WHEN AND WHY WAS AELIA FOUNDED?
Archeologist Hanan Eshel argued in a recent lecture that the issue has been resolved. Aelia was founded before the revolt. As grounds for this conclusion, Eshel pointed to a hoard of coins found in a cave northeast of Jerusalem, near the Pisgat Ze'ev neighborhood of today. Most of the coins were Jewish coins minted by Bar Kokhba. A few others, however, were coins of the Colonia Aelia Capitolina. Now, it is reasonable to assume that a hoard of Bar Kokhba coins found in a cave were brought there by refugees from the Romans seeking refuge in the cave. That the Bar Kokhba coins and the Aelia coins were found together, presumably in the possession of war refugees who may have been killed in (possibly by smoke-producing fires) or near the cave by Roman troops, shows that the Aelia coins were minted before the war.
Bar Kokhba Coins -- a major motif on these coins is a sketch of the entrance to the Temple sanctuary. Inscriptions on the coins include For the Freedom of Jerusalem.
The Bar Kokhba coins were struck on Roman coins that were thereby reminted. Some think that the Jewish forces captured the pay chest for the 22nd Legion Deioteriana, a legion which --it is generally believed by historians-- was wiped out by the Jews. Nothing is heard of this legion after the Bar Kokhba uprising. The coins meant to pay the legion were presumably reminted as Jewish coins.
See link below for a view of Bar Kokhba coins and Aelia coins:
Aelia Coins -- these carried the inscription Col Ael Cap and other abbreviations [Col Ael Kapit, etc.] of Colonia Aelia Capitolina. The name Aelia was used by the Eastern part of the divided Roman Empire, ruled as a Christian state from Constantinople [originally Byzantion], and today called the Byzantine Empire. This was so notwithstanding that the Christians knew that Jerusalem was the original name. Aelia was still in use when the Arabs conquered the country. The Arabs retained pre-Arab place names in the conquered territories. Hence, they called Jerusalem at first Iliya, their pronunciation of Aelia (as proven by their coins, inter alia). Only a few hundred years after the conquest did they begin to use al-Quds and Bayt al-Maqdis which were copied from Jewish terms, haQodesh and Beyt haMiqdash, which originally referred to holiness and the Temple, and later were applied by Jews to the city of Jerusalem. Jerusalem in Hebrew was Yerusholem. Today's name Yerushalayim means "the two Jerusalems" and refers to the heavenly and the earthly Jerusalems. As a comparison, Mitsrayim, the Hebrew name for Egypt, means the two Egypts, Upper Egypt --the south-- and Lower Egypt --the north. The Nile flows downstream from south to north.
The Walls of Aelia -- Hadrian is depicted on a coin driving a team of oxen around the ruins of Jerusalem left from the first revolt [when the Temple was destroyed in the year 70 CE], making a furrow on which the new city walls would be built. This was a Roman ceremony for founding a new city. The Old City walls of Jerusalem today follow the walls of Aelia, except on the south. Jerusalem in Second Temple times was much bigger than the Old City of today. The Third Wall of the Second Temple city was built just south of the present US consulate about a kilometer north of today's Old City. Remains of the Third Wall can be seen very close to the consulate building, southwest of it, and east of the new Route One.
On the south, the walls of Aelia went substantially south of the present Old City walls, which were built for Ottoman Sultan Sulayman the Magnificent by a Jewish contractor, Abraham de Castro.