There was no public debt in Grecian-Roman antiquity. This absence is peculiar to the period, unlike Italian cities of the late middle ages and modern times, and modern states. Some Greek cities certainly did borrow publicly, |1| especially in the Hellenistic period, but such loans were always occasional and they did not constitute a public debt. As for Rome, its position on public borrowing was absolutely radical: it was to be avoided as much as possible, and the other cities of the empire were also, as much as possible, impeded from borrowing. This policy was perpetuated by the Roman emperor Augustus and by his successors |2|. Only during the particularly ferocious ’Punic wars (against Carthage)’ during the third century BC did Rome borrow money. Even so, more or less professional financiers did not participate, the borrowing came from Roman citizens by way of an obligatory, but refundable, levy.
So the question of Roman public debt may leave the place to discussion of private debt only.
Roman documents frequently mention private debt and the crises that were caused. For example, the historian Tacitus, (circa 58 -120), wrote about one such crisis that occurred in 33 CE during the reign of Tiberius: ’Loan interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. was an ingrained evil in the city of Rome, a very frequent cause of sedition and discord strongly disapproved of |3| Seeing that in the following lines, Tacitus alludes to the ’Law of the Twelve Tables”, a normative text dating from 450 BC. and to the prohibition of usury, most probably enacted as from 342 BC These ancient times are apparently the fifth and fourth century BC.
During these centuries payments were made with bronze bars, then, towards the end of the fourth century, with the first minted bronze coins. Debt could then lead to a form of serfdom, which the Latins named nexum, which is ’debt slavery’. The insolvent debtor was convicted and awarded to his creditor, to work on his land. He could not be sold, he was not slave merchandise, he remained within the territory of the city (unlike the slave merchandise, who was almost never a slave in his own region ) and was still considered a citizen, but he had permanently lost his freedom. This debt bondage, which caused much social unrest, especially in the fourth century BC. was finally abolished by law, in 326, for Roman citizens.
The end of the fourth century BC. was marked by a strong social reaction against endebtment, but if the debt bondage was never subsequently reinstated for Roman citizens, the abolition of interest lending did not last for very long, and was never again abolished. Harsh private debt crises occurred during the following centuries, in Italy and in the whole of Roman domination. Thanks to the works of Cicero and other author we are the better informed about those that erupted in south- central Italy in the first century BC. These Italian crises were of particular importance because of the importance of Rome itself, its elites and the trade which guaranteed its supplies. However, this did not necessarily happen all around the Mediterranean, nor at the same time. There was a debt crisis in Rome and central Italy in 192 – 193 BC Cato had a similar crisis to manage in Sardinia when he was governor in 198 BC |4|. Another happened in Etolie and Thessaly in173BC The Governor of the Province,Claudius Pulcher, applied debt relief, reimbursement restructuring, annual repayment and other measures. |5|
Personal debts could have two causes. Unpaid sums or outstanding loans. In the first case the debtor had not borrowed, but had not paid a sum that was due, such as taxes, which was often the case. Fiscal crises and protesting against taxes was not uncommon, especially outside of Italy. In fact, as from 167 BC Italy was practically exempted from what we would call ’direct taxation’. Tax troubles arrived at the beginning of the the reign of Tibere, first in Achaia and Macedonia (15), then in Judea and Syria (17) |6|. In reply to these difficulties emperors occasionally wrote-off tax arrears. This was done in the 2nd century By Hadrian, then by Marcus Aurelius |7|. We shall see that the Roman government was very hostile to the erasing of debts between persons, but would sometimes erase tax arrears.
It is not easy to identify the causes of each debt crisis, but they were obviously not all as serious as in these examples. Lending at interest was widely practiced in many circumstances, in cash or in kind (grain loans, for example). We know very little about the lending in kind, and it is impossible to say how much went on. In Egypt, where papyrus documents provide more information than elsewhere, it was not preponderant. Nevertheless, there was certainly chronic indebtedness among the poor (laborers, farmers and sharecroppers, various professionals among the urban plebians, etc...). Debt crises are born when this sort of popular endebtment becomes serious, and when a part of the elite (such as senators, knights and local dignataries) are also indebted. Members of the elite were accustomed to borrow and others accustomed to lending, while others still, lent and borrowed at the same time. If debtors members of the elite could no longer reimburse the financial vigour of the elite crashed and debt crises could have serious social and political consequences. Such circumstances could have several causes: poor harvests, causing hardship for all those who lived off agriculture; political or military tensions, reduced money supply, which caused difficulties in acquiring the money necessary for making payments and resulting in higher interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…
The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. etc... But as we have very little information on these causes we must, the most often, limit ourselves to assumptions.
From the beginning of the first century BC to the end of the first century Comon Era. There were four major debt and repayment crises in Italy. The first between 91 and 81 BC, then another around 60 BC, which provoked the « Conjuration of Catalina », a third from 49 to 46 BC during the civil war between Caesar and Pompeii and the Pompeiiens. There was another in 33 |8|.
The 91-81 BC crisis seams to have have been the worst and should be considered apart. There were three ferocious wars (the ’Social’ war between Rome and its Italian allies, the civil war between Marius’ troops and those of Sulla and the war against Mithridates, who, in 88, murdered tens of thousands of Romans and Italians in the eastern Mediterranean), an explosion of debt and monetary and fiscal troubles. The prevailing confusion in the circulation of currency, and social tensions due to indebtedness, led the Roman magistrature, in 86 BC., to restructure a quarter of existing debts. and to abolish the remainder. This is the only time in the history of Rome that such a high proportion of debt was abolished. Rome was never to enact a total debt abolition |9|.
The Conspiracy of Catalina lasted a year and a half, from the middle of 64 to the beginning of 62 BC., but the truly insurgent phase did not exceed a few months, between October 63 and January 62 BC. It is interesting because the event is richly documented. Indeed, Sallust devoted a historic treaty to Catalina. Cicero, who fought against the conspirators while he was consul in 63 BC. (In Rome the consulate was the highest judicial authority, it was occupied by two senators each year), wrote four speeches opposing him (the ’Catiline orations’). It is also interesting because it does not occur in the context of a civil war, and the surviving texts tell us the arguments of the indebted conspirators, and those of Cicero. Who; without being himself a great moneylender, was on principle, closer to the positions of the creditors than that of the debtors.
He continued to insist on the extreme gravity of the plot, at the time it was happening and afterwards; claiming the plotters wanted the complete destruction of the Roman state. This was certainly excessive, in the four orations he pronounced at the moment of the events, Cicero heavily dramatised the situation to influence opinions. Afterwards, the repression of the plot became his principle glory. Sallust, not an ally of Cicero, also insisted on the gravity of the events; he called it the ’bellum Catilinarium’ the Catiline war |10|.
Although It was certainly less bloody than the civil wars of the 80s BC. It did lead to the execution of five important personalities, including a former consul who held the praetor-ship in 63, Publius Cornelius Lentulus, and a few thousand (between 3000 and 10000?) Catiliniens were put to death in Pistoia at the beginning of 62 BC. It was so much more dramatic than the monetary crisis of 33 CE. which took place without bloodshed.
It is impossible to recount here in detail everything we know about the plot’s political evolution. Its leader, Catalina, was of a very ancient family, Senator and former staunch supporter of Sulla in the 80s. He was twice, in 62 and 63 BC, failed candidate in consular elections, among his supporters, there was a group of senators, and several important personalities |11|. It was, for example, rumoured that the renowned Crassus supported him discreetly (Crassus and Pompey, at that time, were the two most influential politicians of Rome, and they were of course rivals; Caesar had not the influence that he achieved three or four years later, at 36 years old he was a rising star).
If we are to believe Sallustius, Catalina stressed, along with this group of confirmed partisans, the contrast between their own poverty and debt on the one hand, and on the other hand the wealth and arrogance of those in power who abused their political position to appropriate money paid by foreign sovereigns in tribute or by immigrants from Rome in taxes |12|. He promised them tabulae novae, meaning the abolition of debts. At the same time, he was already speaking to them of seizing power, banishing adversaries and the loot to be gained from the war.
There is some disagreement about the meaning of tabulae novae, an expression which, literally, indicates the establishment of new financial registers or new acknowledgement of debts |13|. It is a slogan which refers to the complete abolition of debts resulting from monetary loans. This slogan, which was very popular amongst the common people of Rome, obviously met with a great deal of hostility from money lenders and all creditors. The abolition of debts could be achieved by passing a law. If Catalina had been elected and passed this law, would it have also prohibited the lending of money with interest for the future? We do not know, it is uncertain. The abolition of debts is one thing, the prohibition of lending with interest is quite another. But, as I have said, these tabulae novae were never introduced in Rome to abolish all debts. However, we have seen that in 86 BC three quarters of the debts had been abolished, which amounts to an almost total abolition.
In 64 BC part of the urban working classes of Rome (in other words, the free people of the city, partly comprised of more or less parasitic clients from large families, but also of small shop owners, workers and artisans) was heavily in debt. Troubles erupted. Working class associations had to be dissolved and roadside preachers banned. After losing the elections, in October 63, Catalina turned to violent measures. There were rumours that he was planning to murder the consul Cicero and set fire to the city of Rome. Cicero and Sallustius tell us the conspirators had several partisans:
► amongst the working classes of Rome;
► amongst the young people from the senatorial elite. These “young people” were legally under their parents’ control but, as a group, this gilded youth had influence and added to the heated atmosphere in the city. Such was the tension that Appian recounts the case of a “young” senator who was killed by his father for supporting the conspiracy.
► and, in addition, amongst Sulla’s “colonialists”.
In 82-79 BC, following his victory in the civil war, Sulla settled a significant number of his previous soldiers and veterans in the territory. Appian quotes the enormous number of 120,000 previous soldiers installed in this way; in general it is believed to be 23 legions, in other words, between 80,000 and 100,000 men. This in itself is a very large total, if one considers that in the census carried out in 70 BC the total number of adult male Roman citizens was approximately 900,000. This means that 10% of Roman citizens had received land from Sulla which, as a result of the civil war, had been confiscated from its previous owners. Some of these “colonies” and Sulla’s individual distributions were situated close to Rome, others in Etruria (mainly in Arezzo and Fiesole) or in Campania (For example, in Pompei). Given that Catalina was an old partisan of Sulla’s, many rallied around him (notably those from Tuscany, Arezzo and Fiesole).
It is impossible to relate in detail here all that we know about the development of the conspiracy. The consul Cicero declared an emergency state (the “final senatus-consultum”) and, to improve his fight against Catalina, led him to abandon the city of Rome. Catalina joined his insurgent partisans in Tuscany (on 8 November) and was declared a public enemy by the Senate. Cicero had five of Catalina’s chiefs arrested, including the money lender Lentulus, who was discharged on 3 December. The execution of such high profile Roman citizens in virtue of the emergency state was not a foregone conclusion and Cesar, for example, appealed to the Senate against the death penalty (he recommended keeping them under supervised custody and judging them after the complete defeat of Catalina’s troops). They were nevertheless sentenced to death and the five prisoners were executed on 5 December 63. Furthermore Catalina and his partisans were defeated and killed by the regular army in Pistoia, Tuscany, during the second half of January 62. This marked the end of the “conspiracy.”
The circulation of money following the debt crisis and the political situation seemed to have been frozen |14|. It was what was called in Latin inopia mummorum, a shortage of coins. Aware of the situation, Cicero banned the transport of precious metals (gold and silver) outside Italy and possibly even their transport from one province to another |15|.
The origins of this insurrectionary movement lie with the fact that several social groups fell into debt: Sulla’s previous soldiers who had become small or medium scale landowners; the working classes of Rome (shop keepers, artisans, etc) and part of the senatorial elite. In one passage, which I will cite below and which dates between 44-43, Cicero repeats that there has never been so much debt in Italy as during his consulate. He repeatedly links the existence of the conspiracy to the debt crisis. When Catalina left Rome, for example, he exclaimed “But what men has he left behind! And what debts they have! And what influence! And what names!” |16|.
The large debt crises such as that of 64-63 seem to occur each time the senatorial elite, or at least a part of it, also falls into debt. The urban working classes and a certain number of poor or modest peasants were most likely chronically in debt, but this indebtedness did not become politically dramatic until the elite also fell into debt. The indebted senators had assets consisting of land, livestock, slaves, houses and valuable objects and, unless they sold a fraction of these assets, they would not be able to repay their creditors. In 63, some of them, including Catalina, could not make the decision to break up their estate, they even refused for political reasons because their dignity and their rank were founded on their estates |17|. Sallustius quotes Catalina as having said the following sentences, which he would have written in a letter (but, as we know, ancient historians rewrote the letters and speeches that they attributed to the heroes of their works).
“Given the impossibility of preserving my rank I have publicly taken upon myself, as is my custom, the defence of the most unfortunate, not because I am unable to repay my personal debts by selling my assets (and, as far as the debts of others go, the generosity of Aurelia Orestilla [Catalina’s wife] has placed her resources and those of her daughter at my disposal with the aim of settling my debts); but I saw men who had no right to them being showered with honours, while I felt excluded, and was exponed to unjust suspicion. It is in this regard that I have kindled hope and formed the design, which my situation more than justifies, of saving what remains of my dignity.” |18|.
As regards the indebted rich who were willing to sell, the moment they tried to do so the price of land went down |19|.
On an individual level the senators’ debts can sometimes be explained by their occupational hazards. A senator’s position in the elite was partly conditioned by elections in which the family’s “nobility” certainly counted for a lot, but along with other factors. If a patrician like Catalina lost the courtroom or consular elections he also lost the chance to gain access to their funds and remake a fortune that had been dilapidated by his career debut.
Catalina and his partisans demanded an abolition of all debts, a demand which the consul Cicero and the majority of his senators refused. Years later, in the treaty of Duties (De officiis) written in 44-43, Cicero once again justifies the radical nature of his policies regarding debt:
“What does the establishment of new debt accounts mean other than that you buy a plot of land with my money, that you’re the one who owns it and that I do not have my money? That’s why you have to ensure that there aren’t any debts, which may harm the State. It can be avoided in many ways but, if there are debts they should not be such that the rich lose their assets and the debtors acquire the assets of others. Nothing in fact maintains the State more efficiently than good faith (fides), which cannot exist if there is no need to pay one’s debts. Never has anyone acted with more vehemence to avoid paying them than under my consulate. It has been attempted by men of all ranks, men who were armed, and who set up camps. But such was my resistance that this evil was eliminated from the State (de re publica) entirely” |20|.
Let us move on to Sulla’s colonies. It was traditional to found cities known as colonies, which were inhabited by the poor, for example in the city of Rome, from redistributed land. This was not the first time that previous semi professional or practically professional soldiers had received land. These distributions often, but not always, had positive results. In Sulla’s case it was a failure. Why? It is not easy to explain but one of the reasons is doubtless that the distributed land had been confiscated from its previous owners following a civil war |21|. The foundation of a colony of this nature was a traumatising event for the social fabric of a region (especially when it occured at the end of a civil war and when the region in question was not traditionally latin and had its own culture and its own language, as was the case with Etruria or the Oscan cities of the gulf of Naples)!
Despite being the beneficiaries of these plots of land (the exact amount of which we do not know, in the case of Sulla’s colonisation), the veterans were not very rich. The debt problem was not the same for them as it was for Catalina or Lentulus. Sallustius included in his account a letter which he attributes to Caius Manlius, a centurion who commanded the Catalinians in Tuscany |22|. It’s not a question of an estate that one could sell but one that one does not wish to sell! Manlius insists on the fact that the estate has been totally lost already, along with his reputation, and that they are trying to save, if at all possible, their personal freedom. The text shows that although (definitive and statutory) servitude for debt had been abolished in Italy, at least for Roman citizens, forced work for repaying debt still existed, on a temporary basis, until such time as the work carried out had compensated the sum of money owed. Was it usual to apply this procedure? Or did it depend on the personality of the money lender (a magistrate whose cruelty was denounced by Manlius)? We do not know. In any case, the possibility of such forced work, conceived as a violation of freedom, existed legally, even if it was not to be confused entirely with slavery.
The ancient writers are aware that, during crises, and particularly in debt crises, factors beyond the agents’ control can come into play, which, to our way of seeing, are economic. They are for example fully aware that bad agricultural harvests can affect the price of grain and thereby produce a debt crisis. The economic causes of such crises that they they single out the most often are either bad harvests, or destruction caused by wars (foreign or civil), as well as the despondency and fear they produce, or factors related to the financial behaviour of particular social groups.
Detrimental financial behaviour could be that of individuals who have managed their affairs badly |23|. It could also be that of social groups who have not adapted their responses appropriately in terms of managing their assets. Thus, according to Cicero, having receieved land and feeling intoxicated by their victory in the civil war, Sulla’s previous soldiers wanted to play at being large scale farmers by carrying out major construction and buying significant numbers of slaves. These unifamiliar rural exploitations thus drove them into debt and the only conceivable way out was to join the conspiracy |24|.
The ancients who have written of the Conspiracy, such as Cicero, Sallustius and Appian, have stressed the political causes of this crisis infinitely more than the “economic” factors. They have insisted on the idea that the causes of the debt are to be found in the political climate and the management of public money. What is stressed are the problems of one sector of the elite, and these problems are mostly attributed to the abnormal and unfair management of State resources. In the secret meeting with his partisans in 64, Catalina does not in the least condemn a situation which would have compromised the sale of wine, oil or livestock produced in the domaines of those in debt, but the grabbing of State riches by a small clique, at the exclusion of the rest of the city’s legitimate elite.
It is also difficult to understand why the debt crisis escalated to such an extent during the years 64 and 63, rather than several years before or after this date. It has often been thought that the State’s minting of currency was to blame and that the 60s subjected the State to the repercussions of insufficient minting throughout several decades. It is not easy to know approximately how many coins were in circulation each year; there is much debate about this amongst numismatists. On the other hand, we do not know how many coins the State remelted and reminted before putting them into circulation again. Some believe that the State reminted all of them, but that is hardly likely. When all is said and done it is by no means certain that the number of silver coins issued diminished throughout the 70s and 60s BC. It remains to consider the question of the possible contraction of practically available monetary stock, and in particular the question of thesaurisation. The reduction of the price of land, the debt problems, the political troubles, led some people to keep their money at home, even though they were in a position to pay their debts and their rent. It is significant that in 49 Cesar banned anyone from keeping more than 60,000 sestertia in cash |25|.
In normal times public power intervened very little in private financial affairs, unless it were via the usual functions of justice and to fix an interest limit. In view of the absence of a bureau for registering contracts there was doubtless no way in Italy of knowing the details of all the debts that were incurred. But the debt or payment crises that affected Rome and central-meridional Italy were fairly frequent and when they occured it was necessary to intervene, in order to avoid very serious social and political problems. Which means of action did the State have at its disposal? In order to simplify, let’s say it had five. All of these means were used at one time or another, and consisted of different political options:
1) the pure and simple refusal of any kind of debt adjustment, together with the repression of possible uprisings (this was Cicero’s stance in 63 BC);
2) different measures aimed at facilitating debt payment without abolishing either capital or interests: for example the non retroactive reduction of interests and the rescheduling of the due dates of the debts, as was carried out, according to Tite-Live, in 348-347 BC |26|;
3) payment of public funds as gifts, loans or reduced interest loans (as carried out by Tiberius in 33.);
4) The attribution to creditors of certain of the debtors’ assets, or the public organisation of the sale of estates. The first of these two measures, which was taken by Cesar between 49 and 46, was possibly more favourable to the debtors than the second, because the multiplication of sales with bids led to the lowering of the price of land and thus condemned the debtors to sell their assets at a very low price. Cesar himself wrote that during the crisis of 49-46 he was trying to, at the same time “do away with or diminish the fear of a general cancellation of debts, almost constantly following wars or civil troubles, and on the other hand to maintain the reputation of the debtors” |27|.
5) The partial or total abolition of interests or debt capital (in Rome the total abolition of debts was never decided but there were reductions of interest and partial abolitions, the most prominent being in 86 BC).
The financial measures of general scope taken in times of crisis were only enforced on a very temporary basis. When Cesar decided, in order to remedy the payment crisis which struck in 49, that no one could keep more than 60,000 sestertia in cash he emphasised that this law was not new, but reiterated another law which was already in force |28|. After the crisis in 33, Tiberius himself put back into force one of Cesar’s laws which had never been abrogated but had fallen into disuse for a long time because, Tacitus writes, private interest comes before public good |29|. And, out of laxity, the measures applied by the senate in 33 AD were enforced for a very short time. This is one of the reasons that explains the triggering of new debt crises several years or several decades later.
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