The Power of Gold Read online

  Hatshepsut was an impressive woman by any standard. She managed a major increase in Egyptian trade with Palestine, Syria, and Crete, which had withered during the preceding 150 years when Egypt was occupied by Asian invaders known as the Kyksos. The explorations for gold during her reign were ceaseless, reaching farther and farther south, probably well into Zimbabwe.

  Hatshepsut’s demand for gold was enormous, because she was a builder on a scale that would put Louis XIV and his Versailles to shame. She was also fond of gilding her face with a mixture of gold and silver dust. When she decided to erect a great monument for Amon Re, the chief god of Thebes, her original design included two gold pillars one hundred feet high that would be seen above the walls of the Karnak complex, which covered an area larger than the Vatican. When her chancellor prevailed on her to be a little more economical, she built the pillars of granite and covered only their peaks with gold. But even that required generous amounts. When the job was complete, she declared, “Their height pierces to heaven. . . . Their rays flood the Two Lands when the sun rises between them. . . . You who after long years shall see these monuments will say, ‘We do not know how they can have made whole mountains of gold.’ ”10

  Most of the gold of biblical times and ancient Egypt—approximately four thousand years before Christ—came from the bleak and forbidding landscape of southern Egypt and Nubia; nub is the Egyptian word for gold. Nubia continued to supply gold to the Western world well into the sixteenth century. According to one authority, the output of the Nubian mines “far exceeded the quantity which was drawn from all the mines of the then known world in subsequent ages, down to the discovery of America.”11

  The Egyptians had developed these mines from shallow ditches, but in time they cut complex underground shafts deep into the hills. The deeper the mines were cut, the greater the human pain that went on inside. The best description we have of the horrors experienced by the workers in these mines has been provided by Diodorus, a Greek who visited Egypt about the time that Caesar ruled Rome. The air in the shafts was fetid, constantly depleted by the tiny candles that barely illuminated the terrible darkness. The heat was intense, the earth frequently gave way, and subterranean water was a constant hazard. The fires used to crack the quartz in the rock released arsenic fumes that caused excruciating deaths among the many who inhaled them. The slaves had to work on their back or side and were literally worked to death if they were not crushed to death by falling rocks before they expired from exhaustion.12

  No wonder slavery was so prevalent—and warfare so important—as military victories brought fresh supplies of slaves to work the mines. Diodorus informs us that the kings of Egypt did not limit the slave population to notorious criminals or captives taken in war, but even their “kindred and relations” as well—men, women, and children under the lash of the whip and without housing or care of any kind.13 In an ingenious arrangement, the slaves were guarded by mercenaries drawn from many different nations. As none of them spoke the language of the slaves, there was little opportunity for the slaves to corrupt or to conspire with their guards in order to effect escapes.14

  The employment of human labor was the standard mining technique right up to the twentieth century, except for a process that the Romans had devised in Spain, whose gold-stuffed hills served as the backbone of the Roman economy. The Romans originally used human labor to dig as deep as 650 feet to extract the ore from the Spanish countryside, but with a new method, called hydraulicking, they used powerful jets of water to break up the rock and expose the gold-bearing earth. The water came from great holding tanks situated as much as four hundred to eight hundred feet above the site. The method, though wonderfully efficient and productive, washed away entire mountains, destroyed farmland, and silted many rivers and harbors.15

  Hydraulicking was used in spotty fashion in other parts of Europe as well, but its most notable reappearance was in California in 1852, at the height of the gold rush. The Roman technique was faithfully reproduced in the Sacramento area, with water under pressure of up to thirty thousand gallons a minute smashing into the rocky hillsides and mountains. The environmental damage was awful. Forests and farmland disappeared in short order, the detritus even pouring into San Francisco Bay and leaving the landscape dotted with piles of rock and barren mountainsides. Nevertheless, hydraulicking was the primary method of gold extraction in California until 1884, when angry citizens finally had it outlawed.

  Today, in the great gold mines of South Africa, the shafts reach down as far as twelve thousand feet and the temperature reaches 130º F. As one source describes it, “To produce one ounce of fine gold requires thirty-eight man-hours, 1400 gallons of water, electricity to run a large house for ten days, 282 to 565 cubic feet of air under straining pressure, and quantities of chemicals including cyanide, acids, lead, borax, and lime.” The labor force employed in the South African mines exceeds four hundred thousand men, about 90 percent of whom are black.16

  King Ferdinand of Spain coined immortal words in 1511 when he declared, “Get gold, humanely if possible, but at all hazards—get gold.”17

  Not all gold has to be mined. When gold is carried down by mountain streams, the prospector can wade in and sieve up the fragments of gold-bearing ore that have broken loose from the mountainside. Gold was collected long ago in this fashion in Asia Minor, where gold coinage first made its formal appearance. Some 3500 years later, the California gold rush of the nineteenth century began on the banks of the Sacramento River, when the Forty-Niners crowded into the river with their crude equipment to “pan” the gold out of the rushing waters.

  They were following a practice that had come down from the ancient Greeks, who used woolly sheepskins for panning gold from the rivers—the tight curls of the sheep’s coat did an excellent job of capturing and holding the fragments of gold as the waters came rushing down the mountainsides. The mention of fleece and gold together immediately evokes Jason and the Golden Fleece, a legend that is worth a brief digression for its moral.18

  Phryxus, the son of the king of Boeotia, an area in eastern Greece, had been badly treated by his stepmother, so his own mother arranged for him and his sister to escape on the back of a winged ram whose fleece was pure gold, a handsome gift that she had received from Hermes (for services undefined). The trip could hardly have been smooth, because the Golden Fleece must have weighed heavily even on a ram delivered by Hermes. Phryxus’s sister, Helle, was apparently susceptible to air sickness, and, lacking the facilities of modern aircraft, became dizzy and fell off the ram into the sea; the point where she landed was named after her as the Hellespont.

  Phryxus held on. After a trip of over one thousand miles, he was finally delivered by his ram to Colchis on the far eastern side of the Black Sea. Happy to be safe and alive, he sacrificed the ram to Zeus and presented the fleece to the local king, Aeetes. Aeetes was delighted, as he had been told by an oracle that his life depended upon his possession of this fleece. Consequently, he nailed the Golden Fleece to a tree in a sacred grove and hired a huge, bloodthirsty dragon to guard it.

  Meanwhile, back in northern Greece a king named Pelias decided he had better get rid of his handsome and popular nephew Jason, who was trying to assert his family’s claim to the throne. Pelias told Jason that he could have the throne if he would first perform a deed “which well becomes your youth and which I am too old to accomplish. . . . Fetch back the fleece of the golden ram. . . . When you return with your magnificent prize, you shall have the kingdom and the sceptre.”19 Pelias never dreamed that Jason would succeed and return one day with his magnificent prize; on the contrary, he fully expected Jason to perish along the way or at least in the jaws of the guardian dragon.

  Jason did take the Golden Fleece, with the help of his Argonauts, but only after an extensive and prolonged series of hair-raising adventures. Even then, he would have failed had it not been for the assistance he received from Aeetes’s daughter Medea, who possessed magic powers. Medea had been hit with a dart
thrown by Eros and had fallen madly in love with Jason, so she used all her wiles to catch his fancy. Jason was sufficiently tempted by her to offer to take her back to Greece with him, but on the condition that she support his efforts to take the Golden Fleece. Much as she loved him, Medea was unwilling to yield to what might well have been a seductive ruse. “O stranger,” she cried, “swear by your gods and in the presence of your friends, that you will not disgrace me when I am alone, an alien in your land.”20 Jason swore to make her his “rightful wife” as soon as they returned to Greece. As such oaths were guarantees as reliable as written contracts in our time, Medea delivered the goods by singing the dragon into drowsiness while Jason seized the Golden Fleece from the tree.

  The story does not have a happy ending, because Jason was a compulsive social climber. From the outset, he was determined to become king of his homeland. He risked his own life and those of his friends in search of a sheepskin dusted with gold. He used a king’s daughter to bear children and promised to marry her. When he returned to Greece and found that he could not succeed to the throne, he fled with Medea to Corinth. There he proceeded to woo the daughter of King Creon but he told Medea what he was up to only after Creon had agreed to his betrothal to the princess. When Medea, inconsolable, recalled to him his solemn oath in Colchis, Jason justified himself by saying that their children would be better off because his newly betrothed had better social and political connections in Corinth than Medea did. The only solace he offered her was some gold and a request to friends to provide her with hospitality.

  Medea fixed him. With a fine touch appropriate to the occasion, she created a gorgeous gown made of cloth of gold and drenched it in poison. She then presented it as a gift to the bride-to-be. Delighted at the sight of this beautiful garment, the poor young woman wrapped herself in the radiant fabric, twined the golden wreath into her hair, and died a horrible death. Medea then completed her act of revenge by killing her own sons and flying off in a dragon-drawn chariot she had conjured up. Jason threw himself on his sword and died on the threshold of his home.

  The gold of Aeetes’s fleece had promised Jason power. That power gained him a princess who promised him a throne. But in the end, it was the gold that snuffed out both his bride and his future.

  Notes

  1. Chamber of Mines of South Africa and Sutherland, 1959, p. 12.

  2. Bartlett, John, 1943. Familiar Quotations, 11th ed., Christopher Morley, ed. Boston: Little, Brown & Co. This line came from Will Rogers’s last dispatch to the press, sent from Fairbanks and published on August 15, 1935, the day he died in an airplane crash.

  3. World Gold Council.

  4. Job, 31, 24–25.

  5. Sutherland, 1959, p. 57.

  6. Ibid., p. 57.

  7. Ibid., p. 57.

  8. Marx, 1978, p. 236.

  9. Encyclopedia Britannica On-Line, Egypt: History: The New Kingdom: The 18th Dynasty.

  10. Marx, 1978, pp. 48–53.

  11. Jacob, 1831, p. 55.

  12. Ibid., pp. 50–59.

  13. Marx, 1978, p. 44.

  14. Jacob, 1831, p. 56.

  15. Marx, 1978, p. 193.

  16. Green, 1993, pp. 405–407.

  17. Ibid., p. 17.

  18. For the whole story, see Schwab, 1946, pp. 86–102.

  19. Schwab, 1946, p. 87.

  20. Ibid., p. 122.

  Chapter 2

  Midas’s Wish and the Creatures of Pure Chance

  Though the crowns of gold that monarchs wear on state occasions must weigh heavy on their heads, no monarch has ever chosen zinc or plastic as an alternative. Rulers for centuries have also been fond of stamping their likeness on gold coins, to circulate throughout their kingdom and beyond. The tension between gold as adornment and gold as money developed early in history and has continued up to the present time. The everlasting radiance of gold, together with its scarcity, suggested such exceptional value that its route from the golden calf, the gilded phallus, and the Golden Fleece to its use as money was probably inevitable. The process works both ways: gold’s massive purchasing power adds to the lustre we see when we look at gold jewelry or the gilded dome on a state capitol.

  This chapter is about the nature of money and how gold coinage came into being. We shall see that gold’s association with power and magic linked it to the wide range of monetary functions that emerge when trade and business flourish. Money serves cultures and also reflects their basic values, and that may best explain gold’s longevity as a form of money. Indeed, gold has played the most important role as money in those cultures that hold business and exchange in highest repute.

  Value alone is insufficient for a substance to qualify as money. Lots of things have value that do not serve as money. In fact, the most effective forms of money have developed from objects that were otherwise quite useless, such as paper and computer blips.

  In early Britain, cattle and slaves served as money. Their value was set by law—although the church, eager to discourage slavery, refused to accept slaves in payment of penances.1 Pepper was popular in medieval times. In some areas, hoarding cattle to serve as wealth instead of as a food supply is a practice that has continued into modern times; this practice has led to serious ecological degradation in parts of Africa, where the sheep and goat population shrank by over 66 million from 1955 to 1976.2

  That is a rare case. In modern times, nothing useful has ever functioned as money for very long. For example, the cigarettes accepted as currency in Germany in the early days after World War II ultimately went up in smoke. Gold, in contrast, has always been useless for most practical purposes that call for metal, because it is so soft. With only 125,000 tons of it in existence, gold is also too scarce to have many uses.

  But gold has clear advantages as money compared to other kinds of useless substances that people have used for the purpose. Unlike cowrie shells, which were the main form of money for centuries in parts of Asia, gold is remarkably durable and does not easily fragment. Every single piece of gold, no matter how small or how large, is instantly recognizable everywhere as a receptacle of high value. Furthermore, every piece of gold is valued only by its weight and purity, attributes that are inconveniently applied to cattle.

  Seen from the perspective of uselessness, the electronic blips on computer screens that comprise most of the money in the modern world are the best form of money—we have no other use for them, they are readily recognizable as money, they weigh a lot less than gold or even paper, they are easily transferable, they can be broken down into any amount we choose from a penny to trillions of dollars and even beyond, they are as durable as we wish them to be, and they have a kind of magic that commands our respect.

  Yet gold endures as a standard of value. From the Golden Rule to Olympic gold, it has commanded far more respect than any other substance in history.

  But we should hesitate before admiring the sophistication of our contemporary currency while snickering about currencies in societies supposedly more primitive than ours. Consider the monetary system on the small island of Yap in the Caroline Islands, as charmingly described by an American anthropologist named William Henry Furness III, who spent several months on Yap in 1903.*3

  Furness points out, “In a land where food and drink and ready-made clothes grow on trees and may be had for the gathering, it is not easy to see how a man can run very deeply in debt for his living expenses.” Nevertheless, people like some tangible representation of the labor they have expended that can be accumulated as wealth.

  The medium of exchange, or, more properly, the store of value on Yap at that time was called fei. Fei consisted of thick stone wheels with diameters ranging from saucer-size pieces to twelve-foot millstones. The stones from which these fei had been fashioned came from limestone quarries found on the island of Babelthuap, one of the Pelao Islands about four hundred miles away, and brought to Yap long ago, piece by piece, in canoes and on rafts by some venturesome natives described by Furness “as persuasive as . .
. the most glib book-agent.”

  The smaller and more portable fei served as a medium of exchange and were handed around in payment for fish or pigs. The larger fei, however, received different treatment. The natives punched holes in the center of these fei to facilitate moving them about, but most of these big stones weighed so much that they remained permanently in one spot. On the rare occasions when a major transaction took place, the process went through with a simple acknowledgment of change of ownership while the “coin” continued to sit undisturbed wherever it happened to be.

  In fact, the wealthiest family in the community owned an enormous fei that no one could see or had ever seen. According to this family, their fei lay on the bottom of the sea. Many generations past, while an ancestor was towing it on a raft attached to his canoe, a terrible storm came up. Unlike the protagonist of Ruskin’s story, this man had decided that life came first and money second: he cut the raft adrift and watched the huge stone sink below the waves. But he survived to tell the tale and to describe to everyone the extraordinary size and quality of the stone he had lost. Nobody had ever doubted the veracity of his testimony. As Furness described it, “The purchasing power of that stone remains, therefore, as valid as if it were leaning visibly against the side of the owner’s house.”