Lydia, inheriting the traditions of Phrygia, and like that state situated on the border of two worlds, allied moreover with Egypt as well as Babylon, and in regular communication with the Delta, borrowed from each that which fell in with her tastes or seemed likely to be most helpful to her in her commercial relations. As the country produced gold in considerable quantities, and received still more from extraneous sources, the precious metal came soon to be employed as a means of exchange under other conditions than those which had hitherto prevailed. Besides acting as commission agents and middle-men for the disposal of merchandise at Sardes, Ephesus, Miletus, Clazomenaa, and all the maritime cities, the Lydians performed at the same time the functions of pawnbrokers, money-changers, and bankers, and they were ready to make loans to private individuals as well as to kings. Obliged by the exigencies of their trade to cut up the large gold ingots into sections sufficiently small to represent the smallest values required in daily life, they did not at first impress upon these portions any stamp as a guarantee of the exact weight or the purity of the metal; they were estimated like the tabonu of the Egyptians, by actual weighing on the occasion of each business transaction.
The idea at length occurred to them to impress each of these pieces with a common stamp, serving, like the trade-marks employed by certain guilds of artisans, to testify at once to their genuineness and their exact weight: in a word, they were the inventors of money. The most ancient coinage of their mint was like a flattened sphere, more or less ovoid, in form: it consisted at first of electrum, and afterwards of smelted gold, upon which parallel striae or shallow creases were made by a hammer. There were two kinds of coinage, differing considerably from each other; one consisted of the heavy stater, weighing about 14.20 grammes, perhaps of Phoenician origin, the other of the light stater, of some 10.80 grammes in weight, which doubtless served as money for the local needs of Lydia: both forms were subdivided into pieces representing respectively the third, the sixth, the twelfth, and the twenty-fourth of the value of the original.
The stamp which came to be impressed upon the money was in relief, and varied with the banker; * when political communities began to follow the example of individuals, it also bore the name of the city where it was minted.