History of Money, Banking, and Trade
A historical look at the development and evolution of money, banking, and trade. From the ancient civilizations to the present.
History of Money, Banking, and Trade
Episode 22. The Financial Frameworks of Ancient India: Usury, Banking, and Coinage
How did ancient civilizations manage to thrive without modern conveniences? Join me, Mike D, as we uncover the secrets behind the prosperity of Ancient India.
Ever wondered how ancient societies organized themselves socially and politically? Our exploration continues with an in-depth look at the Kuru kingdom and the migration of Indo-Iranian speaking peoples. Learn about their transition from nomadic tribes to agriculturalists, the intricate social hierarchies, and the fascinating fact that their electoral process included women. We'll also touch upon the kingdom's economic strategies and the stories behind their rise and eventual decline, paving the way for the Panchala kingdom and the Mahajanapadas coalition.
The evolution of financial systems is no less intriguing. Delve into the history of usury and banking practices in ancient India, where initially condemned practices became regulated professions. Discover the detailed legal frameworks that governed loans, interest rates, and debt recovery, and how the caste system influenced financial transactions. Finally, we dive into the introduction of coinage during the Nanda period, comparing it to the existing debt systems, and wrap up with a look at Alexander the Great's campaign in India, his strategic alliances, and the mutual respect between him and Indian leaders like Porus. Tune in for a comprehensive journey through the early economic and social landscapes of ancient India.
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Welcome podcast listener. I am Mike D and this is the History of Money, banking and Trade podcast. My goal is to expand your knowledge of the history and evolution of trade, along with money, banking and credit, from ancient civilizations all the way to the present. I truly hope you find these episodes to be informative and entertaining. Now, I'm not a historian but, like Dan Carlin likes to say, I am a fan of history. Now for the next couple episodes. I really wanted to get into the history of India and in all honesty, I think it's a great segue because I just finished up with the Indus Valley. So ultimately, I think it makes for a great transition.
Speaker 1:Now, as a reminder, harappa was the first city discovered in modern Punjab. About a year later, mahanjodhara was discovered in Singhd, which is located in modern-day Pakistan, and really from there, more and more ancient Indus Valley cities were discovered in modern Pakistan and in northern India. These settlements are old, as some date back to 7,000 BCE. These early settlements may not have been permanently settled at the time, as they hadn't really developed any necessary irrigation systems early on. However, it's quite possible that once the people of the Indus started trading with Mesopotamia, there were goods and, more importantly, knowledge that was transferred from each civilization to the other, and this is when the people were taught by the Mesopotamians potentially how to irrigate their fields. And when I say Mesopotamians potentially how to irrigate their fields, and when I say Mesopotamians, I'm more or less talking about the people of Sumer, who transferred this knowledge, along with other farming techniques, back to the Indus Valley, and also the Indus Valley would have transferred information they had gained along the way back into Mesopotamia. They had gained along the way back into Mesopotamia. So by 5000 BCE, the Indus Valley began to domesticate cotton, which will eventually spread through India.
Speaker 1:And also, around 5000 BCE, large quantities of silt naturally came into the region as a result of the Indian plate movement, and silt was more or less vital because, if you remember from what I said in the previous episode or even when I discussed it, in Mesopotamia and Egypt, silt is very important because it helps promote water retention and air circulation. Thus, ultimately, it allows the local region to be a lot more fertile and therefore, once the land becomes fertile and you can grow large quantities of crops, that means what you're going to have is you're going to start to have permanent settlements around this particular region, and that's when you start to see the Indus Valley and even other societies around the world that had good natural, fertile land, you start to see settlements spring up and people went from being semi-settled to being more permanently settled, and this is the case from anywhere from India to China to Africa. So, ultimately, what I'm getting at is the combination of silt and irrigation techniques. While this allowed the people in northern India and Pakistan to flourish, and with regards to irrigation, the people of the Indus were able to build up upon the Mesopotamian techniques by engineering sophisticated drainage and reservoir systems that ran across and even underneath the city, with house drainages being connected to the city main drainage systems. Now, because of this, we see that this civilization took personal hygiene very seriously and ultimately, it probably meant that there was less disease that was spreading throughout the cities. In addition, the people in this valley standardized their weights and measures across various cities, and also we see the cities in the start to resemble each other. Now, this is probably an underrated development, because it was very important as far as we're concerned, because standardized weights and measures, along with similar cultural aspects of each city, meant that trade can flow efficiently throughout the region.
Speaker 1:Its extensive trade with Elam, along with migration patterns from Elam, may have exported its language from western Iran to the Indus Valley. Trade was further enhanced when the people of the Indus had adopted the use of the wheel from the Sumerian trading partners. As such, the Indus was probably one of the earliest adopters of the wheel for transportation, as they built ox carts to transport goods and people, and they could also transport goods through their small boats that they had developed. They could also transport goods through their small boats that they had developed. As such, the Indus Valley had expanded its trade throughout the region with each other, from Afghanistan all the way to Egypt and Crete, let alone Mesopotamia that we'd been talking about earlier. However, once the rivers changed courses and even some would have dried up, completely, changed courses and even some would have dried up completely, well, the climate change basically affected this region, probably more so than a lot of other places, and former settlements and cities began to die out and other settlements would have sprung up and other people would have drifted towards the River Ganges, where they would have formed smaller urban settlements. So, while the Indus Valley was flourishing, the ochre culture was being formed.
Speaker 1:With the arrival of the Indo-Iranian wave of migration that would have occurred in the Indian subcontinent, in the area of Rajasthan, sometime in the late 3rd millennium BCE. What separated this culture apart from other Indus settlements was the fact that the archaeologists uncovered a stockpile of weapons like double axes, harpoons and swords. Now, I bring this up because in the Indus Valley, the interesting thing about that culture was the fact that there were no weapons of war that were discovered. In fact, there was no evidence of any kind of war that had occurred in the region, which might be the only place in the world that's ever happened. So what I'm getting at is that was a very peaceful culture, as far as we can tell Maybe we'll find out information in the future but it appears that they lived peacefully. Now, the Okra culture was probably like every other culture in the world, except for that of the Indus Valley, in that they would have had weapons of war, they would have went to war, they would have trained for defense, they would have been like every other culture, except for those of the Indus Valley. So when I say that they came sometime in the late third millennium BCE, this means that they probably would have arrived with the Vedic culture that had emerged in northern India, which would have been forming a new culture, which included ancient Indian literature that survived to this day.
Speaker 1:Much of what we know about the ancient Indian subcontinent comes from the period from about 1300 to 900 BCE, and much of it comes from significant pieces of ancient literature known as the Vedas, which Veda means knowledge. As such, this period is often referred to as the Vedic period, since this was the time when the Vedic culture was being composed and still revered in orthodox Hindu sects. It's also probably worth noting that during this wave of migration, that there were some cultural and genetic connections between the Indo-Aryan people as well. Before the Vedas were written down, much of it was originally spread orally through precise narrations in the old Hindu Aryan language. The scriptures are also known as the Shruti, which translates into what is heard. Another body of scriptures is known as the Smriti, which means what is remembered. There really isn't a precise date, but the Vedas were first recorded between 1500 and 500 BCE, making them possibly the oldest surviving religious scriptures in the world the oldest surviving religious scriptures in the world.
Speaker 1:The Vedas were originally sent to sages, who would receive the knowledge while in a state of long and deep meditation, and, of course, also another ancient script that was written around 500 BCE would have been the Bhagavad Gita, but for now I'll more or less concentrate on the Vedas and just kind of give you an overview of them. The Vedas consisted of four scriptures the Rig Veda, the Sama Veda, yajur Veda and Atharva Veda. All four Vedas essentially explain life and its meaning through three divine figures Brahma, vishnu and Shiva. Together they make the holy triumvirate in the Hindu religion. According to the Vedas, every person has a part of Brahman's, vishnu's and Shiva's essence within them.
Speaker 1:Now, as a reminder, the Indus Valley was remarkable in that there wasn't any evidence of war battles in the region. Therefore, there were no weapons were found in the region either. However, the Vedas describe conflicts, battles for the throne, wars and even kings. Furthermore, despite the fact that they are around 100,000 lines dedicated to war, there just isn't any evidence to prove that any of the events that were described are historically accurate.
Speaker 1:In the Vedic Age, cows were primarily the standard value in trade. In trade, I'm going to state the obvious, so much so that it's almost comical to state, but the problem is, cows cannot be divided into smaller units without losing their original value, for obvious reasons. In addition, livestock are very expensive to maintain and even move, and are rather vulnerable to disease or even predators that can kill them at any time. Therefore, cattle could have been suitable for exchanging tremendous values, but really not for average exchanges in everyday life. So, in other words, cattle would have been viewed sort of like how gold would have been viewed in Mesopotamia, but the biggest difference is gold can be divided down pretty easy where obviously any kind of cattle can't be Now.
Speaker 1:With that being said, poetry that was collected in these texts included priestly commentaries that had some of the earliest known historical views on debt. In fact, one of the earliest Vedic poems, written around 1500 to 1200 BCE, appears to give a great concern regarding debt and as such, that becomes a tantamount with sin and guilt. That becomes a tantamount with sin and guilt. Also, numerous prayers were created to proceed with the gods to free the worshiper from the shackles of debt. The Rig Veda, 10.34, has a fairly long description of the wandering, homeless person in constant fear and in debt, and therefore always seeks money. The thing is, even though they discuss debt, we really don't know if there were actual interest-bearing loans that were being issued in the Vedic period of India.
Speaker 1:There's also metaphors that seem to indicate that Yama, the god of death, would have had a weight placed on you if you weren't dead. But it also makes it sound like, in some of the texts, debt is a metaphor for inner suffering. In other words, the human existence is in itself a form of debt, is in itself a form of debt and, as a result, early commentators would say to sacrifice is a way to pay tribute to death, and to live in debt is to be guilty or not complete. Therefore, to pay tribute in the form of sacrifice could be seen as an interest payment and, as a result, many Brahmins were to have said to tell their clients that a sacrificial ritual, if done correctly, would allow them to break out of the human condition entirely and achieve eternity. And in the face of eternity, all that becomes meaningless.
Speaker 1:So, with this belief about personal death, sages who created the Vedic process? Well, they indicate that people who live a proper life are constantly paying back existential debts of one sort or another. One's own existence is a loan taken out against death. Additionally, once someone has fathered children, one is both a debtor and a creditor. So, in essence, the Vedas well, they apply the concept of debt to the actual owing of money or other resources. So, in other words, the Vedas really look at debt on the actual owing of money or other resources to individuals, but they also look at debt on a more spiritual level. So it's kind of a metaphor for life in general. Now, also, what is interesting is there appears to be a quite a bit of crossover between Zoroasterism and the Vedas. Therefore, this leads a lot of people to conclude that the Indo-Aryans and the Indus people of the Vedic culture were closely related in their spiritual beliefs.
Speaker 1:One of the early stories pertaining to ancient India was the war between Sudas and the alliance of the ten tribal kings, because the Sudas decided to replace Vasishtha with another sage named Vishvamitra, sudas came out on top and resulted in this tribe merging with the Puru tribe. This merger created a whole new civilization known as the Kuru, which may have been the very beginnings of the first state in India outside the Indus, as it extended from modern day Delhi to Punjab and even Hirana. The Kuru Kingdom was formed sometime around 1200 BCE, and it is the first recorded center of power in the Indian subcontinent, with Hastinapur as its capital. As such, the Kuru Kingdom was founded after the shakeout of the Battle of the Ten Kings. It is also around this time that cowrie shells were starting to get circulated as a form of money on the subcontinent For one. These shells were shiny and rare and therefore made them a commodity to be used as an early form of money. In fact, they became so widespread and popular that they began to be used as a medium of exchange in the Pacific Oceans and even later in Australia and also even in China. Old as primitive forms of money appeared in Mesopotamia by the 3rd millennium BCE and really started to gain steam in the 2nd millennium BCE. Now, as I just mentioned, towards the end of the Vedic age, neck ornaments made of cowrie shells in India were used as a form of money. Eventually, the word for such ornament would gradually acquire the meaning of money in those regions.
Speaker 1:Now, the Kuru kingdom was mostly comprised of Indo-Aryan pastoral and nomadic tribes, who were the Indo-Iranian speaking peoples who migrated from Central Asia and essentially split up, with some heading into South Asia and introducing the Proto-Indo-Aryan language, while others headed west into Iran and even further into the Levant. In some cases, these tribes were nomadic in nature and therefore relied on domesticated animals. These tribes descended from the mountains and the Eurasian steppe long before the Battle of the Ten Kings. Like a lot of the early pastoral and nomadic tribes in the Bronze Age, many had decided to settle down and moved into agriculture, where they tended to focus on cultivating barley and rice. Eventually, these tribes moved from the Bronze to Iron Age. Now the rise of the Kuru means someone else is probably going to have to fall.
Speaker 1:In India, it was the Dravidians who paid the price, as they were in the region long before the Aryans came in. At the time, the Dravidians were considered godless savages and were subjugated as a slave class in the Kuru kingdom. They obviously would have spoken a different language, but the real differentiation was the fact that they were of a dark complexion. Differentiation was the fact that they were of a dark complexion. Also, as a reminder, please don't confuse these Aryans with the definition of Aryan that Adolf Hitler espoused. As time went on, the class system evolved and became more elaborate within the Kuru kingdom. It's quite possible that these language barriers and the difference in complexion well, they may have been the driving forces initially and, honestly, if you ask any black person in the United States, they would say duh. Obviously this would be a factor and they would probably be right.
Speaker 1:But either way, the society was divided into four main classes, which would have been the Brahmin, kshatriya, vishaya and Sudra, with the Brahmin being the class of the priests, who were considered to be the gurus, physicians and generally the intellectuals of society, and therefore they were the guardians of sacred knowledge. Second in line in the caste system were the Kshatriya, as they represented the warrior class and the military aristocracy. Below them, in the third slot in the caste system of the Kuru kingdom, were the Vishayas, who were most commonly cattle keepers and farmers. However, as the economy and society expanded, so too did this caste, and they would evolve into careers such as moneylenders, traders and, surprisingly, even landowners. The fourth class in the Kuru kingdom was the Shudras. According to religious texts that was used during this period, the purpose of this class was to serve the first three classes. The shudras were usually laborers and even craftsmen. Of course, the highest person was the king, which was called the raja.
Speaker 1:The kings of the society were different from those in other ancient cultures in that they were rarely inherited by lineage. Instead, the kings of the Kuru were chosen by the Samidi, which was a tribal assembly. What is even more interesting is that the assembly wasn't just men. In fact, women were also voting members. Since the king was elected, he wasn't given pure power to do as he pleased. Instead, the king would have ruled with high priests as his advisor, while the royal court would have consisted of various chieftains, emissaries and even spies, who probably acted like early national security advisors. In order to fund much of the kingdom in the military, the king would choose or recruit people from the kingdom, along with people from Sudu tribes, to be sent to nearby tribes and kingdoms to plunder. Of course, this was a business decision, but it was also a tool to assert their dominance over local regional members. However, the kingdom eventually fell around 500 BCE, but before the fall of the kingdom.
Speaker 1:It's worth noting that it wasn't like they were just about plunder. I just want to make that clear. In fact, trade between West Asia, which was places like the Levant, anatolia and Mesopotamia, was quite active with the western Indian subcontinents. Now we know this is the case because we found Hebrew texts that indicated that there was trade with India. Furthermore, it was well known that Indian teak and cedar were widely used by various builders in Babylonia. So I wanted to bring all this up because I didn't want to make it appear that the people of the Kuru kingdom were just about plunder. No, in fact, they had actually set up long-distance trade that benefited both the people of the Indian subcontinent along with Now.
Speaker 1:Sometime after the founding of the Kuru kingdom, the kingdom of Panchala was also founded and increased in strength to become a powerful kingdom. In ancient India, both kingdoms were allies, and that would have lasted until 500 BCE. Panchala was located in Doab, which would have put it in the northern regions of modern India between the Ganges and the Yamuna, but after the fall, the Salvo tribe took over the region around the Yamuna river, where it became a regional power. This particular location would mean that they were neighbors with the Matsyad kingdom, which was one of the 16 Majinapandas. However, the Salva was a non-Vedic tribe, so they had developed a different core belief system from the civilizations I just previously mentioned. So it's quite possible that they didn't come from the Indus or the Aryan culture. They did, however, accept Sanskrit writing and eventually merged with the other local Vedic cultures in ancient India, including what was left of the Kuru culture.
Speaker 1:Now I just referenced the Majanapandas. Now I just referenced the majin pandas. What they were was a political and cultural belief system that gained traction in ancient india. This was more or less due to coalitions between various tribal states and kingdoms that had emerged in northern indian plains of the ganges and the Indus around 600 BCE, right before we see the Kuru and Pachala kingdoms being absorbed into the Majanapandas. Just like the tribes before them, their alliance expanded through raiding and plunder.
Speaker 1:The 16 kingdoms of Majapandas were the Anga, asaka, avanti, daciti, gandahar, kamoja, kashi, kosala, kuru, matsya, magadha, mala, panchala, surasena, vajna and Vaji, surasena, vajna and Bhaji. I wanted to speak about the Anga in particular because this was one of the main cities in ancient India. Anga and its kingdom were settled and populated during the wave of migration from the Indus to the Ganges. Anga developed into an important trading center in ancient India, as well as a commercial center that was developed as traders sailed into and out of the region.
Speaker 1:Probably the most famous person in the Vedic period came from Magadha. He went by the name of Sigata Kodama and he began his lessons on a spiritual philosophy. He would later become known as the Buddha, meaning the awakened one or the enlightened one. Siddhartha wasn't from an impoverished family. Instead, he was born into an old, noble family called the Shakaya, who themselves formed an oligarch republic where Siddhartha was raised. The Buddha's father may or may not have been a king, but some scriptures refer to him as a king. But it appears that he was probably more like a senator or like a member of the board of directors who had a vote on state affairs. So if he were not the king but instead part of some small elite group, then he would have been known as a Raja. Either way, sudatra himself would have been given the title as a prince before becoming the Buddha or the enlightened one, and therefore he would have lived the life of luxury during his early years.
Speaker 1:The issue with this is that historians have quite a bit of disagreement with regards to the Buddha's life, especially the exact year of his birth or even his death. Some say he lived between 563 BCE to 483 BCE, while others have his life between 480 BCE and 400 BCE, between 480 BCE and 400 BCE. Eastern Buddhist tradition indicates that the Buddha had died around 949 BCE. So you can see there's a pretty big discrepancy between what Eastern traditions say versus what the historians are saying. Either way, when he was in his late 20s, he essentially gave up his life of luxury to lead a strict, disciplined life in the woods with some of the best gurus of his time. In doing so, he had to leave everything behind, including his wife and son.
Speaker 1:The Buddha used his knowledge and meditations to teach the entire range of people in the region, from noblemen to commoners, about the enlightenment, and probably more importantly would have been freedom from suffering. But it wasn't all smooth sailing. At some point he had a major disagreement between himself and his cousin Devadatta, who wanted to be the main guy and its leader. At some point, a split developed between the Buddha and Devadatta and, as a result, his cousin Devadatta had left the group and founded a new spiritual sect that would rival the Buddhists, founded a new spiritual sect that would rival the Buddhists. Some indicate that the split was so severe that his cousin plotted to kill the Buddha, but with no success. Now, this may or may not be true, because scholars aren't really sure if it was true or not and really don't know what caused the split as well. However, buddha informed his faithful disciple that the order should not have any successors as long as the monks live by Dharma.
Speaker 1:Now, dharma is a kind of interesting concept, because it's really kind of hard to pinpoint down what it exactly means. As far as I can tell. It really has many different meanings, including law, duty, religion and so on. This concept of Dharma would have a big impact on trying to maintain integrity and fairness when it comes to various trade activities. In fact, people would believe that many socioeconomic wrongdoings, like hoarding and black markets and business corruption, exist because of the failure to adhere to Dharma.
Speaker 1:Even after the Buddha nearly died at the age of 80, he went on to travel the region to teach those who wanted to listen. On his deathbed, buddha told his disciples that once he's gone, their teachers would be the Dharma Vinaya, which was Buddha's teachings. Buddha's last words were I was only able to point the way for you. All individual things. Pass away, strive on with diligence. He also said Be a lamp unto yourself, be a refuge to yourself. Take yourself to no external refuge. Essentially, what he was saying was that the Buddha wasn't a source of well-being, harmony and knowledge. That the Buddha wasn't a source of well-being, harmony and knowledge. Instead, what he was getting at was that he was reminding people that to become fully free, they needed to find the truth for themselves and, more importantly, within themselves.
Speaker 1:Now, since this is a podcast about money-making and trade, it's worth noting that early Buddhist economic attitudes have long been considered something of a mystery. On the one hand, monks could not own property as individuals. They were expected to live a strict communal life, with little more than a robe and a begging bowl as personal possessions, and they were absolutely forbidden to touch anything that was made of silver or gold. On the other hand, buddhism always had a liberal attitude towards credit arrangements. It is one of the few of the great world religions that has never formally condemned usury. But I feel that I should take a step back and give a little bit more color on the subject of usury.
Speaker 1:Around the time of the rise of Babylon in ancient Mesopotamia, ancient Indian texts mentioned that the concept of usury with the word kushidin, which translates into usurer. Therefore, the text appears to condemn usury. Basita, one of the oldest sages, who was credited as the chief author of Mandala 7 of the Rig Veda, which forbade the priest class and the warrior aristocracy from participating in usury. However, that position evolved over time and usury became more acceptable. Many of the legal texts in ancient India, which were often written manuscripts on how their society should be run, would often contradict each other, but it appears that usury had evolved to the point where it was considered an acceptable means of acquiring wealth. In other words, banking was an accepted and standard profession. However, it also considered money lending above a certain interest rate, along with exceeding certain interest rates for certain casts, a major sin. In fact, the state went out of their way to create extensive rules and regulations regarding banking institutions. These rules would have touched upon various mortgages, along with laws for recovering certain debts.
Speaker 1:Now, for the most part, it appears that taking on debt for personal consumption wasn't outlawed, but it was frowned upon. However, taking on debt for trade and other productive measures was absolutely allowed, and since there were laws surrounding debt, it would not have meant that there were some sort of standardized policy procedures for borrowers and lenders. So, therefore, a system was set in place that would have made it a little bit more efficient than, say, in other places, especially those that weren't really receptive to the idea of charging interest. These rules that were put in place essentially laid out the fact that a creditor would have various levers in order to collect on the debt, including legal proceedings or even by force, if necessary. Also, a debtor could settle his debts through the use of personal labor only if he belonged to the same caste or a lower caste, but the debtor may pay it slowly if he is of a higher caste. With that being said, I would imagine that the people of the higher caste would exploit this if they were taking on debt from people of the lower caste.
Speaker 1:Also, it appears that there needed to be some sort of written contract between the two parties. Is that there needed to be some sort of written contract between the two parties, and it had to be in the presence of a witness. If need be, this contract could be presented in some sort of court proceedings if necessary, but any contract that was signed under duress, including intoxication or underage or very elderly, would not be recognized by the courts. Another thing was anyone who co-signed under that would be responsible to pay off the debt if the signee died before the debt was paid off, but also the debtor's sons or heirs would also be on the hook for the debt, including the interest, if they were to die. It should be also noted that if a creditor did not accept a valid payment, they could be fined, as they were essentially breaching the contract, and they could actually be barred from receiving any payments if they were doing this for malicious reasons.
Speaker 1:Now, since the state was responsible for the welfare of the population, it wouldn't have been uncommon for the state to advance loans to people, especially population. It wouldn't have been uncommon for the state to advance loans to people, especially farmers, if they were in dire need. Now it's important to note that when we say loans, we're not necessarily speaking about money. They could be some sort of in-kind loan, so they weren't necessarily always monetary in nature. They could have been loans such as seeds or even cattle. Additionally, the loans had to be from the state, not from the official's personal resources. Furthermore, the state always was in the first position when someone had outstanding debts with the state and other sources, such as guilds or individuals. So, in other words, it was almost like they were the bondholder and individuals were the equity holders. Right, the bonds always get paid before the equity, so the state always got paid before the individual.
Speaker 1:And I know a lot of people would probably grumble oh, it's the state taking money. But you think about it, it makes a lot of sense, right? The state is the people and therefore the people should benefit before individuals. So it's more or less. I view it as the collective benefits before the individual. Some people might have an issue with that. I personally don't have a problem with that, but I can see where some people might. But either way, it doesn't matter that it was the rules. Another thing about this was the fact that anyone in the Brahmin caste would always take the first position over a lender of a lower caste. Once again, you have a society that would allow for the upper class to continue to be the upper class and people below them would continue to be lower class. So by the time we get to Buddhist literature, we find accounts of loans that were taken out by needy persons.
Speaker 1:According to the law at the time, a loan deed consisted of the name of the debtor, his caste, his occupation, the creditor, the loan amount and the interest rate, along with the conditions and length of payment. The agreement had to be from a respectable witness. If a loan were a mortgage, it had to be mentioned in the agreement. All loans must be written according to the loan deed law. The rates themselves weren't set in stone and therefore they weren't uniform and could be purely negotiated. So, in other words, the interest rates weren't regulated, in that they could only charge a certain rate at the high end or there was a floor. There was none of that. Everything was purely negotiated.
Speaker 1:An instrument called the Adashah was in use, which that was an order on a banker directing him to pay the sum on the note to a third person, which corresponds to a definition of a modern bill of exchange, which we will see that this is how the Medici, for example, become multi-bankers. In medieval Europe, these Adashahs were very common and in fact there were a considerable sum that were used during this time period, and these were all recorded, so people can kind of look back and see the kind of lending operations that were occurring in the Morian period In large towns. Merchants also gave letters of credit to one another. So really what we have is we have a system set in place that will allow for people to lend to one another. As such, this local financing base would have probably enabled the economy to grow, and therefore we see Buddhist literature that specifically mentions trade with Babylon. Once Babylon fell, it was the Arab traders from the southern Arabian region that picked up the slack and became an intermediary between the Indian subcontinent and Egypt, along with eastern Mediterranean city-states.
Speaker 1:Another interesting thing is their politics. Another interesting thing is their politics. Democratic-leaning city-states of northern India were all eventually wiped out by the great empires and destroy any sort of democratic institutions. The Buddha appreciated the democratic organization and in particular, he appreciated their public assemblies and therefore adopted it as the model for his followers. Buddhist monasteries are still called Sanghas, which is the ancient name for such republics, and they continue to operate by the same accords to this day, which is preserving a certain democratic ideal that would otherwise have been entirely forgotten in India.
Speaker 1:The Mahajan Padas were the dominant coalition in India until around 345 BCE. Now, when you look at it from today's viewpoint, you can see that there were some serious cracks politically speaking. And when I say this, what I'm referring to is the fact that they developed this kind of awful tradition, whereas the son would kill the father and then take over as a king, and then, when that king is on the throne, his son would kill him, and so on and so forth. So it was just this kind of never ending cycle of violence and murder. So this would obviously be a recipe for disaster in the long run. In addition, the Shishinaga dynasty in northern India was also growing in strength. Now. The Shishinaga had engaged in a hundred-year war with the kingdoms of the Avanti and Magadha. From there, the Nanda Empire rose to prominence, where they overthrew the Shishinaga dynasty. The Nanda Empire had instituted a more centralized government, and apparently they were able to amass great wealth through the introduction of a new currency and taxation system.
Speaker 1:According to Roman sources, this kingdom was founded by essentially a commoner. It's quite possible that the founder was a barber who got close to the queen at some point, and others tended to speculate that he became her lover no-transcript father's throne, and of course I could imagine that you would realize hey, this probably isn't going to play out that way, and of course it didn't, as he quickly killed the prince and secured himself as the ruler of this new dynasty. However, the story I just said may be entirely a myth, as it came down from the Romans and not from first or even secondhand sources, but either way, it makes for a great story, so it's kind of fun to tell Now. Either way, though, there was certain sources of information that had been handed down over the years that there was tremendous wealth generated by the Nanda dynasty. Apparently, the last king of the dynasty was obsessed with hoarding wealth, so much so that he was believed to be worth over $800 million in today's dollars, but it wasn't enough, as he then went on to heavily tax the local population on various transactions, including the sale of clothing and stones. Now, apparently there was some sort of poem that was written that kind of goes into the wealth in more detail, but it was speculated that this great wealth was kind of swept away by a great flood of the Ganges. And then others say that the wealth was hidden but never found. And this kind of story or stories must have been passed down from generation to generation, because in the 800 CE a Chinese traveler appeared to come across it from some kind of verbal discussion with locals and therefore he kind of passed on this information as well about this great wealth that this great Uru had some thousand years prior.
Speaker 1:Now, this great wealth may have been fueled by the fact that they had introduced a new coinage. As such, a hoard of coins was found on the site of ancient Pataliputra, probably belonging to the Nanda period. The coins were initially made of copper and were the basis of value in India in the 7th century BCE. The coins would have weighed about 150 grams, and also it appears that they were not minted by the government but instead they were minted by individuals. Eventually these transitioned to silver coins, and they were either circular or even potentially square, without any kind of inscription except for the approximate outlines of certain natural objects such as the sun or a man, or even a tree. It is speculated that these inscriptions may have been enough to identify the person who issued them. The first Indian coins were initially bars of silver trimmed down to a uniform weight. Then they were punched with some sort of official symbol. Most examples discovered by archaeologists contain numerous additional counter punches, presumably added much in the way that a check or a credit instrument is endorsed before being transferred.
Speaker 1:Also, sometime around 500 to 400 BCE, interest-bearing loans were beginning to become a common feature of everyday life. Therefore, just like we would see in Greece and in China, the intellectuals among the people were struggling to understand the implications of coined money, along with the ever-expanding use of debt and the ability of the individuals to make a living off this interest. Now, one of the big differences between coinage and the use of debt is, it's pretty obvious. I mean, a coin or any other sort of commodity can easily be stolen, whereas debt is an expression in some sort of record that entails a certain amount of trust between two parties. Coinage really doesn't involve any kind of trust, the same way debt does. Because you can have a certain amount of coins or ingots that are measured for their metal contents, someone would most likely be able to accept the coins or the ingots. So in this time period in India, coins or ingots would be widely accepted due to the simplistic nature of coins. This is even more applicable when dealing with payments to soldiers. So what I'm getting at is coinage was obviously a lot more efficient than the use of debt.
Speaker 1:However, it did come with drawbacks, as we even see today. You carry dollars or pounds in your pocket and someone can rob you and take it. When you have some sort of debt instrument, well, it's a lot harder to steal. Another thing, too, is coinage is easily transferable, whereas debt may not be as easily transferable between two parties because one party has to know the other. So if you try to transfer to a third party, the third party may not accept it because there are certain kind of credit risks, maybe that they don't really fully understand or even comprehend or even want to understand credit risk. Maybe that they don't really fully understand or even comprehend or even want to understand. However, credit tends to flourish in peacetime and especially when you have established trusted networks like merchant guilds. In periods that are characterized by widespread war and plunder, credit tends to be replaced by precious metals. This is why you can say that a well-armed military could mean that there is an increased credit risk in the region, and this will be particularly true when we get to the Dutch East Indian Company, when they start trading shares in their open markets. When the Dutch are at war, or potentially at war with the French or the English or the Portuguese or whoever, the rumors will be flowing around and the value of the shares will plummet. When there's extended periods of peace, the shares will generally rise.
Speaker 1:However, this dynasty was relatively brief, as it only lasted maybe a quarter century, as the Mauryan Empire eventually would have taken over Now. It was around the time of Alexander the Great, when he was moving towards India In 328 BCE. Alexander had defeated the Bactrians, which was one of the satraps of Persia, which is located in modern-day Afghanistan. Alexander then decided to keep going, but before moving on, Alexander solidified an alliance with the locals through marriages, as he had married an Iranian princess from Bactria, which allowed him to strengthen his relationship, along with the forces in Central Asia, which allowed him to strengthen his relationship along with the forces in Central Asia. Once he was set to go, alexander decided to invade India by crossing the Khyber Pass, located on the border of modern-day Pakistan and Afghanistan. Alexander then was outnumbered and attacked by Hindu clans from the Hindu Kush, which was west of the Himalayas. Despite the numbers, alexander defeated the Hindu clans, and it should be noted that they say it was the most difficult victory of all. During his campaigns east of the Persian Empire To penetrate deeper, alexander would then need to take on one of the kings in the Punjab region, but he was smart enough to form an alliance with the king Taxilis, a powerful king in the Punjab region.
Speaker 1:Historians noted that Alexander really admired his adversary, the Indian king named Porus, and the reason for this admiration is the fact that Porus basically let it be known that he would rather fight and die than get captured. As such, it sounds like Alexander really wanted him to surrender out of just pure respect. Therefore, alexander pleaded with his Indian ally to ask Porus to surrender. The Indian ally with Alexander when he approached Porus to surrender, while Porus was mad and threw a spear at him, forcing Tuxes to turn around and head back home. However, after long battles, of which Porus wasn't doing well. Porus was finally convinced to speak with Alexander, and when Alexander asked Porus how he wanted to be treated, porus replied as a king would treat another king. Many have interpreted this as he'd rather be killed than be taken captive, and apparently Alexander was more or less blown away by Porus, so much so that he was treated as a king and therefore he let Porus keep his territories and his power. But Alexander founded two cities in Porus' territory, which was Alexandria and Nicaea, to celebrate the victory, and Bucephalus, which was the name of his horse who had died after the battle. Alexander's victory coin was minted in Babylon in 322 BCE. That was the same year that Alexander had died. The coin depicts Alexander being crowned by the Hellenistic god of victory, nike, and Alexander attacking Porus, who is mounted on a war elephant.
Speaker 1:After allowing King Porus to keep his land, alexander decided to move his army to the east, to the Nanda Empire, where he would face the last king of the Nandas. However, alexander's army basically was done by this point and began to plead with Alexander that they needed to go home and that they've gone far enough east, far enough east. Plutarch, the famous Greek philosopher and historian, in his book titled the Life of Alexander. Well, he goes into details about the army disagreeing with the desire to keep going east, and it was the battles with Porus that basically exhausted the army. Basically, what Plutarch wrote was the struggle with Porus basically exhausted their strength and courage. They were done when they were attempting to cross the Ganges because on the other side they noticed that the enemy had approximately 80,000 horsemen and war elephants, along with 200,000 foot soldiers, whereas Alexander had about 20,000 men and about 2,000 horses. The sheer numbers just didn't add up for Alexander and apparently he probably was the only one that really couldn't see it. So basically what it was is Alexander's army was extremely outnumbered and they were all tired from the previous battle battle, and it sounds like Alexander was the only one who just basically wanted to carry on. And this doesn't even get into the fact that now he's getting into areas that they may not be accustomed in fighting because the land area was much different. Now they're in the jungle with dangerous animals and insects. The insects is probably the worst part about it.
Speaker 1:Nanda was an empire, not a minor kingdom run by some warlord. It was much bigger and much more powerful than Porus' kingdom and Alexander struggled to take control. Also, when Alexander conquered the Persian Empire, it was important to note that it was severely weakened by that point. This would not be the case of the Nanda Empire. So finally, whether it was Alexander himself or someone else who got through to Alexander, you know, he basically decided that it was time to retreat and really give up his dreams of possibly conquering the wealth in Nandas, which he probably wouldn't have done anyway. On his way out, alexander and his army subdued several Hindu tribes living on the banks of the Indus River, which allowed them to secure the borders.
Speaker 1:Before returning to Babylon, after going on a multi-day drinking binge, alexander became very ill. He was so weak that he couldn't even speak and all he could do was just lay in his bed, and this is why some people think that he may have been poisoned. Even to this day, there is a disagreement over Alexander's death. But even the scholars disagree over how he died, and apparently, before he died, he said that he was going to leave his empire to the strongest. He said that he was going to leave his empire to the strongest. After Alexander's death in 323 BCE, the ancient world basically erupted as all the territories that Alexander had conquered immediately destabilized as his generals all vied to take over. Perticus was assassinated in 321 BCE and the 40 year long war was instigated between Alexander's successors, all of whom had claims to the throne of Macedonia and its territories won by Alexander. Once the four-decade war was settled, the Alexandrian Empire was divided into four regions Ptolemaic Egypt, adalid Anatolia, seleucid Mesopotamia, central Asia and Antigonid Macedon.
Speaker 1:One lasting effect that the Macedonians brought to the Indian culture they had brought saffron to the Indian subcontinent. Saffron would become a staple spice in traditional Indian dishes. Today, india is the fourth largest producer of saffron in the world. Would this be the case if Alexander hadn't decided to expand eastward? It's one of those minor little things, but it's still an interesting thing nonetheless, because you can see how certain events in world history happen and things that may not be native to certain locations really kind of take over as a traditional dish. I mean, the perfect example is my heritage, is Irish heritage and, like I said I've said this before it's the potato became a staple in the Irish diet and the potato is not native to Europe. So you can see how, when you have expansion of one empire into another, changes can be made that can be everlasting.
Speaker 1:And for the purposes of this podcast. It appears that the concept of coinage was introduced to India by the Greeks from Batria, which would have been a region around modern-day Afghanistan, as I had said previously and I'll get into it in another podcast. But the Greeks didn't come up with coinage either. They got that from the Lydians, which would have been in western Anatolia. Now it should be noted that an excavation from Taxila was done and the archaeologists noted rectangular coins which would have been dated around 400 BCE. So it's possible that coinage was already established in the Indian subcontinent by the time Alexander had made his way east. I want to thank you for taking your time to listen. This will be the first of two episodes of Ancient India. If you like what you hear and want to donate to the show, you can visit us at patreoncom slash history of money, bank and trade or you can visit our website at moneybankandtradecom. Also, you can help the show out a ton by leaving a five star review and telling a friend or two. Thank you very much. Talk to you soon.
