money and banking

   Coins were unknown in Mesopotamia until about forty years after their introduction in Lydia in western Anatolia circa 650 B.C. Before that, barter, or paying for goods with goods of equal value, was the main means of financial exchange. As early as the late third millennium B.C., Mesopota-mian governments placed values on various commodities, including agricultural products like wheat and luxury goods sold by merchants. These values were based on the accepted existing value of silver, though it does not appear that silver actually exchanged hands during most financial transactions. (Large-scale transactions between merchants or between merchants and the palace might have been exceptions.) Instead, objects to be exchanged in barter were weighed and their values were computed based on given weights of silver. Then the bartering process proceeded. Palace and temple officials collected and stored the silver and oversaw its weighing and circulation, if any. The standard weights included the mina, weighing about 500 grams (17.5 ounces), the shekel (1/60 of a mina), and the talent (60 minas).

   Even when coins were introduced into Mesopotamia in the last years of the seventh century B.C., they were probably exchanged mainly among merchants, shopkeepers, and other people who exchanged large quantities of goods. Coins did not become a widespread form of currency in the region until the Persian period, when King Darius I issued his silver "Darics." The Seleucid rulers who followed the Persian kings in Mesopotamia issued coins that varied in weight and value according to the whims of the individual monarchs.

   The rapid spread of coins stimulated the rise of banking in Mesopotamia from the early 500s b.c. on. Bankers were individuals or groups of individuals who charged a fee for exchanging one form of currency for another and loaned people money, also for a fee (the interest on the loan). A few large families - notably the Egibi of Babylon, the Ea-iluta-bani of Bor-sippa, and the Murashu of Nippur - dominated the banking industry from the sixth century b.c. on. But individual lenders made loans, too. A banker drew up a contract consisting of a promissory note carved on a clay tablet. It listed the amount borrowed; the names of the lender and the borrower; the duration of the loan; how it would be paid back, including interest; and the type of collateral the borrower would provide. Finally, the document was signed, dated, and witnessed. When the debt was repaid, the banker gave the borrower the contract/tablet to acknowledge that he had fulfilled his obligation.

   See also: Nippur; trade; weights and measures