Part 2 (1/2)

The men of business may be divided into two cla.s.ses, according as they undertook work for the State or on their own account entirely. It does not follow that these two cla.s.ses were mutually exclusive; a man might very well invest his money in both kinds of undertaking, but these two kinds were totally distinct, and called by different names. A public undertaking was called _public.u.m_,[109] and the men who undertook it _publicani_; a private undertaking was _negotium_, and all private business men were known as _negotiatores_. The publicani were always organised in joint-stock companies (_societates publicanorum_); the negotiatores might be in private partners.h.i.+p with one or more partners,[110] but as a rule seem to have been single individuals. We will deal first with the publicani.

In a pa.s.sage of Livy quoted just now it is stated that at the beginning of the Hannibalic war money was advanced to the State by societates publicanorum; Livy also happens to mention that three of these competed for the privilege. Thus it is clear that the system of getting public work done by contract was in full operation before that date, together with the practice on the part of the contractors of uniting in partners.h.i.+ps to lessen the risk. System and practice are equally natural, and it needs but a little historical imagination to realise their development. As the Roman State became involved in wars leading to the conquest of Italy, and in due time to the acquisition of dominions beyond sea, armies and fleets had to be equipped and provisioned, roads had to be made, public rents to be got in, new buildings to be erected for public convenience or wors.h.i.+p, corn had to be procured for the growing population, and, above all, taxes had to be collected both in Italy and in the provinces as these were severally acquired.[111] The government had no apparatus for carrying out these undertakings itself; it had not, as we have, separate departments or bureaux with a permanent staff of officials attached to each, and even if it had been so provided, it would still have found it most convenient, as modern governments also do, to get the necessary work carried out in most cases by private contractors. Every five years the censors let the various works by auction to contracting companies, who engaged to carry them out for fixed sums, and make what profit they could out of the business (_censoria locatio_). This saved an immense amount of trouble to the senate and magistrates, who were usually busily engaged in other matters; nor was there at first any harm in the system, so long as the Romans were morally sound, and incapable of jobbing or scamping their work. The very fact that they united into companies for the purpose of undertaking these contracts shows that they were aware of the risk involved, and wished as far as possible to neutralise it; it did not mean greed for money, but rather anxiety not to lose the capital invested.

But as Rome advanced her dominion in the second century B.C., and had to see to an ever-increasing amount of public business, it was discovered that the business of contracting was one which might indeed be risky, but with skill and experience, and especially with a trifle of unscrupulousness, might be made a perfectly safe and paying investment. This was especially the case with the undertakings for raising the taxes in the newly acquired provinces as well as in Italy, more particularly in those provinces, viz. Sicily and Asia, which paid their taxes in the form of t.i.the and not in a lump sum. The collection of these revenues could be made a very paying concern seeing that it was not necessary to be too squeamish about the rights and claims of the provincials. And, indeed, by the time of the Gracchi all these joint-stock companies had become the one favourite investment in which every one who had any capital, however small, placed it without hesitation. Polybius, who was in Rome at this time for several years, and was thoroughly acquainted with Roman life, has left a valuable record in his sixth book (ch. xvii.) of the universal demand for shares in these companies; a fact which proves that they were believed to be both safe and profitable.

These societates were managed by the great men of business, as our joint-stock companies are directed by men of capital and consequence.

Polybius tells us that among those who were concerned, some took the contracts from the censors: these were called _mancipes_, because the sign of accepting the contract at the auction was to hold up the hand.[112] Others, Polybius goes on, were in a.s.sociation with these mancipes, and, as we may a.s.sume, equally responsible with them; these were the _socii_. It was of course necessary that security should be given for the fulfilment of the contract, and Polybius does not omit to mention the _praedes_ or guarantors[113]. Lastly, he says that others again gave their property on behalf of these official members of the companies, or in their name, for the public purpose in hand.

These last words admit of more than one interpretation, but as in the same pa.s.sage Polybius tells us that all who had any money put it into these concerns, we may reasonably suppose that he means to indicate the _participes_, or small holders of shares, which were called _partes_, or if very small, _particulae_[114]. The socii and participes seem to be distinguished by Cicero in his Verrine orations (ii. 1. 55), where he quotes an addition made by Verres illegally as praetor to a lex censoria: ”qui de censoribus redemerit, eum socium ne admitt.i.to neve partem dato.” If this be so, we may regard the socius as having a share both in the management and the liability, while the particeps merely put his money into the undertaking[115]. The actual management, on which Polybius is silent, was in Rome in the hands of a _magister_, changing yearly, like the magistrates of the State, and in the provinces of a _pro-magister_ answering to the pro-magistrate, with a large staff of a.s.sistants[116]. Communications between the management at home and that in the provinces were kept up by messengers (_tabellarii_), who were chiefly slaves; and it is interesting incidentally to notice that these, who are constantly mentioned in Cicero's letters, also acted as letter-carriers for private persons to whom their employers were known.

Such a business as this, involving the interests of so many citizens, must have necessitated something very like the Stock Exchange or Bourse of modern times; and in fact the basilicas and porticoes which we met with in the Forum during our walk through Rome did actually serve this purpose.[117] The reader of Cicero's letters will have noticed how often the Forum is spoken of as the centre of life at Rome--going down to the Forum was indeed the equivalent of ”going into the City,” as well as of ”going down to Westminster.” All who had investments in the societates would wish to know the latest news brought by _tabellarii_ from the provinces, e.g. of the state of the crop in Sicily or Asia, or of the disposition of some provincial governor towards the publicani of his province, or again of the approach of some enemy, such as Mithridates or Ariovistus, who by defeating a Roman army might break into Roman territory and destroy the prospects of a successful contractual enterprise. a.s.suredly Cicero's love for the Forum was not a political one only; he loved it indeed as the scene of his great triumphs as an advocate, but also no doubt because he was concerned in some of the companies which had their headquarters there. When urging the people to give Pompeius extraordinary powers to drive Mithridates out of reach of Roman Asia, where he had done incalculable damage, he dwells both with knowledge and feeling on the value of the province, not only to the State, but to innumerable private citizens who had their money invested in its revenues[118]. ”If some,” he pleads, ”lose their whole fortunes, they will drag many more down with them. Save the State from such a calamity: and believe me (though you see it well enough) that the whole system of credit and finance which is carried on here at Rome in the Forum, is inextricably bound up with the revenues of the Asiatic province. If those revenues are destroyed, our whole system of credit will come down with a crash. See that you do not hesitate for a moment to prosecute with all your energies a war by which the glory of the Roman name, the safety of our allies, our most valuable revenues, and the fortunes of innumerable citizens, will be effectually preserved.[119]”

This is a good example of the way in which political questions might be decided in the interests of capital, and it is all the more striking, because a few years earlier Sulla had done all he could to weaken the capitalists as a distinct cla.s.s. Pompeius went out with abnormal powers, and might be considered for the time as their representative; the result in this case was on the whole good, for the work he did in the East was of permanent value to the Empire. But the const.i.tution was shaken and never wholly recovered, and nothing that he was able to do could restore the unfortunate province of Asia to its former prosperity. Four years later the company which had contracted for raising the taxes in the province sought to repudiate their bargain. This was disgraceful, as Cicero himself expressly says;[120] but it is quite possible that they had great difficulty in getting the money in, and feared a dead loss,[121] owing to the impoverishment of the provincials. This matter again led to a political crisis; for the senate, urged by Cato, was disposed to refuse the concession, and the alliance between the senatorial cla.s.s and the business men (_ordinum concordia_), which it had been Cicero's particular policy to confirm, in order to ma.s.s together all men of property against the dangers of socialism and anarchy, was thereby threatened so seriously that it ceased to be a factor in politics.

These companies and their agents were indeed destined to be a thorn in Cicero's side as a provincial governor himself. When called upon to rule Cilicia in 51 B.C. he found the people quite unable to pay their taxes and driven into the hands of the middleman in order to do so;[122] his sympathies were thus divided between the unfortunate provincials, for whom he felt a genuine pity, and the interests of the company for collecting the Cilician taxes, and of those who had invested their money in its funds. In his edict, issued before his entrance into the province, he had tried to balance the conflicting interests; writing of it to Atticus, who had naturally as a capitalist been anxious to know what he was doing, he says that he is doing all he can for the publicani, coaxing them, praising them, yielding to them--but taking care that they do no mischief;[123] words which perhaps did not altogether satisfy his friend. All honest provincial governors, especially in the Eastern provinces, which had been the scene of continual wars for nearly three centuries, found themselves in the same difficulty. They were continually beset by urgent appeals on behalf of the tax-companies and their agents--appeals made without a thought of the condition of a province or its tax-paying capacity--so completely had the idea of making money taken possession of the Roman mind. Among the letters of Cicero are many such appeals, sent by himself to other provincial governors, some of them while he was himself in Cilicia. We may take two as examples, before bringing this part of our subject to a close.

The first of these letters is to P. Silius Nerva, propraetor of Bithynia, a province recently added to the Empire by Pompeius. Cicero here says that he is himself closely connected with the partners in the company for collecting the pasture-dues (scriptura) of the province, ”not only because that company as a body is my client, but also because I am very intimate with most of the individual partners.”

Can we doubt that he was himself a shareholder? He urges Nerva to do all he can for Terentius Hispo, the pro-magister of the company, and to try to secure for him the means of making all the necessary arrangements with the taxed communities--relying, we are glad to find, on the tact and kindness of the governor.[124] The second letter, to his own son-in-law, Furius Cra.s.sipes, quaestor of Bithynia, shall be quoted here in full from Mr. Shuckburgh's translation:[125]

”Though in a personal interview I recommended as earnestly as I could the publicani of Bithynia, and though I gathered that by your own inclination no less than from my recommendation, you were anxious to promote the advantage of that company in every way in your power, I have not hesitated to write you this, since those interested thought it of great importance that I should inform you what my feeling towards them was. I wish you to believe that, while I have ever had the greatest pleasure in doing all I can for the order of publicani generally, yet this particular company of Bithynia has my special good wishes. Owing to the rank and birth of its members, this company const.i.tutes a very important part of the state: for it is made up of members of the other companies: and it so happens that a very large number of its members are extremely intimate with me, and especially the man who is at present at the head of the business, P. Rupilius, its pro-magister. Such being the case, I beg you with more than common earnestness to protect Cn. Pupius, an employe of the company,[126] by every sort of kindness and liberality in your power, and to secure, as you easily may, that his services shall be as satisfactory as possible to the company, while at the same time securing and promoting the property and interests of the partners--as to which I am well aware how much power a quaestor possesses. You will be doing me in this matter a very great favour, and I can myself from personal experience pledge you my word that you will find the partners of the Bithynia company gratefully mindful of any services you can do them.”

If Cicero, the most tender-hearted of Roman public men, could urge the claims of the companies so strongly, and, as in this last letter, without any allusion to the interests of the province and its people, we may well imagine how others, less scrupulous, must have combined with the capitalists to work havoc in regions that only needed peace and mild government to recover from centuries of misery. Such a letter is the best comment we can have on the pernicious system of raising taxes by contract--a system which was to be modified, regulated, and eventually reduced to harmless dimensions under the benevolent and scientific government of the early Empire.

We must now turn to the other department of the activity of the men of business, that of banking and money-lending (_negotiatores_).

On the north or sunny side of the Forum we noticed in our walk round the city the shops of the bankers (_tabernae argentariae_).

The _argentarii_ were originally, as their name suggests, only money-changers, a cla.s.s of small business men that arose in response to a need felt as soon as increasing commerce and extended empire brought foreign coin in large quant.i.ties to Rome. The Italian communities outside the Roman State issued their own coinage until they were admitted to the civitas after the Social War,--a fact which alone is sufficient to show the need of men who made it their business to know the current value of various coins in Roman money; and as Rome became involved in the affairs of the East, there were always circulating in the city the tetradrachms of Antioch and Alexandria, the Rhodian drachmas, and the cistophori of the kings of Pergamus, afterwards coined in the province of Asia.[127] No doubt the money-changing business was a profitable one, and itself led to the formation of capital which could be used in taking deposits and making advances; and, as Professor Purser puts it,[128] the mere possession of a quant.i.ty of coin for purposes of change would be likely to develop spontaneously the profession of banking. In the same way the _nummularii_, or a.s.sayers of the coin, having a ma.s.s of it in their hands, would tend to develop a private business as well as their official public one. All these, argentarii or nummularii, might be called _foeneratores_, from the interest (_foenus_) which they charged in their transactions. The profession was a respectable one, for honesty and exactness in accounts were absolutely necessary to success in it.[129] If the reader will turn to Cicero's speech in defence of Caecina (6. 16), he will find these accounts appealed to, though apparently not actually produced in court; but in the _Noctes Atticae_ of Aulus Gellius (xiv. 2) a judge who is describing a civil case which came before him, mentions, among the doc.u.ments produced, _mensae rationes_, i.e. the accounts kept by the banker.

Your argentarius seems to have been ready to undertake for you almost all that a modern banker will do for his customer. He would take deposits of money, either for the depositor's use or to bear interest, and would make payments on his behalf on receipt of a written order, answering to our cheque;[130] this was a practice probably introduced from Greece, for in the Eastern Mediterranean the whole business of credit and exchange had long been reduced to a system. Again, if you wished to be supplied with money during a journey, or to pay a sum to any one at a distance, e.g. in Greece or Asia, your argentarius would arrange it for you by giving you letters of credit or bills of exchange on a banker at such towns as you might mention, and so save you the trouble of carrying a heavy weight of coin with you. When, Cicero sent his son to the University of Athens, he wished to give him a generous allowance,--too generous, as we should think, for it amounted to about 640 a year,--and he asked Atticus whether it could be managed for him by _permutatio_, i.e. exchange, and received an affirmative answer[131]. So too when his beloved freedman secretary Tiro fell ill of fever at Patrae, Cicero finds it easy to get a local banker there to advance him all the money he needed, and to pay the doctor, engaging himself to repay the money to any agent whom the banker might name[132].

Your argentarius would also attend for you, or appoint an agent to attend, at any public auction in which you were interested as seller or purchaser, and would pay or receive the money for you,--a practice which must have greatly helped him in getting to know the current value of all kinds of property, and indeed in learning to understand human nature on its business side. In the pa.s.sage from the _pro Caecina_ quoted just now, a lady, Caesennia, wished to buy an estate; she employs an agent, Aebutius, no doubt recommended by her banker, and to him the estate is knocked down. He undertakes that the argentarius of the vendor, who is present at the auction, shall be paid the value, and this is ultimately done by Caesennia, and the sum entered in the banker's books (tabulae).

But perhaps the most important part of the business was the finding money for those who were in want of it, i.e. making advances on interest. The poor man who was in need of ready money could get it from the argentarius in coin if he had any security to offer, and, as we saw in the last chapter, might get entangled more and more hopelessly in the nets of the money-lender. Whether the same argentarius did this small business and also the work of supplying the rich man with credit, we do not know; it may have been the case that the great money-lenders like Atticus themselves employed argentarii, and so kept them going. That Atticus would undertake, anyhow, for a friend like Cicero, any amount of money-finding, we know well from many letters of Cicero, written when he was anxious to buy a piece of land at any cost on which to erect a shrine to his beloved daughter[133]; and we may be pretty sure that Atticus could not have done all that Cicero importunately pressed upon him if he had not had a number of useful professional agents at command. From these same letters we also learn that finding money by no means necessarily meant finding coin; in a society where every one was lending or borrowing, and probably doing both at the same time, what actually pa.s.sed was chiefly securities, mortgages, debts, and so on. If you wanted to hand over a hundred thousand or so to a creditor, what your agent had as often as not to do was to persuade that creditor to accept as payment the debts owing to yourself from others, i.e. you would hand over to him, if he would accept them, the bonds or other securities given you by your own debtors.[134]

It is plain then that the money-lenders had an enormous business, even in Rome alone, and risky as it undoubtedly was, it must often have been a profitable one. And it was not only at Rome that men were borrowing and lending, but over the whole Empire. For reasons which it would need an economic treatise to explain, private men, cities, and even kings were in want of money; it was needed to meet the increased cost of living and the constantly increasing standard of living among the educated;[135] it was needed by the cities of Greece and the East to repair the damages done in the wars of the last three hundred years; it was needed by the poorer provincials to pay the taxes for which neither the publicani nor the Roman government could afford to wait; and it was needed by the kings who had come within the dismal shadow of the Roman Empire, in order to carry on their own government, or to satisfy the demands of the neighbouring provincial governor, or to bribe the ruling men at Rome to get some decree pa.s.sed in their favour. Cicero, at the end of his life, looking back to his own consuls.h.i.+p in 63, says that at no time in his recollection was the whole world in such a condition of indebtedness,[136] and in a famous pa.s.sage in his second Catilinarian oration he has drawn a picture of the various cla.s.ses of debtors in Rome and Italy at that time (_Cat._ ii. -- 18 foll.). He tells us of those who have wealth and yet will not pay their debts; of those who are in debt and look to a revolution to absolve them; of the veterans of the Sullan army, settled in colonies such as Faesulae, who had rushed into debt in order to live luxurious lives; of old debtors of the city, getting deeper and deeper into the quagmire, who joined the conspiracy as a last desperate venture. There was in fact in that famous year a real social fermentation going on, caused by economic disturbance of the most serious kind; the germs of the disease can be traced back to the Hannibalic war and its effects on Italy, but all the symptoms had been continually exacerbated by the negligence and ignorance of the government, and brought to a head by the Social and Civil Wars in 90-82 B.C. In 63 the State escaped an economic catastrophe through the vigilance of Cicero and the alliance of the respectable cla.s.ses under his leaders.h.i.+p. In 49, and again in 48, it escaped a similar disaster through the good sense of Caesar and his agents, who succeeded in steering between Scylla and Charybdis by saving the debtors without ruining the lenders.[137]

Wonderful figures are given by later writers, such as Plutarch, of the debts and loans of the great men of this time, and they may stand as giving us a general impression of private financial recklessness. But the only authentic information that has come down to us is what Cicero drops from time to time in his correspondence about his own affairs,[138] and even this needs much explanation which we are unable to apply to it. What is certain is that Cicero never had more than a very moderate income on which he could depend, and that at times he was hard up for money, especially of course after his exile and the confiscation of his property; and that on the other hand he never had any difficulty in getting the sums he needed, and never shows the smallest real anxiety about his finances. His profession as a barrister only brought him a return indirectly in the form of an occasional legacy or gift, since fees were forbidden by a lex Cincia; his books could hardly have paid him, at least in the form of money; his inherited property was small, and his Italian villas were not profitable farms, nor was it the practice to let such country houses, as we do now, when not occupying them; he declined a provincial government, the usual source of wealth, and when at last compelled to undertake one, only realised what was then a paltry sum,--some 17,500, all of which, while in deposit at Ephesus, was seized by the Pompeians in the Civil War.[139] Yet even early in life he could afford the necessary expenses for election to successive magistracies, and could live in the style demanded of an important public man.

Immediately after his consuls.h.i.+p he paid 28,000 for Cra.s.sus' house on the Palatine, and it is here that we first discover how he managed such financial operations. Here are his own words in a letter to a friend of December 62 B.C.:[140] ”I have bought the house for 3,500 sestertia ... so you may now look on me as so deeply in debt as to be eager to join a conspiracy if any one would admit me! ... Money is plentiful at 6 per cent, and the success of my measures (in the consuls.h.i.+p) has caused me to be regarded as a good security.”

The simple fact was that Cicero was always regarded as a safe man to lend money to, by the business men and the great capitalists; partly because he was an honest man,--a _vir bonus_ who would never dream of repudiation or bankruptcy; partly because he knew every one, and had a hundred wealthy friends besides the lender of the moment and among them, most faithful of all, the prudent and indefatigable Atticus.

Undoubtedly then it was by borrowing, and regularly paying interest on the loans, that he raised money whenever he wanted it. He may have occasionally made money in the companies of tax-collectors; we have seen that he probably had shares in some of their ventures. But there is no clear evidence in his letters of this source of wealth,[141] and there is abundant evidence of the borrowing. After his return from exile, though the senate had given him somewhat meagre compensation for the loss of his property, he began at once to borrow and to build: ”I am building in three places,” he writes to his brother,[142] ”and am patching up my other houses. I live somewhat more lavishly than I used to do; I am obliged to do so.” Here again we know from whom he borrowed,--it was this same brother, who of course had no more certain income than his own, probably less. But he had been governor of Asia for three years (61-58 B.C.), and must have realised large sums even in that exhausted province; and at this moment he was legatus to Pompeius as special commissioner for organising the supply of corn, and thus was in immediate contact with one of the greatest millionaires of the day. In order to repay his brother all Marcus had to do was to borrow from other friends. ”In regard to money I am crippled. But the liberality of my brother I have repaid, in spite of his protests, by the aid of my friends, that I might not be drained quite dry myself” (_ad Att._ iv. 3). Two years later an unwary reader might feel some astonishment at finding that Quintus himself was now deep in debt;[143] but as he continues to read the correspondence his astonishment will vanish. With the prospect before him of a prolonged stay in Gaul with Caesar, Quintus might doubtless have borrowed to any extent; and in fact with Caesar's help--the proceeds of the Gallic wars--both brothers found themselves in opulence. The Civil War, and the repayment of his debts to Caesar, nearly ruined Marcus towards the end of his life, but nothing prevented his contriving to find money for any object on which he had set his heart; when in his grief for the loss of his daughter he wishes to buy suburban gardens where a shrine to her memory may (strange to say) attract public notice, he tells Atticus to buy what is necessary _at any cost_. ”Manage the business your own way; do not consider what my purse demands--about that I care nothing--but what I _want_.”[144]

Such being the financial method of Cicero and his brother, we cannot be surprised to find that the younger generation of the family followed faithfully in the footsteps of their elders. We have seen that the young Marcus had a large allowance at Athens and on the whole he seems to have kept fairly well within it, in spite of some trouble; but his cousin the younger Quintus, coming to see his uncle in December 45, showed him a gloomy countenance, and on being asked the meaning of it, said that he was going with Caesar to the Parthian war in order to avoid his creditors, and presumably to make money to pay them with.[145] He had not even enough money for the journey out. His uncle did not offer to give him any, but he does not seem to have thought very seriously of the young man's embarra.s.sments.

One more example of the financial dealings of the business men of this extraordinary age, and we will bring this chapter to an end. It is a story which has luckily been preserved in Cicero's speech in defence of a certain Rabirius Postumus in the year 54, who was accused under Caesar's law de pecuniis repetundis (extortion in the provinces). It is a remarkable revelation of all the most striking methods of making and using money in the last years of the Republic.

The father of this Rabirius, says Cicero, had been a distinguished member of the equestrian order, and ”fortissimus et maximus publica.n.u.s”; not greedy of money, but most liberal to his friends--in other words, he was not a miser, for that character was rare in this age, but lent his money freely in order to acquire influence and consideration. The son took up the same line of business, and engaged in a wide sphere of financial operations. He dealt largely in the stock of the tax-companies; he lent money to cities in several provinces; he lent money to Ptolemy Auletes, King of Egypt, both before he was expelled from his kingdom by sedition, and afterwards when he was in Rome in 59 and 58, intriguing to induce the senate to have him restored. Rabirius never doubted that he would be so restored, and seems to have failed to see the probability of such a policy being contested or quarrelled about, as actually happened in the winter of 57-56. He lent, and persuaded his friends to lend:[146]

he represented the king's cause as a good investment; and then, like the investing agent of to-day who slips so easily from carelessness into crime, he had to go on lending more and more, because he feared that if he stopped the king might turn against him.