Money, Prices, and Banking

Sources

From Barter System to Market. Before the rise of cities, individual households in Mesopotamia produced most of what they consumed. Within small villages and settlements, one household could trade or barter its goods with other households. In a simple barter transaction, participants exchange a product or service for a different product or service on terms both parties consider fair and equitable; that is, the good or service received is deemed worth the good or service given up. Over time, as individuals and individual households began increasingly to specialize in one of an ever-wider variety of goods and services, the network of exchange grew more complex. The brewer, for example, might seek to exchange his beer with a potter for storage jars; the potter, in turn, might seek to trade his wares for the services of the barber; the barber might seek to exchange a haircut and a shave for new blades from the metalsmith; and the metalsmith with a surplus of sickle blades might seek to obtain fine beer from the brewer for his daughter’s wedding banquet. To facilitate such complex exchanges, markets developed, allowing groups of producers and consumers to meet simultaneously. Established markets stimulated further specialization and also attracted producers and consumers from other regions.

Weights and Measures. As markets evolved, systems of weights and measures were developed, enabling producers and consumers to set values for each other’s products. In Mesopotamia, weights were typically fashioned out of stone in the shape of animals. A popular shape was a duck with its head reversed and resting on its back. After conquering and uniting southern Mesopotamia, king Sargon of Akkad (circa 2334 b.c.e. - circa 2279 b.c.e.) standardized the system of weights and measures throughout his new dominion. He and subsequent kings boasted of their efforts at standardization as a mark of the order and economic advancement that they had brought to the people under their rule. Ur-Namma (circa 2112 - circa 3095 b.c.e.), founder of the Ur III Dynasty, mentioned weights and measures in the prologue to his laws:

I fashioned the copper bariga-mtzsuit and standardized it at 60 silas (liters). I fashioned the copper seah-measure and standardized it at 10 silas. … I standardized (all) the stone weights from the pure (?) 1 sheqel (weight) to the 1 mina (60 sheqel weight). I fashioned the bronze 1-sila measure and standardized it at 1 mina. (Roth)

King Shulgi (circa 2094 - circa 2047 b.c.e.), son and successor of Ur-Namma, reformed accounting procedures and the calendar, tools that played a role in the redistributive economy he established throughout his realm. Ensuring fair trade was a vital obligation of a king, as demonstrated by the Laws of Hammurabi (circa 1750 b.c.e.), in which a large number of measures are dedicated to regulating business transactions. One describes the penalty for a lender who used two different systems of weights and measures in order to cheat a borrower:

If a merchant gives grain or silver as an interest-bearing loan, and when he gives it as an interest-bearing loan he gives the silver according to the small weight or the grain according to the small measure, but when he receives payment he receives the silver according to the large weight or the grain according to the large measure, that merchant shall forfeit all that he gave (as the loan). (LH gap § x; Roth)

Prices. The term price is defined as the quantity of money or goods asked for or given in exchange for something else. In general, price is an index of demand. Rising prices indicate increasing demand; likewise, falling prices indicate decreasing demand. Prices far higher than usual for basic foodstuffs, such as bread, may be an indicator of want or famine in the land. Prices can indicate the prosperity—or poverty—of the land, and stable prices are indicators of the stability of society and the economy. They are of concern, therefore, to rulers as well as their subjects, and prices of common goods are found in royal inscriptions as concrete illustrations of the health of the economy and the well-being of the people during a king’s reign. The reforms of the Early Dynastic III period ruler of Lagash, Uru’inimgina (circa 2380 b.c.e.), list the prevailing prices of his day, as do the laws of the city of Eshnunna (circa 1770 b.c.e.), which open with a statement of what can be purchased for one sheqel of silver and for a measure of grain; this information is followed by the cost to hire certain services. The text also specifies interest rates for loans of silver and of grain. In hard times, such as during drought or a siege, highly inflated prices (expressed as the low purchasing power of the sheqel) appear in the textual record as indicators of die extent of the economic want die land is suffering. In the aftermath of the destruction of Akkad (circa 2200 b.c.e.), the narrator of The Cursing of Agade lamented:

In those days, oil for one (silver) sheqel was only half a liter, grain for one sheqel was only half a liter, wool for one sheqel was only one mina, fish for one sheqel filled only a one ban measure—these sold at such prices in the markets of the cities! (Black et al.)

On the other hand, in the coronation prayer of the Assyrian king Ashurbanipal (668 - circa 627 b.c.e.), blessings for the new king and his reign included:

With one sheqel of silver, may the resident of Ashur obtain 30 kur of grain!
With one sheqel of silver, may the resident of Ashur obtain 3 seahs of oil!
With one sheqel of silver, may the resident of Ashur obtain 30 minas of wool! (translation by the author, after Livingstone’s edition)

During the period from the mid-seventh through the mid-first centuries b.c.e., texts now known as astronomical diaries—primarily records of the day-by-day observations of the positions of the sun, moon, and planets—also included data on the purchasing power of the sheqel for six basic commodities: barley, dates, mustard, cress, sesame, and wool. Typically, the diaries—whose entries can be dated precisely to the year, month, and day—list the commodity prices at the end of each month. Some, however, give the prices for the beginning, middle, and end of each month, while others chart virtually day-by-day fluctuations throughout the month.

THE LAWS OF ESHNUNNA

The following passages are excerpted from the Laws of Eshnunna, a kingdom in northern Babylonia contemporary with the early part of the First Dynasty in Babylon (circa 1894 - circa 1595 B.C.K.) and conquered by Hammurabi as he expanded his kingdom to the north. The laws are preserved on three tablets that are later copies of the original, which—like other law collections—may have been inscribed on a stone stele for public display. The name of the ruler who wrote these laws, composed circa 1770 b.c.e., is not preserved. The provisions address a wide variety of situations (such as theft, fugitive slaves, marital rights, and vicious dogs) as well as economic and financial matters. Whatever king of Eshnunna wrote the laws, it is clear that his conception of justice for his people included fair treatment in economic matters.

300 silas (liters) of barley (can be purchased) for 1 sheqel of silver. 3 silas of fine oil—for 1 sheqel of silver. 12 silas of oil—for 1 sheqel of silver. 15 silas of lard—for 1 sheqel of silver. 40 silas of bitumen—for 1 sheqel of silver. 360 sheqels of silver. of wool—for 1 sheqel of silver. 600 sheqels of sat—for 1 sheqel of silver. 180 sheqels of copper—for 1 shcqcl of silver. 120 sheqels of wrought copper—for 1 shcqcl of silver. (§1)

1 sila of oil. . . —30 silas is its grain equivalent. 1 si la of lard … —25 silas is its grain equivalent. 1 sila of bitumen … —8 silas is its grain equivalent. (§2) A wagon together with its oxen and its driver—100 silas of grain is its hire; if paid in silver, 1/3 shekel is its hire; he shall drive it for the entire day. (§3) The hire of a boat is, per 300-sila capacity, 2 silas; furthermore, [x] silas is the hire of the boatman; he shall drive it for the entire day, (§3)

20 silas of grain is the hire of a harvester; if paid in silver,

12 barleycorns (1/15 sheqel) is his hire. (§7)

15 silas is the hire of a sickle, and the broken blade (?) shall revert to its owner. (§9A)

10 silas of grain is the hire of a donkey; and 10 silas of grain is the hire of its driver; he shall driver it for the entire day. (§10)

The hire of a laborer is 1 sheqel of silver, 60 silas of grain is his provender; he shall serve for 1 month. (§11)

Per 1 sheqel (of silver), interest accrues at the rate of 36 barleycorns (=20 percent); per 300 silas (of grain), interest accrues at the rate of 100 silas (=33 percent). (§18A)

Source: Martha T. Roth, Law Collections from Mesopotamia and Asia Minor, second edition, Society of Biblical Literature, Writings from the Ancient World Series, volume 6 (Atlanta: Scholars Press, 1995).

Money and Coinage. Grain, usually barley, seems to have been the common standard by which the values of other commodities were originally reckoned. If payments, including wages, were made in a commodity other than barley (such as oil or beer), the value of the oil or beer was calculated according to its worth in barley, which was measured by volume. Over time, silver, measured in increments of weight, came to be more widely used as the standard of value. The basic unit of barley was the seah (Sumerian: manu; Akkadian: sutu), the equivalent of approximately ten liters (about ten quarts). The basic unit of silver, the mina (Sumerian: mana; Akkadian: manu), was about 480 grams (about 17 ounces); the mina was subdivided into 60 sheqels. Large payments, as for real estate or slaves, as well as investments in business partnerships, were generally made in silver, but smaller purchases could be made in silver as well. Mesopo-tamian texts express the concept “to sell” as “to give for silver.” Whereas barley has an immediate, real value as a consumable good—to be eaten in some form or used for seed—silver does not; its worth lies in the fact that a person holding silver can use it to obtain other goods and services. In this way, silver functioned as money in ancient Mesopotamia. For this purpose, silver (and rarely gold) was fashioned into simple thin coils or rings that could be easily carried. Pieces were then clipped off the rings to measure out precise increments to be weighed on a balance. Silver served as money in Mesopotamia for at least two thousand years. Coins, the earliest of which were fashioned from electrum, first appeared circa 650 b.c.e. in Lydia in western Anatolia, apparently an innovation of the state to pay its mercenary soldiers. Coins came into popular use in Mesopotamia only after the arrival of Alexander III of Macedon in 331 b.c.e. In the Seleucid period (311-129 b.c.e.), despite the fact that coins were minted to specific values, cuneiform contracts recording large purchases, such

as houses or slaves, still required that payment made in silver coin be weighed to determine its real value.

Borrowing and Lending. Large numbers of written texts from Mesopotamia are evidence of a lively commercial scene in which individuals and institutions entered into business partnerships and borrowed from institutions or other individuals. Loans could be either interest or non-interest bearing. The standard interest rate was 33 percent for a loan of barley and 20 percent for a loan of silver. To lend capital requires the existence of a surplus, and the temple at times served as a kind of bank; in times of economic distress, texts record that temples gave non-interest-bearing loans. Merchants (Sumerian:damgar, Akkadian: tamkarum) who came to have liquid capital on hand, also appear frequently in documents as lenders. If a borrower was not able to meet his loan obligations, he might be forced to sell himself or a member of his household into service to work off the debt. Debt slaves were obliged to serve for a proscribed period of time, but could be released before their terms were up if the king declared a general cancellation of debts.

Sources

Sabina Franke, “Kings of Akkad: Sargon and Naram-Sin,” in Civilizations of the Ancient Near East, 4 volumes, edited by Jack M. Sasson (New York: Scribners, 1995), II: 831–842.

Jacob Klein, “Shulgi of Ur: King of a Neo-Sumerian Empire,” in Civitions of the Ancient Near East, II: 843–858.

Alisdair Livingstone, Court Poetry and Literary Miscellanea, State Archives of Assyria, volume 3 (Helsinki: Helsinki University Press, 1989).

J. N. Postgate, Early Mesopotamia: Society and Economy at the Dawn of History (London&New York: Routledge, 1992).

Marvin A. Powell, “A Contribution to the History of Money in Mesopotamia Prior to the Invention of Coinage,” in Festschrift Lubor Matoüs, 2 volumes, edited by Bohuslav Hruska and G. Komoróczy, Assyriologia V (Budapest: Eötvös Loránd Tudományeggyetem, 1981), II: 211–243.

Powell, “Identification and Interpretation of Long Term Price Fluctuations in Babylonia: More on the History of Money in Mesopotamia,” Altorientalische Forschung, 17 (1990): 95–118.

Martha T. Roth, Law Collections from Mesopotamia and Asia Minor, second edition, Society of Biblical Literature, Writings from the Ancient World Series, volume 6 (Atlanta: Scholars Press, 1995).

Alice Louise Slotsky, The Bourse of Babylon: Market Quotations in the Astronomical Diaries of Babylonia (Bethesda, Md.: CDL Press, 1997).