debt; her foreign obligations had to be met in good silver; the arrears may have been liquidated out of the indemnity levied on Carthage.

The partial repudiation of war debts by manipulation of the coinage, which we have just described, is directly recorded by coinage authorities. It has often been called in question by modern scholars, who have tried to form interpretations of the facts more consistent with their conception of Roman fides. The facts of the coinage, however, do not suggest any doubts of the tradition, and there are two good parallels in later Roman times for the policy then followed by Rome.

Let us look a little more closely at the position. There can be no doubt that the urgency of war may force a State to inflate its coinage and thus meet the needs of the present by a draft on the uncertain future. The only question really is, what is to be done when the crisis is over and a return to settled conditions can be contemplated. The obviously honest course is to meet the whole burden of debt by funding it, if it is too great to discharge at once, and arranging for slow repayment with interest over a long term of years. This is the method that Great Britain is adopting to-day; but it was never the method of the Roman Republic. There is no evidence whatever in Rome of a national debt like our own. A second method-direct repudiation, partial or complete-is inimical to national credit; Rome, like other selfrespecting States, declined to adopt it. But there is a third choice open. War having instigated inflation and made money cheap, the inflation, if not strictly checked, will tend to go on and on. Why not, then, accept the new values brought about by war as permanent and pay off debt in money as cheap as, or cheaper than, that in which the debt was incurred? This was the choice of the Roman Government in the first Punic War. The fact that Rome had the wisdom to recognise the natural limits set to inflation, by the whole structure of her monetary system and by the demands of her credit abroad, is one that deserves careful pondering.

Between the first and second Punic Wars, Rome enjoyed a period of comparative peace. There was still a tendency to inflation of the coinage-the as fell towards the weight of one ounce and the denarius was losing nearly an eighth of its weight. But this inflation was not recognised by law. Rome began to encroach on the coinage of other Italian States, and Roman

coinage became current over the whole peninsula. In the north, the centre, and the east, the bronze coinage was still predominant. In the south, silver was the ruling metal. For trade in the Adriatic-the new district opened up by the wars against the Illyrian pirates a new denomination, the victoriate, or " Victory " coin, named after the figure on its reverse, was now struck; it was in value three-quarters of the denarius, or one-half of the Roman didrachm of South Italy; but, being struck only for the foreign market, it passed in Rome itself only as merchandise, not as current coin.

In the second Punic War, Rome fought for her very existence, and in finance, as in everything else, she had to use every possible expedient to win through. Presents of gold or corn were received from such friendly States as Syracuse; whether they were ever— as Livy reports in the case of Naples and Pæstum-simply declined with thanks may well be doubted. A double war-tax was levied, and bank commissioners were appointed to regulate the money market and call in for the use of the State all private stocks of bullion. Money was withdrawn from the special reserve; soldiers and other servants of the State were ready to forego their pay; a moratorium for State debts was introduced. In the extreme need of the time the coinage could only be used to cover part of the debt. But here, too, everything that could safely be done was tried.

On two occasions gold was issued at a tariff well above its market value-first in B.C. 217, perhaps in part from presents made by friendly States, and again a few years later from the special reserve. The weight of the as was reduced by law to one ounce, the so-called "uncial reduction." The nominal value of all debts was thus reduced by a half. The denarius was finally reduced to the lower standard towards which it had been falling. As the market value of silver in terms of bronze had not materially changed, the denarius had to be retariffed at sixteen new, in place of ten old asses. Open tampering with the silver was clearly felt to be hopeless even if a denarius of half-weight could be forced on the home market at its original value (and who could expect even that?), in the foreign market it could only find acceptance on its merits. But if defective weight could not escape detection, defective quality might. The temptation to debase the silver lay near at hand, and our authorities tell us that Rome yielded to it ;

it

may be observed that full confirmation from the coins has not yet been obtained.

During the middle period of the war, Rome was apparently bankrupt, issuing little coinage except bronze and living on hope and credit; only after the "crowning mercy" of the Metaurus in B.C. 207 did business begin to revive. The final victory at Zama saw Rome restored to a position even higher than that she had held before. Her foreign credit no longer gave any cause for anxiety. With the indemnity from Carthage being punctually paid, she could liquidate her outstanding debts. The war had seen the end of all coinage in Italy that was independent of Rome, and the distinction between the districts using silver and those using bronze was rapidly being obliterated. The didrachm and victoriate ceased to be struck and the denarius could enter alone on the path to world currency. We are struck with admiration of the sound practical sense which taught the Roman statesmen to apply some moderation to the use of inflation, the instinct that led them to stop at a point where a further advance might have inflicted damage out of all proportion to immediate gain.

The victory opened the way to a dazzling career of expansion abroad. Rome had emerged from the war without vital damage to her currency and need not waste time over building a new system. Wealth began to flow in to Rome from all sides. There was the indemnity from Carthage, there were presents from States anxious to win Rome's favour, there were ever fresh spoils from wars in East and West. Mr. Norman Angell in our generation has told us of the "great illusion" that war can really be good business. Rome, however, in the second century B.C., seemed to find it so. Her own trade was not highly developed and suffered little from economic disturbances, and she could propose to herself a rapid climb from poverty to wealth by brigandage on a large scale the forcible transfer of bullion and coin from other centres to Rome. Even in the West, where hard blows were given and exchanged, wars were not unlucrative. The armies in Spain lived on the country and brought home with them the silver treasure for which Spain was famous. The profits from the wars against the Eastern monarchies-Macedon and Syria-were on a vastly greater scale. The Greek kings had long learnt to hoard reserves of treasure, and out of these the victorious Roman had to receive his price. The quantities of gold and silver, in coin

and bullion, that reached Rome after the victory over Perseus were so great that the war-tax on Roman citizens could be abolished in perpetuity.

The spectacle of Rome, the nouveau riche among States, is an unattractive one, though we must not forget that this financial greatness was largely thrust upon her. But, with all her wealth, was she truly prosperous? Was the new money usefully distributed over the State? The answer is certainly in the negative. The ruling classes, by fair means or foul, added vastly to their holdings and, beside the Senate, a new lower aristocracy of wealth, the great financial interests, the equites, began to emerge. Big business companies were formed and money-lending on a large scale became common. In addition, the State treasury accumulated a colossal reserve of gold and silver. The Roman citizen, however, had little share in the gain beyond the abolition of wartax and an occasional free dole of corn or wine. He found prices rising sharply on all sides. If he were a farmer, he found himself faced with the competition of foreign corn and unable to get easy access at serviceable rates to the money that poured in to Rome. It is certain that wages rose slowly in comparison to prices. Let us take the case of the Roman soldier. At the beginning of the war with Hannibal the Roman soldier was receiving 1200 asses per annum, and, when the as was reduced from two ounces to one, he continued to receive the same number.* Throughout the second century not an as was added to this scale of pay, until Julius Cæsar doubled it. It is true that there was booty to be had from campaigns, and donatives on an ever-rising scale at a triumph; but these irregular gains were no equivalent for a just re-assessment of normal pay. If you wanted to become rich you must go abroad and share in the plunder of the provinces, or attach yourself to the right sort of patron at Rome-almost everything except work hard at your ordinary business.

The coinage remained simple as before. In spite of the increase in wealth, no gold coin, nor any silver coin larger than the denarius, was struck, though such coins as the gold Philippus and the Athenian tetradrachm, imported from the East, may have helped to fill the gap. Nominally the bronze as of one ounce was still the unit of reckoning, but soon after B.C. 200 the

But, as the 1,200 asses were still reckoned as equal to 120 denarii, his pay was not reduced.

sestertius, which equalled four of these asses, began to replace it. In practice, though not in theory, silver was becoming the important metal; after about B.C. 160, the coinage of bronze notably declined and the as itself was hardly ever struck. Of the relation of the mass of coinage to the metal reserves in the treasury we know nothing, but we can assume with some probability that the State made use of bullion and foreign coinage, as well as of denarii, in its larger payments. There is some evidence that Rome borrowed from the East the ratio of one to ten for gold and silver, whereas gold in the Italian market was always worth more than that. The result would be that the imported gold Philippi would be melted down or sent abroad to more favourable markets, such as Gaul; and in point of fact they do not appear to occur in finds in Italy.

Below the outward splendour of Rome's great age of expansion lay deep-rooted miseries and discontents, which gradually gathered force, and at last in the Gracchi found means of outward expression. Tiberius Gracchus saw and pitied the misery of the Roman farmer and resolved at all costs to restore him to prosperity. Of what good was wealth to Rome if it bred only a selfish crowd of moneyed lords in Rome, while agriculture, the core of Roman prosperity, decayed? The public lands must be recovered from illegal private occupation and must be assigned to small-holders, with suitable allowances for stocking them. Gaius Gracchus, who came forward to avenge his brother and carry on his work, felt the need of a broader basis of support. The Senate had shown its resolution to surrender nothing that it could hold. Gaius therefore tried to forge into one power all the elements of discontent in the State and, with that weapon, break the unworthy ruling caste. The poor of Rome were won by doles of corn below market prices. A less ignoble bribe was the offer of settlement of colonies of citizens in and beyond Italy. Most important of all, the big financial interests were drawn into opposition to the Senate; the revenues of the wealthy province of Asia were to be collected by the great Roman companies of publicani, and the rich men of Rome were to supply the juries who tried defaulting governors and thus to secure a free hand for their friends in the provinces.

The story of the bitter struggle and the dearly-bought victory of the Senate may be read in any Roman history book: here we must confine ourselves to the financial aspect of the quarrel. The