Chapter 9 — Public Finances

CHAPTER IX

Public Finances

The Roman was a practical, businesslike person in the management of his private concerns, but in the management of public finances his instinct for efficiency was neutralized, as happens in all democracies, by the pressure of friends seeking special privileges, by the lack of a stable and durable policy in an ever-changing government, by the want of any scrutinizing and controlling supervision, and by a popular demand for amiable rather than officious magistrates. Frequently, therefore, the Oriental despots whom Roman governors displaced in the East had been better managers than their successors. Their kingdoms had been their private possessions: they had accordingly chosen efficient men to manage the satrapies, had removed those who failed, and had continued successful officials in office until they became specialists in their respective tasks.

The Roman democracy, on the contrary, worked upon the theory that any citizen of good family could serve the state in any capacity. An eligible young man began his career as an official of the treasury for one year; then, after a year’s rest, if he pleased the voting populace, he had charge, as aedile, of some division of the public works, an office which under ordinary circumstances admitted him to the Senate for life. After another year’s rest he might be made a judge in one of the important praetorian courts, whether or not he had studied law. Indeed, one of the reasons why Roman civil law freed itself so readily from outworn legal conceptions and kept its feet on the common-sense ground of equity was just that normal men of affairs presided in the courts over juries of men of similar stamp. But the system, for obvious reasons, failed to create an adequate criminal law.

The official was then given a year’s practice in managing one of the smaller provinces; after which, if the people so disposed, he might for a year become the supreme magistrate of Rome. Thereafter he would be put in command of an important province for a year, from which he returned to Rome to live the rest of his days as a respected senator and aid in the direction of the imperial policies of Rome. Obviously such men received a very wide experience, but they were specialists in nothing in particular, and the knowledge they gained must frequently have come through sad mistakes committed in all kinds of offices for which they were not half fitted until it was time to depart for the next position. The system provided an excellent training school for retired senators; it did not make for skillful government.

In the early days, when the city was the state and when the citizen who paid his taxes could see day by day how the state’s money was being expended, no great evil could result for long. What might happen later, when unprotected provinces far from Rome were placed at the free disposal of such men, is well enough illustrated by the stories that have made the name of Verres a proverb.

In the early Republic national expenses were but trifling. The few magistrates served their year without emoluments. To be selected by popular acclamation was flattering enough to evoke a year’s public service without further reward. The army also served gratis: only property owners were called to arms, and they presumably had sufficient interest in the protection of their homes and properties to fight without pay. As for equipment, the heavily armed first line and the cavalry were selected from the wealthier men, who could best afford to equip themselves. Public work like wall-building¹ was done by the citizen army as a part of its duty; roads and streets were graded by the property owners at public command. The early temples seem largely to have been provided by the sale of booty. And this brief list runs the gamut of the early state’s needs.

Rome had not yet outgrown the conditions of tribal life, where common action, so difficult to secure, confined itself to the mere physical defense of the group, leaving all questions of moral, intellectual, and social welfare to the devices of the family and the interested individual. New functions the Roman government assumed very slowly and reluctantly. Thus, for instance, it was not until the day of autocracy that the state considered itself under any obligation to supervise or encourage education, even as in modern times the most liberal governments of Europe have been the most dilatory in accepting such nonpolitical burdens.

1. For example, Livy (VII, 20) says that the soldiers, after their campaign of the year, spent the rest of their time repairing the walls.

The first demand for a well-stocked treasury came with the long war against Veii. The year-long service in the army, with the consequent neglect of farms and business, necessitated the introduction of a regular stipendium. At first this was very trifling, little more in fact than enough for the soldier to pay for his rations, but it marks the time from which a tax had to be levied upon Roman property. This annual tribute² seems to the modern reader not very large, frequently not more than a mill per cent. And even this was at times restored³ to the taxpayer if war indemnity and booty sufficed to permit repayment.

This tribute was a uniform property tax. On real estate⁴ it was levied on the ager Romanus, that is, upon all land within the bounds of the city-state proper as far as the ward divisions extended, and was levied even if a non-Roman acquired such property. In addition to this, all Roman citizens, whether living at home or abroad, were subject to a tax on all other property as well, as, for instance, on cash, slaves, cattle, implements, and furniture. The property of widows and orphans, not at first on the citizen census list, which had been made up for military purposes, was later subjected to a tax that was set aside for the equipment of cavalry.

2. Livy, XXXIX, 44: his rebus omnibus terni in milia aeris adtribuerentur; Livy, XXIII, 31: eo anno duplex tributum imperaretur.

3. Livy, X, 46; Pliny, N. H. XXXIV, 23.

4. See Marquardt, Staatsverwaltung, II, 167, 168; Lecrivain, art. Tributum, Daremberg-Saglio.

The Samnite wars, long protracted through desolate regions and necessitating a reorganization of the army with new equipment and much road-building, entailed heavy taxpaying for long seasons. The First Punic War also proved extremely expensive, especially because of the heavy losses of the navy. Seven hundred ships of war were lost in battles or in storms. It is not surprising that at the end Rome not only exacted an indemnity from Carthage—though it amounted to but a fraction of the cost—but also adopted from her the new theory that subjects should share with citizens the costs of government. [OCR unclear: T! “^” “*” very materially relieved thr “^ 1”] In the Second Punic War, however, this tithe did not even suffice to feed the armies in the field.

Taxes were doubled and trebled. New surtaxes on incomes were added, free contributions were called for, contracts were let on credit, and loans floated on the security of Rome’s public lands. Indeed, at that time the administration of the Roman exchequer assumed the aspects of a modern national treasury. But the Roman Senate disliked arrears and [OCR unclear: compV'^'^*'"' '"''"'-•"" ^'^ 0/%^..,......;jj....f*..- *yQ ^2|> ii liu ig] the mortgaged lands to the creditors, at first reserving the right to reclaim them at a revaluation, later conceding even this privilege. Thus the treasury got rid of its loans and thereafter succeeded fairly well in keeping a surplus account.

Finally, in 167 B.C., the accumulation of a large surplus from state mines, from indemnities and war booty, and an accession of regular income from Spanish tribute and from the rental of the Campanian and other public lands in Italy placed the treasury in such a strong condition that the direct tax upon citizens was discontinued.

In Cicero’s consulship, before Pompey had added the new eastern provinces of Syria, Bithynia, and Pontus, we are told that Rome’s public receipts were about 50,000,000 denarii,⁵ or about ten million dollars. The bulk of this sum came from provincial taxes, but smaller amounts were received from the rental of Campanian public land, public mines in Spain and Transpadane Gaul, fishing rights on lakes, rivers, and coasts, and a salt monopoly; a five percent tax on the price of manumitted slaves; an occasional tax of five percent on inheritances; and port duties levied at harbors, usually of from two to five percent. These port duties were not conceived of as protective tariffs. They were too low to serve such purposes and were, in fact, collected as regularly on exports as on imports. The Empire indeed developed a system of tariff districts, so that goods which were shipped a long distance were apt to pay duty more than once.

5. Plut. Pompey, 45.

Of the ten million dollars provided in Cicero’s day, the larger part came from provincial tributes, which differed in amount and method of collection according to the treaty or exaction made at the time of conquest. Sicily, with its tithes and rents on public lands, provided about one tenth of this, the tithe alone amounting to about one million bushels of wheat. Asia furnished one and a half million dollars in Hadrian’s day, after Caesar had somewhat lightened her burden. Perhaps we may estimate two millions for Cicero’s day. Since enlarged Gaul provided two millions in the Augustan period, a half million will be a generous estimate for the small province of Narbo. In comparison with these provinces, if we consider the size, productivity, and conditions of conquest of each, we may venture to assume about one million dollars from Spain,⁶ apart from her mines; a half million for Sardinia and Corsica; one and a half for Africa, with her public lands; a half million for Macedonia; and another half million for Cilicia. The other revenues mentioned may well account for some three million dollars.

To these amounts Pompey added the revenues of Syria, Bithynia, and Pontus, amounting to about six million dollars; Caesar conquered Gaul, thus adding at least one and one-half million; and Augustus annexed Egypt, which, being wholly royal property and consequently now completely at the disposal of the treasury, brought in a full ten million dollars.⁶ If we add to these some minor taxes instituted by Augustus, we find that the Empire in its most prosperous day had an annual budget of about thirty million dollars, or less than five percent of the annual budget of the City of New York!

6. Strabo, II, 118, and XVII, 798.

These provincial tributes varied in nature and manner of collection, since Rome frequently tried to adapt her methods to those that had already been in vogue. In Spain, for instance, Carthage had imposed a light burden in order to make her conquest easy, and Rome, in order to invite the people to a new allegiance during the Punic War, had lightened rather than increased the burden. Hence a definite amount was agreed upon for each community, and the towns collected these dues without the interference of Roman publicans. The stipendium of Spanish communities was equal to about half a tithe.⁷

In Sicily,⁸ except in the case of several friendly cities which were left immune and of public lands which Rome had inherited from the former sovereign or expropriated at the time of conquest, the grain lands were subjected to tithes, fruit lands to double tithes, and pasture lands to a cattle head tax. These tithes were estimated jointly by the community and the Roman official, and the collection contracted for accordingly. Since, however, the law required that the contract should be let in Sicily, the community could protect the interests of its citizens by bidding for the contract, and this was frequently done. To be sure, Roman and Italian businessmen who often engaged in collecting port dues and in renting the public land in Sicily might also enter into the bidding, and, being men of ready capital, they came to capture many contracts which they managed to make lucrative. In the days of Verres these men had been so favored by the Roman quaestor on the island that Cicero, in gathering evidence for the prosecution, found Roman knights engaged in oppressive exaction in several cities.

7. Livy, XLIII, 2, 12.

8. Rostowzew, art. Frumentum, Pauly-Wissowa, VII, 152.

After the contract law of Gaius Gracchus, Asia fared even worse. Here there were legitimate objections to a fixed annual amount, since years of drought and incursions from the East made such payments impossible at times. A tithe on the actual crop, whereby both parties shared equally in the uncertainties, was therefore in theory a fairer tax. But many communities⁹ of the interior had little experience in management and failed to bring in their quota. Furthermore, the produce was not needed at Rome, and transporting and disposing of it proved irksome. Gracchus therefore, to ensure a reliable income to the treasury, decided to throw the speculative risks upon capitalistic companies which might care to undertake the business of collecting¹⁰ and disposing of the tithe.

The censor auctioned the complete prospective tithe to the highest bidder. The companies that secured the contract gathered the requisite capital by issues of stock, which, because of the risks involved, were put out at attractive rates of interest. These stocks were widely bought at Rome, and as a result complaints of extortion on the part of Asiatics met with less sympathy on the Rialto at Rome than they might otherwise have done. Sulla, after himself robbing the province, relieved it somewhat by substituting fixed charges, but Pompey, under pressure of the equites who had supported him in politics, reinstituted a modified form of the Gracchan law,¹¹ and this lasted until Caesar abandoned the worst features of the contract system. In the Empire, when it became possible to organize permanent civil-service bureaus, the contract system was gradually displaced everywhere by officials responsible to the Emperor.

9. Cic. Ad Quint. I, 33: qui petidere ipsi vectigal sine publicano non potuerint.

10. Rostowzew, Geschichte der Staatspacht, Phil. Supp. IX.

11. Rostowzew, ibid., p. 357; cf. Josephos, Antiq. XIV, 10, 6; Cic. prov. conj. 10; Ad Att. V, 13; V, 16; VI, 1, 16; Ad Fam. XIII, 65; Ad Quint. I, 35; Pro Flacco, 32. Caesar remitted about a third, converted the rest into fixed amounts of money which the cities henceforth collected: Plut., Caes. 48, 1; Dio, XLII, 6; App. B. C. V, 4.

Corresponding to this income were the expenditures for the state bureaus, public works, cults, corn doles, the army, and the provincial government. Since magistrates served without pay, administrative expenses were still low, but the office forces and bands of public slaves were increasing in size. Little was spent on police or fire departments before Caesar’s day. One wonders how long a modern city would last with the kind of police protection that Cicero had. Some charges fell on the treasury for games.

Public works, as, for instance, the building and repairing of roads and aqueducts, walls, and public buildings, frequently received outright a fifth or a tenth¹² of the year’s income to be assigned by the censors. Temples, as in the past, were often built by victorious generals from booty and sometimes also endowed by them or kept in repair by their descendants. But at times the state itself built temples and paid for special devotions requested by the pontiffs. The corn doles instituted by Gaius Gracchus required in Cicero’s day about a million dollars¹³ annually. From this, the fifteen bushels of wheat allowed to each man who cared to stand in the breadline were supplied at a fraction of the cost. Clodius, in his bid for popularity, passed laws that nearly doubled this expense.

12. Livy, VI, 32; XL, 46, 16; XLIV, 16, 9.

13. See Marquardt, Staatsverwaltung, II, 116–18.

The armies and the provinces, however, devoured the greater part of the state’s income in these troublesome days, and some provinces cost the state more than they provided in tribute. The Senate never admitted the need of a standing army, always dreading a repetition of its abuse by men like Marius and Sulla, but the warfare in Spain, Africa, and the East continued incessantly, and the Senate was compelled to hand on standing armies from one proconsul to another.

As each soldier received 120 denarii per year as pay, the salaries for a legion exceeded $100,000, and the annual expenses of a legion doubtless reached double that amount. From incidental remarks in Cicero’s letters we find that even in normal times Syria, Asia, Bithynia, Africa, Spain, and Cisalpine Gaul had at least three legions each. At least twenty legions were therefore in service. Wars called for new and extra levies, though at such times neighboring legions might be brought to the point of immediate danger.

Pompey received six million dollars—more than half the year’s income—to prosecute the war against the pirates in 67, and in 55 he was voted a million dollars annually for Spain, largely for the sake of matching his forces with those that Caesar had in Gaul. Piso, Caesar’s father-in-law, received an equal appropriation for the comparatively peaceful province of Macedonia in 58, but the Senate in this case probably intended Caesar’s relative to come back with a handsome surplus for which he need make no accounting. Indeed, at this time the Senate had adopted the theory that nobles who had served the state all their lives gratuitously ought to receive in their last office as provincial governors a large enough appropriation to indemnify them in part for past expenses.

Cicero, at the end of his term in Cilicia, a province of very modest requirements, had a surplus of a hundred thousand dollars still unused from the senatorial appropriation, and an equal sum left over from provincial dues. He did not put it in his own pocket, which awakened some unfavorable comment. A paragraph from Augustus’ account of his reign¹⁴ will give a better insight than can any general statistics into the extraordinary expenditures which the new Empire assumed in its efforts to please the populace.

“When consul for the fifth time I gave each and every Roman plebeian four hundred sesterces (about $20) from the spoils of war; again, in my tenth consulship, I made to every man a special gift of four hundred sesterces out of my own estate; in my eleventh consulship I twelve times distributed food, buying grain at my own expense; in the twelfth year of my tribunician power I again gave four hundred sesterces to every man. These donations have never been made to less than 250,000 men. In my twelfth consulship I gave sixty denarii (about $12) apiece to 320,000 of the city plebs. When consul for the fifth time I gave to each colonist of my army 1,000 sesterces ($50) from the spoils. About 120,000 participated in this triumphal donation. When consul for the thirteenth time I gave sixty denarii to the plebs who were at that time receiving public grain; of these there were a little more than 200,000.

“To acquire lands for soldier-colonies I paid 600,000,000 sesterces (thirty million dollars) for Italian farms and 360,000,000 sesterces for land in the provinces... and to soldiers whom I sent back to their native cities I gave gratuities amounting to 400,000,000 sesterces, etc.”

14. Res Gestae Divi Augusti, 15–17.

Rome’s method of exploiting mines of precious metals and useful ores for the benefit of the treasury requires a more explicit statement than could be given above in the general review of the state’s sources of income. The ancient state’s need of precious metal for purposes of coinage early begot a more or less conscious theory that veins of silver and gold were public property, to be treated as discovered treasure. Philip of Macedon worked the rich gold mines of Thrace on the state’s account, Athens the silver mines of Laurion, and Carthage those of Spain.

The Roman government of the Republic never consistently claimed possession of such subsoil treasure as a matter of course: Crassus¹⁵ and other wealthy Romans owned rich mines in Spain, and the state even sold to private individuals various properties it could no longer exploit with profit. But the Senate did from time to time, when the need was great or when the opportunity favored, betray a strong interest in acquiring mines and working them for the account of the treasury. The Spanish placer mines, which for a while during the second century B.C. brought the state nearly two million dollars¹⁶ annually, may have been upon public land inherited from Carthage. It seems, however, that when Rome came into possession of a new province, the mines, whether on public or private lands, were apt to be taken over for the public account.¹⁷ If ores were afterward discovered, the state probably did not claim ownership, at least during the regime of the Senate.

15. Plut. Crass. 2; Diod. V, 36; Digest, 27, 9, 3.

16. Polybius, according to Strabo, III, 2, 10. These seem to have been sold to private individuals later, perhaps when so far outworked that contractors were no longer willing to exploit them on a 50 percent basis.

17. Strabo, IV, 6, 7 and 12.

We still possess fragments of the regulations¹⁸ under which some silver and copper mines of Spain were farmed out by the Emperors, and since the contract system was here used and the mines had then long been worked, we can apply most of the specifications to the Republican situation. Here we find that the whole mining region, including the town itself, was state property under the supervision of an imperial procurator. Whoever wished to take a mining claim must first pay a stipulated occupation price, after which he must begin work within twenty-five days. On beginning work, he had to pay the state, or give proper security for, the price placed on the mine by the procurator, this being fixed on the theory that the state’s price should, as in the case of treasure troves, be estimated at one-half the value of the ore. On payment of this price, the contractor received possession of the mine so long as he worked it faithfully without a respite of more than six months. Abandoned mines could be occupied on the same terms.

In addition to the mining rights, however, the state also established and rented out a great many concessions in the town. It controlled a public bath, the exploitation of which was auctioned to the highest bidder under very strict rules regarding its management: the concessionaire must contract to keep the bathtubs full of warm water every day throughout the year, must polish the metalwork once a month, must admit women from daybreak until one o’clock daily at the price of one cent, and men from two until eight o’clock at half that price!

The state also controlled a public shoe shop, a barber shop, a laundry, and an auction room, the concessionaires receiving a monopoly of such work in the town but being required to provide what was needed at prices fixed by the state’s procurator. Schoolteachers alone had the free range of the town and paid no fees. The work in the mines was largely done by slaves, but the rules regulating penalties for thefts of ore on the part of miners specify free men as well as slaves.

18. At Aljustrel, Lex Metalli Vipascensis, C.I.L. II, 5181, and a fragment of another regulation which may be found in Rev. Arch. 1906, p. 480. See Bruns, Fontes⁷, pp. 289–295.

Finally, a glance at the peculiar system of public finance in vogue in Egypt,¹⁹ which Augustus added to the Empire in 30 B.C., will reveal the source of the strange paternalistic ideas that so profoundly changed Rome’s fiscal methods after Cicero’s day. Since national and individual prosperity in Egypt had always depended upon the regular distribution of the waters of the Nile, and since this was impossible without a unified control which virtually entailed unified ownership, the Pharaohs of Egypt had come to be recognized as the owners of the whole acreage of the kingdom as well as sovereigns of the people.

After Alexander’s death the Ptolemies succeeded to this vast possession. They owned the soil. To be sure, they generally left the rich temple properties and temple industries intact; they colonized soldiers on various tracts; and they assigned portions to favored groups of people, besides simply renting out large districts as crown lands. But ultimately all the land was at the disposal of the Ptolemies. When Augustus came to Egypt, he assumed possession of that vast estate, which brought in an annual surplus of over ten million dollars.

On wheat lands he, like the Ptolemies before him, charged according to the worth of the soil from one to three bushels per acre, and other lands yielded proportionate rents, usually payable either in money or in wheat. For plants that produced oil, a certain percentage of the acreage was specified by the regulations; the state bought the crude oil at fixed prices, manufactured the edible products from it in state factories, and distributed these to small agencies that sold them at regular and fixed prices. The Italian shops which today sell “salt and tobacco” for state monopolies are direct descendants of such state agencies in Egypt.

19. See Grenfell and Mahaffy, Revenue Laws of Ptolemy Phil.; Grenfell and Hunt, Tebtunis Pap. I, App. I; Rostowzew, Gesch. Röm. Kolonates; Mitteis-Wilcken, Chrestomathie I; Maspero, Les finances de l’Egypte.

Since by the action of the overflowing Nile the Egyptian peasants were freed from much of the labor of tilling, they were employed for a part of the year in state factories or permitted to engage in private industries that were more or less under monopolistic control. In this way Augustus in due time became a captain of industry. Indeed, most necessities were controlled by the state monopoly: all the clothing of wool, flax, and hides; salt; oil, the butter of the ancient world; honey, their sugar; natron, their soap; brick and timber; even the fulleries and the dyeing establishments; and a few luxuries like jewelry, perfumes, and beer.²⁰

20. See Mitteis-Wilcken, op. cit., p. 239, on the Egyptian monopolies. They classify the last-named article as a necessity!

Furthermore, since the products of the Egyptian soil and of industry for the most part belonged to the state, the government naturally directed much of the transportation and encouraged trade which helped to dispose of the surplus. Strabo²¹ says that in his time a ship bound for India sailed every third day from the Red Sea harbor. For the same reason, wherever it paid, Egypt protected its products from having to compete with foreign imports. Oil could be imported for use only on the payment of a 25 percent duty; importation of oil for sale was wholly prohibited.

Finally, capital had naturally to be provided or controlled by the state. Every bank was accordingly a state concession which did all its business on a fixed scale. Indeed, economic absolutism was carried to an extent never dreamed of elsewhere, unless perhaps by some Bolshevist dictator. Augustus accepted the Ptolemaic inheritance and, because it proved very profitable, continued its practices with but few changes. It was indeed the source of many of those sums with which he fed the Roman populace into an obese acquiescence. We shall have occasion later to note how some of these practices were afterward applied in an attempt to rehabilitate agriculture in the abandoned areas of Africa and Italy.

21. Strabo, II, 5, 12: “When Gallus was prefect of Egypt, I accompanied him and ascended the Nile as far as Syene and the frontiers of Ethiopia, and I learned that as many as one hundred and twenty vessels were sailing from Myos Hormos to India, whereas formerly under the Ptolemies only a very few ventured to undertake the voyage and to carry on traffic in Indian merchandise.”

CHAPTER IX

Public Finances

The Roman was practical and businesslike in managing his private affairs. In managing public finances, however, his instinct for efficiency was neutralized—as happens in all democracies—by pressure from friends seeking special privileges, by the lack of a stable and lasting policy under an ever-changing government, by the absence of searching and controlling supervision, and by a popular preference for agreeable rather than officious magistrates. Consequently, the Eastern despots whom Roman governors displaced had often been better managers than their successors. Their kingdoms had been their private possessions. They had therefore chosen efficient men to manage the satrapies, removed those who failed, and kept successful officials in office until they became specialists in their respective duties.

The Roman democracy, by contrast, worked on the theory that any citizen of good family could serve the state in any capacity. An eligible young man began his career by serving for one year as an official of the treasury. Then, after a year’s rest, if he pleased the voting public, he took charge, as an aedile, of some division of the public works—an office that, under ordinary circumstances, admitted him to the Senate for life. After another year’s rest, he might be appointed a judge in one of the important praetorian courts, whether or not he had studied law. Indeed, one reason Roman civil law freed itself so readily from outdated legal ideas and remained on the common-sense ground of equity was that ordinary men of affairs presided in the courts over juries composed of men of a similar kind. For obvious reasons, however, the system failed to create an adequate criminal law.

The official was then given a year’s experience in governing one of the smaller provinces. After that, if the people wished, he might serve for a year as Rome’s highest magistrate. He would then be placed in command of an important province for a year, after which he returned to Rome to spend the rest of his life as a respected senator, helping to direct Rome’s imperial policies. Such men obviously gained a very broad experience, but they specialized in nothing in particular. The knowledge they acquired must often have come through painful mistakes committed in all kinds of offices for which they were not even half prepared before it was time to leave for the next position. The system provided an excellent training school for retired senators, but it did not produce skillful government.

In the early days, when the city was the state and a citizen who paid his taxes could see from day to day how state money was being spent, no serious evil could continue for long. What could happen later, when unprotected provinces far from Rome were placed entirely at the disposal of such men, is illustrated well enough by the stories that made the name of Verres proverbial.

In the early Republic, national expenses were very small. The few magistrates served their year without pay. Selection by popular acclamation was flattering enough to inspire a year of public service without any further reward. The army also served without pay. Only property owners were called to arms, and they presumably had enough interest in protecting their homes and property to fight without compensation. As for equipment, the heavily armed first line and the cavalry were selected from the wealthier men, who could best afford to equip themselves.

Public works such as wall-building were carried out by the citizen army as part of its duty.[1] Roads and streets were graded by property owners at public command. The early temples seem largely to have been paid for through the sale of war booty. This short list covers the full range of the early state’s needs. Rome had not yet outgrown the conditions of tribal life, in which common action—so difficult to secure—was limited to the physical defense of the group, while all questions of moral, intellectual, and social welfare were left to the resources of the family and the interested individual. The Roman government assumed new functions very slowly and reluctantly. For example, it was not until the age of autocracy that the state considered itself under any obligation to supervise or encourage education, just as, in modern times, Europe’s most liberal governments have been the slowest to accept such nonpolitical responsibilities.

[1] For example, Livy (VII, 20) says that, after their campaign of the year, the soldiers spent the rest of their time repairing the walls.

The first need for a well-stocked treasury arose during the long war against Veii. Year-round service in the army, and the resulting neglect of farms and businesses, made it necessary to introduce a regular stipendium. At first this payment was very small—little more, in fact, than enough for a soldier to pay for his rations—but it marks the point from which a tax had to be levied on Roman property.

To a modern reader, this annual tribute[2] does not seem very large; it was often no more than one-tenth of one percent. Even this was sometimes returned[3] to taxpayers if war indemnities and booty were sufficient to permit repayment. The tribute was a uniform property tax. On real estate,[4] it was levied on the ager Romanus—that is, on all land within the boundaries of the city-state proper, as far as the ward divisions extended—and it was imposed even when a non-Roman acquired such property. In addition, every Roman citizen, whether living at home or abroad, was taxed on all other property as well, including cash, slaves, cattle, tools, and furniture. The property of widows and orphans, who were not originally included in the citizen census list because that list had been drawn up for military purposes, was later subjected to a tax set aside for equipping the cavalry.

[2] Livy, XXXIX, 44: his rebus omnibus terni in milia aeris adtribuerentur; Livy, XXIII, 31: eo anno duplex tributum imperaretur.

[3] Livy, X, 46; Pliny, N. H. XXXIV, 23.

[4] See Marquardt, Staatsverwaltung, II, 167, 168; Lecrivain, art. Tributum, Daremberg-Saglio.

The Samnite Wars were prolonged campaigns through desolate regions. Because they required a reorganization of the army, new equipment, and extensive road-building, they imposed heavy taxes for long periods. The First Punic War also proved extremely expensive, especially because of the navy’s heavy losses. Seven hundred warships were lost in battles or storms. It is not surprising that, at the end, Rome not only exacted an indemnity from Carthage—although it covered only a fraction of the cost—but also adopted from Carthage the new theory that subjects should share with citizens the costs of government.

[OCR unclear: T! "^ " * '] very materially relieved the [OCR unclear: thr ^ 1]. During the Second Punic War, however, this tithe did not even provide enough to feed the armies in the field. Taxes were doubled and tripled. New surtaxes on incomes were added; free contributions [OCR unclear: ^l^J^.crc]; contracts were let on credit; and loans were floated on the security of Rome’s public lands. Indeed, at that time the administration of the Roman treasury took on the characteristics of a modern national treasury.

But the Roman Senate disliked arrears and complications. [OCR unclear: ^'^ 0/%^..,...,w...;jj....*..- *y^Q ^2| ii liu ig the] mortgaged lands to the creditors, at first reserving the right to reclaim them after a revaluation, but later surrendering even that privilege. In this way, the treasury eliminated its loans and thereafter succeeded fairly well in maintaining a surplus. Finally, in 167 B.C., a large surplus had accumulated from state mines, indemnities, and war booty. In addition, regular income was now coming from Spanish tribute and from the rental of Campanian and other public lands in Italy. These resources placed the treasury in such a strong condition that the direct tax on citizens was discontinued.

In the year of Cicero’s consulship, before Pompey added the new eastern provinces of Syria, Bithynia, and Pontus, Rome’s public revenue was reportedly about 50,000,000 denarii,[5] or approximately ten million dollars. Most of this amount came from provincial taxes, but smaller sums came from the rental of Campanian public land; public mines in Spain and Transpadane Gaul; fishing rights on lakes, rivers, and coasts; a salt monopoly; a five percent tax on the price of manumitted slaves; an occasional five percent tax on inheritances; and port duties, usually ranging from two to five percent, collected at harbors.

These port duties were not intended as protective tariffs. They were too low to serve that purpose and were, in fact, collected as regularly on exports as on imports. The Empire eventually developed a system of tariff districts, so that goods shipped over a long distance were likely to pay duty more than once.

[5] Plutarch, Pompey, 45.

Of the ten million dollars collected in Cicero’s day, the larger part came from provincial tributes, which differed in amount and method of collection according to the treaty or exaction imposed at the time of conquest. Sicily, with its tithes and rents on public lands, supplied about one-tenth of the total; the grain tithe alone amounted to approximately one million bushels of wheat.

Asia supplied one and a half million dollars in Hadrian’s day, after Caesar had somewhat reduced its burden. We may perhaps estimate that it supplied two million dollars in Cicero’s day. Since an enlarged Gaul supplied two million dollars in the Augustan period, half a million dollars would be a generous estimate for the small province of Narbo. By comparing these provinces and considering the size, productivity, and circumstances of the conquest of each, we may venture to estimate approximately one million dollars from Spain,[6] apart from its mines; half a million from Sardinia and Corsica; one and a half million from Africa, including its public lands; half a million from Macedonia; and another half million from Cilicia. The other revenues already mentioned may well account for approximately three million dollars.

[6] Strabo, II, 118, and XVII, 798.

To these amounts Pompey added the revenues of Syria, Bithynia, and Pontus, totaling approximately six million dollars. Caesar conquered Gaul, thereby adding at least one and a half million. Augustus annexed Egypt, which was entirely royal property and therefore now completely at the treasury’s disposal, bringing in a full ten million dollars.[6] If we add several minor taxes instituted by Augustus, we find that, even in its most prosperous period, the Empire had an annual budget of only about thirty million dollars—less than five percent of the annual budget of the City of New York!

These provincial tributes varied in nature and method of collection because Rome often tried to adapt its methods to those already in use. In Spain, for example, Carthage had imposed a light burden to make its conquest easier. During the Punic War, Rome had reduced rather than increased that burden in order to encourage the people to transfer their allegiance. A fixed amount was therefore agreed on for each community, and the towns collected these payments without interference from Roman publicans. The stipendium of the Spanish communities was equal to approximately half a tithe.[7]

In Sicily,[8] several friendly cities were exempt, as were public lands that Rome had inherited from the former sovereign or expropriated at the time of conquest. Apart from these exceptions, grain lands were subjected to tithes, fruit lands to double tithes, and pasture lands to a head tax on cattle. The community and the Roman official jointly estimated these tithes, and a collection contract was issued accordingly. Because the law required the contract to be awarded in Sicily, a community could protect the interests of its citizens by bidding for the contract, and communities frequently did so.

Roman and Italian businessmen who often collected port duties and rented public land in Sicily could, of course, also enter the bidding. Because they had capital readily available, they came to secure many contracts and managed to make them profitable. In the time of Verres, these men received so much favor from the Roman quaestor on the island that Cicero, while collecting evidence for the prosecution, found Roman knights engaged in oppressive exactions in several cities.

[7] Livy, XLIII, 2, 12.

[8] Rostowzew, art. Frumentum, Pauly-Wissowa, VII, 152.

After Gaius Gracchus’s contract law, Asia fared even worse. There were legitimate objections to demanding a fixed annual amount because years of drought and invasions from the East sometimes made such payments impossible. A tithe on the actual crop, under which both parties shared equally in the uncertainty, was therefore theoretically a fairer tax.

Many inland communities,[9] however, had little administrative experience and failed to supply their quotas. Moreover, the produce was not needed at Rome, and transporting and disposing of it was burdensome. To ensure a reliable income for the treasury, Gracchus therefore decided to transfer the speculative risks to capitalist companies willing to undertake the collection[10] and disposal of the tithe.

The censor auctioned the entire expected tithe to the highest bidder. The companies that secured the contract raised the required capital by issuing stock. Because of the risks involved, this stock was offered at attractive rates of interest. It was widely purchased in Rome, and complaints from Asians about extortion consequently received less sympathy in Rome’s business district than they otherwise might have received.

After plundering the province himself, Sulla gave it some relief by substituting fixed charges. Pompey, however, under pressure from the equites who had supported him politically, restored a modified version of the Gracchan system.[11] This remained in force until Caesar abolished the worst part of the contract system. Under the Empire, once it became possible to organize permanent civil-service departments, the contract system was gradually replaced everywhere by officials responsible to the Emperor.

[9] Cicero, Ad Quint. I, 33: qui petidere ipsi vectigal sine publicano non potuerint.

[10] Rostowzew, Geschichte der Staatspacht, Phil. Supp. IX.

[11] Rostowzew, ibid., p. 357; cf. Josephus, Antiq. XIV, 10, 6; Cicero, prov. conj. 10; Ad Att. V, 13; V, 16; VI, 1, 16; Ad Fam. XIII, 65; Ad Quint. I, 35; Pro Flacco, 32. Caesar remitted about one-third and converted the remainder into fixed amounts of money, which the cities thereafter collected: Plutarch, Caes. 48, 1; Dio, XLII, 6; Appian, B. C. V, 4.

Against this income stood expenditures for state departments, public works, religious observances, grain distributions, the army, and provincial government. Because magistrates served without pay, administrative expenses remained low, although office staffs and groups of public slaves were growing. Before Caesar’s time, little was spent on police or fire departments. One wonders how long a modern city would survive with the kind of police protection Cicero had.

Some of the cost of public games fell on the treasury. Public works—including the construction and repair of roads, aqueducts, walls, and public buildings—often received outright one-fifth or one-tenth[12] of the year’s revenue, to be allocated by the censors. As in the past, victorious generals often built temples from war booty. They sometimes endowed these temples as well, or their descendants maintained them. At other times, however, the state itself built temples and paid for special religious observances requested by the pontiffs.

The grain distributions introduced by Gaius Gracchus required about one million dollars[13] annually in Cicero’s time. This provided the fifteen bushels of wheat allotted to each man willing to stand in the bread line, at only a fraction of the full cost. In his bid for popularity, Clodius passed laws that nearly doubled this expense.

[12] Livy, VI, 32; XL, 46, 16; XLIV, 16, 9.

[13] See Marquardt, Staatsverwaltung, II, 116–18.

In these troubled times, however, the armies and provinces consumed the larger part of the state’s income, and some provinces cost the state more than they supplied in tribute. The Senate never admitted the need for a standing army because it constantly feared another abuse of military power by men like Marius and Sulla. Warfare in Spain, Africa, and the East nevertheless continued without interruption, and the Senate had to transfer standing armies from one proconsul to another.

Since every soldier received 120 denarii a year in pay, salaries for a legion exceeded $100,000, and the total annual expense of a legion undoubtedly reached twice that amount. Incidental remarks in Cicero’s letters show that, even in ordinary times, Syria, Asia, Bithynia, Africa, Spain, and Cisalpine Gaul each had at least three legions. At least twenty legions were therefore in service. Wars required new and additional levies, although legions from neighboring areas could be brought to the point of immediate danger.

In 67, Pompey received six million dollars—more than half of the state’s annual income—to conduct the war against the pirates. In 55, he was granted one million dollars annually for Spain, largely so that his forces would equal those Caesar commanded in Gaul. In 58, Piso, Caesar’s father-in-law, received an equal appropriation for the comparatively peaceful province of Macedonia. In this instance, however, the Senate probably expected Caesar’s relative to return with a large surplus for which he would not have to account.

Indeed, by this time the Senate had adopted the theory that nobles who had served the state without pay throughout their lives should, in their final offices as provincial governors, receive appropriations large enough to reimburse them for at least part of their earlier expenses. At the end of his term in Cilicia, a province with very modest requirements, Cicero still had an unused surplus of one hundred thousand dollars from the senatorial appropriation and an equal amount left from provincial payments. He did not put it into his own pocket, which provoked some unfavorable comment.

A passage from Augustus’s account of his reign[14] gives a better understanding than any general statistics could provide of the extraordinary expenditures the new Empire assumed in its efforts to please the populace:

“When I was consul for the fifth time, I gave each and every Roman plebeian four hundred sesterces—about $20—from the spoils of war. Again, in my tenth consulship, I gave every man a special gift of four hundred sesterces from my own estate. In my eleventh consulship, I distributed food twelve times, purchasing the grain at my own expense. In the twelfth year of my tribunician power, I again gave four hundred sesterces to every man. These donations were never made to fewer than 250,000 men.

“In my twelfth consulship, I gave sixty denarii—about $12—apiece to 320,000 members of the urban plebs. When I was consul for the fifth time, I gave each colonist from my army 1,000 sesterces—$50—from the spoils. About 120,000 men shared in this triumphal donation. When I was consul for the thirteenth time, I gave sixty denarii to the plebeians who were then receiving public grain; there were slightly more than 200,000 of them.

“To acquire land for military colonies, I paid 600,000,000 sesterces—thirty million dollars—for Italian farms and 360,000,000 sesterces for land in the provinces... and to soldiers whom I sent back to their native cities, I gave gratuities amounting to 400,000,000 sesterces, etc.”

[14] Res Gestae Divi Augusti, 15–17.

Rome’s method of exploiting mines of precious metals and useful ores for the treasury’s benefit requires a fuller explanation than could be given earlier in the general review of state revenue. The ancient state’s need for precious metal to make coins led early to a more or less conscious theory that veins of silver and gold were public property and should be treated like discovered treasure. Philip of Macedon operated the rich gold mines of Thrace for the state; Athens did the same with the silver mines of Laurion; and Carthage with those of Spain.

The Roman government during the Republic never consistently claimed ownership of such underground treasure as a matter of course. Crassus[15] and other wealthy Romans owned rich mines in Spain, and the state even sold private individuals various properties that it could no longer operate profitably. From time to time, however, when the need was great or the opportunity favorable, the Senate showed a strong interest in acquiring mines and operating them for the treasury’s benefit.

The Spanish placer mines, which for a time during the second century B.C. brought the state nearly two million dollars[16] annually, may have been on public land inherited from Carthage. It appears, however, that whenever Rome took possession of a new province, its mines—whether on public or private land—were likely to be taken over for the state.[17] If ores were discovered later, the state probably did not claim ownership, at least while the Senate remained in control.

[15] Plutarch, Crass. 2; Diodorus, V, 36; Digest, 27, 9, 3.

[16] Polybius, according to Strabo, III, 2, 10. These mines seem to have been sold to private individuals later, perhaps when they had been worked so far out that contractors were no longer willing to operate them on a fifty-percent basis.

[17] Strabo, IV, 6, 7 and 12.

We still possess fragments of the regulations[18] under which several Spanish silver and copper mines were leased by the emperors. Because the contract system was used there, and because the mines had already been worked for a long time, most of these provisions can be applied to conditions under the Republic.

These regulations show that the entire mining district, including the town itself, was state property under the supervision of an imperial procurator. Anyone who wished to take up a mining claim first had to pay a specified occupation fee and then begin work within twenty-five days. Upon beginning work, he had to pay the state—or provide adequate security for—the value the procurator had placed on the mine. This amount was fixed on the principle that, as with treasure troves, the state’s price should be estimated at half the value of the ore.

After paying this price, the contractor retained possession of the mine as long as he worked it faithfully, without suspending operations for more than six months. Abandoned mines could be occupied on the same terms. In addition to controlling mining rights, however, the state also established and leased many concessions within the town.

The state controlled a public bath, whose operation was auctioned to the highest bidder under very strict management rules. The concession holder had to agree to keep the baths filled with warm water every day of the year, polish the metalwork once a month, admit women daily from daybreak until one o’clock for a fee of one cent, and admit men from two until eight o’clock for half that price.

[18] At Aljustrel, Lex Metalli Vipascensis, C.I.L. II, 5181, and a fragment of another regulation that may be found in Rev. Arch. 1906, p. 480. See Bruns, Fontes², pp. 289–295.

The state also controlled a public shoe shop, a barber shop, a laundry, and an auction room. The concession holders had a monopoly on such work within the town, but they had to provide whatever was required at prices fixed by the state procurator. Schoolteachers alone could operate freely throughout the town and paid no fees. Most of the work in the mines was performed by slaves, but the rules establishing penalties for miners who stole ore refer to free men as well as slaves.

Finally, a look at the distinctive system of public finance used in Egypt,[19] which Augustus added to the Empire in 30 B.C., reveals the source of the unusual paternalistic ideas that profoundly changed Rome’s fiscal methods after Cicero’s time. National and individual prosperity in Egypt had always depended on the regular distribution of the Nile’s waters. Because this distribution was impossible without unified control, and because unified control virtually required unified ownership, the pharaohs of Egypt came to be recognized both as owners of all the land in the kingdom and as sovereigns over its people.

After Alexander’s death, the Ptolemies inherited this enormous possession. They generally left intact the rich temple properties and temple industries. They settled soldiers on various tracts, assigned portions to favored groups, and rented out large districts as crown lands. Ultimately, however, all the land remained at the Ptolemies’ disposal.

When Augustus came to Egypt, he took possession of this vast estate, which produced an annual surplus of more than ten million dollars. On wheat lands, like the Ptolemies before him, he charged from one to three bushels per acre, depending on the soil’s value. Other lands paid proportionate rents, generally in either money or wheat.

For oil-producing plants, regulations specified that a certain percentage of the total acreage had to be planted. The state bought the crude oil at fixed prices, manufactured edible products from it in state factories, and distributed these products to small agencies, which sold them at regular, fixed prices. The Italian shops that today sell “salt and tobacco” for state monopolies are direct descendants of such state agencies in Egypt.

[19] See Grenfell and Mahaffy, Revenue Laws of Ptolemy Phil.; Grenfell and Hunt, Tebtunis Pap. I, App. I; Rostowzew, Gesch. Röm. Kolonates; Mitteis-Wilcken, Chrestomathie I; Maspero, Les finances de l’Égypte.

Because the overflowing Nile freed Egyptian peasants from much of the labor of tilling the soil, they were employed for part of the year in state factories or permitted to work in private industries that were more or less under monopolistic control. In this way, Augustus eventually became a captain of industry.

Indeed, state monopolies controlled most necessities: all clothing made from wool, flax, and hides; salt; oil—the butter of the ancient world; honey—their sugar; natron—their soap; brick; and timber. Even fulling and dyeing establishments were controlled, as were several luxuries, including jewelry, perfumes, and beer.[20]

[20] See Mitteis-Wilcken, op. cit., p. 239, on the Egyptian monopolies. They classify the last-named article as a necessity!

Moreover, because the products of Egyptian agriculture and industry belonged for the most part to the state, the government naturally directed much of the transportation and encouraged trade that helped dispose of the surplus. Strabo[21] says that in his time a ship bound for India sailed from a Red Sea port every third day.

For the same reason, wherever it was profitable, Egypt protected its products from foreign competition. Oil could be imported for personal use only after payment of a twenty-five-percent duty; importing oil for sale was completely prohibited. Finally, capital naturally had to be supplied or controlled by the state. Every bank was therefore a state concession and conducted all its business according to a fixed scale. Economic absolutism was carried to a degree never imagined elsewhere, except perhaps by some Bolshevik dictator.

[21] Strabo, II, 5, 12: “When Gallus was prefect of Egypt, I accompanied him and ascended the Nile as far as Syene and the frontiers of Ethiopia, and I learned that as many as one hundred and twenty vessels were sailing from Myos Hormos to India, whereas formerly, under the Ptolemies, only a very few ventured to undertake the voyage and to carry on traffic in Indian merchandise.”

Augustus accepted the Ptolemaic inheritance and, because it proved highly profitable, continued its practices with only a few changes. It was, in fact, the source of many of the funds with which he fed the Roman populace into obese acquiescence. We will later have occasion to observe how some of these practices were applied in an attempt to restore agriculture in the abandoned regions of Africa and Italy.