Isakndar Posted March 17, 2008 Share Posted March 17, 2008 During the time of the Emperor Tiberius, 33AD - from Tacitus' Annals In their dismay the senators, not one of whom was free from similar guilt, threw themselves on the emperor's indulgence. He yielded, and a year and six months were granted, within which every one was to settle his private accounts conformably to the requirements of the law. Hence followed a scarcity of money, a great shock being given to all credit, the current coin too, in consequence of the conviction of so many persons and the sale of their property, being locked up in the imperial treasury or the public exchequer. To meet this, the Senate had directed that every creditor should have two-thirds his capital secured on estates in Italy. Creditors however were suing for payment in full, and it was not respectable for persons when sued to break faith. So, at first, there were clamorous meetings and importunate entreaties; then noisy applications to the praetor's court. And the very device intended as a remedy, the sale and purchase of estates, proved the contrary, as the usurers had hoarded up all their money for buying land. The facilities for selling were followed by a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined. The destruction of private wealth precipitated the fall of rank and reputation, till at last the emperor interposed his aid by distributing throughout the banks a hundred million sesterces, and allowing freedom to borrow without interest for three years, provided the borrower gave security to the State in land to double the amount. Credit was thus restored, and gradually private lenders were found. The purchase too of estates was not carried out according to the letter of the Senate's decree, rigour at the outset, as usual with such matters, becoming negligence in the end. ------------------------------------------------------------------------------- From what I have been reading I gather this was caused by the end of a long building boom under Augustus, the Banks loaning had been investing their gains in land and property, but the huge building program work had dried up under Tiberius reducing the velocity and supply of money. Then and there was a sudden event, the enforcement of an existing law that required "cash backing for real estate loans" - I think the senate enforced the banks to hold more cash on deposit for their outstanding loans, it is not entirely clear. Anyway how ever it happened there was a sudden credit crisis and many banks and private investors were forced to liquidate assets in order to comply with the requirements at first and then to pay off loans to other institutions as they were called in - the property market crashed. Tiberius was forced to provide liquidity to the credit markets - 100 million sestercies is about £1.5 billion if such comparisons are possible. It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar. And there was I trying to write an essay on the Roman Economy for my History BA. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted March 17, 2008 Share Posted March 17, 2008 fascinating stuff! Quote Link to comment Share on other sites More sharing options...
dissident junk Posted March 17, 2008 Share Posted March 17, 2008 Nice one, Isakndar! Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 17, 2008 Share Posted March 17, 2008 During the time of the Emperor Tiberius, 33AD - from Tacitus' Annals In their dismay the senators, not one of whom was free from similar guilt, threw themselves on the emperor's indulgence. He yielded, and a year and six months were granted, within which every one was to settle his private accounts conformably to the requirements of the law. Hence followed a scarcity of money, a great shock being given to all credit, the current coin too, in consequence of the conviction of so many persons and the sale of their property, being locked up in the imperial treasury or the public exchequer. To meet this, the Senate had directed that every creditor should have two-thirds his capital secured on estates in Italy. Creditors however were suing for payment in full, and it was not respectable for persons when sued to break faith. So, at first, there were clamorous meetings and importunate entreaties; then noisy applications to the praetor's court. And the very device intended as a remedy, the sale and purchase of estates, proved the contrary, as the usurers had hoarded up all their money for buying land. The facilities for selling were followed by a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined. The destruction of private wealth precipitated the fall of rank and reputation, till at last the emperor interposed his aid by distributing throughout the banks a hundred million sesterces, and allowing freedom to borrow without interest for three years, provided the borrower gave security to the State in land to double the amount. Credit was thus restored, and gradually private lenders were found. The purchase too of estates was not carried out according to the letter of the Senate's decree, rigour at the outset, as usual with such matters, becoming negligence in the end. ------------------------------------------------------------------------------- From what I have been reading I gather this was caused by the end of a long building boom under Augustus, the Banks loaning had been investing their gains in land and property, but the huge building program work had dried up under Tiberius reducing the velocity and supply of money. Then and there was a sudden event, the enforcement of an existing law that required "cash backing for real estate loans" - I think the senate enforced the banks to hold more cash on deposit for their outstanding loans, it is not entirely clear. Anyway how ever it happened there was a sudden credit crisis and many banks and private investors were forced to liquidate assets in order to comply with the requirements at first and then to pay off loans to other institutions as they were called in - the property market crashed. Tiberius was forced to provide liquidity to the credit markets - 100 million sestercies is about £1.5 billion if such comparisons are possible. It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar. And there was I trying to write an essay on the Roman Economy for my History BA. How long would it have taken the romans to print out 100 million susterces for crisakes? and They didnt have printing presses in those days either., or mint the coins? doesnt sound credible to me. Quote Link to comment Share on other sites More sharing options...
insidetrack Posted March 17, 2008 Share Posted March 17, 2008 33AD was a big crash. A lot of the BTL properties on the North side of the forum never regained their pre crash prices. A lot of building projects were pulled as well - hence the Collesium not being finished off. BTW Some academic pointed out that British house prices crashed in the Fifth century, when the Romans pulled out, and didn't recover until around the Sixteenth century - over a thousand years! It could be as bad this time round. Quote Link to comment Share on other sites More sharing options...
nmarks Posted March 17, 2008 Share Posted March 17, 2008 (edited) How long would it have taken the romans to print out 100 million susterces for crisakes? What was the major event? Did it involve bolts of lightning from on high? Edited March 17, 2008 by nmarks Quote Link to comment Share on other sites More sharing options...
Orsino Posted March 17, 2008 Share Posted March 17, 2008 Villas only go up! At least that was what Krustus Maximus said on Locus, Locus, Locus. Quote Link to comment Share on other sites More sharing options...
flatnose Posted March 17, 2008 Share Posted March 17, 2008 How long would it have taken the romans to print out 100 million susterces for crisakes? and They didnt have printing presses in those days either., or mint the coins? doesnt sound credible to me. Bloo Loo...You are talking excreta. The Romans did mint their coins and the gold aureus was worth 100 sestertii. Manpower was also cheap (slavery). These coins would have been minted over a considerable time period and the palace coffers were massive. The Romans had mints all over their empire. Tacitus is also a very well respected Roman historian. I suggest you go to Roman Coinage and educate yourself. Nice find Isakndar! I specialised in Roman history at Lancaster. I will never regret it. Would love a copy of your dissertation, sounds fascinating. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted March 17, 2008 Share Posted March 17, 2008 It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar. And there was I trying to write an essay on the Roman Economy for my History BA. What's the source of your info? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 17, 2008 Share Posted March 17, 2008 (edited) Bloo Loo...You are talking excreta. The Romans did mint their coins and the gold aureus was worth 100 sestertii. Manpower was also cheap (slavery). These coins would have been minted over a considerable time period and the palace coffers were massive. The Romans had mints all over their empire. Tacitus is also a very well respected Roman historian. I suggest you go to Roman Coinage and educate yourself. Nice find Isakndar! I specialised in Roman history at Lancaster. I will never regret it. Would love a copy of your dissertation, sounds fascinating. I know the Romans had coins. I also know they minted throughout the empire. My point was the short timescale of the redistribution/creation of the 100 million. Have you ANY idea how much metal would be required to mint at least 1 million coins? plus all the small change in short order? It would have taken months if they put all their efforts in it. So it would appear the shortage and debt problems were more likely caused by the same thing that is happening now, the money ends up in a few places away from the masses- in the emporers and moneylenders coffers. As you say, these were very large indeed. Far from creating a ton more on short notice, the emporer redistributed what he already had. At least the roman wealth was based on something tangible ie Coinage, whereas todays money is based on nothing at all. Edited March 17, 2008 by Bloo Loo Quote Link to comment Share on other sites More sharing options...
ong Posted March 17, 2008 Share Posted March 17, 2008 LOL Of all the websites I visit, houseprice crash is the best for erudite humour! Cheers me up no end Quote Link to comment Share on other sites More sharing options...
BandWagon Posted March 17, 2008 Share Posted March 17, 2008 I know the Romans had coins. I also know they minted throughout the empire. My point was the short timescale of the redistribution/creation of the 100 million.At least the roman wealth was based on something tangible ie Coinage, whereas todays money is based on nothing at all. The Roman's debased their currency as the empire fell. They started adding bronze to the gold, then gold plating tin. Very similar to Heli Ben's current strategy... Quote Link to comment Share on other sites More sharing options...
ImA20SomethingGetMeOutOfHere Posted March 17, 2008 Share Posted March 17, 2008 I know the Romans had coins. I also know they minted throughout the empire. My point was the short timescale of the redistribution/creation of the 100 million.Have you ANY idea how much metal would be required to mint at least 1 million coins? plus all the small change in short order? It would have taken months if they put all their efforts in it. So it would appear the shortage and debt problems were more likely caused by the same thing that is happening now, the money ends up in a few places away from the masses- in the emporers and moneylenders coffers. As you say, these were very large indeed. Far from creating a ton more on short notice, the emporer redistributed what he already had. At least the roman wealth was based on something tangible ie Coinage, whereas todays money is based on nothing at all. A lot of Rome's wealth came through conquest. The legions under Augustus were pretty busy so I'd imagine a fair amount of gold and silver coin found its way into circulation. Of course as the empire became established and the Romans became less interested in conquest and more in defense this source of money dried up meaning higher taxes and gradual economic decline. Towards the end when what was left of the Western empire was trying to fend off the Huns and the like a major financial crisis came about because the Romans had to pay large amounts of tribute to the hairy ones to stop them ransacking what was left of the empire. This had the effect of removing large amounts of money from circulation (if only somebody had thought to print some paper money instead) causing widespread financial ruin. Quote Link to comment Share on other sites More sharing options...
Isakndar Posted March 17, 2008 Author Share Posted March 17, 2008 How long would it have taken the romans to print out 100 million susterces for crisakes? and They didnt have printing presses in those days either., or mint the coins? doesnt sound credible to me. Sestercies were silver coins as were denarii - the two main forms of coin apart from bronze small change. Aureus were just too big value wise. The treasury was flush with cash. Tiberius had a reputation for being very stingy. They had to keep a great deal in the treasury because they did not operate a national debt. Quote Link to comment Share on other sites More sharing options...
Isakndar Posted March 17, 2008 Author Share Posted March 17, 2008 (edited) I know the Romans had coins. I also know they minted throughout the empire. My point was the short timescale of the redistribution/creation of the 100 million.Have you ANY idea how much metal would be required to mint at least 1 million coins? plus all the small change in short order? It would have taken months if they put all their efforts in it. So it would appear the shortage and debt problems were more likely caused by the same thing that is happening now, the money ends up in a few places away from the masses- in the emporers and moneylenders coffers. As you say, these were very large indeed. Far from creating a ton more on short notice, the emporer redistributed what he already had. At least the roman wealth was based on something tangible ie Coinage, whereas todays money is based on nothing at all. The Romans mined silver, gold and copper on an industrial scale like no other until the 19th Century - the Rio Tinto valley in Spain is scared by their workings on a truely epic scale. The used a great deal of machinery to do it, water powered ore crushers, people power cranes etc etc. The only thing they were missing was steam power. They were not a pre-industrial society but a proto-industrial one. Much of the money went to the far east in trade in luxuries. Pliny the Elder complained that there balance of payments deficit to India and China was amounting to no less that 100 million sectercies a year via Alexandria - I am not kidding you. Edited March 17, 2008 by Isakndar Quote Link to comment Share on other sites More sharing options...
Marek Posted March 17, 2008 Share Posted March 17, 2008 During the time of the Emperor Tiberius, 33AD - from Tacitus' Annals In their dismay the senators, not one of whom was free from similar guilt, threw themselves on the emperor's indulgence. He yielded, and a year and six months were granted, within which every one was to settle his private accounts conformably to the requirements of the law. Hence followed a scarcity of money, a great shock being given to all credit, the current coin too, in consequence of the conviction of so many persons and the sale of their property, being locked up in the imperial treasury or the public exchequer. To meet this, the Senate had directed that every creditor should have two-thirds his capital secured on estates in Italy. Creditors however were suing for payment in full, and it was not respectable for persons when sued to break faith. So, at first, there were clamorous meetings and importunate entreaties; then noisy applications to the praetor's court. And the very device intended as a remedy, the sale and purchase of estates, proved the contrary, as the usurers had hoarded up all their money for buying land. The facilities for selling were followed by a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined. The destruction of private wealth precipitated the fall of rank and reputation, till at last the emperor interposed his aid by distributing throughout the banks a hundred million sesterces, and allowing freedom to borrow without interest for three years, provided the borrower gave security to the State in land to double the amount. Credit was thus restored, and gradually private lenders were found. The purchase too of estates was not carried out according to the letter of the Senate's decree, rigour at the outset, as usual with such matters, becoming negligence in the end. ------------------------------------------------------------------------------- From what I have been reading I gather this was caused by the end of a long building boom under Augustus, the Banks loaning had been investing their gains in land and property, but the huge building program work had dried up under Tiberius reducing the velocity and supply of money. Then and there was a sudden event, the enforcement of an existing law that required "cash backing for real estate loans" - I think the senate enforced the banks to hold more cash on deposit for their outstanding loans, it is not entirely clear. Anyway how ever it happened there was a sudden credit crisis and many banks and private investors were forced to liquidate assets in order to comply with the requirements at first and then to pay off loans to other institutions as they were called in - the property market crashed. Tiberius was forced to provide liquidity to the credit markets - 100 million sestercies is about £1.5 billion if such comparisons are possible. It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar. And there was I trying to write an essay on the Roman Economy for my History BA. are we finally trully ******ed? let's run for the hills Quote Link to comment Share on other sites More sharing options...
South Lorne Posted March 17, 2008 Share Posted March 17, 2008 are we finally trully ******ed? let's run for the hills ...Rome was built on the seven hills but not in a day ...there's hope yet..... Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted March 17, 2008 Share Posted March 17, 2008 I know the Romans had coins. I also know they minted throughout the empire. My point was the short timescale of the redistribution/creation of the 100 million.Have you ANY idea how much metal would be required to mint at least 1 million coins? plus all the small change in short order? It would have taken months if they put all their efforts in it. So it would appear the shortage and debt problems were more likely caused by the same thing that is happening now, the money ends up in a few places away from the masses- in the emporers and moneylenders coffers. As you say, these were very large indeed. Far from creating a ton more on short notice, the emporer redistributed what he already had. At least the roman wealth was based on something tangible ie Coinage, whereas todays money is based on nothing at all. Reminds me of this Moneyweek article about Japan from a couple of days ago (not sure if posted to hpc) .. http://www.newsweek.com/id/123322?from=rss The Japanese love affair with cash shows signs of going out of control.Investigators arrested two sisters in the city of Osaka on charges of evading taxes by hoarding the equivalent of $56.4 million in cash. Hatsue Shimizu, 64, and Yoshiko Ishii, 55, were said to have hidden the money away in Shimizu's garage. Last fall, when tax inspectors first raided the property, they were stunned to find stacks of cardboard boxes (50 in all) stuffed with yen banknotes. The stash is said to have weighed in at around 1,300 pounds. Many of the wads of bills still had the original bank bands around them; some were moldy with age. It took the tax bureau days to count out all of the money. The two sisters had apparently siphoned off the cash in dribs and drabs from a larger sum ($72.5 million) that they inherited from their father, a real estate magnate, on his death in 2005. Apparently, the women were spooked when one of the banks that held their money went bankrupt a few years back. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 17, 2008 Share Posted March 17, 2008 The Romans mined silver, gold and copper on an industrial scale like no other until the 19th Century - the Rio Tinto valley in Spain is scared by their workings on a truely epic scale. The used a great deal of machinery to do it, water powered ore crushers, people power cranes etc etc. The only thing they were missing was steam power. They were not a pre-industrial society but a proto-industrial one.Much of the money went to the far east in trade in luxuries. Pliny the Elder complained that there balance of payments deficit to India and China was amounting to no less that 100 million sectercies a year via Alexandria - I am not kidding you. ROME, US, both worldwide empires, both dying of the same disease. Fascinating Of course, the Romans must have had mobile phones too- no-one has found any telegraph poles! Quote Link to comment Share on other sites More sharing options...
barsark Posted March 17, 2008 Share Posted March 17, 2008 Of course, the Romans must have had mobile phones too- no-one has found any telegraph poles! Quote Link to comment Share on other sites More sharing options...
huw Posted March 17, 2008 Share Posted March 17, 2008 ROME, US, both worldwide empires, both dying of the same disease. The parallels may go deeper than many imagine. The American founding fathers used Rome as a guide and a model. They were absolutely fascinated by the Roman Republic, and sought to copy it when they built the American Republic. The American founding fathers were all well versed in Greek and Roman history, culture, and custom. They all knew about the tyranny Rome suffered under its kings, and later by its emperors. They learned the Roman love of liberty. And that love of liberty, we continue to share and emulate to this day. The odd thing is, if they wanted to set up a Republic able to resist the emergence of tyranny, why did they choose a model that manifestly failed in that goal? Quote Link to comment Share on other sites More sharing options...
Isakndar Posted March 17, 2008 Author Share Posted March 17, 2008 [q] Nice find Isakndar! I specialised in Roman history at Lancaster. I will never regret it. Would love a copy of your dissertation, sounds fascinating. I have to admit it is driving me around the bend. The subject is productivity during the Empire - there are so many views because there are no statistics. The archeological evidence is hard to interprete and the literary evidence was written by the elite and they did not really write about economics because they did not have a concept of it. But there are a couple of indicators of how much more productive it may have been such as the 1000s of ships wrecks found in the med between 200BC and 400AD but following centuries there are only about 10 per century found until 1500. And the industrial pollution found in the Greenland Icecap is not matched for lead and copper (by products of smelting) are not equalled in some respects until the late 1700s Quote Link to comment Share on other sites More sharing options...
ImA20SomethingGetMeOutOfHere Posted March 17, 2008 Share Posted March 17, 2008 ROME, US, both worldwide empires, both dying of the same disease.Fascinating Of course, the Romans must have had mobile phones too- no-one has found any telegraph poles! The Romans actually did invent buy-to-let flats, mass entertainment and the welfare state. Look where it got them. Quote Link to comment Share on other sites More sharing options...
Isakndar Posted March 17, 2008 Author Share Posted March 17, 2008 ROME, US, both worldwide empires, both dying of the same disease.Fascinating Of course, the Romans must have had mobile phones too- no-one has found any telegraph poles! I should point out the Credit Crisis was in 33AD which is quite early on, their economy expanded for another 150 years from that date. Under Trajan Rome may have had a population of 1.5 million people, many living in blocks of flats 7-8 stories high built with reinforced concrete (that was not re-invented until the late 19th C for skyscapers) - the senate introduced legislation to limit their height - these were the first BLT properties slums. The Coinage was not debased significantly until the 200s, but then it did cause massive inflation and it disrupted the economy, forcing it from a commercial economy to more of a command one. The coinage was much restored by Diocletian and later Emperors. The Rhine frontier was not breached until 408AD (though hoards of barbarians are not the true cause of the collapse of the west). Rome was sacked in 410, but the western empire tottered on to 476AD. in 410 the population in Rome was just under a million by the end of the century it was maybe just 50-80,000. This shrank further to just a few 10,000 over the comming centuries scattered through the ruins of a massive city. People lived through this and would have remembered what life was like before collapse. Before 410, people could buy everyday disposable items, buy services from other people, live an urban educated life working in public service. All of this stopped within a human lifetime. The east empire survived, but declined and mutated into the Byzantine empire. Imagine something like this happening in London or NY. Quote Link to comment Share on other sites More sharing options...
Ked Posted March 17, 2008 Share Posted March 17, 2008 That is a really interesting read Isakndar. What was the source of your information? I'm finding myself more and more fascinated by the history of fiat money. Two statements that are commonly bandied around on this site are: 1) Every fiat currency in the last 2000 years has failed 2) It does so within approximately 30 years of being taken up I would love to see some more references / stats to back this up. Although as previously stated, the educated elites of the time probably didn't understand economics that well or document their failures. It really amazes me that this phenomenon has been repeated throughout history and always has the same outcome. I found some similar information here: Why does fiat money seemly work? Flashback: Rome 27 BCRome’s history of inflation and money debasement actually began with Cesar’s successor Augustus, whereby his method was at least not a prima facie fraud. He simply ordered the mines to overproduce silver in an attempt to finance the empire that had grown greatly under Cesar and himself. When this overproduction began to have inflationary effects, Augustus wisely decided to cut back on the issuance of coins. This was the last time that a Roman emperor attempted to honestly correct a monetary policy blunder, aside from a brief flashing up of monetary rectitude under Aurelius some 280 years later. Under Augustus’ successors, things began to deteriorate fast. Claudius , Caligula and Nero embarked on enormous spending sprees that depleted Rome’s treasury. It was Nero who first came up with the idea to actually debase coins by reducing their silver content in AD 64 , and it all went downhill from there. It should be mentioned that Mark Anthony of Hollywood fame financed the army he used in his fight against Octavian – then later Augustus – also with debased coinage. These coins remained in circulation for a long time, obeying Gresham’s Law – "bad money drives good money from circulation". In AD 274 Aurelius entered the scene with a well-intentioned monetary reform, which fixed the silver-copper content of the then most widely used coin (the Antonianus)at 1:20 – however, just as soon as this reform was instituted, the silver content resumed its inexorable decline. n AD 301 Emperor Diocletian tried his hand at reform, this time by instituting price controls, an idiocy repeated numerous times thereafter, in spite of the incontrovertible evidence that it never works (Richard Nixon’s ill-fated experiment being the most recent example) . Naturally, those price controls accelerated Rome’s downfall as goods simply began to disappear from the market place. Merchants began to hide their goods rather than accept the edict to sell them at a loss. This is of course why price controls are always doomed to failure. One recurring feature of Rome’s long history of debasing its money was a perennial trade deficit due to overconsumption. Does this sound vaguely familiar? Quote Link to comment Share on other sites More sharing options...
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