Money in Ancient Times

Stater, Cyzicus 

Aureus, Rome, Augustus
(27 B.C. to 14 A.D.) 

In his book The Philosophy of Money (1907), Georg Simmel states that the purpose of money lies in spending it; as soon as money is idle, its specific value or purpose is no longer that of money. Money passes from one person to another, mobilizes things and people and plays a pivotal role mirrored by idioms such as “money circulation” and “money makes the world go around.” 

The great empires of antique times are historical examples of the role of money as a driving force of economic activity and social integration. Highly developed monetary systems were the basis of the economic supremacy of both the Greek and the Roman Empires; as monetization progressed, these systems also influenced Greek and Roman cultural and social relations. 

The rise of Greek trade metropolises in the 5th century B.C. went hand in hand with the development of new monetary instruments. While the use of money in the form of bars in Mesopotamia and Egypt may be traced back to the 3rd millennium B.C., above all grain and silver were also used in these highly developed cultures. Silver took the form of coins from the 7th century B.C., and the ruler and temple guardians determined the (silver) weight standard. The new element introduced into the Greek city-states’ monetary system was the acceptance of coins for their nominal value, which was higher than the value of the bars from which these coins were struck.

1/3 Stater, 7th century B.C. 

Tetradrachm, Athens, after 449 B.C. 

To ensure that the coins made from precious metal (silver) were accepted, the monetary system had to have a sound legal basis, and the issuing state had to exhibit an adequate degree of economic activity. Athens fulfilled both of these conditions to a sufficient degree. The introduction of a new silver currency based on the monetary standard of Attica at the beginning of the 6th century B.C. by the statesman Solon had been preceded by comprehensive legal reform. The Greek term for coinage – nomisma – also reflects a connection between law and coinage. Both words have the same root – nomos. The monetary system also expanded under Solon’s rule as a consequence of the promotion of trade and crafts as well as the growth of silver mining. Attic coins, which had displayed the proverbial owl as their heraldic motif since the rule of Peisistratos (560 B.C. to 527 B.C.), became the symbol of the new monetary power and came to be used as a trade coin throughout the Mediterranean. 

In the 5th century B.C. numerous other Greek cities began to produce coins. One reason may have been seigniorage, the monetary gain resulting from the difference between the cost of the silver used in coinage and value of the coins. Coins quickly became established as a common form of money. According to the writings of the historian Thucydides, silver coins represented the bulk of the Acropolis temple treasures of Athena to which the city could resort in times of crisis (when even the golden cult statues were melted down). Coins were used for everyday transactions as well, chiefly low-value silver coins or on occasion copper coins that were transported by mouth, as portrayed by Aristophanes in his dramas. 

Even city-states which did not manufacture coins themselves either because of a lack of silver resources or for other reasons, such as Sparta, which forbade its male citizens to own coins and silver and prescribed the use of iron rods – so called oboloi – as means of payment, needed coins. Nevertheless, Sparta was compelled to ask the king of Persia for financial support in the form of large amounts of coins to finance its war against Athens.

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  Tetradrachm, Syracuse, 510 B.C. to 485 B.C. 

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  Stater, Aegina, 480 B.C. to 456 B.C. 

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  Tetradrachm, Acragas (Sicily), around 420 B.C. 

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  Tetradrachm, Ephesus, 390 B.C. to 330 B.C. 

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  Tetradrachm, Rhodos, around 360 B.C. 

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Tetradrachm, Alexander III the Great (336 B.C. to 323 B.C.)
Arados, 328 B.C. to 326 B.C. 

Tetradrachm, Athens, 183 B.C. to 182 B.C. 

The example of Alexander the Great (336 B.C. to 323 B.C.) demonstrates the impulses that a functioning monetary system has for society as a whole. His monetary reforms succeeded in creating the prerequisites for the economic integration of the Orient and the Mediterranean and thus in reinforcing his military accomplishments. Alexander consolidated the financial system and introduced the Attic monetary standard throughout the entire realm. With the precious metal hoards he had seized in Persia, Alexander had enough resources to mint an unprecedented volume of coins. The existence of a single currency with fixed exchange rates benefited trade and laid the groundwork for the development of international trade. The Greek coins evolved into an international currency that became a model not just for the Romans, but had repercussions even far beyond the Balkan region into the westernmost reaches of Europe to Gallia and Britannia through the spread of Celtic copies.

Dekadrachm, Syracuse, around 390 B.C.
The coin is from the workshop of the famous engraver Euainetos. 

Octodrachm
Ptolemy VI and Ptolemy VIII
(180 B.C. to 116 B.C.), Egypt 

The rapid monetization of Greek society led to the development of new monetary instruments tailored to meet specific needs. The first forerunners of banks were established in Athens at the end of the 5th century B.C. These forerunners were money changers and pawnbrokers who offered their services on the marketplace. Their customers were mainly foreign traders and merchants who needed local currency to do business. The bank owners personally bore the risk of their business and were not bound by stipulations or provisions. They also accepted deposits, on which they paid no interest. The advantage of their service was obviously that they provided a safe deposit. On occasion, they also extended loans, for which they charged borrowers 12% interest a year as a rule.

Stater, Corinthia,
415 B.C. to 387 B.C. 

Stater, Lysimachus (323 B.C. to 281 B.C.)
Sardis (Thracia), 299 B.C. to 296 B.C. 

The success of a monetary system is contingent on people’s trust in the value and stability of money. The advantage of sovereign control over money was that the issuing volume could be controlled. However, the system was vulnerable to all sorts of manipulation. In order to maintain trust and to safeguard their reputation as a monetary power, issuing states repeatedly had to resort to drastic sanctions. 

The First Peloponnesian War (431 B.C. to 404 B.C.) was followed by a bout of inflation when Athens reacted to the growing competition of the Corinthian currency by raising silver production without contemplating the consequences of a rise in the volume of money. One of monetary problems of the period was the large-scale counterfeiting of coins. Athens strictly punished this crime, and by 375 B.C. laws had been passed under which public slaves were used to determine the authenticity and quality of coins. Devaluation, the experience of inflation and social unrest accompanied the downfall of the Hellenistic system after the end of the 3rd century B.C.

Not until the rise of Rome to supremacy in the Mediterranean around 200 B.C. did the Roman money system receive a powerful development boost. Until then, Rome had gotten by with a fairly crude monetary system that sufficed to meet the needs of a regional economy but was not sophisticated enough for the financial and administrative demands of a large empire. 

During the first four centuries following the foundation of Rome in 735 B.C. unworked lumps of copper, aes rude, and then cast bronze bars, aes signatum, with an image or inscription were used as money. Small domestic animals were also used as a measure of value. The Latin term for money, pecunia, is derived from the word for small animals, pecus, which is seen as indicating that cattle and sheep were the first form of money in Rome. However, bronze bars are cited as payment means more often. 

As copper was cheap, money had to be manufactured in heavy units, mostly bars or plates. Large sums, such as the wealth of a Roman senator, were so heavy that they could only be transported in carts. The stipendium, the Roman legionaries’ pay from the 4th century B.C., probably took the form of bronze bars.

Didrachm (quadrigatus), 222 B.C. to 215 B.C. 

60 asses, Rome, after 211 B.C. 

The first true coins were minted around 300 B.C. Apart from the aes grave cast with the head of Janus on the obverse and a ship’s prow on the reverse, the Romans also began to mint silver coins modeled on the money of the Greek cities in southern Italy. The Hellenistic influence on Roman money grew when Rome strengthened its position as a Mediterranean power after its victory over Pyrrhus, the king of Epirus, in 275 B.C. and took advantage of the Greek cultural achievements in the region. The booty from the conquered areas, including the production of the silver mines of Bruttium (present-day Calabria) fortified the Roman economy and laid the foundation for the development of silver coinage. 
The First and Second Punic Wars (264 B.C. to 241 B.C. and 218 B.C. to 201 B.C.) resulted in the spread of Rome’s influence throughout the Mediterranean. The wars gave rise to a lasting change in the internal, economic and social structure of the Roman state. The war production during the Second Punic War, for instance, marked the beginning of slavery, which was then also introduced on the latifundia, the large Roman agricultural estates. The expense of war and the administration of the new provinces drove up the state’s costs to unheard of levels. To cover these expenses, the confiscated goods from the conquered lands were rigorously subjected to taxation. The reform of the coinage system in 212 B.C. instituted the monetary basis of Rome’s hegemony in the Mediterranean. It set up a system of silver and bronze coinage based on uniform, fixed relations. The main coins modeled on Greek precedents were the bronze as and the silver denarius, whose mark, X (ten), signified that it was worth 10 asses. The Roman Senate exercised control of the monetary system on behalf of the Roman citizens.

By comparison to Greece, the Roman monetary system developed quite late. However, Roman society was monetized quite rapidly during the 2nd century B.C., which went hand in hand with a noticeable rise in the circulation of money. The importance of money in day-to-day dealings in the regions under Rome’s influence is substantiated by the numerous references to money transactions in the New Testament, among others: 1 denarius was appropriate pay for a day’s work harvesting grapes, and holdings of 10 denarii were considered a goodly sum. 200 denarii were required to supply 5,000 people with bread. 

By conquering provinces, Rome amassed inconceivable riches. The loot from forays and the tax revenue from the subjugated regions filled the coffers of ancient Rome. With their clever politics of coexistence, the Roman overlords managed to exploit the existing financial resources and administrative facilities in the provinces for their own ends. This was also true of the regional money systems, which the Romans permitted to operate in coexistence with Roman money. However, the provinces’ coins vanished as a result of growing impoverishment and were replaced by Roman money, mirroring the fate of Athens’ silver coins in the mid-1st century B.C. 

Rome’s enormous wealth is frequently cited as the reason for its moral decadence and the civil war of the 1st century B.C. The sheer volume of revenues from the annexed regions allowed the Roman occupational forces to squander these resources. Most of the provincial administrators (propraetors and proconsuls), scions of the most aristocratic patrician families, lived in the lap of luxury with the thus amassed fortunes and wielded them to expand their political influence. Anyone with large sums of money could buy public offices and could pay the army to secure one’s power. Games and gifts won over the people. 

On his conquests in Gallia, southern Britannia, Africa and Egypt, Julius Caesar pulled in an impressive fortune that he used to finance his political ambitions. Upon his triumphant return to Rome in 46 B.C., Julius Caesar showered his army with gold coins: 200 coins for every common solder, 400 for every centurion, and 800 each for every tribune. Caesar commissioned substantial gold minting assignments for the payment. These coinage contracts, which were continued in the following year, marked the birth of the Roman aureus gold coin (with a weight of 8.19 grams). During Augustus’s reign (27 B.C. to 14 A.D.) it was integrated into the Roman money system a few years later.

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  Denarius, Gaius Julius Caesar
  Gallia, 49 B.C. to 48 B.C. 

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  Denarius, Gaius Julius Caesar, Rome, 44 B.C. 

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  Aureus, Vitellius (69 A.D.), Tarraco 

Augustus – the actual victor of the civil war – reorganized the Roman state and rebased the currency. The new coinage code specified gold and silver as coinage metals and tariffed gold to silver at a ratio of 1 to 12.5. The copper coins – the sesterce, the dupondius, the as and the quadrans – were also rebased at a fixed ratio to gold and silver coins (1 aureus = 25 denarii = 100 sesterces = 400 asses). The ruler (pontifex maximus) was accorded the sole right to issue gold and silver coins; only the striking of copper coins at the mint in Rome remained within the province of the Senate. The imperial aspect of mint policy had already surfaced during Caesar’s reign, when the image on the mint showed the ruler or his family rather than the signum of the elected official. 

The start of regular gold minting operations and the extraordinary volume of coinage are evidence of a highly developed monetary system that could be kept stable for a long time. Military activities accounted for the lion’s share of the Roman Empire’s expenditure. Rome succeeded in bringing its money to the most remote corners of its gigantic empire by way of its soldiers and its army’s activities. Beyond the borders of the Roman Empire, the aureus and the denarius became the main trade coins, e.g. in Germania and Scandinavia, and even in India, where considerable amounts of Roman coins were in circulation.

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  Denarius, Augustus
  (27 B.C. to 14 A.D.),
  21 B.C. to 20 B.C. 

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  Denarius, Augustus
  (27 B.C. to 14 A.D.),
  19 B.C. to 18 B.C. 

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  Denarius, Tiberius
  (14 A.D. to 37 A.D.) 

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  As, Publius Aelius Hadrianus
  (117 to 138),
  Rome, 125 to 128 

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  Aureus, Marcus Aurelius
  (161 to 180),
  Rome, 174 to 175 

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The huge success of the Roman coins, which were accepted as legal tender throughout the ancient world, had its drawbacks, too. Rome’s high expenditures for luxury imports triggered high outflows of precious metal. Moreover, in the mid-2nd century more and more resources had to be channeled to defending the empire against invasions from the east and the north. With the manufacture of coins expanding and precious metal resources contracting at the same time, Romans resorted to reducing the the silver content of the coins after centuries in which it had remained fairly stable. Emperor Nero (54 to 68) was the first to reduce the weight of the aureus (from the 7.96 grams defined in Augustus’ coinage code to 7.29 grams) and of the denarius, to which up to 10% base metal was now added. The silver content of the denarius declined further, slowly but surely, over the next two centuries. In the second half of the 3rd century, the deterioration of Roman money accelerated dramatically. By the time of Aurelian’s reign (270 to 275), the silver content of the denarius had dropped to just 2%. 

One of the causes of the Roman Empire’s monetary crisis in the 3rd century was the ratio between the two precious metals fixed in Augustus’ coinage code. This ratio did not reflect actual coin values, and, in prompting outflows of undervalued coins, successively undermined the Roman currency. Emperor Caracalla’s attempt in 212 to correct the value shift in the ratio of gold to silver by lowering the value of the gold pound and by introducing a new silver coin, the antoninianus (a double denarius with a weight of about 5.1 grams), had failed. 

Moreover, the political circumstances had negative repercussions on the monetary system. Operations to quell the provinces’ separatist struggles and the nonstop civil wars after the Severan dynasty had died out in 235 were very expensive and affected trade and business. At the same time, Italy lost its markets in the provinces when these developed regional economies of their own. Nonetheless, coin production was kept in full swing to satisfy the empire’s insatiable need for money. As a result, the value of money fell and prices rose, entailing all the social and economic consequences of inflation. Financial assets depreciated, the price of everyday purchases burgeoned and purchasing power diminished. Soldiers and civil servants were especially hard hit: Instead of receiving fairly generous amounts of money as pay like they used to, they were frequently given payment in kind. Farmers, too, suffered from price inflation, as they could no longer sell their surplus goods on the market. Speculators took advantage of the situation to buy goods cheap and sell them at a higher price later.

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  Denarius, Plautilla
  (d. 212), Rome 

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  Sesterce, Caracalla
  (198 to 217),
  212 to 217 

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  Antoninian,
  Marcus Clodius Pupienus Maximus
  (d. 238) 

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  8 denarii, Gordian III
  (238 to 244), Rome,
  241 to 243 

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  Antoninian, Regalianus,
  (Carnuntum) around 260 

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  8 aurei, Claudius II Gothicus
  (268 to 270),
  Milan, 268 

The repeated efforts to straighten out the monetary order showed only limited success. A reform under Emperor Aurelian (270 to 275) to restore the former coinage standard sparked a riot of mintmasters in Rome, who feared for their privileges. This conflict was so savage that 7,000 soldiers died putting down the revolt. 

Diocletian (284 to 305) made a renewed attempt to reform the currency 20 years later. He abolished the fixed link between the coinage metals and raised the coinage standard for the debased gold coins. This price of gold coins now no longer depended on the gold-to-silver ratio, but on the value of their gold weight. Hence the price of the coin could change in line with the market price of gold. Gold coins were traded like bars or jewelry, which once again functioned as money. Diocletian tried to stop the debasement of silver and copper coins by issuing a new silver coin of good purity, the argenteus, and by introducing a new copper coin, the follis. Additionally, in 301, Diocletian decreed upper thresholds for staples as well as for wages to contain prices. 1 pound (about 325 grams) of beef were to cost a maximum of 8 denarii and the daily wage of a farm laborer was capped at 25 denarii, that of a baker at 50 denarii, and a scribe could charge no more than 20 denarii for writing 100 lines. The edict of maximum prices proved to be unsuitable for curbing inflation – instead of putting a lid on prices, it merely resulted in even moderate prices being raised to the legal maximum and in black market trading. Thus the experiment of a controlled economy miscarried. 

Constantine the Great (306 to 337) was more successful in reforming the currency regime. He introduced a new gold coin to replace the aureus, which had disappeared from circulation. This coin, the solidus, weighed 4.55 grams and became the basis of the new monetary system. This coin soon became standard, and huge volumes were minted. Even after the division of the Roman Empire into an Eastern and a Western Empire in 395, the solidus went on to become the principal coin of the monetary system of the late Roman state and the Byzantine Empire.

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  Binio (= double aureus), Aurelian (270 to 275), Siscia 

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  8 double denarii,
  Carus (282 to 283) 

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  Aureus, Diocletian
  (284 to 305),
  Cyzicus, 287 to 290 

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  Argenteus, Diocletian
  (284 to 305), Ticinum, 294 

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  Follis, Diocletian (284 to 305),
  Aquileia, 301 

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Yet even Constantine the Great could not stop the decline of the Roman monetary system. As the value of gold coins was tied to the precious metal price and could therefore rise, the silver and copper coins were subjected to even stronger inflationary pressure. Despite repeated price adjustments and reissues of coins in the course of the 4th century, the debasement above all of the copper currency could not be halted. The complete loss of trust in the totally debased currency led to a revival of the barter system, a development that was reinforced by the economic and social changes in the course of the 3rd and 4th centuries. Political uncertainty hindered regional and local trade alike. The main focus of business life shifted to the countryside from urban centers, in which many people were no longer able to subsist and in which anarchy often ran rampant. The importance of money as a means of payment diminished. 

Upon the final breakdown of the the Western Roman Empire in 476, only small amounts of silver coins were still in circulation next to the gold solidus, which remained the predominant legal tender in Mediterranean trade. There are numerous explanations for the decline of the monetary system in the West. One reason was the rapid shrinkage of precious metal holdings through attrition and outflows of coins to the East, another the growing concentration of assets held by the Christian church, which managed to accumulate the bulk of the riches of the times and used the money to establish monasteries and churches. The loss of political and financial control resulting from the lack of political cohesion is also cited as a resaon for the downfall of the monetary system. At any rate, Europe could not reattain the peak of monetary development reached during the heyday of the Roman Empire until many centuries later.

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  Aureus, Licinius I (308 to 324),
  Nicomedia, 321 to 322 

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  1½ solidi, Constantin I (307 to 337), Nicomedia 

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  Solidus,
  Flavius Julius Constantin II (324 to 361),
  Antioch 

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  Solidus, Theodosius I
  (379 to 395),
  Constantinople (384) 

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