Commerce in the Hellenistic world was stimulated by a circulation of money that went deeper and farther than in earlier times. When Alexander had taken possession of the treasures of the Persian king in Susa, Persepolis, and Ekbatana, he had much of the gold and silver coined, and this money was brought into circulation by way of payments to his troops. Successors such as Antigonus and Seleucus would do the same with what was left of the treasures. This sudden and huge increase in the money supply, hardly balanced by any increase in the production of goods, caused serious inflation in the Hellenistic world. At the same time, the now monetized economy of western Asia was connected with that of the Greek world proper, creating one large, integrated economic system. Formally, there was no question of a monetary union, though, for the Greek cities and the new Hellenistic kingdoms had their own currencies in the form of bronze and silver coins, while since the time of Philip and Alexander some cities and all the kingdoms also minted gold coins. But the coins were easily interchanged, the silver and gold coins deriving their value essentially from their weight in precious metal. The most important unit was the silver drachme, usually modeled on the Attic standard, and the silver tetradrachms (four drachmas) minted by Alexander and the Hellenistic kings dominated international trade. Toward the end of the 3rd century BC, Roman coins were added to the international currency: the silver
Denarius and sestertius (one fourth of a denarius), and since the 1st century BC, golden Roman aurei would be irregularly issued. Understandably, the money changer became a familiar figure in the big Hellenistic cities.
The evolution from money changer to banker had already started in the 4th century BC. In the classical poleis, temples had functioned as places where individuals and states could leave their valuables as deposits, for safekeeping. States could also borrow from the temples, in which case the temple lent from its own property, not from the deposits stored in it. Thus, the temples did not function as rudimentary “banks” in the modern sense. In the 4th century BC, however, in Athens and the Piraeus, the money changer, taking over the role of “deposit banks” from the temples, at least for private citizens, did assume some functions of the modern banker. One could deposit money with the moneychanger or money dealer without receiving any interest, but the dealer was obligated to make the money available at any given moment or to pay the money to a third party after a written order to that effect was issued. In that way, a rudimentary credit system could develop. Cicero could transfer money from Rome to his son in Athens by writing to his banker without having to send, literally, a heap of coins overseas. The banker, in his turn, could try to make more money for himself with the sums entrusted to him by investing in certain economic activities, such as giving a loan to merchants against an interest that could vary from 10% to 30%, usually with the ship and/or its cargo as security. It seems that in some places, such as commercially important Delos, the temples could also act in such a banking capacity. No doubt all this favored international trade in the Hellenistic world. Yet, both the budding banking activities and the international trade itself remained hemmed in by various limitations inherited from the previous period that prevented commerce and banking from flourishing as in the early modern age. Loans and commercial activities in antiquity were essentially ad hoc activities, aimed at a specific transaction. Merchants pooled their money—either their own or borrowed from a third party such as a “banker”—for one commercial enterprise at the time, not for a business or “company” that would endure. In the prevailing juridical systems, which acknowledged only individual accountability, the creation of a company or firm together with partners was virtually impossible.
Apart from the usual unavailability of interest on money deposited, this simple “banking system” had another weakness: it catered exclusively to the very rich. For the common people, it was impossible not only to borrow but also to deposit money and thus to save. “Saving” money in antiquity meant safekeeping, and often in a primitive way by literally hiding money in a pot in the ground. As a result, only the very rich made use of “bankers” or indulged in a little “banking” themselves by giving loans, often against exorbitant interest rates, to merchants for commercial activities or to cities for paying their tributes to kings or states—to the Roman state, in particular. Especially, rich Romans of the equestrian order or “knights” (the elite ranking just below the senatorial class) in the 2nd and 1st centuries BC often used their wealth in that way. United in a sort of consortium, they rented the tax for one year that a given province had to pay to Rome, the amount of which had been fixed in advance, by simply paying that amount of money into the Roman treasury first and collecting, or rather extorting, the actual tax in the province concerned afterward, with a considerable surplus, amounting to 100% of the taxes due, as a reward for themselves. The
Practice was regularly lamented by the provincials, who, however, were mostly powerless, since the governor would protect the tax collectors with his troops, and would usually receive a fair share of the profits. These persons, known as publicani (since it was public transactions that they leased from the Roman government), were understandably hated. It could also happen that when the Romans imposed on a province an extra amount of tribute by way of punishment, the cities there had to borrow the full amount from a group of publicani, who then proceeded to collect their money with exorbitant interest in annual installments for the next few years. In this way, in the last two centuries of the Roman Republic, enormous amounts of money, that is, coins in silver and in gold, ended up in Roman hands, part of a general process of shifting wealth and economic prosperity from the eastern Mediterranean to Italy, as a result of the expansion of Rome.
World History
