Financing the Second Punic War

[Jona Lendering]

I hope someone can help me with an economic puzzle. I find it hard to conceptualize the problem.

Until 217, a Roman as coin weighed 326 gr, or one Roman pound. After the battle at the Trasimene Lake, coins were minted of 178 gr, and after Cannae, it was 54 gr, one sixth of the original value. Between 214-211, the Roman monetary system was renewed, and based on a 4.3 gr denarius, which was divided into 10 asses, soon sixteen.

(1)
Is this called devaluation or debasement?

(2)
If I understand it correctly, this means that, prizes remaining the same, the Roman government could mint extra coins and was able to spend six times as much money.

(3)
It also means that if you were lending money, you would receive back one sixth of the bronze you had lent; on the other hand, if you had borrowed money, you were lucky.

(4)
It also means that if a Roman wanted to purchase something abroad, it was six times as expensive; a foreigner, on the other hand, would find Roman products very cheap.

(5)
There appears to be evidence for a similar development in Egypt, Syracuse, and Etruria. Assuming that the development was universal, this means that all governments were suddenly capable of raising additional money for their wars. Am I right to conclude that the states that were at war by that time (Second Punic War, First Macedonian War, Fourth/Fifth Syrian War) could fight as long as they did because they toyed with the money?

(6)
If so, who suffered most?

[Aryaman2]

Toying with money has been always a favourite methodfor financing wars. Devaluation is good if your debt is mainly a national debt that can be repaid in local currency, it is bad if you have to pay in international currency (at the time a good silver coin related to the Dracma or the Sheckel). Besides, devaluation means inflation, the governement has payments eased one year, but the next year the goverment collects its own devaluated coin. In the end an spiral of devaluations could break the confidence in the monetary system with deletereous effects for the whole economy.
Rome was able to finance its wars through devaluation better than Carhage, as its citizens army could be paid in national currency. Carthage had to pay mercenaries with international currency.
As for who suffered most, in a situation of inflation those who send items could always raise prices to keep the pace of devaluation, those who work for a salary can´t.

[Praefectusclassis]

Hi Jona,
If you really need some info, contact the ancient history department at Leiden. They are currently running a 'Vici'-project on Roman economic developments from the 2nd Punic War into the 1st C BC. One of their post-docs did a lecture on this coinage a while ago and it's hopelessly confusing. IIRC the ancient historians themselves get messed up trying to reconstruct the coinage before the various changeovers.

[john m roberts]

I believe that debasement refers to changing the alloy in coinage so that it contains less of the valuable metal (gold or silver) and more base metal while retaining its face value. You can hardly debase copper coinage, so I suppose devaluation is the correct term.