HomeFeatureMoney and the pursuit of wealth: Part Nine...hazards of moneylending

Money and the pursuit of wealth: Part Nine…hazards of moneylending

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WHEN most people struggled to simply survive on a daily basis, a handful of resourceful entrepreneurs built huge fortunes.  

Mankind progresses from the Age of Agriculture, farmers and gift-giving, to the Age of merchants, explorers and bankers in the Ancient Middle East Athens and Rome —when nations and fortunes were built by discovering methods to take products from areas of abundance to places where they were scarce and expensive.

The hazards of lending money were amplified by two Greek money-lenders, named Darius and Pamphilus, who had the misfortune to lend money to a defaulter.  

They told a court, before which their claims had been set, what it was like in this business:“We whose business it is to finance shipping ventures and put our capital into the hands of other men know only too well that the borrower has the advantage of us at every point. 

He takes our good money, actual cash in hand, and leaves us with a bit of writing on a sheet of paper which costs a penny or so, his agreement is to deal honestly with us. 

As for us, we don’t merely promise to pay, but actually pay down the money to the borrower on the spot.

What, then, is the security we receive when we make a loan, and what assurance have we of getting back our money? 

We trust in you, gentlemen of the court, and in the law, which provides that all contracts entered into voluntarily shall be valid. 

Yet, in our opinion, neither law nor contract offers any security whatsoever if the borrower is not a man of upright character and is either not afraid of the courts or ashamed to violate an agreement.”

In another example of the risks of moneylending, a trapezita (Greek banker), Demon, a second cousin to Demosthenes, became the defendant in an action brought by Zenothemis. 

The latter had sailed on a trading mission to Syracuse on a ship owned and commanded by Hegestratus. 

These two were partners in a scheme to defraud not only Demon, who had loaned the money to purchase the cargo, but to other investors as well. 

When the ship arrived in Syracuse, Hegestratus and Zenothemis borrowed large sums of money, using the cargo just bought with Demon’s loan as collateral, claiming it belonged to them free and clear. 

In accordance with customary practice, the agreement was that the cargo had to reach port safely for the loans to be collectible and for their crime to be discovered. 

Once on the high seas, the two conspirators planned to sink the ship, escape in a small boat and declare to both sets of creditors that the cargo was lost and, therefore, the collateral was gone. 

They would then pocket the money obtained from the Syracusans and owe nothing to Demon. 

But when Hegestratus started cutting a hole in the ship’s hull, the noise led to his detection. 

Passengers, who would have gone down with the ship and its cargo, crowded around to see what was happening, and to escape them, Hegestratus leaped overboard, missed the boat and drowned. 

Meanwhile, the ship was leaking and had to put in for repairs. 

While there, Zenothemis attempted to change the final destination from Athens to his home city of Marseilles but failed. 

On arriving in Athens, Demon took possession of the cargo.

Zenothemis protested, outrageously claiming that the cargo was his, alleging it had been purchased by the now deceased Hegestratus from Protus, Demon’s agent, who had sailed with the ship from Athens. 

The outcome of the trial is unknown; however, ancient records of this case offers an insight into the pitfalls of business in this period and place and that greed for wealth remains eternal

One unpleasant aspect of economic life in both the ancient Near East and in the Greek world was the presence of slavery. 

Slaves were acquired in war, through purchase or birth, and through debt. 

Hammurabi’s Code demonstrates that a man could secure a loan with himself, his wife or even with his children as collateral.

By the code, such individuals had to work for the creditor for three years, but would be freed in the fourth. 

This form of contractual slavery is also found in the Bible (Exodus 21: 2-8; Deuteronomy 15: 12-18), where the contractual period is six years. 

Such debt slavery could also last for the duration of the debt or forever. 

In Greece, debt slavery ended in the 6th Century BC. 

Most slaves, however, were captured in warfare and warfare in antiquity never ceased. 

In the middle of the Second Millennium BC, Pharaoh Tuthmosis III is recorded to have enslaved 89 600 people and brought them from what is today Israel to Egypt. 

In spite of the prevalence of slaves, they did not monopolise labour in the pre-Roman era. 

In many cases, they worked alongside free individuals and often were paid for their services, although almost always at a lower rate than their free counterparts.

Slaves were often employed in hazardous endeavors as well. 

This was especially true in mining, where the dangers were great and the work grueling; free labour was reluctant to endure either. 

While the condition of slaves was not as harsh as in societies where slavery became racial in nature, these individuals were still considered property. 

They could be abused with little recourse to any authority other than the humanity of their owners, which often seems to have been in short supply.

Most slaves worked in the households of the wealthy and the upper middle-class as domestic servants.

Such was the nature of the Western pursuit of wealth down to the latter half of the 4th Century BC. 

It was in this century that an area on the fringe of the Greek world rose to prominence and briefly united all of Greece and the entire Near East under its dominion.

During most of its existence, this northern Greek land was divided; its king was only able to hold on to a small part of the territory known as Macedonia. 

Culturally, Macedonia was Greek and the people spoke a Greek dialect. 

Its origin was linked mythologically to the Greek world; and its religion was Greek. 

But politically, Macedonia was primarily a tribal society ruled by kings.

This began to change dramatically in 359 BC, when Philip II came to the throne.  

During the 24 years of his reign as King of Macedonia, in which he started with meagre resources, Philip II built his own kingdom up into the greatest power in Europe.

By 336 BC, through clever diplomacy and military success, he had united Macedonia in its entirety under his leadership and had joined the Greek city-States in a federation. 

To cement his hold on the poleis, Philip II planned an expedition against the Persian Empire. 

This was the last and greatest of the near eastern empires, stretching from the Nile and the Aegean Sea east to the Indus River.  

But Philip II never carried out his grand design. 

Shortly before his army was to march east, he was assassinated. 

Two years later, his 21-year-old son, Alexander III of Macedon (356-323 B.C), known as Alexander the Great, led his father’s forces on what perhaps is the greatest conquest in all history. 

When Alexander the Great died in 323 BC, the entire Western world had been altered for all time. 

Though political unity did not survive Alexander, the cultures of the Greeks, Egyptians, Mesopotamians, Jews, and many other peoples had been and would continue to be intertwined with breath-taking results. 

Dr Michelina Andreucci is a Zimbabwean-Italian researcher, industrial design consultant and is a published author in her field. For views and comments, email: linamanucci@gmail.com

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