maritime loans

In the ancient Greek and Roman worlds, centred as they were on the Mediterranean, maritime transport was army for the liberation of rwanda more practical than kingdom conveyance for long- and tied medium-distance barter. Most ships seem to have been of medium size ( around 70 tonnes burden ) and to have been owned and run by a shipper who both carried goods as freight and traded on his own account. There were besides many individual merchants who hired transport as needed for their ventures. then as now, the major expense in trade was the investment in purchasing goods ; roughly, one cargo of wheat was worth a much as the ship. Hence a merchant, whether or not besides a shipowner, frequently needed third-party finance, for which, because of the curious risks involved, a special type of lend was used. This was the nautical loan—nautikon daneion in Greek, nauticum faenus or mutua pecunia nautica in Latin .
The maritime loanword is first attested in 4th-century bce Athens, in four speeches attributed to Demosthenes, of which the most informative is the prosecution of the brother of a pair of merchants for deceitful default on a loanword ( Dem., Or. 35 ; cystic fibrosis. 32, 34, 56 ). These two merchants from Phaselis ( Lycia, southerly Turkey ) had borrowed from an athenian and a man from Carystus ( Euboea ), through a third-party presentation, 3,000 drachma for a round trip to the north slide of the Black Sea using a shipper from Halicarnassus ( western Turkey ). En route, they were to buy 3,000 jars of wine at Mende or Scione ( north Greece ) to be sold in the Crimea implicitly to finance the purchase of wheat as the return cargo to Athens ; the matter to would be 225 per 1,000 dram, or 300 if they returned after the end of the safe voyage season ( increasing the hazard ). On their return, they claimed the ship had sunk, so the lend was not repayable. The next known maritime lend comes in the second hundred bce, in a fragmental condense on papyrus from Ptolemaic Egypt. here an alexandrian lends, through a Roman or italian mediator, a summarize of money to five merchants, including one world from Sparta and another from Marseilles, for a attack trip to the “ aromatics-bearing down ” ( Somalia ) ; the five guarantors include another Massiliote, two more Romans or Italians, a man from Elea ( Lucania ), a carthaginian, and a Thessalonican ( SB III 7169 ).

The beginning attested use of a maritime loanword at Rome comes from the fib that the elder Cato ( c. bce ) lent regularly to a consortium of fifty shipowners through one of his freedman who was in partnership with the merchants and travelled on their trips ( Plut., Cat. Mai. 21.6 ). After a long silence, we then have a receipt of the second century cerium, from four shipowners of Ascalon, for a maritime loan made to them by two roman veterans through a bank in Alexandria ( SB XIV 11850 ), and separate of a narrow detailing respective virtual arrangements in association with a maritime lend for a return trade travel from Alexandria to Muziris on the Malabar seashore, which imply that the extremely affluent lender involved was a regular investor in trade ventures to India ( SB XVIII 13167 ). There are besides versatile references to maritime loans in Roman legal sources, from the second century cerium through to Justinian, some stating principles, others discussing real or fabricated disputes. section 22.2 of the Digest, for example, is wholly about nauticum faenus, while Dig. 45.1.122.1 is an opinion of Scaevola ( 170s ce ) on a assumed encase involving the slave of a Roman nonmigratory in Rome making a maritime loanword to a shipper in Berytus ( Beirut ) for a round trip to Brundisium ; and Cod. Iust. 4.33.2 is a rule of Diocletian ( ? ce ) on a petition from the victimize charwoman lender of a maritime lend for a round trip from Salona ( Split ) to Africa.

The maritime lend frankincense seems to have been a greek legal form, which the Romans adopted, and which remained in essence the same across the centuries, even if in the Roman period it was used for much bigger and more complex enterprises. The proportional dearth of ancient references is outweighed by their longevity and consistency, which imply this was a coarse way of financing commerce for about a millennium of Mediterranean history. In its basic form, it was a loanword made by an investor to a merchant for a individual trade travel, normally a return ocean trip. The loan was to cover the costs of buying and shipping a reelect cargo, from whose sale the merchant would repay the loanword and interest on it, pay his other costs, and make his profit. The merchant could besides purchase and ship an outward cargo, and sell that to buy the return cargo, but that was optional. The deadline set for refund was always less than a year within the parameters of the Mediterranean glide season ( March to October ). The independent security for the lend was the cargo brought home by the merchant ; if the lend or the return cargo was lost at sea through violence majeure ( storm, shipwreck, piracy ), the investor bore the loss. If the investor suspected negligence ( not purchasing a desirable cargo, late return ) or fraud ( forge personnel casualty at sea ), he could sue the merchant, whose wholly property would then be apt. The investor frequently sent a representative ( supercargo ) on the tripper to guard against imposter. All kinds of variations were possible, including loans made by or to groups of parties ( both in Cato ’ s case ), or cabotage trips involving respective cargoes, but the principal discrepancy was when the merchant besides owned his own ship, in which case he had no freight charges to pay, but his ship was besides liable as security for the loanword. This has often been mistaken as ship-insurance ( bottomry ) by scholars, but if the ship went devour, the loss was wholly the owner ’ second, and he was simply not liable for refund of the lend for the cargo.

The all-important peculiarity of the nautical loan was the level of risk accepted by the investor because of the implicit in riskiness of sail, the opportunities for imposter, and the mobility of merchants and attendant trouble of claiming against them. Because dates of loanword and for repayment varied, it seems that the interest due was normally expressed as a ball sum. however, because only one major retort trip was possible per sailing temper, this could be represented as an annual rate of matter to, and Roman police, apparently following greek exercise, exempted nautical loans from the standard maximum rate for usury, which in the Roman conglomerate was 12 percentage per annum. The only design we have for the actual returns is the 22.5 percentage, or 30 percentage in the Demosthenic case, but there is reason to think this was the usual stove. In his anti-usury drive, for exemplify, Justinian capped maritime loans at 12 percentage, as compared to 4 percentage to 8 percentage per annum for other loans, which had previously been capped at 12 percentage ( Cod. Iust. 4.32.26.1–2 ). justinian ’ randomness hood, if enforced, could have made the hazard of maritime loans unacceptable to investors, but the actual consequence is nameless .

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Category : Maritime