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History of Money: The Legendary Gold & Silver Coinage of Lydia and King Croesus the Rich

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"Khrysos (Gold) is a child of Zeus; neither moth nor rust devoureth it; but the mind of man is devoured by this supreme possession." — Pindar, Fragment 222 (trans. Sandys) (Greek lyric 5th century BC)

Ancient Greek Gold

Gold occupies a prominent place in the ancient Greek history of money. The Greeks were one of many ancient tribes to use the wooly fleeces of sheep for capturing the alluvial gold borne downstream from the mountain rivers. It has been speculated that this practice is the origin of the ancient legend of the Golden Fleece sought by the Argonauts.

Mount Olympus
Alexander Del Mar, in his 1895 work A History of Monetary Systems, suggested that much of the earliest Greek history is filled with fables for various reasons— notably that the Scythians conquered and colonized Greek territories, and replaced the indigenous paternity with a fictitious one of their own creation, in which the Grecian heroes were descended from gods. Del Mar suggests that some of the early Greek moneys may even have been gold rings, which Scythians carried with them into Greece, as well as into Egypt and Britain.

However, it was the ancient Lydians who are first credited with the creation and introduction of coins, which then spread throughout other kingdoms along the coast. The Lydian coins— the first of which was made from the "white gold" amalgam of electrum — are believed to have sparked a revolutionary change in the development of money, affecting much of the Western world's monetary development for many centuries.

 The Lydian Kingdom

Map of Lydia, Ionia & Asia Minor
The Lydians are believed to have lived in Anatolia around 2000 BC, and to have spoken a European language. They evidently traded in a broad array of commodities and luxury goods, developing thriving retail markets in Sardis (the Lydian capital city), in which anyone with something to sell came to a central marketplace.

Herodotus wrote that the Lydians were the first he knew of to mint gold and silver coins, and that they were the first retail-traders known to the Greeks— though there were certainly earlier retail traders in more distant lands. The Lydians have even been credited with inventing dice for gambling games, which archeological excavations indicate were frequently played around the markets. 

Most of the earliest Lydian coins were made of electrum, the naturally occurring amalgam of gold and silver. They were shaped into ovoid "slugs," thicker than modern coins, and later stamped with the Lydian heraldic emblem of a lion's head.

Lion-head Electrum Coin of Lydia

Legends of the Ancient Lydian Gold

The legends of Lydia's ancient origins are connected to the ancient legend of King Midas, of the nearby kingdom of Phrygia: Midas was said to have inherited the kingdom from his father, who was so poor he possessed only a pair of oxen. But despite his poverty, Midas was renowned for his hospitality. One of his guests proved to be the foster father of Bacchus, who granted Midas his wish to have everything he touched turned to gold.

King Midas washes away the golden enchantment
Unfortunately, the enchantment was applied literally, with the disastrous result that everything Midas touched—including his food and close relations—was instantly turned to solid gold.

Bacchus advised Midas to extricate himself from this curse by bathing in the Pactolus River. As soon as Midas did so, the river itself became the recipient of the enchantment, and proved through the ages to be a rich source of gold for the Phrygians and the nearby Lydians.

Geologists believe that the Pactolus carried rich alluvial gold deposits from the mountains of Anatolia, though in modern times the site has long since been eroded, and was reportedly already mined out by the time the Romans invaded the territory.

The Legacies of the Ancient Lydian Kings

Much of the ancient Lydian history comes from Herodotus, who lived around 500 BC. Herodotus claimed the Lydian kings traced their own ancestry from Hercules. One of their oldest kings of notoriety was a certain Candaules, a man so infatuated with his wife's beauty that he reportedly could not resist bringing his favorite bodyguard into a hiding place in his chambers, in order to observe the king's wife in the nude as she undressed.

Candaules
Unfortunately for Candaules, the queen noticed what he had done, and evidently took a grave view of the matter— though she did not tell him so. Instead, she summoned Gyges without the king's knowledge, and declaring that Gyges could either die by her hand at that moment, or else slay the king and marry her himself. Gyges chose the latter option, and consequently became the first ruler of the Mermnadae dynasty.

In order to stave off the vengeance of the outraged Lydian people, Gyges persuaded them to first hear the pronouncement of the Oracle at Delphi— to whom he prudently made lavish gifts of six golden bowls weighing around 1800 pounds. The Oracle subsequently spoke in Gyges favor, but not without reservation, as she predicted that the fifth generation successor of his dynasty would meet an untimely doom as a result of the slaying of Candaules. Gyges and the Lydians were apparently less concerned with posterity than with the present, and the dynasty continued to prosper through many generations.

The "White Gold" Electrum Coinage of Sardis

Around the year 700 BC, the Lydian capital city of Sardis still stood over abundant alluvial gold placers borne out of the nearby mountains by the waters of the Pactolus— which legendarily still carried down the gold flowing from the enchantment once placed on King Midas. The Lydians thrived both from their commerce, and from the rich and abundant gold and silver deposits found in their own kingdom. The Lydians were even said to make orgiastic devotional rites in honor of the goddess of the mountains, who bestowed treasures in the form of ores and precious metals.

Among these was the naturally occurring amalgam of gold and silver called electrum, also known as"white gold." Usually consisting of two parts gold to one of silver, electrum's name is derived from an ancient Greek word pronounced "elector," meaning "he who shines." 

At beginning of 7th century BC, Lydian money consisted of unstamped lumps of electrum. Initially these bore no uniform standard, until the reigning dynasty usurped the power to issue metallic money as the sole prerogative of the government, and had the ingots stamped with insignia. Around the year 660 BC, Gyges' descendant Ardys began stamping the ingots of electrum with distinctive marks. Initially various kingdoms in the region had different stamped ingots, but in time they became comparatively uniform and evolved into an early coinage stamped with a lion's head — the heraldic emblem of the Mermnadae.

Gold Lion & Bull Coin from Lydia

Many of the historic accounts related by Herodotus have been doubted in some cases, but his accounts of ancient Lydian coinage appear to have been validated by modern discoveries: In the 1950s, archeologists digging in the ruins of the great Ionian city of Ephesus unearthed a huge hoard of Lydian treasures beneath the ruins of the temple of Artemis, which was believed to have been built around 600BC. Thousands of golden treasures and jewels were found, but also hoards of ancient golden and electrum money— including many of the eldest globular coins that bore no mark, but also many more which did, including coins struck with the heraldic lion's head of Lydia. The dating of these ancient Lydian coins around 630BC appeared to confirm the general accuracy of the estimated dates given by Herodotus. 

The Kingdom of Croesus the Rich

The Lydians made war on nearby kingdoms while defending their own from the Cimmerians. However, they reportedly engaged in less wanton destruction of the properties and holy places of their victims than many of their contemporaries— choosing instead to demand monetary and commodity tribute to increase their own wealth.

The prophesied fifth generation Mermnadae sovereign was none other than Croesus the Rich, who completed most of the conquests of his forefathers. Croesus ascended the Lydian throne sometime around 560BC. The Lydians were already a rich kingdom by this time; they were said to manufacture some of the world's finest perfumes and cosmetics, and were noted for being greatly preoccupied with commerce and trade. 

The Lydians of Sardis enjoyed not only the abundance of gold streaming downriver from the legendary mountains, but also a propitious location for trade along the highway that linked the Aegean Sea to the Euphrates. The Lydian capital of Sardis was filled commercial activity, and the thriving trade and commerce of Lydia gave rise to great demand for money, goldsmiths, and money changers. Many wealthy Lydians lived in luxury, and the elite of Sardis were reputedly large spenders who believed in conspicuous consumption.

Croesus Introduces The First Pure Gold & Silver Coinage

"Croesus showing his treasures to Solon"
Croesus was known as a shrewd financial and monetary innovator. His legacy as a man of great wealth lives on even today in the expression "As rich as Croesus." At one point Croesus called in all the electrum coins in circulation, and had them melted down and recast into the kingdom's first coins of pure gold and pure silver. Archeologists have reportedly confirmed the Lydian methods of melting down metals and extracting impurities, after discovering the remains of ancient Lydian metallurgical foundries.

By this time, the most common denomination of coin in the surrounding realms was the stater. This was further divided into the denominations of thirds, sixths, and twelfths. According to Peter Bernstein in The Power of Gold, the division of staters into twelfths was the origin of the troy ounce's composition of 24 carats of pure gold, and of the British shilling's composition of 12 pennies (prior to the eventual conversion into the decimal system, in the latter case).

The Lydian gold and silver coins struck at the behest of King Croesus were not only widely accepted, but in heavy demand throughout Asia Minor and parts of Greece. Money, banking and financial markets already existed in Mesopotamia, China, and Egypt— but according to some accounts, coins struck from gold and silver did not come into widespread use until after rise of Lydia, and the minting of their first coins sometime in the 7th century BC.

 

Gold Deer Coin from Ephesos

By striking coins in a standardized size and weight, and stamping them with royal emblem easily recognizable even by illiterate citizens, the Lydians had created a form of money that would greatly aid commerce and trade. The recognizability and uniform weight of the coinage reduced the need to carefully weigh and evaluate the gold and silver every time a transaction took place, reducing the chances that one of the parties to the transaction would wind up being swindled. The Lydian coinage became renowned as a well designed form of money, credited with a primary role in stimulating the rise of commerce and trade in many of the surrounding territories.

The Downfall of Lydia

Unfortunately, the entirety of Croesus' reign was not nearly as auspicious as his introduction of the fine Lydian coinage. Some have accused Croesus of squandering his wealth on war-making, and the conquering of most of the Greek cities of Asia Minor, including Ephesus— where he spent a great deal more on lavish building projects. Some accounts also charge him with becoming an aggressor against Persia— but others suggest that Croesus felt obligated to strike out preemptively lest his own kingdom be conquered by the Persian Emperor Cyrus, who was waxing in power and rumored to already be plotting the conquest of Lydia.

The Oracle of Delphi Entranced
Remarkably, Croesus was said to have decided much of his war strategy by the consultation of Oracles. He was suspicious enough of their talents, however, that he sent out a task-force of agents to test the accuracy of their claims, instructing each agent to count the days from departure and ask the Oracles what Croesus himself was doing on that day. Of the many Oracles consulted, only the Oracle at Delphi was able to guess correctly, prophesying that Croesus would be attending to 'strong-shelled tortoise seething in bronze with the flesh of lambs' — which, according to the tale, he was.

Ruins in Mountains of Delphi
Croesus promptly paid a kingly tribute to the Oracle of over one hundred golden ingots of pure gold, a 600 pound golden lion, and a gigantic golden vat capable of holding 5,000 gallons. He also ordered the Lydian citizens to make sacrifices for the Oracle. In exchange for this distribution of largesse, the Oracle evidently gave Croesus special consultation rights and a permanent grant of Delphic citizenship to any Lydian citizen, among other benefits. The Oracle then prophesied that if Croesus waged war against Persia he would "destroy a great empire," which reportedly emboldened Croesus to immediately raise forces and attack the Persians. Unfortunately for Croesus, the empire that was prophesied to fall was not that of the Persians, but his own.

After an apparently indecisive opening battle against Persian imperial forces, Croesus wanted to withdraw to Sardis to muster more troops before launching a second attack. However, at this point Cyrus employed the noteworthy strategy of taking his cavalrymen off horseback and onto the back of camels, which had originally been brought along as pack animals. The horses apparently could not stand the sight or the smell of the Persian camels, and were so averse to them that the camel charge forced the Lydian cavalry into making a disorderly retreat back into the city. After this, the forces of Cyrus eventually broke a two week long siege and defeated Croesus and his embattled armies. The Emperor Cyrus was said to have taunted Croesus with a reference to the ongoing plunder and destruction of his capital, to which Croesus replied "Not mine any longer. Nothing here belongs to me now. It is your city they are destroying and your treasure they are taking away." 

Map of Ephesos, Lydia & Ionia
With Croesus fallen, the Lydian kingdom disappeared. But it left its long-lasting monetary legacy of gold and silver coinage to rest of the world: The Lydian coinage spread throughout Asia Minor and to Greece, becoming an integral part of commerce and trade throughout the Mediterranean basin. Much of the most famous Greek coinage was made of silver, but it was said to be the Lydian bimetallic coinage that would later be modeled for the gold and silver money used throughout much of the Roman Empire. The burgeoning prosperity and economic development that followed brought gold and silver into excellent repute as premiere forms of sound money, a status they continued to enjoy in much of the world up into modern times.
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