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Augustus emerged as the victor of the final civil war of the Roman Republic, which was a contest between Augustus and Marc Antony over who would become the sole ruler of Rome and her empire. Augustus had amassed a great fortune though the spoils of war he acquired in the last few of the civil wars of the Late Republic. With his final victory, he also gained control of all the Roman legions. He used the power he had accumulated to bring the Roman Republic to an end and establish his absolute personal rule over Rome and the empire. He became the first Roman emperor and began the 503-year period of absolute rule by emperors.

Augustus' predecessor, Julius Caesar, had ended the republican practice of electing the executive officers of state and turned them into his appointees. Augustus retained this. He transferred the powers of the popular assemblies to the senate, turning the proceedings of these bodies into useless formalities. He also turned the senate into an instrument for his power. He created an imperial bureaucracy under his control. He turned the Roman army into a fully professional force under his control and took over the control of the treasury.

Augustus' tight grip on the Roman state and Roman politics ended the dysfunctionalities of government of the Late Roman Republic, which had become corrupt and had lost control over the provinces of the empire (conquered territories), which the provincial governors treated as their own personal fiefs and power bases. He restored central control over the provinces and stabilised a previously chaotic, civil war-torn and exhausted empire. Through this, he started what historians have called the Pax Romana (Roman Peace), a period of voer two hundred years of relative political stability in the empire. The stability led to prosperity through the development of thriving trading networks throughout the empire and beyond. Augustus actively promoted the development of trade by encouraging commercial production, setting low taxes which did not hamper enterprise and building infrastructure.

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