Ancient World Review

Currency & The Collapse Of The Roman Empire

Comment: This is an interesting lecture. I don't necessarily agree with all of it, but there's no doubt that "coin debasement and inflation helped lead to the demise of the western Roman empire," to quote from The Money Project. Rome's economic problems led to the debasement of its currency and the resulting inflation led to shortages, decreased trade, increased taxation, widespread poverty and the depopulation of once productive parts of the empire in the west. These problems, in turn, seriously weakened the frontier which was eventually overrun by Germanic tribes.

If nothing else, the history of inflation in ancient Rome proves that any unit of exchange can be debased. These days, a lot of people think we could solve our monetary problems by switching to a gold and silver based currency. According to this view, precious metals have "intrinsic value" which makes them immune or at least resistant to inflation. Unfortunately, the idea that gold and silver currencies hold their value as opposed to fiat currencies is flat-out wrong. You can see this by looking at historical gold and silver prices, then comparing them to a chart of the historical value of the dollar. The "value" of gold and silver varies over time just like the value of our fiat currency, so where is the "intrinsic value" in these metals?

The main problem with the Roman monetary system is that it was controlled by the emperors themselves. Faced with finite gold and silver reserves, they turned to "clipping" or reducing the metal content of their coins in order to pay the army and fund all their other projects:

"By decreasing the purity of their coinage, [emperors] were able to make more 'silver' coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years." -- "Currency and the Collapse of the Roman Empire," The Money Project.

The Money Project has an interesting series of graphics illustrating the correlation between the deaths of Roman emperors and the debasement of the coinage. The record shows a steady decline in the silver content of Roman coins over the centuries until there wasn't much left except "a negligible coating of silver" by around 300 AD. This correlation doesn't imply that the debasement of the coinage had any direct bearing on the deaths of all these emperors or vice versa, but it does show the steady economic decline of the empire as its leaders desperately tried to cope with the problem:

"By the time of Marcus Aurelius, the denarius was only about 75% silver. Caracalla tried a different method of debasement. He introduced the 'double denarius', which was worth 2x the denarius in face value. However, it had only the weight of 1.5 denarii. By the time of Gallienus, the coins had barely 5% silver. Each coin was a bronze core with a thin coating of silver. The shine quickly wore off to reveal the poor quality underneath."

Gallienus (218-268 AD) ruled during The Crisis of the Third Century, "a period in which the Roman Empire nearly collapsed under the combined pressures of invasion, civil war, plague, and economic depression," according to Wikipedia. Rome never developed a stable political  system or a stable economic system and the shine was wearing off the empire as well as the denarius.

Related: Taxes Brought Down The Roman Empire, And They'll Do The Same To America. This is an interesting article, but taxes alone didn't bring down the empire.

Ancient Rome's Real Population Revealed?

This 2016 news report describes the discovery of an ancient Roman coin hoard in Spain. As it turns out, hoards like this one can be used not only to date periods of internal unrest, but to estimate the real population of Rome.

Researchers involved in the population study "focused on the region's prevalence of coin hoards, those bundles of buried treasure that people hid to protect their savings during times of great violence and political strife. If the people who hid these bundles were killed or driven off, they wouldn't have been able to retrieve them, leaving them for archaeologists to find." Source: Live Science (2009).

"According to the researchers, mapping out the times when the coins were buried is a good indirect method for measuring the intensity of internal warfare and unrest, and therefore a key indicator of population demographics."

This research showed that "... the entire population of the Roman Empire — and not just its male population — was somewhere around 4 million to 5 million people by the end of the first century B.C." If these estimates are accurate, the population of the empire was roughly the same as modern Denmark, which has around 5,760,000 people according to Worldometers.

Coins Of The Roman Republic

"Ancient coins are often neglected by coin collectors because they believe they must be very rare, too expensive to collect, and too difficult to understand. While some ancient coins are rare, many are very common. The most famous cities and rulers of the ancient world struck coins in great quantities. Coins of Athens, Corinth, and Rome and of Alexander the Great, Julius Caesar, Marc Antony, and Hadrian, for example, are common. Many are less expensive than collectible modern coins. Some late Roman bronze coins can be purchased for as little as a few dollars each. Anyone can appreciate ancient coins and quickly learn the basics of collecting them. Ancient coins are historically interesting, artistic and obtainable at reasonable prices." Source: NumisWiki - The Collaborative Numismatics Project.

Roman Coins And Cattle

The origins of Roman money can be seen in the language. "One of the Latin words for money is PECUNIA, which originates from the shorter Latin word, PECUS, meaning 'cattle.' It may not at once be recognized that there is a connection between cattle and money, but a brief analysis will show a definite wedding of the two words." Source: Handbook of Ancient Greek & Roman Coins, by Zander H. Klawans, p. 177.

According to the Online Etymology Dictionary, "livestock was the measure of wealth in the ancient world, and Rome, like any other culture, was essentially a farmer's community. That pecunia was literally 'wealth in cattle' was still apparent to Cicero."

To the early Romans, cattle were a unit of exchange. "In early times, cattle were viewed as a trading commodity (as they still are in some parts of the world), and property was often valued in terms of cattle." -- Merriam Webster.

This arrangement worked well in the early Roman world. "Rome under the kings and in the early republic managed without a coinage," according to the Oxford Classical Dictionary (3rd ed. revised), but the system broke down when the ancient economy got larger and started to expand to more distant markets. Coins were invented because cattle were too big to be practical for business transactions:

"Obviously, such bulky material was an inadequate means of exchange," according to the Handbook of Ancient Greek & Roman Coins (p. 177).  "The problems of transporting hundreds of heads of cattle here and there was a great one and it became more intense when the world markets of those days started to blossom; trading in cattle became cumbersomely impossible. The logical answer was the creation of a means of exchange, universally recognized, but small in size. Coinage was the answer."

I don't think it's correct to say that these early coins were a "cattle-backed" currency in the sense that one coin represented a certain number of cattle. The coins had value in and of themselves because their value was directly related to their weight (in bronze, for instance). In fact, the first Roman coinage "was crude, shapeless and heavy in an attempt to approximate the value of the coin with its actual weight." (Ibid).

Some of these coins "carried the images of animals, such as birds and cattle upon them, and also inanimate objects, such as tridents and shields. It would seem to be a mistake to call such pieces "money" rather than to consider them as having been used as a means of exchange on the basis of weight." (Ibid).

The difference between "money" and "a means of exchange" escapes me. According to Wikipedia, at least, money is a "medium of exchange." Whatever the case, the value of these early Roman coins appears to have been based on their metal value (otherwise their weight wouldn't have been an issue). The value must have been purely relative, i.e., the larger the coin or the higher its actual metal content, the more it was worth.

The switch from a system of livestock-based commodity exchange to metal coinage was an important factor in the expansion of Rome, but it introduced other problems. Despite the current myths about the "intrinsic value" of gold, silver, etc., metal coins can be debased and inflated like any other kind of fiat currency. This can be done by "clipping" the coins, i.e., by using various tricks to reduce their actual metal content. In later years, Roman emperors did just that in order to cope with their money problems. The inflation of the Roman currency was one of the factors that led to the fall of the empire in the West.

Amateur Danish Archaeologist Finds 1500-Year-Old Treasure

"An amateur archaeologist made a remarkable find on muddy land on the island of Hjarnø near Horsens.  Source: The Local.

"Over 32 pieces of jewellery including gold and pearls, dating 1,500 years, have been found on the island in Horsens Fjord, according to broadcaster DR.

The gold included beads, pendants, a needle and small gold pieces that were used as currency during the Iron Age."

Roman Emperors & Co-Emperors On Their Coins

"Imperial Portrait types were controlled by the imperial administration, aligned to and combined with propaganda messages such as military victories, or strength of the dynasty. Portraits were distributed to the people across the empire using different and parallel news media. Main news media were sculpture, paintings, medals, and coins. Roman coins of even the most shortlived emperors survived till today, as millions and millions of coins were issued, and people in ancient times proactively tried to hide them away due to their intrinsic metal value. Thus coins are a major source of information for Roman imperial portraits. Except the most esoteric usurpators [usurpers], all Roman Emperors and many of their family members had coins with their portraits issued." Source: The Roman Numismatic Gallery.

How The Romans Represented The Myth Of Romulus & Remus On Their Coins

"Numismatics the study of coinage, and is a wonderfully useful tool in the archaeologist’s and historian’s toolbox. One of the best things for an archaeologist to find while digging is a coin. The reason is simple; it can instantly provide some date for the layer they are digging. Additionally, coins provide information for trade, economy, social organisation, mythology, ideologies, personages, leadership, military, important events, and the list goes on." Source: Ancient History Encyclopedia. This article presents a good overview of the parts of coins, abbreviations typically found on coin legends, and "important terms to remember when analyzing" ancient coins.

Ref: The legend of Romulus and Remus.

Guide To Ancient Coins Of Nero

Rare Roman Coin Of Nero Found In Jerusalem

"Though the Roman Empire occupied Jerusalem and certainly spread its currency there, the only known Roman coins from the ancient Jewish capital have all come to historians and archaeologists through collectors, with uncertain provenance. An exception is a gold coin recently discovered near excavations of wealthy first century priestly houses on Jerusalem's Mt. Zion. Dated to 56 CE, it may be an remnant of looting at the time of the city's destruction in 70 CE." Source: Science Daily.

"... The gold coin (aureus) bears the bare-headed portrait of the young Nero as Caesar. The lettering around the edge of the coin reads: NERO CAESAR AVG IMP. On the reverse of the coin is a depiction of an oak wreath containing the letters 'EX S C,' with the surrounding inscription 'PONTIF MAX TR P III.' Importantly, these inscriptions help to work out the date when the coin was struck as 56/57 AD."

Note: Nero was emperor from 54-68, so this coin dates back to the early years of his reign when the aureus was probably worth a lot more than it was in later years. "In AD 64 Nero reduced the weight of the aureus and the weight and fineness of the denarius ..," according to the Oxford Classical Dictionary (3rd ed. revised). This debasement of the coinage was a symptom of the financial problems that contributed to the decline and eventual collapse of the western Roman empire.

According to Science Daily, "[This particular coin] dates to a little more than a decade before the destruction of Jerusalem by the Romans in 70 AD, and was found in rubble material outside the ruins of the 1st Century Jewish villas the team has been excavating. The team has hypothesized that the large houses may have belonged to wealthy members of the priestly caste, and it may have come from one of their stores of wealth."

Why would Jewish priests have been rich? It's an interesting question. Did they draw large salaries or was something else going on? As it turns out, the temple was more than just a simple house of worship. It was also a bank and commercial market than ran its own treasury and foreign exchange:

"In the period of the Second Temple vast numbers of Jews streamed to Palestine and Jerusalem 'out or every nation under heaven' (Acts 2:5), taking with them considerable sums of money in foreign currencies," according to the Jewish Virtual Library. "This is referred to in the famous instance of Jesus' driving the money changers out of the Temple (Matt. 21:12). Not only did these foreign coins have to be changed but also ordinary deposits were often handed over to the Temple authorities for safe deposit in the Temple treasury (Jos., Wars 6:281–2). Thus Jerusalem became a sort of central bourse and exchange mart, and the Temple vaults served as 'safe deposits' in which every type of coin was represented ..." Next video shows a virtual reconstruction of the Second Temple:

Temple authorities charged transaction fees for converting currencies from one denomination or another. "This premium seems to have varied from 4 percent to 8 percent," according to the Jewish Virtual Library. They were also bankers who paid out interest on deposits and presumably made a good living through investments, and I wouldn't be surprised if they indulged in a little skimming on the side. The temple was a major financial and religious institution, kind of like a combination of a mega-church and Bank of America.

It would be interesting to know the actual history of this auerus recently discovered in Jerusalem. How did it end up in the villa of wealthy priest, for instance, and why wasn't it moved to a safe location before the Roman invasion? If it was looted from one of the temple's "safe deposits," who did the looting? The Romans? If so, did the rest of the treasure end up back in Rome with the other spoils from the temple, or were a group of legionaries carrying out an act of private enterprise? We'll probably never know, but there's a lot of history hidden behind this single gold coin.

The Coins Of Caligula

Related: Browsing Roman Imperial Coins of Caligula.

Caligula: Coins

According to Wikipedia, "[Cassius] Dio wrote that following the death of Caligula the Senate demonetized his coinage, and ordered that they be melted. Regardless of whether or not this actually occurred, it demonstrates the importance and meaning that was attached to the imagery on a coin."