Creature From Jekyll Island by G. Edward

weight of the solidus soon became fixed at 65 grains and was minted at that standard for the next eight-hundred years. Its quality was so dependable that it was freely accepted, under the name bezant, from China to Brittany, from the Baltic Sea to Ethiopia.

Byzantine laws regarding money were strict. Before being

admitted to the profession of banking, the candidate had to have sponsors who would attest to his character, that he would not file 1. Alan Greenspan, 'Gold and Economic Freedom,' in Capitalism: The Unknown Ideal, ed. Ayn Rand (New York: Signet Books, 1967), p. 101.

2. Even the Greeks under Solon had one, brief experience with a debased currency. But it was short lived and never repeated - See Groseclose, Money and Man, pp. 14, 20, 54.

150

THE CREATURE FROM JEKYLL ISLAND

or chip either the solidi or the miliarensia, and that he would not issue false coin. Violation of these rules called for cutting off a hand.1

It is an amazing fact of history that the Byzantine Empire flourished as the center of world commerce for eight-hundred years without falling into bankruptcy nor, for that matter, even into debt. Not once during this period did it devalue its money.

'Neither the ancient nor the modern world,' says Heinrich Gelzer,

'can offer a complete parallel to this phenomenon. This prodigious stability...secured the bezant as universal currency. On account of its full weight, it passed with all the neighboring nations as a valid medium of exchange. By her money, Byzantium controlled both the civilized and the barbarian worlds.'2

BAD COMMODITY MONEY IN HISTORY

The experience of the Romans was quite different. Basically a militaristic people, they had little patience for the niceties of monetary restraint. Especially in the later Empire, debasement of the coinage became a deliberate state policy. Every imaginable means for plundering the people was devised. In addition to taxation, coins were clipped, reduced, diluted, and plated. Favored groups were given franchises for state-endorsed monopolies, the origin of our present-day corporation. And, amidst constantly rising prices in terms of constantly expanding money, speculation and dishonesty became rampant.

By the year 301 A.D., mutiny was developing in the army,

remote regions were displaying disloyalty, the treasury was empty, agriculture depressed, and trade almost at a standstill. It was then that Diocletian issued his famous price-fixing proclamation as the last measure of a desperate emperor. We are struck by the similarity to such proclamations in our own time. Most of the chaos can be traced directly to government policy. Yet, the politicians point the accusing finger at everyone else for their 'greed' arid

'disregard for the common good.' Diocletian declared: 1. Le livre du prefet on lempereur Leon le Sage sur les corporations de Constantinople*

French translation from the Geneva text by Jules Nicole, p. 38. Cited by Groseclose.

Money and Man, p. 52.

2. Byzantininsche Kulturgeschichte (Tubingen, 1909), p. 78. As quoted by Groseclose, Money and Man, p. 54.

THE BARBARIC METAL

151

Who is of so hardened a heart and so untouched by a feeling of humanity that he can be unaware, nay that he has not noticed, that in the sale of wares which are exchanged in the market, or dealt with in the daily business of the cities, an exorbitant tendency in prices has spread to such an extent that the unbridled desire of plundering is held in check neither by abundance nor by seasons of plenty....

Inasmuch as there is seen only a mad desire without control, to pay no heed to the needs of the many,...it seems good to us, as we look into the future, to us who are the fathers of the people, that justice intervene to settle matters impartially.1

What followed was an incredibly detailed list of mandated prices for everything from a serving of beer or a bunch of watercress to a lawyer's fee and a bar of gold. The result?

Conditions became even worse, and the royal decree was rescinded five years later.

The Roman Empire never recovered from the crisis. By the

fourth century, all coins were weighed, and the economy was slipping back into barter again. By the seventh century, the weights themselves had been so frequently changed that it was no longer possible to effect an exchange in money at all. For all practical purposes, money became extinct, and the Roman Empire was no more.

RECEIPT MONEY

When new civilizations rose from the ruins of Rome, they

reclaimed the lost discovery of money and used it to great advantage. The invention was truly a giant step forward for mankind, but there were many problems yet to be solved and much experimentation lay ahead. The development of paper

money was a case in point. When a man accumulated more coins than he required for daily purchases, he needed a safe place to store them. The goldsmiths, who handled large amounts of precious metals in their trades, had already built sturdy vaults to protect their own inventory, so it was natural for them to offer vault space 0 their customers for a fee. The goldsmith could be trusted to guard the coins well because he also would be guarding his own Wealth.