Digital Assets and the Law
Fiat Money in the Era of Digital Currency
Edited by Filippo Zatti and Rosa Giovanna Barresi
Thispublication is fundedby the EURecovery andResilience Plan (PNRR), aspartofthe DepartmentofEconomics andManagement’s ResearchProjectofNationalInterest(PRIN)at the University of Florence.
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BritishLibrary Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-19227-7 (hbk)
ISBN: 978-1-032-19235-2 (pbk)
ISBN: 978-1-003-25826-1(ebk)
DOI: 10.4324/9781003258261
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To Vincenzo Atripaldi,
My only ‘Master,’ Forever grateful for having shown me the Way
Contents
Listoffigures andtables
Listofacronyms andabbreviations
Editors andAuthors
Acknowledgements
Preface
PART I
Overview
1 A History of Central Bank Digital Currency and the Money Monopoly
FRANKLIN NOLL
1.1CBDCs defined
1.2The evolution ofCBDCs
1.3The money monopoly
1.4Conclusion: The money monopoly andCBDC
2 The Technological Factor in the Conception of Central Bank Digital Currencies
VINCENZO VESPRI AND ANDREA BRACCIALI
2.1Introduction
2.2Technologicalchoices
2.3Cashversus CBDC
2.4CBDCopportunities
2.5Conclusions
PART II
Central Banking and Monetary Economics in the Digital Currency Era
3 Monetary Sovereignty in the Digital Currency Era
CHRISTIAN PFISTER
3.1Introduction
3.2Notions
3.3Governmentandmoney
3.4Risks to monetary sovereignty
3.5Policy recommendations
3.6Conclusion
4 Central Bank Digital Currencies: A New Nexus Between Central and Commercial Banks?
ARTHUR ROSSITHE VIEWS EXPRESSED IN THIS CHAPTER ARE SOLELY THOSE OF THE AUTHOR AND MAY NOT NECESSARILY REPRESENT THE POSITION OF THE SAUDI CENTRAL BANK.
4.1CBDCs, agame changer for the relationship between centralandcommercialbanks?
4.2The Bahamas sanddollar or the challenges of introducing ageneral, domestic, two-tier,
permission-basedCBDC
4.3The design choices ofCBDCs are a crucial determinantofthepotentialimpacton the banking architecture
4.4Conclusion
5 Unlocking the Potential of Central Bank Digital Currencies in Developing Countries
SANGITA
GAZI
5.1Introduction
5.2Financialexclusion vs financialinclusion: Existing trends ofinnovative financialservices in developing countries
5.3The transformativepotentialoftechnology in promoting financialinclusion: From mobile money to CBDC
5.4CBDC’spromise ofaccelerating financial inclusion: Capitalising on existing infrastructure to adopt, distribute, andscale CBDC
5.5Promoting financialinclusion in a CBDC economy: Adigitalcurrency ecosystem as the primer
5.6Looking ahead: Additionalmacroeconomic challenges for developing countries hindering CBDC’s success
6 A Universal Stablecoin to Rule Them All?
DAVID TERCERO-LUCAS
6.1Foreword
6.2The risksposedby the euro area monetary system andits regulatory framework
6.3Amulti-currency stablecoin issuance
6.4Asingle-currency, e-money issuance
6.5Whatcomes next?Improving the regulatory framework
6.6Conclusion
PART
III The Central Bank Digital Currencies in the Mirror
7 Implications of the Digital Euro for Monetary Policy Transmission Outside the Euro Area
DEYAN RADEV
7.1Motivation
7.2Overview ofdigitaleuro designs
7.3Monetarypolicy implications
7.4Cross-borderpayments
7.5Euroisation: Pointofconcern or an opportunity?
7.6Conclusion andpolicy discussion
8 Digital Euro: Issued by Commercial Banks, Digitally Transforming the Industry
PHILIPP SANDNER, JONAS GROSS, AND ROMAN AVDEEV
8.1Motivation
8.2Forms ofthe digitaleuro
8.3Digitaleuro issuedby commercialbanks
8.4Digitaltransformation driven by the digital euro
8.5Outlookandconclusion
9 How To Design a Private and Compliant Central Bank Digital Currency?
JONAS GROSS
9.1The CBDClandscape
9.2Whyprivacy matters for CBDC
9.3Privacy andcompliance
9.4Adetailedproposal
9.5Conclusion
10 Beyond Central Bank Digital Currencies: Lessons from Japan’s experience
SHUJI KOBAYAKAWA
10.1Introduction
10.2Overview ofJapan’spayment, clearing, and settlement
10.3Recent initiatives for next-generation FMIs
10.4Medium- to long-term strategy for nextgeneration FMIs
10.5Conclusion
PART IV
Digital Currencies, Cryptocurrencies, and Stablecoins: Fiat Money and Legal Tender
11 The Applicable Laws to Cross-Border Payments in Central Bank Digital Currencies: The Late LexMonetaeor Long Live the LexMonetae?
CAROLINE KLEINER
11.1Premise
11.2The conceptandscope ofthe lex monetae
11.3The interaction between the lex monetae andother lawsapplicable to a cross-border payment
11.4The resurgence ofthe lex monetae within CBDCs: Anew digitallex monetae?
12 ‘Legal tender’ and Central Bank Digital Currency
FILIPPO ZATTI
12.1Changes in legaltender
12.2The role ofdigitalcurrency in shaping a new banking andpaymentsystem
12.3The legaldimension ofdigitalmonies issued (or not)by a centralbank
12.4Some finalconsiderations
13 A European Central Bank Digital Currency under German Law
SEBASTIAN OMLOR AND AURELIA BIRNE
13.1Statusquo
13.2The legalnature ofCBDCunder German law
13.3Legalregulation ofCBDCunder German law
13.4Futurequestions
13.5Conclusion
14 The Digital Loonie: The Legal Framework for a Central Bank Digital Currency in Canada and Beyond
POONAM PURI AND ILONA LARIONOVA
14.1Introduction
14.2Background: The loonie throughtheyears
14.3Implementing the digitalloonie
14.4Thepotentialriskofnon-digitisation
14.5Considerations for a digitalloonie
14.6Conclusions
15 The Evolution of the Finality of Payment or ‘How RTGSs, Instant Payment Systems, and DLT Platforms Change the Concept of Money’
ROSA GIOVANNA BARRESI
15.1The conceptoffinality andits historical evolution
15.2Theprinciple ofsettlement finality
15.3Frameworks andlegislations aboutdigital assets
15.4The extension ofthe doctrine offinality to digitalassets
15.5Law in the making: Digitalassets
15.6Atemporary conclusion
16 Central Bank Digital Currencies and the European Framework for Payments: Friends or Foes?
GABRIELLA GIMIGLIANO AND MARIA CECILIA DEL BARRIO ARLEO
16.1Introduction
16.2Aprimer on digitaleuro design choices
16.3The digitaleuro andpayments: Trade-offs andpolicy choices
16.4The digitaleuro andthe European regulatory frameworkforpayments
16.5The digitaleuro andpayments oversight function
16.6Conclusions
17 The Digital Euro, Stablecoins, and the Banking Sector
REYES PALÁ LAGUNA
17.1Introduction
17.2The digitaleuro: Why now?
17.3The digitaleuro andrisks for the banking system
17.4Stablecoins, MiCA, andthe banking sector
17.5Conclusion
PART V
Towards the Uncharted Times of the Digital Assets Era
18 Decentralised Finance and Capital Markets Regulation
EUGENIA MACCHIAVELLO
18.1Decentralisedfinance, capitalmarkets regulation, andCBDC: The aim ofthis chapter
18.2Benefits andrisks ofDeFianddifferent levels ofdecentralisation
18.3 ‘DecentralisedDLT’systems: Their multilayeredstructure andgovernance implications
18.4DLTnetworks andEUcapitalmarkets regulation: Existing laws
18.5The EUregulation ofdecentralisedDLT systems
18.6Decentralisednetworks: Anew type of business organisation deserving new rules?
18.7Conclusions: Decentralisation, regulation, andinsights for CBDCs
19 Central Bank Digital Currencies: What Future for Banks and Other Financial Intermediaries?
FRANCESCA MATTASSOGLIO
19.1Introduction
19.2Amemo on how centralandcommercial banks create money
19.3The CBDCandthe new monetary theories
19.4Direct, indirect, or hybridCBDC
19.5Remuneration andlimit holdings ofCBDCs
19.6Some CBDCprojects aroundthe world
19.7Some finalremarks
20 Beyond Digital Assets: What is Next for Money and Payments?
FILIPPO ZATTI AND ROSA GIOVANNA BARRESI
20.1Introduction: Fiat, legaltender, official currency, whatelse?
20.2Sovereignty andseigniorage in the digital currency era
20.3Interoperability, sovereignty, andfinality
20.4Emission rights as digitalassets
20.5The digitaleuro andpaymentprivacy
20.6Some final ‘tips’
Index
List of figures and tables
Figures
4.1 GDP/banknotes ratio in circulation in the US
4.2 Average value payments by type of payment instruments in the US, October 2021
5.1 Agency banking model
5.2 A digital currency ecosystem
7.1 CBDC pyramid and consumer needs
8.1 Taxonomy of a digital currency
8.2 Different variations of the trigger solution
8.3 Trigger solutions—DLT trigger vs. DLT native
8.4 Asset-as-a-service model based on IoT data
9.1 CBDC payment infrastructure
10.1 Overview of payment, clearing, and settlement in Japan
10.2 Large-value payment systems in three economies
Tables
5.1 Legal, regulatory, technological, and structural considerations for a trustworthy CBDC
6.1 Transmission of monetary policy via reserves
6.2 The impact on the commercial bank’s balance sheet of migration from bank deposits to e-money
6.3 E-money institutions setting up a 100 per cent CBDC reserve
Acronyms and abbreviations
ACH Automated Clearing House
AML Anti Money Laundering
BIS Bank for International Settlements
BoE Bank of England
CFT Countering the Financing of Terrorism
DAO Decentralised Autonomous Organisation
DvP Delivery Versus Payment
ECB European Central Bank
ESCB European System of Central Banks
ESMA European Securities and Markets Authority
Fed Federal Reserve
FSB Financial Stability Board
FMI Financial Market Infrastructure
CBDC Central Bank Digital Currency
CBoB Central Bank of The Bahamas
CPMI Committee on Payment and Market Infrastructure
CPSS Committee on Payment and Settlement Systems
DeFi Decentralised Finance
DLT Distributed Ledger Technology
EMIR European Market for Infrastructure Regulation
GDP Gross Domestic Product
GFC Global Financial Crisis
GSC Global Stablecoin
ICO Initial Coin Offering
IMF International Monetary Fund
IOSCO International Organization of Securities Commissions
IoT Internet of Things
KYC Know Your Customer
LVTS Large Value Transfer System
MiCA Markets in Crypto-Assets Regulation
MIFID Markets in Financial Instruments Directive
MIFIR Markets in Financial Instruments Regulation
OCC Office of the Comptroller of the Currency
PSP Payment Service Provider
PBoC People’s Bank of China
PoS Proof of Stake
PoW Proof of Work
RBI Reserve Bank of India
RTGS Real-Time Gross Settlement
SEC Securities and Exchange Commission
SEPA Single Euro Payments Area
SFD Settlement Finality Directive
SME Small-Medium Enterprise
SVP Special Purpose Vehicle
TFEU Treaty on the Functioning of the European Union
TIPS TARGET Instant Payment Settlement
UCC Uniform Commercial Code
UNCITRAL United Nations Commission on International Trade Law
UNIDROIT International Institute for the Unification of Private Law
USC Utility Settlement Coin
ZKP Zero-Knowledge Proof
Editors and Authors
Editors
Filippo Zatti (https://orcid.org/0000-0002-1528-3045), PhD (Univ. Sapienza Rome), is an associate professor in economic law at the University of Florence. He leads a working group called BABEL, which focuses on blockchains and artificial intelligence for business, economics, and law. He has held numerous positions, including fellow academic member of the European Banking Institute (EBI), individual fellow of the European Law Institute (ELI), research associate at the University College London Centre of Blockchain Technology (UCL CBT), expert at the Digital Euro Association (DEA), and academic advisory member of the International Association for Trusted Blockchain Applications (INATBA).
Rosa Giovanna Barresi (https://orcid.org/0000-0002-2845-2194), LLM (FU), is a lawyer focusing on corporate and financial law. She teaches at the University of Florence’s School of Economics and Management as an adjunct professor for the Lab in Cryptoassets. She is also affiliated with BABEL and the DEA as an associate member and expert, respectively. She is part of the Digital Asset Task Force, a global coalition against financial crime. She is also the founder of Amerigo for Law.
Authors
Roman Avdeev, BSc (FSFM), is a partner at J3L Capital, leading risk at a top 10 Ethereum Mainnet DAO.
María Cecilia del Barrio Arleo (https://orcid.org/0000-0002-23552081), PhD (Univ. Trento), is a supervisor at ECB Banking Supervision and an EBI associate researchers’ group (ARG) member.
Aurelia Philine Birne, Dr iur, is a research fellow at the Institute for Law and Regulation of Digitalization at the University of Marburg.
Andrea Bracciali (https://orcid.org/0000-0003-1451-9260), PhD (Univ. Pisa), is a SICSA lecturer at the Department of Computing Science and Mathematics of the University of Stirling and a UCL CBT research associate.
Sangita Gazi (https://orcid.org/0000-0002-9151-1724), LLM (DU) and LLM (UW), is a PhD candidate at the University of Hong Kong, a senior research fellow at Rutgers Law School and a UCL CBT research associate.
Gabriella Gimigliano, PhD (Univ. Siena), is a lecturer in economic law at the University of Siena.
Jonas Gross, PhD (U UBT), is the DEA chairman and COO at etonec GmbH.
Caroline Kleiner is a full private international law and banking law professor at the University Paris Cité (formerly Paris V, René Descartes).
Shuji Kobayakawa, DPhil (OU), is a professor at the School of Political Science and Economics of Meiji University.
Ilona Larionova, JD (OHLS), is legal counsel at the Ontario Securities Commission.
Eugenia Macchiavello (https://orcid.org/0000-0002-7986-6987), PhD (Univ. Genoa) and LLM (NYU), is a tenure-track professor in economic law at the University of Genoa and an EBI research associate.
Francesca Mattassoglio, PhD (Univ. Milan), is an associate professor in economic law at the Bicocca University of Milan.
Franklin Noll, PhD (UMD), is the former President and Chief Historian at Noll Historical Consulting, LLC and now Lead Payments Specialist at the Federal Reserve Bank of Kansas City.
Sebastian Omlor, Dr iur, LLM (NYU), LLM Eur (UdS), is a full professor and director of the Institute for Law and Regulation of Digitalization at the University of Marburg.
Reyes Palá Laguna (https://orcid.org/0000-0002-9059-5698), PhD (UZ), is a tenure-track professor in business law at the University of Zaragoza.
Christian Pfister is a lecturer at Sciences Po (Paris) and a senior consultant in digital currencies.
Poonam Puri, LLM (HU) and LLB (U of T) is a full professor of corporate law, corporate governance and securities regulation at Osgoode Hall Law School, York University in Toronto.
Deyan Radev, (https://orcid.org/0000-0002-0445-0397), PhD (GSEFM), is a fintech and banking associate professor at the Faculty of Economics and Business Administration of Sofia University St. Kliment Ohridski.
Arthur Rossi is a financial regulation lead at the Saudi Central Bank.
Philipp Sandner, PhD (LMU), is a professor in business and IT at the Frankfurt School of Finance and Management and head of the
Frankfurt School Blockchain Centre.
David Tercero-Lucas (https://orcid.org/0000-0001-5201-6870), PhD (UAB), is teaching at the Comillas Pontifical University ICADE and is a DEA associate team member.
Vincenzo Vespri (https://orcid.org/0000-0002-2684-8646), is a full professor in mathematics at the Department of Mathematics and Informatics of the University of Florence.
Acknowledgements
In December 2020, during the Covid-19 pandemic, BABEL, a research team of the Department of Economics and Management of the University of Florence, organised a webinar with the unusual title (for an academic conference) of ‘What do fiat currencies still are for?’ Speakers included Francisco Rivadeneyra, Zighuo He, Bitange Ndemo, and Reyes Palá Laguna. In November of that year, we participated in a webinar organised by the Italian Embassy in the United States and the Amerigo Association. The topic of discussion was ‘Digital Dollar & Digital Euro: An International Perspective’ and featured guest speakers Christopher Giancarlo and Daniel Gorfine, who are advocates of the ‘Digital Dollar Project,’ as well as Tommaso Mancini-Griffoli of the IMF. The webinars led to a research project that created the book. After that, we had many meetings, discussions, and research tasks. It would not be easy to list them all because we had the chance to meet with numerous scholars, institutions, and organisations. We want to thank the Digital Euro Association (DEA) for extending the call for chapters to their members. We also appreciate Flaviano de Fusco for his behind-thescenes contributions, especially in clarifying the technical aspects of how the digital currency works during the custody phase.
The digital euro project has eliminated concerns about the legality of a digital currency as legal tender. However, unforeseen circumstances could still hinder its development. Our book explores the creation of fiat currency and legal tender in the digital era for all readers, regardless of background.
Currency is a complex concept, especially with the advancements in DLT. Legal experts struggle to define sovereignty’s role, making setting boundaries for the monetary phenomenon difficult.
We are currently observing the emergence of the third wave of currency—digital money. This comes after the use of paper money and electronic money. Electronic money only impacts the payment system, whereas digital money has the potential to replace both electronic and traditional currency. It is a novel form of currency with distinctive features that have the potential to revolutionise the concept of money and the way we carry out transactions. Money’s legal concept is evolving, affecting possession and custody.
A comprehensive analysis that includes legal, economic, and technical factors is required to fully grasp digital currency’s potential. We have gathered scholars from various regions of the world who possess diverse, yet complementary skill sets in developing digital money solutions. The manuscript's printing was stalled until late Spring 2023 due to the project's ambitious nature.1
1 Kindly note that the book endeavours to provide a broad perspective that transcends short-term goals and delves into the underlying principles of legal and financial systems. Additionally, we would like to apprise you that the manuscript underwent minimal modifications during its production cycle after its submission to the publisher.
It is worth noting that this book was written prior to the releases of the “Payments Package” and the “Digital Euro Package” by the European Commission, as well as the agreement between the Council and the European Parliament regarding the instant payment proposal and the European Digital Identity Wallets.
Please, moreover note that the authors are solely responsible for any errors present in this manuscript. The editors have taken all reasonable measures to ensure the accuracy of what is contained in each manuscript. However, the editors cannot assume responsibility for any errors that may have inadvertently crept in.
As we move towards a more digitally oriented economy, there may be changes in how monetary policy and central banking are approached. The final part of this book delves into the legal implications of this shift, with a focus on the digital euro project as a case study. Looking ahead, we will need to develop new policies and solutions to adapt to this new digital landscape. We hope that readers will appreciate the originality of this path and will be able to use these insights to inform their own strategies moving forward. Before we conclude, we would like to express our gratitude to all the authors who contributed to this book. Each author’s unique
perspectives, talents, and roles have created rich and valuable content for the readers. Our gratitude also goes to Miguel Fernández-Ordõnez, the former Governor of the Bank of Spain, for writing the preface to our book. Additionally, we thank Professor Iris Chiu for her supportive words that facilitated the acceptance of our project as a publication. At last, with a heavy heart, we extend our gratitude to Professor Lloyd Blenman. Unfortunately, he passed away during the book’s processing. We want to honour his memory by sharing the words he wrote about the project and his desire for the research findings to be published:
This proposed book will be a standard reference for years to come. We are on the cusp of a major revolution in what is defined as money, how it can be used, created, and how monetary policy is conducted. It means that we will now be able to reach many of the people who do not have traditional bank accounts via e-wallets.
These changes will also have significant implications for settlements in almost real-time as well as the finality of payments. They will cause major privacy issues as well as bring increased benefits. It is, therefore, no understatement to say the coming changes will have the most significant multivariate impacts on banking, monetary policy, payment systems and, most importantly, cross-border cash flows since the Bretton Woods agreements were put in place.
Dear Professor Blenman, we genuinely hope we have met all your expectations. May God bless you.
Filippo ZattiandRosa Giovanna Barresi
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arrived eventually at an extraordinary degree of development; and his adaptive ingenuity was revealed in the discovery and application of many indispensable drugs of the Materia Medica, and in the intelligent use of the instruments and caustics of the surgeon. In ancient Chaldea and Babylonia there were no physicians. The priesthood, as in the Middle Ages, enjoyed a monopoly of learning, which, so far as the practice of medicine was concerned, rested upon no more substantial foundation than the imposture of the charlatan. The cure of disease was effected by the exorcism of evil spirits; and such is the tenacity of venerable ideas and the lamentable credulity of the human mind that, through the influence of a certain class whose pecuniary interests are directly involved, this superstitious belief, with others equally absurd, still prevails among the members of educated communities even in our enlightened age. The difference between the fetichism of the African savage, the mediæval relic-cure, and the so-called Christian Science of modern days is one of degree and not of kind. In the infancy of civilization every malady was attributed to demoniacal possession. The Jews were the first to detect the true nature of disease and to realize the necessity for the employment of physical remedies, where heretofore, through the medium of spells and incantations, the aid of the supernatural alone had been invoked. By the adoption and application of rational principles, they revolutionized the theory and practice of medicine. Their attempts to thus partially emancipate the human mind from the degrading thraldom of superstition brought upon them the anathemas of the priesthood wherever these innovations were attempted. The wonder-workers of Pagan temples and the monkish custodians of Christian shrines saw with dismay their incomes decreasing as a consequence of the successful ministrations of the Hebrew practitioner. It was not without reason that the latter became an object of clerical animadversion, for the offerings annually bestowed by grateful credulity upon the custodians of some apocryphal relic of imaginary virtues not infrequently exceeded in value the revenues of a city. Much of the prejudice everywhere existing against the Jewish name is thus attributable to sacerdotal malevolence, originally excited by interference with material interests. But even in an age of ignorance
homage was paid, however reluctantly, to the ascendency of intellectual power; and the Jews flourished in countries where the laws did not tolerate their presence and sovereigns were pledged by their coronation oaths to their destruction. Political necessity proved stronger than popular odium; and the strange anomaly of a proscribed race, whose existence was condemned by the civil and ecclesiastical codes alike, flourishing in the midst of implacable enemies was exhibited in every country of mediæval Europe. This peculiar condition was due to the dominating force of intellect alone. It is true that toleration was frequently purchased with gold; but the Jews were the sole depositaries of real knowledge, and without their wise and practical counsels the wheels of government could not be kept in motion. This indispensable necessity of maintaining in positions of honor and power a class whose nominal disabilities degraded them below the legal status of cattle was a result of the illiterate and priest-ridden state of the Dark Ages.
The cause of the universal prejudice existing against the Jews from time immemorial has been the subject of much speculation, but has never been definitely ascertained. That prejudice long antedates the Christian era. They were banished by the Egyptians, enslaved by the Persians, despised by the Greeks, persecuted by the Romans. So little were they esteemed by the latter, that during the wars with Hadrian four Jews were bartered for a modius of barley. A wellfounded tradition, repeated time and again by classic historians, declared that they were expelled from Egypt for fear that the plague might be communicated by the loathsome diseases with which they were afflicted. In that country, as elsewhere subsequently, they were isolated from all other members of the community. Moses is designated by ancient writers as the “Chief of the Lepers.” It is well known that leprosy was first introduced into Italy by the soldiers of Pompey, who contracted it in Palestine. This awful malady was not only indigenous to the latter country, but was generally considered a morbid physiological condition peculiar to the Hebrew people, with whom, in fact, it was chronic and hereditary, and among whom it assumed its most malignant and appalling form.
The national customs of the Jews were regarded with peculiar abhorrence by the polished nations of antiquity. They practised human sacrifices. Tacitus says that they rendered distinguished homage to the ass, an animal sacred to the Phœnician goddess Astarte. A golden head of that animal was worshipped in their temples. The Bible repeatedly mentions the fact that they were debased and incorrigible idolaters. In Pagan Arabia they conformed to the religious customs of the country, shaved their heads, venerated the images of the Kaaba, and made the circuit of that shrine upon their knees. The idea of the Resurrection, which, with that of the Trinity, formed no part of the primitive belief of any Semitic race, but is a purely Aryan conception, they learned during the latter part of the Babylonian captivity. Its adoption was far from unanimous, however, for it was always repudiated by the Sadducees, reputed the most orthodox and precisian sect of the Hebrew nation. They sold their children into slavery. Their personal habits were indescribably filthy. It was believed by the African Christians that a peculiarly offensive odor, an evidence of Divine wrath provoked by the tragedy of the crucifixion, and which could only be removed by baptism, emanated from them. Hatred of everything non-Jewish was a ruling principle of their nature and conduct, and every country in which they were domiciled they betrayed, in turn, to the invader.
The moral and physical condition—that of a race of pariahs infected with foul distempers—which characterized them in ancient times presents a singular contrast to that under which they actually existed subsequently, and under which they exist to-day They were not affected by the great epidemics which swept with devastating force over Europe during the Middle Ages, although they were as fully exposed to contagion as any of the nations which were decimated by them. Their immunity to many of the most serious ailments which afflict mankind is demonstrated by every table of medical statistics. Their longevity, unquestionably due to a strong constitution, is proverbial. Their average annual death-rate, in both Europe and America, is less than one-half that of persons of other nationalities subjected to the influence of similar conditions of climate, food, and occupation. Their freedom from criminality and pauperism is one of their most remarkable characteristics. Every
lawyer knows how rarely a Jew is seen in courts of justice, either as a litigant, a malefactor, or a witness.
The propagation and improvement of a people under circumstances which indicated their speedy and inevitable extinction is one of the most curious problems in the annals of ethnology. Not only is it anomalous, but it is absolutely inexplicable under any scientific and logical hypothesis which can now be advanced. It would ordinarily be conceded that a race affected with congenital leprosy, whose habits were uncleanly, and whose members constantly intermarried, must certainly perish in a few generations. It would also not be denied that such a race would be especially liable to visitations by epidemics, and that its reduced capacity for resistance would induce an extraordinary fatality. Not so, however, with the Jews. They grew stronger by intermarriage. They threw off the disease which had once made them odious in the sight of men. The plague and the typhus which desolated the homes of their neighbors passed them by. They not only survived, but throve under persecution which would have exterminated any other branch of the human family. Their tenacity of life, the persistence of their institutions, the boundless power they wield in the commercial world, their versatility of character, their success in the most difficult undertakings, their national and religious organization maintained in the face of appalling obstacles, tend to confirm the ancient tradition that they are the Chosen People of God.
The Hebrew, whatever his capacity or experience, was in the eye of the law immeasurably inferior to the most humble and ignorant of those who ruled him. He paid higher taxes than any one else. His testimony was not competent in a court of justice. He was excluded from the enjoyment of office. If, having become an apostate through force or policy, he addressed a word to one who was loyal to the faith and traditions of his people, even though of his own blood, he was condemned to slavery. He was not permitted to abstain from food which his ordinances declared unclean. The practice of the rite of circumcision, a rite pronounced by the rabbi more meritorious than all others, and enjoined by the Talmud, brought with it confiscation and death. The ancient national records—the books of the Law, the
chronicles of bygone dynasties, the treatises of Hebrew physicians already prominent in the world of science—were diligently sought for and destroyed. Every effort was made to separate wives from their husbands and slaves from their masters, by the edict that the ceremony of baptism, when solicited by consort or bondsman, produced, according to circumstances, ipso facto, divorce or emancipation. All Jews were enrolled upon the public registers, and at stated times were mustered by the bishop. They were also required to report to the magistrate at every town they visited, to be examined as to their business and destination. The Seventeenth Council of Toledo, by a sweeping decree, seized the property of all the Jews in the kingdom and sentenced its owners, without exception, to absolute servitude. They were accused of practices alike revolting to humanity and subversive of morals,—of poisoning the sacramental elements, of the torture of children, of crimes against nature, of cannibalism. The ecclesiastical denunciations of offences concerning religion, such as the blasphemy of images and relics, the ridicule of orthodox tenets, the promulgation of the doctrines of the Talmud, and the soliciting of proselytes, were not less violent than those which reprobated the greatest enormities of which human frailty is susceptible. Every rank of society vied with the others in manifestations of hostility towards the despised race. The monarch, upon frivolous pretexts, confiscated their property and abandoned them to the violence of the populace. In the eyes of the ferocious noble, who scarcely acknowledged the superior dignity of his king, they were sources of wealth to be utilized as occasion or inclination demanded; and the levy of an excessive contribution was regarded as an act of especial leniency, when the last ducat might have been exacted with impunity. The Church never failed to pour out upon these victims of prejudice the full measure of ecclesiastical oppression and hatred, and no deed was more meritorious than the persecution of a Jew. But it was with the lower orders that the unfortunate Children of Israel fared the worst. Their wealth aroused the basest passions of the ignorant and fanatical rabble. To the malice incited by poverty and envy was added the animosity engendered by religious prejudice, which found expression in every kind of maltreatment and outrage. Although necessary to the state
and indispensable to its political and financial prosperity, the Jew was precluded from claiming the protection of the very laws he assisted to administer. Deprived of this unquestionable right, he was unfitted by his constitution, his habits, and his traditions for armed resistance. Centuries of oppression had taught him to rely on pacific rather than on violent measures for the discomfiture of his enemies. None understood more thoroughly than he the secret springs of action which control the movements of mankind; and with its worst and most degrading characteristics, his experience, reaching through many troubled generations, had rendered him especially familiar. His practical and thorough acquaintance with every foible of human nature thus made him equal to the exigencies of every occasion. He dispensed his gold with unstinted liberality. Powerful nobles, everywhere, were in his pay. Ecclesiastics of eminent talents and reputed sanctity were not ashamed to accept his gifts, and, in return, to secretly and effectually protect his person and his interests. No efforts were spared to impress the sovereign with the extent of his attainments and the value of his services. The people, despite their prejudices, looked with awe and respect upon the members of a race who had visited lands whose very names were unknown to them, who conversed fluently in strange and guttural tongues, and who spread before their wondering and delighted eyes precious articles of merchandise of whose existence they had hitherto remained in ignorance.
Under such circumstances, however disadvantageous, the Jews, scattered throughout the countries of Europe, maintained from century to century the integrity of their social and religious organization. Their isolation was in many respects productive of personal safety and financial benefit. Exempted by their civil disabilities from exposure to the dangers of revolution, they escaped the penalties of unsuccessful treason and profited by the necessities of every faction. They alone of all classes flourished amidst the perils of internal disorder. By the liberal and judicious employment of money, they secured the favor of the party for the moment in power. Meanwhile the commerce of every country was almost exclusively under their control. No competition, of any importance, interposed to diminish their enormous profits. There was not a city, scarcely a
hamlet, where the Hebrew was not sure of sympathy and assistance from his countrymen. With them his goods were secure. They afforded him valuable information. Their experience enabled him to obtain the highest prices for his wares, and the secret intelligence at their disposal gave him timely warning of the presence of danger and facilitated his escape. His cosmopolitan habits prevented national affiliations, and permitted him to immediately change his residence whenever it was required by personal considerations or commercial interests. He bought amber on the Baltic. He sold slaves in Constantinople. He exchanged the commodities of Spain for the furs of Russia and the pearls and incense of Yemen. In France he found a profitable market for jewels, spices, and cochineal. His intimate and extensive relations with the great emporiums of the Orient were one of the most important factors of his success. In that quarter of the world, enjoying the protection and confidence of the rulers of Persia, Babylonia, Syria, and Egypt, were to be found the most powerful and wealthy communities of the Hebrew nation. The omnipresent Jew had established a chain of trading stations across every continent, and even far beyond the most distant limits of civilization. This immense advantage was his alone; no competitor possessed, or could ever hope to obtain, such extraordinary mercantile facilities. From the depths of the mysterious East came the rare products which commanded fabulous prices in the European capitals,—costly tissues, gems, dyes, aromatics, porcelain,—articles which often brought far more than their weight in gold. The monopoly enjoyed by the shrewd importers enabled them to receive for their commodities sums which far exceeded their intrinsic value, and placed them beyond the reach of any excepting the most opulent.
But the enterprise of the Jew was not confined to the importation and distribution of luxuries. He furnished society with every species of merchandise, from the crown of the monarch to the sandals of the beggar. The law forbade him to be seated by an ecclesiastic without the latter’s invitation, but the bishop was compelled to purchase of him the sacerdotal vestments in which his race was anathematized; and the sacred furniture of the altar, including even the crucifix, the significant emblem of the Passion, was sold to the cathedral chapter by the descendants of those who had enacted the tragedy of
Golgotha, and had trafficked in the body and blood of our Saviour The Jews of Provence paid their tribute to the Church in wax, and provided the tapers used in the ceremonies of great religious festivals. The vessels destined for the celebration of the mass were frequently disposed of to Jewish merchants by dishonest custodians; and this sacrilegious trade became at one time so notorious and shameless in France as to call forth the indignant denunciation of the Holy See. The pawning of objects consecrated to Christian worship for loans ostensibly contracted for the benefit of the Church was one of the most flagrant abuses of ecclesiastical authority in mediæval times. These pledges, often forfeited, became the property of the lender, and the clergy were constantly subjected to the scandal arising from their exposure for sale in the shops and public markets. It was no unusual circumstance in those days for the greater part of the sacred plate of an entire diocese to be temporarily in the hands of Jewish usurers. It was, moreover, a matter of common notoriety that the families of wealthy Jewish brokers daily drank from golden chalices in which once had been offered the holy sacramental wine of the mass.
The confidence reposed by all classes in the Hebrews, despite the universal and ineradicable prejudice entertained against their nationality, affords undeniable proof of their integrity. Their financial capacity and experience procured for them the office of receiver of royal taxes in countries where public sentiment was absolutely opposed to their toleration. Their fitness for this important and responsible post was emphasized not only by their abilities, but by the fact that their prosperous circumstances were, in a measure, a guaranty of their honesty, their wealth removing the principal incentive to peculation. The most bigoted Christians eagerly sought their services in the management of property and the settlement of estates; and to their sagacity and wisdom was frequently committed the solution of the difficult problems relating to the methods of taxation and enforced contribution adopted by both the Crown and the Church. During the Middle Ages, every court in Europe patronized the Hebrew physician. His practice, while by no means free from the prevailing charlatanism of the time, embodied many
principles of the healing art still recognized as sound, and represented all that was then known of medical science.
In literary culture, as in commercial ability and scientific acquirements, the mediæval Jew of Christian Europe had no rivals. It was an extraordinary circumstance when a sovereign could even read, in an age when one of the greatest princes in Europe was invested with the title of Beauclerc because he could write his own name legibly, a remarkable distinction in an era of almost universal ignorance. Such accomplishments, when they did exist in any community, were almost entirely confined to the clerical profession, and, even among its members, were far from being generally diffused. The officiating priest had, ordinarily, sufficient education to enable him to stumble through the pages of his missal. In the monastic establishments, where the opportunity afforded by solitude and leisure permitted, and even encouraged, the cultivation of letters, the talents of able men were too often wasted in frivolous and unprofitable pursuits. While such unpromising conditions prevailed among the higher classes, the state of the populace was incredibly degraded. The latter naturally looked to its spiritual advisers for instruction and guidance, and the evil influence of the Church was everywhere significantly disclosed by the crowds of stupid and fanatical devotees who listened with awe and rapture to the incoherent harangues of monkish zealots, or, bowed upon their faces, grovelled in the mire before the idolatrous shrine of some spurious saint.
In the midst of the darkness which obscured the face of the mediæval world, Hebrew learning emitted a small but brilliant ray of light. Priestly tyranny and popular odium prevented the regeneration of the masses, which, under different auspices, might readily have been accomplished. The erudition of the early rabbis, remarkable even at the present time, was, in the age in which they flourished, absolutely phenomenal. Their superior intelligence and extensive acquirements caused them to be universally branded as wizards and enchanters. Men shunned all intercourse with them, and even feared to encounter them upon the highways. No greater tribute could be paid to their knowledge and ability than the ecclesiastical decrees
launched against the Jews at the very time when their talents were employed in directing the financial affairs of the Church. In spite of his indispensable usefulness to government and society, the proscribed Hebrew was always under the ban of the law and lived in a state of constant apprehension. Princes claimed and exercised the privilege of absolute ownership of all the Jews and their property in their dominions. Even such an enlightened sovereign as the Emperor Frederick II. published a sweeping edict reducing the Jews of his realms to servitude, and declaring their wealth forfeited to the state. In England, near the end of the thirteenth century, every Jew in the kingdom was arrested and held in durance until a ransom of twelve thousand pounds had been extorted. Three years afterwards all their property was taken, and they were expelled from the country. The bishop often received, as a token of royal esteem, the present of the Jews of his diocese. This singular prerogative, which was neither based upon prescriptive custom, former enslavement, nor any claim excepting that of force, was first exerted in France; and the enormous profits resulting from its application led to its general adoption by all the Christian sovereigns of Europe. The Jew, by the stringent restrictions of savage laws, was degraded below the level of humanity. The owner of a beast was entitled to fixed legal compensation for its death, but no penalty was enacted and no damages could be claimed for the murder of a Jew. If maltreated, no evidence could be received against his assailant. The Jews of Toulouse, who, tradition declared, had surrendered the city to the Moors, were condemned each year on that anniversary to furnish one of their number to receive a box on the ear at the cathedral door. One of the oldest and most respectable of the community was always selected; the blow was usually given with a mailed hand, and the victim not infrequently died from the effects of it. During Passion Week, the active persecution of the accursed sect was considered so meritorious as to be almost equivalent to the performance of a religious duty At that time no Hebrew could appear in the street without endangering his life. On Good Friday, in the year 1016, an earthquake destroyed many of the houses in Rome. Pope Benedict VIII., having learned that at the time of its occurrence the Jews were worshipping in their synagogue, and attributing the catastrophe to
their influence, caused a great number to be massacred. At all times they were exposed to the contumely of adults and the petty persecutions of children. The isolated quarter in every community, to which their residence was restricted, and separated from the dwellings of orthodox Christians to prevent contamination, is to-day, in nearly all the cities of Europe, still known by its once distinctive name; although, in most instances, its Jewish population has disappeared. It was also a common pastime of the mob to stone the houses of the Jews, and, as the latter were not permitted to defend themselves, all large towns resounded with tumult and disorder during the celebration of the most sacred festival of Christendom. Upon every occasion, these unfortunates were pursued and baited like wild animals; always with the tacit connivance, often with the open encouragement, of the authorities. Their intimate relations with the countries of the East offered substantial grounds for the belief that they introduced leprosy into France, Spain, and England,—a disease whose general dissemination has ordinarily been credited to the Crusades, but whose existence in France as early as the sixth century must be attributed to some anterior agency. The undoubted Oriental origin of this malady pointed strongly to the itinerant Jewish merchants as responsible for its appearance in Western Europe; while its loathsome and incurable character tended to increase the popular odium with which those suspected of infecting a portion of the human race hitherto exempt from this affliction were universally regarded.
Every precaution which could have a tendency to maintain the social and domestic ostracism that popular intolerance had placed upon the Jew was enforced by civil and ecclesiastical authority. He could not legally marry a Christian, inherit real property, hold slaves. In royal donations, where, without warrant of right or pretence of ancient custom, he was deprived of his liberty and his possessions, his person was thereafter attached to the glebe. He was forbidden the exercise of many of the most profitable mechanical arts in which he excelled. Christians could not eat or drink with him, visit his house, listen to his conversation, or learn his language. The priesthood considered the integrity of the doctrines which were at once the foundation and the instruments of their power as of far
greater importance than the material comfort and intellectual improvement of their parishioners. They were quick to recognize the peril with which ecclesiastical institutions would be threatened if exposed to the logic and sarcasm of Hebrew criticism. The necessities of society could not, as yet, permit the extermination of the Jews, but their practical isolation was imperatively demanded by considerations of prudence, and by the just apprehension that the toleration of social intimacy would eventually result in the emancipation of the masses from ignorance, and the consequent disintegration of the Church. The Dominican and Franciscan Orders were the sworn enemies of the Jew from the very day of their organization. The Inquisition was introduced into Spain for the express purpose of plundering the rich Jews of Aragon. The efforts of the Papacy were assisted by the policy of the more bigoted of the rabbis, who saw, with no less apprehension than their Christian oppressors, the diffusion of liberal ideas which threatened their own authority and importance. Under such discouraging conditions had the Jews maintained their national existence, the purity of their religion, the perpetuation of their customs, the permanence of their laws amidst the anarchy, corruption, and intolerance of mediæval Europe.
The origin of this strange people is absolutely unknown. Their roving propensity probably dates from the very foundation of the race, as the words Hebrew and pilgrim are derived from the same root. No question, however, can exist concerning their Semitic affiliations. Their geographical distribution was extensive in very early times. The most ancient collection of myths extant describes their migrations. They were numerous in China during the third century before Christ. Profoundly superstitious, implicit believers in omens, idolaters while professing monotheism, the facile dupes of wizards and magicians, the simplest phenomena of nature were always, in their eyes, invested with a mysterious or an astrological significance. Even their division into tribes has been traced by Dozy to a cabalistic association with the twelve signs of the zodiac.
The Israelites are first noticed in history as a horde of vagabond herdsmen in Mesopotamia. Oppressed by powerful neighbors,
repeatedly enslaved, and reduced to those depths of moral degradation incident only to long-continued servitude, they still succeeded in preserving inviolate the principles of their religious and social organization. They were almost universally considered as outcasts, with whom it was contamination to associate. But in all their adversity their peculiar theocratic belief confirmed their resolution and sustained their hopes. They were the Chosen People of God. His Spirit was ever with them, speaking through the voices of their teachers, directing the councils of their rulers, illuminating the Holy of Holies of the Tabernacle, hovering about the Ark with its golden cherubim. They had the Divine assurance that one day their troubles would end, that the scattered members of their race would be again united, that they would inherit the kingdoms and possess the riches of the earth. Their arrogant exclusiveness was unconsciously, but none the less diligently, fostered by the prejudices and regulations of the countries within whose borders they fixed their residence. In each city they were confined to a certain quarter, within whose precincts Christian men were little disposed, and Christian women absolutely forbidden, to enter. The use of a distinctive costume, popularly regarded as a badge of ignominy, was imposed upon them. They were not allowed to marry outside their sect. The minute and innumerable restrictions of Hindu caste were not more rigid or vexatious than those ordinances which regulated the intercourse of Jew and Christian during the Middle Ages. The enforcement of these social distinctions, as well as the inexorable requirements of the laws, increased the isolation of the Jews in every community. In this manner their unity was preserved, and the extraordinary vitality which characterized their existence in all its phases was promoted.
In no part of Europe had their influence exhibited such constant, marked, and permanent effects as in the Spanish Peninsula. On its coast, with which their ancestors had long been familiar, and where archæological research has placed the Tarshish of Holy Writ, the establishment of the Hebrew is of such high antiquity that history has failed to record it; and it may not unreasonably be assumed that it antedated the Christian era by at least a thousand years. The turbulent and perfidious character of the Hebrew sectaries caused
them to be regarded with apprehension by the Romans. In the time of Hadrian, their old and powerful families were distributed, as a measure of public safety, among the most widely separated provinces of the empire. The fact is well ascertained that the Spanish Jews were rich and numerous in the fifth century, and then practically controlled the commerce and the financial resources of the country. Even at that early period they were renowned for their intellectual accomplishments, their extensive literature, their dexterity in the mechanical employments, the assiduity with which they pursued the most abstruse branches of science, and their proficiency in those practical arts which tend to the amelioration of the condition of the human race and the prolongation of the term of human life. As has been mentioned in a previous chapter, although occasionally pursued by royal avarice and clerical animosity, the Jews did not experience in Spain the full effects of that hatred which seemed to be their unhappy birthright until the accession of Reccared, the first orthodox sovereign of the Visigothic dynasty. From the latter part of the sixth century, the malice accumulated in the church and the cloister through ages of alternate restraint and forbearance was unmercifully wreaked upon them. The Visigothic Code is largely taken up with the statement of their disabilities, the denunciation of their customs, the enumeration of their offences, and the description of the penalties to be inflicted by the avenging magistrate. The paternal character of the ecclesiastical legislation, then and long afterwards in the ascendant in the Councils, scrutinized with jealous vigilance not only the public actions of the offensive sectaries, but invaded with brutal violence the sacred privacy of domestic life. The celebration of all national religious festivals was prohibited. A Jew could not be a witness against a Christian; intermarriage of the two races was declared null and void, and all issue of such unions were subject to seizure by the clergy, to be reared and educated in monastic institutions; circumcision was declared illegal; and the grotesque cruelty of the law which enforced the use of pork as food violated without cause or excuse a rational prejudice of the Jew, established by Divine command and confirmed by the unbroken practice of countless generations of his kinsmen. The observance of these savage and unreasonable regulations was enforced by
penalties of corresponding severity The culprit was usually burned alive; in cases where it seemed that leniency might be properly exercised, he was stoned to death. The constant and systematic evasion of these laws, which even priestly malevolence hesitated to enforce, was the consequence of their extreme rigor. Many circumstances then, as subsequently, intervened to mitigate the condition of the Jews; the necessities of the state, the jealousy of the nobles, the venal and corrupt disposition of the clergy, who were often the first to violate the ordinances which they themselves had been instrumental in having enacted, were all enlisted, from time to time, in securing for the objects of popular hatred a temporary and precarious indulgence.
Under the Visigothic domination, as a rule, the policy of the government was decidedly hostile. The opulent were, as is usual in such cases, considered the most guilty; and thousands were seized, despoiled, and murdered on no other provocation than the evidences of prosperity and the imprudent and ostentatious exhibition of their wealth. In the Council, which chose the sovereign, ecclesiasticism always preponderated; and through its influence a clause was early inserted in the coronation oath which bound the king to suffer no other religion but the Roman Catholic in his dominions. Powerful protectors, whose services were purchased by the lavish distribution of bribes, averted the storm for the time; but about the beginning of the seventh century public opinion declined to be longer conciliated, and a frightful persecution was begun. An immense number, amounting, it is said, to ninety thousand, apostatized and publicly received the rite of baptism. Multitudes, who preferred banishment to renunciation of their faith, fled to France, Italy, and other countries. Such extreme measures drove the suffering Israelites to resistance, but their hereditary cowardice and their total want of organization rendered their exertions hopeless, and produced no result but an aggravation of their misfortunes.
While these events were transpiring in the Visigothic kingdom, Mohammedan conquest had spread from Central Arabia to the western extremity of the African continent. Before its irresistible force, the activity of the Berber savage and the discipline of the
Roman veteran had alike been humbled in the dust. The dangerous proximity of the Moslem outposts at the south had more than once aroused the apprehensions of the proud and luxurious sovereigns of Spain. But their efforts had been directed rather to the indulgence of their passions and the extirpation of heresy than to the fortification of the frontiers of the kingdom against the ambition of an unknown and underrated foe. The Jews, however, fully realized the gravity of the situation, and were only too willing to promote the designs of an enemy whose success, they were convinced, would enure to their own advantage and security Numerous considerations of profound significance impelled them to this course. They themselves and the Arabs were derived from a common origin. Both sprang from the same branch of the great human family. Many of their customs were identical; their traditions denote a similar source; their languages vary but little in construction and pronunciation, and have been so slightly modified by the vicissitudes of centuries that the Hebrew rabbi and the Bedouin sheik of to-day can readily communicate with each other by means of their respective idioms. Both nations had for centuries been accustomed to a pastoral life on the vast plains of Asia, where the illimitable monotony of the landscape, the unbroken stillness of immense solitudes, the magnificent spectacle of the unclouded heavens glowing with the most gorgeous constellations of the firmament, have always impressed upon the nations subject to these potent and omnipresent influences the conviction of the unity of God. The caravans that issued from the Desert exchanged the precious commodities of that region for the wares manufactured and imported by the Hebrews of Alexandria, Damascus, and Antioch. Although in the early ages of Islam the Jews were often harshly treated, the Arabs were quick to perceive the advantages to be obtained from their commercial experience and literary knowledge. As Hebrew enterprise was instrumental in opening to the world the lucrative and important trade of the Arabian Peninsula, so Hebrew genius disclosed to the descendants of Ishmael the capacity of their own tongue, which until then had found no permanent mode of expression. The first book which appeared in the Arabic language was written by Javaich, a Syrian Jew. It was the translation of a medical work by a famous practitioner of Alexandria, and the
practical character of the subject not only indicates the serious nature of early Hebrew research, but also becomes a matter of curious significance when the subsequent interest and proficiency of Arab scholars in everything concerning the scientific acquirements of that profession are considered.
The impulse thus early exerted by Jewish culture upon the Arab intellect was eventually productive of the most extraordinary results. The scholars soon surpassed their instructors in the extent and profundity of their knowledge. The Arab mind assimilated, with wonderful ease and insatiable avidity, the useful and valuable information afforded it, while its critical faculty enabled it to reject what it intuitively perceived to be spurious. In all the countries subject to the Khalifates of Mecca and Damascus, the Hebrew opened to the Moslem conqueror the avenues of literature and science. He was treated by the Mohammedan princes with far more consideration and justice than he had ever experienced under Pagan or Christian domination. His synagogues were erected in the shadow of Moslem minarets. His academies became famous as centres of learning. The works of Grecian philosophers, the fragmentary treasures of Alexandrian erudition, were, through his efforts, made familiar to the studious of the great Mohammedan capitals. In the distribution of literary patronage the Jews were the most distinguished recipients of royal munificence. In proportion to the eminence they attained in the province of letters, their political power and financial prosperity increased. They enjoyed the familiar confidence of the monarch, when his favorite councillors dared not venture without a summons into his presence. They amassed great fortunes in the various branches of trade and industry. Their mercantile occupations brought them frequently in contact with their fellow-sectaries, who, in other parts of the world, maintained under the weighty sceptre of cruel and bigoted sovereigns an existence fraught with danger and hardship.
These facts were well known to the Spanish Jews who had, amidst the multiplied catastrophes afflicting their race, survived the effects of Visigothic tyranny. Notwithstanding the successive persecutions of which they had been the object, they were still
numerous in the Peninsula. The phenomenal vitality of a people which, from time immemorial, has preserved its integrity under the most adverse conditions, enabled it to defy the malice of courts and the edicts of councils whose office and pastime was the pitiless extirpation of heresy. The Jews flourished in defiance of bloodthirsty laws. In many ways they evaded the effects of proscription. Thousands apostatized. Multitudes secretly purchased immunity by means of the arts of corruption. Of those who had gone into exile, the majority quickly returned and took up their residence in other provinces, where, unknown to the populace, and often with the venal connivance of civil officials and prelates, they were permitted to pursue their avocations in comparative security. The Israelitish element was so preponderant in Toledo, Lucena, and Granada, at the time of the Moorish invasion, that they were known as Jewish cities. This large population formed a separate state, an imperium in imperio, whose members, exasperated by the memory of intolerable suffering and sustained by the hope of retribution, were ready to embrace the first opportunity to avenge the oppression of centuries. Thus the fatal policy of the Visigoths—weak, violent, and corrupt— had introduced an organized, powerful, unscrupulous, and vindictive enemy into every province and city of their tottering empire. With their African brethren the Jews of Spain maintained an intimate and frequent correspondence. Numbers of the latter had sought a refuge beyond the sea, as their descendants did, under similar circumstances, seven centuries afterwards. The settlements of the Mauritanian coast swarmed with indigenous or exiled Hebrews, attracted thither by the superior facilities they offered to commercial pursuits. All of these shrewd and intelligent traders were perfectly familiar with the condition of the Visigothic monarchy; with its apparent splendor and actual decay; with the political and social disorganization pervading every department of the state and every rank of society; with the tyranny of the King; with the universal disaffection of the nobles; with the grasping avarice of the clergy, whose exactions spared neither the plenty of the rich nor the starving wretchedness of the poor; with the weakness of the army, whose soldiers, subsisting by pillage, had neither weapons to arm nor officers to command them; with the abject misery of the people, who,
protected by none and plundered by all, insecure in the pursuit of every employment, a constant prey to licensed brigandage, with no recollection of the past but the bitter reminiscence of unprovoked and repeated injury, with no hope of the future save in the intervention of a more powerful, perhaps a more ruthless, oppressor, were certain of tranquillity only in the silence and oblivion of the grave.
The advent of Moslem supremacy, which promised a new and splendid career to the down-trodden race, was welcomed by the Jews of Africa with all the enthusiasm of an impulsive and excitable people. Al-Maghreb had scarcely been conquered before the Moslem generals were more conversant with the details of Visigothic weakness and demoralization than the councillors of Roderick himself. The minute and secret ramifications of Jewish society united in a common cause the widely distributed communities of Africa and Spain; the intelligence and resolution of the conspirators, whose hostility was increased by the bitterness of sectarian hatred, rendered their enterprise and activity the more dangerous; and a propitious opportunity alone was awaited to pour upon the fertile and defenceless plains of the Peninsula the resistless torrent of Moslem invasion. That opportunity soon arrived. The fortress of Ceuta, lost by treason, fell into the hands of the Arabs; the Visigothic power, crushed in one great battle, succumbed to the superior valor of an enterprising enemy; and within the short period of fourteen months the sceptre of empire passed from the feeble hands of a barbarian dynasty to the control of a foreign race, whose mental capacity and intellectual ambition, as yet untried, were subsequently found to be equal to the most exacting demands of a refined and highly developed civilization. In these events, whose consequences produced such radical modifications in the religious, political, and domestic conditions of European society, Hebrew energy and craft were eminently conspicuous. One of the principal divisions of Tarik’s army was commanded by a Jew. During the invasion, Jewish guides conducted the Moslem squadrons along the highways of an unknown country, furnished information of the enemy’s movements, disclosed the whereabouts of military supplies and hidden wealth. When the slender numbers of the Arab forces would not admit of
their diminution for garrison duty, the Jews volunteered their services to defend the conquered cities and faithfully discharged the important trust. The obligations thus incurred by the Moorish invaders to their allies were of the most important character. The latter not only facilitated an enterprise whose difficulty, without their co-operation, would have been enormously increased, if not actually rendered impracticable, but, the country once subdued, they directed the attention of the Arabs to elegant pursuits, of whose nature and value they had hitherto remained in ignorance. Moslem civilization in Europe owed an incalculable debt of gratitude to the Jews. They were its real founders. They inculcated a taste for letters. They promoted the investigations of science, the development of industry and the arts. Their refined tastes and intellectual employments aroused a noble emulation in the minds of their pupils and imitators, which, in turn, reacted upon their own talents and aspirations. Hebrew genius and ambition were no longer hampered by the malicious interference of royal councils and ecclesiastical synods. The Jewish merchant and the Jewish banker pursued their way to opulence and distinction, unmolested by the extortionate demands of corrupt officials and tyrannical farmers of the revenue. Their scholars were not insensible to the advantages to be derived from the study of ancient learning, and the Greek and Latin classics were thoroughly familiar to the Spanish Jew, whose commentaries upon them were of considerable extent and of unquestionable authority.
Under a government favorable to their existence and prosperity, their numbers rapidly increased. The depopulation resulting from the conquest of an already impoverished and exhausted territory required an extraordinary and immediate remedy. Publication was everywhere made throughout the Orient inviting the settlement of immigrants in Spain. Lands and houses were promised to all who were willing to change their domiciles for new homes in the distant and recently founded Mohammedan empire. In the multitude that responded were, it is said, fifty thousand Hebrew families, amounting to not less than a quarter of a million individuals. These, with their fellow-sectaries already established in the Peninsula, composed a most important element of its population. Highly favorable social and domestic conditions, among which must be considered the prevalent
