Europe’s main theatre of international commerce. It also shows us the responsiveness of the Duke towards signals of distress from both his subjects and foreign merchants, and consequently his importance in managing commercial disputes. Philip the Good was neither absent nor uninterested, nor was he particularly proactive in his trade policy, although his decisions certainly weighed on transaction costs, and with them foreign merchants’ calculations on whether to stay or depart Bruges. In matters of trade, this prince mattered.