A Four Thousand Year Old Bond

by on July 26, 2017 at 7:25 am in Economics, History | Permalink

From the Museum of Anatolian Civilizations in Turkey via a post on twitter from Isobel Finkel.

1 Thiago Ribeiro July 26, 2017 at 7:32 am

So, by getting a hold of it, I become entitled to all the wealth of the world – and more!!

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2 Dan1111 July 26, 2017 at 7:40 am

Hahaha. If you can find the debtor.

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3 Thiago Ribeiro July 26, 2017 at 8:48 am

He is so old, probably much of mankind descends from him and owes me money. They are spending my money!

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4 msgkings July 26, 2017 at 11:45 am

LOL

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5 A clockwork orange July 26, 2017 at 2:41 pm

cuneiform writing, calculil, began 3200 BC in Egypt.

6 Dick the Butcher July 26, 2017 at 7:51 am

It would be huge if you could find the 4,000 year-old obligor and he had the wherewithal to cover the note. .

Generally, there would be no compounding of interest.

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7 Thiago Ribeiro July 26, 2017 at 8:55 am

But he – and his descendants – owe me 7.5 seqels for each month of their being late with their bills. If I had invested the money in TIPS for the last four thousand years, I would own all Earth. They owe me for the loss of profits (or better yet, for the non-existance of profits).

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8 Jeff July 26, 2017 at 8:54 am

Sadly, there is such a thing as counterparty risk.

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9 Thiago Ribeiro July 26, 2017 at 8:58 am

The debtor commited his full faith and credit, so I will be paid, right?

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10 Excursive July 26, 2017 at 5:39 pm

Currency risk too. Today’s value of minas and seqels?

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11 Excursive July 26, 2017 at 5:42 pm

Never mind, minas was a weight or volume. Probably seqels was too.

12 Thiago Ribeiro July 26, 2017 at 8:20 pm

The weight in silver. Whatever it was, it is much today because the FED degraded money.

13 Believe it! July 26, 2017 at 10:54 am

The Germans, at least, don’t believe in such things.

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14 athEIst July 26, 2017 at 4:04 pm

You can buy Ohio.

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15 Thiago Ribeiro July 26, 2017 at 4:33 pm

Nothing interesting has ever happened in Ohio.

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16 TMC July 26, 2017 at 5:13 pm

The Wright brothers invented powered flight, embarrassing Brazil in the process.

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17 Thiago Ribeiro July 26, 2017 at 8:22 pm

It is a fascist lie. Brazilian Santos Dumont invented the airplane in France and exposed it ro all men to see. He donated his invention to Mankind, the Wrights wantedmro sell it as adeath-raining machine to make money!!

18 Kris July 26, 2017 at 7:44 am

Anatolia == “Hittite realm”? Or was the region known as “Anatolia” in antiquity as well?

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19 Plucky July 26, 2017 at 9:58 am

Hittites didn’t establish dominance of Anatolia until mid-17th century BC, so this pre-dates them. In near-eastern archaeology/history, “Anatolia” is almost always used for geographical description regardless of era, despite it being anachronistic for the Bronze age

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20 Dick the Butcher July 26, 2017 at 7:49 am

Today, it would be unenforceable. Incomplete documents, but that was almost 4,000 years ago.

This looks like an account receivable (trade receivable) on delivery of goods. The certificate provides for payment in 10 weeks (would make it a “note”). Then, default interest is added if unpaid.

Silver not gold?

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21 Hellsmond July 29, 2017 at 11:32 am

I think the closest source of gold is in egypt from anatolia, while silver was mined, at that time, in anatolia already (and greece as well?). Also not bronze because that required trade from modern italy for tin

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22 Alex July 26, 2017 at 8:45 am

Cool

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23 Florian July 26, 2017 at 9:09 am

Would be interesting to know, what the “default interest” was.

(As an aside note:
in “Pride and Prejudice” all possible suitors are always judged by their wealth and resulting capital income. All the ladies automatically do the math in their head. They always use the same intereset rate of 5%. That rate somehow was the universally understood “Default” interest rate in the early 19th century.
Nowadays we don’t have such a thing any more.
It would be interesting to know, for what historical time period this Default rate was in use.
Maybe all the way back to Assyria?)

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24 polly July 26, 2017 at 9:34 am

Good point. 5% is utterly familiar to me, anyway, as the assumed default rate, in English-language novels. Post Jane Austen it is still in place for Galsworthy’s Forsythe Saga which runs up to 1921. Will now check ‘Gulliver’s Travels’ (1721) ‘Pamela’ (1741) and Tristram Shandy (1759). And what about outside England; what return did Mme Lyubov expect to get when she invested the proceeds of sale of her orchard, in 1902?

It also occurs in that old joke:
Teacher: ‘John – what is five per cent?’
John (wearily):

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25 Tanstaafl July 26, 2017 at 7:02 pm

5% sounds a bit highish. Here’s from the Forsyte Saga:

“Timothy, indeed, was seldom seen. The baby of the family, a publisher by profession, he had some years before, when business was at full tide, scented out the stagnation which, indeed, had not yet come, but which ultimately, as all agreed, was bound to set in, and, selling his share in a firm engaged mainly in the production of religious books, had invested the quite conspicuous proceeds in three per cent. consols. By this act he had at once assumed an isolated position, no other Forsyte being content with less than four per cent. for his money; and this isolation had slowly and surely undermined a spirit perhaps better than commonly endowed with caution. He had become almost a myth—a kind of incarnation of security haunting the background of the Forsyte universe. He had never committed the imprudence of marrying, or encumbering himself in any way with children.”

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26 JWatts July 26, 2017 at 9:46 am

“They always use the same intereset rate of 5%. That rate somehow was the universally understood “Default” interest rate in the early 19th century. Nowadays we don’t have such a thing any more. ”

I assume all real long term return on my personal assets is 4%.

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27 Brian Donohue July 26, 2017 at 10:36 am

Yup. Before The Great inflation, the joke was that a banker had a 3/6/3 job: pay 3% on deposits, charge 6% on loans, and tee-off at 3:00.

It seems like we are settling in to a 1/4/I don’t golf world now.

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28 Brett Dunbar July 27, 2017 at 3:38 pm

The Bank of England’s Bank Rate was increased from 4.5% to 5% in April 1719 and remained there until being cut to 4% in June 1822; 103 years later. At the time Austen was writing interest rates hadn’t changed in living memory. The 4.5% rate had itself been in place from June 1699 to April 1719, nearly 20 years. The relative volatility between the foundation of the BoE in 1694 and 1699 was by then a thing of the past.

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29 Benjamin Cole July 26, 2017 at 9:16 am

See? A silver standard is the way to go.

The ancients considered silver the monetary metal, while gold was considered vulgar, for women’s jewelry, fops and gilding brothels.

Nations are cheapened by crass gold standards, and the implicit endorsement of decadent luxury, and befouled ostentation.

Silver! Now there is a monetary metal to be proud of!

The silver standard!

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30 Pshrnk July 26, 2017 at 9:56 am

“gold was considered vulgar” I guess they were not looking to work at Trump Tower.

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31 RPLong July 26, 2017 at 10:08 am

10/10 for use of the word “fop.”

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32 Thiago Ribeiro July 26, 2017 at 10:12 am

A gold standard is the correct way to go: “God put it into the hearts of men to desire marriage, and family, and society; and God put it into their hearts to appreciate, value, and thus desire gold.”
https://www.garynorth.com/public/14704.cfm

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33 Ray Lopez July 26, 2017 at 10:21 am

Electrum dude. “Electrum is a naturally occurring alloy of gold and silver, with trace amounts of copper and other metals. It has also been produced artificially, and is often known as green gold. The ancient Greeks called it ‘gold’ or ‘white gold’, as opposed to ‘refined gold’. Its colour ranges from pale to bright yellow, depending on the proportions of gold and silver”

They used a lot of electrum back in the ancient days, since it’s found in nature. A true “bimetallic standard”.

PS–I’m surprised by the brainy comments so far. Did not expect it.

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34 John Thacker July 26, 2017 at 9:33 am

Can’t help but notice that a Turkish museum isn’t particularly interested in replacing “B.C.” with “BCE.”

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35 Thiago Ribeiro July 26, 2017 at 10:14 am
36 Urso July 27, 2017 at 2:14 pm

Why would they? They’re a religious culture, and they do consider the “C” in that acronym as a prophet. Only a secular culture would use BCE

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37 polly July 26, 2017 at 9:36 am

*rolls eyes*

the missing line there is
John (wearily) : ‘I know, what’s five per cent?’

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38 Asher July 26, 2017 at 9:37 am

I’m pretty sure a “seqel” is what we call now a “shekel”. That means that the interest rate is explicit in the bond: 3 shekels per mina. In the time of the mishna (which was about 800 years later) a “mana” was 50 “shekel” so the interest rate would be quite high, 6% per month. Don’t know how stable these measures were.
Today I think we would call this 6/15 net 30.

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39 leppa July 26, 2017 at 9:44 am

net 70?

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40 Plucky July 26, 2017 at 10:13 am

In most commodities, Minas were subdivided into units of 60 (60 is a great base number- cleanly divisible by 2,3,4,5,6,10,12,15,20, and 30). That would make the interest rate 5% per month. 30% annual was common for trade finance (which is probable here, Assyrians in Anatolia were most likely merchants)

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41 Plucky July 26, 2017 at 10:14 am

which is to say, yes, this is a high interest rate even for the time, although it is clearly a penalty default rate

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42 Asher July 26, 2017 at 10:20 am

Corrections accepted, it would be 5/15 net 70.

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43 Jim July 26, 2017 at 2:26 pm

The fact that the document comes from Anatolia and the witnesses are from Anatolia while the debtors and creditors are Assyrian is not surprising. There were numerous colonies of Assyrian merchants in Anatolia.

The area certainly wasn’t called “Anatolia” at that time as “Anatolia” is a classical Greek word meaning “land to the East”.

It is probable that there were already Indo-Europeans in Anatolia at that time but there were also a lot of other people both at that time and later. Indeed even at the time of the Hittite Empire the majority of the population of the Hittite Empire in Anatolia were probably not Indo-Europeans. Indeed some of the later Hittite Emperors have names that appear not to be Indo-European

From the names of the witnesses it should be possible to determine if they were Indo-Europeans or not..

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44 Tom Warner July 26, 2017 at 4:54 pm

Kultepe is Kanesh, in Cappadocia, the original home city of the people who came to be known as Hittites. There was a major Assyrian colony there, which largely explains how the Hittites became relatively more advanced than their neighbors, including literacy and financial ideas.

Yes the Hittites were Indo-European, as were all so-far-known ancient native written languages of central and western Asia Minor. The only ancient native non-Indo-European written languages of Asia Minor are in the Hurro-Urartian and Kartvelian families and are native to eastern Asia Minor. The are guesses about there having been ancient unwritten non-Indo-European languages in central and western Asia minor, but only guesses, no evidence.

It is usually impossible to determine whether names are Indo-European unless the names are known from some other source. Beware low-grade scholarship that attempts to simultaneously guess the meaning and language of a name or word whose meaning and language are unattested, and may be misheard or conformed to a similar-sounding name or word in the writer’s language, as with most names found in documents like this one.

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45 Tom Warner July 26, 2017 at 5:05 pm

EG the earliest recorded Urartian king is called Aramu in Assyrian, a well-known Semitic name, but it’s very unlikely that he was Semitic, and very likely that the Assyrians were conforming the later-attested Urartian name Erimena to a more familiar name. When you are dealing with an obscure witness in a legal document and the name is your only clue, you’ve usually got nothing. In this case with this tablet the names might be known to be Hittite from other texts, but I wouldn’t be surprised if they’re just tendentiously blind guessing.

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46 Jim August 4, 2017 at 10:40 am

Yes it is also true that names could be adopted from other languages. I believe there is at least one known case in the Levant of a Semitic ruler adopting an Aryan name. At one time the Hungarians believed they were descendants of the Huns and the name “Attila” became a popular Hungarian name. Quite aside from the fact that the Magyars have no particular relation to the Huns, “Attila” isn’t even a Hunnish name but is the Gothic word “atta” for “father” combined with a Gothic diminutive “-la”.

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47 Jim August 1, 2017 at 12:26 pm

I’m curious as to what language or languages of ancient Asia Minor are clearly Kartvelian?

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48 dux.ie July 26, 2017 at 10:17 pm

In ancient times there was such thing as debt jubilee, i.e. debt cancellation.

http://www.cadtm.org/The-Long-Tradition-of-Debt

“””In neighbouring Assyria, the emperors of the 1st millennium BC also adopted the tradition of debt cancellation, as did the rulers of Jerusalem in the 5th century BC: in 432 BC Nehemiah”””

So based on the laws when it was drawn up, you might get nothing now.

The earliest still valid bond seems to be the Dutch Water Bond,

http://www.history.com/news/history-lists/6-longstanding-debts-from-history

“””In 2003, Yale University forked over around $25,000 to buy the 1648 perpetual bond, which was originally worth 1,000 Dutch guilders (a little over $500). The university purchased the 368-year-old bond for its historical value, but since it was issued with no maturity date, it still pays out interest even today. In 2015, a Yale professor traveled to the Netherlands to collect 12 years of interest totaling $153. “””

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49 Tom Warner July 26, 2017 at 10:56 pm

Ancient debt forgiveness was generally a populist measure against juicing poor people. This is a big debt, more than 3 pounds of silver, presumably between wealthy people, not the type to have been forgiven. The point of the tablet is that official authority is recognizing and endorsing it.

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50 JWatts July 27, 2017 at 4:43 pm

“In 2015, a Yale professor traveled to the Netherlands to collect 12 years of interest totaling $153.”

I wonder if he was paying for the trip out of his own funds.

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51 dan1111 July 28, 2017 at 8:06 am

Either way, it was more logical than the average academic trip.

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52 JWatts July 28, 2017 at 6:20 pm

Good Point.

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53 Tzvika July 27, 2017 at 9:46 am

I’ve been to that museum and saw this tablet in person and many other treasures. Because it’s somewhat out of the way in Ankara, so few people get to it, and it’s a shame.

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