Croesus (595–546 BCE), a king of Lydia, was instrumental in promoting currency as a means of determining relative value, both between buyer and seller and among nation-states. The ruler of a prosperous part of Anatolia (Asia Minor, in western Turkey), during the sixth century BCE, he introduced a state-sanctioned system of coinage that, in increasingly complex variants, remains in use more than 2,500 years after his death.
For centuries, the name Croesus has been used in Western civilization to evoke someone of enormous wealth, usually as the lead-in to a cautionary tale about the perils of great riches. King Croesus was likely born in 595 BCE, in the town of Salihi, near the Lydian capital of Sardis. His achievement in establishing a rudimentary central-banking system made him a target of the Persians, who besieged Sardis while en route to conquering large swathes of the known world, from the Indus Valley in Asia to the Balkans in southern Europe. Persian king Cyrus the Great, who captured the king, adopted his system of officially monitored coinage throughout his growing empire. So did the Athenian Greeks, who came later, as well as the Romans when they succeeded the Greeks as a dominant world power.
The surviving account of this period of antiquity comes from the Greek historian Herodotus (c. 484–c. 424 BCE), who lived in what is present-day Bodrum, Turkey. Herodotus compiled the first chronology of events in the Mediterranean realm and the Middle East in his Histories. Although he did not travel to the kingdom of Lydia during Croesus's time, he based his account on the writings of Athenian statesman Solon, who met the famed king and spent time at Croesus's court.
According to Herodotus, Croesus ascended to the throne of Lydia in 560 BCE, following the death of his father, King Alyattes. This royal line, known as the Mermnad dynasty, stretched back five generations to King Gyges, whose date of death is calculated at roughly 678 BCE. Gyges usurped the Lydian throne after a clash with his predecessor, King Candaules, whose claim in history is as the final ruler of an epic 500-year dynasty that was said to have originated when the Greek deity Heracles—also known as Hercules, the son of Zeus—produced a family with a mortal woman. This was the Heraklid dynasty, and Herodotus reported that it ended with the ascent of Gyges, the great-great-grandfather of Croesus.
Lydia was one of several kingdoms in present-day Anatolia, and Croesus's predecessors had expanded their power over time to subjugate other Greek-origin peoples living in Anatolia. By the time he came to power, Croesus ruled turf that stretched from present-day Istanbul, near the Black Sea, south to the Mediterranean Sea. His empire included the important port cities of Troy, Ephesus, and Smyrna, which enabled Anatolian traders to seek out foreign markets. Croesus's capital city of Sardis was inland from Smyrna, in present-day Manisa Province. The vestiges of Sardis are believed to include the village of Sart and the larger Salihi. During Croesus's reign, Sardis and the surrounding region were home to a thriving wool manufacturing and carpet-weaving industry.
The rise of trade in the region before Croesus's rule had necessitated the development of a monetary system that could enable the equitable exchange of goods and also facilitate purchases using a rudimentary form of credit. One of the notable features of this part of Anatolia was the ready availability of gold. In fact, some nearby rivers, including the Pactolus, were littered with both gold nuggets and lumps of silver and gold fused together. The naturally occurring alloy of gold and silver was known as electrum, and pieces of electrum were used as an early form of currency in Anatolia.
The purity of naturally occurring electrum was variable, however, and there were often trace elements of other minerals such as copper. “Hence, when exchanged, its quality first had to be tested visually from the color of streaks made on a touchstone,” explained John H. Kroll in The Oxford Handbook of Greek and Roman Coinage. As Kroll went on to note, such testing made transactions involving large quantities of electrum both time-consuming and impractical. In response, the Lydian government created uniform pieces of electrum that were stamped with a face value and could be authenticated by the royal mint at Sardis, where they were also produced.
The minting of these rudimentary coins was believed to have begun about 100 years before Croesus ascended to the throne. As Kroll and other scholars have noted, however, corruption and clandestine currency speculation are virtually as old as the invention of formal monetary systems. In this case, Lydia's electrum coins were often adulterated with varying amounts of copper, likely by officials at the mint who hoped to squeeze a tidy profit from the margin between a coin's actual value and its face value.
Recognizing that Lydian coinage was debased, Croesus ordered all coins to be recalled and set about removing corrupt officials from their positions at the royal mint. He then issued a new form of currency that benefited from a technological breakthrough and was the most significant achievement of his reign. Marking an advance in rudimentary metallurgy, chunks of the precious electrum were hammered into sheets and then soaked in a solution of sodium chloride, or common salt. When then heated in a furnace at a temperature of 800 degrees centigrade, the alloy was separated into its parts: pure gold, pure silver, and pure copper and other trace metals. In minting coins of pure gold, Croesus instructed artisans to design denominations that featured the imagery of a lion, as a way to help users assess a coin's denomination by sight.
Archeological evidence shows that, in Sardis, this minting process was underway as early as 560 BCE, likely the same year that Croesus ascended to the Lydian throne. For this reason, he is said to have “established the first known example of bimetallism, commonly defined as a monetary system in which the state fixes the exchange rate between gold and silver,” explained Koray Konuk in The Oxford Handbook of Greek and Roman Coinage. The system was adopted across Anatolia and later became standard practice in Athenian Greece, whose rulers had limited access to gold but used a similar practice to mint pure silver coins.
Although the phrase “rich as Croesus” is of unknown origin, the Lydian king's personal net worth was likely substantial, and during his roughly 14-year reign, Sardis grew into a major center of trade. As a monarch, his largesse was well documented: Sardis thrived as a city, and the Lydians living in his realm benefited from a welfare network in which basic needs such as food, water, and basic health care were provided to all. Croesus also launched impressive public-works projects, including the renovation of the Temple of Artemis at Ephesus, which became one of the proverbial Seven Wonders of the World.
The expansive fortune of his kingdom ultimately imperiled the Lydian king, however. The nearest threat was to the east in the form of the Persian Achaemenid empire founded by Cyrus the Great, who came to power in 559 BCE. Along with soliciting supernatural help by presenting offerings to several Greek deities, Croesus sent munificent caches of Lydian coins to the oracles at Delphi in Greece and Apollo in Miletus, along with delegates requesting both protection and advice.
A prominent political figure in ancient Athens, Solon was a contemporary of Croesus who made a lengthy tour of nearby lands. After a trip to Egypt, he arrived in Sardis and was given an official tour of the king's splendid imperial buildings. As noted in The Landmark Herodotus: The Histories, edited by Robert B. Strassler, the two men conferred and Croesus stated: “I really can't resist asking you now whether you have yet seen anyone who surpasses all others in happiness and in prosperity?” Solon responded that he knew of a Greek man who had died nobly trying to protect Athens during a period of civil unrest. Solon said that the man, Tellus, was the patriarch of a large and healthy clan that included several grandchildren and that, after his death, Athens mourned and erected a monument to his heroism.
Knowing Solon's stature as one of the Seven Sages of Greece, Croesus seemed confused by the respect he lavished on an ordinary man. Asked who might the second happiest person be, Solon then recounted the story of two brothers who, after serving both their parents and the pantheon of Greek deities in various acts of filial love and devotional piety, died peacefully in their sleep. Sensing Croesus's ire, the Athenian explained—according to Strassler's translation of Herodotus—that he “who goes through life having the most blessings and then ends his life favorably, he is the man, sire, who rightly wins this title from me. We must look to the end of every matter to see how it will turn out. God shows many people a hint of happiness and prosperity, only to destroy them utterly later.”
After Solon departed, Croesus grew concerned for his sons. The heir to the Lydian throne was Atys, who resented the fact that his father had protected him from the dangers of military service. According to Herodotus, Croesus now had a terrible dream. In it, a wild boar threatened villagers near Mount Olympus in Mysia, and Atys asked to be assigned to lead the team to vanquish the beast. At this time, Adrastus, a young prince from nearby Phrygia, was at Croesus's court, requesting a ritual absolution for accidentally killing his brother. Croesus granted Adrastus absolution and accepted his offer to accompany Atys on the mission to slay the wild boar. When a series of tactical errors ended with the accidental death of Atys by the spear-wielding Adrastus, the Phrygian prince again begged Croesus for forgiveness. In this dream, the king again granted it and then, overcome by grief, committed suicide at the tomb of Atys.
Concerned for another son, who was mute, Croesus now sent an envoy to asked the oracles at Delphi for guidance, besides seeking news about Persia's recent conquests. The Lydian delegates returned from Delphi with a caution that the first sound of Croesus's son's voice would portend misfortune, and a great empire would fall. Although Croesus forged alliances to fend off the Persian threat, Cyrus the Great and his army advanced toward Lydia and laid siege to Sardis in December of 547 BCE. After 14 days, enemy combatants breached one of the fortress walls. “One of the Persians, who did not recognize Croesus, approached the king and was going to kill him,” according to The Landmark Herodotus. “Croesus saw him coming but did nothing; in his misery he did not care that he would die by a stroke of violence. But when his mute son saw the Persian approaching, he shouted out in fear and horror, ‘You there! Do not kill Croesus!’ These were the first words he ever spoke, and after this, he could speak for the rest of his life.” Croesus's wife reportedly died by her own hand during the siege rather than be taken captive.
Croesus was taken alive and an execution planned. According to an oft-repeated tale, when Cyrus the Great ordered the Lydian king to mount his funeral pyre with his remaining family members, Croesus shouted out the name “Solon” three times in his grief. When Cyrus asked about this, Croesus explained that Solon was a wise Athenian and that all tyrants should heed his words. At that, Cyrus was said to have spared Croesus, after which a cloudburst soaked what would have been Croesus's funeral pyre. A Babylonian chronicle states that Croesus died while in service to Cyrus as an advisor a few months later.
After conquering Lydia, Cyrus incorporated it into his realm and utilized the coinage technology developed at the Sardis mint. His Achaemenid Empire lasted more than 200 more years, and its monetary system enabled it to become the largest empire in human history up to that time.
Herodotus, The Landmark Herodotus: The Histories, edited by Robert B. Strassler, translated by Andrea L. Purvis, Pantheon Books, 2007.
The Oxford Handbook of Greek and Roman Coinage, edited by William E. Metcalf, Oxford University Press, 2012.