The Truths of Banking and Money in The Roman EmpireBank.pro Magazine Editor
Banking and money are not new terms. They have been around for a long time in human history. Back in the days, ancient empires had trade, wealth distribution, and tax collection, all that needed a functional financial system like a bank. A flashback to the classics takes us to the Roman Empire. How did they do their banking back then? The Roman law must have had a strong influence. If you have ever wondered what truths there are regarding the system of banking and money in the Roman Empire, let’s find out.
The Birth of Banking
Well, in the olden days, empires engaged in foreign trade for their goods and services. What does this mean? A payment system was necessary, and convenience was a need. This would mean ease in conducting the exchange, hence more efficient trading. Coins came in handy. They were available in small and big sizes and were different across cities.
One of the earliest empires to participate in banking is Ancient Rome, which grew out of present-day Italy. It dominated most parts of Europe. With all the coins and metals used in exchange, the Roman empire needed a safe storage place. The idea wasn’t hacked yet, because the wealthy Romans didn’t have any steel safes. The only storage for their coins was in the basements of the temples.
Why the temples though? Remember, these places were consecrated to their Gods. Also, they had priests, devout workers, and armed soldiers who regularly patrolled the place. The temple was heavily guarded and the priests were seen as honest individuals. Therefore, there was some degree of safety for their coins.
The good thing with depositing money in the temples is that it attracted no interest. There was also good record keeping by the priests. Notably, the wealthy stored money in different temples. This was for practicality and security. Imagine if one temple was used and it caught fire or got ransacked and destroyed! Some of the temples used include the Temple of Castor and Pollux, the Temple Saturn, and the Juno Moneta Temple.
According to the documented historical records, the Roman temples did not only act as a safe storage place for the coins of the wealthy merchants but also loaned money to those in need. However, they charged an interest. Therefore, the temple performed the major duties of the current-day banks; safely keeping and lending money while charging interest on the same. The temples were in charge of large loans while the wealthy merchants loaned money to those in need of smaller amounts. Therefore, the rich money lenders also got profits.
Additionally, there were money changers. This is because different cities used different coins. The expansion of trade and commerce led to the high demand for exchanging foreign currency for Roman currency.
So, banking in ancient Rome had the temples as the main financial centres. The parties who facilitated banking were priests and wealthy Roman merchants. Moreover, it served three main purposes at the time; money exchange, money lending, and facilitating financial transactions.
Banking in the Roman Empire
Did the wealthy Roman merchants keep storing their money in the temples? Remember, there was no great formality in this. What’s more, their rivals were aware of this. It is no wonder the temples were the major targets in case of war. Nonetheless, the financial system was gradually increasing, and the development of large banks was necessary throughout the Empire. How long could they keep storing the money in the temple basements? As you may have guessed, there were changes.
One of the main features of this empire is the skills and expertise of the people. They were experts in building and administration. Therefore, having a formal building set for banking would not be that big of a deal. They had distinct buildings specifically for banking. The era of banking with the temples was over. Thankfully, a more legitimate way of commerce was birthed.
However, did the wealthy money lenders keep lending to those in need? of course, they did. The only difference this time was that they used an institutional bank. They still had their profits, but the commerce was more formal and legitimate, unlike in the past.
Lending to individuals means that after some time they have to get it back to the creditor. What happened to the instances when the debtor could not pay back the money he owed the lender? Would their descendants have to struggle to pay off the debts of their forefathers? Not at all. During the reign of Julius Caesar, banks could take the debtors’ lands when they were unable to pay back the loans.
Money Used in the Roman Empire
As earlier mentioned, Rome had control over most parts of Europe. Interestingly, most of the coins it used were introduced after a victory in war. For example, the very first coin used in the Roman Empire was bronze, and it was introduced in 289BC. This was after Rome attained success after the war with Samnium. The bronze was heavy. Its weight was equivalent to the Roman pound.
Also, in 269BC, there was the introduction of the first silver coin. This was after the victory in the war against Tarentum and Pyrrhus. At the time when the Roman empire was in control over most parts of Italy, conflicts emerged, and they gained more wealth. Notably, coin minting was majorly done in Rome. Also, they rarely used gold coins until Caesar came into power.
The Rise and Fall of the Roman Empire
The Ancient Roman Empire enjoyed trade with other merchants. They had a working financial system that facilitated banking. It was later improved and regulated by the laws. Also, it had victory in several wars, which made it acquire new coins. The Roman Empire was one of the successful empires in money and banking. However, the history of banking and money in the Roman empire is not all glorious. Unfortunately, the empire crumbled and came to a fall later which also affected the famous banking system.