A History of Interest Rates Quotes

“Henry Kaufman”

“Interest rate#History”

“There are only meager data on interest rates, i.e. the net opportunity cost of holding real capital. For estimates near the 1774 benchmark, see Homer and Sylla...”

“Sidney Homer, Richard Sylla, A History of Interest Rates (2011) fourth edition*oogle Books”

“In 508 B.C. a democracy was established in Athens. From this time on Athens so rapidly outdistanced other Greek cities in trade and finance that the history of Greek credit and interest rates is largely... a history of Athenian credit and... interest rates.”

“There are many references in the Iliad and the Odyssey to the use of the ox as a unit of account. The Homeric Greeks had been nomads in the grassy steppes. ...One of the later reforms of Solon, 594 B.C., was the recomputation of fines and bounties in coined money instead of cattle.”

“The victories of the Turks and the interruption of the Oriental trade route through the Mediterranean led to the discovery of alternative trade routes. This ultimately deprived the Italians of their central trading position. Nevertheless, in this century Italian prosperity continued...”

“In historical times credit preceded the coining of money by over two thousand years. Coinage is dated from the first millennium B.C., but old Sumerian documents, circa 3000 B.C., reveal a systematic use of credit based on loans of grain by volume and loans of metal by weight. Often these loans carried interest.”

“Under Henry IV... Sully... consolidated the debts during a state bankruptcy into low-rate rentes. He avoided floating debt, introduced economy, improved the national finances, and brought on a period of prosperity.”

“Spain, recently the most powerful of European states, sank into financial decrepitude in spite of her empire in the New World and in spite of inpouring gold and silver. Spanish state bankruptcies occurred about every twenty years: 1607–1627–1649. ...Spain’s imported gold and silver were pledged in advance to Genoese bankers.”

“In 1610 a new period of mismanagement began. The aggressive foreign policy of Richelieu... and the extravagance of the court led again to a new and huge floating debt. At this time the term “partisans” was coined: people who had partis, money transactions with the government, and thus became its unconditional adherents.”

“In France the Italian bankers to the Crown were ruined in a more orderly and fastidious way. The power of France grew under Louis XIII... and Louis XIV... and these absolute monarchs were strong enough to exploit their creditors. There were, however, a number of enlightened efforts by French finance ministers to reform the state credit, and in the course of these France made some valuable contributions to techniques of government finance.”

“Another French state bankruptcy in 1648 eliminated the Italian bankers, mostly Florentines. State revenues by that time had been anticipated three years ahead by borrowing from the partisans who charged the Crown ruinous rates. Even the rentes (perpetual loans) were not always serviced in full. From 1639 French rentes enjoyed a market on the new Paris Exchange.”

“Sidney had many admirable qualities. I benefited enormously from his detailed knowledge of financial markets and his historical perspective. His style of writing and his behevior were remarkable. He wrote with a flair in a grand manor. He never criticized; he suggested. ...[H]e plowed through complicated statistical and economic material to unearth meanings and then explained those meanings in understandable language. His advice on my writings was invaluable.”

“This book will always be important to me, not just because of the subject matter but also because of my rather intimate involvement with it. Just a few weeks after I joined Salomon Brothers, Sidney came to be with the galleys of his book in hand. He asked if I would read them for him, which of course I readily agreed to. But being exceedingly meticulous, he then added that he wanted me to read the galleys out loud to my secretary, who would also have a set.”

“Cattle breeding has supplied us with many financial terms used in later money economies. For example, there is our own word capital and our term pecuniary, from pecus, meaning a “flock” in Latin. Sumerians used the word mas for calves and for interest. The Egyptian term ms, meaning interest, is derived from the verb msj, which means “to give birth.” Early Greeks, in fact, valued their precious metals in terms of cattle.”

“The structure of trade and industry changed. Europe now had great capitalists possessed of large and diversified interests. These men were not local merchants; they were no longer dependent on the restrictive regulations of the town burghers. They could move their operations from place to place: to the country or to other towns. ...They began to operate on credit on a large scale and to speculate. They supported royalty and financed wars.”

“Between 1430 and 1480, the Medici Bank at Florence was by far the greatest financial organization in Europe.., with branches throughout Europe, the Levant and North Africa. It was the chief bank for the Curia. Many other Italian banks had large capital and a worldwide business. Venice kept ahead of Genoa and was the first seaport of the Mediterranean.”

“Before the Persian wars... the hoarding of coin was general... Cities and temples, especially the Temple of Delphi, accumulated treasure. Temples made loans to states and to individuals. But after 450 B.C., investment in productive capital became common. ...land, ...rental housing, slaves let out for hire, business investments ...Even Socrates... had a friend to whom he entrusted his investments, and loans bearing interest.”

“[M]uch academic work had been done on interest-rate theory over the years, including the writings of Irving Fisher, John Maynard Keynes, and Frederick R. Macaulay. And in 1962 Sidney Homer, my mentor and partner at Salomon Brothers, was putting the finishing touches on his monumental A History of Interest Rates, which would appear the following year. Nevertheless, in those days there was remarkably little interaction between academicians and financial practitioners.”