Book Four - The Byzantine Achievement

Book Four. THE BYZANTINE ACHIEVEMENT AN empire that existed as a political entity for more than il eleven hundred years, whose capital was not threatened by an invader for a period of nine hundred years, whose rulers were regarded with awe from the tips of Brittany to the Punjab, whose commerce extended from the China Sea to the Atlantic, and whose money was the unquestioned standard in the camps of the Huns on the Danube and in the ports of the Arabian Sea, cannot be regarded but with wonder and admiration. /. The Fabric of Empire SUCH was the empire of Byzantium, which rose like a phoenix from the ashes of Roman civilization. During the long era of medievalism, when Europe was the camp ground of the barbarian, when it seemed that the lamp of civilization might at any moment be extinguished, it hurled back assault after assault upon its frontiers and maintained itself as the repository of ancient culture and the traditions of Greek and Roman civilization.

Such an empire must have sucked its strength from deep and spreading roots. Armies do not breed of themselves, and courts and emperors and robed ecclesiastics and stately churches and magnificent palaces and baths and far flung embassies are not supported without industry and commerce, and industry and commerce depend upon a sound and well-managed money. Among the contributory factors to the Byzantine achievement certainly the character of the money and, more particularly, the character of the monetary administration, must be given a large place. It was in the year A.D. 325 that Constantine laid the foundations of his new capital on the banks of the Bosporus—the New 46 THE BYZANTINE ACHIEVEMENT 47 Rome, the imperial city of Constantinople. With spear in hand he marked out the boundaries, and on such scale that his courtiers exclaimed in astonishment, "How long, our Lord, will you keep going?"

"I shall keep on until He who walks ahead of me will stop," replied Constantine. It was also in that year that the Emperor, with the same prescience of the future grandeur of the empire he was creating, enacted his great reform in the currency system, and thereby laid the commercial foundations upon which the political strength of the empire rested. Constantine had, indeed, recognized, long before, the importance of stable money as the basis of stable empire. Twelve years earlier, when he was but a local satrap, he had reformed the coinage in the provinces over which he exercised authority. But to examine the reconstruction of money in Byzantium requires us to refer, for a moment, to the Emperor Diocletian. Among the reforms introduced by Diocletian was his great scheme for the reorganization of the imperial administration. Two imperators, or augusti, were established, one to rule over the Asiatic portions of the Empire, the other to guard the European dominions; and the entire machinery of government was placed under imperial authority. Among the various functions absorbed under the imperial establishment was that of coining money, previously exercised, as we have seen, by a host of conflicting authorities. Henceforth, the familiar letters S. C. are no longer seen on the copper coins, and everywhere was the diademed effigy of the ruling emperor. For the first time in Roman history a universal and uniform coinage became possible.

The division of authority between two imperial households soon extended itself into a geographical and political severance of the realm. Under Constantine, the ruler of the Eastern Empire took up his permanent residence at Byzantium, which thereafter remained the capital of an empire which preserved the name and tradition of Roman civilization.

48 MONEY AND MAN //. Splendor of the East THE significant thing about the division of the Empire by Diocletian—from the standpoint of monetary economics—is that it permitted the revival of a tradition which had long been submerged. The eastern half of the Empire, embracing the Asiatic provinces, had from the time of Alexander been Greek in character, culture, and to a large degree, language. After the split of the imperial administration, Greek influence again became paramount in the East. Greek became the language of the court —the imperator or divus becomes basileus—and Greek became the renascent culture. With the dominance of Greek influence in the imperial administration, we find returning to authority, after a submergence of 500 years under Roman domination, the sound philosophy of commerce and money, which we have traced in a preceding chapter. This Greek tradition of sound money, while it had been submerged, had not been extinguished.

We have already noted how, during the era of Gallienus, the bronze coins of the East were so superior to anything of Roman production that, though they were coined only for local use, they were circulated as far as the Rhine and the Danube, where, apparently in lieu of a better coin, they were utilized for troop payments. Greek mints had still been operating within the preceding fifty years, and the last, the Alexandrian mint, had only been closed by Diocletian. As Greek commercial tradition revived we find a cessation of the continual debasement of the coinage that had marked the history of Rome. Constantine had reformed the coinage by the establishment of a new gold piece called the solidus, or nomisma, and a new silver piece called the miliarense, and by continuing the coinage of the copper jollis originated by Diocletian. This system, in its general outlines, was not tampered with by succeeding emperors. Gradually it became fixed upon the gold solidus, weighing approximately 65 grains,* which was * It is significant of the Greek tradition that the weight of the new THE BYZANTINE ACHIEVEMENT 49 minted at this standard for eight hundred years; and under the name bezant, it circulated from Ceylon to the Baltic.

It was a more honest coin, and a more honest commercial ethic than the world had witnessed for a long time, that we find in Byzantium. One important influence of the return to honest coinage was the reappearance of the precious metals in circulation. In the latter years of the Roman Empire, gold and silver had, as we have noted, so far disappeared from circulation that practically all payments were made in copper. Gold and silver now came out of hoarding and returned to the channels of trade. Certain it is that gold was never scarce in Constantinople, despite the fact that large amounts of bezants were shipped abroad and used as media of payment throughout Europe. The amount of specie in existence during the ascendancy of the Empire (A.D. 716-817) was tremendous—so great indeed that no degree of extortion could have collected these sums unless the people had been wealthy and great commercial activity existed. We have some figures on the treasury assets. They amounted, during the regency of Theodora, to 1,099 centenaries of gold (a centenary was one hundred libra weight of bullion), 3,000 centenaries of silver, and in addition plate and gold embroidery containing 200 centenaries of gold.1 If the Roman libra may be taken as 5,040 grains, and the silver valued at a ratio of 14 to 1, the whole was equivalent to nearly 1,589,000 troy ounces.

Some light on the actual size of this hoard is afforded by comparison with other famous treasures of history. The famous ransom—the roomful of gold—paid to Pizarro by Atahualpa, the last of the Incas, is estimated to have been no more than 185,000 ounces of gold, and the total gold extracted by the Spaniards from Peru, not more than 231,000 ounces. Lexis estimates, basing himself in the main on Soetbeer, that between gold bezant corresponded very closely with that of the Attic silver drachma, the great unit of account in the Hellenic world.

50 MONEY AND MAN 1522 and 1547 the gold produced and plundered in Mexico amounted at the most to 922,000 ounces.2 The total amount of gold collected and delivered by France to Germany in payment of the flve-billion-franc war indemnity exacted by the Treaty of Frankfort of 1871 did not exceed 2,600,000 ounces.3 The famous German War Chest, established in the Harz mountains, contained only 1,383,000 ounces of gold at the outbreak of World War I,4 and the gold reserves of the Bank of England in August, 1914, amounted to less than 10,000,000. Not only was money in abundance at Constantinople, center of a far flung political and commercial hegemony, but the bezants struck with the imperial seal became the accepted medium of exchange throughout the civilized world. Indubitable evidence of the regard for Byzantine coinage are the nomisma with names of the Byzantine emperors of the fourth, fifth, and sixth centuries which have been found in southern and western India, and in the Mongol hoards which were uncovered during the Indian Mutiny of 1856.5 The bulk of these coins, incidentally, were not carried to India by Byzantine merchants, but by Persians and Abyssinians, who evidently regarded them as more generally acceptable than the productions of their own mints.

And in Europe the bezants served in all important payments where gold passed hands. Either because of respect for the authority of the Eastern Empire, as Del Mar believes, or because of the prestige of the Byzantine gold and the profusion with which it was minted, the European princes and feudal lords never minted gold on their own account. In England, for instance, we learn from the exchequer rolls of the Middle Ages, payments in bezants were the ordinary thing where gold was used.6 Of the prestige of the Byzantine coinage, we have the testimony of Cosmas Indicopleustes, an Egyptian merchant of the sixth century, who traveled widely, perhaps as far as Ceylon, THE BYZANTINE ACHIEVEMENT 51 and whose work Christian Topography, is a leading source material for historians. He writes: "The Roman Empire hath many privileges in that it is the first of empires, and that it first believed in Christ, and that it doth service to every branch of the Christian economy; and there is yet another sign of the power which God hath accorded to the Romans, to wit, that it is with their gold piece that all nations do their trade; it is received everywhere from one end of the earth to the other; it is admired by all men and every kingdom, for no other kingdom hath its like."7 And Cosmas tells an interesting story in illustration of the profound respect commanded in India by Byzantine money: "The King of Ceylon, having admitted a Byzantine merchant, Sopatrus, and some Persians to an audience and having received their salutations, requested them to be seated. He then asked them: 'In what state are your countries, and how go things with them?' To this they replied, 'They go well.' Afterward, as the conversation proceeded, the King enquired: 'Which of your kings is the greater and the more powerful?' The elderly Persian, snatching the word, answered, 'Our king is both more powerful and the greater and the richer, and indeed is King of Kings, and whatsoever he desires, that he is able to do.' Sopatrus, on the other hand, sat mute. So the King asked, 'Have you, Roman, nothing to say?' 'What have I to say,' he rejoined, 'when he there has said such things? But if you wish to learn the truth you have the two kings here present. Examine each and you will see which of them is the grander and the more powerful.' The King, upon hearing this, was amazed at his words and asked, 'How say you that I have both kings here?' 'You have,' replied Sopatrus, 'the money of both—the nomisma of one, and the drachma, that is, the miliarense of the other. Examine the image of each and you will see the truth ' After having examined them, the King said that the Romans were certainly a splendid, powerful, and sagacious people. So he ordered great honor to be paid to Sopatrus, causing him to be mounted on an elephant and conducted around the city with drums beating and high state."8 52 MONEY AND MAN A sound coinage was of course but one aspect of a commercial policy devoted to the encouragement of industry, the investment of capital, and the organization of enterprise. Banking was brought under a more wholesome ethic. No longer do we read of unregulated banking and the frauds of the money interest. Exchange was brought under imperial monopoly, and the money changers, like many of the commercial fraternity of the Empire, were organized strictly into guilds under imperial auspices, with fees limited and the exchange rates fixed by law.

The Book of the Prefect contains a series of provisions concerning bankers and money changers in the capital of the Byzantine Empire. In order to be admitted into the society of bankers, the testimony of honorable men had to be forthcoming to answer for the candidate that he would do nothing contrary to the rules—that is, that he would not file or clip either the solidi or the miliarensia, that he would not issue false coin, and that if any public service prevented him from carrying on his business he should not install any of his slaves in his place as director of the bank. Infringement of these rules was severely punished: the delinquent's hand was cut off. The money changers were bound to denounce to the prefect the unlicensed changers, saccularii, who prowled about the highways with their money bags; they might not discount anything on the gold if it was of good alloy and stamped with the authentic imperial effigy; they should take it for what it was worth if it was not good metal; the penalty was chastisement with the whip, cropping off the hair and beard, and confiscation. They were compelled to denounce false money and the receivers of it.9 Debt apparently had no large place in Byzantine economy.

Under the influence of Aristotelian concepts of money, as handed down in Greek philosophy and passed on in the structure of Christian economic teaching, it is likely that interest was regarded with repugnance, and that debt, although it existed, was an inconsequential factor in commercial transactions. Among other important contributions of Byzantine administrative policy to the commercial weal of the Empire was the guild system, in which production, prices, and methods of work were meticulously regulated and which provided a pattern for THE BYZANTINE ACHIEVEMENT 53 the later guilds of Europe. The Rural Code, which broke entirely with Roman law tradition, accorded the peasant and small landowner privileges which this class of society had never before enjoyed.* Likewise, the Nautical Code, or Rhodian Sea-Law, attributed to the time of Leo III (A.D. 717-741), but developed sometime between A.D. 600 and A.D. 800, was of great benefit to navigation and became the model for the navigation codes of Europe.

The dominance of Constantinople lasted for the better part of 800 years—a period longer than the historical era of Rome. Toward the end, however, evidences of decay became manifest. And we need not look into the chronicles of military campaigns for the evidence. The coins that have been handed down tell the story. The first signs appear in the reign of Alexius Comnenus (A.D. 1081-1118). Alexius was unpopular, and his unpopularity is attributed to the frauds he committed in adulterating the coinage. Alexius paid the public debts in his own debased coinage, but he enforced the payment of taxes, so long as it was possible, in the pure coinage of the earlier emperors. The ruin produced by these measures at last compelled him to adopt new regulations for collecting the land tax; and the credit of his coinage became so bad throughout all the countries in Europe in which Byzantine gold had previously circulated that the Emperor was compelled, in all public acts with foreigners, to stipulate that he would make all his payments in the gold coin of his predecessors.

The decline of Byzantine commerce in the Mediterranean is attributed by George Finlay to these measures of Alexius, which ruined the credit of the Greek merchants and transferred a large * The Rural Code has received its greatest attention from Russian scholars (much of whose work has not been translated into English), partly because of the mooted question of Slavonic influence in Byzantine institutions, partly because of the influence of Byzantine communal land theories in later Russian rural economy and political policy. See A. A. Vasilev, History of the Byzantine Empire (University of Wisconsin Studies, Madison, 1928).

54 MONEY AND MAN quantity of capital from the cities of the Empire to the republics of Italy.* In A.D. 1204 the Venetians, who had been growing in importance and who had a grudge to even with the Emperor, succeeded in diverting the Fourth Crusade into an attack upon Constantinople. The City and the Empire fell; and though it was later reconstituted and continued to exist as an independent power for another 250 years (until the final sack by the Turks in 1453), it never recovered its commercial importance. Byzantium ceased, from 1204, to be a world center of civilization. Such was the strength of Byzantine finance that in a period of eight hundred years, from Diocletian to Alexius Comnenus, the government never found itself compelled to declare bankruptcy or to stop payments. "Neither the ancient nor the modern world," says Heinrich Gelzer, "can offer a complete parallel to this phenomenon. This prodigious stability of the Roman financial policy secured the bezant its universal currency. On account of its full weight it passed with all the neighboring nations as a valid medium of exchange. By her money Byzantium controlled both the civilized and the barbarian worlds."10 «§ §»> The Byzantine Empire is an example of sound commercialism and testimony that money, if handled properly and with due restraint, can be made to serve the highest purposes of man. In its commercial institutions and commercial philosophy lay a great part of the secret of its long continued vitality. And a principal feature of that commercial philosophy was the tradition of sanctity of the coinage—the idea that it is the duty of the state to avoid tampering with the money mechanism for personal or political objects, and that the duty of commercialists is to use money with restraint, as a means and not as an end.

* George Finlay, op. cit., Ill, 63. In the treaty with Bohemund for the evacuation of Byzantine territory, signed at Deavolis in 1108, Alexius was obliged to stipulate that his payments should be made in bezants of the coinage of Michael (Anna Comnenus 328).