Even after Athens lost her primacy at sea, she yet had a large accumulated capital for merchandising and she took care by her laws, as has been stated, that all merchandising on Athenian money and of the cities that she controlled should subserve Athenian commerce, and that every lawful merchant venture at sea should favor Athens as a distributing point for the goods of the eastern and western Mediterranean and for those brought from the Black Sea, which they called the Euxine.
The support of the population of Attica required large importations, especially of grain from Sicily or other points, and such ventures were required to be financed. The capitalist with money to lend was not prepared to trust his body to the treacherous seas. The trader who was ready to risk his life in commerce had no money or capital. The foreign dealers with goods to sell would not extend credit to an Athenian, any more than to-day a foreigner would trust an American importer. The man who carried on trade by borrowing the capitalist’s money and by paying the borrowed money as cash to the seller operated then much as he would operate to-day. Although, then as now, the importer was sometimes a rascal, we may call him by the dignified term of merchant adventurer.
Such a merchant adventurer was Protus at Athens. He applied to the capitalist Demon for a loan to finance a shipment of grain from Syracuse to Athens and obtained the money for that purpose. The amount of the loan Demosthenes does not betray in the speech he wrote for Demon, but we may suppose it to be large, for the shipment took the whole vessel. It does not appear that Protus took goods bought with Demon’s money out to Syracuse and converted them there into cash with which to buy the grain. It would seem that he simply took out Demon’s money on the empty vessel.
It must be noted, also, that in those days of small vessels a responsible carrier was not easy to find, and it would seem that there was at that time no such thing as a bill of lading. Under the Babylonian law, the carrier of the goods gave a bill of lading and was responsible for every loss except that arising from the public enemy. At Rhodes and at Alexandria, in the next centuries, the carriers gave bills of lading and from that day to this the carrier has always receipted by bill of lading for the merchandise to be carried. Among the Greeks the owner of goods or his representative accompanied the goods as a “super-cargo,” because the Greek law had not developed a carrier’s liability.
To make sure of a vessel to bring the grain from Syracuse to Athens, an impecunious Greek colonial from Marseilles, named Hegestratus, who was at Athens with a vessel, was engaged to bring the grain from Sicily. Hegestratus promptly mortgaged his vessel and, no doubt, the freight to be earned, in order to fit out his vessel with tackle and supplies and to obtain money to pay the crew. The crew appear to have been men from Marseilles.
We may picture Protus setting out from Athens on his voyage in the ship skippered by Hegestratus and arriving at Syracuse. There he bought a shipload of grain, paid the export duties and loaded his grain upon the ship. While Protus was waiting for the vessel to sail, and probably wine-bibbing at a convenient wineshop, boasting loudly, like a true Athenian, of the wonders of Athens and refreshing himself after the arduous labors of superintending the slaves in loading, Hegestratus, the unscrupulous colonial, tried to improve his time by looking for some personal gain from rascality. His vessel was mortgaged. All he could look for was the freight money. He did improve, or rather misemploy, his time by finding a person at Syracuse named Zenothemis, and represented to Zenothemis that he had a ship lying in the harbor laden with grain that he was about to take to Athens. Hegestratus asked Zenothemis to obtain for him a loan on the cargo, offering a commission. He, no doubt, took Zenothemis and showed him the ship with the grain in it.
In spite of the abuse of Zenothemis in the speech which Demosthenes wrote for Demon to deliver—a feature without which an Athenian oration would be unrecognizable—it seems probable that Zenothemis believed the grain on the ship to belong to Hegestratus. Zenothemis at any rate represented Hegestratus to Syracusan capitalists to be the owner of the load of grain and obtained for Hegestratus a loan from them upon the cargo. Hegestratus does not appear to have given a mortgage on the cargo of grain, and Zenothemis accompanied the cargo to protect his principals. Hegestratus promptly sent to Marseilles the money obtained by this fraudulent transaction. But it is evident from the speech that the cargo was at the risk of the Syracusan money lenders and that the payment of the loan was contingent upon the arrival of the cargo at Athens. Every man at this time was his own insurer, and the liability of Protus to Demon was likewise contingent upon the safe arrival.
It is impossible to suppose that the Zenothemis loan furnished the money to purchase the grain, for in that event Hegestratus would have had no money to send to Marseilles. He could not have made a single drachma if the loan bought the cargo. Protus, of course, paid the port dues on export, but the idea that he was given a receipt or document therefor which would prove the fact is not tenable. Such proof would probably mean nothing to such expert forgers as Greeks.
We should now state the character of the loan that Demon had made to Protus. The contract is not set forth in the speech but it was, mutatis mutandis, like the contract set forth in the speech against Lacritus, among Demosthenes’s orations. That contract, regarding a trading venture to the Euxine, recites the loan made to the trader to be invested in casks of wine at Mende in Thrace, to be laden in the twenty-oared galley of Hyblesius. The goods to be purchased are by the contract hypothecated to the lender with a covenant by the borrower that no money should be owing on those goods at the time of purchase and that no further money would be borrowed on them by the trader. The goods were to be sold in Pontus on the southern shore of the Black Sea, and other goods were to be purchased with the avails for the return voyage to Athens. If the goods were brought safely to Athens, the borrower within twenty days of arrival (in which period doubtless there would be time to sell the goods) should reimburse the loan to the lender with twenty-two and one-half per cent interest, without any abatement except for jettison (i.e., goods thrown overboard to save the vessel). Upon the arrival of the goods they should be delivered to the lender until the money borrowed had been paid, and if the money should not be paid as provided, the lender might sell or pledge the goods, and if there should be any deficiency in the proceeds to pay the loan, should have execution for the deficiency against the borrower. This transaction means, of course, that Protus and Demon together would sell the grain at Athens.
Any one will note that the necessities of the commerce dictate the contract. Marine insurance was unknown until it was invented at Rhodes in the form of reciprocal insurance, which has become in late years so common among us. The risks of navigation could not be obviated by insurance and the lender took the risk of shipwreck or jettison. The lender thought nothing of the borrower’s ability to pay but looked to the goods. As soon as the goods were purchased and ascertained they became at the risk of the lender, and the goods were dedicated to the loan. In the meantime the borrower, though in possession, is in possession as the representative of the lender, and the contract creates a pro forma hypothecation. The goods are in fact the goods of the lender, for as soon as it is possible they are delivered to him, but for twenty days or longer the borrower can sell them to realize the loan. They are sold apparently as the goods of the lender. The Greek law or any other intelligent system of law, except certain law of a “country town” type, would see no objection to the borrower having the power of sale as agent of the lender. Out of the proceeds the loan is to be paid, any excess of proceeds over the loan and interest goes to the borrower, and any deficiency is paid by the borrower.
The Protus contract with Demon differed from the Lacritus contract in that no purchase of goods and conversion thereof into other goods was provided for. It will be seen that the Greek law recognized a mortgage of the vessel, a hypothecation or pledge of goods, and a special contract of merchandising for the protection of the lender of money to be used for the express purpose of investment in particular goods, on the principle that the goods purchased shall realize the loan. It is the same principle as the equitable one that he who pays the purchase money owns the thing purchased, which comes out of the Roman law. It is a common thing in modern business for a banker to buy a draft with a bill of lading attached, and upon acceptance of the draft to deliver the goods in the bill of lading to the drawee of the draft to dispose of as the agent of the banker, but without any power to the drawee to store the goods or to treat them as his own. As it was in Greek