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bidden to faithful Christians (and Muslims) are obvious. If you borrow 10 and are forced to pay back 11, sooner or later the lender, or usurer, will take your property. Babylonian loan. Interest on the loan drained Persia of money. Commerce came to a virtual halt except for barter. There was no gold for taxes so the king could not pay his retainers. King Cyrus of Persia needed gold. Babylon had the gold Persia need- ed. Persia went to war against her creditor and conquered Babylon in 536 BC—and confiscated Babylon's gold. She also adopted Babylon's usury system. Usury between nations inevitably leads to war. ey a 8 wna saws Bee armas tae See ane 8 wee ae Ancient Money Contracts ed. Persia went to war against her creditor and conquered The example used earlier of Seth borrowing 10 talents and Babylon in 536 BC—and confiscated Babylon's gold. She also having to repay 11 talents is straightforward and easily under- adopted Babylon's usury system. Usury between nations stood. But to elaborate just a little: inevitably leads to war. Suppose Seth goes again to the lender and borrows 10 gold : talents and agrees to repay interest each year of 3-1/3 talents, and © Greece Conquers Persia also agrees to repay the 10 gold talents whenever the Baal priest As Persia spent the confiscated Babylonian gold, there was an asks for it. Each year for three years Seth pays 3-1/3 talents. At instant flash of economic activity. New cities were built, indus- the end of three years there is no more gold in circulation and _ tries were financed, armies outfitted, and palaces were built. Seth must ask for a loan in order to pay the interest he had The flood of wealth sent Persian merchants to Greece. The agreed to pay (or forfeit his farms, children, etc.). Greeks needed Persian wares so they borrowed with the promise The lender then has a choice: he can lend Seth gold talents _f returning the loans plus interest. with which to pay interest or he can give him a clay tablet which A case in point: in 412 BC Sparta borrowed 5,000 tdlents the lender says is worth 3-1/3 talents and keep his gold. _ from Persia to build warships. This loan, like all the others, was Understanding money is just common at standard rates. Seven years later, in 405 BC, Lysander of sense. Which would yo0? YO, nn Sparta used these ships to destroy the would give Seth a clay tablet and keep whole Athenian fleet which was attacked the gold. This is the reason for the clay while they were drawn up on a beach. : 7 s ; Thi aes a Sabstiue for gold The ctizens of Pe*Sia went to war against Grscewalontorowed money. Babylon treasured their clay tablets. her creditor and conquered Let's look at this transaction in a little They are found in great quantities today + more detail. If the Spartans repaid the ane excavating is being done in the Babylon in 536 BC, and Persians’ loan monthly, the payments ruins of Babylon. confiscated Babylon s gold. would have come to 153.19 talents month- We have mentioned the temple ¢ 2 ae ly for 7 years. At 33-1/3%, the total banks—they were big ones. There were She also adopted Babylon s repaid would have come to 12,857.96. A also government banks, and private usury system. tidy profit—if that much money could banks such as the Igibi Bank which actually have been found in circulation to flourished in 575 BC. These banks meet the payments. offered almost every service offered by —— Chances are the Spartans needed the banks today, including the use of entire 5,000, and everything else they cheques, savings, letters of credit, and the Babylonian form of could get together, to prepare for the coming war. If this is what paper money—the clay tablet. The banks kept the gold...natural- happened, the debt would have looked like this: ly. In ancient Egypt a canal had been dug from the Nile all the Spartan Debt To The Persians @ 33-1/3% way to the Red Sea. Boats coming from India could stop by 5,000.00 borrowed barges tied up by the side of the canal and get a loan—day or 6,666.65 owed at end of Ist year night. At night these loan-boats were well lit so that they could 8,888.84 owed at end of 2nd year be seen from a long way off. They are the ancestors of the 11,851.79 owed at end of 3rd year drive-in window in today's banks. 15,802.39 owed at end of 4th year a1 acnoc aww te a Spartan Debt To The Persians @ 33-1/3% 5,000.00 borrowed 6,666.65 owed at end of 1st year 8,888.84 owed at end of 2nd year 11,851.79 owed at end of 3rd year 15,802.39 owed at end of 4th year 21,069.85 owed at end of Sth year 28,093.13 owed at end of 6th year 37,457.51 owed at end of 7th year Persia Conquers Babylon The relationship between nations follows almost exactly the relationship followed between individuals. If one nation desires something another nation has and doesn't have the required pay- ment, the money can be borrowed. If interest is required, as it usually is, trouble is just a matter of time. Babylon had a neighbor to the north—Persia. In the course of trade Babylon graciously made loans which enabled Persia to buy things she ordinarily would not be able to buy. The loans were made at standard interest rates for the time, 33-1/3%, payable in gold. Persia kept her part of the bargain as best she could. She borrowed extensively and was required to repay dou- ble the amount in three years. After paying back the original loan, Persia, like Seth earlier, found that there was no more money left in circulation and that she still owed Babylon's bankers the interest on the loans. In that day 1 talent was a substantial sum. Five thousand tal- ents was enough to buy an entire navy. Thirty seven thousand talents was an impossible figure. "The borrower is servant to the lender.” Sparta was forced to use the navy she had borrowed the money to buy—she couldn't allow the unpaid debt to continue to mount. When she won the war, she transferred the payments of this horrendous debt to Athens—and Athens instead became the servant of Persia, The Persians certainly felt themselves the real winners. Greeks were killing Greeks—and their 5,000 talent loan had brought home wonderful riches. It was these loans that drained Greece of money and paved the way for unending war. Philip If of Macedonia died, Philip had conquered Greece and placed her under his rule. His son, Alexander, inherited the NEXUS¢*29 336 BC—Alexander The Great The king of Persia had other problems resulting from this AUGUST-SEPTEMBER 1993