BYZANTIUM, Bank of. In the remotest historical times Byzantium was not only a city of commercial importance, it was the feeder to Ilion, Tyre and Carthage, and the port through which flowed not merely the envied products of the Orient, but also its science, its art and its delusions. It was the galleys of Byzantium that first bore the spices of India to the 2Egean, its rich carpets and metallic wares to Tyre, its Hyperborean missionaries (peripheres) to Delos, its sacred hymn (the maneros) to Egypt, and its fame to Venice and Carthage. (Herodotus, Mel., 32, 36). The Byzantines en grossed the entire trade and prolific fisheries (palamenes) of the Pontic sea; levied tolls upon all vessels passing the Bosporus; and in their proud superiority, jeered at the Chalcedonians, who, after following them from Phrygia and arriving at the Bosporus too late to seize upon its commanding shore, had camped upon the arid point now known as Scutari. It is true that the Greeks claimed to have founded By zantium; they also swore to their lineal descent from the °Eternal Gods)); but Grote has long since pricked these bubbles. Byzantium was in the possession of Cyrus, who died 520 B.c.; and the Ionian Greeks only captured it from the Persians in 478.
Byzantium was probably the most ancient city of the Levant, older than Colchis or Troy, and richer than Tyre or Sidon. To the former she afforded safe passage to adventurous Jason and vengeful Menelaus; to others, the com merce of the Mediterranean. Under whatever name — Byzantium, Nova Roma, Constanti nople, Stamboul— she remained for 25 centuries the mistress of two seas; the arbiter and in terpreter of two continents; the most inviting and most necessary location for the establish ment and maintenance of an international bank, whose installation took place about 390 B.c., when she became an independent state and shook off the restraints imposed upon her industries and growth by the successive tyrannies of Babylon, Assyria, Persia and Greece.
At this period, shortly after the disastrous Peloponnesian War, Greece was much ex hausted; its industries were prostrated, sup plies annihilated, and the mines of Laurium, Thasus, Scapte-hyle, Siphnos, Parigzus, etc., all shut down. Both gold and silver coins were hoarded. In 407 B.C. the Athenians were obliged to melt down the statue of Minerva Victoria and convert it into those base gold coins which Aristophanes satirizes in "The Frogs.* In time, even the base mina: were
hoarded and gave way to the iron coins and parchment notes alluded to by Aristotle: the "shinplasters* and "wild cats" of a disturbed and suffering state. Prohibitions against ex porting the precious metals had been followed by the usual evasions and these by the inevitable issuance of a fiduciary currency; something by which to trade; something by which to count.
When this makeshift currency was es tablished in Athens the hoarded coins (chiefly silver drachmas) were furtively purchased by brokers, technically at risk of their lives, and sold to merchants with Oriental connections, who even in normal times profited so largely by this trade that now the shipment of silver to the Orient is said to have yielded, clear of all expenses, profits nearly cent per cent: a circumstance due to the superior value of silver as compared with gold, over and against the same relation in the Occident.
to Boeckh, 772: The money changing business, which, if the iron coins were at that time in existence, must have been of special importance, was farmed in Byzantine to a single bank; and all persons were prohibited from buying or selling money elsewhere, under penalty of forfeiting the sums thus bought or sold.* As the Hellespont at that period (5th and 4th centuries a.c.) was the principal, al most the only channel through which flowed the trade to the Orient; the Bank of Byantium must have reaped very considerable advantages from this monopoly, even when, before the independence of the state, such monopoly may have been acquired through Athens: advan tages that were doubtless enhanced when By zantium recovered its entire liberty. But the "money-changing business" was not its only source of profit. The bank collected the Straits dues and farmed the customs; it financed the fisheries, by discounting the obligations of merchant adventurers who were obliged to provide ships, tackle and nets and yet run the risk of storms or a bad catch. The bank also accommodated the foreign merchants who came to buy or sell commodities in the adjacent fairs; of which a great number were held within a short distance of Byzantium, both in Greece, the Isles and "Syria,* a name, that according to Herodotus, went at that period for nearly all of Asia Minor west of the Halys.