Under Augustus the precious metals were plenty and cheap, and the prices of commodities were correspondingly high; but a full generation had hardly passed before a dearth began to be felt, which manifested itself in a debasement of the coinage, the surest sign of an appreciation of the currency.
Speaking generally, the manufactures and the more costly products of antiquity came from countries to the east of the Adriatic, while the West was mainly agricultural; and nothing is better established than that luxuries were dear under the Empire, and food cheap.32 Therefore exchanges were unfavourable to the capital from the outset; the exports did not cover the imports, and each year a deficit had to be made good in specie.
The Romans perfectly understood the situation, and this adverse balance caused them much uneasiness. Tiberius dwelt upon it in a letter to the Senate as early as 22 A.D. In that year the ædiles brought forward proposals for certain sumptuary reforms, and the Senate, probably to rid itself of a delicate question, referred the matter to the executive. Most of the emperor’s reply is interesting, but there is one particularly noteworthy paragraph. “If a reform is in truth intended, where must it begin? and how am I to restore the simplicity of ancient times?.. How shall we reform the taste for dress?.. How are we to deal with the peculiar articles of female vanity, and, in particular, with that rage for jewels and precious trinkets, which drains the Empire of its wealth, and sends, in exchange for bawbles, the money of the Commonwealth to foreign nations, and even to the enemies of Rome?”33 Half a century later matters were, apparently, worse, for Pliny more than once returned to the subject. In the twelfth book of his Natural History, after enumerating the many well-known spices, perfumes, drugs, and gems, which have always made the Eastern trade of such surpassing value, he estimated that at the most moderate computation 100,000,000 sesterces, or about $4,000,000 in coin, were annually exported to Arabia and India alone; and at a time when silk was worth its weight in gold, the estimate certainly does not seem excessive. He added, “So dear do pleasures and women cost us.”34
The drain to Egypt and the Asiatic provinces could hardly have been much less serious. Adrian almost seems to have been jealous of the former, for in his letter to Servianus, after having criticised the people, he remarked that it was also a rich and productive country “in which no one was idle,” and in which glass, paper and linen were manufactured.35 The Syrians were both industrial and commercial. Tyre, for example, worked the raw silk of China, dyed and exported it. The glass of Tyre and Sidon was famous; the local aristocracy were merchants and manufacturers, “and, as later the riches acquired in the East flowed to Genoa and Venice, so then the commercial gains of the West flowed back to Tyre and Apamea.”36
Within about sixty years from the final consolidation of the Empire under Augustus, this continuous efflux of the precious metals began to cause the currency to contract, and prices to fall; and the first effect of shrinking values appears to have been a financial crisis in 33 A.D. Probably the diminution in the worth of commodities relatively to money, had already made it difficult for debtors to meet their liabilities, for Tacitus has prefaced his story by pointing out that usury had always been a scourge of Rome, and that just previous to the panic an agitation against the money-lenders had begun with a view to enforcing the law regarding interest. As most of the senators were deep in usury they applied for protection to Tiberius, who granted what amounted to a stay of proceedings, and then, as soon as the capitalists felt themselves safe, they proceeded to take their revenge. Loans were called, accommodation refused, and mortgagors were ruthlessly sold out. “There was great scarcity of money … and, on account of sales on execution, coin accumulated in the imperial, or the public treasury. Upon this the Senate ordered that every one should invest two-thirds of his capital on loan, in Italian real estate; but the creditors called in the whole, nor did public opinion allow debtors to compromise.” Meanwhile there was great excitement but no relief, “as the usurers hoarded for the purpose of buying low. The quantity of sales broke the market, and the more liabilities were extended, the harder liquidation became. Many were ruined, and the loss of property endangered social station and reputation.”37 The panic finally subsided, but contraction went on and next showed itself, twenty-five years later, in adulterated coinage. From the time of the Punic Wars, about two centuries and a half before Christ, the silver denarius, worth nearly seventeen cents, had been the standard of the Roman currency, and it kept its weight and purity unimpaired until Nero, when it diminished from 1⁄84 to 1⁄96 of a pound of silver, the pure metal being mixed with 1⁄10 of copper.38 Under Trajan, toward 100 A.D., the alloy reached twenty per cent; under Septimius Severus a hundred years later it had mounted to fifty or sixty per cent, and by the time of Elagabalus, 220 A.D., the coin had degenerated into a token of base metal, and was repudiated by the government.
Something similar happened to the gold. The aureus, though it kept its fineness, lost in weight down to Constantine. In the reign of Augustus it equalled one-fortieth of a Roman pound of gold, in that of Nero one forty-fifth, in that of Caracalla but one-fiftieth, in that of Diocletian one-sixtieth, and in that of Constantine one seventy-second, when the coin ceased passing by tale and was taken only by weight.39
The repudiation of the denarius was an act of bankruptcy; nor did the financial position improve while the administration remained at Rome. Therefore the inference is that, toward the middle of the third century, Italy had lost the treasure she had won in war, which had gradually gravitated to the centre of exchanges. This inference is confirmed by history. The movements of Diocletian seem to demonstrate that after 250 A.D. Rome ceased to be either the political or commercial capital of the world.
Unquestionably Diocletian must have lived a life of intense activity at the focus of affairs, to have raised himself from slavery to the purple at thirty-nine; and yet Gibbon thought he did not even visit Rome until he went thither to celebrate his triumph, after he had been twenty years upon the throne. He never seemed anxious about the temper of the city. When proclaimed emperor he ignored Italy and established himself at Nicomedia on the Propontis, where he lived until he abdicated in 305. His personal preferences evidently did not influence him, since his successors imitated his policy; and everything points to the conclusion that he, and those who followed him, only yielded to the same resistless force which fixed the economic capital of the world upon the Bosphorus. In the case of Constantine the operation of this force was conspicuous, for it was not only powerful enough to overcome the habit of a lifetime, but to cause him to undertake the gigantic task of building Constantinople.
Constantine was proclaimed in Britain in 306, when only thirty-two. Six years later he defeated Maxentius, and then governed the West alone until his war with Licinius, whom he captured in 323 and afterward put to death. Thus, at fifty, he returned to the East, after an absence of nearly twenty years, and his first act was to choose Byzantium as his capital, a city nearly opposite Nicomedia.
The sequence of events seems plain. Very soon after the insolvency of the government at Rome, the administration quitted the city and moved toward the boundary between Europe and Asia; there, after some forty years of vacillation, it settled permanently at the true seat of exchanges, for Constantinople remained the economic centre of the earth for more than eight centuries.
Similar conclusions may be drawn from the fluctuations of the currency. At Rome the coin could not be maintained at the standard, because of adverse exchanges; but when the political and economic centres had come to coincide, at a point upon the Bosphorus, depreciation ceased, and the aureus fell no further.
This migration of capital, which caused the rise of Constantinople, was the true opening of the Middle Ages, for it occasioned