Merchant law made cargo loans contingent on cargo survival

Merchants financing a speculative sea voyage could already pledge the ship itself under an ancient instrument called bottomry -- a loan secured on the hull and freight, repaid with interest if the vessel completed its voyage and forgiven if the ship was lost at sea. But a merchant's real bet was often the cargo, not the hull: goods bought on credit and carried thousands of miles to be sold, whose entire value existed only as a probability until the ship actually made port.

No ordinary lender would advance money against that cargo on ordinary terms. A conventional loan assumes the collateral exists and can be seized or resold if the borrower defaults, but cargo at sea had no such standing: its fate over the coming months was genuinely unknowable, and by the time a fixed repayment date arrived the goods might already be at the bottom of the ocean, sold in a foreign port, or spoiled in transit -- with no interim market where a lender could check on or recover their stake.