Ancient Banking Functions: From Coin Testing to Commercial Mediation

In ancient times, bankers carried out various functions – they tested and exchanged coins for a fee; received money, valuables, and legal documents in deposit; collected money at auctions, advanced and mediated loans, and performed various related functions. Diversity of activities enabled bankers to choose their field of specialization, although in practice these fields often overlapped.

Coin Testing

One of the oldest functions that they performed was called “probation nummorum” or testing of coins and ascertaining their genuineness. The very nature of banker’s occupations made them qualified for performing this task. To verify the value of the coins, particularly the valuable gold ones, the ancient bankers relied on touchstones as well as on empirical techniques. This implied observing the coin, feeling it, and tapping it to make it ring to determine its worth and ascertain that it was not filled or covered with some other substances. They also checked the dimensions, its origin, and whether the coin was mined by an officially authorized workshop. Finally, they weighted it on a “tratina”, a small pair of scales with arms of equal length, designed to be held, not set down, and equipped with two plates, curved to form bowls. The aim was to ascertain that a coin was not worn with use and that it had not lost too much weight. Since the Roman state was more unified than the Greek one, consequently, there was less need for foreign exchange operations. The services for changing high-value coins into smaller ones (gold into silver or bronze), or for changing various categories of money that were minted over one state into the other, were more in demand.

Evolution of Banking

After the “argentarii” became acquainted with the custom of using bills of exchange, they take part in cashless transfer of money called “permutation”, literally meaning the exchange of one thing for another. The point of these transactions was to transfer funds without having to transport coins from one location to another. The procedure was the following – the “argentarii” received sums of money which had to been paid at Athens, and then drew a bill payable at Athens by some banker in that city. This mode of transacting business implied acquaintance with the current value of the same coin in different places and at different times, as well as involving a network of relationships and obligations.

Commerce and Auctions

One of their most ancient duties was related to commerce and public auctions. In these times, various commodities could be sold by auctions that were held in ports, fairs and in wholesale and retail markets. Auctions were also the mechanism for the sale of the estate of a deceased person or an insolvent debtor as well as of goods of a debtor in default. The aim was to achieve sale to the highest bidder. There was also an important difference between a public and private auction. The former was connected to collection of debts from an impecunious or insolvent debtor, while the latter was a way of distributing goods in market place.

“Coactores argentarii” who operated at auctions were in charge of keeping detailed registers relating to these auctions (“tabulae auctionariae”) in which they wrote down dates, descriptions of the objects sold and its prices, and the names of the sellers and buyers. They also participated in auctions by paying over the purchase price to the sellers and advancing a short-term loan to the buyers. Their mediating role was particularly required in the cases when one of the protagonists, the seller or the buyer, was absent.

Banking Practices: Deposits, Payments, and Interest Rates

The bankers also served as a general receiver of deposits. The deposits that they received belonged to two different categories: some produced interest for the depositors, and others did not. When the money was deposited by its owner in order to facilitate its keeping and for making payments, it was called “depositum”. In these cases, banker paid no interest and the money was called “vacua pecunia”. But, in the cases when the money was deposited for a specified period of time and with condition that banker was paying interest, it was called “creditum”, and the banker was allowed to use it in lucrative manner.

Function performed by banker called “per mensam” was related to payments made through banker and previously authorized by the owner of the funds. Payment could be made either in cash, or if the receiver kept an account with the same banker, in the book to his own deposit. This latter practice was called “rescribere” or “scriber”.

In addition to these deposits, bankers were also involved in lending business which appears to have brought a major part of their profits. In the period of the late Republic and early Empire, the most prevalent range of interest for loans was between 6 and 10 per cent. This rate could be much higher in outlaying provinces because of the greater risks, as well in cases of maritime loans. However, the “centesima” or 12 per cent rate became established as the regular rate of ancient interest, and thus, it remained throughout the later Republic and under the Empire.