Chapter 13 — Capital

CHAPTER XIII — CAPITAL

From the point of view of the modern world, the capitalist had a thorny path to tread during the late Republic. The semi-aristocracy of wealth, flattered when needed in the civil service or in the formation of a political bloc, was generally at war with the Senatorial nobility after the Gracchan turmoil. Gaius Gracchus, to be sure, strengthened the hands of the knights and united them with the popular party for an onslaught upon the Senate. In turn, the Senate made peace with them in 64, in its eagerness to protect vested interests against Catiline’s rebellion. For a season between 70 and 66, they seemed to be the dominant power, forming the backbone of the coalition that broke the Sullan constitution in 70 and directed an aggressive foreign policy in 67–66. But this temporary success is not to be attributed to equestrian popularity or leadership. Indeed, Roman history does not point to a single effective leader trained in business.

The Sullan constitution, out of date when adopted, was doomed to failure in any case. It gave way at the first attack, when Pompey accepted the position of figurehead in a revolt that most of Rome desired. Crassus manipulated the political moves, Cicero coined the necessary phrases, and the knights provided the funds. Three years later, the knights had their reward when the same elements combined in a demand that Pompey clear the seas of pirates, so shamefully permitted by the Senate to prey on commerce, and the year after commissioned him to destroy Mithradates and organize the East into a series of provinces that would be open to commercial “development.”

To this extent, the capitalistic interests played the political game with some success and profit. Nevertheless, Romans were never allowed to forget that political considerations were and must be paramount, and that wealth must be subject to political needs. Sulla in 82 proscribed 2,600 knights and confiscated their property in order to fill the treasury. Furthermore, when he laid an indemnity of twenty million dollars upon Asiatic cities for acknowledging Mithradates, and the cities turned to Roman capitalists for a large part of the amount, Lucullus, acting for the Senate, presently permitted them to repudiate most of the interest charge, thus throwing the burden of Sulla’s theft largely upon the shoulders of the knights.

Again, in 43, the triumvirs, after raising an army of forty legions by extravagant promises of bounties, threw the principal burden of payment on those who had wealth. Two thousand knights were proscribed under the pretext of disloyalty, and their property was taken for the account of the treasury.[1] It is not surprising that Roman businessmen usually preferred to avoid politics, and that they made their investments, if possible, in far-distant real estate or in noiseless private banking.

1. Many Roman landowners who were not themselves accused of disloyalty lost properties that they happened to possess within the confines of municipalities that were punished by wholesale expropriation.

The feeling grew strong in those days of civil war that, while money might be power, it should not measure itself against political power, and that vested interests, so strongly supported by the old aristocratic code, had few rights that were sacred in the eyes of the government if held by a class not in sympathy with the government. This condition continued into the Empire. Whereas capitalists continued to gather vast sums from all the Empire into their private coffers at Rome, they remained at the mercy of imperial tyrants, who, when driven to bankruptcy, preyed upon them and confiscated their treasure under whatever pretext offered the easiest method of balancing their ledgers.[2]

2. See Pliny’s famous statement (N.H. XVIII, 35) that Nero, finding half of the province of Africa in the hands of six planters, confiscated their lands.

The surplus capital of the Romans, as we have noticed, had for centuries followed the expanding armies inland. Time and again, when the population of the city became dense and there were signs of a drift toward the sea or toward commercial outlets, a new advance on the border had required military colonization, and the familiar call of the land, which Romans were accustomed to heed, turned men inland once more. It is a situation that reminds one strongly of the opening of the American frontiers, which permitted our once-flourishing merchant marine to decay and temporarily stemmed the current of New England industries. When, in the second century, however, Rome’s armies went beyond Italy, annexing Spain, Greece, Africa, southern Gaul, and parts of Asia, the settler did not follow with the same alacrity. The land among strangers did not seem to offer a congenial home to the average Roman, and even Gracchus found little support for foreign colonies.

In Italy, however, Roman wealth must have expanded rapidly, as measured by the census rolls. Beloch[3] estimates that the land in Italy thrown under Roman cultivation by the expropriations of the Punic War and by the seizures in the Po Valley doubled the former acreage, making the total of ager Romanus about fourteen million acres. At the very modest price of fifty dollars per jugerum, usually given for unimproved land, this totals a billion dollars in soil value alone.[4] This would give a high per capita property rating for the 320,000 citizens of Gracchus’ day. When we remember that large landholding was already the rule, we may be sure that there were many thousand Romans who were well-to-do.[5]

3. Beloch, Bevölkerung, 388.

4. Columella, III, 3, 3, places this value on ordinary unimproved Italian farmland. The figure is rather too low than too high for Cicero’s day, when Varro’s account shows a very active interest in farmlands.

5. Before the Second Punic War, there were nearly 20,000 citizens possessing a knight’s census. We are not told that this was then placed at 400,000 sesterces, but it may have been, since Polybius (VI, 20) implies that the knights’ census was higher than that of the “first class.” See Marquardt, Staatsverw., II, 331.

Ready capital may, however, have been scarce. The typical farmer seldom went to the bank; the turnover of money is exceedingly slow in agriculture; and the strongbox in the tablinum could take care of the surplus until the owner found another neighboring patch in which to invest. Later, this process extended into the provinces. Always did the surplus of the average Roman lie easiest when it found its resting place quickly in some real estate. Cicero’s properties were mainly in farm and city holdings; Atticus had large estates in Epirus and Italy; Varro in Campania and Apulia; and Caesar’s prefects, men like Labienus[6] and Mamurra, who were enriched by booty, at once invested in land. Cicero’s civil suits usually had to do with titles to land in Gaul or Etruria or Lucania, and his letters of recommendation are full of references to large estates in Greece, Sicily, and Asia.[7]

6. The Caesarian partisan attacked by Catullus in Carm. 94, 105, 114, and 115 is Labienus; see Am. Jour. Phil. 1919, 396 f.

7. Cf. Cicero, Pro Flacco, 70; Pro Caelio, 73; Ad Fam. XIII, 69; 70; 38, 11; VIII, 9, 4; Pro Quinctio; Pro Tullio; Pro Fonteio; De Lege Agraria, passim. Cicero, De Off. I, 151, naively suggests that the merchant may deodorize his profits by investing them in a plantation.

In the last century of the Republic, however, not a little capital found new outlets, especially in the management of state contracts, in moneylending and banking, and in trade. The activities and importance of state contracts are apt to be overestimated because, having a general interest and being the concern of every citizen, they form the topic of the political harangues and letters of the day. Indeed, our newspapers give more space to one million dollars invested in municipal contracts than to many hundreds of millions invested in other enterprises. As a matter of fact, the actual capital engaged in public contracts probably did not reach one percent of the amount invested in real estate in the city of Rome.

Of the ten millions of state income that we have estimated for Cicero’s day, at least two-thirds did not pass through the hands of the publicans. Asia was the only province that had been wholly abandoned to them, and in other provinces, like Sicily, Spain, Africa, and Gaul, they collected only the less lucrative revenues. The construction of public works like aqueducts, roads, and harbors brought profit at times, but such works were subject to precise estimates of cost and close supervision; the work was almost invariably well done and without the odor of dishonest spoils. Whoever will take the time to examine the pavement of an ordinary Roman highway, the remnants of the docks of an old Roman harbor, or the imposing arches of Republican aqueducts still standing on the Campagna will conclude that even political contracts have at times been honestly filled.

The collection of port dues could usually be checked by ship invoices, since the cargoes at most ports passed at a low and uniform rate. Pasture dues also depended upon a simple count of cattle and must have caused little confusion of accounts. In the estimate of tithes,[8] however, many companies were caught in vicious thievery. The calculation was difficult; the provincial could not take his appeal to Rome without great cost; at Rome he seldom found a patron who cared to waste time on an unsympathetic jury in his behalf; many of the jurymen were apt to hold shares in the company of contractors; and the provincial governors, though often hostile to the financial group, usually preferred—sometimes with their eye on political preferment—not to incur the enmity of a company.

8. The companies were generally rather small, specializing in one form of taxation, as portoria, scriptura, salinae, etc. The Bithynian company seems at one time to have consisted of an inner group composed of members of several companies. Cic. Ad Fam. XIII, 9.

Many cities were robbed; some resorted to bribing the collectors or the governors for self-protection. Very often, in lieu of efficient management of their own finances, they borrowed money at unreasonable rates from the official collectors with which to pay the taxes due. Thus the evils of the vicious system raised a stench to heaven before Caesar put an end to it. The system certainly worked as much wrong in that far-off province of Asia as it did, for instance, in France before the Revolution, where we are told that the cost of collecting often amounted to as much as the sum that reached the exchequer.

The wounds of Asia must not, however, all be laid to the bludgeons of the companies. The aristocratic party should have credit for a generous half of them. When Sulla exacted his enormous indemnity of twenty million dollars, he laid upon the Asiatic cities a burden of debt that kept them in arrears for a generation, and it was the interest upon such debts that pressed them even more than the annual tithes.

Nor did senatorial supervision always use reason in dealing with the companies. It was an old theory, even in the days of Polybius,[9] that the companies should be encouraged to bid within a narrow margin of receipts, on the understanding that the Senate would remit a reasonable portion in case of unforeseen disaster. Such contingencies frequently arose in the East, where Parthian raiders might drive off herds, burn the fields, and put a temporary end to trade. But in the political squabbles of Cicero’s days, it happened more than once that a clique in the Senate would effectively block any attempt at remission, and the companies had to bear the complete loss.

9. Polybius, VI, 17.

By that time, the buying of shares in the public companies had come to be looked upon as a gamble that conservative men avoided,[10] and the business therefore fell to men of lower standards. The companies consequently exerted themselves to cover their occasional losses due to war, bad crops, and senatorial obstinacy by extortion and deceit. Such was the experience that led Caesar to place Asia in the same position as the other provinces, and during the Empire the companies are found in charge only of contracts in which supervision was readily exercised and extortion quickly detected. Henceforth, little capital was required in the concerns, shares were less extensively held, and public interest seldom became such as to bring the companies to the notice of Roman writers.

10. See Cic. Ad Fam. XIII, 10, 2.

Following the flag and the official tax-gatherer went the negotiator,[11] the “busyman.” The history of the word illustrates the history of business activities. At first, the word applies to men who went abroad to lend money where rates were high, to place mortgages, to buy land at bargain prices, and incidentally to do some trading if good profits offered. This indicates that the Roman had little control of the machinery of commerce, and also that specialization in business had not yet progressed far. It was only in the Empire, when various enterprises were better segregated, when banking in the provinces became less profitable because of a more stable regime, and when the Roman had a better command of shipping, that the word came to apply wholly to traders. It is with the negotiator of the Republic that we are here concerned.

11. See Cagnat, art. “Negotiator,” in Daremberg-Saglio.

A typical example may be found in Cicero’s client Rabirius Postumus,[12] who in many respects reminds us of the American business adventurers who operate in Central American bonds, mines, and revolutions. Inheriting a fortune made in tax-farming, he continued to some extent to engage in the same business. But he also extended his activities into regular contract work on a large scale, into lending money at high risks in the provinces, and even into shipping and trading.

12. Fowler, Social Life of Rome, p. 91; Giraud, Études Économiques, p. 204; Tyrrell and Purser, The Correspondence of Cicero, II, p. xxx. Dessau (Hermes, 1911, p. 613) seems to be in error when he identifies Curtius Postumus with Rabirius Postumus.

In 57, the King of Egypt, driven into exile by a revolution, came to Rome to appeal for aid. When it was bruited about that Caesar and Pompey were inclined to support him, Rabirius formed a partnership to equip the King with the needed millions, the King pledging his revenues against the debt. When the Senate obstructed a motion to give the King official recognition and support, the governor of Syria, a friend of Pompey’s, received an intimation from adherents of Pompey that he might profit by escorting the King home even without a decree of the Senate.

So the King was restored, and Rabirius went with him to see that the mortgaged revenues were used toward paying his debts. At Alexandria, to the astonishment of Roman travelers, Rabirius took his office in Greek garb at the customhouse and managed the state monopolies in cottons, cosmetics, bricks, beer, and all the rest. Puteoli was not a little amazed to find one day a whole fleet of Rabirius’ ships come into harbor laden with precious Egyptian ware, paper, linen, and glass.

The Senate, in a rage at the success of the King despite its explicit veto, took vengeance on the Syrian governor, who was tried and banished for his part in the affair. Rabirius was finally imprisoned by the King and escaped alive with difficulty. His lawyer claimed that he was a bankrupt. The Senate suspected, however, that the farcical denouement was invented by Rabirius and the King to deceive the Senate and the angry Egyptians—an implausible hypothesis. The adventurer was apparently exiled from Rome, but Caesar found a place for him in his commissary department during the Civil War, where, like most of Caesar’s business agents, he was doubtless given an opportunity to fill his purse. Such were, in general, the negotiators of the late Republic.

To make an estimate of the capital available for large business undertakings would not be possible, but it is fair to say that overestimates are frequently encountered. In the first place, we do not know of any very large fortunes actually made in commerce, banking, or manufacturing at Rome. The large fortunes mentioned—in two cases we hear of twenty million dollars—were acquired by other methods and were possessed by the ruling aristocracy or by freedmen who acquired their wealth through misuse of imperial influence.[13]

13. Marquardt, Staatsverw. II, 56.

Lentulus, credited with the largest sum, was a senator who gained much of his wealth through opportunities afforded him by Augustus, presumably in the purchase of confiscated estates and in military service. Pompey, worth several millions, had profited from very fortunate campaigns in the East, for generals then, as naval commanders until recent times, secured a portion of the booty taken in war. Pompey’s business manager, the freedman Demetrius, is said to have gained very heavily from his business connections with the general and to have left a fortune of four million dollars.

Crassus, reputed the richest man of the Republic, left seven million dollars, acquired largely from secret dealings in the real estate of those proscribed by Sulla. The three richest men mentioned in the first century of our era were three rascally freedmen of Claudius, who traded on the influence and power that they acquired over Claudius, and over the Empire through him. Pliny[14] indeed mentions an Isidorus, a freedman in the time of Augustus, who left large estates and herds besides a ready fortune of three million dollars. Perhaps this was acquired in trade, but we are not informed.

14. Pliny, N.H. XXXIII, 135.

Corporation law did not, in Republican times, develop to the point where vast sums could be combined in ordinary enterprises of industry and commerce. Only in the formation of companies to farm public revenues and to operate public property like mines and salt works did the state permit and encourage full-fledged joint-stock companies—associations that could accumulate considerable sums not only through the participation of members who held partes, but also of stockholders who bought shares (particulae).

Yet such companies could not have been very large, since separate firms seem generally to have been organized at each census for the management of each subdivision—ports, pastures, tithes, etc.—of each province. Seldom did any annual operation of this kind require a capital of a million dollars. For the management of business enterprises, partnerships[15] were often formed, but they had slight protection in law and had to rely mainly upon the mutual good faith of the partners. They were, of course, dissolved by death or by the word of any member, and they were not protected by privileges of limited liability.

15. Illustrations of such partnerships are found in Cic. Pro Fonteio; Pro Rosc. Com.; Pro Rab. Post. For the law on corporations and partnerships, see Gaius, III, 148–154, and Digest, especially 17, 2; 47, 22; 14, 1–4; and 3, 4.

One has but to read the brief paragraphs in Gaius, De Societate (III, 148–154), to realize how little Roman business relied upon partnerships and how incapable these were of undertaking enterprises like manufacturing or extensive banking, which must depend upon a durable and legally protected corporation. As a matter of fact, most of Rome’s larger business enterprises seem to have been carried on by individuals who placed in the business only their own capital and what they might borrow on their personal credit.

The machinery of banking[16] also developed more slowly in the Republic than the growth of the state would seem to require. The needs in the provincial field were largely met by the taxing societies, which seem to have transported money and credits, and by the Greek and south-Italian bankers already in the eastern field. The vicious attacks upon property made in the civil wars of Sulla, Marius, Catiline, and Caesar taught Romans the need of keeping their accounts in the hands of trusted freedmen rather than in bank ledgers accessible to the agents of proscribing governments.

16. Byrne, Titus Pomponius Atticus; Früchtl, Die Geldgeschäfte bei Cicero, 1912; Blümner, Röm. Privataltertümer, 649. At Pompeii were found more than a hundred receipts of a small private banker, Caecilius Jucundus, who seems to have specialized in collecting moneys, auctioning slaves and chattels at a percentage of one or two percent, and in farming the city’s lands and town properties. C.I.L. IV, 1.

Finally, the lack of interest in business always betrayed by the landed aristocracy must be taken into account in explaining why the Roman government failed to follow the example of several Greek states and of the Ptolemies in chartering state banks, or at least in encouraging banking by instituting state supervision. There were, however, several important bankers doing business at Rome in Cicero’s day, though they seem to have been foreigners and Campanians. Men like Oppius, Egnatius the Spaniard, Cluvius, and Vestorius—the last two both of Puteoli—must have had large offices and were widely trusted.

They received deposits on current accounts on which they paid interest; they lent money on notes, mortgages, and current accounts; and they did some discounting. They bought and sold real estate on their own account and as agents for others. They did considerable business in money-changing, since numerous foreign issues of gold and silver came to Rome through foreign trade. They often kept expert business agents at the disposal of customers, especially men versed in provincial investments who traveled extensively abroad. Cicero, for instance, gave the agents of Oppius and Cluvius letters of introduction to provincial governors to use in their eastern affairs.

There was, of course, little of what we call syndicate banking, since industries had not as yet developed to the point of requiring it. But in the placing of large loans to foreign cities, the bankers sometimes acted as agents for wealthy nobles and sometimes formed temporary partnerships. Finally, some of them had branches or correspondents in the provinces, so that bills of exchange could usually be procured for most of the important centers of trade.

It must be said, however, that the business of foreign exchange was far from systematized. Cicero, for instance, when he wished to establish a credit for his son in Athens, made over to Atticus his urban rentals at Rome, in return for which Atticus gave his banker in Athens orders to credit Cicero junior with the amount and to debit the account of his income from the Epirote estate.[17]

17. Cic. Ad Att. XII, 32, and XIII, 37.

For gauging the growth of Rome’s foreign business, we have some data in the body of inscriptions found at Delos.[18] In 169, after subduing Macedonia, Rome gave the island of Delos to Athens, requiring only that the place be left a free port to all comers. Since no port dues were exacted, the shipping of the East soon found it a convenient meeting place for trade. From the cities of the Black Sea, from Syria, Egypt, and Italy, traders came to exchange their wares.

18. Hatzfeld, Les Italiens résidant à Délos, Bull. Corr. Hell. 1912; Frank, Roman Imperialism, 284; Roussel, Délos, Colonie Athénienne, 73 ff., who gives an excellent map of the city. The traditional view, still repeated by Roussel, 7 and 433, that Rome established a free port at Delos to favor Roman commerce assumes an interest that did not yet exist. Why did Rome then give the island to Athens, with control of the sacred property in shops and houses so necessary to commerce? Why did she not assume control of the harbor, securing port exemptions to Roman traders? Obviously, the declaration against port dues extended to all commerce and all visitors at the shrine—the natural privileges of a sacred port, which had regularly been manifest in the asylum enjoyed even by hostile vessels in the harbor. See Livy, XLIV, 29.

Rome found Delos a useful rendezvous when, in the middle of the century, she had to deal with revolts in Macedonia and Greece; and when Corinth was then destroyed, the harbor of Delos was in a position to take its place as the chief port of Greece for western shippers. Twenty years later, Asia became a Roman province, and then Delos naturally came to serve as a way station for Roman publicans who farmed the provincial tithes and managed the royal estates. Its marketplace was chosen as a convenient one in which to dispose of the products exacted in the province, and before the end of the second century, as our inscriptions prove, Italians had come to be the controlling element of the town.

To be sure, when we examine the names of these hundreds of Italians, it is seen that they largely emanate not from Rome but from the south—that is, from Campania, only half-Romanized at the time, and from the federated Greek cities of Magna Graecia, which in all Roman treaties were given the same protection accorded to Romans. In fact, the “Roman” associations (conventus) in foreign cities consisted at this time indiscriminately of all peoples from any part of Italy.

The two groups of “Romans” at Delos that we can best identify, the bankers and the oil merchants, consist of south-Italians. The bankers are respectively a Greek from Syracuse, one from Tarentum, a Syrian who acquired citizenship in Naples, an Apulian, and a certain Aufidius Bassus, who may or may not be a real Roman. The oil merchants, all from the south, are apparently men who sell the oil of southern Italy on the eastern market.

Can it be that Rome, after all, had not yet entered either the commercial or the capitalistic field that her armies had opened, and that only those peoples who were already upon the high seas profited from the pax Romana and the “freedom of the seas” that followed the extension of Roman rule? It is clear that south-Italian merchants and the bankers associated with them were the first to profit by the extension of Roman rule eastward. The Greeks from Tarentum to Cumae had always loved the sea and engaged in trade and in shipbuilding. Indeed, Rome had always relied upon these people to supply her vessels and seamen for the navy. Their merchant marine had therefore received all the encouragement that came from the upkeep of shipyards and the training of seamen. Furthermore, these Greeks, who knew the language and customs of the Oriental peoples as well as of the Romans, naturally became the middlemen between the East and the West.

Nevertheless, it is difficult to believe that these Italiote Greeks could successfully have captured so much of the Delian trade from the practiced Syrians, Egyptians, and islanders if they had dealt wholly with their own capital and on their own account. It is very probable that Romans of Campania were supplying some of the capital of the shippers who put out at Puteoli. The rather startling statement of Plutarch[19] that the elder Cato lent money in marine-insurance partnerships may be explained in this way. Cato possessed lands in Campania, where he came into contact with the numerous industries that centered about the harbor town of Puteoli. Cicero,[20] in his Verrine speeches and his letters, reveals the fact that the Romans who engaged in business in Sicily and the eastern trade with Sicily were largely men like Vestorius, Granius, Cluvius, and Sittius, whose base of operation was Puteoli.

19. Plut. Cato Maj. 21.

20. Cic. Verr. V, 56, 57, and seq.

The true interpretation of the Delian inscriptions relating to Roman business seems, therefore, to be something like this. When Rome established her rule in Macedonia and later in Asia, the trading and banking between Rome and the East was at first done through south-Italian businessmen already in the field, supported by some venturesome Roman capital. Then, when the contracts for the Asiatic tithes were let at Rome, the contracting firms, which were obliged to find a large personnel of clerks and agents who could speak Greek and knew something of the East, must at first have relied very heavily upon the business houses of the South for their staff.

Naturally, the Roman business managers who went to the province to supervise the work reported upon the new opportunities they found there for lucrative investments, and thus gradually drew Roman capitalists directly into the field. At the time of Mithradates’ raids in Asia and at Delos, few real Romans[21] seem to have been slain, but the financial loss fell largely on the Roman Forum.

21. The eighty thousand “Italians” slain in Asia by Mithradates were indeed called cives Romani by Cicero (De Leg. Man. 7), but only for rhetorical purposes. Those of them who were not slaves and freedmen were mostly south-Italian Greeks, as is revealed by Posidonius (quoted by Athenaeus, 213 B), who says that, to save themselves, “they assumed Greek dress and called themselves citizens of their own native cities again.” The explanation is that the south-Italian Greeks had assumed—somewhat prematurely—the Roman toga and Roman names after the passage of the lex Plautia Papiria in 89. One year later, when Mithradates attacked the province, they renounced Roman citizenship for safety’s sake and reassumed their former status, which in most cases must still have been their real legal status. The majority of the 20,000 inhabitants of Delos at the time of its destruction in 88 were Italian, according to Appian (Mith. 28).

Capitalistic ventures in the East were somewhat uncertain, but capable under favorable circumstances of bringing good profits. Many bought real estate, available at low prices because of a generation of turmoil and dread of invasions. The Romans, having faith that their rule would ensure peace, stable government, and sympathetic courts, invested where discouraged natives sold, and we find that many of Cicero’s friends owned[22] plantations there.

22. Cic. Ad Fam. XIII, 69; 70; Pro Flacco, 14; Pro Cael. 73.

More profitable, however, was moneylending on the frontier, where interest rates were high. At Rome, where conservative courts had always protected property—indeed, Sallust[23] complains that they were more concerned with supporting the laws of property than those of human rights—interest was usually stable and low, normally ranging from four to six percent.[24] In Greece, where vested interests were less considerately protected and a more venturesome spirit directed the money market, rates generally ranged from ten to twelve percent. In Asia, where invasions, inefficient government, and indirect business methods made for insecure possession, twelve percent was a low rate even in times of peace.

23. Sall. Cat. 33 and 39.

24. Billeter, Der Zinsfuss.

After the Mithradatic raids, extraordinary inducements alone could lure money out of hiding, and Romans entered the market only if the rates were attractive enough. The situation was not unlike that of our own frontier days, when eastern bankers who lent money in Boston and New York at five and six percent asked twenty-four to forty-eight percent in the Indian- and locust-ridden plains of the West, and when even municipalities, since grown great and rich, were compelled to issue bonds at thirty-six percent. In such circumstances, senatorial edicts against high rates had little effect.

Cicero’s correspondence has left a notorious record of how the Stoic Brutus[25] exacted forty-eight percent in Cyprus. To be sure, he was sufficiently ashamed of his act to attempt to conceal it, but not enough to make reparation when discovered by Cicero. Even at twelve percent, the legal rate, the profits to Roman bankers were enticing when the establishment of Roman law courts promised to protect investors. Hence large sums were placed, through bankers and private agents, with spendthrift kings, semibankrupt cities, and individuals.

25. Cic. Ad Att. VI, 1 and 3.

The king of Cappadocia[26] owed Pompey and Brutus a sum that ran into millions of dollars; the king of Egypt, as we have noted, borrowed several million dollars from Rabirius and his friends. Cluvius[27] of Puteoli lent heavily to five Asiatic cities, placing not only his own funds but also those of Pompey and others. Lampsacus, Tralles, Sardes, Mylasa, Alabanda, and Heraclea are some of the other cities incidentally mentioned by Cicero that owed money to Roman knights.

26. Cic. Ad Att. VI, 1.

27. Cluvius, Cic. Ad Fam. XIII, 56; Nicaea, Cic. Ad Fam. XIII, 61.

Before Pompey went East, the cities of Asia owed a total of forty million dollars, most of it doubtless to Roman capitalists. If this brought twelve percent per annum, private interests at Rome drew more than twice as much from this account as the treasury drew from the annual tribute.

That bankers in general were not held in very high esteem is not surprising. Respect for them has come only with their participation in promoting and organizing productive industries, for which there was as yet little opportunity at Rome, and in financing state debts, which Rome generally tried to avoid. As a matter of fact, Romans were liable to come into contact with bankers too frequently as mere money changers or as moneylenders secretly accepting questionable risks at high rates from riotous youths not yet in possession of an approaching inheritance. The enormous debts of young nobles like Caesar, Antony, Caelius, and Curio raised an ill odor about the Forum.

Even in the legitimate investment business and the placing of loans, bankers performed only the kind of service that most of the wealthy lords could procure through clever and trusted stewards. These stewards were generally freedmen, and the association of business with them did not tend to elevate the latter in the general esteem. Then, too, bankers were often asked by wealthy men like Pompey to place funds at good rates with hard-pressed eastern cities and potentates, acting as agents in affairs that the noblemen might hesitate to carry out through their own stewards and in their own names.

When such affairs were generally talked of on the street, they did not add to a statesman’s dignity, and it is likely that Pompey, though he wrote polite letters of thanks to his bankers, preferred not to be seen chatting too intimately with them in the Forum. Cicero, whose political program called for a close union between the nobility and the men of wealth, assumed more cordial manners, occasionally inviting men like Vestorius to dinner. But he too adopted the usual patronizing tone when, in his private letters or in his speeches before the Senate, he spoke of negotiatores, faeneratores, and toculliones. Caesar, who prized business efficiency and gladly employed men of affairs in the army organization, admitted men like Balbus into the Senate, but he did not please the Senate in doing so. When bankers like Vestorius, for instance, stood well in the esteem of many Romans, the fact was a special tribute to their personal integrity, to cultural interests, and probably to a refusal to engage in transactions considered questionable.

CHAPTER XIII Capital

From the modern point of view, the capitalist had a thorny path to follow during the late Republic. The semi-aristocracy of wealth was flattered when its support was needed in the civil service or in forming a political bloc, but after the turmoil surrounding the Gracchi, it was generally at war with the senatorial nobility. Gaius Gracchus certainly strengthened the knights and united them with the popular party for an assault on the Senate. In turn, the Senate made peace with them in 64, in its eagerness to protect vested interests against Catiline’s rebellion. For a time between 70 and 66, they seemed to be the dominant power. They formed the backbone of the coalition that broke the Sullan constitution in 70 and directed an aggressive foreign policy in 67–66.

But this temporary success should not be attributed to the popularity or leadership of the equestrian order. Indeed, Roman history does not reveal a single effective leader trained in business. The Sullan constitution, already outdated when adopted, was bound to fail in any case. It gave way at the first attack, when Pompey accepted the role of figurehead in a revolt that most Romans wanted. Crassus managed the political moves, Cicero coined the necessary phrases, and the knights supplied the money. Three years later, the knights received their reward when the same elements united to demand that Pompey clear the seas of pirates, whom the Senate had shamefully allowed to prey on commerce. The following year, they commissioned him to destroy Mithradates and organize the East into a series of provinces open to commercial “development.”

To this extent, capitalist interests played the political game with some success and profit. Nevertheless, Romans were never allowed to forget that political considerations were, and had to be, supreme, and that wealth had to submit to political needs. In 82, Sulla proscribed 2,600 knights and confiscated their property to replenish the treasury. Furthermore, when he imposed an indemnity of twenty million dollars on the cities of Asia for recognizing Mithradates, the cities turned to Roman capitalists for a large part of the money. Lucullus, acting for the Senate, later allowed them to repudiate most of the interest charges, thus placing much of the burden of Sulla’s theft on the knights.

Again, in 43, after raising an army of forty legions by making extravagant promises of bounties, the triumvirs placed the principal burden of payment on the wealthy. Two thousand knights were proscribed under the pretext of disloyalty, and their property was seized for the treasury.[1] It is not surprising that Roman businessmen usually preferred to avoid politics and, when possible, invested in distant real estate or quiet private banking. During those years of civil war, a strong feeling developed that although money might be power, it should not measure itself against political power. Vested interests, though strongly supported by the old aristocratic code, had few rights that the government considered sacred when those interests belonged to a class out of sympathy with the government.

This condition continued under the Empire. Capitalists continued to gather vast sums from throughout the Empire into their private coffers at Rome, but they remained at the mercy of imperial tyrants. When such rulers were driven into bankruptcy, they preyed upon the capitalists and confiscated their wealth under any convenient pretext, since this was the easiest way to balance their accounts.[2]

[1] Many Roman landowners who were not themselves accused of disloyalty lost properties that they happened to own within the boundaries of municipalities punished through wholesale expropriation.

[2] See Pliny’s famous statement (N.H. XVIII.35) that Nero, finding half the province of Africa in the hands of six landowners, confiscated their lands.

As we have seen, surplus Roman capital had for centuries followed the expanding armies inland. Time and again, when the city’s population became dense and showed signs of moving toward the sea or toward commercial outlets, a new advance along the frontier required military colonization. The familiar call of the land, which Romans were accustomed to obey, once more drew men inland. This situation strongly recalls the opening of the American frontiers, which allowed our once-flourishing merchant marine to decay and temporarily checked the growth of New England industries.

In the second century, however, Rome’s armies moved beyond Italy and annexed Spain, Greece, Africa, southern Gaul, and parts of Asia, but settlers did not follow with the same eagerness. Land among strangers did not seem to offer the average Roman a congenial home, and even Gracchus found little support for colonies abroad.

Within Italy, however, Roman wealth must have expanded rapidly, as measured by the census rolls. Beloch[3] estimates that the land brought under Roman cultivation through the expropriations of the Punic War and the seizures in the Po Valley doubled the former acreage. This made the total ager Romanus about fourteen million acres. At the very modest price of fifty dollars per jugerum,[4] the usual value assigned to unimproved land, this amounted to a billion dollars in land value alone. It would produce a high per capita property rating for the 320,000 citizens of Gracchus’s day. When we remember that large-scale landholding was already the rule, we may be sure that many thousands of Romans were well-to-do.[5]

[3] Beloch, Bevölkerung, 388.

[4] Columella, III.3.3, gives this value for ordinary unimproved Italian farmland. The figure is more likely too low than too high for Cicero’s time, when Varro’s account reveals a very active interest in farmland.

[5] Before the Second Punic War, nearly 20,000 citizens possessed the property qualification of a knight. We are not told that it was then fixed at 400,000 sesterces, but it may have been, since Polybius (VI.20) implies that the knights’ property qualification was higher than that of the “first class.” See Marquardt, Staatsverw., II, 331.

Ready capital, however, may have been scarce. The typical farmer seldom went to a bank; money circulates extremely slowly in agriculture; and the strongbox in the tablinum could hold the surplus until its owner found another nearby piece of land in which to invest it. Later, this process extended into the provinces. The average Roman’s surplus always rested most comfortably when it quickly found a place in real estate.

Cicero’s property consisted mainly of farms and urban holdings. Atticus had large estates in Epirus and Italy, and Varro had estates in Campania and Apulia. Caesar’s prefects—men such as Labienus[6] and Mamurra—were enriched by booty and immediately invested in land. Cicero’s civil cases usually concerned titles to land in Gaul, Etruria, or Lucania, and his letters of recommendation contain many references to large estates in Greece, Sicily, and Asia.[7]

[6] The Caesarian partisan attacked by Catullus in Carm. 94, 105, 114, and 115 is Labienus; see Am. Jour. Phil., 1919, 396.

[7] Cf. Cicero, Pro Flacco, 70; Pro Caelio, 73; Ad Fam. XIII.69; 70; 38.2; VIII.9.4; Pro Quinctio; Pro Tullio; Pro Fonteio; De Lege Agraria, passim. Cicero, De Off. I.151, naively suggests that a merchant may deodorize his profits by investing them in a plantation.

During the final century of the Republic, however, a considerable amount of capital found new outlets, especially in managing state contracts, lending money, banking, and trade. The activity and importance of state contracting are easily overestimated because public contracts concerned every citizen and therefore became subjects of the political speeches and letters of the time. Indeed, our newspapers give more space to one million dollars invested in municipal contracts than to many hundreds of millions invested in other enterprises.

In fact, the capital involved in public contracts probably did not equal one percent of the amount invested in real estate in the city of Rome. Of the ten million dollars in state revenue that we have estimated for Cicero’s time, at least two-thirds did not pass through the hands of the publicans. Asia was the only province wholly surrendered to them. In other provinces, such as Sicily, Spain, Africa, and Gaul, they collected only the less profitable revenues.

The construction of public works such as aqueducts, roads, and harbors sometimes produced profits, but these works were subject to precise estimates of cost and close supervision. The work was almost invariably done well and without the odor of dishonest spoils. Anyone who takes the time to examine the pavement of an ordinary Roman highway, the remains of the docks of an old Roman harbor, or the imposing arches of Republican aqueducts still standing on the Campagna will conclude that even political contracts have sometimes been honestly fulfilled.

The collection of port duties could usually be checked against ships’ invoices, since cargoes at most ports were taxed at a low and uniform rate. Pasture fees also depended on a simple count of cattle and must have caused little confusion in the accounts. In estimating tithes,[8] however, many companies became involved in vicious theft. The calculations were difficult; provincials could not appeal to Rome without great expense; and at Rome they seldom found patrons willing to waste time presenting their cases to unsympathetic juries. Many jurors were likely to own shares in the contracting company, and provincial governors, though often hostile to the financial group, usually preferred not to incur a company’s enmity, sometimes because they were thinking about future political advancement.

Many cities were robbed, and some resorted to bribing collectors or governors in self-defense. Very often, instead of efficiently managing their own finances, they borrowed money at unreasonable rates from the official collectors to pay the taxes they owed. Thus, before Caesar ended it, the evils of this vicious system raised a stench to heaven. The system certainly inflicted as much harm in the distant province of Asia as it did, for example, in France before the Revolution, where we are told that collection costs often equaled the amount that actually reached the treasury.

[8] The companies were generally rather small, specializing in one form of taxation, such as portoria, scriptura, salinae, and so forth. At one time, the Bithynian company seems to have consisted of an inner group composed of members of several companies. Cicero, Ad Fam. XIII.9.

The wounds of Asia, however, must not all be attributed to the clubs of the companies. The aristocratic party deserves credit for a generous half of them. When Sulla exacted his enormous indemnity of twenty million dollars, he imposed on the cities of Asia a burden of debt that kept them in arrears for a generation. The interest on these debts weighed on them even more heavily than the annual tithes.

Nor did senatorial supervision always act reasonably in dealing with the companies. Even in the time of Polybius,[9] an old theory held that companies should be encouraged to bid within a narrow margin of expected receipts, with the understanding that the Senate would grant a reasonable remission in the event of an unforeseen disaster. Such emergencies frequently occurred in the East, where Parthian raiders might drive off herds, burn fields, and bring trade to a temporary halt.

In the political quarrels of Cicero’s time, however, it happened more than once that a faction in the Senate effectively blocked any attempt at remission, forcing the companies to bear the whole loss. By then, buying shares in public companies had come to be regarded as a gamble that conservative men avoided,[10] so the business fell into the hands of men with lower standards. Consequently, companies tried to compensate for occasional losses caused by war, bad crops, and senatorial obstinacy through extortion and deceit.

This experience led Caesar to place Asia in the same position as the other provinces. During the Empire, companies were entrusted only with contracts in which supervision could readily be exercised and extortion quickly detected. From then on, such concerns required little capital, their shares were less widely held, and public interest in them rarely became great enough to bring the companies to the attention of Roman writers.

[9] Polybius, VI.17.

[10] See Cicero, Ad Fam. XIII.10.2.

The negotiator,[11] the “busy man,” followed the flag and the official tax collector. The history of the word illustrates the history of business activity. At first, the term referred to men who went abroad to lend money where interest rates were high, place mortgages, buy land at bargain prices, and, incidentally, engage in trade when good profits were available. This indicates that Romans had little control over the machinery of commerce and that specialization in business had not yet advanced very far.

Only under the Empire—when different enterprises were more clearly separated, provincial banking became less profitable because government was more stable, and Romans gained better control of shipping—did the word come to refer entirely to traders. Here, however, we are concerned with the negotiator of the Republic.

A typical example is Cicero’s client Rabirius Postumus,[12] who in many ways recalls American business adventurers dealing in Central American bonds, mines, and revolutions. He inherited a fortune made in tax farming and continued to engage in that business to some extent. But he also expanded into regular contract work on a large scale, high-risk provincial moneylending, and even shipping and trade.

In 57, the king of Egypt, driven into exile by a revolution, came to Rome to appeal for aid. When it became known that Caesar and Pompey were inclined to support him, Rabirius formed a partnership to supply the king with the necessary millions, with the king pledging his revenues as security for the debt. When the Senate obstructed a proposal to grant the king official recognition and support, the governor of Syria, a friend of Pompey, received an indication from Pompey’s supporters that he might profit by escorting the king home even without a senatorial decree.

The king was therefore restored, and Rabirius accompanied him to ensure that the pledged revenues were used to pay his debts. At Alexandria, to the astonishment of Roman travelers, Rabirius took up his post at the customs house dressed in Greek clothing and managed the state monopolies in cottons, cosmetics, bricks, beer, and everything else. Puteoli was greatly astonished when an entire fleet belonging to Rabirius entered the harbor one day, loaded with valuable Egyptian goods—paper, linen, and glass.

Enraged that the king had succeeded despite its explicit veto, the Senate took revenge on the Syrian governor, who was tried and banished for his part in the affair. Rabirius was eventually imprisoned by the king and barely escaped alive. His lawyer claimed that he was bankrupt. The Senate, however, suspected that Rabirius and the king had invented this farcical ending to deceive both the Senate and the angry Egyptians—a not implausible theory.

The adventurer was apparently exiled from Rome, but during the Civil War Caesar found a position for him in the commissary department. There, like most of Caesar’s business agents, he was doubtless given an opportunity to fill his purse. Such, in general, were the negotiators of the late Republic.

[11] See Cagnat, article “Negotiator,” in Daremberg-Saglio.

[12] Fowler, Social Life of Rome, p. 91; Giraud, Études Économiques, p. 204; Tyrrell and Purser, The Correspondence of Cicero, II, p. xxx. Dessau (Hermes, 1911, p. 613) seems to be mistaken when he identifies Curtius Postumus with Rabirius Postumus.

It is impossible to estimate the capital available for large business ventures, but it is fair to say that estimates are frequently too high. First, we know of no very large fortunes actually made at Rome through commerce, banking, or manufacturing. The large fortunes mentioned—in two cases, we hear of twenty million dollars—were acquired by other means. They belonged either to the ruling aristocracy or to freedmen who gained their wealth by misusing imperial influence.[13]

Lentulus, who was credited with the largest fortune, was a senator who acquired much of his wealth through opportunities given to him by Augustus, presumably in purchasing confiscated estates and through military service. Pompey, worth several million dollars, had profited from highly successful campaigns in the East, because generals, like naval commanders until recent times, received part of the booty captured in war.

Pompey’s business manager, the freedman Demetrius, is said to have profited greatly from his business relationship with the general and to have left a fortune of four million dollars. Crassus, reputedly the richest man of the Republic, left seven million dollars, much of it acquired through secret dealings in the real estate of people proscribed by Sulla.

The three richest men mentioned during the first century of our era were three dishonest freedmen of Claudius who traded on the influence and power they acquired over Claudius and, through him, over the Empire. Pliny,[14] however, mentions an Isidorus, a freedman in the time of Augustus, who left large estates and herds in addition to a ready fortune of three million dollars. Perhaps this fortune was acquired through trade, but we are not told.

[13] Marquardt, Staatsverw., II, 56.

[14] Pliny, N.H. XXXIII.135.

During the Republic, corporation law did not develop far enough to allow vast sums to be combined in ordinary industrial and commercial enterprises. Only when companies were formed to farm public revenues and operate public property, such as mines and saltworks, did the state permit and encourage fully developed joint-stock companies. Such associations could accumulate considerable sums through both members who held partes and shareholders who bought shares, or particulae.

Yet these companies could not have been very large, since separate firms seem generally to have been organized at each census to manage each subdivision—ports, pastures, tithes, and so forth—of each province. An annual operation of this kind seldom required capital amounting to a million dollars.

Partnerships[15] were often formed to manage business enterprises, but they received little legal protection and had to rely mainly on the mutual good faith of the partners. They were, of course, dissolved by the death or the declaration of any member, and they did not enjoy the protection of limited liability. One need only read the short paragraphs in Gaius, De Societate (III.148–154), to understand how little Roman business depended on partnerships and how incapable such partnerships were of undertaking enterprises such as manufacturing or large-scale banking, which require durable and legally protected corporations.

In fact, most of Rome’s larger business enterprises seem to have been conducted by individuals who invested only their own capital and whatever they could borrow on their personal credit.

[15] Examples of such partnerships are found in Cicero, Pro Fonteio; Pro Roscio Comoedo; Pro Rabirio Postumo. For the law governing corporations and partnerships, see Gaius, III.148–154, and the Digest, especially 17.2; 47.22; 14.1–4; and 3.4.

The machinery of banking[16] also developed more slowly during the Republic than the growth of the state might lead us to expect. Provincial needs were largely met by the tax-farming companies, which seem to have transferred money and credit, and by the Greek and southern Italian bankers already operating in the East.

The vicious attacks on property during the civil wars of Sulla, Marius, Catiline, and Caesar taught Romans that they needed to keep their accounts in the hands of trusted freedmen rather than in bank ledgers accessible to agents of governments issuing proscriptions. Finally, the landed aristocracy’s persistent lack of interest in business must be considered when explaining why the Roman government failed to follow the example of several Greek states and the Ptolemies by chartering state banks or at least encouraging banking through state supervision.

Nevertheless, several important bankers were doing business at Rome in Cicero’s time, though they seem to have been foreigners and Campanians. Men such as Oppius, Egnatius the Spaniard, Cluvius, and Vestorius—the last two both from Puteoli—must have had large offices and enjoyed widespread trust. They accepted deposits in current accounts and paid interest on them; lent money on notes, mortgages, and current accounts; and carried out some discounting.

They bought and sold real estate both for themselves and as agents for others. They conducted considerable business in currency exchange because numerous foreign issues of gold and silver reached Rome through foreign trade. They often made expert business agents available to customers, particularly men familiar with provincial investments who traveled extensively abroad. Cicero, for example, gave the agents of Oppius and Cluvius letters of introduction to provincial governors for use in their eastern affairs.

There was, of course, little of what we call syndicate banking, because industry had not yet developed to the point of requiring it. But when large loans were placed with foreign cities, bankers sometimes acted as agents for wealthy nobles and sometimes formed temporary partnerships.

Finally, some bankers had branches or correspondents in the provinces, so bills of exchange could usually be obtained for most important centers of trade. It must be said, however, that the foreign-exchange business was far from systematic. When Cicero wanted to establish credit for his son in Athens, for example, he transferred his urban rental income at Rome to Atticus. In return, Atticus instructed his banker in Athens to credit the younger Cicero with the amount and charge it against the account holding Atticus’s income from his estate in Epirus.[17]

[16] Byrne, Titus Pomponius Atticus; Früchtl, Die Geldgeschäfte bei Cicero, 1912; Blümner, Römische Privataltertümer, 649. At Pompeii, more than a hundred receipts were found belonging to a small private banker, Caecilius Jucundus, who seems to have specialized in collecting money, auctioning slaves and movable property for a commission of one or two percent, and farming the city’s lands and urban properties. C.I.L. IV.1.

[17] Cicero, Ad Att. XII.32 and XIII.37.

To measure the growth of Rome’s foreign business, we have some evidence in the inscriptions found at Delos.[18] In 169, after subduing Macedonia, Rome gave the island of Delos to Athens, requiring only that the place remain a free port open to everyone. Because no port duties were charged, the shipping of the East soon found it a convenient meeting place for trade. Traders came from the cities of the Black Sea, Syria, Egypt, and Italy to exchange their goods.

Rome found Delos a useful rendezvous when, in the middle of the century, it had to deal with revolts in Macedonia and Greece. When Corinth was then destroyed, the harbor of Delos was well positioned to replace it as Greece’s principal port for western shippers. Twenty years later, Asia became a Roman province, and Delos naturally came to serve as a stopping place for Roman publicans who farmed the provincial tithes and managed the royal estates.

Its marketplace was chosen as a convenient location for selling products exacted from the province. Before the end of the second century, as our inscriptions prove, Italians had become the town’s controlling element. Yet when we examine the names of these hundreds of Italians, we find that most came not from Rome but from the south: from Campania, which was only partly Romanized at the time, and from the allied Greek cities of Magna Graecia, which received in all Roman treaties the same protection granted to Romans.

Indeed, the “Roman” associations, or conventus, in foreign cities at this time indiscriminately included people from every part of Italy. The two groups of “Romans” at Delos that we can identify most clearly—the bankers and the oil merchants—consisted of southern Italians. The bankers were, respectively, a Greek from Syracuse, one from Tarentum, a Syrian who had acquired citizenship at Naples, an Apulian, and a certain Aufidius Bassus, who may or may not have been a true Roman. The oil merchants, all from the south, were apparently men who sold southern Italian oil in eastern markets.

[18] Hatzfeld, “Les Italiens Résidant à Délos,” Bull. Corr. Hell., 1912; Frank, Roman Imperialism, 284; Roussel, Délos, Colonie Athénienne, 73 ff., which provides an excellent map of the city. The traditional view, still repeated by Roussel, pp. 7 and 433, that Rome established a free port at Delos to favor Roman commerce assumes a commercial interest that did not yet exist. Why, then, did Rome give the island to Athens, together with control of the sacred property in shops and houses that was so necessary to commerce? Why did Rome not take control of the harbor and secure exemptions from port duties for Roman traders? Clearly, the prohibition against port duties applied to all commerce and all visitors to the shrine. These were the natural privileges of a sacred port and had regularly appeared in the asylum granted even to hostile vessels in the harbor. See Livy, XLIV.29.

Can it be, then, that Rome had not yet entered either the commercial or the capitalist field opened by its armies, and that only peoples already active on the high seas profited from the pax Romana and the “freedom of the seas” that followed the extension of Roman rule?

It is clear that southern Italian merchants and the bankers associated with them were the first to profit from the eastward expansion of Roman rule. The Greeks from Tarentum to Cumae had always loved the sea and participated in trade and shipbuilding. Rome had always relied on these people to provide ships and sailors for its navy. Their merchant marine had therefore received all the encouragement that came from maintaining shipyards and training sailors. Furthermore, these Greeks, who knew the languages and customs of both the eastern peoples and the Romans, naturally became intermediaries between East and West.

Nevertheless, it is difficult to believe that these Italiote Greeks could have captured so much of the Delian trade from experienced Syrians, Egyptians, and islanders if they had operated entirely with their own capital and on their own account. Romans in Campania were probably supplying some of the capital used by shippers who sailed from Puteoli.

Plutarch’s rather startling statement[19] that the elder Cato lent money through marine-insurance partnerships may be explained in this way. Cato owned land in Campania, where he came into contact with the many industries centered around the harbor town of Puteoli. In his Verrine speeches and his letters, Cicero[20] reveals that the Romans engaged in business in Sicily and in eastern trade with Sicily were largely men such as Vestorius, Granius, Cluvius, and Sittius, whose base of operations was Puteoli.

[19] Plutarch, Cato Major, 21.

[20] Cicero, Verr. V.56, 57, and following.

The correct interpretation of the Delian inscriptions concerning Roman business therefore seems to be roughly as follows. When Rome established its rule in Macedonia and later in Asia, trade and banking between Rome and the East were at first conducted through southern Italian businessmen already active in the field, supported by some Roman capital invested in ventures.

Then, when contracts for the Asian tithes were awarded at Rome, the contracting firms had to find a large staff of clerks and agents who could speak Greek and knew something about the East. At first, they must have depended heavily on southern business houses to supply that staff. Naturally, Roman business managers who went to the province to supervise the work reported on the new opportunities for profitable investment that they found there. In this way, they gradually drew Roman capitalists directly into the field.

At the time of Mithradates’ attacks in Asia and at Delos, few true Romans[21] seem to have been killed, but the financial loss fell largely on the Roman Forum.

[21] The eighty thousand “Italians” killed in Asia by Mithradates were indeed called cives Romani by Cicero (De Lege Manilia, 7), but only for rhetorical purposes. Those who were not slaves or freedmen were mostly southern Italian Greeks, as Posidonius reveals in a passage quoted by Athenaeus, 213B. He says that to save themselves “they assumed Greek dress and called themselves citizens of their own native cities again.” The explanation is that, after the passage of the lex Plautia Papiria in 89, the southern Italian Greeks had adopted—somewhat prematurely—the Roman toga and Roman names. One year later, when Mithradates attacked the province, they renounced Roman citizenship for safety and resumed their former status, which in most cases must still have been their true legal status. According to Appian (Mith. 28), most of the 20,000 inhabitants of Delos at the time of its destruction in 88 were Italian.

Capitalist ventures in the East were somewhat uncertain, but under favorable circumstances they could produce good profits. Many people bought real estate that was available at low prices because of a generation of turmoil and fear of invasions. Romans believed that their rule would ensure peace, stable government, and sympathetic courts. They therefore invested where discouraged natives sold, and we find that many of Cicero’s friends owned plantations there.[22]

[22] Cicero, Ad Fam. XIII.69; 70; Pro Flacco, 14; Pro Caelio, 73.

Even more profitable, however, was lending money on the frontier, where interest rates were high. At Rome, conservative courts had always protected property—indeed, Sallust[23] complains that they were more concerned with upholding property law than human rights—and interest rates were generally stable and low, normally ranging from four to six percent.[24]

In Greece, where vested interests received less considerate protection and a more adventurous spirit directed the money market, rates generally ranged from ten to twelve percent. In Asia, where invasions, inefficient government, and indirect business methods made ownership insecure, twelve percent was a low rate even in times of peace.

After the Mithradatic raids, only extraordinary inducements could draw money out of hiding, and Romans entered the market only when the available rates were sufficiently attractive. The situation resembled that of our own frontier era, when eastern bankers who lent money in Boston and New York at five or six percent demanded twenty-four to forty-eight percent on the Indian- and locust-ridden plains of the West, and when even municipalities that have since become great and wealthy were forced to issue bonds at thirty-six percent.

Under such circumstances, senatorial decrees against high interest rates had little effect. Cicero’s correspondence has left a notorious account of how the Stoic Brutus[25] exacted forty-eight percent in Cyprus. He was ashamed enough of his action to try to conceal it, though not ashamed enough to make restitution after Cicero discovered it.

Even at twelve percent, the legal rate, the profits were attractive to Roman bankers once the establishment of Roman courts promised to protect investors. Large sums were therefore placed, through bankers and private agents, with spendthrift kings, nearly bankrupt cities, and private individuals.

The king of Cappadocia[26] owed Pompey and Brutus a sum amounting to millions of dollars. As we have seen, the king of Egypt borrowed several million dollars from Rabirius and his friends. Cluvius of Puteoli[27] lent heavily to five Asian cities, investing not only his own money but also that of Pompey and others. Lampsacus, Tralles, Sardes, Mylasa, Alabanda, and Heraclea are some of the other cities incidentally mentioned by Cicero as owing money to Roman knights.

Before Pompey went east, the cities of Asia owed a total of forty million dollars, most of it doubtless owed to Roman capitalists. If this debt yielded twelve percent annually, private interests at Rome received more than twice as much from this source as the treasury received from the annual tribute.

[23] Sallust, Cat. 33 and 39.

[24] Billeter, Der Zinsfuss.

[25] Cicero, Ad Att. VI.1 and 3.

[26] Cicero, Ad Att. VI.1.

[27] Cluvius: Cicero, Ad Fam. XIII.56; Nicaea: Cicero, Ad Fam. XIII.61.

It is not surprising that bankers generally were not held in high esteem. Respect for them developed only when they began participating in the promotion and organization of productive industries, for which there was still little opportunity at Rome, and in financing state debts, which Rome generally tried to avoid.

In practice, Romans were likely to encounter bankers too often merely as money changers or as lenders who secretly accepted questionable risks at high interest rates from reckless young men not yet in possession of expected inheritances. The enormous debts of young nobles such as Caesar, Antony, Caelius, and Curio created a bad odor around the Forum.

Even in legitimate investment business and the placement of loans, bankers provided only the type of service that most wealthy lords could obtain through clever and trusted stewards. These stewards were generally freedmen, and the association of business with them did not raise business in the public esteem.

Moreover, bankers were often asked by wealthy men such as Pompey to place funds at good interest rates with hard-pressed eastern cities and rulers. They acted as agents in transactions that noblemen might hesitate to conduct through their own stewards and under their own names. When such dealings became common street gossip, they did not add to a statesman’s dignity. It is likely that Pompey, though he wrote courteous letters of thanks to his bankers, preferred not to be seen speaking too intimately with them in the Forum.

Cicero’s political program called for a close union between the nobility and wealthy men, so he adopted more cordial manners and occasionally invited men such as Vestorius to dinner. Yet even he adopted the usual patronizing tone when, in private letters or speeches before the Senate, he spoke of negotiatores, faeneratores, and toculliones.

Caesar valued business efficiency and willingly employed men of affairs in organizing the army. He admitted men such as Balbus into the Senate, but by doing so he did not please the Senate. When bankers such as Vestorius stood high in the esteem of many Romans, this was a particular tribute to their personal integrity, cultural interests, and probably their refusal to participate in transactions regarded as questionable.