Banking, Credit and Loans in the Novels of the Emperor Justinian

Abstract

The ‘Novels’ or ‘New Laws’ of the Emperor Justinian provide an unusually rich vein of evidence about the relationship between law and economic performance in the Roman world. Unlike the constitutions in the Codex, the Novellae typically preserve their introductory prefaces, setting out the official version of the circumstances that generated each law, revealing the concerns of petitioners and the imperial administration, the relationship between economic interests and imperial legislation, and the economic constraints that curtailed the emperor’s legal agenda. This is particularly clear with respect to loans, credit, and bankers, heightened by the fact that much of this legislation was issued during a period of sustained fiscal pressure and demographic decline due to the bubonic plague. Two guiding principles emerge. The first was the emperor’s determination to increase tax-revenues by cracking down on tax-evasion at local levels and by supporting large landowners and the Church against attempts by tenants, agricultural workers and artisans to take advantage of labour shortages caused by the bubonic plague to reduce rents and increase rates of pay. The second was the full-blown Christianization of late Roman society including the reshaping of imperial law, particularly with respect to sexual and marital morality. Civil law rights increasingly depended on religious conformity. Heterodox Christians were marginalized and heretics, Jews, Samaritans, and pagans were treated as second-class citizens. Justinian’s moralizing agenda had implications for members of professional groups whose activities the emperor disapproved of. Brothels were banned, castration (for the production of slave eunuchs) was prohibited. Yet curiously, despite the Church’s condemnation of moneylending, Justinianic legislation regarding banking and credit adopted a relatively technocratic and morally neutral tone, balancing the interests of creditors and debtors. Significant legislation on loans and on the banking profession was introduced but it tended to be permissive rather than restrictive. The Novels reveal that loans and credit arrangements were vital to the fiscal machinery of the state because they enabled cash-strapped taxpayers to meet the government’s demands. Hence Justinian recognized what he termed the ‘valuable service to the common good’ that bankers provided. In addition the laws reveal that debtors from the lowest to the highest ranks of Byzantine society had to rely periodically on credit relations. Many bankers, the Novels show, were members of the imperial service elite, enjoying senatorial rank of both the higher and middling grades. Others were attached to aristocratic households, whose fortunes they helped to invest. It made the bankers perhaps not just too big to fail, but too big to fault, thus explaining the absence of moralizing rhetoric concerning them in the imperial legislation. The bankers of Constantinople were thus to a certain extent insulated against the Emperor Justinian’s moralizing agenda by virtue of their centrality to the economic interests of the early Byzantine state and the early Byzantine elite.