Attestation Update – A&A for CPAs

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More ideas on the wealth in the Roman treasury back in 49 B.C.

with 6 comments

Gold Roman aureus coin of Roman emperor Trajan. Photo courtesy of DollarPhotoClub.com

Gold Roman aureus coin of Roman emperor Trajan. Photo courtesy of DollarPhotoClub.com

A while back I discussed a comment I read saying that when Caesar crossed the Rubicon, the Roman treasury held 17,410 pounds of gold, 22,070 pounds of silver and 6,135,400 sesterces.

I made a bunch of wild assumptions and estimated that volume of precious metals would be worth about $361M at today’s market prices.

See my post How much wealth was in the Roman treasury in 49 B.C.? How about annual tax revenue under Augustus?  I’m going to cross-post this discussion and that previous post to my other blog, Outrun Change.

A reader, Caleb, has expanded the discussion by indicating he thinks the value of gold was dramatically higher back then in relative terms that it is today. He estimates gold was around $7,000 an ounce in today’s dollars. See his comments at the above post for further explanation.

I enjoyed his comments so much I decided to create new post in order to extend the discussion.

First I will rephrase his calculations:

  • Sestertuis = 1/4th denarii = $20
  • Denarii = 1/25 aureus = 4 sestertius = $80
  • Aureus = 3.5 to an ounce of gold = 25 denarii = $2,000
  • Gold = 3.5 aureus = $7,000

Price of silver

On Caleb’s  idea that value of precious metals were far higher relatively than today, consider this supporting calculation.  From Wikipedia:

  • Aureus = 25 denarii = 100 sestertuis
  • Aureus weighs 8 grams (as Caleb mentioned)
  • Denarii is one ounce of silver (imagine hefting a Morgan or Peace dollar)

Look at the content of a denarii – one ounce of silver. We know from a variety of comments in the New Testament of the Bible that a denarii is usually considered to be a day’s pay for a common laborer. So let’s call that a day’s pay in circa 30 A.D.

Translate that back from today. If minimum wage of $7.25 is an approximation of the hourly pay for what could be roughly called a common laborer, then an 8 hour day would gross $58. Adjust for a 10 hour day would be $75 a day. That is radically more than the $16.03 for silver today from the WSJ.

So let’s back into it from the other direction.

A day’s labor today is worth $58. A denarii has an ounce of silver, so it would it should be worth $58 in today’s economy based on metal content alone (yeah, you and I both wish we owned a real denarii! it would be worth a bunch more than $58).

Does that means silver was $58 in circa 30 AD or circa 49 BC?

Yeah, I think so.

That would be consistent with Caleb’s point and his calculation.

Relative values

Consider the relative values of silver and gold.  Gold at $7,000 with silver at $58 would give a relative value of 120:1. Today the ratio is more like 73:1 (calc as $1177.30/$16.03).

Changes in the amount of per capita mining, relative preferences for silver and gold, and other market factors would easily explain that variance. So I agree with Caleb’s point.

Recalculations

Photo courtesy of DollarPhotoClub.com

Examining Roman coins. Photo courtesy of DollarPhotoClub.com

Annual revenue

So I’ll do those calculations again. Rome had annual revenue of 500 million sesterces.

At the new estimate of $20 for one sesterce, that would be annual revenue of $10 billion dollars.

I previously calculated $7.25 billion.

Money in the vault:

gold

  • 17,410 pounds of gold
  • x 12 troy ounces to a troy pound
  • = 208,920 troy ounces
  • x $7,000 new calc
  • $1,462,440,000 current value of gold then

silver

  • 22,070 pounds of silver
  • x 12 troy ounces to a troy pound
  • = 264,840 troy ounces
  • x $80 new calc
  • = $21,187,200 current value of silver then

coins

  • 6,135,400 sesterces
  • x $20, 1/4th of an ounce of silver
  • = $122,708,000 current value of sesterces then

That is about $1,606 million, or about $1.6 billion.

My previous calculation was about $361 million.

How do my calculations look? Did I miss something? Slip a digit somewhere? Drop in a bad assumption? Let me know and I’ll run another calculation.

The next iteration would be to find some way to translate that amount of gold and silver into purchasing power. Like how many cars you could buy. Oh, wait. That won’t work. How about how much food it costs to feed a family or to equip and hire a legion.

Perhaps another day.

Thanks Caleb!

Written by Jim Ulvog

October 19, 2015, 7:15 am at 7:15 am

Posted in Other stuff

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6 Responses

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  1. […] So, you can go along with me on the journey, if you wish. As a simple start, let’s look again at Wikipedia. Took a previous look at the Denarius here and here. […]

  2. I agree with the calculations and appreciate the work done.

    I’ve seen other explanations of the value of Roman coins based more on goods and services. They were derived from Diocletian’s Edict of 301 AD. That type of analysis would be enlightening but in lieu of documentation like that for 49 BC your work is sound I think.

    One other thing about that era, the value of a day’s work might not compare to our idea of a minimum wage. So much of the work was performed by slaves, making it hard for average people to even find work. Enter the Son of Venus, Gaius Julius Caesar, looking to change all that.

    Kind regards, Yordie

    Yordie

    April 21, 2017, 9:53 am at 9:53 am

    • I forgot to mention the grain dole, that effects what we might think of as a minimum wage. You’ve really got me thinking about this.

      Yordie

      April 21, 2017, 10:17 am at 10:17 am

      • Hi Yordie:
        Good comments. It is difficult to translate coins or income or value of assets from ancient times to today. Two more factors I hadn’t yet pondered include the grain dole and the heavy use of slavery which would seriously alter market prices.

        Another huge factor that I’ve tried to explore in other posts is the radical increase in the standard of living today compared to even 200 years ago. You and I are filthy rich compared to people living 200 or 2000 years ago. We need to take that into consideration as well.

        Thanks for taking time to comment.
        Jim

        Jim Ulvog

        April 21, 2017, 10:40 am at 10:40 am

  3. Hi Jim… yes, we are very rich in relative terms. I think when we travel to an underdeveloped country we gain an understanding of how locals survive on a fraction of what we could. I think the television series “Rome” did a good job of painting a picture of life in Ancient Rome (after 50 BC). The fascination continues.

    Yordie

    April 21, 2017, 10:56 am at 10:56 am

    • Hi Yordie:
      Here is a framework to consider. When we read of a unit of measure in ancient times representing a day’s wage, consider that has the power to provide the standard of living provided today by a day’s wage in Haiti or Somalia. Then mentally adjust to a day’s wage in the US or other developed country. Thanks for reading!
      Jim

      Jim Ulvog

      April 21, 2017, 13:04 pm at 1:04 pm


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