Pasion the Banker

In these dire economic times, I thought this might be a good moment to stop and reflect on what great guys bankers are.

Stay with me here. Of course I'm not referring to modern bankers.

Moneylenders have been around since money was invented, which was in Lydia in Asia Minor, what is now the Turkish coast, some time in the 7th century B.C.. Moneychangers likewise, because every city of the ancient world minted its own coins. But neither lenders nor changers were banks in our sense.

Then a few of these people started offering to keep money safe for others. That was getting close to being a bank, but not quite there yet.

Then bottomry began.

Some time during the early 5th century B.C., somewhere around the Aegean or Asia Minor, someone thought of lumping these different financial services into a single business. Why not lend the money you're holding on behalf of clients to others, so they can invest in new ventures, and make even more money?

That's a bank.

These early bankers were called trapezai, because they worked at tables covered with trapezoid shapes. They held knotted string along the sides of the trapezoids to do their money calculations.

The earliest Athenian bank that we know of was founded by two men called Antisthenes and Archestratus. If their business existed today, it would be called something like the Antisthenes and Archestratus Savings and Loan Company. Because that's what they did. You could save your money with them, and you could borrow from them (if your collateral was good, like for example, your ship). They made profits by investing the savings lodged with them, often insuring cargo on trading ships.

The business grew, and Antisthenes and Archestratus decided they needed an assistant. So they did what any Athenian citizen would do, they wandered down to the slave market to see what was on the auction block. They bought a guy called Pasion. No one knows where Pasion came from; he may have been a captured enemy soldier. Nor do we know if Antisthenes and Archestratus were just unbelievably lucky, or whether they knew they were making one of the best HR hiring decisions in human history. But they were, because Pasion turned out to be a financial genius.

Pasion took to banking like a leech to blood. It wasn't long before Antisthenes and Archestratus were happy to sit back and let their slave run things. Pasion had just become the world's first banking CEO.

When Antisthenes and Archestratus retired in about 400BC, they freed Pasion and sold the business to him. Pasion amassed a huge fortune. With buckets of money to invest, he bought up shield factories (i.e. armaments) thus turning himself into a one man military-industrial complex. It was a good investment; Athens always had a war on somewhere.

But he wasn't niggardly with his wealth or his time. He made massive donations to the state, funding five triremes (the average millionaire struggled to supply one) and in times of need donated military equipment gratis, at one point donating 1,000 shields.

In litigious Athens, Pasion had an enviable reputation for integrity and seems to have been almost universally liked. Anyone could go to him for financial advice and he gave his time freely to help the poor. He was so loved that the citizens of Athens granted him citizenship by acclamation, and he was enrolled as a citizen in the deme of Archarnae. A man who had once stood naked on the auction block had risen to become one of the most respected and liked citizens of Athens. And he'd done it by being a banker.

I've made good use of this little piece of history. The Antisthenes and Archestratus Savings and Loan Company makes an appearance in my first novel. Perhaps more interestingly, last year I won the Sir Arthur Conan Doyle Prize in the historical category for a short story called The Pasion Contract. The short story is about the Pasion of this blog post, and a contract taken out to kill him.


pierre l said...

I followed the link from Janet Reid's blog yesterday; I have enjoyed the three posts I have read so far and will definitely order the book when it becomes available.

Mimzy said...

You always write the most fascinating articles. For some reason I had never even considered that bankers had to be an ancient invention. It's also interesting to know that one of the earliest financial geniuses came from such a humble background to being so respected.

Not only can I not wait for your novel to come out, but I also wish that you would write a history book.

D.A. Riser said...

Great write up, Gary. I wonder how much Pasion charged in fees for withdrawing money from his ATM machines ...

Barrie said...

Fascinating. I never really stopped to think about bankers before. Thanks.