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Ancient Rome grew out of a small city state in Italy to a great empire, that dominated much of Europe. Eventually, it broke apart, the Western part disintegrated, while the Byzantine Empire lived on in the east.

The silver denarius, patterned after the Greek drachma, was introduced about 212 BC. Soon after, the prior copper coin (aes, or libra) began to be debased until, by the onset of the empire, its weight had been reduced from 1 pound (12 Roman ounces) to half an ounce. By contrast the silver denarius and the gold aureus (introduced about 87 BC) suffered only minor debasement until the time of Nero (AD 54), when almost continuous tampering with the coinage began. The metal content of the gold and silver coins was reduced, while the proportion of alloy was increased to three-fourths or more of its weight.[1]

Roman Republic[]

The first Roman coin was the bronze as, introduced in 289 BC after the successful war with Samnium. It was heavy, weighing a full Roman pound (327,45 g, equal to 12 ounces).

1 as = 2 semis = 3 quadrans = 6 sextans = 12 uncia

The first silver coin was the didrachm, introduced 269 BC after victory in war with Tarentum and Pyrrhus - Rome controlled Samnium, Lucania and Bruttium, practically all of Italy, leading to the conflict with Carthago. The wealth gained in the war made a silver currency possible, though the coins with a Greek-Italic design were probably made for the conquered lands, which were using Greek drachmas for centuries. In 241 the war with Carthago brought Sicily under control. In 235 BC were the unwieldy bronze coins reduced to a half weight with the same nominal value, turning them into credit coins.

Italy is poor in precious metal ores. The Apennines had no metals. Most important were the deposits in Tuscany, mainly with iron, copper and tin, little silver and no gold. Only in Bruttium was a significant amount of silver.

1 denarius = 2 quinarii = 4 sestertii = 10 as

Rome was the official place to mint coins, only Imperators were allowed to coin outside of Rome. Gold coins are rare until Caesar's times, mostly made by Imperators (Sulla, Sextus Pompeius).

The Second Punic War was led mainly for Hispania (Spain), among other things for its wealth in gold and silver. After the terrible defeat at Cannae followed the reduction of the as to 4 ounces. In 201 BC was Carthago defeated and Hispania finally became a colony. Rome could pursue numerous wars in the east, by 148 BC were Macedonia and Greece turned into provinces.

In 187 BC were introduced actual Roman silver coins with the denarius. 1 pound of silver was divided into 72 denarii, weighing 4,55 g. A denar was 10 as, which was reduced to the weight of the old sextant of two ounces (54 g).[2]

The Rise and Fall of the Roman Empire[]

From at least the 4th century B.C.. the Roman government bought grain in times of shortage and resold it at a lower price. At 58 B.C. was the law changed: every citizen should receive free wheat. To the surprise of the government, most farmers left the country to live in Rome without working. To deal with the increasing economical problems, the emperors gradually began to devalue their currency.[3]

The Roman Republic was not exactly prepared to be a world power with many colonies. The Senate could not pass laws, only perform duties transferred to it, the officials were elected annually. the huge incomes from the provinces fell to the patricians that ran them, the money used for politics and a life of opulence. The debt many went into and their spending are well documented. Caesar himself is one example, but he gained great wealth in his wars against the Gallic and Germanic tribes. When the Civil War was over, Caesar celebrated a huge triumph, with many feasts and games for the people. His troops have been rewarded with gold coins. Made for the occasion, the production of the aureus continued and it still belongs to the most frequently found Roman gold coins. (40 aurei were made from a pound, each 8,19 gram gold).

Under Augustus, coining of silver and gold became the privilege of the emperor. The Senate was only responsible for bronze coins in Rome, some provinces, like Syria and Egypt, had the privilege to make their own coins. Gold and silver were fixed in a relation of 12 ½. 42 aurei were made from a pound of gold, weighing 7,96 g. A pound silver was made into 84 denarii at 3,9 g (the purity ranged from 100-95%, most probably due to technical limitations). This binding of prices between gold and silver (and bronze) made the system subject to Gresham's Law and so more vulnerable. The sestercius and dupondius were made from aurichalcum (brass), which was valued more than bronze at the time. The as and quadrans (a quarter of an as) were made from pure copper.

1 aureus = 25 denarii = 100 sestertii = 200 dupondii = 400 asses

Augustus wanted the aureus and denarius to circulate not only in the Roman Empire, but to make them a world currency - and he succeeded. India accepted the gold and silver coins in large amounts and much silver was hoarded in Germania. The coins made their way to China, are known from Siberia and Scandinavia, as from Africa's East Coast.

The currency remained unchanged until the rule of Nero. The aureus was reduced to 7,29g (45 per pound of gold) and the denarius to 3,41g (96 per pound silver). The denarius was minted with an 5-10% addition of base metal, but its ratio to the aureus was kept. It was theorized, that this was done to prevent the outflow of silver and gold; and indeed, India stopped accepting the denarius completely, while the Germans preferred the older coins.[2]

The crisis and soldier-emperors[]

Another devaluation followed under Trajan, the denarius was set to a purity of about 85%. The price of silver and gold has changed due to the great loot in gold from the Dacian Wars and Trajan's drive for gold mining in the region. A further lowering of the content to 75% followed under Marcus Aurelius, probably because of the Marcomannic Wars. The Germans ceased to accept the denarius and preferred gold instead. The silver content sunk to 50% under Septimius Severus.

Caracalla reformed the currency in 215 AD. The aureus was set down to 50 per pound. A new silver coin was introduced with a weight of about 5,1g of a worse purity than the denarius, the antoninianus (later possibly called the miliarense). The reason may have been the steadily falling price of bronze - a pound of gold went from 4000 to 5000 sestertii. But the denarius was still coined by some emperors.

After the Severan line died out in 235 AD, the "soldier emperors" were in constant need of money. The crisis came into full display under Valerian I and his son Gallienus, who couldn't get enough silver for coinage. Its content in the antoninian was lowered to 20%, but soon down to 5%. It basically stopped being a silver coin, and had a plating of silver and later tin to maintain its color. A rapid inflation followed. The constant civil wars, destruction of property and the falling price of bronze leading to the outflow of gold and silver did not help the situation either. (It was estimated, that from the time of Augustus to the half of the 3rd century Rome has lost 4/5ths of its gold and 2/3rds of silver.) Foreign and domestic trade came to an effective halt, there was great uncertainty, followed by impoverishment and outright depopulation. Prices have risen ten to hundred times after Galienus.

Aurelian (270-275) was a very capable soldier, who succeeded in reuniting the Empire. He destroyed the kingdom of Queen Zenobia, that included even Egypt, and brought the Gallic lands back into the fold. From the year 273 is known an uprising of the minters in Rome led by Felicissimus, which hints at the size of inflation - 7000 soldiers fell, with estimated 40.000 minters taking part in the revolt. The cause may have been Aurelianus' reform of the currency. He has created a new coin (the name is uncertain, probably nummus, later called by some pseudoantoninianus). It was described as "new silver", but it simply had a thin silver-coating, a silver content of just about 2%. The privileges of the Senate to make copper coins and the provincial rights were taken away. With these measures, the inflation was not stopped, but it was slowed down.[2]

Diocletian's reforms and decline of the empire[]

In a more serious reform in 293, Diocletian introduced a new 5-denarius coin of fine silver, the argenteus (96 per pound). The gold coins had become rare and their weights so different, that they were only accepted for their weight. Carus or Carinus had set the weight of the aureus to 70 per pound, which Diocletian raised to 60 per pound of gold. In the same year was the Empire divided into four parts, ruled by co-emperors, the Tetrarchy. Around 295 AD was introduced a new copper coin, marked as the pseudoantoninianus, but weighing 10g.

Diocletian most probably released the binds between coins of various metals, which continued to fluctuate. Gold and silver started to circulate again, but the bronze coins were still credit coins and were soon devalued again. The relative peace of the time brought some degree of economic stability, but the prices continued to rise.[2]

To limit the prices, Diocletian issued the Edict on Maximum Prices in 301. Justified by the avarice of merchants and hoarders, the prices of many goods and the wages of many workers were set to a fixed value. Death was the punishment for dealing at higher prices or hoarding, and much blood was shed in its cause. It is unknown how long it took, before the law was completely ignored, but in 305 Diocletian voluntarily abdicated, as the only Roman emperor on record; and the law was dead by then. The debasement continued.

In the years of chaos preceding Diocleatian's rule, trade had been reduced to barter and the middle class was almost obliterated. Since money was unreliable at best, he devised a system of payments in kind. This tax reform had bound the lower classes to the soil and made them effective serfs. The once free men suffered under the state and its taxes and "prayed that the barbarians would deliver them from it."[3] When people tried to get out they were by law compelled to remain in the occupation that they were in. The occupations were made hereditary. These laws started by being restricted to the defense-oriented industries but, of course, gradually it was realized that everything is defense-oriented.

The peasantry, known as the coloni, were leaseholders on both imperial and private estates. They too were formerly a free class. Under the same pressures as all smallholders, they began to drift away, to find better opportunities, better leases, or better occupations. So under Diocletian the coloni were now bound to the soil. Anyone who had a lease on a particular piece of land could not give that lease up. More than that, they had to stay on the land and work it. In effect, this is the beginning of what in the Middle Ages is called serfdom.

The silver currency was basically abandoned, so much that the government started to demand payment of taxes in kind and in services instead of coin. Constantine the Great issued the golden solidus in large numbers. The government moved away from collecting taxes and paying salaries in kind, and began to use gold. But taxes had to be paid in gold bullion, as the government refused its own coins, since it was never sure how adulterated the coinage really was. The inflation of lesser coins continued, even cities were free to make their own token coins. Most people had to buy gold coins to pay taxes with, those who couldn't afford it lost their lands or became delinquents. So there was a relatively stable 'gold standard' used by the growing number of soldiers and civil servants, and an increasingly worthless currency for the rest of the citizenry. A rapid decline of their fortunes and personal freedoms followed.[4]

The solidus weighed 4,55g of pure gold (72 per pound). For centuries, it was the only gold coin in Europe, it was the base coin for Germanic kingdoms of the Merovingians and the Byzantine Empire continued to make it for a millenium. The new silver coin, the siliqua, was a credit coin of variable weight. The copper coin, this time in bronze, was fully subject to devaluation. Both silver and bronze coins were probably weighed as a result in daily use. Diocletian's 5-denarius piece with 10g had by 311 only 4.4g, by 320 3.1g and 1.5g by 344. More attempts at reform followed, as huge finds of the period attest. Some of the bronze coins were still used at the beginning of the 19th century in southern France.[2]

Inflation in numbers[]

The silver content in the denarius fell over the ages:

Emperor Purity
Augustus (27 BC - 14 AD) about 97%
Nero (54 - 68) 90%
Trajan (98 - 117) 85%
Marcus Aurelius (161 - 180) 75%
Septimus Severus (193 - 211) and Caracalla (198 - 217) 50%
Traianus Decius (249 - 251) 40%
Gallienus (253 - 268) 20-25%
Aurelian (270 - 275) 2%

The inflation is hard to document, but one good indicator are the payments a Roman legionary would receive:

Emperor yearly pay in Denarii
Augustus (27 BC - 14 AD) 225
Domitian (81 - 96) 300
Commodus (176 - 192) 375
Septimus Severus (193 - 211) 500
Caracalla (198 - 217) 750

The devaluation of silver money to a half has led to a similar increase in their wages. This doubling of prices over the course of a century is also documented for bread.[2]

In Diocletian's time, in the year 301, he fixed the price at 50,000 denarii for one pound of gold. Ten years later it had risen to 120,000. In 324, 23 years after it was 50,000, it was 300,000. In 337, the year of Constantine's death, a pound of gold brought 20,000,000 denarii.

The army itself had grown from the time of Augustus, when they had about a 250,000 troops, to the time of Diocletian, when they had somewhat over 600,000. So the army had doubled in size in the course of this inflationary spiral, and obviously that contributed greatly to the inflation.[4]

Roman banking[]

Banking was highly developed and subject to Roman Law, money deposits were to be safeguarded and not lent out. A specialty were banker associations or societates argentariae, where members supplied capital to form them, but they had unlimited liability to prevent fraud. Most banks failed during the economic crises of the third and fourth centuries A.D.[5]


  1. Encyclopedia Britannica. "Money", referenced 2009-08-09.
  2. 2.0 2.1 2.2 2.3 2.4 2.5 Richard Gaettens. Geschichte der Inflationen Von Altertum bis zum Gegenwart (German: History of Inflations from Old Ages to the Present), Der Zusammenbruch des römischen Münnzwesens (The Collapse of the Roman Currency) p. 22-39. ISBN: ISBN 3-87045-211-0. Referenced 2010-01-20.
  3. 3.0 3.1 Robert L. Schuettinger and Eamonn F. Butler. "Forty Centuries of Wage and Price Controls", Chapter 2 - The Roman Republic and Empire, p. 19-27, referenced 2009-08-09.
  4. 4.0 4.1 Joseph R. Peden. "Inflation and the Fall of the Roman Empire", posted on 2009-09-07 in Mises Daily, referenced 2009-09-11.
  5. Jesús Huerta de Soto. "Money, Bank Credit, and Economic Cycles". 2. Historical Violations of the Legal Principles Governing the Monetary Irregular-Deposit Contract, p. 53-58, referenced 2009-10-29.

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