Gold has shaped human history for several millennia. But how and when did it first turn into currency? And what can it tell us about the birth of money?In today's episode of The Ancients, Tristan Hughes delves into the origins of money with TV producer, author and professor Alan Ereira. Together, they reveal the intertwined origins of commerce, trade, and coinage and journey through the history of ancient money - from the earliest use of gold by the Varna Culture 6,000 years ago, through to King Croesus's revolutionary minting of pure gold coins in Lydia and the first ever financial crash.Presented by Tristan Hughes. Audio editor is Aidan Lonergan, the producer is Joseph Knight. The senior producer is Anne-Marie Luff.The Ancients is a History Hit podcast.Sign up to History Hit for hundreds of hours of original documentaries, with a new release every week and ad-free podcasts. Sign up at https://www.historyhit.com/subscribe. You can take part in our listener survey here:https://uk.surveymonkey.com/r/6FFT7MKTheme music from Motion Array, all other music from Epidemic Sound
Chapter 1: What is the main topic of this episode?
It's The Ancients on History Hit. I'm Tristan Hughes, your host. In today's episode, we are exploring the story of the earliest coins ever minted, the birth of money.
It's a topic that takes us back over 2,500 years to what is today Western Turkey and the ancient kingdom of Lydia, home to the wealthy trading city of Sardis and famously rich kings such as Croesus, the man from whom we have the saying, rich as Croesus. Now our guest today is the TV producer, author and professor Alan Herrera.
Alan, he has recently written this extraordinary new book all about gold and how this precious resource has shaped human history. Now, one key part of Alan's book, it explores the invention of money, of coinage, and how intertwined this story is with changing human attitudes towards gold. Alan, he is a wonderful storyteller.
We cover everything from the earliest known use of gold over 6,000 years ago with the Varna culture in present-day Bulgaria to the first financial crash in history. Lots of great information about gold and early money coming your way. I hope you enjoy. Alan, it is wonderful to have you on the podcast today.
Well, it's wonderful to be here, it really is.
We're talking all about the birth of money today and the use of gold thousands of years ago and the story of the first coinage, early money. Alan, this feels it's closely entwined with this continual human fascination with gold, which has been there for over millennia.
Yes, it has. And it's very extraordinary because gold is itself a very weird substance. The behavior when people discovered gold is extremely weird as well.
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Chapter 2: How did the Varna culture use gold?
The first thing when they discovered the oldest gold known in the world, which turns out to have been in Bulgaria on the shores of the Black Sea at a holiday resort called Varna, probably wasn't a holiday resort in 4700 BC, but it's quite a while back. That's part of the point. Troy seems, the story of the Trojan War seems a long time ago to us.
Well, to people living through the Trojan War, this story is as far back again. We are talking about a very, very distant history, pre-history, when it was inconceivable that people were doing metalwork in 4700. And then this turns up, this cemetery, containing hundreds of graves, a fair number of which, over 60, have got gold in them, worked gold.
And the graves are very strange and tell you something but it requires quite a lot of interpretation to figure out what it's telling you. There's only one grave which has a human body with a substantial quantity of gold. A third of all the gold that's in this graveyard is on one body. And that one body is quite a tall man compared to the others. He had a gold headdress.
He had a gold scepter in his right hand. And he had a big gold disc. Now, this is where the story begins. And what you're looking at is the coronation regalia that was being used in Westminster Abbey last year.
Chapter 3: What significance does gold have in ancient societies?
So these are like 6,000-year-old kings who are using gold almost as part of their status?
Nearly 7,000 years old, we don't know that the man was a king, except the stuff he's carrying is what we associate with a royal regalia. Why? Where does this idea come from? It comes out of nowhere. There isn't a predecessor to this. And this is where the story of gold actually begins. Now, that cemetery is really a culture we know nothing about. It disappeared from the face of the earth.
Six of the graves contain not just no human being, but no human being and quite a lot of gold. Three of them contain scepters with no bones in there. Three of them, and they're associated also with weaponry, and the one that I call the Lord of Varna. has got weaponry, and his weaponry is amazing. He has got a flint sword, 35 centimetres long. A flint sword? Flint, yes. Wow.
And it comes from Switzerland. I mean, this is a very, very long journey. He's got material from the Alps, the Italian Alps. So there are huge journeys being undertaken. There are very long connections with people very far away at this period when the rest of the Balkans is hunter-gatherers. This is associated with a small group of the earliest agricultural settlements there.
Alan, it's really interesting. I mean, it might seem obvious to yourself, but to me less so. But what you were talking about there with the Varna culture and these gold ornaments with these very high status figures. So it suggests, well, it shows that the earliest use of gold by humans, it's not they discover gold and they decide straight away to turn it into currency, to use it as currency.
It's used for a very different purpose. First off, it's a status symbol to highlight these very important figures, do we think?
Well, you say a status symbol. I think it's something different from that. Okay. I think it's a direct connection with eternity. That is part of the status, of course. You have to be entitled. But the thing that makes gold so strange... is that it is incorruptible. So it doesn't belong in the mortal world.
So you have people who've discovered this substance, which is unlike anything else in that it's absolutely malleable, absolutely ductile. You can change it in any way you like without altering it, because you can put it back together again after you finish working it, and it turns back into what it was.
You can bury it in the ground for lifetimes, and when you dig it up again, it'll look exactly as it did when you buried it. There's nothing else like that on Earth.
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Chapter 4: When did coinage first emerge in history?
certain people so how long is it before gold changes in its meaning at least in certain places of the world in that it goes from meanings like as we've just mentioned there to ultimately the first evidence of money emerging and gold being used as currency well money is a very difficult concept
because I would distinguish between money and being used for exchange. Money is something with defined value, and it's being used for exchange long before it has a defined value. And the problem for them is people have to work out how to use it for exchange. But it acquires this exchange identity because of its connection to eternity.
I mean, even in the modern world, people regard gold as something which contains intrinsic value. That if you have a piece of gold, somehow that is more secure as a store of value. than anything else you could have. This is, of course, entirely potty. It's a psychological thing. It has no other kind of reality. But that's how we think.
And I would also just quickly like to point out that a very similar burial to the Varna burial that I just mentioned turned up in northern Peru at a place called Sipan, dated about 300 AD, where there is a figure who's referred to now as the Lord of Sipan, who has a gold headdress, a gold wrap scepter, and a big gold disc. Now, I don't think this is cultural transmission.
I don't think anybody in the world remembered what had been done in Varna, and they certainly didn't get to Peru 5,000 years later and show everybody what a king looked like. These are ideas which formed independently. This is what gold inspired. I talk to people who work with gold, and they say that they have the feeling that gold talks to them and tells them what they can do with it.
Very odd substance. You first see that happening, I think, in the second millennium BC, where the first sign, I think, of what we're talking about is Hammurabi. King Hammurabi holds a ceremony. He has had soldiers...
coming from Mari, which is a town in Syria, a very special town, first purpose built town, which was built on a circular plan as a trading center, crossroads, and also manufacturing center, making bronze. And the soldiers who come from Mari, he holds a palace reception for them. And it's well-recorded.
And at this palace reception, he gives out what he calls sun discs, golden discs that are somehow connected to the sun, and they are given to the soldiers. You could see that as the first gold payment to mercenaries. I don't think they saw it quite that way, but it's kind of the origin. And one of the features of it is that these sun discs have got a specified value stated on them.
in shekels, and the value that's stated on them is wrong.
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Chapter 5: What led to the development of currency in Lydia?
Well, you start with the idea that if you are engaged in long distance trade, you need to have some portable thing to be exchanged. We're not dealing with barter. Barter doesn't work for substantial trade. Firstly, what you may be trying to Sell may be something which is perishable and you're selling it in the summer.
What you want to acquire is perhaps much later in the year and with a different quality. So you need something where the value is being stored by the person who's selling so that they can then later use it to acquire the other things, not barter. So you need some symbolic material. The material that gets used quite quickly is electrum.
Electrum is gold that is found in riverbeds, which is alloyed naturally, mostly with silver, to some extent with copper and other materials. It's called in the Sumerian period and the Egyptian period, it's called white gold because there's so much silver in it that it's white. The Greeks call it electrum, which is actually the word for amber.
which also gives you an indication of what the material is like. But it also tells you that Electrum can vary in its content from one lump to the next. So you've got traders traveling with Electrum because it has this quality of goldness, but it's not pure gold, but it's very useful to do deals with. And you get bars being produced. by the late second millennium BC, bars of electrum for trade.
And these marked in divisions, and archaeologists refer to them as chocolate bars. You can break a bit off and do your deal with that bit. And these turn up, for example, at Troy. They don't come from Troy, and we don't know quite where they've come from, but they travel around with the traders. And the traders are traveling long distances. There's a trade route that goes from Babylon to Troy.
That's 2,000 kilometers. That's a heck of a walk. It's going to take months. So you want the material you're trading to be as compact as possible. And it's much easier to do a trade with a bar of electrum than with 15 such bars of silver, which is what you would need to get the sense of equivalence, or 200 sacks of wool or whatever. So the bar of electrum is a very handy, useful object.
And the problem is that to do the trade, at the point where an exchange is being done, you've got to have an assessment of what this material actually contains. So there has got to be at the trade center an expert who is trusted by everybody, who will assay the lumps of material and tell you what they're actually worth. And if you don't do the trade, you've got to go somewhere else and find another
equally qualified equally trusted dealer that must be one of the most highly sought after jobs at that time for weighing the purity yes they used a touchstone to do it you know a touchstone is a stone where you have sticks of different grades of gold different levels of alloy and you make a mark on the stone with it and you compare it with the mark made by the lump that you're testing
And we still use that word touchstone to have that sense of jeopardy, something that it's a heightened moment testing the alloy. Much easier to find a way around it. Now, at the crossroads on this trade route up towards Troy is the kingdom of Lydia. The king of Lydia, his kingdom is rooted in Sardis. Sardis is a huge market center, a bazaar of a fabulous scale.
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Chapter 6: How did the value of coins evolve over time?
And when is this? I've got my eyes on this. It's like the late 7th century BC we're talking now. Yes. Kingdom of Lydia. Yeah. And this is often regarded as one of the great birthplaces of money with these early tokens of this king, Aliates.
Aliates, exactly. And you get an invention of currency going on in China. You get an invention of currency going on in India, probably roughly the same time. But it's not well documented and it's difficult to work out exactly what's happening. Whereas in Lydia, it's much easier. The source material is much better. The archaeology is also much better.
And we know pretty much what Aliates was doing in producing these. And it was hugely popular. And lots of other mints start up doing the same thing because this is now business.
Is this mints across the Kingdom of Lydia or is it stretching beyond the Kingdom of Lydia? No, beyond.
The Greeks are also doing it on the coast. And they're also being, not just necessary kingdoms, some individual businessmen seem to be minting coins to sell to traders. So long as you trust the source and you trust the mark on it, then it works. The Lydian stamp was a lion's head. And that was the identity of the king was there on the coin.
And everybody seemed to be very happy with that for quite a while.
I mean, Alan, before we go on to the next part, I want to ask a bit more about that because I know you'll be going on to the next part otherwise. Yeah, sure. The archaeology from Lydia at that time, you mentioned how it seems to be this great bazaar, this amazing marketplace.
And surely then with the minting of these early coins, if they're made of electrum, archaeological record, do we have a rich record of these earliest coins surviving? We do have.
Oh, yes. And, well, there was a huge conference a couple of years ago, three years ago, on white gold, which is an enormous study of the archaeology of this material. Lydia, I should say, is a very odd place. It's odd because it's not part of Sumerian culture. It's not part of Greek culture. And its language, although it has a written language, is barely known at all.
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Chapter 7: What role did women play in Lydian commerce?
So the coins themselves contain 40% gold, 60% silver. But the value is not the metal. The value is the stamp. Oh, okay. That's what tells you you can trust this. And you don't have to see what the coin is made of. And in fact, they're gilded to stop them being tested by touchstones. So you can't actually find out what's in the coin unless you destroy it.
And this is a good working system until the balance of value of the two metals moves apart completely.
And so what is the cause of this?
Now, what has happened, and this has been unclear up to now, what has happened is was that the amount of gold available for the market had changed dramatically. And nobody's really looked at this connection before, but what had happened, the big thing that had happened, was the destruction of Jerusalem.
So early 6th century BC, Nebuchadnezzar I, king of Babylon, sacking Jerusalem.
Nebuchadnezzar, king of Babylon, becomes king in 605 and in 587 seizes the Temple of Jerusalem. But it's not a quick and easy process. And it's a very extraordinary one. What's happened is that when Assyria was great, Assyria attacked the northern kingdom of Israel. Israel was split into two parts. The northern kingdom was attacked by Assyria. Its inhabitants fled south.
A lot went to Jerusalem, carrying their treasure and carrying all the religious goods, tons of stuff, which all goes into the temple in Jerusalem, which is already a great golden shrine. And the Bible is very clear about the massive quantities of gold in there. And this is part of the general culture of the area in which the gods are associated very much with gold.
And the space that is created for them of gold allows a special human being who is divinely connected to be in there with the gods. The word, after all, in the languages of the time and in modern Hebrew for a temple is actually the word house. This is the house of a god. And that's why it is spray painted to an incredible scale with gold. It just is.
like an explosion in a gold factory going into Solomon's temple. And then there's more come down from the north. Assyria, obviously, Sennacherib decides that he's got to go on and grab Jerusalem as well. But he can't do it. It's a very well defended place. And that collapses. Then Nebuchadnezzar comes to power after the defeat of Assyria. And he has a great building program.
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Chapter 8: What caused fluctuations in the value of gold and silver?
He wants to rebuild Babylon. To do this, he's going to need a lot of money. And the reason he's going to need a lot of money is because Babylon has no access to the natural resources needed to rebuild it. It's got no timber, it's got no stone, and it's got no metal. What it's got is agriculture, very prosperous and successful agriculture.
And he's going to have to monetize this, but he's got to get hold of more gold from somewhere. so that he can buy the enormous quantities of stuff he wants to rebuild Babylon. Where can he get this gold from?
During the defense of Jerusalem, the king of Jerusalem had invited Babylonian delegation to come and have a look at the temple, presumably because he wanted to show them that he could afford to finance a rebellion by them against Assyria. It didn't go anywhere. But the prophet Isaiah was very annoyed about this having been done, because one day you're going to get into serious trouble here.
You should never have shown them all that. And it means that Nebuchadnezzar now knows where he can go to get the gold. And this is the only possible explanation of his campaign against Jerusalem, I think, because Jerusalem is not on a trade route. It's not on a military road.
The two big roads, one called the Sea Road, which goes up along the coast, the other called the King's Road, which goes up the Jordan Valley, they both avoid Jerusalem.
Yes, it's not like a Damascus or Tyre or Gaza, is it, in that significance? No, it's not.
It is not that sort of... Why would you bother attacking it on a large scale? Nebuchadnezzar makes his first attack. He gets bought off, basically. He goes away with a certain amount of gold. And what he does is interesting. And the Bible is very clear about this. He takes the gold vessels and he cuts them up. He's not treating them as sacred booty. He's having them converted into money.
They are for sale. That's why he chops them up. There's no other reason why you would do that. He's not going to use them. He's not going to show them off. No, he's handing them out to the merchants. And clearly the merchants say it's not enough. So he goes back a year later. And he's got to get it. And he knows there's a lot there. And he can't get it. So this is a siege that goes on.
It looks like 30 months. 30 months of a great empire using its massive army to besiege a place which is of no military significance. And when it finally succeeds, it doesn't just conquer it. It totally destroys it. It takes it apart stone by stone. Where have they hidden the gold? And Jerusalem doesn't exist at the end of this. And he's taken out a hell of a lot of gold.
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