![Ivory bankers' tallies, British Museum](https://upload.wikimedia.org/wikipedia/commons/a/ab/Ivory_bankers%27_tallies%2C_British_Museum.jpg)
The practices of ancient Roman finance, while originally rooted in Greek models, evolved in the second century BC with the expansion of Roman
monetization
Monetization ( also spelled monetisation) is, broadly speaking, the process of converting something into money. The term has a broad range of uses. In banking, the term refers to the process of converting or establishing something into legal tend ...
. Roman elites engaged in private
lending
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
for various purposes, and various
banking
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Becau ...
models arose to serve different lending needs.
Private finance
Pooling capital
Before
banks
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Becaus ...
were established in Rome there was little ability to mobilize large amounts of
capital, leaving Romans to operate within the constraints of the wealth of their households. When household wealth was exhausted, the elites in Roman society would often extend loans amongst themselves.
The value of these loans to the
lender
A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...
was not always derived from
interest
In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...
payments, but rather from the social obligations that were an implication of being a lender.
The formation of a ''
societas'' allowed for the utilization of pooled capital. ''Societates'' were groups who could combine their resources to place a bid for a government contract and then share in the resulting
profit or loss.
The ''
publicani
In antiquity, publicans (Greek τελώνης ''telōnēs'' (singular); Latin ''publicanus'' (singular); ''publicani'' (plural)) were public contractors, in whose official capacity they often supplied the Roman legions and military, managed the c ...
'' (public contractors) were an early incarnation of ''societates'' who would bid for the right to collect
taxes
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, o ...
from the
Roman province
The Roman provinces (Latin: ''provincia'', pl. ''provinciae'') were the administrative regions of Ancient Rome outside Roman Italy that were controlled by the Romans under the Roman Republic and later the Roman Empire. Each province was rule ...
s. Senators were not allowed to engage in trade, so it fell to the knights (''
equites'') to bid on these contracts issued by the
censors
Censorship is the suppression of speech, public communication, or other information. This may be done on the basis that such material is considered objectionable, harmful, sensitive, or "inconvenient". Censorship can be conducted by governments ...
every five years.
Banks were established in Rome that modeled their Greek counterparts and introduced formalized financial intermediation.
Livy
Titus Livius (; 59 BC – AD 17), known in English as Livy ( ), was a Roman historian. He wrote a monumental history of Rome and the Roman people, titled , covering the period from the earliest legends of Rome before the traditional founding in ...
is the first writer to acknowledge the rise of formal Roman banks in 310 BC.
Ancient Roman banks operated under private law, which did not have clear guidance on how to decide cases concerning financial matters, which forced Roman banks to operate entirely on their word and character. Bankers congregated around the
arch of Janus
The Arch of Janus is the only quadrifrons triumphal arch preserved in Rome. It was set up at a crossroads at the northeastern limit of the Forum Boarium, close to the Velabrum, over the Cloaca Maxima drain that went from the Forum to the Rive ...
to conduct their business and despite their informal location, were clearly professional in their dealings.
Private loans
Up until the dawn of the
Roman Empire
The Roman Empire ( la, Imperium Romanum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post- Republican period of ancient Rome. As a polity, it included large territorial holdings around the Mediter ...
, it was common for loans to be negotiated as oral contracts. In the early Empire, lenders and borrowers began to adopt the usage of a ''chirographum'' (“handwritten record”) to record these contracts and use them for evidence of the agreed terms.
[Temin 2013, p. 168] One copy of the contract was presented on the exterior of the ''chirographum'', while a second copy was kept sealed within two waxed tablets of the document in the presence of a witness.
Informal methods of maintaining records of loans made and received existed, as well as formal incarnations adopted by frequent lenders. These serial lenders used a ''kalendarium'' to document the loans that they issued to assist in tabulating interest accrued at the beginning of each month (''Kalends'').
[Temin 2013, p. 169] Parties to contracts were supposed to be Roman citizens, but there is evidence of this boundary being broken.
Loans to citizens were also originated from public or governmental positions. For example, the Temple of Apollo is believed to have engaged in secured loans with citizens’ homes being used as collateral. Loans were more rarely extended to citizens from the government, as in the case of Tiberius who allowed for three-year, interest-free loans to be issued to senators in order to avert a looming credit crisis.
Deferred payment
There is sufficient evidence of deferred payments and financing arrangements to be negotiated for large purchases. Deferred payments were used in the auction of wine or oil that was "on the tree" (not yet harvested or produced), requiring payment from the winning bidder long after the auction had ended. Roman peasants who needed money to pay their taxes would use an inverted form of this process by selling the right to a portion of their harvest in the future in exchange for cash in the present.
[Temin 2013, p. 171] The ''sulpicii'' arose as professional bankers in the first century AD, and among other forms of financial intermediation, they offered financing for speculators in grain markets.
Public finance
For centuries the monetary affairs of the
Roman Republic
The Roman Republic ( la, Res publica Romana ) was a form of government of Rome and the era of the classical Roman civilization when it was run through public representation of the Roman people. Beginning with the overthrow of the Roman Ki ...
had rested in the hands of the
Senate. These elite liked to present themselves as steady and fiscally conservative, but as the 19th-century historian of Rome
Wilhelm Ihne
Joseph Anton Friedrich Wilhelm Ihne (2 February 1821 – 21 March 1902) was a German historian who was a native of Fürth. He was the father of architect Ernst von Ihne (1848–1917).
Life
He studied philology at Bonn, obtaining his degree in 184 ...
remarked:
The ''
aerarium
Aerarium, from ''aes'' (“bronze, money”) + -''ārium'' (“place for”), was the name given in Ancient Rome to the public treasury, and in a secondary sense to the public finances.
''Aerarium populi Romani''
The main ''aerarium'', that ...
'' (state treasury) was supervised by members of the government rising in power and prestige, the
quaestors
A ( , , ; "investigator") was a public official in Ancient Rome. There were various types of quaestors, with the title used to describe greatly different offices at different times.
In the Roman Republic, quaestors were elected officials who ...
,
praetors
Praetor ( , ), also pretor, was the title granted by the government of Ancient Rome to a man acting in one of two official capacities: (i) the commander of an army, and (ii) as an elected ''magistratus'' (magistrate), assigned to discharge variou ...
, and eventually the
prefect
Prefect (from the Latin ''praefectus'', substantive adjectival form of ''praeficere'': "put in front", meaning in charge) is a magisterial title of varying definition, but essentially refers to the leader of an administrative area.
A prefect's ...
s. With the dawn of the
Roman Empire
The Roman Empire ( la, Imperium Romanum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post- Republican period of ancient Rome. As a polity, it included large territorial holdings around the Mediter ...
, a major change took place, as the emperors assumed the reins of financial control.
Augustus
Caesar Augustus (born Gaius Octavius; 23 September 63 BC – 19 August AD 14), also known as Octavian, was the first Roman emperor; he reigned from 27 BC until his death in AD 14. He is known for being the founder of the Roman Pr ...
adopted a system that was, on the surface, fair to the Senate. Just as the world was divided in
provinces
A province is almost always an administrative division within a country or state. The term derives from the ancient Roman '' provincia'', which was the major territorial and administrative unit of the Roman Empire's territorial possessions ou ...
designated as
imperial or
senatorial
A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the e ...
, so was the treasury. All tribute brought in from senatorially controlled provinces was given to the ''aerarium'', while that of the imperial territories went to the treasury of the emperor, the ''
fiscus
''Fiscus'', from which comes the English term "fiscal", was the name of the personal chest of the List of Roman emperors, emperors of Rome.
The word is literally translated as "basket" or "purse" and was used to describe those forms of revenue col ...
''.
Initially, this process of distribution seemed to work, although the
legal technicality did not disguise the supremacy of the emperor or his often used right to transfer funds back and forth regularly from the ''aerarium'' to the ''fiscus''. The ''fiscus'' actually took shape after the reign of Augustus and Tiberius. It began as a private fund (''fiscus'' meaning purse or basket) but grew to include all imperial monies, not only the private estates but also all public lands and finances under the imperial eye.
The property of the rulers grew to such an extent that changes had to be made starting sometime in the 3rd century, most certainly under
Septimius Severus
Lucius Septimius Severus (; 11 April 145 – 4 February 211) was Roman emperor from 193 to 211. He was born in Leptis Magna (present-day Al-Khums, Libya) in the Roman province of Africa. As a young man he advanced through the customary suc ...
. Henceforth, the imperial treasury was divided. The ''fiscus'' was retained to handle actual government revenue, while a ''
patrimonium'' was created to hold the private fortune, the inheritance of the royal house. There is a considerable question as to the exact nature of this evaluation, involving possibly a ''
res privata
Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
'' so common in the Late Empire.
Just as the Senate had its own finance officers, so did the emperors. The head of the ''fiscus'' in the first years was the ''
rationalis
A ''rationalis'' was a high-ranking fiscal officer in the Roman Empire. Until replaced by the ''comes sacrarum largitionum'' by Emperor Constantine in the early 4th century, the ''rationalis summarum'' – comparable to a modern-day finance minist ...
'', originally a freedman due to
Augustus
Caesar Augustus (born Gaius Octavius; 23 September 63 BC – 19 August AD 14), also known as Octavian, was the first Roman emperor; he reigned from 27 BC until his death in AD 14. He is known for being the founder of the Roman Pr ...
' desire to place the office in the hands of a servant free of the class demands of the traditional society. In succeeding years the corruption and reputation of the freedman forced new and more reliable administrators. From the time of
Hadrian (117–138), any ''rationalis'' hailed from the Equestrian Order (''
equites'') and remained so through the
chaos of the 3rd century and into the age of
Diocletian.
With Diocletian came a series of massive reforms, and total control over the finances of the Empire fell to the now stronger central government. Tax reforms made possible a real budget in the modern sense for the first time. Previously it had issued the tax demands to the cities and allowed them to allocate the burden. From now on the imperial government driven by fiscal needs dictated the entire process down to the civic level. Under
Constantine the Great
Constantine I ( , ; la, Flavius Valerius Constantinus, ; ; 27 February 22 May 337), also known as Constantine the Great, was Roman emperor from AD 306 to 337, the first one to convert to Christianity. Born in Naissus, Dacia Mediterran ...
this
aggrandizement continued with the emergence of an appointed minister of finance, the ''
comes sacrarum largitionum
The ''comes sacrarum largitionum'' ("Count of the Sacred Largesses"; in el, , ''kómes tōn theíon thesaurōn'') was one of the senior fiscal officials of the late Roman Empire and the early Byzantine Empire.
Although it is first attested in ...
'' ("Count of the Sacred Largesses"). He maintained the general treasury and the intake of all revenue until Constantine divided the treasury into three, giving the prefect, count, and the manager of the ''res privata'' their own treasuries. The treasury of the prefect was called the ''arca''. His powers were directed toward control of the new ''sacrum aerarium'', the result of the combination of the ''aerarium'' and the ''fiscus''.
![Notitia dignitatum - insignia comitis largitionum](https://upload.wikimedia.org/wikipedia/commons/b/bf/Notitia_dignitatum_-_insignia_comitis_largitionum.jpg)
The ''comes sacrarum largitionum'' was a figure of tremendous influence. He was responsible for all money taxes, examined banks, ran the mints and mines everywhere, weaving mills and dye works, paid the salaries and expenses of many departments of the state, the upkeep of imperial palaces and other public buildings, supplied the Courts with clothing and other items. To accomplish these many tasks, he was aided by a large central staff, a regional field force and small staffs in larger cities and towns. Just below the ''comes sacrarum'' were the ''rationales'',
comptrollers, positioned in each diocese. They supervised the collection of all tribute, taxes, or fees. They were everywhere and omnipotent until Constantine demoted them after his reorganization of the palatine level ministries' competencies in the years 325–326 by restricting their activity to supervision of the collection of taxes collected in gold and silver performed by the governors under the general supervision of the vicars. The rationales lost the last of their provincial field force of procurators between 330–337.
Only the
praetorian prefects were more powerful. His office, as vice-regent to the emperors, took precedence over all other civilian officials and military officers. They were chief finance officers of the Empire. They composed the global budget and set the tax rates across the board. Before Constantine's reforms they were directly responsible for the supply of the army, the ''annona militaris'', which was a separate tax form the time of Diocletian in place of arbitrary requisitions. The ''annona civilis'', the general in kind taxes were turned over to the prefects alone. To their care was entrusted the supply of food stuffs to the capitals, the imperial armament factories, the maintenance of the state post. The ''
magister officiorum
The ''magister officiorum'' (Latin literally for "Master of Offices", in gr, μάγιστρος τῶν ὀφφικίων, magistros tōn offikiōn) was one of the most senior administrative officials in the Later Roman Empire and the early cent ...
'' ("Master of Offices"), who was a kind of Minister of the Interior and State Security and the ''
comes rerum privatarum In the Roman Empire during late antiquity, the ''comes rerum privatarum'' ( gr, κόμης τῆς ἰδικῆς παρουσίας, ''kómēs tēs idikēs parousías''), literally "count of the private fortune", was the official charged with admin ...
'' ("Count of the Private Fortune") could counter the political the ''comes sacrarum largitionum''. The ''magister officiorum'' made all the major decisions concerning intelligence matters was not a fiscal officer and could not interfere with the operation of the ''sacrae largitiones'' and the ''res privata''. The ''comes sacrarum largitionum'' gradually lost power to the prefects as more and more in kind taxes of his department were converted to gold. By the 5th century their diocesan level staff were no longer of much importance, although they continued in their duties. However, the heads of the office continued to have power into the 430s in part because appellate jurisdiction in fiscal cases had been returned to them in 385.
The imperial estates and holdings were huge. Their ''res privata'' was directly under the management of the RP. The ''
patromonium'', or imperial inheritance were lands leased to individuals. Both were under the jurisdiction of the ''comes rerum privatarum''. In the West the rents and tax income was shared with the ''sacrae largitionum'' but not in the East. In the East the palace administration took over gradually post-450 and the RP was finally dissolved by Justinian's successors.
See also
*
Agentes in rebus
The ''agentes in rebus'' ( grc, ἀγγελιαφόροι, angeliaphóroi, messengers, or , ''magistrianoí'', ' magister's men'.) were the late Roman imperial courier service and general agents of the central government from the 4th to the 7th c ...
*
Comes
''Comes'' ( ), plural ''comites'' ( ), was a Roman title or office, and the origin Latin form of the medieval and modern title "count".
Before becoming a word for various types of title or office, the word originally meant "companion", either i ...
*
Congiarium Of Ancient Roman containers, a congiarium, or congiary (Latin, from ''congius''), was a vessel containing one congius
In Ancient Roman measurement, ''congius'' (pl. ''congii'', from Greek ''konkhion'', diminutive of ''konkhē'', ''konkhos'', "shel ...
*
Donativum
The ''donativum'' (plural ''donativa'') was a gift of money by the Roman emperors to the soldiers of the Roman legions or to the Praetorian Guard. The English translation is '' donative''.
The purpose of the ''donativa'' varied. Some were expre ...
*
Rationibus The ''a rationibus'' was the secretary of finance in the Roman Empire and in charge of the imperial treasury, the ''fiscus''. His responsibilities involved monitoring the state's revenues and expenditures and maintaining the accounts of the ''fiscus ...
*
Roman commerce
Roman commerce was a major sector of the Roman economy during the later generations of the Republic and throughout most of the imperial period. Fashions and trends in historiography and in popular culture have tended to neglect the economic basis ...
*
Roman economy
The study of the Roman economy, which is, the economies of the ancient city-state of Rome and its empire during the Republican and Imperial periods remains highly speculative. There are no surviving records of business and government accounts, suc ...
References
Further reading
*
Jean Andreau
Jean Andreau is a French historian, former student of the École normale supérieure (1960) and former member of the École française de Rome. As of 2016, he is research director at the EHESS.
He was a student of both Pierre Grimal, Julien Guey ...
: ''Banking and Business in the Roman World'', translated by Janet Lloyd (Cambridge University Press, 1999). Limited previe
online.
{{Ancient Rome topics
Economic history of Italy
Finance in Italy