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Transcript
FIN-03-002
February 05, 2003
American University
The Acquisition of Empires:
Bidding for Rome 193 A.D.
1
The Auction
“...The soldiers cut off the head of [Emperor] Pertinax and fastened it on a spear, glorying in the
deed. Thus did Pertinax, who undertook to restore everything in a moment, come to his end.
He failed to comprehend, though a man of wide practical experience, that one cannot with safety
reform everything at once, and that the restoration of a state, in particular, requires both time
and wisdom. He had lived sixty-seven years, lacking four months and three days, and had reigned
eighty-seven days.
When the fate of Pertinax was noised about, some ran to their homes and others to those of the
soldiers, all taking thought for their own safety. But Sulpicianus, who had been sent by Pertinax
to the camp to set matters in order there, remained on the spot, and intrigued to get himself
appointed emperor. Meanwhile Didius Julianus, at once an insatiate money-getter and a wanton
spendthrift, who was always eager for revolution and hence had been exiled by Commodus to his
native city of Mediolanum, now, when he heard of the death of Pertinax, hastily made his way to
the camp, and, standing at the gates of the enclosure, made bids to the soldiers for the rule over
the Romans.
Then ensued a most disgraceful business and one unworthy of Rome. For, just as if it had
been in some market or auction-room, both the City and its entire empire were auctioned off. The
sellers were the ones who had slain their emperor, and the would-be buyers were Sulpicianus and
Julianus, who vied to outbid each other, one from the inside, the other from the outside. They
gradually raised their bids up to twenty thousand sesterces per soldier. Some of the soldiers would
carry word to Julianus, ”Sulpicianus offers so much; how much more do you make it?” And to
Sulpicianus in turn, ”Julianus promises so much; how much do you raise him?” Sulpicianus would
have won the day, being inside and being prefect of the city and also the first to name the figure
twenty thousand, had not Julianus raised his bid no longer by a small amount but by five thousand
at one time, both shouting it in a loud voice and also indicating the amount with his fingers. So
the soldiers, captivated by this excessive bid and at the same time fearing that Sulpicianus might
avenge Pertinax (an idea that Julianus put into their heads), received Julianus inside and declared
him emperor.” (Cassius Dio, Roman History, Book LXXIV)
2
The Currency of Acquisition
The principal Roman coins were the as, of copper; the sestertius, quinarius, denarius, of silver;
and the aureus, of gold. The as, the unit of the Roman currency, contained originally a pound of
copper, but it was diminished from time to time till at last it contained only 1/24 of a pound. An
as, whatever its weight, was divided into twelve unciae. The contained originally 2 1/2 asses, the
Professor Robert Hauswald prepared this case as the basis for class discussion rather than to illustrate either effective
or ineffective handling of an administrative situation.
c Robert B.H. Hauswald, Kogod School of Business, American University, Washington, DC 20016-8044. To order
°
copies or request permission for reproduction, please send email to [email protected] No part of this publication may be reproduced in any form or by any means, or used without prior consent.
Bidding for Rome
FIN-03-002
Figure 1: Sestertius Minted by Didius Julianus during His Brief Reign
quinarius 5, and the denarius 10; but as the as depreciated in value, the number of asses in these
coins was increased so that a sestertius contained 4 asses in Julianus’ times.
The classical sestertius of the first centure A.D. (i.e., one hundred years before Julianus) roughly
equates to USD 0.80 on a purchasing power parity basis. As an illustration, a modest bottle of wine
cost 1 sestertius, a lawyer’s fee was 50 sestertii, and a week’s pay after deductions 7 sestertii for
an ordinary soldier. Given that Julianus paid 25,000 sestertii per soldier, and that the Praetorian
Guard had roughly 9,000 men (paid the royal sum of 2 denarii per day!), how much did the empire
cost Julianus?
Coins in ancient Rome, especially the small denominations such as sestertii used by everyone on
a daily basis, served the purpose to advertise political changes and communicate official news to the
sprawling empire. Despite is very short reign, Didius Julianus managed to mint his own sestertius
(see Figure 1) that bears the following inscriptions. The head with his own likeness has around the
edge the text IMP CAES M. DID. SEV.ER. IVLI[AN AVG], i.e., “Imperator Cæsar Marcus Didius
Severus Julianus Augustus”(translation: The Emperor Marcus Didius Severus Julianus). The tails
displays a Felicitas (goddess of good fortune) with the inscription [P M TR P COS/ S|C], i.e.,
“Pontifex Maximus Tribunicia Potestate Consul”, (translation: High Priest with Tribunal Powers
and Consul).
The short rein of Didius Julianus might have been expected in light of the following information
on the above coin that he put into circulation: its theoretical weight should have been 27.06 g while
the actual one was only 16.27 g. Furthermore, the metal was not even pure copper (the sestertius
should have been silver or, at least, contained some), but debased brass! Needless to say, the guard
did not remain loyal to him once Septimius Severus, an admired and feared general, marched on
Rome...
3
The Imperial Cast
Commodus (Lucius Aelius Aurelius Commodus), 161–192, Roman emperor (180–192), son and
successor of Marcus Aurelius. In 180, reversing his father’s foreign policy, he concluded peace with
the German and the Sarmatian tribes and returned to his licentious pleasures in Rome. There he
2
FIN-03-002
Bidding for Rome
vaunted his strength in gladiatorial combats and decreed that he should be worshiped as Hercules
Romanus. He changed his own name to Marcus Commodus Antoninus and wanted to rename the
city of Rome after himself. Many plots to assassinate him failed, but eventually, on the order of
his advisers, he was strangled by a wrestler. Pertinax succeeded him.
Pertinax (Publius Helvius Pertinax), 126–193, Roman emperor (193), b. Liguria. Formerly
a general, he reluctantly succeeded Commodus on the throne. Attempting to curb license in the
Praetorian Guard, he was slain by a soldier, thus ending his brief reign of three months. He was
succeeded by Didius Julianus (Marcus Didius Salvius Julianus), d. 193, Roman emperor (193).
He was consul under Pertinax, on whose death the Praetorian Guard received bids for the position
of emperor. Didius bid highest and became emperor. Two months later he was murdered when
Septimius Severus, who would not recognize him, bought the support of the Praetorian Guard.
Severus succeeded him.
Severus or Septimius Severus (Lucius Septimius Severus), 146–211, Roman emperor (193–
211), b. Africa. He was campaigning in Pannonia and Illyria when the emperor Commodus was
murdered. His successor, Pertinax, lasted three months before he too was assassinated. The
Pretorian guards arranged the succession of the weak Didius Julianus. With the empire in disarray,
Severus marched on Rome. Proclaimed emperor, Severus went to the East to overthrow Pescennius
Niger, the governor of Syria, who had also been proclaimed emperor by his legions. Severus defeated
(194) the pretender. He took (196) Byzantium and subdued the rebellious Arabs of Mesopotamia.
Returning to the West, he defeated (197) Clodius Albinus, another pretender, in Gaul and, returning
eastward, attacked and expelled (198) the Parthians from Mesopotamia. In 208, Severus went to
Britain. From there he harassed Scotland, but he died at York before completing his plans for a
large invasion. Severus built a strong army, increasing the number of legions while eliminating the
large commands that had been common for Rome, thus protecting himself against being overthrown
while he protected Rome. He ruled with vigor and, when he found it useful, a calculated cruelty.
His son Caracalla succeeded him.
4
The Author
The author, Cassius Dio, c. 155–235?, was a historian, administrator and Roman senator in the
second century A.D. Although a Roman citizen (and senator) he was Greek by birth (b. Nicaea in
Bithynia). Cassius Dio Cocceianus was a near relative, probably a grandson, of the famous orator,
Dio Chrysostom, after whom he took the names Dio and Cocceianus, and like him was a native of
Bithynia. His father was Cassius Apronianus, a Roman senator, who served as governor of Cilicia
and of Dalmatia. It is now established that the correct order of Dio’s names, if we follow the
normal Roman usage, is that just given, his praenomen being unknown. The common Greek order,
however, was Divwn oJ KavssioV, and this order has become so thoroughly familiar to English
readers that it bids fair to remain the popular usage.
The few details known regarding Dio’s life are derived from casual statements occurring in his
history. The date of his birth has been various placed between 155 and 164 A.D., according to the
time assumed for his admission to the senate. We learn that he was with his father during the
latter’s governorship of Cilicia, and that after his father’s death he came to Rome, apparently about
the year 180. His rise in civil and military office was steady; he became a senator (c. 180), praetor
(193), consul (220?), proconsul in Africa (224), legate in Dalmatia (226), legate in Pannonia (227),
and consul again (229). He was a good commander, but he remained in favor more for his literary
works than for his abilities in office.
In describing the behaviour of Commodus toward the senate and others at the beginning of his
reign, he states that his account is henceforth the result of personal observation and not hearsay.
It seems a reasonable, therefore, that he was already a member of the senate at this time, and
3
Bidding for Rome
FIN-03-002
therefore at least twenty-five years of age. Pertinax in 193 nominated him to the praetorship for
the following year; but in the meantime both Pertinax and his successor Julianus were overthrown,
and Dio thus assumed the office under Septimius Severus. The mild course of the new ruler at the
outset of his reign, taken in connexion with his past record, was such as to win the enthusiastic
admiration of Dio and to encourage in him the hope that a new era was now dawning.
Caracalla, the successor of Severus, took Dio along as a member of his retinue on his Eastern
expedition in 216, and the following winter was spent at Nicomedia; but Dio did not accompany
the emperor to the Parthian war. By Macrinus he was placed over the cities of Pergamum and
Smyrna as curator ad corrigendum statum civitatum, and he was continued in this position by
Elagabalus. Under Alexander Severus he became proconsul of Africa, and upon his return was sent
out as governor successively of Dalmatia and Upper Pannonia, both imperial provinces. In 229 he
became consul for the second time (consul ordinarius) with Alexander himself as colleague. But
his disciplinary measures in Pannonia had made him unpopular with the praetorians, so that he
found it advisable to remain away from Rome much of the time; and he soon obtained permission
to retire to Nicaea, his native city, on the plea of an ailment of the foot. This is the last he tells
us about himself, and we can only conjecture how many years of leisure he enjoyed in his native
land; inasmuch, however, as he was presumably already past the age of seventy at the time of his
retirement, it is probable that his death occurred soon afterwards.
5
The Work
The work for which Dio is known to the modern world is his Roman history ( JRwmai>kh‘ iJstoriva
or JRwmai>kav), originally in eighty books, covering the period from the landing of Aeneas down
to the year of his own (second) consulship in 229 A.D. The last years, however, were treated very
summarily, having been added, apparently, as an afterthought. He informs us that he spent ten
years in gathering material for the period down to Severus’ death, that he had read everything of
importance on the subject, and that twelve years was the time occupied in composing the work.
The period of these labours may be roughly estimated as the years 200-222. The lexicographer
Suidas attributes five other works to Dio; but it is practically certain that only one, or possibly
two, of these shorter works can have been written by him. The Life of Arrian, who was a fellowBithynian as well as a fellow historian, may actually have been the work of Dio. If he ever wrote
an account of Hadrian’s reign, it was doubtless incorporated in his large work, as was the case with
his first two treatises; but it is strange that he should have made no mention of it.
The whole period of nearly a thousand years covered by his history falls into three main divisions
according to his own statements. The first is the period of the republic, when political action rested
with the senate and the people; the facts were public property, and even if distorted from personal
motives by some writers, could readily be ascertained from others or from the public records.
The second period extends from the establishment of the monarchy to the death of Marcus Varus.
Under the emperors action was no longer taken openly, and such versions as were given to the public
were naturally received with suspicion. Dio must now content himself in the main with giving the
published reports of events, although he proposes now and then to express his own opinion based
on what he has heard and read. The third period is that of his own day; he now writes of events of
which he had first-hand knowledge, and, as might be expected, introduces more of detail into this
portion of his work. Incidentally he states that with the accession of Commodus his history makes
a sheer descent from the golden to the iron age. There are traces of a division of the work into
decads. Book XLI begins the Civil War, LI the monarchy (if we accept Dio’s view, here stated,
that the battle of Actium marked the beginning of the reign of Augustus), and LXXI, apparently,
the reign of Marcus Aurelius; while it is very probable that Book XI began the First Punic War,
XXI the Third Punic War, and perhaps XXXI the First Mithridatic War.
4
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Bidding for Rome
Of the original 80 books, 19 survive in full. They are a reputable source for the period of the
later republic and the first two centuries A.D. Dio Cassius tried earnestly to study all available
sources in the light of a moderate skepticism.
6
Assignment
.
Carefully read through the preceding account of the auction and answer the following questions.
1. What object is being auctioned off and why?
2. What is the format of the auction and how is the winning bid determined?
3. What type of auction is it, i.e., private, affiliated (correlated), or common values?
4. Why did Julianius win the bidding? What does this kind of strategy correspond to in the
realm of corporate finance and M&A?
5. In light of the subsequent events and, especially, Julianus’ fate, what did the unlucky winner of
the auction definitely experience? Analyze the likely reasons other than the unstable political
situation in Rome (which itself was probably a consequence of the auction) for the overall
outcome.
6. How much did Julianus offer in his winning bid to the soldiers? Calculate a rough estimate
of the price in USD on the basis of the provided purchasing power parity information.
5