An Ancient Debtors' Code

By Tonietti, Alphonse | Business Credit, January 2008 | Go to article overview

An Ancient Debtors' Code


Tonietti, Alphonse, Business Credit


Creditors' Rights Established 39 Centuries Ago

CREDIT and debit transactions played a large role in the life of the ancient Babylonians and Assyrians as judged by the thousands of clay tablets representing fiduciary dealings in the land of the Tigris and the Euphrates. Besides these business tablets, the famous Code of Hammurabi, who lived about 2000 B. C., devotes an entire section outlining the legal relations between creditor and debtor.

The venerable figure of Hammurabi looms forth as that of both a redoubtable conqueror and a lawgiver. Having consolidated his conquests, Hammurabi set about formulating a code of laws which he caused to be carved on a stone stele and placed in the Temple of Marduk, thus making the laws of the land accessible to the rank and file of his subjects. He then caused other copies to be published on smaller, baked-clay tablets with notes for the schools. The original stele on which this code was written was discovered in 1902 in Susa, the ancient capital of Persia, by J. de Morgan. It is a tapering block of black diorite, eight feet high and inscribed with forty-four columns of cuneiform.

A distinct effort is made in this Code to better the position of the debtor and to protect him against the cruelty of his creditor. Yet it assumes that the debtor is criminally liable, even though a criminal intent be absent, and that he could be seized and punished for failing to meet his obligations.

Treating money-lending as perfectly legal, the Code specifies the interest rates in some cases. "Sibtu," a word meaning "growth," stands both for interest and profit which are largely treated synonymously. Mesopotamia being to a great extent an agricultural country, the "growth" of capital into a larger volume was more than figurative. The returns of the fertile soil of that land were, and still are, proverbial. Likewise was the rate of interest comparatively high, varying between 331/3 and 20 per cent. Neither was this interest considered exorbitant at all, since we are told that the crops not infrequently yielded five to one or even more.

Floods Wiped Out Debts

No coined money was known in the Babylonian Empire. Loans were made in weights of silver, barley, wheat, sesame and other less popular cereals. And the extent to which the Babylonians depended on their agricultural yields is shown by the great care with which the Code of Hammurabi treats the relations between the grower and his creditor. Thus it lays down that in case of inundation or drought and consequent loss to the farmer, neither payment of capital nor of interest need be made. If, however, as a result of negligence to fortify his dyke a man should cause damage to the crops of his neighbors, he is to reimburse them for all their losses. But if such a culprit has no barley to pay "he and his goods shall be sold for silver and it shall be divided among those whose corn he destroyed."

Other sections of the Code in regard to debtors are so explicit that they need no explanation.

90. "If a trader has lent silver at interest, then for each shekel of silver he shall take a sixth part of a shekel plus six grains of interest.

95. "If a trader has lent barley or silver at interest and has delivered the silver in light weight or the corn in light measure; or if when he collects the debt he takes the silver over-weight or the corn over-measure; then that trader shall lose the whole amount that he has lent."

117. If a man contracts a debt and gives his son, daughter or wife "for silver or for labor," they must work three years and then be free. But if such person given over to a creditor be a slave, then there is no further claim on his release, according to the next section of the Code. …

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