Athens capitalized upon the invention of coinage more than any other Greek city. The city owed no small part of its success to the Laurium mines, which Aeschylus called a “fountain of running silver.” Athens’ coins became the most popular in the Greek world, and the city forced the client states in the Athenian empire to replace their own currency with Athenian currency, creating the Attic silver standard.
Before the sixth century b.c. Greece and Macedonia could lay claim to only two small mines that held deposits of pure silver. Silver was relatively rare, and valued among the ancient Egyptians more highly than gold. Athens had at its doorstep mines at Laurium that held vast deposits of argentiferous lead ores, awaiting only the technology to separate the silver from the lead. The mines got their name from the laurai, or horizontal alleys, that entered into the hillsides before deeper mining methods were employed. The Greeks learned to free the silver from the lead by heating molten metal on cupels of porous material and exposing it to the air, thereby separating a metal that was 98 percent silver. In 546 b.c. the tyrant Peisistratus, the first Athenian ruler to see the value of the silver mines, coined the first owls, the Athenian coins that would become the most famous coins of the Greek world, remaining in circulation for nearly 600 years. Around 490 b.c. a prospector discovered the first really profitably veins of silver, touching off a silver rush and supplying the financial resources that would propel Athens to commercial supremacy. The Laurium mines remained an important source of silver to the ancient world before playing out around 25 b.c.
The basic monetary unit throughout the Greek world was the drachma, from a word meaning “handful of grain.” The precise weight seemed to range between less than 3 grams in Corinth, and more than 6 grams in Aegina. The famous Athenian owls were usually struck in one-, two-, and four-drachma pieces, and on rare occasions in eight-, 10-, and 12-drachma pieces. Perhaps the most famous coin in antiquity was the four-drachma, or tetradrachm, bearing the image of an owl on one side and the head of the goddess Athena on the other. The owl was the sacred bird of Athena. Before the Athenian owl there were a few scattered instances of coins bearing human heads, but the owl started the fashion of putting the head of a deity or famous person on one side of a coin, a practice that has survived into modern times.
The smallest Athenian coins were made of copper and were called chalkous. Eight chalkoi made an obol, a reference to its resemblance to nails or spits, obeliskoi. Six obols made a drachma, and two drachmae made a silver stater. One hundred drachmas, or 50 staters, equaled a mina. And 60 minae, or 6,000 drachmae, equaled a talent. Two obols were a day’s pay for a laborer.
In 456 b.c. Athens forced Aegina to give up minting its own turtle coinage in favor of the Athenian owls. In 449 b.c. Athens issued an edict requiring that all foreign coins be brought to the Athenian mint, and that all allies adopt the Attic standard of weights, measures, and money. These were probably measures to promote commerce, and certainly acted to further Athenian commercial ambitions.
The Athenian government’s stubborn avoidance of debasement through all its vicissitudes deserves some credit for the esteem that the owls commanded among Mediterranean trading centers. The one exception was an episode during the Peloponnesian War, when Sparta stopped the flow of silver from the Laurium mines in 407 b.c., causing Athens a severe coin shortage. The Athenian government first melted down golden statues and other treasures that adorned the Acropolis, and minted 84,000 golden drachmae. When the coin shortage worsened between 406 and 405 b.c. Athens issued bronze coins with silver coating, giving history one of the first examples of Gresham’s law in operation. During the wartime bronze debasement, the famous Greek comedy playwright Aristophanes, wrote: “In our Republic bad citizens are preferred to good, just as bad money circulates while good money disappears.” (Angell, 1929). Athenian citizens hoarded gold and silver coins and spent the bronze coins. Athens demonetized the bronze coins in 393 b.c. and Athenian coinage again established itself as the preferred currency in the commercial world.
The Attic silver standard gave the Western world a shining example of a monetary policy committed to sound money for an extended period of time. In contrast, the lack of rectitude in Roman monetary policy left the world a legacy of monetary disorder and rapid inflation.