1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

Search Mises.org

Big Business in Politics

Mises Daily: Monday, February 08, 2010 by

A
A

The political machine is familiar to Americans. While it may lead to gross abuses, experience shows that some sort of behind-the-scenes organization may be useful to the functioning of democratic institutions. Such an organization may hold diverse elements of the population together and provide continuity of policy through all the shifting personnel of official life.

In Rome through the greater part of the existence of the Republic, the senatorial machine ran the show. The magistrates might change every year; the machine carried on. It represented the landed aristocracy.

The big landowners had common economic interests. They had their personal ambitions and differences. They might disagree on foreign policy; on domestic affairs they stood together.

The senatorial machine was the instrument through which they operated. It ran smoothly and efficiently in managing the unification of Italy and the expansion about the Mediterranean basin. In its great days the Roman Senate probably included a larger number of competent and experienced public men than any subsequent legislative body. Its members were reared under a stern code. They were proud, courageous, resolute, never daunted by defeat.

But the unearned wealth that Rome drained from the provinces in the last century and a half of the Republic sapped the older virtues. The Senate gradually lost its ability to meet new situations and became rigidly reactionary. Then came Tiberius Gracchus, forerunner of the American Boss-Buster.

To be sure, this turbulent insurgent had finally been disposed of by the ruthless machine, but the gathering forces he had represented still remained. The slums of Rome housed a mass of embittered voters. They could be handled in various ways by the senatorial organization. But another element in the population had come to the front in the second century.

Businessmen, bankers, and traders had found great opportunities for making money in the new lands that had been added to the Empire. Often their interests differed from those of the old aristocrats. By the time of the death of the elder Gracchus it was apparent that under competent leadership the Chamber of Commerce crowd might unite with the poorer voters to take charge of the government.

Rome set the example to modern Germany of making war profitable. It is calculated that in the half-century following the fall of Carthage, fifty million dollars in tribute and plunder drained into Rome. This sum, huge for its day, gave a great opportunity to energetic men with the acquisitive instinct.

As the senators were barred from foreign trade by law, an important plutocracy of businessmen developed. They were impatient of the restrictions that a group of the elder statesmen, who still cherished the old-fashioned Roman ideals of honesty and fair dealing, had been able to impose upon the exploitation of the provinces.

With the foundations of political revolt thus laid, ten years after the death of Tiberius Gracchus his brother, nine years his junior, returned from a minor office in Sardinia to Rome and crashed the gate of the ruling class. Against machine opposition he was elected tribune.

Gaius Gracchus was a young man of thirty: vigorous, intelligent, passionate, a great natural leader. Behind the burning words that could sway a popular audience was a cool, calculating intellect. He combined traits not often found in one man: ability as an orator and unusual administrative capacity.

Plutarch gives an attractive picture of him after he had come into the tribunate and was immersed in its duties. His office was crowded with officials, military officers, contractors, work superintendents, scholars. A competent and just executive of immense industry, the biographer says, he was always dignified, courteous, and scrupulously honest.

The older brother was high-minded and sincere. He believed life is organized on a purely rational basis and that men can be persuaded by argument to surrender selfish interests. On one occasion he had taken his case before a Senate that was packed against him. Apparently he was surprised that it would not listen to the voice of reason.

Gaius Gracchus had entered public life completely disillusioned by his brother's experience. He was driven by the same passion to correct the obvious evils that were threatening the very life of the state, supplemented by a human desire to avenge his brother's death. But he had a flair for politics that his brother lacked. He would have been perfectly at home in the White House in the Washington of the twentieth century.

His brother's appeal had been to one class. Patiently Gaius set to work on a program that would appeal to all the important classes in the state. Against the senatorial machine he proposed to organize a coalition that could be fused into a real democratic party. This party he hoped to make an instrument for public service to carry out reforms that could not be obtained from the entrenched interests in the Senate.

We can only guess at his motives. But to anyone familiar with the working of the political mind, the implications of the Gracchan policies are obvious. There were four important groups of voters who might be united against the senatorial machine. There were the small farmers who wanted access to the public domain for themselves and their children. Tiberius had made a good beginning in this direction, but his land commission in the hostile atmosphere of Rome had bogged down. There were the unemployed who lived in abject poverty. There were small shopkeepers and businessmen. Finally there were the bankers, contractors, and large commercial operators who constituted Roman Big Business.

In the program of Gaius there were measures that appealed to each of these groups. For the farmer he revived and revamped his brother's legislation for the allotment of land from the public domain. For the urban poor he provided the sale of wheat by the government below the market price. For the little fellow who wanted larger business opportunities he proposed the establishment of trading centers in Italy and one in the territory of Carthage in North Africa. Allotments of land were to be made in these centers to selected colonists of good character.

For the big businessmen he provided contracts for great warehouses for the storage of grain, for an extensive system of farm-to-market roads, and for the collection of taxes in the province of Asia, in western Asia Minor. At the same time he recognized their importance in the state by transferring to them the right to make up the juries that tried provincial governors for extortion, hitherto a prerogative of senators. There were other measures, not of an economic character, intended to curtail the power of the old senatorial machine.

Most of these measures may be classed as New Deal experiments. Perhaps it would be imputing to the Rome of the second century BC modern economic ideas to suggest that Gracchus intended to relieve unemployment. Nevertheless there is reason to regard the building of roads and other public works as projects designed to provide employment at government expense and to stimulate business, as well as to reflect credit upon the responsible official. Land distribution and the founding of colonies were the equivalent of the modern Resettlement Administration.

The warehouses may be considered the instrument for carrying out the modern Ever Normal Granary idea, with an important difference. The Ever Normal Granary is intended to stabilize wheat prices at a fairly high level for the benefit of the producer. Gracchus desired to stabilize prices at a low level for the benefit of the consumer. In the ancient world transportation difficulties were responsible for famines and for wild fluctuations in wheat prices. Gracchus proposed that the government procure an adequate supply of wheat to be sold at a low and fixed price to everyone who was willing to stand in line once a month at a warehouse.

The prevalence of local famines in antiquity had forced governments to resort to similar methods to keep their people from starving. But now Gracchus was transforming an emergency measure into a permanent system. The wheat was sold for thirty-two cents a bushel, which was below the normal price; in the absence of Board of Trade figures we do not know how much below. Historians rather generally have guessed that thirty-two cents was about half-price. To judge from the screams of the conservatives of that day and later, this guess may be right.

In America we have seen wheat sell as low as twenty-five cents a bushel on the farm, and as high as three dollars. In ancient Italy prices ranging from ten cents to four dollars are mentioned. Thirty years before the Gracchan Ever Normal Granary plan was adopted the normal price was apparently regarded as about sixty cents. Fifty years after this legislation the same figure is recorded. In any event, thirty-two cents represented a sharp cut.

The idea that the state should tax its richer citizens to take care of the unfortunate on a permanent basis was shocking to the old Roman ideas of self-reliance. An illuminating tale has come down to us that shows the attitude of the sincere conservatives of the time. Cicero tells the story in his Tusculan Disputations. A consul, Piso, had fought the proposal. After the law had been enacted Piso appeared in the throng standing in line to get the low-price grain. Gracchus saw him there and inquired about his consistency in taking advantage of a law that he had opposed.

"I shouldn't like it, Gracchus," the old gentleman replied, "if the bright idea should come into your head to divide up my property among all the citizens. But if you should do it, I would be on hand to get my share."

The plan that Gracchus put into effect was really the two-price system discussed by farm leaders in America. Under such a system food is sold at the market price to the bulk of consumers. Those unable to pay this price may buy at a reduction food subsidized by the government. In Rome the two-price program proved the beginning of what soon became direct relief.

By any humane standard this grain subsidy was needed to mitigate the evils of unemployment. Presumably the unemployed were able to get occasional odd jobs and they could sponge on the rich. But undoubtedly low-price wheat was a great help.

Gracchus was a keen businessman. He may reasonably have calculated that if the grain which the government could collect as tribute from the provinces was not enough, more could be bought when the price was low and that in the long run the cost to the treasury would be less than under the existing system. As it was, when a shortage of grain caused the cost of living to rise above a certain point, the government had to sell grain at a heavy loss till the crisis was passed.

But a man as politically minded as Gracchus could not possibly have overlooked the political implications of the policy. It is a fair assumption that he figured, with a modern American director of relief, that "ninety per cent of these people are naturally with us." In starting the project he was thinking of votes as well as of human needs.

As this is one of the most famous pieces of social legislation in antiquity, we may here summarize its development and later history. Events proved how dangerous a necessary public subsidy may become under political pressure. There was no means test. Anyone willing to stand in the bread line could take advantage of the low price. There were perhaps fifty thousand who applied at first. But the number kept increasing.

Unfortunately, in the absence of government reports the record at times is hazy. When the senatorial machine regained control after the death of Gracchus, it dared not abolish the sale of cheap wheat, but it modified the law in the interest of economy.

Twenty years later a leader with large ambitions sought popularity by proposing to reduce the price to four cents a bushel. If this proposal was adopted it was soon annulled. Later as part of the budget-balancing activities of a conservative government under Sulla, who had an army at his back, the cheap wheat was withdrawn.

This economy could not be maintained in the face of public pressure. Shortly afterwards in a period of great unrest the government restored cheap wheat and 200,000 persons appeared as purchasers. Then a smart politician named Clodius ran for tribune on a free-wheat platform, and won.

A decade later when Julius Caesar came to power he found 320,000 persons were on grain relief. He had plans for taking care of at least part of the unemployed through a large-scale Resettlement Administration. As dictator he no longer needed the votes of citizens on the dole.

To promote migration of the unemployed he brought pressure on those who were unwilling to leave the exciting life of the capital, by ordering the relief rolls cut to 150,000 with a means test. Eighty thousand citizens were sent overseas. The fact that as a result of these measures some ninety thousand persons were left unprovided for and that there are no reports that any of them starved may have a certain significance. It is a fair assumption that people were going to the government for relief who might have got on without it. Such imposition has been heard of even in modern times.

Under the Empire the rolls were maintained and finally food relief was greatly extended and made hereditary. The progress of direct relief in Rome is a conspicuous example of the menacing possibilities of pressure groups.

As for Gracchus, his vision extended beyond Rome. He was the first really Italian statesman. A grievance was cherished by the Italian cities that had fought with Rome against Carthage and in the subsequent wars. They had not been put on a political equality with Rome by the grant of Roman citizenship. Shortly before Gracchus came into office one of the important central Italian cities had revolted against this injustice and had been destroyed.

The tribune sensed the growing discontent which only a few years later was to lead to a civil war that cost thousands of lives. He was not satisfied with having created, at least temporarily, a democratic party. He desired to continue to make the party an agency of progress. He took the statesmanlike view and became the champion of the wronged Italian cities. Success would have averted the future bitter struggle.

The proposals of Gracchus to extend Roman citizenship gave his eager enemies an opening. As tribune he had to stand for election every year. His opponents resorted to a political trick that is familiar today. They put up a candidate against him who promised impossible gifts of colonial land to the people and appealed to the 100 percent Roman sentiment against sharing citizenship with outsiders. The people deserted their leader and he was defeated.

In a riot that followed, the great reformer was killed. His biographer gives a moving account of the circumstances of his death. With a sprained ankle he had escaped across the Tiber, his enemies in hot pursuit. As he limped along, those whose champion he had been encouraged him and wished him success, "as standers-by may do to those who are engaged in a race." But nobody in that stolid throng would furnish him the horse for which he asked. In a little grove in which he finally hid he was overtaken and met his death.

The influence of Tiberius and Gaius Gracchus did not die with them. "At every turn in the paths of political life," says the English historian A. H. J. Greenidge, "the Roman statesman was confronted by two figures whom fear or admiration raised to gigantic proportions…The youth, the brotherhood, the martyrdom of the men were the very elements that gave a softening radiance to the hard contour of their lives. The Gracchi were a stern and ever present reality; they were also a bright and gracious memory. In either character they must have lived; but the combination of both presentments had secured them an immortality which age, wisdom, experience and success have often struggled vainly to secure."


The younger Gracchus, as I have said, set out to challenge the authority of the senatorial machine with his coalition democratic party. For a brief time he succeeded. Appian makes the acute observation that under Gracchus,

[P]olitical power was turned upside down. The power was in the hands of Big Business. Empty honor was left to the Senate.

The coalition soon went to pieces. But the business leaders had learned that their group held the balance of power. They adopted the policy so successfully used in the American labor movement by Samuel Gompers. Under Gompers, organized labor supported whichever party seemed to offer the greater inducements.

Big Business joined the Popular party of small businessmen, farmers, and reliefers to obtain its objectives. When the Popular party swung too far to the left, the important business leaders allied themselves with the conservative senatorial machine. For a good share of the last republican century Big Business was able to exert a strong influence on the policies of the government.

The chief policies in which the business group was interested had to do with territorial expansion and the exploitation of the conquered provinces. The conservative senators shrank from the annexation of additional territory. This presented governmental problems which they were not ready to undertake.

But new lands brought under Roman control gave the businessmen opportunities for profitable investments, for handling government contracts, for lending money, and for opening new markets for trade. Rome became the banking centre and clearing house of the world. Cicero boasted that not a single transaction could take place in southern Gaul without an entry in a Roman account book.

The history of the contracts that were let for tax collections belongs to the seamy side of Roman expansion. The Republic had no permanent civil service for provincial administration. Following a common practice, it let five-year contracts to business syndicates. These paid the taxes in lump sums and the government was relieved of all trouble. But in certain provinces the syndicates would extort enough taxes in the five-year period above what was due Rome to enrich their members.

The evil reputation of the oppressive tax collectors, the puhlicani, has come down to us from the New Testament references to "publicans and sinners." "Wherever the publican penetrates," wrote Livy, "there is no more justice or liberty for anyone." With the backing of troops tax collecting frequently became organized plundering.

These conditions were not universal. There were parts of the Empire in western Europe and northern Africa where taxes were not farmed. These were generally free from extortion and the condition of their people was much improved under Roman rule. It would be a distorted picture that presented Rome's colonial government as everywhere oppressive. Nevertheless provincial extortion had become a glaring evil.

In connection with provincial dealings and contracts there were many opportunities for shrewd businessmen to pick up money on the side. They could hold Asiatic grain that they had collected for taxes and sell at high winter prices. They could speculate in land that went on the market at distressed prices during unsettled times, knowing that values would advance under the Roman peace. They could lend money to cities at high rates of interest, running to 4 or 5 percent a month.

Marcus Junius Brutus, one of those grim republicans who murdered Julius Caesar, was a man universally respected for his integrity. Yet he saw nothing out of the way in lending the city of Salamis a large sum of money at 48 percent a year and then bringing pressure on the provincial governor to use troops to collect the debt.

It was in the judicial proceedings for trying provincial governors for extortion that one of the Gracchan laws proved an instrument of oppression, wholly contrary to the purposes of the reformer who obtained its adoption. In the time of Gracchus governors accused of extortion were tried by juries made up of senators, men of their own class and naturally sympathetic with them. To avoid this abuse, Gracchus substituted businessmen for senators.

But an unforeseen evil developed. If an honest governor tried to protect the provincials from exactions from a tax-collecting syndicate, its stockholders could frame up charges against him and have him tried by a jury whose members might be financially interested in the syndicate that he had antagonized. The makeup of these juries became one of the important issues between the senatorial machine and the big business operators. So often do reforms produce unhappy consequences!

How the business group intervened in politics is apparent in several incidents. There was a civil war in northern Africa in which a considerable number of representatives of Roman commercial houses were killed. The Senate was reluctant to prosecute a punitive war which might bring Rome a new province to govern. An expeditionary force was conducting a half-hearted campaign when the business crowd intervened. It stirred up the Assembly in defiance of the Senate to investigate the conduct of the war and finally to send a new general, Marius, of humble origin, to replace the dilatory aristocratic commander.

Another incident was in connection with the depredations of pirates in the Mediterranean. Rome had been too preoccupied with other matters to police the seas, and the pirates had multiplied and become a serious menace to commerce. While the Senate finally sent forces against them, it never was particularly concerned about trade. The campaign was allowed to drift. The businessmen were outraged, and when pirate raids threatened the capital's grain supply, public sentiment reacted against senatorial incompetence.

The Senate's dignity could not prevail against the soaring price of wheat. A magistrate proposed to the Assembly that Pompey, a competent middle class general, be given extraordinary powers to deal with the situation. The Senate strenuously objected to such a surrender of its authority. A tribune was found to interpose a veto and announce that the new command would be set up only over his dead body. But the magistrate who had proposed the bill now invoked the principle of the recall, which Tiberius Gracchus had used.

As the vote proceeded and it was apparent that the obstructionist would be removed from office he withdrew his veto and the bill passed. Pompey was allowed three years for the task. But he acted with such energy that within three months the pirates had been virtually swept from the seas.

Still another instance of business intervention in the field of government had to do with Asia Minor. This had proved a profitable field for Roman business, especially for the tax-collecting corporations. Mithridates, an able native ruler of a kingdom beyond the Roman province, had raised the cry of "Asia for the Asiatics" and invaded Roman territory. I have already referred to the sudden massacre of the unpopular Italian business men instigated by him.

The war to expel the invader dragged along. Dividends in Asiatic stocks widely held in Rome were suspended. Finally the businessmen forced a transfer of the command from the senatorial general to Pompey, who they believed was sympathetic with their policy of expansion. They depended on him, not merely to end the war, but to find excuse for annexing additional territory to which government contracts for taxes and public works might be extended.

The feverish business and speculative activity that had sprung up in Rome with the great era of expansion continued to enrich the few at the expense of the many. The situation would have been different if the new capital could have been used to develop industries whose production would have been distributed in wages and salaries to the benefit of the whole community. But such a use requires a degree of industrialization that was wholly lacking in ancient Italy.

The wealth that flowed in was concentrated in a comparatively few hands. It was spent on luxuries from abroad, on maintaining large slave establishments, on big country estates, and sometimes on investments in the provinces. It created few new jobs. There was little chance for the poor man to get ahead. In spite of the primitive economic ideas of the time, these significant facts did not escape contemporary observers. One of them wrote that, "conquests enriched the wealthy and impoverished the poor."

Reckless speculation induced by easy money had the usual consequences. Businessmen became overextended. The panic of 86 BC, and a severe depression less than a quarter of a century later, testified to the unhealthiness of the economic situation.

Civil war in Italy, which Gaius Gracchus had tried to prevent, led to a slump in the value of real estate, the chief form of investment in Rome. A few years previously the government had attempted to meet extravagant expenditures by devaluing the currency. This had added to the uncertainty. As Cicero remarked, no one was able to tell what he was really worth.

Then came the shock of extensive losses in Asia. In this emergency the government dominated by the Popular party enacted a bankruptcy law by which debts were scaled down by 75 percent. The financial stringency was relieved by spoils from the Asiatic provinces. But the lesson of the panic was soon forgotten. Within a few years the gambling spirit again permeated Italian society and wild land speculation became general.

Looking back near the close of his life, Cicero wrote of conditions in the year 63 BC that at no time in his recollection was the world so heavily involved in debt. "Never," he said, "were measures for the repudiation of debts more strenuously agitated. Men of every sort and rank attempted with arms and armies to force the project through."

An explosion came in the famous conspiracy of Catiline in the very year to which Cicero referred. It is worth examining briefly for the light it throws on the bitterness between the oligarchy of wealth and the submerged masses that flared up under the strain of the depression.

Catiline has come down to us from accounts written by his bitter enemies as a villain of purest ray serene, an upper class gangster, the unsuccessful leader of a dangerous conspiracy. But four years after his death the populace strewed flowers upon his tomb. He must have had redeeming qualities.

An enigmatical fellow, this Catiline; embittered by political failure, heavily in debt, courageous, dashing, magnetic, driven by combined ambition and sympathy for the forgotten man. Our accounts of him are based chiefly on the writings of Sallust and Cicero. Sallust had been proconsular Governor of Numidia. "Thereafter he retired from public affairs and lived in great splendor, having acquired his wealth, it was said, by extortion in his province." Cicero was Rome's leading lawyer, with a $175,000 mansion on the Palatine and several country estates. To him the Popular party was made up of the " scum and dregs of the town," the "miserable starveling rabble." In their attitude toward Catiline these men probably were no more objective than modern industrial leaders would be in discussing issues in a bitter labor controversy today.

Vituperation was even more common and more extreme in Roman controversies than it is in modern campaigns in America. The "smearing" attacks by American politicians are not taken seriously by disinterested observers. Reading the violent language used against Catiline we are constantly reminded of gutter politics at home.

In the light of American experience we cannot be sure of the facts in this ancient conspiracy case, especially in the prelude. Certainly we have abundant reason to discount some of the charges made. A century later accusations on a similar scale were circulated against the Emperor Tiberius. They no longer are believed.

What has completed the damnation of Catiline in the eyes of historians is a letter he wrote to an aged aristocrat, an old friend, just before he left Rome to join the rebel farmers who had been attracted to his cause. He is determined, he says, to publish no defense of his course, but he feels he owes an explanation to a friend. He has suffered injuries and indignities. Robbed of the fruit of his exertions, he has been defeated for the honor of the consulship, which he had fairly earned. So, he adds, "I have undertaken, as is my wont, the public cause of the distressed."

Anyone who condemns Catiline as merely a self-seeking demagogue on the strength of this letter is unfamiliar with the political mentality. In an acquaintance with American political leaders covering many years, I do not recall a single one who did not combine personal ambition with a desire, in varying degrees, to serve the public. Indeed, without the personal motive a man does not become a successful politician.

In the heated Bull Moose campaign of 1912, Theodore Roosevelt on one occasion frankly avowed that he would show the Republican bosses that "they can't do this to me," referring to the steamroller methods used to prevent his obtaining the Republican nomination for President. I knew Colonel Roosevelt fairly well, and I recognized his faults. But there is not the slightest question in my mind that desire to be of public service in the troubled years preceding the World War was dominant with him, although it was mixed with a human determination to get back at his political enemies. In his letter to his friend, Catiline merely shows himself a typical politician.

Undoubtedly Catiline was a man of violent nature. "If a fire is lighted against me," he is quoted by Cicero as saying, "I shall put it out, not by water, but by pulling down the roof of things."

That he regarded himself as the leader of the helpless masses is shown by another remark that Cicero has preserved:

There are two bodies in the state. One is feeble with a feeble head. [Here he was referring to the oligarchy.] The other is strong but headless. While I live this strong body shall never lack a head while it deserves one.

This boast might have come from any turbulent leader of the cause of the oppressed in recent times — from John Brown, of Osawatomie, for instance.

A speech of Catiline to his followers, quoted by Sallust, shows the underlying bitterness among the people to which he was appealing. "Everything," he says,

is monopolized by a proud and insolent oligarchy; power, riches, honors are in the hands of the few, or scantily dealt out among their creatures, at their will and pleasure. To us they have left nothing but disgrace, contempt, and danger, the terror of prosecutions, and the pangs of gripping poverty…We have beggary at home, a load of debts abroad; desolation before our eyes, and not the smallest hope of relief to assuage our misery. In a word, the breath we draw is all that is left for us.

A case may be made for Catiline on the assumption that he turned to conspiracy and violence only after he had lost hope for reform through political action, as he became convinced that he never could win a consulship.

In his campaign for consul in the summer of 63 BC his formal program is not clear, and it is quite possible he had none. It has been suggested that he urged the stock left-wing proposal of the time — cancellation of the general indebtedness, which Cicero mentioned, called in Rome the "clean slate" policy. But this would not have reached the mass of the people. It seems more likely that he was appealing to all the discontented elements while pledging himself to nothing in particular. But if he did not declare openly for the clean slate policy, he soon was suspected of intending this and perhaps even more violent measures.

In any event his campaign was disturbing enough to frighten businessmen and precipitate the panic of 63 B.C. The foundation for it had been laid by the speculation in land and the widespread indebtedness just mentioned. Loans were generally called and there was a flight of gold from Italy.

The discontent from the depression had given Catiline his chance. The panic caused his defeat. It rallied all the conservatives against him. The government acted vigorously to stop the flight of gold, as the United States government acted under similar circumstances in March 1933. An embargo was put on gold exports.

At the same time the help of Q. Considius, one of the leading financiers of Rome, was enlisted. He held a position in the financial world very like that of the first J. P. Morgan in Wall Street. His outstanding loans at this time were in the neighborhood of three-quarters of a million dollars. An announcement from him that he would extend credit at easy rates was important enough to receive a vote of thanks from the Senate. The combined action of government and financier allayed the panic.

The parallel to what happened in the United States in the Panic of 1907 is close. Frenzied speculation had led to a severe financial strain. In October of that year when the Knickerbocker Trust Company of New York failed and the National Bank of America went down, a wave of fear swept the country. In the New York Stock Exchange there was a day of terror and nobody would lend. The interest rate shot up to 150 per cent.

President Theodore Roosevelt sent his Secretary of the Treasury to confer with the leading New York bankers. J. Pierpont Morgan sat at the head of the table. While we have no record, we may guess that the same thing happened in the Roman Forum in 63 BC, with Considius taking charge. Under Morgan's direction a pool of twenty-five million dollars was raised to be lent at 10 percent. Gradually the situation was worked out and the panic subsided.

Doubtless the disappearance of Catiline contributed to the reassurance of business. Defeated in the consular election, he had planned an armed revolt. Evidence was difficult to obtain. His followers were held by a strange magnetism. A reward of ten thousand dollars offered by the government failed to produce a traitor who would betray the plot.

But the net was closing around the conspirators. Catiline left Rome and joined a band that had rallied to his standard north of Florence. It was made up of evicted farmers and distressed ex-servicemen; some three thousand under arms. Here early in 62 BC he fell in a battle with government troops sent to quell the insurrection. So desperate were his men that not a single free Roman among them survived. "A fine man wasted," is the verdict of a sober English historian, W. E. Heitland.

The panic left its aftermath of trouble. Presumably in Rome as in New York there were concerns that were too heavily involved to survive. But a few months later Roman conditions were greatly relieved by large additions to the gold reserve. Pompey came home with millions in precious metals that he had expropriated in his successful campaigns in Asia. As a result of the easy money now available the situation became normal.

Meanwhile a revolutionary change had been taking place in one arm of the government. Its significance nobody had understood, least of all its originator. It ended the Republic and brought in the Empire. The old citizen army was replaced by a semiprofessional army on a new basis.

At the close of the second century BC, Italy was threatened with invasion from the north. Marius of North African fame was repeatedly elected consul to deal with the danger, which he did with complete success. As consul he was empowered to raise the necessary troops. He realized the difficulty of conscripting enough soldiers from the depleted farms of Italy and of whipping the raw farmers into a disciplined armed force. He called for volunteers.

Veterans, unemployed, and unattached men flocked in, attracted by the prospect of adventure and the rewards that a liberal general might offer from successful campaigns. Thus was created a volunteer army of mercenaries who looked to their commanders rather than to the state. Thereafter until the reorganization of the army under Augustus, the government bowed to the general who could control the soldiers.

In Rome's situation, large armies were required for the frontiers, and no civil power could long stand against an ambitious commander of the legions. In the last years of the Republic the young Octavian, whom we know better by his later title of Augustus, insisted that the Senate authorize his election as consul while he was still under legal age. Objection was raised. But the officer who bore the commander's message threw off his soldier's jacket and showed the hilt of his sword. "This shall do the deed if you will not," he exclaimed.

The Senate temporized and then yielded when it learned that Octavian was marching on Rome with eight legions. Nearly two thousand years later another Roman government was to capitulate before another march on Rome headed by the man who was to become the Duce (Leader), as Octavian was to become the Princeps (First Citizen).

For eighty years and more the business interests, except for short intervals, had more or less dominated the government. Under their direction Rome had been defended from fierce attacks from without, and as a result of pressure from them its boundaries had been extended. They had proved much more successful in foreign affairs than in domestic.

Today we may recognize, as contemporaries could not, two major defects in their administration. While the capital, in spite of outbursts of savagery in the civil wars, had become increasingly a centre of civilized living, this was confined to the well-to-do. The condition of the impoverished masses had been ignored except for the providing of relief and free amusements. Doubtless, and perhaps naturally, the average Roman businessman felt that these provisions fulfilled the state's full duty to the less fortunate.

The second defect proved speedily disastrous to the Republic. The problems involved in creating the new mercenary army were not appreciated. Even if they had been, the men in control lacked the statesmanship for their solution. With Marius and the succeeding holders of high commands, the supreme authority was passing to the master of the legions.

Out of the conflicting ambitions of military leaders emerged a great soldier and administrator. It was the destiny of Julius Caesar to bring western Europe into the orbit of civilization and to prepare the way for the Empire. On January 11, 49 BC, when Caesar crossed the Rubicon, the long history of the Republic was approaching the end.