By 2000 b.c. Babylonia had evolved into a highly developed commercialized society, complete with a sophisticated monetary and credit system. Barley and silver functioned side by side in a dual monetary system that made use of both as mediums of exchange and standards of value. Historically, barley preceded silver as the chief form of currency, but both were legally sanctioned currencies in the heyday of Babylon’s commercial preeminence. A legal ratio established the value of silver in terms of barley and vice versa. Creditors accepted payments in either silver or barley, depending upon a debtor’s preference. Silver grew in importance relative to barley, and later in the ascendancy of Babylon gold became a competing metal currency.
The standard monetary unit was a shekel, equal to 180 grains of barley, or a fixed weight of silver. “To weigh” was the term for payment in silver, and “to measure” was the term for payment in grain. Silver was melted into small ingots that circulated as money and was usually tested for fineness at each transaction. Some of the ingots bore the image or superscription of the god whose temple guaranteed the fineness of the silver. An extant Babylonian contract refers to payment of “fifty shekels of white silver in single shekel pieces,” suggesting that silver came in pieces equal to a shekel, and multiples of a shekel. Sixty shekels made a mina, and 60 minas made a talent.
The Code of Hammurabi (ca. 2123–2108 b.c.) specified grain money for certain payments and metal for others. This code required grain to pay for hired oxen or field laborers, and silver to pay for surgeons, veterinary surgeons, artisans, brick makers, and tailors. Merchants who insisted upon payment in the wrong currency could face severe penalties. Article 108 of the code read: “If a wine-seller does not receive grain as the price of traffic, but have wish to receive money (or silver) they shall call that wine-seller to account and they shall throw her into the water” (Einzig, 1966).
Temples lent goods from their stores for repayment in kind. These loans charged no interest as long as they were repaid on time. Some merchants carried on a banking business of sorts, making loans in silver and grain, and holding deposits of customers that earned interest. These customers could pay obligations by writing drafts on these deposits. The statutory rate of interest was 20 percent, but silver loans often earned 25 percent and grain loans more than 33 percent. Bills of exchange have survived written on clay tablets, showing the names of the drawer and drawee, the amount of money changing hands, including interest, and the place and date of payment.
After the Hittites sacked Babylon in 1758 b.c., silver remained mostly as a fictitious unit of account while grain, slaves, domestic animals, and garments served as a tangible means of payment. Primitive currencies often surface in advanced economies when established money either loses its value or, as in Babylon, becomes too scarce. The Hebrew scriptures always measure gold and silver in shekels, making shekels a recognizable unit of money in the Western world.
