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Companies, Commerce and Merchants: Bengal in the Pre-Colonial Era
 9781138234796, 9781315276830

Table of contents :
Cover
Half Title
Title
Copyright
Dedication
Contents
Preface
Acknowledgements
1. The Rise and Decline of Hugli: A Port in Medieval Bengal
2. Prices of Provisions in Bengal in the Second Half of the Seventeenth Century: Moreland Refuted
3. The Myth of the English East India Company's Trading Privileges in Bengal, 1651-1686
4. The Problem of Financing East India Company's Investments in Bengal, 1650-1720
5. Textile Trade and Industry in Bengal Suba, 1650-1720
6. Bengal Merchants and Commercial Organisations in the Second Half of the Seventeenth Century
7. Saltpetre Trade and Industry in Bengal Suba, 1650-1720
8. Continuity or Change in the Eighteenth Century? Price Trends in Bengal, c. 1720-1757
9. European Companies and the Bengal Textile Industry in the Eighteenth Century: The Pitfalls of Applying Quantitative Techniques
10. European Companies and Pre-Modern South Asian Commercial System: A Study of Bengal in the Eighteenth Century
11. General Economic Conditions under the Nawabs
12. The Traffic in 'Drug' in Bengal Suba: A Study of Opium Trade and Production, 1700-1757
13. International Trade in Bengal Silk and the Comparative Role of Asians and Europeans, c. 1700-1757
14. Merchants, Companies and Rulers: Bengal in the Eighteenth Century
15. The Asian Merchants and Companies in Bengal's Export Trade, c. Mid-eighteenth Century
16. The Inflow of Silver to Bengal in Global Perspective, c. 1650-1757
17. Was there a Crisis in Mid-eighteenth Century Bengal?
Index

Citation preview

Companies, Commerce and Merchants

Sushil Chaudhury

Companies, Commerce and Merchants Bengal in the Pre-Colonial Era Sushil Chaudhury

an informa business

ISBN 978-1-138-23479-6

www.routledge.com

,!7IB1D8-cdehjg!

COMPANIES, COMMERCE AND MERCHANTS

COMPANIES, COMMERCE AND MERCHANTS Bengal in the Pre-Colonial Era

SUSHIL CHAUDHURY

First published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2017 Sushil Chaudhury and Manohar Publishers & Distributors The right of Sushil Chaudhury to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Print edition not for sale in South Asia (India, Sri Lanka, Nepal, Bangladesh, Afghanistan, Pakistan or Bhutan) British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Catalog record for this book has been requested ISBN: 978-1-138-23479-6 (hbk) ISBN: 978-1-315-27683-0 (ebk) Typeset in Sabon by Ravi Shanker, Delhi 110 095

For hundreds of my students who were my main source of inspiration for more than four decades

Contents

Preface

ix

Acknowledgements

xi

1. The Rise and Decline of Hugli: A Port in Medieval Bengal

1

2. Prices of Provisions in Bengal in the Second Half of the Seventeenth Century: Moreland Refuted

39

3. The Myth of the English East India Company’s Trading Privileges in Bengal, 1651-1686

51

4. The Problem of Financing East India Company’s Investments in Bengal, 1650-1720

60

5. Textile Trade and Industry in Bengal Suba, 1650-1720 85 6. Bengal Merchants and Commercial Organisations in the Second Half of the Seventeenth Century

108

7. Saltpetre Trade and Industry in Bengal Suba, 1650-1720 152 8. Continuity or Change in the Eighteenth Century? Price Trends in Bengal, c. 1720-1757

161

9. European Companies and the Bengal Textile Industry in the Eighteenth Century: The Pitfalls of Applying Quantitative Techniques

189

viii | Contents

10. European Companies and Pre-Modern South Asian Commercial System: A Study of Bengal in the Eighteenth Century

213

11. General Economic Conditions under the Nawabs

263

12. The Traffic in ‘Drug’ in Bengal Suba: A Study of Opium Trade and Production, 1700-1757

300

13. International Trade in Bengal Silk and the Comparative Role of Asians and Europeans, c. 1700-1757

307

14. Merchants, Companies and Rulers: Bengal in the Eighteenth Century

323

15. The Asian Merchants and Companies in Bengal’s Export Trade, c. Mid-eighteenth Century

358

16. The Inflow of Silver to Bengal in Global Perspective, c. 1650-1757

383

17. Was there a Crisis in Mid-eighteenth Century Bengal? 398 Index 423

Preface

I had been contemplating for some time to bring out a collection of my articles written over the last four and a half decades but it did not materialize because of my busy schedule. However Subrata Roy, a former student and now a college teacher, was insistent that I should go ahead with the plan. Fortunately, Mr. Ramesh Jain of Manohar came forward with great enthusiasm to publish the collection of my essays. This is how the present volume came about. It was really a difficult task to select the essays from numerous pieces that were published in different books, journals and those that were presented in various international and national conferences or seminars over the years. No less tough job was to pick and choose essays, which were relevant more or less, to a particular theme. However, in this volume I have included the articles which pertain to Bengal’s economic history in general, its commercial economy in particular, with special emphasis on the role of the European Companies in Bengal in the seventeenth and the eighteenth centuries. Some of the other pieces were put together in another volume entitled Trade, Politics and Society: The Indian Milieu in the Early Modern Era. There is no chronological arrangement to the essays as I felt it was not at all necessary. Since the essays were written at different times and in different perspective, there are bound to be some repetitions and this could hardly be avoided. But I can assure the readers that the repetitions, wherever they occur, are very relevant for the clarity of that particular chapter. There was a temptation to revise such repetitions as far as possible, correct the essays and make them up to date, bring uniformity in spellings, update the bibliographies wherever needed. But I

x | Preface

have resisted this except reluctantly in correcting some factual mistakes and in intervening despairingly to bring about some uniformity of spelling. But these, I am glad to say, have been done very sparingly. I am extremely thankful to Mr. Ramesh Jain of Manohar Publishers & Distributors for taking great care and interest in publishing the book. My wife Mahasweta, as always, has been very helpful in reading the manuscript, correcting the proofs and the errors which escaped my eyes. Perhaps it will be superfluous to thank her after more than half a century of married life. Sushil Chaudhury

Acknowledgements

Profuse thanks from the author and the publisher to the following Publishers/Editors/Authors for granting permission to reproduce the articles published in this volume: Ashgate (Chapter 16); Asiatic Society of Bangladesh, Dhaka, History of Bangladesh, vol. 2 (Chapter 11); Bengal Past and Present (Chapter 1, 3, 6); Cambridge University Press (Chapters 9, 13, 15); Indian Economic and Social History Review (Chapter 4); Indian Historical Review (Chapter 5); Indian History Congress (Chapters 2, 7, 12); Journal of the Economic and Social History of the Orient (Chapter 14); Manohar Publishers & Distributors (Chapter 17); Modern Asian Studies (Chapters 9, 13); The Calcutta Historical Journal (Chapter 8, 10)

chapter 1

The Rise and Decline of Hugli A Port in Medieval Bengal*

‘The Paradise of Nations’ – thus Aurangzeb is said to have styled Bengal.1 No official firman, parwana or other official papers of the Mughal Empire ever mentioned Bengal without adding ‘the Paradise of India’, an epithet – as Monsieur Jean Law, the chief of the French factory at Cassimbazar opines – given to it par excellence.2 Bengal’s richness in medieval period was legendary and the cheapness of wares there were attested by most of the foreign travellers.3 The natural products of Bengal were profusely abundant. In the beginning of the seventeenth century Pyrard de Laval found that Bengal exported rice ‘not only to other parts of India as well to Goa and Malabar’, but even to ‘Sumatra, the Moluccas and all the islands of Sunda to all of which Bengal is a very nursing mother who supplieth them with their entire subsistence and food.’4 Bernier was inclined to believe that the ‘pre-eminence ascribed to Egypt (which had been represented throughout the middle Ages as the finest and most fruitful country in the world) was rather due to Bengale.’5 Rice from Bengal, as the French traveller tells us, was supplied to Patna, Masulipatam, and many other parts on the Coromandel coast, as also to Ceylon and the Maldives. Bengal sugar was not only sent to Golconda and the Carnatic, but to Arabia and Mesopotamia through the towns of Moka and Basra, and to Persia by way of Bandar-Abbas.6 Bernier is also eloquent in describing the *Bengal Past and Present, vol. LXXXVI, part 1, sr. no. 161, January-June 1967, pp. 33-67.

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industries of Bengal. ‘In regard to valuable commodities of a nature to attract foreign merchants, I am acquainted with no country where so great a variety is found . . . there is in Bengale such a quantity of cotton and silks, that the kingdom may be called the common storehouse for those two kinds of merchandise, not of Hindoustan or of the Empire of the Great Mogul only, but of all the neighbouring kingdoms, and even Europe.’7 In craftsmanship also Bengal enjoyed an enviable position. ‘The inhabitants (of Bengal), both men and women, are wonderously adroit in all such manufactures such as of cotton, cloth and silks and in needlework such as embroideries which are worked so skilfully down to the smallest stitches that nothing prettier is to be seen anywhere.’8 Therefore it was quite natural that trade and commercial activities were brisk in medieval Bengal and hence her ports played an important role in the economy of the then Bengal. Till the middle of the sixteenth century Satgaon was the most important port which from ancient times was the chief emporium of trade in the western part of Bengal. It was the advantageous position of Satgaon – on the river Saraswati in the loop formed by it before it falls into the Ganges – that made it ‘the great port of Bengal for ocean-going ships in the middle Ages’. Its wealth was the theme of medieval Bengali poetry and foreign travellers’ tale. According to the poet Mukundaram, it used to attract so much foreign trade that the merchants of Satgaon never left their home town.9 It was the royal port of Bengal till the emergence of Hugli in the last quarter of the sixteenth century and the latter prospered so rapidly that made the former ‘hide its diminished head’ in the beginning of the seventeenth century.10 As the chief mart of Bengal, it attracted merchants from different parts of India and diverse other countries.11 It was the chief emporium of Portuguese trade since 1537 and popularly known to them as ‘porto piqueno’.12 Even in 1567 Caesar Federici found Satgaon ‘a remarkable faire cite’ where ‘every year they lade thirtie or five and thirtie ships, great and small, with rice, cloth of Bombast of divers sorts, Lacca, great abundance of Sugar, Mirabalans dried

The Rise and Decline of Hugli | 3

and preserved, long Pepper, Oyle of Lerzeline and many other sorts of merchandise.’13 But the historic port of Satgaon began to decline from the middle of the sixteenth century mainly due to freak of nature. The river Saraswati on which it was situated and through which flowed the main current of the Hugli began silting up and was navigable only by smaller vessels. The mouths of the feeders of the Ganges became choked with sand and the water supply diminished till at last only the tidal Ganges remained navigable, and the Saraswati dried up into narrow channels, thereby rendering navigation by merchantmen and large vessels very difficult; even the smallest craft could not ply except for a few weeks in the monsoon. This sounded the death-knell of Satgaon as an important port.14 The Saraswati actually had been silting up from the beginning of the sixteenth century. De Barros found Satgaon in 1532 ‘not . . . so convenient for the entrance and departure of ships.’15 Even in 1540 the harbour of Satgaon was becoming difficult to the access of big ships. Though in 1567 Satgaon was still described as ‘a reasonable faire eitie’ abounding in all things, its importance as a port was visibly declining.16 Apart from the natural cause, the activities of traders, especially the Portuguese, also helped the decline of Satgaon and the rise of Hugli as the principal port of Bengal. The Portuguese were the dominant seapower in the Indian Ocean in the sixteenth century and the greater part of the seaborne trade of Bengal was concentrated in their hands. They began to frequent Bengal from the fifteen thirties and had important settlement at Satgaon. In the sixties of the century they felt it necessary to build temporary quarters at a place downstream during the trading seasons as their big ships could not reach Satgaon and burnt those villages when they left Bengal every year after brisk trade activities.17 But they found making and unmaking of villages did not lead to either comfort or economy and so were naturally anxious to shift their 'porto piqueno' to a convenient place 'on a navigable river with sufficient anchorage.' Thus their choice fell on Hugli, which soon supplanted Satgaon as the principal port of Bengal.

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Not only the Portuguese, even the merchant princes of Satgaon, who once boasted that they sat at home and grew rich while all the world came to them to trade, were forced, one after another, by the declining importance of Satgaon to leave the place and seek livelihood elsewhere. The great majority of them moved only a short distance and settled down at Hugli, which rose to the position of the chief port of Bengal and remained so throughout the seventeenth and early part of the eighteenth century.18 The external trade of Bengal and through Bengal of upper India thus deserted Satgaon and was diverted to Hugli where the Portuguese mastered the major portion of the overseas trade, albeit the limited activities of a few Malaya, Arab and Indian traders. Even the inland trade was mostly diverted to Hugli, though Satgaon remained the royal port and the seat of the governor and the Imperial Customs house till 1632 when Hugli took its place officially as the royal port.19 This natural change of fortune aroused the jealousy of the Mughal officers at Satgaon and was misunderstood by the court historians, who called it ‘stealing away of business and wealth of the royal port by the treachery of the Feringis’. Abdul Hamid Lahori, the official historian of Shah Jahan, states: “During the rule of the Bengalees a party of Feringi merchants, inhabitants of Sandip, used to frequent Satgaon and populated [i.e. colonised] a place on the estuary one Kos beyond Satgaon. In course of time, owing to the stupidity and carelessness of the rulers [governors?], many Feringis assembled here. In due course, a large town grew up here and it came to be known as Hugli Bandar. It became the practice for ships from Farang to call at this port and carry on their trade; so the market of Satgaon declined and lost its splendour and use.”20 It has been established beyond any shade of doubt that the Portuguese were the founders of Hugli port.21 The precise date of the foundation of Hugli, however, is not very easy to determine. The question has taxed the ingenuity of various scholars.22 It can however be determined within close approximation from a critical analysis of contemporary writings and events. Scholars who fix the date of the foundation of Hugli in the 1530s probably confuse Hugli with Satgaon, which was the

The Rise and Decline of Hugli | 5

first Portuguese settlement in Western Bengal. Hugli could not have been founded in the thirties of the sixteenth century. The most authoritative proof of this assertion can be found in the fact that Caesar Federici spoke only about Satgaon in 1567 and did not mention Hugli. In Portuguese history ‘DA ASIA’, there is no reference to Hugli. Again in 1554 Antonio Nanez referred to Satgaon as ‘porto piqueno’. O’Malley’s contention that Hugli was founded between 1568 and 1573 [seems to be 1572 and not 1573, as Sulaiman Karnani died in 1572] is solely based on the absolute reliance he had placed on Abdul Hamid Lahori. This court historian of Shah Jahan died in 1654 and wrote a passage on the origin of Hugli, which we have already quoted. A careful study of the passage does not easily lead to the contention that the Portuguese founded Hugli before Akbar’s conquest of Bengal in 1576. They might have visited the Hugli region before 1576, as is obvious from the statement of Lahori – ‘Under the rule of the Bengalees a party of Feringi merchants, inhabitants of Sandip, used to frequent Satgaon and populated [i.e. colonised] a place on the estuary one Kos beyond Satgaon’. But the next line of Lahori [‘in course of time due to the stupidity and carelessness of the rulers (governors?) many Feringis assembled here’] does not specifically refer to the pre-Mughal period; it can as well refer to the early and weak administration of the Mughal governors of Bengal under Akbar. It is in the latter sense that the whole thing becomes more intelligible, especially when we find that Turbati, Akbar’s governor in Bengal, was weak and this led to serious consequences in Bengal. Besides, the next sentence of Lahori [‘in due course, a large town grew up here and it came to be known as Hugli Bandar’] is a definite hint that Hugli Port did not emerge suddenly and that it took considerable time for its growth and development. So it is perhaps not a wholly untenable proposition, that though the Portuguese had come to the neighbourhood of Hugli before Akbar’s conquest of Bengal in 1576, it was only after Akbar’s conquest that they established themselves on a firm footing in Hugli. If Lahori’s statement is accepted at its face value and thus the date of foundation of Hugli is fixed before Akbar’s conquest of Bengal, it hardly stands

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some acid tests. It is very strange that the Kavikankan Chandi of Mukundaram, written in 1577, had no reference at all to Hugli, while it mentions in several passages ‘Satgaon’ and the ‘Feringis’. Again neither any Persian chronicle nor any foreign traveller ever corroborates the contention that Hugli was founded before Akbar’s conquest of Bengal. On the contrary, we find sufficient evidence, both among the indigenous and foreign writers (who were earlier authorities than Lahori) that the foundation of Hugli can be fixed somewhere after 1576 i.e. after Akbar’s conquest of Bengal. Manrique who was in Bengal from 1628-9, does not unfortunately specify the date of the foundation of Hugli, but gives a detailed account of the circumstances leading to the Portuguese foundation of Hugli. He tells us that Akbar, having heard about the Portuguese and seen the valuable goods which they exported from the Eastern ports of Borneo, Moluccas etc., gave orders to the Nawab of Dacca to send two principal Portuguese from Satgaon to his court at Agra.23 The Nawab’s messengers, however, found on reaching Satgaon that the Portuguese had already left Bengal in that year. Next year, one Pedro Tavares, was sent to Fathepur,24 and the fruit of the mission was the foundation of Hugli by the Portuguese.25 The Akbarnama records the visit of Tavares as occurring in the beginning of the 23rd year of Akbar’s reign i.e. in 1578.26 If Du Jarric was correct in dating Father Juliano Pereira’s arrival at Fathepur in 1578,27 then Tavares must have gone to Akbar’s court in 1577 or 1578 at the latest since it was through his request that Pereira was invited by Akbar to his court. To reconcile this with the account of Akbarnama, it can be presumed that Tavares went to Akbar’s court in the beginning of 1578.28 Tavares must have been still in Fathepur in 1579, because, as Father F. deSouza says that the former obtained a decree from the emperor exempting the Portuguese of Bengal from all their dues upto 1578.29 Again, we have evidence that Tavares had already left Fathepur for Bengal by 1580. Father A. Monseratte relates that when the first Jesuit mission arrived at Fathepur on 8 February 1580, they found there some Portuguese of Tavares’ suite, while no mention is made of Tavares.30 This is again con-

The Rise and Decline of Hugli | 7

firmed by ‘Akbarnama’ which records that in 1580 Mirza Najat Khan, Akbar’s Faujdar at Satgaon, being defeated by Qutlu fled to ‘Partale Bal Feringi’ (Pedro Tavares), the Portuguese governor of Hugli.31 So all the evidence, noted above, perhaps reconcile very well with each other if the date of foundation of Hugli by Tavares is set down towards the close of 1579. The Portuguese had most sanguine expectations of a lucrative trade in Bengal which was not only realised but sometimes even seems to have surpassed their imagination. Vasco da Gama and Albuquerque, long before the foundation of Hugli, reported to Lisbon on the vast possibilities of trade and commerce in Bengal. After the foundation of Hugli, and thus when they monopolised the major portion of Bengal trade, the Portuguese realised to their great satisfaction what a mine of wealth they had found at last. The Hugli port flourished with amazing rapidity under the Portuguese. It soon rose to the position of ‘the richest, the most flourishing, and the most populous’ of the various ‘bandels’ or trading ports in Bengal. It became the common emporium of trade, where, as Fr. John Cabral writes on 12 November 1633, the vessels of India (Portuguese India), China, Malacca and Manila repaired in great numbers. The Portuguese missionary further says, ‘Not only the natives of the country, but also Hindusthanis, the Mogols, the Persians and the Armenians came there to fetch goods.’32 Van Linschoten, who visited India between 1583 and 1589 writes, ‘there is great trafficke used in those partes by divers ships (and merchants) which all the year divers times both go to and from all the Orientall Ports.’33 Ralph Fitch, the English traveller who visited Hugli in 1588, says that Hugli was the ‘chief keep’ of the Portuguese.34 The Ain-i-Akbari, completed in 1596-97, states that Hugli was a more important port than Satgaon.35 After the rise of Hugli, Chittagong which so far enjoyed a pre-eminent position, began to lose its commercial importance.36 Thus it appears that at the end of the 16th century Hugli became the first port in Bengal and fully deserved to be called, not ‘Porto piqueno’, but ‘Porto Grande’ (the Great Haven), the name by which Chittagong was known to the Portuguese.

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In the absence of sufficient materials, it is not possible to give an idea of the volume of Portuguese trade at Hugli. We only get some rough idea of the extent of the trading activities of the Portuguese at Hugli from the number of ships that plied to and from that port. Of course, here also materials are too meagre to arrive at an accurate and final estimate. Caesar de Federici found that thirty or thirty-five ships were laden every year at Satgaon by the Portuguese and from this it could perhaps be surmised that a greater number of ships were engaged in trading activities at Hugli, when the Portuguese firmly established themselves and where they carried on trade much more vigorously than they did at Satgaon. Manrique states that over one hundred ships were yearly laden in the ports of Bengal with rice, sugar, ‘fat oil’, wax and other similar articles,37 and most of them, it may be presumed, were laden at Hugli since it was then the principal port in Bengal. Besides, numerous smaller crafts and barges, engaged in coastal and inland trade in which the Portuguese were no less active than in the external trade, plied to Hugli. Perhaps Laval referred to this when he wrote in the beginning of the 17th century that ‘an infinite number of vessels arrive in the ports of Bengal to lade them with provisions’.38 In an account on the trade of Hugli, Clavell, the English factor, stated on the 16 December 1676, ‘when in the possession of the Portuguese, who in their prosperity sailed to it yearly from India, and Malaya with 60: 80: to 100 vessells.’39 According to Abdul Hamid Lahori, when Hugli was sacked in 1632 by Qasim Khan, the governor of Shah Jahan, there were 64 large ‘dingis’, 57 ‘ghrabs’, and 200 ‘jaliyas’ at Hugli, out of which only one ‘gharb’ and two ‘jaliyas’ escaped.40 Both Hunter and O’Malley, relying on Lahori, it seems, put the number of vessels as above.41 It can well be assumed that most of these vessels were engaged for trading purposes by the Portuguese and the local merchants. A good idea of the extent, composition and direction of the Portuguese trade in Bengal can be gathered from Manrique, who was in Bengal during the palmy days of the Portuguese. The Portuguese imported to Bengal various commodities from different places. The articles imported by them from ‘Southern India’

The Rise and Decline of Hugli | 9

(i.e. Borneo, Moluccas, Sumatra etc.) were a large amount of ‘worked silks, such as brocades, Brocateles, cloth, velvets, Damasks, Satins, Tafettas, Taffissirias and Escomillas or Muslins, all from China.’ They also brought cloves, nutmegs and mace from Mulaccas and Benda, and highly precious camphor from the Isles of Borneo. From the Maldive islands they imported sea-shells (cauris) which were then current in Bengal as coins, ‘chanquo’ or bigger shells from ‘Tutucurim’ and ‘Pescaria’ coast [the coast of Tinnevelley], pepper from Malabar and cinnamon from Ceylon. They also brought from China great quantities of ‘porcelain’, valuable pearls and jewels and many kinds of gift articles such as bedsteads, tables, boxes, chests, writing desks etc. From the kingdom of ‘Salor’ and ‘Timor’ they imported great quantities of sandalwood, both red and white varieties, which in Bengal was a rich commodity.42 The Portuguese exported from Bengal a wide variety of merchandise such as cotton goods, ginghams made of grass, and silks of various shades, as well as sugar, ghee, rice, indigo, long pepper, saltpetre, wax, lac and other articles which were abundant in the Gangetic provinces.43 Caesar de Federici’s list of commodities which the Portuguese exported from Bengal in about 1567 differs little from that of Manrique. Rice in particular was exceptionally cheap in Bengal and hence it formed one of the chief articles of Portuguese export to other parts of India and the East Indies. Pyrard de Laval states ‘. . . when the Bengal ships are behind their time or are lost, rice is fabulously dear and there is cry of famine [in Sumatra, Moluccas etc.]’.44 Besides rice, ‘cotton linen’ was another commodity which was carried by the Portuguese, as Linschoten observes, not only ‘into India and all the Eastern parts, but also into Portugal and other places’.45 The Portuguese collected commodities for shipment at Hugli not only from Bengal, but also from the neighbouring territories and they took part in the inland trade of the country as well. They sold the cargoes which they imported to Bengal from different places in the internal markets. In Patna, the Portuguese had brisk trading activities, not only buying commodities for export from Hugli, but selling their imports there to different merchants. We

10 | Companies, Commerce and Merchants

learn a good deal about the Portuguese trade from the records of the English East India Company. Hughes and Parker wrote from Patna (where they went to explore the possibility of founding a factory) on 30 November 1620 to the Court of Directors that ‘the Portingalls of late years, have had a trade in Puttana, cominge up with their friggitts from the bottom of Bengala, where they have two porttes, th’ one called Gollye [Hugli] and th’ other Pieppullye. . . . Gollye is theire cheefest porte where they have yearlye shipping both from Mallacka and Cochine. The commodities theye usiallye bringe up hither is for most part tyne, spices and China wares, in lewe where of theye transporte ambertye, callicoes, carpets and all sorts of thin cloth, . . . for saile to the Southwards’.46 Another letter dates 20 July 1620, written by Hughes at Patna to the President and Council at Surat also refers to the Portuguese trade. ‘There are some Portingalls,’ he wrote, ‘at present in towne and more are latllye gone for theire portes in Bengala, into whose trafique I have made enquirye and gather that they usailye bringe vendable here all sortes of spices and silk stufes of Chyna, tyne, and some jewelleres ware; in lewe where of theye transporte coarse carpets of Junapoore, ambertyes, cussaes, and some alike.’47 Hughes even reported that the Portuguese ‘merchants buy up all theye can laye hand of’.48 A rough idea of the value of the Portuguese trade in Bengal could be formed from the fact that they paid over 100,000 rupees as customs duties to the Mughals at the rate of 2½ per cent on the value of goods exported and imported.49 The ship St. Augustin, bound for Hugli and on which Manrique boarded for Hugli from Cochin, alone carried merchandise to the value of eight lakhs of rupees.50 But in the absence of sufficient evidence at present, it is not possible to give an exact idea of the value of the Portuguese export from and import to Bengal. The Portuguese, however, carried on a very lucrative trade of Bengal, while in inland trade they were formidable competitors of the country merchants and other foreigners. They earned such a huge profit in Bengal trade that, as Tavernier asserts, if the Dutch had not come to India, there would be no piece of iron in the Portuguese factories but all would be gold and silver, for the Portuguese with

The Rise and Decline of Hugli | 11

two or three voyages to China, Japan, Philippines and Moluccas would earn as much as a thousand per cent on their goods.51 Though an obvious exaggeration, this description of Portuguese trade perhaps was not very far from the truth. The Bengal trade was so profitable and its memory so imposing to the Portuguese that in the later half of the 18th century there was an attempt in Lisbon to form a company exclusively to trade in Bengal.52 Though the Mughals were the rulers of the country, the Portuguese supremacy at Hugli was so strong that it rendered the Mughal authority content with merely collecting customs duties and market dues. The Portuguese enjoyed almost absolute independence; even the Mughal governor of Bengal could enter the Portuguese town of Hugli only with their consent and the Mughal ships had to submit to various regulations enforced in the port. Even as early as 1535, Rebello had forbidden any alien ship from touching Satgaon without permission. In fact, the superiority of the Portuguese vessels over those of the Indians and other foreigners rendered the enforcement of the principle – that any ship without a Portuguese pass would be treated as enemy ship and hence liable to capture and confiscation – practicable. In order to destroy the moorish trade, they applied the rule to Bengal.53 While entering Hugli, even the fleets of the viceroy of Bengal, as Cabral states, had to submit to certain formalities.54 This very supremacy of the Portuguese at Hugli rendered the task of opening trade with Bengal extremely difficult for the Dutch and the English East India Company. The English factors at Surat wrote in a letter of 26 February 1616 that ‘hitherto they had not found it practicable to open a trade in the countries bordering on the Ganges, the Portuguese being in exclusive possession of the commerce in this part of the Peninsula.’55 Sir Thomas Roe wrote from Ahmedabad to the Company on 14 February 1618, ‘Bengala hath noe ports but such as the Portuguese possesse for small shipping.’56 The Dutch also found that any substantial trade with Bengal was impossible so long as the Portuguese were firmly entrenched there.57 The palmy days of the Portuguese in Hugli came to an end in 1632 when Shah Jahan’s governor Qasim Khan captured Hugli

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after inflicting a crushing defeat on them. Many reasons have been ascribed by various authors (including contemporaries like Manrique, the Portuguese missionary Cabral and the historians like Abdul Hamid Lahori and Shihabuddin Ahmed Talish, besides later authorities) as to the sack of Hugli by Shah Jahan. We need not discuss those in the present article, except mentioning that none of the writers gave any direct hint that Shah Jahan’s desire to command overseas trade through Hugli was a weighty reason for crushing the Portuguese. Dr. Abdul Karim makes a casual suggestion that ‘the need for controlling the external commerce through Hugli might have been one of the reasons why Shah Jahan had expelled the Portuguese’,58 but he did not put forward any evidence to corroborate the point. If we closely study the commercial activities of Shah Jahan both before and after his accession, we stand on a much surer ground and it seems probable that Shah Jahan’s interest in external trade and his desire to seize the supremacy from the Portuguese in the East, was one of the main reasons for his onslaught on the Portuguese. Even when he was the viceroy of Gujarat his ships carried an extensive trade with Molla. Sir Thomas Roe suspected that Khurram’s opposition to the English trade with the Red Sea ports was due to the fact that ‘Sultan Coronne himself . . . had a ship to set out for the Red Sea’. His ships also traded between Masulipatnam and the Persian ports.59 Two of his ships, The Fethe and Shahe were engaged in trading with the Red Sea ports and at least one of his ships went to Achin in 1636.60 That Shah Jahan had actively taken part in overseas trade and thus tried to augment his revenue is also evident from the Dutch sources. In an answer to a petition by the Dutch Company that they seek permission to take Moorish persons and goods to Basra, Persia and other ports without interference from subordinate governors, Shah Jahan regretted that he could not grant the request because he ‘himself has had several vessels constructed and intended for the carrying trade and to increase his revenue’.61 Again in a letter, dated 24 December 1652, from the Governor-General and Council for India to the Directors of the Dutch East India Company, they complained that the governor of Surat forbade them to accept

The Rise and Decline of Hugli | 13

any merchandise for shipping ‘before the King’s ships, six large vessels, should have their full loading’.62 So these evidences would lead us to the conclusion that Shah Jahan was interested in overseas trade and hence he wanted to drive away the Portuguese who by their monopoly and various regulations hampered the trade of the Indian merchants. So he made the onslaught on Portuguese Hugli. The country merchants, nobles and governors might have also instigated (which is evident from Qasim Khan’s complaints to the Emperor against the Portuguese) Shah Jahan because they were also actively interested in overseas trade and had their own ships making voyages to different ports in the Red Sea and in the East. Indeed, the Portuguese, by their monopoly of the overseas trade of Bengal and their supremacy in the Eastern Seas, became the eyesore of the nobility and the ruling class. After the capture of Hugli in 1632, it was made the royal port of Bengal and all the offices and records were removed to Hugli where the Mughal authority was firmly established.63 Though the Portuguese were allowed to return to Hugli in 1633, the blow was too severe for them to revive. Thomas Colley, the English factor at ‘Harrapore’, writing to Cartwright at Balasore on 17 July 1633, on the chances of the English establishing trade in Bengal, says that the ‘Portuguese who had been expelled from Hugli had found great favour with Shah Jahan and reentered that place. . . . So that our expectation [of] Hugly is frustrayt’.64 But his apprehension was not realised – the Portuguese lost their pre-eminent position in Bengal trade for good. Hugli now became the seat of local faujdar and the imperial customs house was located there. Notwithstanding the decline of the Portuguese, trade flourished unabated at Hugli. It became now the chief seat of considerable maritime trade on the part of the country merchants.65 Soon after, the Dutch and the English settled down at Hugli. With the decline of the Portuguese supremacy ends the first phase of Hugli as the most important port of medieval Bengal. For more than half a century the Portuguese dominated the overseas and coastal trade of Bengal from Hugli. The fall of the Portuguese at Hugli caused a great concern even to the authori-

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ties of Goa. The Portuguese viceroy of India expressed his anxiety over the loss of Hugli in a letter of 3 February1633 to the king, and hoped to reopen the port ‘so that Malacca should not be wanting what used to come to it from Bengala which is what had been to me the greatest source of anxiety.’66 But the Portuguese in Bengal were doomed and could never recover from the shock. During the later part of the 17th century the Portuguese trade was negligible. Clavell reported on 15 December 1676 that ‘their trade was not worth mentioning’.67 So long as the Portuguese were entrenched firmly in Hugli, it was not possible for the Dutch to explore the possibilities of trade in Bengal. The Bengal trade attracted the Dutch because of two-fold reasons – first, through it they hoped to solve partially ‘the problem of inadequate cash-capital’ and secondly, the waterways connecting Bengal with the trade marts of Northern India, offered them a cheaper means of transport.68 After the expulsion of the Portuguese, the Dutch first sent a yacht to Hugli and in 1635 got a firman from the Bengal Nawab granting freedom of trade and the right to establish a factory at Hugli. In the same year they secured a firman from Shah Jahan. But the Muslim traders of Hugli who resented foreign competition stood in the way of successful and profitable trade of the Dutch and even a new firman from Shah Jahan could not improve their position.69 Writing to the governor of Pulicat on 31 July 1637, the Governor General and Council of the Dutch factories in the East Indies stated, ‘We have learned with great regret how slowly the trade in Bengal progresses and the bad treatment experienced by our people at Ougley’.70 It was not until the middle of the century that the Dutch permanently settled in Bengal and in 1655 the Hugli factory was made an independent Directorete.71 During the third quarter of the 17th century the Dutch predominated in the overseas and coastal trade of Bengal. They operated their trade mainly from Hugli, their chief factory in Bengal. They were not only engaged in Europe trade but in intra-Asian trade, specially trade with the East Indies. The supremacy of the Dutch in the external trade of Bengal during this period is evident from the reports of the English factors.

The Rise and Decline of Hugli | 15

Paul Waldegrave and Thomas Stevenson at Balasore, wrote on 28 December 1654 to the Company that their business ‘may be thought in the least proportionable to the great and vast trade of the Hollanders here’.72 In the same letter the English factors reported that the Dutch invested at least 200,000 sterling yearly in Bengal.73 Clavell’s report in 1676 on the trade of Hugli gives a detailed picture of Dutch trade.74 He states that the Dutch had a great stock and assumes the amount as 24 tons of gold in circa 1674. He suggested to the English East India Company to follow the Dutch method who brought their ships, even of six or seven hundred tons, up the river to Hugli, thus saving the trouble and the extra-expenses of taking the merchandise from Hugli to Balasore and lading the ships at the latter place. He also gave a list of the items of export from and import to Bengal by the Dutch. They imported to Bengal ‘gold from Japan, copper of Japan, tuttenag, tinn from Malaya, pepper, chanck [conch shell], betelnuts, elephants and elephants’ teeth, cloves, mace, nuttmegs and gaunce [ganja]’. They also imported brimstone, quicksilver, vermilion, and some cloth, which did not sell well in Bengal. Their export consisted of ‘rice, oil, butter, hemp, cordage, silk cloth, raw silk, silk wrought, saltpetre, opium, Tumerick, Neelas [Nila], Ginghams, Tapits [hanging carpet], brawles [blue and white striped cloth], Achee Beagnes [used in dying red cloth], sugar, long pepper and bees-wax as much as they can gett’. Throughout the third quarter of the 17th century the Dutch trade in Bengal, centering round Hugli, far outshadowed the English trade. Even in the fifties and sixties of the century the Dutch found ‘lading for seven or eight ships of burthen’ and some of them were 600 tons.75 The profit of the year 1660 was stated to have been 155,744 gulden and that for the next twelve months was given as nearly 204,00.76 Saltpetre and ‘Amphora’ [bastard Indigo] were the most profitable articles of their trade and they used every effort to keep out the English and the French from these two articles. In 1693 the Heeren XVII (the Board of Directors) gave instructions that the 160,000 tons of saltpetre which they had ordered from Bengal might be increased to any amount as far as space in the vessels allowed.77 Saltpetre was

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obtained generally from Patna where the Dutch refined it and sent it by river to Hugli, where the seabound ships were loaded. Even in the nineties of the 17th century the Dutch trade in Hugli was considerable and competed well with the English. In a letter of 8 July 1693, the Heeren XVII advised the Dutch factors to make as many purchases of silk, silken goods and cotton goods as could be obtained in Bengal.78 In the field of inter-Asiatic maritime trade (where also as in Europe trade, Bengal had an excess of exports over imports), besides the import of precious metals and copper and export of fabrics and raw silk (which again played an important role), the Dutch dealt in other commodities. They carried Indonesian pepper and spices to Bengal, as also cinnamon, areca-nuts and chanks from Ceylon, tin from Moluccas and Siam, Persian tobacco, sandalwood from Coromandel coast. They exported various grains, specially wheat, that among other places was carried to Ceylon and Batavia, rice, Bengal butter and cheese, sugar and wax. They also sent opium and jute to other Asiatic places. Around the turn of the century, the exports of the Dutch from Bengal were carried to the following regions and countries in Asia – Moluccas, Batavia, Siam, Japan, Ceylon, Coromandel, Malabar and Persia.79 Besides the Dutch, the English Company had also brisk trading activities at Hugli. As early as 1616, the English East India Company tried to explore the possibilities of opening trade with Bengal.80 But it was only in 1633 that the Company sent the ‘Siwan’ to Bengal in an attempt to open trade with Bengal. This delay on the part of the English can be explained by several factors – first, the goods sought by the English merchants on the coast at that period were mainly calicoes of Golconda and the countries southward and hence they were not too interested in Bengal trade; secondly, the products of Bengal were readily available at Masulipatnam and ‘there was no temptation to venture further afield in quest of them, at the risk of being snapped up by the Portuguese war-vessels.’ Moreover the trouble at Masulipatnam, culminating in the withdrawal of the English in 1628, put a stop for the time being to the schemes they might have enter-

The Rise and Decline of Hugli | 17

tained for the enlargement of their trade. The change of policy following their return in 1630 was partly due to the famine, the soaring price of food stuffs which rendered coasting trade in sugar, rice and butter highly profitable, and the general dearth of piece-goods due to the heavy mortality among the weavers, which rendered coarse silks and cottons of Bengal more valuable in the eyes of the English merchants. Another factor, though less obvious, but equally effective was the prospect it offered of lucrative private trade for the factors who found little opportunity in Masulipatnam and its neighbourhood to invest their own capital. Furthermore another great inducement was the capture of the Portuguese Hugli by the Mughals and the supposed intention of the Emperor to stamp out the Portuguese trade in Bengal, and it led the Masulipatnam factors to conclude that a favourable opportunity had offered itself for planting English trade in Bengal.81 But though the English trade in Bengal through Balasore began in 1633,82 they did not establish a factory at Hugli before 1651. It was in January 1651 that the English East India Company first established a factory at Hugli and commenced trading on a large scale in Bengal.83 On the possibilities of a lucrative trade in Bengal, the English factors reported on 28 December 1654 that inspite of the great Dutch investment, there was enough room for the employment of ‘a very great stock’. They wrote to the Company, ‘Your Worships supplying this place with stock sufficient and honest men to manage it, will soon find as great business and as much profit when besides for the shipping Your Worships shall designe to returne to Europe, there may be sufficient to employ to Persia, the Red Sea, Acheen, Pegu, Tanassara and Zealon, places which all of them returne good profit from.’84 This hope and calculation of the factors were more than realised as we find that the English East India Company really had a great trade in Bengal; they were engaged not only in Europe trade, but in Inter-Asiatic trade. Thus Hugli port played a vital role in the trade complex of the Company. The advantageous situation of Hugli made it the most important factory and port of the Company in Bengal. Mr. Clavell, in

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his account of the trade of Hugli, writes in 1676: ‘Hugli having the advantage of situation upon the banks of the river Ganges, whose branches come far from the country above, and spread wide thereabouts . . . hath continued to be a scale [emporium] of great trade’.85 Streynsham Master who came to reorganise the Bengal settlements decided (in a Consultation at Cassimbazar on 1st November 1676) that Hugli should be the chief factory in Bengal. This reason was that Hugli was the most fitting place ‘notwithstanding the Europe ships doe unloade and take in their ladeing in Ballasore roade, Hugly being the key or scale of Bengala, where all goods pass in and out, to and from all ports.’86 Until the foundation of Fort William (Calcutta) in 1690, Hugli was the headquarters of the English in Bengal and as such had a lucrative and an extensive trade. The trade, of course, was not confined to the local varieties of goods produced or manufactured in or near Hugli itself, but the Hugli factory was the general clearing-house for the products of Bengal, brought for export to Europe and the Asian marts, and for the imports from those marts for distribution throughout Bengal. While some of the articles so exported were produced locally, such as silk and silk fabrics, many of the exports from Hugli were not local products, as for instance, saltpetre which all the European Companies obtained chiefly from Bihar through Patna. Unlike the Dutch, the English did not take their ships upto Hugli and lade their sea-bound ships there. The English procured all the items of export from their various factories at Malda, Cassimbazar, Patna and Dacca and brought all those mostly through waterways to Hugli. From Hugli these merchandise were taken in sloops to Ballasore where the sea-bound ships were laden. Similarly the imported commodities were transhipped at Balasore and were taken in small boats to Hugli from whence they were distributed to the inland factories. Thus upto the seventies of the 17th century Hugli was mainly an entrepot in the trade complex of the Company. This caused unnecessary delay in the departure of ships and incurred extra expenditure in the transport of cargoes at Balasore. The boats, both private and belonging to the Company, again were sometimes ‘comman-

The Rise and Decline of Hugli | 19

deered’ by the local governors or nawabs for their own purposes, thus making speedy loading and unloading as also the departure of ships impossible. In a letter to the Madras Council in 1665, the Hugli factors reported, ‘one hindrance to the speedy loading of the ships was the fact that the boats built the previous year at Hugli had been commandered by the governor to fetch the Nawab’s salt. . . . Formerly boats might have been procured here freight, now few or none, arising from the ill government of this place.’87 They suggested if the ships from England would come into the Hugli River, these difficulties would largely disappear. The English, however, were not permitted to take their ships upto Hugli, when they first settled down there. Only in 1669, through a petition to Shah Shuja to the effect, they received as a concession the privilege of bringing their ships up the river to the Hugli port.88 The first English ship intended for Hugli was the ‘Lyoness’ despatched in 1650 but fearing the passage to be full of danger, the Agents at Madras did not permit her to attempt the navigation of the river upto Hugli, and accordingly she only went upto the Balasore Road. But the Court of Directors did not desist from urging on their factors that their ships, instead of being discharged and reladen for England at Balasore, should go upto Hugli and then their business in the Bay ‘brought into some decorum’. In 1662 they agreed to pay 10s. per ton extra to the chartered ships for all goods that they should take to Hugli.89 Seeing that the Dutch ships of 600 tons performed the feat of sailing up and down the river, one Captain Elliot ventured to essay the task but he was prevented by Agent Trevisa who considered the risk too great, to the chagrin of the Court. The Captain, however, left a written memorandum at Hugli stating that the passage up the river Hugli was hazardless and it was proposed that the vessels should in future go direct to Hugli and that Balasore should be abandoned. The proposal was accepted by the Court which made fresh offers but without any success. The suggestion was condemned by the local agents; though aware of the advantages to be gained, they sent no ships up the river, as they had no pilots. The local pilots were too expensive

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and the owners refused to risk their ships without proper pilots and charts to indicate the depths and sounding. Accordingly, in 1667 the Court built a small vessel, the Diligence for the purpose of survey.90 The renewed offers of the Directors gave an increased impetus to the attempts at the navigation of the Hugli river and in 1672, in accordance with the order of the Company that ships should try to go up the river, the Rebecca, a vessel of 200 tons, assisted by the sloop Diligence and chief pilot Samuel Hason, made the journey up and down the river in safety.91 But it took a few more years for the English ships to come straight to Hugli for loading and unloading of cargoes. In 1676 Clavell, in his report of the trade at Hugli, was very insistent on the advantage possessed by Hugli in its navigable river and urged the importance of having trained pilots to bring the Company’s ships upto the town, thus avoiding the transhipment of cargoes at Balasore.92 In 1678 the ship Falcon piloted by the sloop ‘Arrival’ got safely to Hugli, with a cargo of bullion and goods valued at over £40,000. But still, three other ships, Williamson, Nathaniel and Society which came in the same year to Balasore, did not adventure up the river for want of the necessary orders from their owners, though they were requested to do so by the Council in accordance with the wishes of the Company. The commanders of these ships, however, came to Hugli on sloops and were satisfied by the navigability of the river.93 It seems that from the 1680s, it became a general practice for the Company’s ships to load and unload at Hugli instead of at Balasore, and thence onward Balasore was abandoned in favour of Hugli. The coming of the ships upto Hugli was considered very beneficial to the Company and as it was put ‘having excellent conveniences for carrying their European commodities up into the inland town and cities and the like for bringing down the commodities purchased in this or some other kingdoms.’94 The trade of the English East India Company in Bengal expanded in rapid strides. The factors of the Company were very hopeful of an extensive trade in Bengal. They wrote home, ‘Bengal is a rich province. Raw silk is abundant. The taffaties are

The Rise and Decline of Hugli | 21

various and fine. The saltpetre is cheap and of the best quality. The bullion and pagodas you have sent have had an immediate and most favourable effect on the trade; the goods have been sold at great advantage. Our operations are going so extensive that we shall be obliged to build new and large warehouses.’95 The investment of the Company in Bengal in 1668 was £34,000, in 1674 it rose upto £85,000; in 1680 it was £150,000 and in 1682 it went as high up as £230,000. These figures show how rapidly the trade of the Company increased in Bengal.96 Generally in the 1670s and 1680s on an average four ships of the Company came to Bengal every year and were despatched back to England with merchandise.97 The English East India Company imported different types of woollen cloth such as broadcloth and woollen fabrics called perpetuanoes and in addition lead, copper, iron, ironwares, ‘tutenague’, vermilion, firearms, looking glasses and a variety of finer articles generally called ‘rarities’. The sale proceeds of the imported articles however could not provide for the increasing volume of goods exported from Bengal. So the European Companies had to pay for their export commodities in hard cash either brought from Europe or earned through trading with other parts of Asia. That Bengal had a very favourable balance of trade is apparent from the fact that the English East India Company had to export to Bengal a large amount of bullion which was far greater than the value of the commodities imported by them. In 1677, in the total amount of £72,000 sent to Bengal for investment, £55,000 was in bullion and the rest £17,000 in goods.98 Besides this, the factors at Hugli were authorised to draw on the Company for that year to the value of 20,000 pound sterling if they could take up the exchange at 2s 6d per rupee.99 In the early period of Company’s trade in Bengal, saltpetre formed the most important of the commodities exported from Hugli. In the early fifties the factors at Hugli were instructed to invest half of their capital in saltpetre, and the remaining half in equal proportion in silk, sugar, cloth.100 Throughout the century, in the list of commodities to be provided in Bengal, the place of honour was accorded to saltpetre. In 1659 the Court

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directed the Hugli factors to remit Rs. 50,001 annually to Patna for the purchase of saltpetre while Rs. 40,001 was to be sent each year to Kasimbazar for investment in raw silk, taffetas and cotton yarn.101 In the 1670s and 1680s of the century generally the volume of saltpetre exported by the Company to England amounted from 600 to 800 tons.102 Besides saltpetre, the Company exported from Bengal raw silk, sannaes, ginghams, cassaes, mulmulls, humhums, taffetas, ‘nillaes’, tincall, cotton yarn, sticklac, turmerick, etc. It is not possible at the moment to give an idea of the volume of commodities exported by the English East India Company from Bengal in the 17th century.103 A rough idea of that could be found from the list of items to be provided for export every year from Hugli. In a general letter to the chief and factors at Hugli, on 24 December 1675, the Court asked Bengal Council to provide following goods for the year ensuing 1677: ‘10000 Sannaes from 12 to 16 yds. long . . . 10000 Collor’d Ginghams, the finest and best procurable 10000 Cossoes made at Dacka, very fine, cleare and thinn, 1 yd. broad 5000 Cossoes from 4 to 7 rupees, 20 yds. long or more, 1 yd. broad, the thinner the better 5000 fine mulmulls, the finest and the clearest and 1 yd. broad 1000 fine humhums, of 5 rupees 1000 finer ditto, from 7 to 8 rupees 10000 Nillaes, all of the best sorts, of the pleasantest and liveliest coullers. 6000 Taffetyes, raw made thicker and closer struck (woven) than the last sent, though the cost a little more 4000 white, to be packt by themselves, about 4 or 5 rupees 1000 full yellowes and 1000 full redds, to be packt by themselves, about 4 or 5 rupees 2000 Mixt Taffetyes for lynings of hatts, about 7 rupees . . . 3000 light coullers vizt. sky, sky and white mixt, Izabella Ash couller, straw couller, coronation and white, greyes, each in proportion in a chest

The Rise and Decline of Hugli | 23

8000 cloth coullers without mixture, according to sample formerly sent 7000 Mixt cloth coullers, according to samples formerly sent . . . 15000 Silke Romalls, head and belly 500 bales raw silke, halfe heade, ½ belly, cleane and good, more head, if not too deare 100 bales of white silke 140 Duppers of Tincall 50 or 60 bales cotton yarne, 3 mds. each, as formerly directed 600 tonnes saltpetre 50 or 100 bales (if procurable) of Florett yarne, each 90 seere, 100 tonnes of the Best Pegu Black Sticklack’104 The English East India Company also traded with different parts of Asia and India from Hugli port. Perhaps the most important branch of Inter-Asian trade of the Company from Hugli was the sugar trade with Persia. As early as 1651, the Hugli factors were asked to provide 160 or 180 tons of sugar for Persia for which they were authorised to borrow or draw on the Agra factors to the extent of Rs. 15,000.105 Again in 1652 the Agra factors were asked to send Rs. 10,000 for the sugar investment for Persia.106 Throughout the period this branch of trade was extremely profitable to the Company and they regularly sent ships to Persia from Hugli with cargoes of sugar, and other articles like fine rumalls, mulmulls, cassaes etc.107 Besides the European Companies,108 Indian and Asian merchants also played a great role in the history of the Hugli Port. It was a port where merchants from many parts of Asia gathered for trading in different commodities. In his account of the fall of the Portuguese Hugli, John Cabral states that Hugli was a common emporium to which vessels from India (Portuguese India), China, Malacca and Manila repaired in great numbers. He found in Hugli not only country merchants but also Hindusthanis, the Mogols, Persians and the Armenians’.109 The author of Riyaz-us-Salatin tells us that even the ‘merchants of Arabia and Ajam’ (i.e. Arab and non-Arabian merchants), China, Persia

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and Turan, besides Europeans and ‘wealthy Moguls’ traded at Hugli.110 In fact Hugli became a Shia colony and as such many Persians came there and tried their luck through trade.111 Thus even in the beginning of the 18th century, persons like Agha Fazlullah from Persia and Agha Motaber from Ispahan, settled at Hugli and amassed vast fortunes through trade.112 The merchants of Bengal had a long established tradition in overseas trade and kept it alive throughout the 17th century. The Portuguese traveller Barbossa found many merchants in the ‘ports of Bengala’ who owned large ships and traded to Malabar, Cambay, Pegu, Tenassarim, Sumatra, Ceylon and Malacca.113 At the end of the 15th century, every year four or five ships sailed from Bengal to Malacca or Sumatra with provisions and textiles.114 Bengal ships also went to the Red Sea ports of Aden and Jedda.115 In the beginning of the 17th century, Pyrard de Laval found Bengal merchants in the Maldives and named one ‘Mouhamede Coca’ as ‘an honourable, rich, discreet merchant’ of Bengal.116 The first attempt of the Dutch Company to open trade with Bengal after the fall of the Portuguese was frustrated by the opposition of the Muslim merchants of Hugli.117 At the time of the Mughal attack on Hugli, there were at least 12 or 13 local merchants who operated with a large capital.118 After 1632 Hugli became the chief seat of a considerable maritime trade carried on by local traders. In 1645 the Danes seized several ships of the Bengal merchants by way of reprisal for injuries suffered at the hands of the local authorities. In 1665 out of 12 Muslim ships to Acheen, 4 belonged to the merchants of Bengal.119 Thomas Bowrey saw some of the richest merchants of the Kingdom in Hugli, while Schouten stated that there were many Moor merchants who carried on a great trade. Ini Bowrey’s time the Nawab and the merchants in Hugli, Balasore and Pipli had about ‘20 saile of ships of considerable burthen that annually traded to sea.’120 An interesting feature in the composition of Bengal merchants engaged in overseas trade in the 17th century was the presence of nobles, governors and subadars of Bengal. As early as the 1640s of the century we find the subadar of Bengal, Shah Shuja, had his

The Rise and Decline of Hugli | 25

own ships engaged in overseas trade. He took active part in trade and tried to monopolise some sectors of the province’s external trade, and made himself the sole purchaser of the elephants, one of the chief items of the Dutch Company’s import to Bengal.121 In 1651 a junk came to Gombroon with merchandise from Hugli, belonging to the governor of the latter port, to carry some horses as a return cargo.122 In 1654 the Dutch Company refused many applications made by the ‘governor Jaffer’ at Hugli for passes for the Moorish vessels to Queda, Colombo and Cochin. But the Company was obliged to grant two passes for two of the Nawab’s vessels to Tenassarim and Acheen, and one for the governor’s ship to the Maldives. They also gave three more passes to the vessels of the Nawab Nawazish Khan, the faujdar of Rajmahal and Ahmed Beg, the ex-faujdar of Hugli.123 Again in 1656 the faujdar of Hugli appealed for a pass for his vessel to Colombo and Shah Shuja had asked for three passes on Colombo, Cochin and Jafferapatnam. But all these requests were politely refused because of Shah Shuja’s attempt to monopolise some sectors of the province’s overseas trade. The Company similarly refused a request for the services of one of their mates for a ship sailing for Persia.124 The nobles and the members of the ruling family also freighted their goods in the ships of individual merchants or the Companies. Thus as early as 1653 we find the faujdar of Hugli sent 11 bales of goods to Gombroon in one of the English Company’s ships.125 Malik Qassem, a later faujdar of Hugli, also transported his goods in 1672 on the Company’s ships.126 The nobles sometimes acted through their own agents or merchants. Thus one Haji Mohammed, an agent of Mirza Malik Qassem, governor of Hugli, made a trip to Gombroon with some sugar and other commodities vendible there, in one of the English Company’s ships, for purchasing several things Malik Qassem wanted from Persia. The sale proceeds of the merchandise brought from Hugli could not provide for the commodities he wanted to buy at Gombroon and so borrowed Rs. 1904½ from Mr. Alley, the commander of the ship. The Madras Council gave the amount to Mr. Alley when the ship arrived there and Haji Mohammed gave

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an undertaking that his master would pay the Hugli Council the sum of Rs. 2589, of which Rs. 684½ was the freight charge for 4 horses he had brought from Persia. It is interesting to note the commodities which Haji Mohammed brought for Malik Qassem besides the horses. These were – Hing 7 bales, Tobacco 7 bales, Rose water 1 chest, ‘Athar’ 10 chests, Fruits 29 ‘Jurrs’, Almonds 150 maunds, ‘Arraks’ 2 chests, and 8 sheep. The Company brought these commodities freight-free and assisted Malik Qassem’s agent as it expected to gain ‘a profitable influence in Hugli out of it’.127 It seems that until the end of the century, the nobles and members of the ruling family participated considerably in the external trade of Bengal. Bowrey who visited Bengal in the seventies of the century states that the ‘trade of the Moors of Bengala very much increased.’128 Important state officials like the subadars of Bengal, Shah Shuja, Mir Jumla, Shaista Khan, Azim-us-Shan, the Nawab of Patna – Buzurg Umeed Khan, and the governors of Hugli, Pipli and Balasore carried on an extensive overseas trade. The drastic reduction of the nobility’s participation in foreign trade from about the close of the 17th century was perhaps due to the general impoverishment of the nobility followed by the disintegration of the Mughal Empire. An important merchant at the close of the 17th century was Nurullah Khan, the faujdar of Hugli, Jessore, Burdwan, Midnapore and Hijli.129 The Bay Council of the English Company suspected Thomas Pitt of taking service on the ships of Nurullah Khan.130 One of the principal merchants of Hugli in the beginning of the 18th century was Khwaja Mohammed Fazel Kashmiri.131 The records of the English Company show that the merchants of Bengal were active even in overseas and coastal trade at the beginning of the 18th century. In the Fort William Diary of 12 April 1704, we find reference to several Indian ships with their owners e.g. ‘the ship St. Martin, burthen one hundred tons, belonging to Cojah Matroos, bound for Acheen’, ‘ship Romenee, burthen two hundred and seventy tons, belonging to Mahmood Tuckee, bound for Gombroon’, ‘ship Tawockall, burthen one hundred and fifty tons belonging to Allie Rajah, bound for Persia’.132

The Rise and Decline of Hugli | 27

During the season 1705-06 (September 1705-February 1706), as many as 24 ships of different tonnage traded on the account of Bengal merchants to different parts of Asia and India from Hugli and Calcutta. Out of these ships, fourteen received passes from the English Council at Calcutta, and except one (which belonged to the English Company and freighted by Janardan Seth, a Hindu merchant) all belonged to the ‘Moors’ (it seems probable that the ‘Moors’ here meant Muslims as well as Armenians who were very active in Bengal during this period).133 The destination of these ships were mainly Persia, Achin, the Maldives, Coromandel coast and Batavia. It is interesting to find the names of some of these ships with their owners in the records of the English Company. The ship Sallah belonging to ‘Sheek Sallahy Cungee’, burthen 300 tons and Nemede owned by ‘Sheak Sallahy Cungee’, burthen 300 tons and Nemede owned by ‘Sheak Sallee’, were both bound for Gambroom; the ship Mamaruck Ellie; 200 tons, bound for Persia belonged to ‘Hakeem Mohamed Bauher’; Mahmudi, 80 tons, owned by ‘Meer Ellie Yaree’; Ossonee 100 tons, belonging to ‘Haujee Maumed Jumah’ and Muttoh Ellic, 300 tons owned by ‘Alich Yar Cawn’ – were all destined for the Maldives.134 The Armenian merchants carried on an extensive trade in Bengal both overseas and inland. They were the chief foreign competitors of the European Companies in procuring Bengal commodities. As early as 1688 relations were established between the English Company and the Armenians, through Khwajah Phanoos Kalantar who acted on behalf of the Armenians in Bengal and elsewhere. The Armenians had their own ships by which they traded to various Asiatic countries from Hugli and Calcutta, and often sent their goods in the Company’s ships. Sometimes the Company and the private English merchants had to depend on the Armenian merchants for freights in their ships. In 1700 Pitt wrote to Khwaja Sarhad, ‘Merchant in Bengal’, requesting ‘your favour and assistance to Mr. Griffith and Captain Mornett in the Sadgevick, in which I am concerned, we designing her for Persia and hope by your means to get a good freight’.135 Sometimes the ring of Indian merchants, especially the Armenians, gave

28 | Companies, Commerce and Merchants

troubles to the Company in the matter of freight. The Company had to yield often to the pressure of these merchants and this is evident from the Consultation of 29 December 1702. ‘The time of the year being far spent and the Armenians holding together to beate down the freight for goods to be loaden for Gambroon and Bussera on ship Colchester, and Cojah Surhaud having offer’d thirty eight thousand rupees to have the whole ship for the voyage to Bussera and Persia . . . agreed that we contract with him.’136 During the 17th century Hugli was the principal port of Bengal. A rough idea of the volume of trade at Hugli could be formed by the fact that at the close of the 16th century the ‘bandarban’ (port dues) and mandavi (market dues) in Sarkar Satgaon amounted to 1,200,000 dams or Rs. 30,000 and most of this amount was realised at Hugli since by that time the decline of Satgaon was almost complete.137 After the fall of the Portuguese in 1632, Hugli became the royal port and the seat of the local faujdar and the imperial customs house. The Mughal rulers, who as we have seen earlier, were themselves actively interested in overseas trade, fully realised the importance of the ‘Hugli Port’ as an emporium of great external trade and hence directly appointed the faujdar of Hugli. The faujdar had little concern with and was independent of the Subadar of Bengal.138 Only during Shaista Khan’s viceroyalty was it given to him as his jagir.139 In the early part of the 18th century Murshid Quli Khan succeeded in reducing the faujdar of Hugli to the position of his own immediate subordinate and at Hugli ‘he placed the centre of the financial resources of the Country of Bengal upon the Customs duties levied from traders’.140 Even in the beginning of the 18th century Hugli was the principal port, the trade emporium through which passed the great bulk of commodities imported to and exported from Bengal. Alexander Hamilton, who visited Bengal in the first decade of the century, gives Hugli the attribute of the ‘the Sole centre for Bengal’s overseas trade’ because ‘all foreign goods are brought thither for import and goods of the product of Bengal are brought hither for exportation’. He further states, ‘It affords rich cargoes for fifty or sixty ships, besides

The Rise and Decline of Hugli | 29

what is carried to neighbouring countries in small vessels’.141 Bolts repeats the same thing when he says ‘Hoogly . . . was at this time a port of considerable trade, to which all foreigners in general resorted as the general emporium for the purchase and sale of all commodities in Bengal’.142 Even in the Fifth Report of the Select Committee of the House of Commons, Hugli was referred to as a ‘grand emporium of foreign commerce’.143 To the Mughals, Hugli was the ‘Bakshbandar’ i.e. divisional port. The value of the trade which passed through Hugli may be guessed from the fact that in 1728 ‘Syer Bakshbandar’ i.e. export and import duties on foreign merchandise, yielded Rs. 221,975 at the rate of 2½ per cent on the value of goods, and with the tolls on 9 gaunges or subordinate stations, it amounted to Rs. 2,42,014.144 But the Hugli port began to decline from about the middle of the 18th century. That the decline precipitated in the third quarter of the century is evident from the fact that the gross collection of port-dues and customs dues (Saiyar) realised in Hugli amounted only to Rs. 91,196 in 1768 while in Calcutta it rose as high up as Rs. 890,604.145 The process of the decline of Hugli Port was indeed very rapid, as we find, only five years later the ‘Saiyar’ realised at Hugli was only Rs. 62,644.146 Perhaps the seed of the decay and decline of the Hugli port can be traced back to the withdrawal of the English East India Company from Hugli and the establishment of their settlement at Calcutta in 1690 following a war with the Mughals in Bengal. During Murshid Quli’s time, the pre-eminence of Hugli was threatened by the establishment of the factories of some foreign Companies at other points on the banks of the river, which developed into busy centres of trade. Inspite of his efforts, Murshid Quli could not prevent the overshadowing of Hugli.147 Geographical as well as strategic considerations led the English Company to settle down at Calcutta. As a centre of English trade, Hugli had several limitations. It was separated from the sea by a long and dangerous river journey; secondly, as it stood on the west bank, it was open to attack from the land. Calcutta, on the other hand, was much nearer to the estuary and free from the operations of the European rivals, as well as, of

30 | Companies, Commerce and Merchants

the Marathas and the Nawabs of Bengal. Moreover, the position of Calcutta at the lower reaches of the river made deep water channels and anchorages available which were lacking at Hugli. On the question of building a warehouse in Calcutta in 1713, the Court of Directors enquired from the Council at Calcutta whether the latter was not more advantageous to the country merchants than Hugli. The Court wrote, ‘Whether the country merchants do not trade to Surat, Persia and other places yearly from Bengal, whether they do not send their goods on Europe or European’s shipping, whether such goods are not providing by them all the year long to be ready against the time of shipping, whether if such goods are lodg’d at Calcutta and they could be sure they were safe there and to be come there wherever they would, the warehouse Rent at Calcutta being at as cheap a rate as it costs them Hugley would not in a few years and in how many pay for the charge of building substantial and fit warehouse for that use [?] whether such goods so housed at Calcutta could not with more ease and expedition to shift off thence on freight than from Hughley. . . .’148 These points raised by the Court demonstrate that they realised the potential advantages of Calcutta more correctly than their subordinates in Bengal. The advantages thus offered by Calcutta attracted more and more traders to it and thus it ultimately overshadowed Hugli as the principal port of Bengal. The ‘mild and equitable conduct’ of the English at Calcutta, in contrast to the oppression of the local faujdars of Hugli, also accelerated the process of the decline of Hugli. As Riyaz-usSalatin puts it, ‘When the oppression and extortion of the faujdars increased, the port of Hugli declined, and Calcutta, owing to the liberality and protection offered by the English and the lightness of duties levied there, became popular.’149 Salimullah also confirms this – ‘The mild and equitable conduct of the English in their new settlement gained them the confidence and esteem of the natives, which joined to the consideration and privileges and immunities which the Company enjoyed, induced numbers to remove thither with their families so that in a short time Calcutta became an extensive and populous city.’150 The

The Rise and Decline of Hugli | 31

Court of Directors was particular about the point and insisted and instructed their servants to administer ‘exact Justice’ as they were sure that the inhabitants ‘will resort where they may best be secured from oppression or secret of open squeezings and treated with humanity.’151 After the foundation of Calcutta, a large number of local merchants – Armenians, Hindus and Muslims – flocked to Calcutta to carry on trade under the protection of the Company.152 Some important merchant families, in particular the four families of the Bysacks and one of the Setts, who left the rapidly declining city of Satgaon and founded the settlement of Govindapur153 at about the close of the 16th century, had already been settled in Calcutta.154 By 1710 a number of principal merchants had moved over to Calcutta.155 Even in the first decade of the 18th century it was said that ‘the trade at Calcutta causes murmurings already among Moors’ officers’.156 In 1719 the Bengal factors reported that ‘Calcutta trade is brisker’.157 The firman from the Mughals in 1717 again gave an impetus to the growth of Calcutta and thus the shipping belonging to the port amounted to ten thousand tons in the course of ten years after 1717.158 In 1759 thirty vessels sailed from Calcutta aggregating ‘3964 tons burthen’.159 The decline of the Hugli port was precipitated after the battle of Plassey which gave the English political suzerainty in Bengal through which they had at their disposal the entire resources of Bengal for the establishment of commercial hegemony. From this time onward, the decline of Hugli ran parallel to the rapid rise of Calcutta as the premier port of Bengal. Notes 1. The author of Riyaz-us-Salatin calls Bengal ‘Jinnat-ul-bilad’ or ‘Paradise of Provinces’ (Ghulam Husain Salim, Riyazu-s-Salatin, text ed. Moulavi Abdul Hak Abid, Calcutta, 1890, p. 4; Tr. Maulavi Abdus Salam, Calcutta, 1904, p. 3). Humayun bestowed on Gour in Bengal the epithet ‘Jinnat-Abad’ or ‘the realm of Paradise’ (Abul Fazl, Aini-Akbari, Text, vol. 1, ed. Blochmann, Calcutta, 1872, p. 390. Trans, Jarrett, vol. II, Calcutta, 1891, pp. 122-3; Al-Badaoni, Muntakhab-alTawarikh, Text ed. Maulavi Ahmed Ali, vol. I, Calcutta, 1868, p. 349; Trans, Ranking, vol. I, Calcutta, 1898, p. 458.)

32 | Companies, Commerce and Merchants 2. S.C. Hill, Bengal in 1756-57, vol. III, London, 1905, p. 160. 3. Bowrey, A geographical account of countries round the Bay of Bengal, 1664-79, ed. R.C. Temple, Cambridge, 1905, pp. 193-4; Sebastian Manrique, Travels in Mogul Empire, 1656-68, tr. Constable, 2nd ed., revised by V.A. Smith, OUP, 1914, pp. 438-9; Linschoten, The Voyages of . . . , ed. A.C. Burnell, London, 1885, p. 93. 4. Pyrard de Laval, The Voyages of . . ., Tr. Grey and Ball, vol. I, London. 1888, p. 327; M.A.P. Meilink Roelofz, Asian Trade and European Influence, The Hague, 1962, p. 68. 5. Bernier, op. cit., p. 437. 6. Ibid., p. 437. 7. Ibid., p. 439. 8. Pyrard de Laval, op. cit., vol. 1, p. 329. 9. R.K. Mukherjee, Economic History of India, p. 114. 10. Riyaz-us-Salatin, text, op. cit., p. 33; tr., op. cit., p. 29; Crawford, A Brief History of Hugli District, Calcutta, 1902, p. 2; Hunter, Statistical Account of Bengal, vol. 3, London, 1876, p. 299; G. Toynbee, A Sketch of the Administration of the Hooghly District, Calcutta, 1888, p. 2. 11. Campos, History of the Portuguese in Bengal, Calcutta, 1919, p. 113; S. Dey, Hoogly Past and Present, Calcutta, 1906, p. 150. 12. Linschoten, op. cit., vol. 1, p. 93; Campos, op. cit., p. 113; R.K. Mukherjee, op. cit., p. 114; Crawford, op. cit., p. 2; A.K. Ray, A Short History of Calcutta, Census of India, 1901, vol. VII, pt. 1, p. 113; O’Malley and M.M. Chakraborty, Hugli District Gazetteer, p. 47. 13. Caesar de Federici, ‘Extracts of . . . his eighteen year Indian observation’ 1563-81, Glasgow, 1905, p. 114. 14. Salimullah, Tarikh-i-Bangla, tr., Gladwin, Calcutta, 1788, p. 87; Campos, op. cit., pp. 22, 57; S. Dey, op. cit., pp. 9, 150; Hunter, op. cit., p. 299; S.K. Mitra, Hugli Zelar Itihas-o-Banga Samaj, pt. II, enlarged 2nd Mitrani edn, Calcutta, 1962, p. 639; A. Karim, Murslid Quli Khan and his times, Dacca, 1963, p. 214; R.K. Mukherjee, op. cit., p. 114; J.N. Sarkar, History of Bengal, vol. 2, Dacca, 1948, pp. 318, 364; A.K. Roy, op. cit., p. 113. 15. Quoted in S. Dey, op. cit., p. 150. 16. Federici, op. cit., p. 115; C.R. Wilson, Early Annals of English in Bengal, vol. I, London, 1895, pp. 134-6; Crawford, op. cit., p. 2. 17. Federici, op. cit., pp. 113-14. 18. Wilson, Early Annals etc., vol. 1, op. cit., p. 135; Sarkar, op. cit., vol. 2, pp. 364-5. 19. Crawford, op. cit., pp. 188-9; Sarkar, vol. 2, op. cit., p. 318; Hunter, vol. 3, op. cit., pp. 299-300; G. Toynbee, op. cit., p. 2; S. Dey, op. cit., p. 18. 20. Abdul Hamid Lahori, Badshahnama, Text, vol. 1, Calcutta, 1867, p. 434; Elliot and Dawson, History of India as told by its own

The Rise and Decline of Hugli | 33 Historians, vol. VII, London, 1877, p. 31; Sarkar, op. cit., vol. 2, pp. 318-19. 21. Campos, op. cit., p. 44; S. Dey, op. cit., pp. 1-2; S. Mitra, op. cit., p. 639; Manrique, op. cit., vol. 2, p. 288; Hosten, ‘A Week at Bandel Convent, Hugli’, Bengal Past and Present, vol. 10, 1915, p. 42. 22. Hunter gives the date as 1537 (Hunter, op. cit., vol. 3, p. 299); O’Malley between 1567-73 (O’Malley, op. cit., p. 48); Long, 1538 (Calcutta Review, vol. V, 1846, p. 258; Hosten between 1578-80 (Bengal Past & Present, January-March 1915, p. 42; Mukherjee, 1538 (Mukherjee, op. cit., p. 114); Crawford about 1578 (Crawford, op. cit., p. 4); Campos, 1579-80 (Compos, op. cit., p. 54). 23. From Satgaon and not from Hugli, which further strengthens our point that it was after Akbar’s conquest of Bengal that the Portuguese founded Hugli Port. 24. Pedro Tavares is variously described as respectable man, well versed in politics and affairs of state (Manrique, op. cit., vol. 1, p. 34); one of the officials of the merchants of Bengal (Abul Fazl, Akbarnama, tr. Benveridge, vol. 3, Calcutta, 1939, p. 349); chief of the port at Bengal, (Sarkar, op. cit., vol. 2, p. 319); Captain of Porto Piqueno (Hosten, Bengal Past and Present, vol. 12, 1916, p. 313). 25. Manrique, op. cit., vol. 1, pp. 32-7; Campos, op. cit., pp. 51-2. 26. Akbarnama, op. cit., vol. 3, pp. 349-50; Elliot and Dowson, op. cit., vol. VI, p. 59, Sarkar, op. cit., vol. 2, p. 319; Partab Bar Feringi of ‘Akbarnama’ is identified with Pedro Tavares by Beveridge (Journal of Asiatic Society of Bengal, 1888, p. 34 and 1904, p. 52) and Blochmann (Ain, op. cit., vol. 1, p. 440). Campos perhaps wrongly fixed Tavares’ travel to Fathepur in 1579 (Campos, op. cit., pp. 52, 54). 27. Du Jarric, Akbar and the Jesuits, trans and notes by Payne, London, 1926, p. 15. 28. There is hardly any authoritative evidence to prove Hosten’s contention (Bengal Past and Present, 1916, notes to Chapter V, p. 314) that Tavares had come to Fathepur in 1577 at the latest. 29. Campos, op. cit., p. 54; Hosten, Bengal Past and Present, 1916, p. 314. 30. Ibid., p. 313, Campos, op. cit., p. 54. 31. Akbarnama, vol. 3, p. 469; Ain, Blochmann, vol. 1, p. 440; Campos, op. cit., pp. 53-3. 32. John Cabral’s Account of the fall of Hugli, Appendix in Maurique, op. cit., vol. 2, p. 392. 33. Linschoten, op. cit., vol. 1, p. 95. 34. Quoted in Campos, op. cit., p. 55. 35. Ain-i-Akbari, tr. vol. 11 (Jarret and Sarkar), Calcutta, 1949, p. 137. 36. Campos, op. cit., p. 113. 37. Manrique, op. cit., vol. 1, p. 56. 38. Pyrard de Laval, op. cit., vol. 1, p. 327.

34 | Companies, Commerce and Merchants 39. Factory Records, Misc, vol. XIV, f. 317 (India Office Library); The Diary of Streynsham Master, ed. R.C. Temple, vol. 2, London, 1911, p. 79. 40. Elliot and Dowson, op. cit., vol. VII, p. 34; Badshahnama, text, op. cit., vol. 1, p. 438. 41. O’Malley, op. cit., p. 51; Hunter, op. cit., vol. 3, p. 299. 42. Manrique, op. cit., vol. 1, pp. 29-31. 43. Ibid., vol. 1, p. 33. 44. Pyrard de Laval, op. cit., vol. 1, p. 327. 45. Linschoten, op. cit., vol. 1, p. 95. 46. English Factories in India, ed., Foster, 1618-21, Oxford, 1906, pp. 213-14. 47. Ibid., p. 195. 48. Ibid., p. 197. 49. Campos, op. cit., p. 56. 50. Manrique, op. cit., vol. 1, pp. 6, 23. 51. Tavernier, quoted in Campos, op. cit., p. 115. 52. Campos, op. cit., p. 120. 53. Ibid., pp. 62, 112. 54. Manrique, op. cit., vol. 2, p. 393. 55. Letters Received from the Servants of the East India Company, ed., Foster, vol. V (1617), London, 1901, pp. 119-20. 56. Original Correspondence 610, vol. 5 (India Office Library); English Factories, etc., op. cit., 1618-21, p. 14. 57. T. Raychaudhuri, Jan Company in Coromandel, 1605-1690, The Hague, 1962, pp. 75-6. 58. Karim, op. cit., p. 213. 59. Letters Received etc., op. cit., vol. III (1615), p. 270; vol. IV, pp. 1314; English Factories etc., op. cit., 1618-21, pp. 92, 106, 113, 177, 240, 328; S. Chandra, ‘Commercial activities of the Mughal Emperors during the 17th century,’ Bengal Past and Present, January-June 1959, p. 93. 60. English Factories, op. cit., 1634-36, p. 255; Factory Records, Surat, vol. 1, pp. 134, 526, quoted in S. Chandra’s article, op. cit., p. 94. 61. Translation of Dutch Records, vol. 18T, no. DXLVIIA (India Office Library). 62. Ibid., vol. 18T, no. DXXXVIII. 63. Dey, op. cit., p. 18; Hunter, op. cit., vol. 3, p. 300; G. Toynbee, op. cit., p. 2; O’Malley, op. cit., p. 31. 64. Original Correspondence, 1510, vol. 14; English Factories, op. cit., 1630-3, p. 308. 65. C. J. Hamilton, The Trade relations between England and India, 16001896, Calcutta, 1916, p. 31; O’Malley, op. cit., pp. 53, 189.

The Rise and Decline of Hugli | 35 66. Translations of Portuguese Records, Book of the Monsoons, Book 30 [India Office Library]. 67. Factory Records, Misc, vol. XIV, f. 322; Master’s Diary, op. cit., vol. 2, p. 84. 68. This has been discussed in details by T. Ray Chaudhuri, op. cit., p. 76. 69. Ibid., p. 76. 70. Translation of Dutch Records, op. cit., vol. 64T. 71. Campos, op. cit., p. 120; T. Raychaudhuri, op. cit., p. 78; Om Prakash, ‘The European Companies and the merchants of Bengal’, Indian Economic and Social History Review, vol. 1, no. 3, 1964, p. 38. 72. Original Correspondence, 2435, vol. 24; English Factories etc., op. cit., 1651-4, p. 304. 73. Ibid. 74. Factory Records, Misc., op. cit., vol. XIV f. 317-22; Master’s Diary, op. cit., vol. 2, pp. 79-84. 75. Original Correspondence, 2435, vol. 24; English Factories etc., op. cit., 1651-4, p. 303; 1661-4, p. 66. 76. English Factories etc., op. cit., 1661-4, p. 71. 77. Translation of Dutch Records, op. cit., vol. 61T, no. 216. 78. Ibid. 79. Kristof Glamann, ‘Bengal and World Trade about 1700’, Bengal Past and Present, vol. LXXVI, 1957, p. 36. 80. Letters Received etc., op. cit., vol. V (1617), pp. 119-20. 81. English Factories etc., op. cit., 1630-3, p. xxx. 82. Sir Charles Cecil Stevens, ‘The Port of Calcutta’, Journal of Society of Arts, vol. XLVII, p. 635. 83. Original Correspondence, op. cit., no. 2200, vol. 22; English Factories etc., op. cit., 1651-4, pp. xxvi, 16-17; Yule, The Diary of William Hedges, vol. 3, London, 1889, pp. 194-95. 84. Original Correspondence, op. cit., no. 2435, vol. 24; English Factories etc., op. cit., 1651-4, p. 303. 85. Factory Records, Misc., op. cit., vol. XIV, f. 317; Master’s Diary, op. cit., vol. 2, p. 79. 86. Factory Records, Misc., op. cit., vol. XIV, f. 288; Master’s Diary, op. cit., vol. 1, p. 53. 87. English Factories etc., op. cit., 1665-7, pp. 138-9. 88. Dey, op. cit., pp. 22-3; Hunter, op. cit., vol. 3, p. 300; G. Toynbee, op. cit., p. 1. 89. C.C. Stevens, op. cit., p. 635; Wilson, Early Annals etc., op. cit., vol. 1, p. 47; A.K. Roy, op. cit., p. 113. 90. Wilson, Early Annals etc., op. cit., vol. 1, p. 47; Hedges Diary, op. cit., vol. 3, p. 198; Crawford, op. cit., p. 15; C.C. Stevens, op. cit., p. 635; A.K. Roy, op. cit., p. 113.

36 | Companies, Commerce and Merchants 91. English Factories in India, New Series, ed. Sir C. Fawcett, vol. II, Oxford, 1952, pp. 342-3. 92. Factory Records, Misc., op. cit., vol. XIV, ff. 320-1. 93. English Factories etc., New Series, op. cit., vol. IV, pp. 166-7; Stevens, op. cit., p. 635; A.K. Roy, op. cit., p. 113. 94. Bowrey, op. cit., pp. 166-7. 95. Wilson, Early Annals etc., op. cit., vol. 1, p. 34. 96. Letter Book, vol. 4, f. 201 (India Office Library); Letter Book, vol. 5, f. 155; John Bruce, Annals of the Honorable East India Company, London, 1810, vol. 2 pp. 228, 360, 451, 482; Stevens, op. cit., p. 631; Hamilton, op. cit., p. 52. 97. English Factories etc., New Series, op. cit., vol. II, p. 329; vol. IV, p. 161. In 1672 six ships were sent to the Bay, which was rather unusual; English Factories etc., New Series, op. cit., vol. II, pp. 341-3. 98. Letter Book, op. cit., vol. V, f. 390. 99. Ibid., f 391. 100. Original Correspondence, op. cit., 2208, vol. 22; English Factories, etc., op. cit., 1651-54, p. 45. 101. Letter Book, op. cit., vol. 1, f 411; English Factories, etc., op. cit., 1655-60, p. 275. 102. Ibid., p. 276; Letter Book, op. cit., vol. V, f 237-8, 239, 390; Sometimes the volume of saltpetre rose upto 1000 tons as in the year 1681, cf., Home Misc., vol. 1, series 1, f 3; Letter Book, op. cit., vol. 4, f 401. 103. At present I am collecting material on this aspect. 104. Letter Book, op. cit., vol. V, f. 239. 105. Original Correspondence, op. cit., no. 2242, vol. 22; English Factories, etc., op. cit., 1651-4, p. 110. 106. Original Correspondence, op. cit., no. 2297, vol. 23. 107. English Factories, etc., op. cit., New Series, vol. IV, pp. 321, 329. 108. Besides the English and the Dutch, other Europeans like the Danes, the French etc., came to Bengal for trade during this period and established factories in the neighbourhood of Hugli; but it seems that their trade was negligible compared to that of the English and the Dutch. 109. Manrique, op. cit., vol. 2, Appendix, p. 392. 110. Riyaz-us-Salatin, op. cit., text, p. 33; tr. p. 30. 111. Sarkar, op. cit., vol. 2, p. 419. 112. Syed Hussain, ‘Haji Mohammed Mohsin and Hugli Imambara’, Bengal Past and Present, vol. 2, p. 62. 113. Barbossa, Quoted in R.K. Mukherjee, op. cit., p. 120. 114. Meilink Roelofz, op. cit., p. 3. 115. Chablani, The Economic Condition of India during the Sixteenth Century, Delhi, 1929, p. 60. 116. Pyrard de Laval, op. cit., vol. 1, pp. 236, 259, 332, 333.

The Rise and Decline of Hugli | 37 117. Raychaudhuri, op. cit., p. 76. 118. Manrique, op. cit., vol. 2, p. 397. 119. Dagh Register, 9th and 10th March 1665, quoted in Mukherjee, op. cit., p. 120. 120. Bowrey, op. cit., pp. 168, 179-80; Schouten, vol. Ii, p. 158 Quoted by R.C. Temple in Bowrey, op. cit., p. 168. 121. T. Raychaudhuri, op. cit., p. 76. 122. Original Correspondence, op. cit., no. 2219, vol. 22; English Factories etc., op. cit., 1651-4, p. 63. 123. Translation of Dutch Records, op. cit., vol. 18T, no. DL; The possession of a pass from a Company rendered the ship of an individual merchant immune from attack on the high seas by the ships of that particular Company. 124. Translation of Dutch Records, op. cit., vol. 20T, no. DLXXXV; The pass system, its import on the composition, extent and direction of the foreign trade of the merchants of Bengal and the various objects for which the Companies enforced the system, has been discussed by Om Prakash in his article in Indian Economic and Social History Review, op. cit., vol. 1, no. 3, pp. 37-63. 125. English Factories etc., op. cit., 1651-4, p. 188. 126. Ibid, new series, op. cit., vol. II, p. 345. 127. Diary and Consultation Book, 1672-78, Records of Fort St. George, Madras, 1910, pp. 43-4. 128. Bowrey, op. cit., p. 182. 129. Salimullah, op. cit., p. 6. 130. English Factories etc., New Series, op. cit., vol. IV, p. 183. 131. Salimullah, op. cit., pp. 104-5. 132. Wilson, Early Annals etc., op. cit., vol. I, p. 346. 133. Bengal Public Consultations, Range 1, vol. I, Diary & Consultations, from September 1705-February 1706. Dr. A. Karim has given a list of the ships carrying goods of individual merchants during the season 1705-6. According to him, out of 33 ships, 19 belonged to the Moors, one was freighted by ‘Branasi Seth’ (in consultation of the 25 November 1705, the name, however, was Janardan Seth) and the rest belonged to European private merchants (vide A. Karim, op. cit., pp. 230-1); But taking into consideration the consultations of 18 September 1705 and 17 December 1705 (which Dr. Karim perhaps overlooked) we find the number of ships sailing on the account of the ‘Moors’ during this season was 23. Again not all these ships (as Dr. Karim contends, ibid., p. 230), but only 14 out of them received passes from the Calcutta Council. 134. Diary and Consultations of 18 September, 1 December 1705; 7 January 1706, vide Bengal Public Consultations, Range 1, vol. I; Dr. Karim

38 | Companies, Commerce and Merchants names a ship ‘Sarah’ belonging to Sabh-al-Din but the consultation of 19 February 1706 states that the ship ‘Sarah’ belonging to John Salladine; it is perhaps too much to identify John Salladine with Sabh-al-Din’, specially when the first name ‘John’ is there. Moreover, the name of the master of the ship (Sampson Osborn) is another indication that it belonged to a European merchant, and not to a Muslim, since hardly any Muslim ship had European master; only in some cases the Muslim ships had local Portuguese as their masters. 135. Wilson, Early Annals etc., op. cit., vol. I, p. 369. 136. Factory Records, Calcutta, vol. 4, f. 18. 137. O’Malley, op. cit., p. 188; Ain-i-Akbari, vol. II, tr. (Jarret), p. 140. 138. Riyaz-us-Salatin, op. cit., tr. pp. 29-30; text, op. cit., p. 33. 139. Factory Records, Misc, op. cit., vol. XIV, f. 317; Master’s Diary, op. cit., vol. I, p. 79; vol. II, p. 92. 140. Riyaz-us-Salatin, op. cit., text, p. 33; tr, p. 30. 141. Alexander Hamilton, A New Account of the East Indies, ed. Foster, London, 1930, p. 12. 142. William Bolts, Consideration on Indian Affairs etc., 2nd edn, London, p. 58. 143. Fifth Report etc., ed. Firminger, vol. 2, Calcutta, 1917, p. 199. 144. O’Malley, op. cit., p. 190; J.C. Sinha, Economic Annals of Bengal, London, 1927, p. 7; However the ‘Syer Bakshbandar’ in the Fifth Report is given as Rs. 2,97,941 (Fifth Report etc., ed. Firminger, Calcutta, 1917, vol. 2, p. 199) and in the Sixth Report (Appendix 14) it is Rs. 29,289-8-3. 145. Dey, op. cit., p. 154. 146. O’Malley, op. cit., p. 190. 147. Karim, op. cit., p. 215. 148. Wilson, Old Fort William in Bengal, London, 1906, vol. I, p. 96. 149. Riyaz-us-Salatin, op. cit., text, p. 33; tr. p. 30. 150. Salimullah, op. cit., pp. 88-9. 151. Wilson, Old Fort William etc., op. cit., vol. I, p. 62. 152. Wilson, Early Annals etc., op. cit., vol. I, p. 125; Sinha, op. cit., p. 6. 153. One of the three villages, comprising the city of Calcutta, in the beginning of the 18th century. 154. Wilson, Early Annals etc., op. cit., vol. I, p. 128. 155. Wilson, Old Fort William etc., op. cit., vol. I, p. 79. 156. Ibid., p. 68. 157. Ibid., p. 107. 158. Stewart, History of Bengal, London, 1813, p. 403. 159. Roy, op. cit., p. 119.

chapter 2

Prices of Provisions in Bengal in the Second Half of the Seventeenth Century Moreland Refuted*

Moreland’s thesis1 that ‘prices on the Hooghly’ in the second half of the seventeenth century ‘were brought into line with those which prevailed elsewhere on the Indian sea board’ can now be exploded with the discovery of new evidence in the archives of the Dutch and English East India Companies. This mass of material – so far unexplored – leads to the irresistible conclusion that prices of provisions in Bengal were cheaper – much cheaper indeed – than those in any other part of the Indian coast. Moreland’s contention was that upto 1650 ‘prices in Bengal were abnormally low compared with those’ in other regions on the coast of India. The reason for this unusual phenomenon, as he explains, was that – as the supply of silver had ‘previously been inadequate compared with what was available on other portions of the sea-board’ so that silver price was depressed and commodities were cheap. But the extension of trade in Bengal in the second half of the 17th century – in the wake of the brisk trading activities of the European Companies – ‘resulted in that market being brought more nearly on a level with the conditions prevailing elsewhere on the coast’. The basis of his inference was that the English factors who wrote in about 1650 that provisions in Bengal could be procured *Proceedings of the Indian History Congress, Jabalpur, 1970, pp. 387-97.

40 | Companies, Commerce and Merchants

all at half price or little more than that they are in other parts’, complained in 1658 that provisions had trebled in value. He holds that this sudden rise in price, as alleged by the factors, was due to the large inflow of bullion as a result of the European trading activities. He tried to explain the shortage of silver in Bengal – in the preceding period – in the working of the revenue system in which land revenue was paid in silver and much of it remitted to the Mughal Court in the same form’. As a result, the amount of imported silver retained in Bengal was inadequate to satisfy local demand so that silver was normally expensive, or in other words, commodities were cheap. And the sudden influx of silver in the wake of European trading activities was ‘sufficiently large to effect a material alteration in the monetary position in Bengal’. He maintained that this increase in imported supplies of silver occuring from 1650 onwards sufficed to remove the special cause of the low prices of provisions, namely shortage of silver, and bring Bengal in line with the rest of the coast. This inference, as he wrote, was in accordance with the fact that for a long time previously (i.e. before 1650) Bengal had exported rice to countries which would more naturally have obtained their supplies their Coromandel. But we have now enough evidence to show that Bengal was never brought into the same level with other parts of the coast so far as the prices of provisions were concerned. While Moreland’s thesis was solely based on a report from the English Company’s factors, we have got quite a few reports from different parts of the country pointing unmistakably to the low prices of provisions in Bengal compared with those in other parts of the Indian sea-board. The Bombay factors wrote in 1698 that ‘the workmanship in Bengal is (sic) cheaper than here by reason of the great difference in the prices of provisions’.2 In 1702 the Court of Directors reported that ‘the cheapness of provisions is one reason for the difference of price of Europe investments in Bengal and Madras’.3 Again as late as 1711, the Directors wrote that ‘all things are cheaper in the Bay than at the Fort (i.e., Madras) . . . a rupee in the Bay will go as far as a pagoda at the Fort’ (1 pagoda – 3.5 rupees approximately).4

Prices of Provisions in Bengal | 41

Bengal’s richness was legendary, and the cheapness of provisions there was attested to by most of the foreign travellers in the 17th and early part of the 18th century. The natural products of Bengal were profusely abundant. In the beginning of the 17th century Pyrard de Laval found that Bengal exported rice ‘not only to other parts of India as well as to Goa and Malabar’, but even to ‘Sumatra, the Moluccas, and all the islands of Sunda to all of which Bengal is a very nursing mother who supplieth them with their entire subsistence and food’.5 Bernier tells us that rice from Bengal was supplied to Patna. Masulipatnam and other parts on the Coromandel coast as also to Ceylon and the Maldives.6 This traditional export of provisions from Bengal was kept alive throughout the second half of the 17th and at least early years of the 18th century. The cheapness of provisions in Bengal and their export to other parts attracted the attention of all the foreign travellers who visited Bengal during the period. Barlow wrote in 1692 – ‘The place had plenty of good provisions . . . all provisions very cheap’.7 The English ambassador Sir William Norris observed in 1699 that Masulipatnam was supplied with rice from Bengal and that the people of the locality would starve if rice were not supplied from the said place.8 Even as late as 1706-7, Alexander Hamilton wrote – ’The plenty and cheapness of provisions are incredible’.9 So in the face of these statements it is difficult to subscribe to Moreland’s thesis that in the second half of the 17th century prices of provisions in Bengal rose sharply so that it was brought into the same level with the rest of coastal India. Besides the travellers’ accounts, we have statistical evidence in the Dutch records on the export of provisions from Bengal to other parts of the Indian sea-board as well as to the eastern islands throughout the second half of the 17th century. These records provide us with good and concrete ideas regarding the export of food grains by Indian merchants to various regions. The merchants definitely traded on profit-motive and naturally would not have dealt in provisions as one of the main commodities of their trade if these did not fetch a substantial margin for

42 | Companies, Commerce and Merchants

them. The main provisions in the export list of the merchants comprised rice, wheat, butter and oil, besides sugar which was a regular commodity in the trade with Western India and Persia. Rice, wheat, butter etc., were exported by Indian merchants regularly throughout the period to different parts of the Coromandel coast – Masulipatnam, Jaffnapatnam, etc., though also occasionally to Surat, Bombay, Goa, Calicut etc.10 Again, provisions in considerable quantities were regularly exported to Ceylon (Gale), the Maldives, and occasionally, though not very rarely, to Achin, Queda, Moluccas, Siam, Manila and Tenassary in the East Indies and Mocha in the west.11 In a memorandum ‘of what voyages most profitable with commodities from the Bay’, Mr. Pitt wrote in the third quarter of the 17th century that rice, wheat, butter, etc., were regularly exported to Batavia, the Maldives, Achin, and the coast of Coromandel.12 One can reasonably ask why rice or provisions be carried to Ceylon or the islands in the East Indies from Bengal when it could be obtained from Coromandel Coast by a shorter and much less dangerous voyage. The only reasonable answer seems to be that the prime cost of provisions in Bengal must have been so much lower as to cover the increased charge for transit as also a substantial profit. Quantitatively, the amount of rice exported by Indian merchants was not significant. Fortunately enough we can compute the quantity of rice exported annually from the Dutch list of the cargoes of indigenous ships that left Bengal ports. According to the Dutch account, in 1682, 19,170 mds. of rice were exported from Bengal by indigenous merchants, while it went up to 62,500 mds. next year, rising to 92,000 mds. in 1684.13 The export figure was not unimpressive even at the end of the century. In 1698 the total amount of rice exported was 65,500 mds. while in the next year it stood at 31,852 mds.14 If we add to this the amount exported by the European Companies to their different factories in India and other parts of Asia, the total amount would be quite considerable. When the Dutch became the sovereign of part of Ceylon in late 1650s, it became their responsibility to provide rice for the local population as well as for their own establishment. As such, the Bengal factors were asked to send as

Prices of Provisions in Bengal | 43

much rice as possible and also to persuade Indian merchants to send large amount of rice to this island. At the moment I have only computed the amount exported by the Dutch from Bengal to Ceylon, Batavia, and Malacca in 1674-5 and this stood at 1,747,991 lbs. or 27,101 mds.15 Though the major part of this quantity was exported to Ceylon, the amount sent to Batavia and Malacca was not negligible. The amount of wheat and butter exported to these places during the year was 587,294 lbs. and 59,620 lbs. respectively.16 The English East India Company also regularly sent rice to Madras. In 1685 the Company sent rice and other provisions proper for Achin.17 Even in the second decade of the 18th century we find the English Company sending rice to St. Helena from Bengal.18 Obviously, this considerable export of provisions from Bengal would only mean that they were much cheaper there than in other parts. Interestingly, this substantial export of rice and other provisions from Bengal to other parts of India and to neighbouring countries would seem to suggest that the value of trade in these commodities represented a significant proportion of the total output – a possibility which clearly contradicts the thesis of absolute self sufficiency in the contemporary Indian economy. The normal price of rice throughout the period was around 3 to 4 mds. to a rupee while it fluctuated widely in times of scarcity or abundance mainly depending on the nature of harvest. The legendary price of rice at 8 mds. per rupee19 during the subedarship of Shaista Khan was nothing absolutely abnormal. Even in the time of Murshid Quli ‘the ruling price of rice was 5 or 6 mds. per rupee.’20 But for wide variety of rice, a price series could be built up. The great divergence of quality and price of rice is amply clear from the price table for 1729 where the price for the finest quality of rice was 1 md. 10 srs. per rupee while the coarsest kind was as cheap as 7 mds. 20 srs. to a rupee.21 But whatever might be the price, we know for certain that the traders had substantial profit by exporting provisions to other parts of India and the East Indies. Even as late as the close of the century, William Norris remarked on the export of provisions from Bengal to Masulipatnam . . .’ corn from Bengal . . . bearing

44 | Companies, Commerce and Merchants

so much a higher rate here than there, 40:50 hardly ever less, sometimes cent per cent gained’.22 It is interesting to note that probably the Bengal rulers encouraged export of provisions from Bengal – a fact that indicates the abundance of food grains in the country. This is evident from a Dutch report of 1686 which states that rice, wheat, butter, oil etc., were amongst the untaxed (geen thol schuldigh zijn) goods in Bengal.23 The assertions in Tarikh-i-Bangala and Riyaz-us-Salatin that Murshid Quli totally prohibited export of rice24 cannot be taken too seriously on their face value because of contradictory evidence in the Dutch and English records. The prohibition, if any, might have been imposed temporarily or for a very short time, not definitely for a very long period. In the Dutch records, we notice at least up to 1708-9 quite a considerable amount of rice was regularly exported from Bengal. Even in the second decade of the 18th century Bengal rice was carried to Madras by the English East India Company.25 However, it seems, while in periods of acute scarcity the state had to step in and prohibit the movement of rice outside the province with a view to checking the upward trend in price,26 a considerable amount was exported in normal years. A glance at the export lists of the European Companies indicates that there was definitely an expansion of the export trade from Bengal and as such, a corresponding increase in production, specially in the silk and textile industry. But the increased demand for commodities and consequent rise in production do not seem to have affected the price level to any significant extent. The price of raw silk, no doubt, showed violent and inconsistent fluctuations over the period due to various factors.27 But at any rate it did not exhibit any secular upward trend. Though a precise price series of textiles could not be drawn up due to the multiplicity of the types of textiles – prices of the same type widely varying according to the size, quality, place of production etc., a glance at the prices for four years taken at random between 1710 and 1720 would show no significant rise at all over these years.28 It is significant that the increase in production could be made without any fundamental change in the system of

Prices of Provisions in Bengal | 45 Table 2.1: Prices of Raw Silk in Bengal Years 1663/4 1664/5 1668/9 1669/70 1670/1 1671/2 1675/6 1676/7 1678/9 1681/2 1682/3 1583/4 1684/5 1685/6 1690/1 1693/4 1694/5 1695/6 1696/7 1697/8 1698/9 1699/1700 1700/1 1701/2 1702/3 1704/5 1705/6

Price (in Rs.)

Years

Price (in Rs.)

155 p.md. N.E. N.E. 196 p.md. 177 p.md. 152 p.md. 191 p.md. 217 p.md. 165 p.md. 268 p.md. 298 p.md. 167 p.md. 168 p.md. 222 p.md. 182 p.md. 187 p.md. 182 p.md. 160 p.md. 115 p.md. 144 p.md. 164 p.md. 182 p.md. 201 p.md. 236 p.md. 203 p.md. 154 p.md. 174 p.md.

1711/12 1712/13 1713/14 1714/15 1715/16 1716/17 1717/18 1718/19 1719/20

187 p.md. 171 p.md. 171 p.md. 172 p.md. 162 p.md. 169 p.md. 169 p.md. 171 p.md. 155 p.md.

Source: A.G.D. Range 11, vols. 28, 30, 32, 37, 41, 46, 49, 52, 55, 58. The figures for 1678/9 are to be found in B.M. Addl. MSS. 34, 123, All fractions have been left out.

production. This obviously points to the existence of a possible overcapacity in the silk and textile industry over a short period of the creation of new supplies of skilled labour which was the most important factor in the production system. However, it is evident that there was no appreciable change or rise in the price level in general, or prices of provisions in particular, over the

46 | Companies, Commerce and Merchants Table 2.2: Contracts with Calcutta merchants showing the different varieties of three principal muslins and their prices for four years (vide, Beng. Pub. Consult, Range 1, vols. 2-4)

Cossaes Maldah Orrua Cogmary Cogmary Cogmary Colligaum Mulmuls Malda Savagepore Santapore

Santapore Dacca Dumree Cossajura Coincola Flowered with silk Flowered with silk thread Tanjeebs Santose Dacca Dacca Flowered with silk Flowered with silk thread

1710

1713

1716

1719

Co x Co. 40 x 2¼ 40 x 2¼ 40 x 2 40 x 3 40 x 2½ 40 x 2½

Rs. as. 9-12 6-10 9-8 13-0 10-8

Rs. as. 9-12 7-0 9-8 13-0 10-8

Rs. as. 9-12 7-0 9-8 13-9 10-8 -

Rs. as. 9-12 7-0 9-8 13-0 10-8 -

40 x 2 40 x 2¼ 40 x 2¼

13-12 8-12 13-8 16-0

14-12 11-12

40 x 3 40 x 2 40 x 2¼ 40 x 2 40 x 2 40 x 1 40 x 1

-16-0 12-0 13-6 --16-0

20-0 13-0 12-0 11-12 22-0 15-0

8-12 14-12 11-12 22-0 -12-0 --15-0

14-12 11-12 13-4 16-0 8-0 12-0 --15-0

40 x 2¼ 40 x 2¼ 40 x 2 -40 x 1

7-12 8-8 7-0 -13-0

7-12 -7-0 20-0 13-0

------

6-14 -7-0 20-0 13-0

period under review. It might well be assumed that if the prices of provisions had gone up significantly, there would certainly have been a corresponding increase in the prices of silk and textiles, the two principal commodities in the export trade or vice versa. Naturally the question crops up – what happened to the large amount of bullion and specie that poured into Bengal and how was it that this great amount of treasure had no significant

Prices of Provisions in Bengal | 47

impact on the economy as a whole? Besides the European ‘free’ traders and indigenous merchants, the English and the Dutch Companies carried on trade to the value of Rs. 40 or 50 lakhs a year, mostly financed by importing bullion into Bengal.29 This sum is significant percentage of the revenue from Bengal which was about 130 lakhs during the period.30 That the influx of silver had no appreciable impact on the prices of provisions can only be explained by the fact that most part of it was drained out of the country towards northern and western India, and a part went into hoarding. It can hardly be denied that the drain from Bengal to upcountry during this period reached a new and great dimension. The revenue, however, did not seem to have increased to any great extent. But the numerous grantees and even big merchants, who were mostly from northern and Western India, remitted huge sums to Agra and Delhi in the form of cash. The Company’s records provide a rough idea of the vast sum amassed and remitted by numerous officials and revenue formers. The fortunes made by Shaista Khan who was governor in Bengal for more than 20 years would give an indication of the extent of loot from Bengal. It was reported by the English factors in June 1673 that Shaista Khan presented the king with 2 crores of rupees and was thus again confirmed in his governorship.31 In 1678 the factors reported that besides gold and jewels, Shaista Khan’s treasure amounted to Rs. 40 crores.32 In November 1676 he was reported to have regained his governorship by giving 3 crores of rupees to the king.33 When he died at Agra in December 1693, the English factors reported that he was worth ‘40 million of pound sterling’, most of which, it could be assumed, he amassed during his viceroyalty in Bengal.34 All the viceroys during the period indulged in extracting wealth from Bengal. Shaista Khan took with him 9 crores in 10 years, Khan Jahan Bahadur Khan 2 crores in one year, Azim-us-Shan 8 crores in 9 years.35 The merchants too did not lag behind. Khemchand Shah, a prominent Gujarati merchant in Bengal in 1680’s was reported to have been robbed of Rs. 15 lakhs while going to his native land on the occasion of his daughter’s marriage.36 At his death in 1689, when his trade declined considerably, he was said to have left ‘90 odd

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thousand rupees’ which, it can well be assumed, were transferred to his ‘country’ as there was no indication that his successors carried on trade in Bengal.37 Thus there was a continuous drain of specie from Bengal to other parts of India. As a result, despite a great expansion of trade and a consequent influx of bullion, there was no material alteration in the price level in general, and food prices in particular did not show any appreciable rise throughout the period and remained much cheaper than those in other parts of coastal India. Finally it is to be noted that the fertility of land and good yields may explain to some extent this cheapness of provisions in Bengal. But despite the low prices of provisions on the one hand, and the increase in production and competition amongst buyers, the conditions of the actual producers, weavers in particular, remained unchanged and poor. The plight of the weavers is amply illustrated by the factors’ correspondence which often described it in such phrases as – ’weavers cannot subsist or lie long idle’, or ‘weavers live from hand to mouth’, or ‘such needy a generation as the weavers are’.38 Even making allowance for the inevitable exaggeration in the observation of the factors, the poverty of the weavers can hardly be refuted. It seems reasonable to argue that the broker system was responsible for the extreme poverty of the weavers. Otherwise it is difficult to reconcile the weavers’ poverty with the fact so often apparent that the Companies were buying in a seller’s market. The European Companies imported silver which hardly filtered down to the producers to any substantial extent, the surplus being mostly expropriated by only a small section – the merchants middlemen and ruling nobility. Manuscript Sources and Abbreviations AGD

Accountant General’s Department, Range 11, India Office (Commonwealth Relations) Library, London BPC Bengal Public Consultations, India Office Library BGL and J Bengal General Ledger and Journal, India Office Library BM Addl Mss British Museum Additional Manuscript

Prices of Provisions in Bengal | 49

DB Despatch Book, India Office Library Home Misc Home Miscellaneous Series, India Office Library KA Koloniaal Archief, Algemeen Rijksarchief, The Hague OC Original Correspondence, India Office Library. Factory Records (India Office Library): Hugli, Malda, Misc.

Notes 1. W.H. Moreland, From Akbar to Aurangzeb, London, 1923, pp. 17882. 2. O.C. 22 May 1698, no. 6566, vol. 54. 3. D.B., 4 February 1709, vol. 96, f. 434. 4. D.B. 28 December 1711, vol. 97, f. 461. 5. Pyrard de Laval, The Voyages of . . . tr. Grey and Ball, vol. 1, London, 1888, p. 327; M.A.P. Meilink Roelofz, Asian Trade and European Influence, The Hague, 1962, p. 68. 6. F. Bernier, Travels in the Mughal Empire, tr. A. Constable, 2nd edn., revised by V.A. Smith, London, 1916, p. 437. 7. Edward Barlow, Barlow’s Journal, 1670-97, vol. 2, London, 1934, p. 437. 8. H. Das, The Norris Embassy to Aurangzeb, ed., S.C. Sarkar, Calcutta, 1959, p. 120. 9. A. Hamilton, A New Account of the East Indies, ed., W. Foster, London, 1930, vol. 2, p. 13. 10. See relevant volumes in Koloniaal Archief (K.A.) series, Algemeen Rijksarchief, The Hague. 11. Ibid. 12. B.M. Addl. Mss., 34, 123, f. 34. 13. K.A. 1267, f, 1342 recto; K.A. 1276 f, 1179 verso; R.A. 1292, f. 535 verso. 14. K.A. 1500, ff. 71-4, 140-2; K.A. 1516, pp. 122-7. 15. K.A. 1196, ff. 59 recto-603 verso. 16. Ibid. 17. D.B. 15 Oct. 1685, vol. 91, f. 19. 18. B.G.L. and J., vol. 92, f. 83. 19. Ghulam Husain Salim, Riyaz-us-Salatin, tr. Abdus Salam, Calcutta, 1904. 20. Ibid., pp. 280-1. 21. S. Bhattacharya, The East India Company and the Economy of Bengal, London, 1954, p. 213. 22. Das, op. cit., pp. 120-1. 23. K.A. 1311, f. 1202.

50 | Companies, Commerce and Merchants 24. Salimullah, Tarikh-i-Bangala, tr., Gladwin, Calcutta, 1788, p. 112; Ghulam Husain Salim, op. cit., p. 280-1. 25. For export in 1713, see. B.G.L. and J., vol. 90, f. 81; for 1720, see, B.P.C., vol. 4, f. 294 recto. 26. K.A., 1158, f. 907 vol; K.A. 1205, ff. 548-9. 27. See Table 1 for price of raw silk. The fluctuations, often wide, were mainly due to bad or good harvest as also to the competition amongst the three main buyers – the English, Dutch, and indigenous merchants. 28. See Table 2. 29. S. Chaudhuri, ‘Trade and Commercial Organisation in Bengal, 16501720’, unpublished Ph.D. thesis, University of London, 1969. 30. Irfan Habib, The Agrarian System of Mughal India, Asia Pub. 1963, pp. 400-2; Salimullah, op. cit., pp. 63-4. 31. Factory Records, Hugli, vol. 4, pt. 1, f. 54. 32. O.C., 20 January 1678, no. 4134, vol. 38. 33. Home Misc., vol. 803, f. 154. 34. Factory Records, Misc., vol. 3 A, f. 260. 35. J.N. Sarkar, ed., History of Bengal, vol. 2, Dacca, 1948, p. 413. 36. Bowrey, Countries Round the Bay of Bengal, ed., R.C. Temple, Cambridge, 1905, pp. 152-6. 37. Factory Records, Hugli, vol. 11, f. 187. 38. Factory Records, Malda, vol. 1, Diary, 25 October 1680, Home Misc., vol. 803, ff. 84-5; D.B. 28 January 1661, vol. 85, ff. 367-8.

chapter 3

The Myth of the English East India Company’s Trading Privileges in Bengal, 1651-1686*

Most writers on the early annals of the English trade in Bengal maintain that the Company enjoyed the privilege of duty-free trade on the payment of Rs. 3,000 only per annum. But this theory of customs-free trading privileges of the Company can now be exploded on the discovery of new evidence in the Company’s archives. In fact, the Company had never enjoyed – by virtue of any imperial farman – such privileges in Bengal during the period under study. The English claim of duty-free trade was only a myth, hardly based on any legal or valid imperial sanction behind it. Though the English trade in Bengal – through Balasore – began as early as 1633, it was only after the foundation of the Hugli factory in 1651 that the Company started trading there on a large scale. Quantitatively, however, the Company’s trade in Bengal was not yet very significant, though by the close of the century it became the important branch of trade derived by the English Company in India. The main significance of the Bengal trade in the commercial complex of the Company was that it was an expanding trade – ‘the rising’st trade in India’, to quote the Company factors in Bengal.1 *Bengal Past and Present; Sir J.N. Sarkar Centenary Volume, 1971, pp. 287-92.

52 | Companies, Commerce and Merchants

The problem of securing trading privileges, as the Company thought, was a formidable hindrance to the growth and development of its trade in Bengal. Hence from the beginning it tried to secure an invidious trading privilege giving it an obvious advantage in competition with other traders including the local merchants. It claimed that it obtained these differential privileges through various farmans, nishans or letters patent, and tried to maintain these privileges throughout the period. This, however, led often to disputes with local authorities who frequently challenged the authority and bonafide of those claiming such concessions – a common phenomenon which, in its turn, was in essence exploitative rather than an effort on the part of these officials to enrich the royal treasury. The English, on their part, tried to resist such bureaucratic exploitation when they felt it went beyond a certain limit, by open recourse to arms. Thus at one stage war broke out between the Company and the Mughals in 1686 in the trail of which the English withdrew from Bengal and returned to Madras in 1689. They came back in 1690 following a peace settlement when Aurangzeb, ‘on the most humble and submissive petition’ of the English, allowed them to trade freely in Bengal paying Rs. 3,000 only in lieu of customs. The hasb-ul-hukm or imperial order in this respect was issued in 1691 under the seal of the imperial diwan Asad Khan.2 However, it was only in 1717 that the English succeeded in procuring an imperial farman from Emperor Farrukhsiyar for free trade in Bengal in return for the payment of only Rs. 3,000 yearly as peshcash. Historians have repeated, with varying degrees of reservations, the picturesque story according to which the concessions that enabled the Company’s servants to establish factories and to trade duty-free in Bengal were obtained through the magnanimity of a surgeon named Gabriel Boughton. He was high in the favour of Prince Shah Shuja for curing, first an imperial princess and then one of the consorts of the Prince who was then the subadar of Bengal. When offered a reward, Boughton declined to receive any personal remuneration but asked that in lieu thereof his countrymen might be granted the commercial privileges

The Myth of the English East India Company | 53

which they had long desired.3 There are various versions of the story which differ from one another in details.4 A careful and critical analysis of the different narratives makes it clear that Gabriel Boughton got the concession of free trade for himself only, and not for the English in general. Bowrey’s account represents that the concessions of free trade were general to the English, while other imply that they were special concessions to Boughton himself, though they were made to cover the transaction of Brookhaven in his first voyage. The latter version appears to be more accurate, and this is corroborated by the instructions to James Bridgman and other merchants whom Brookhaven was sending up from Balasore in December 1650 to establish a factory in Hugli. In these instructions, stress was laid upon the necessity of a farman from Shah Shuja for free trade in Bengal – a clear proof that no general concession had yet been obtained from the Prince – and reference was made to certain promises secured from Boughton of assistance therein.5 That the privileges granted by Shah Shuja were personal to Boughton and not general to the English, we know for certain from the traditional account of English privileges in Bengal, written in February 1685 allegedly by John Beard,6 the Company’s Agent from October 1684 to August 1685. It was stated there – ‘He (Prince Shuja) offers Mr. Boughton that if he would trade, he should be free from paying of custom and all other duties, and gave Mr. Boughton two nishans to that end’.7 It is true, however, that the account goes on to say that in 1650 Captain Brookhaven’s ship ‘upon the account of Mr. Boughton’s nishans was free of all duties’; but this, if true, might have been due to the factors’ making out that their goods belonged to Boughton. It is clear that the first nishan for the Company’s trade in Bengal was obtained by James Bridgman from Shah Shuja in August 1651 and it was founded upon a farman procured by Davidge from Shah Jahan a year earlier. The obvious meaning of the latter document8 was merely to free the Company from the payment of rahdaries or road-dues on their goods collected in Oudh, Agra, etc. and sent down to the western coast for shipment; it could never have been intended at Delhi, even by the wildest extension

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of the meaning of the farman, to exempt the English from paying the usual customs duties on their goods exported from Bengal. Nevertheless, Bridgman succeeded, by giving a present of Rs. 3,000 in obtaining a nishan from Shah Shuja which adopted the English contention that imperial farman had freed them from all duties in Bengal.9 The English factors reported – ‘. . . . if it (the privilege) can be maintained in its full vigour will in short time quite (quit) the charges’.10 In 1656 the English obtained another nishan from Shah Shuja which confirmed the privileges enjoined in the previous one.11 The Company’s chief concern was to establish exclusive and preferential privileges in the face of multiform bureaucratic exploitation. Hence much of its efforts were directed towards acquisition and extension of such privileges in order to secure an exclusive control of the local market. But the local potentates often without any long-term interest in the region which they governed temporarily, and always desirous to maximise their immediate income, offered various hindrances to the exclusive enjoyment of those privileges by the Company. The general suggestion12 that these officials were eager to treat the foreign traders as ‘milch cows’ could hardly be accepted in its entirety, though this does not necessarily negate the exploitative nature of the former. There were several aspects which complicated the question of the privileges of the Company. So long as the Company’s trade in Bengal was small, the Mughal officials were not greatly concerned at its exemption from customs duties. And if any difficulties were raised, they were removed by presents or bribes. The situation, however, changed when the trade increased considerably and private English ships appeared in Bengal in great numbers. The issue was further complicated by the indigenous merchants’ attempts to cover their own goods with the Company’s dastak, thus illegally securing exemption of duties for those goods. Moreover, one of the main causes of the conflict between the local officials and the Company was essentially one of trade rivalry where the former was backed by political power which they exercised indiscriminately. Most of these local potentates in the second half of the 17th century took

The Myth of the English East India Company | 55

active part in both inland and overseas trade, and often tried to monopolise some sectors of trade which the foreign Companies, themselves strongly monopolistic, tried to foil. Again, the trouble arose quite frequently due to the ambiguity of the concessions which the rival parties interpreted in different ways to suit their respective interests. The Company’s usual practice was to procure a parwana for customs-free trade from the reigning subadars in Bengal on the pretext that Shah Jahan’s farman – which, as the Company alleged was lost and hence could never be produced – enjoined such a concession. Mir Jumla, on the representation of Jonathan Trevisa that the English goods were free from all duties by imperial farman, gave the Company a parwana in 1660 for duty-free trade.13 Similarly in 1672 Shaista Khan confirmed the nishan of Shah Shuja enjoining the English freedom of trade.14 But when he left Bengal in 1677 – only to come back again in 1679 – the new nawab Fedai Khan and diwan Safi Khan altogether disregarded it. However, in 1678 the English procured fresh nishan from Prince Muhammed Azam who succeeded Fedai Khan as governor of Bengal. But the Company was not content with this practice, and considered it very expensive and troublesome that it would have to procure a fresh order for freedom of trade from every succeeding governor. It was apparently such considerations which caused the Company to ask for an imperial grant giving it the freedom of trade. But it seems very doubtful whether the English Company had at any time during the period obtained such a farman. As noted earlier, Shah Jahan’s farman – on the basis of which the English contended that they were exempted from paying customs – could never have been intended to give the Company the entire freedom of trade in Bengal. It was specifically clear in its terms, and only exempted English goods collected in Oudh, Agra, etc. from road duties. Moreover, there was hardly any reason why the English should be exempted from customs while all the merchants, indigenous or foreigners, were bound to pay it. Even some of the Company’s factors doubted the alleged privilege of customs-free trade. In 1669 Joseph Hall, the Chief

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of the Balasore factory, wrote – ‘It’s wonder that after so many years’ trade the Hon’ble Company should write out to know the privileges they enjoy, which as yet I never could see any more than which their peshcashes yearly hindered the Nawab and Governor to demand sight of their pretend (ed) farman, but their eyes being yearly thus blinded, they were willing to believe what the English affirm.’15 Again a passage in the Court Minutes of the English East India Company raises further doubts as to the bonafide of the concessions claimed by the English. According to this – submitted to the Court on 4 September, 1674 in the form of a report by a Committee specially appointed to investigate the question of trade in Bengal – the privilege was first procured by Gabriel Boughton and ‘gave the English only a liberty to trade, paying Custom according to the King’s farman but was altered and made to pay no Custom according to the King’s farman’.16 The position of the English regarding trade-privileges was perhaps best expressed by the author of the traditional account of their trade in Bengal who stated – ‘. . . we have had privileges continued from time to time . . . with much struggling and great bribes.’17 However, the English succeeded in obtaining an imperial farman from Aurangzeb in 1680. But it was interpreted differently by the factors of the Company and the local officials. It is significant that the farman was particularly addressed ‘to all present and future’ governors of Surat. The Company’s version of the relevant clause is as follows – ‘. . . it is agreed of the English nation besides their usual Custom of two per cent for their goods, more one and a half per cent jizyah or poll money, shall be taken. Wherefore it is commanded that in the said place, from the first day of Shawwal, in the twenty-third of our reign of said people, three and a half per cent of all their goods, on account of Custom or poll money, be taken for the future. And at all other places, upon this account, let no one molest them for Customs, rahdari, peshcash, farmaish18 and other matters by the Emperor’s Court forbidden, nor make any demand in these particulars.’19 But this rendering into English made all the difference in the meaning of the farman. Read as above with a full stop after ‘for the future’, it

The Myth of the English East India Company | 57

would appear that the farman was intended to exempt all English goods from Customs duties at Surat and in all other place. But if the full stop is placed after ‘and at all other places’, the meaning is completely reversed. The Company’s factors tried to interpret the farman in the former sense as it was to their own advantage, which in the proper context, seems to be wholly incorrect. As Sir J.N. Sarkar observed – ‘Payment of duty on the goods landed at Surat could by no exercise of ingenuity exempt from duty a different cargo that had come from Home or China not through Surat but directly to Bengal and which therefore could not have paid duty at Surat. The English traders in Bengal had no reason to claim exemption from a law of the land, which the merchants of all other nations had to obey’.20 Some factors of the Company were well aware of the real intention and meaning of the farman. Job Charnock wrote from Patna that the diwan alleged that the farman ‘was for all goods carried to Surat and not to Bengal ports’.21 The traditional account of English privileges, written in 1685, states – ‘When the farman came, though there was a dispute upon it, yet, Haji Safi Khan, being our friend, a parwana was obtained of the Nawab and said Haji Safi Khan for free passing our goods upon the farman, interpreting the said farman in our favour’. It further goes on to add that the next diwan Bulchand pointed out that the farman did not at all concern Bengal, it being directly addressed to the governors of Surat and ‘the meaning was that those that paid Custom at Surat should not be molested in any other place’. The diwan also asserted that if the English could have a rewana or receipt in a merchant’s name that they had paid customs at Surat, he would not demand it from them.22 Again shortly after the receipt of the farman, the Dacca factors reported that it was ‘not speaking very clearly as to that point (customs-free trade) without some adequate bribe given’.23 In 1700 Edward Littleton, a member of the Bengal Council and later on the President of the New Company in Bengal, wrote about the farman that it was ‘so ill penned in favour of the English that some if not most were then of opinion it had been better stifled than produced and made use of . . .’.24 That the farman was never meant to

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exempt the English in Bengal from customs duties was confirmed by the emperor in 1682. In April that year the English came to know that Haji Safi Khan, the diwan, had received orders from Aurangzeb requiring the English to pay 3½ per cent customs on all goods exported from or imported to Bengal.25 The controversy and conflict regarding the privileges, however, dragged on until the outbreak of war in 1686. Abbreviations and Manuscript Sources BM Addl Mss British Museum Additional Manuscript. EFI English Factories in India, ed., W. Foster. Home Misc Home Miscellaneous Series, India Office (Commonwealth Relations Office) Library, London. OC Original Correspondence, India Office Library. Orme Mss Orme Manuscript, India Office Library. Rawl Rawlinson Manuscript, Bodleian Library. Factory Records (India Office Library): Calcutta, Dacca, Fort St. George, Hugli, Misc. Court Books India Office Library.

Notes 1. O.C. 2830, vol. 26, 23 November 1659; E.F.I., 1655-60, p. 296. 2. O.C. 5702, 5704, vol. 48; Factory Records, Calcutta, vol. I, pt. II, ff. 93-4, Factory Records, Dacca, vol. 1, pt. II, ff. 17-22. 3. Charles Stewart, History of Bengal, London, 1813, pp. 251-2; Robert Orme, History of the Military Transactions of the British Nation in Indostan, vol. 1, London, 1803, p. 8; H. Yule, ed., The Diary of William Hedges, vol. III, London, 1889, p. 167. For Boughton and Privileges of the Company, see, William Foster, ‘Gabriel Boughton and the Grant of Trading Privileges to the English in Bengal’, Indian Antiquary, September 1911, pp. 247-57. 4. Thomas Bowrey, A Geographical Account of Countries Round the Bay of Bengal, 1669-1679, ed., R.C. Temple, Cambridge, 1905, pp. 233-4; Orme Mss., O.V. 12, ff. 3-10; Factory Records, Fort St. George, vol. XXX, ff. 35-40; Home Misc., vol. 68, ff. 27-34. 5. O.C. 2186, vol. 22, 14 December 1650; E.F.I., 1640-50, p. 333. 6. William Foster, Indian Antiquary, op. cit., p. 253.

The Myth of the English East India Company | 59 7. Factory Records, Fort St. George, vol. XXX, f. 35; Orme Mss., O.V. 12, ff. 3-10. 8. B.M. Addl. Mss. 24, 039, f. 5; E.F.I., 1655-60, pp. 414-15. 9. B.M. Addl. Mss. 24, 039, f. 6; E.F.I., 1655-60, p. 111. 10. O.C. 2246, vol. 22, 14 January 1652; E.F.I., 1651-4, p. 97. 11. B.M. Addl. Mss. 24,039, f. 7; Home Misc., vol. 629, ff. 5-8; E.F.I., 1650-60, p. 111; Fact. Records, Misc., vol. XIV, f. 346; Hedges’ Diary, op. cit., vol. III, p. 189; R.C. Temple, ed., The Diaries of Streynsham Master, vol. II, London, 1911, p. 21. 12. T. Raychaudhuri, Jan Company in Coromandel, 1605-1690, The Hague, 1962, p. 16. 13. B.M. Addl. Mss. 24,039, f. 8; E.F.I., 1655-60, p. 416. 14. Factory Records, Misc., vol. 3, f. 159; Home Misc., vol. 629, ff. 43-6; O.C. 3029, vol. 28, 21 June 1664. 15. O.C. 3275, vol. 30, 2 May 1669. 16. Court Book, vol. 29, 4 September 1674, f. 72; E.B. Sainsbury, ed., Court Minutes of the East India Company, 1674-76, p. 81. 17. Factory Records, Fort St. George, vol. XXX, f. 40, Orme Mss., O.V. 12, ff. 3-10. 18. Rahdari – road dues; peshcash – tributes; farmaish – commission for goods. 19. The English version of the farman is to be found in Factory Records, Fort St. George, vol. XXX, f. 38 and C.R. Wilson, Early Annals of the English in Bengal, vol. I, Calcutta, 1895, pp. 78-9. I have been fortunate to discover a true copy of the farman, attested by Qazi Abdul Rahim, in the India Office Library, O.C., 4702, vol. 40. There is another copy of the farman which varies in minute details from the attested one in the British Museum, c.f., B.M. Addl. Mss., 24,039, f. 28 recto. 20. J.N. Sarkar, History of Aurangzeb, vol. V, Calcutta, 1924, p. 322. 21. Factory Records, Hugli, vol. 7, pt. III, f. 113. 22. Factory Records, Fort St. George, vol. XXX, f. 38. 23. Factory Records, Hugli, vol. 2, pt. II, f. 99. 24. Rawl. A 302, f. 207. 25. Factory Records, Fort St. George, vol. XXX, ff. 38-9; Factory Records, Dacca, vol. I, pt. II, f. 32.

chapter 4

The Problem of Financing East India Company’s Investments in Bengal, 1650-1720*

The success of the English East India Company’s trade in Bengal depended on several factors other than the purely economic ones of supply and demand. Of these, an important factor was the Company’s organisation of its commerce, specially the financing of investments in Bengal.1 Throughout the period under review, the Company in Bengal, as in other parts of India, suffered from a chronic shortage of funds for investment. The problem of inadequate working capital was accentuated by the poor demand for the Company’s European imports in Bengal. Though the quantity of merchandise imported by the Company was not generally large, the market for even this small amount was strictly limited. The only item for which there was a steady demand in Bengal was bullion and specie. But as their supply was seasonal and often limited, the Company had to explore additional means for financing its investments. The extensive credit market in Bengal, short-term direct borrowings from the servants of the European Companies and free traders, and the Company’s coastal and freight trade to various Asian ports ultimately played a significant role in reducing the shortage of liquid capital for the Company. The story of the English East India Company in Bengal was essentially one of expanding capital investments for procuring *Indian Economic and Social History Review, vol. VIII, no. 2, 1971, 109-33.

Problem of Financing EIC’s Investments in Bengal | 61

commodities for the English and other European markets. The actual financing of the trade was always a complicated and difficult matter for the Company. During the early voyages in the beginning of the 17th century, the Company’s practice was to buy eastern commodities, mainly spices, with gold and silver. But the mercantilist theory and a limited supply of precious metals inhibited large exports of bullion and species which could be shipped to the East Indies. As a result, the Company was obliged, specially in the later period, to send out along with bullion English manufactures and goods which were in little demand in the Asian markets. There was, however, one commodity, namely Indian cloth, which was readily acceptable to the producers of spices and hence, if procured in adequate quantities, could make up for the shortage of bullion and specie. This urged the Company to exchange cheap Indian cotton goods with spices of the East Indies. Thus trade ceased to be bilateral – between England and the East Indies – and became multilateral or triangular. This was the familiar pattern of the Eastern trade during the first half of the 17th century. But after that as the spice trade was monopolised by the Dutch, there was no need for the English Company to exchange Indian cotton goods for the spices of the East Indies. Now Indian cotton and silk piece goods had become the principal attraction of the English Company’s Eastern Trade. These commodities had gained a substantial market in England and on the Continent. And despite the agitation waged against it, the export of bullion increased gradually along with the export of English manufactures. But at the same time the agitation against the export of bullion and the difficulty of procuring it induced the Company to explore additional or alternative means of financing the Indian investments. There were several methods adopted by the Company to finance its expanding investments in Bengal during 1650-1720. Throughout this period, the export of bullion and specie was the normal means of financing the Bengal trade. The capital available for the purpose of investment was, however, limited in the early years of the Company’s trade in Bengal. But this did not pose a serious problem as the volume of export from Bengal

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was small during those early years. The main difficulty faced by the Company was in providing funds for the investment in the proper season which generally started after the shipping season was over.2 As the price of most of the commodities went up considerably (sometimes by 40 to 50 per cent)3 during the time of shipping, the Company had to start investment for goods just after the departure of Europe-bound ships i.e. generally from February or March, and hence it always needed a stock to be left for such investments in India after paying for the previous year’s goods. As early as 1651 the Company resolved to keep the factories supplied with ‘a competent stock beforehand’ and the factors wrote that ‘this was the only way to make the trade flourish’.4 But generally throughout the period the factories were hardly left with adequate stock after the ships had left. To obviate the difficulty the Company sent in the early years stock to Bengal by bills of exchange from other factories. Thus as early as 1651 the Bay factory received nearly Rs. 6,000 from Pegu in bills of exchange.5 Again in 1652 the Bengal factors were asked by the Surat factory to provide sugar and gumlac, and they were asked to draw bills of exchange for the purpose on the Agra factors to the extent of Rs. 15,000 or else borrow to that amount.6 In December 1652 the Agra factory was again asked to send Rs. 10,000 to begin sugar investment in Bengal as there was about 40 per cent difference between prices in February and those at the time of shipping.7 The supply of capital, however, was gradually on the increase and as the export from Bengal grew steadily in volume, so did the import of bullion and specie. Throughout the period under review, the investment in Bengal was dependent to a large extent on the Company’s export of bullion from England and was seldom independent of such financial assistance. But, besides the problem of inadequate supply of bullion, the Company had to fact some peculiar problems in Bengal in converting the bullion into local currency required for investments. Generally during this period, the Company converted precious metals, whether silver or gold, either by selling them to local shroffs or moneychangers, or by coining them in the mint at Rajmahal. Sometimes

Problem of Financing EIC’s Investments in Bengal | 63

when conversion was not possible by either of these two ways due to the shortage of time required for sending and coining the bullion in the mint or absence of substantial merchants to take off the bullion, the Company had to pay for its investments partly in foreign silver or gold. Thus in 1678 the Hugli Council persuaded the merchants to take silver rials as part payment against investments.8 Next year the weavers in Kasimbazar were paid in silver and the silk merchants in gold.9 Even the most prominent merchants were often thus paid by the Company. In 1679 Mathuradas received 1,500 tolas of gold as barter for his goods supplied to the Company.10 But the merchants generally preferred payment in cash thus making the problem of investment more complicated for the Company. In 1678, both in Hugli and Dacca, the merchants could be persuaded to take only half of the value of the contracts for piece-goods in rials and the rest had to be paid in cash within 8 to 10 days.11 Of the precious metals sent to Bengal, the Company’s factors preferred silver to gold since the former had a better market in Bengal. Silver rials, popularised by the Portuguese throughout Asia, were in great demand. It was easier to convert the rials into local currency than any other specie and hence they wee more easily accepted by the merchants against contracts for goods. In 1677 the merchants in Hugli complained that they could not sell cruzadoes timely enough to start investment and asked for rials instead.12 The attitude of the Bengal merchants in this respect was quite rigid. The Kasimbazar factors reported in 1679 that ‘merchants will give much more for coin both of gold and silver known to them than for ingots which are or at least specified of the same finish.’13 As the gold market in Bengal was not profitable and as the Company had to suffer losses in converting gold whether by selling or minting, the Bengal Agency always discouraged the export of gold from Europe for the purpose of investment in Bengal. In 1678 when the Company ordered £10,000 as ‘quickstock’ for Bengal – the greater part of it in gold and only a small quantity in silver – the factors wrote that it would certainly occasion a great loss for the Company.14 Again the Hugli factors wrote in 1680 – ‘We always looked upon gold

64 | Companies, Commerce and Merchants

as merchandise it being so even when in mohars but silver is cash or sooner converted thereunto.’15 During this period, Dacca was the chief market for gold where it was reported to have produced 10 per cent more than anywhere else.16 Minting the gold entailed a loss of 20 per cent for the Company. The Court of Directors reported that even in Dacca one ‘great ingot’ was disposed of in 1685 at a loss of about 30 per cent and in another similar transaction at Patna the loss ranged between 12 to 14 per cent.17 As usual, they attributed this loss – with little justification it seems – to the dishonesty of their servants in Bengal. As to the low price of gold and mohars, the factors wrote in 1679 that it was due to the little demand, ‘the government being as yet poor and not arrived to the hoarding age’.18 The market price of gold mohars appears to have been subjected to sharp fluctuations from time to time as it is evident from the following table19 – Date

Place

Price of gold mohar

Early 1670

Hugli

Rs. 15-2 an. to Rs. 15-4 an.

February 1677 April 1677 July 1677 August 1678 December 1678 September 1684 September 1711

Kasimbazar Kasimbazar Kasimbazar Dacca Kasimbazar Malda Hugli

Rs. 13-14 an. Rs. 13-14 an. Rs. 13-10 an. Rs. 13 Rs. 12-13 an. Rs. 12-6 an. to Rs. 12-8 an. Rs. 15 to Rs. 15-8 an.

September 1711

Calcutta

Rs. 14-8 an. to Rs. 15-8 an.

In 1679 the Bengal factors reported that the Company would lose 22 per cent on the sale of gold, and in order to reduce the loss, they asked for larger supplies of silver.20 The low price of gold and gold mohars which characterised the late ‘seventies continued to embarass the Company, and the Directors resolved in 1686 to send henceforth only rials to Bengal which might be ‘exchanged into Rupees wihtout the trouble, charges or prejudice of the mint and become much sooner useful for investments’.21 The exact mechanism of price fluctuations of gold is not clear. However, the reasons for such fluctuations can be traced to the

Problem of Financing EIC’s Investments in Bengal | 65

larger supplies of gold by the Company, the imposition of a 5 per cent duty for coinage in the mint, the payment of soldiers in mohars sometimes during this period and the frequent change of subadar in Bengal during the late ‘seventies’.22 Though silver was in greater demand in Bengal, the Company quite often encountered difficulties and losses in disposing of or converting it. Coining in the mint yielded more but in the early years the Company preferred selling silver to the shroffs because of the hazards involved and time required in the former process. Generally 100 pieces of silver rials fetched about 206 to 209 sicca rupees, sometimes as low as 205 and at the most 210 rupees throughout our period, though in the mint they produced 219 to 221 sicca rupees excluding the charges and customs. The net yield from 100 rials was about Rs. 213-14 an.23 The fluctuation of silver price depended mostly on the rates of exchange to Agra. Any decline in this rate of exchange had its immediate effect on the price of silver in Bengal and resulted in a consequent fall in the latter and a contraction in the silver market. John Kenn gave an interesting report on the mechanism of the exchange operation in 1661. He wrote – ‘To pay money in Kasimbazar and receive it in Patna, upon Bill of Exchange a month after date, always yields profit. I have known it from 1 to 6 per cent, when the silk sells well at Agra, the produce is usually sent to Kasimbazar in money overland, which is the reason that when great sums of money come from thence the exchange of money to Patna in one day data sometimes fall 2½ to 3 per cent,’24 In 1678 the Kasimbazar factors reported ‘that exchange to Agra is much fallen from 99 to 96 rupees the 100 and leave come to the Gujarat merchants to draw thither which makes us fear our silver will not sell so soon as otherwise it might have done’.­25 Next year they wrote that ‘rise in the exchange caused abatement’ in the price of silver.26 Besides the rates of exchange to Agra, other contributory factors for the fluctuation of silver price were the supply brought by the Interlopers and other merchants, and the imposition of a 5 per cent customs on all treasure coined in the mint. The Company’s factors in Kasimbazar wrote in 1682 that the low price of silver was ‘occasioned by the Interlopers’ treasure being sole here at

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underrates besides 5 per cent custom upon all treasure at the mint imposed lately’ by the king.27 The problem of selling silver was accentuated by the fact that substantial merchants were not often available in most of the factors to take off silver with ready money even at the price which entailed a loss for the Company. This was specially the case in Hugli and Malda factories. In 1678 as also in 1684 and 1685 the Hugli factors reported that they could not sell either silver or gold at all.28 The report of the Malda factors in 1682 similarly conveyed their inability to sell any treasure.29 As a result, the general pattern for the disposal of the Company’s treasures was to send them to Kasimbazar which was the only substantial market for precious metal throughout our period.30 The obvious advantage at Kasimbazar was that it was the main trading centre and the resort of great indigenous merchants, and the mint was nearby. If the treasure could not be sold, it could conveniently be sent to Rajmahal to be coined there. But even in Kasimbazar, as the factors reported in 1682, it was sometimes difficult to find any merchant to buy the treasure for ready money.31 Again, most often the shroffs who bought the treasure paid only half in ready money and the other half in a month’s time. This is evident from the transactions between the Company and its important shroffs and merchants like Sukanand, Chaturmal, Haridas, Nagar, Goculchand etc. during this period.32 To obviate all these difficulties, connected with the sale of silver, Master entered into a ‘firm and lasting contract’ in 1679 with the great shroff and merchant, Chaturmal Shah, who agreed to take all the bullion imported by the Company at a fixed rate.33 According to this contract, Chaturmal would pay 210 sicca rupees for 100 rials, and 13 rupees sicca for each gold mohar besides various rates for other kinds of bullion and specie. The bullion was to be weighed and delivered and ‘the risk of the same to Rajmahal and of money from thence to Kasimbazar to be upon the Company’s account at Chaturmal’s charge and at his risk while at Rajmahal’. This was a satisfactory arrangement and relieved the Company of the uncertainty in obtaining cash for investments as also reduced the chance of loss through

Problem of Financing EIC’s Investments in Bengal | 67

violent fluctuations in the prices of bullion. But unfortunately for the Company, the contract did not last long as Chaturmal failed to comply with the agreement due to the loss he suffered through it.34 The coining of precious metals in the mint at Rajmahal, though yielded more than their sale value in the open market, was no smooth affair. Still the Company had to take recourse to coining its treasure after being disappointed with the bullion market in Bengal. In 1685 the Hugli General Letter to Madras stated that the Bengal Council had stopped the sale of silver there. But the coining of the Company’s treasure in the Mughal mint involved many problems and hindrances. The road and the distance from Hugli to Rajmahal via Kasimbazar were hazardous with the attendant risk of losing the whole boat-load of treasure or money on its way to or from Rajmahal due either to bad weather or robbery.35 Again coining in the mint took considerable time, often more than a month, and sometimes two or three months.36 Another inhibiting factor against coining in the mint was the imposition of a 5 per cent customs on all treasure in 1677.37 Other hindrances too were there. In 1683 Bulchand, a local faujdar, sent a great quantity of copper to be coined which took up so much time at the mint that it was said the English could have coined 4 lakhs of rupees during this time.38 Next year the English were threatened by Rafiuzzaman, the faujdar of Rajmahal and Malda, that the Company would be forced to sell all its gold mohars in the mint to him at his own price.39 In order to obviate the difficulties connected with coining of bullion in Bengal, the Company finally resolved in the early years of the 18th century to coin all imported treasures in the mint at Madras, and then despatch them to Bengal. In 1705 the Court of Directors wrote to Bengal that they had sent silver to Madras from where it was directed to be sent to Bengal after being coined in the Company’s mint there, thus saving the time and hazard of sending the bullion to Rajmahal.40 It seems that from then onward it became the general practice to coin all the bullion in Madras from where it was despatched to Bengal. In 1707 the Directors wrote they were glad that the Bengal fac-

68 | Companies, Commerce and Merchants

tors did not send any silver to Rajmahal and asked them not to alter the practice except in case of urgent necessity.41 The Madras rupees, though claimed by the Company to be of equal ‘weight and matt’ as the slccas or current rupees of Bengal, were deemed two per cent worse than the siccas by the shroffs. This, as the Company thought, was due to the intrigues of the shroffs who wanted to make a profit. In 1708 the Madras rupees in the Bay were current at 9 per cent discount and the siccas at 9½ per cent The Directors expected that the difference between the siccas and Madras rupees would be less when the latter were once ‘very current’ in Bengal. Even if it did not, they thought coining at Madras was much more advantageous considering the cheapness, speed and safety of coining at the Fort as against the hazards and risks involved in sending bullion to Rajmahal.42 But in 1709 when the government refused to accept Madras rupees into the king’s treasury, their batta sharply fell from 9 to 7 per cent.43 Alarmed at the loss the Company would thus incur, the Calcutta Council wrote to Madras to send them henceforth all the uncoined silver which they now designed to coin at Murshidabad for which, as they claimed, they had already obtained a parwana from Murshi Quli Khan.44 But the Directors did not accede to this proposal considering the advantages of coining at Fort St. George – namely, saving the duties of the mint as also the hazards of having the bullion seized, lost or stopped by the troubles in the country. The Company knew that the best solution, so far as the coining of bullion was concerned, was to have a mint of its own in Bengal – like the one it had in Madras, or at least to have the liberty of free use of the mints in Bengal. As early as 1687 the Company had asked for permission to establish a mint in Hugli in one of the clauses of the proposed treaty between the English and the Bengal subadar.45 Then onward it urged the Bengal factors frequently to try to get the liberty of a mint in Calcutta. Though in 1717 Emperor Farrukhsiyar’s farman gave the English the liberty of a mint, the concession proved to be nominal. Murshid Quli in collusion with the great indigenous banker Jagat Seth prevented the Company from enjoying the liberty of free coinage in the mint at Murshidabad.46

Problem of Financing EIC’s Investments in Bengal | 69

Besides bullion and specie, the exportation of which seemed always to fall short of the Company’s actual requirements throughout the period, the Company had to import different English manufactures and goods to pay for the increasing exports from Bengal. But this did not help the Company very much in solving the problem of financing the investments since there was very little demand for these commodities in Bengal. Nevertheless the Company had to import these wares into Bengal due to the unabated agitation against exportation of bullion or precious metals from England.47 But the Company’s factors who were fully aware of the little demand for the European wares requested the Directors as early as 1669 not to send more than ¼ of the total investment in English manufactures and goods.48 But even this comparatively small amount of European commodity could hardly find a favourable market in Bengal. The factors wrote in great disappointment – ‘it is of little or no demand in the country and therefore of low price; the truth is we have no people for trade, they knowing little or nothing but the taking of the Honourable Company’s money and therewith picking up cloth among the weavers’.49 In an attempt to solve the problem of inadequate funds for investment, the Company in the early years bartered English wares for its investments in Bengal. Most of the merchants were obliged to take half the value of ‘Europe-invest’ in English manufactures and goods. But this practice often led to frequent disputes and ill-will on the part of the indigenous merchants who were sometimes saddled with unsaleable goods. The Company, too, on its part suffered loss through such barter, sometimes the loss running as high as 20 per cent.50 Moreover the goods which the Company received against bartering European commodities were often of inferior quality. Hence at one time the Court disapproved of the barter system. In 1674 the Directors, ‘desiring to keep the reputation of the Indian commodities for their goodness’, asked the Hugli Council not to barter but to sell and buy goods for money unless they could barter for as good as those bought for money.51 Similar was the vein of their letter in 1677 – ‘We observe the reason you give for dearness of cloth

70 | Companies, Commerce and Merchants

we complained of and do wholly dislike that way of barter and therefore we recommend you to sell our goods for money’.52 But as the bullion fell far short of the amount and also as the market for English wares was very limited, the Company could hardly do without bartering imported goods for Bengal commodities. It obliged the reluctant merchants to take off a quantity of Europegoods along with cash against their investments for the Company. The problem of disposing of English manufactures and goods was aggravated in 1702 when the Company was required to send one tenth of its total export in the product and manufacture of England.53 The Court directed the factors to increase ‘the vent thereof for we continue in the same mind rather to have it disposed of in greater quantities than for great profit’.54 But all the same the demand for European wares remained highly inelastic and the market hardly expanded. As a result financing the investment remained a great problem for the servants of the Company and hence the factors in Bengal turned to other sources for supply of capital for financing the investments in the most appropriate season of the year. In the absence of sufficient quantitative data, it is not possible to compute the precise amount by which the Company’s capital supply fell short of the actual requirements in a particular year. It does not seem that the value of bullion and merchandise sent to Bengal in a particular year (except in those years when it was not quite possible to send ships directly to Bengal because of wars) fell much short of the amount required for investment. But, as we have seen earlier, the conversion of precious metals by selling them to merchants or coining in the mint took considerable time. Again most of the imported merchandise lay unsold for a long time, thus aggravating the problem of providing working capital for the different factories. But perhaps the most important factor which induced the Company’s servants to turn to other sources for supply of money was the fact that the proper time for giving out advances for investment lay between February and June or July. But by then, after paying for the previous year’s investment, the Company was hardly left with any substantial amount to start investment for the ensuing year. Moreover, the Company

Problem of Financing EIC’s Investments in Bengal | 71

often remained indebted to the merchants for past investments even after the departure of the ‘Europe-ships’. The Kasimbazar factors reported in November 1700 that they were indebted by about a lakh of rupees for the previous year’s investments.55 The Bengal factors frequently wrote to the Court of Directors insisting on the advantages of a double stock which should be kept in Bengal after the departure of the ‘Europe-ships.’56 The Directors seem to have appreciated the benefits following from such a ‘stock left beforehand’ but did never actually put it into practice.57 Hence throughout the period the factors had to seek alternative sources of supply for making investment in the proper season. Of the various additional or alternative sources of supply, the most useful and easily available was the local capital market which the Company found to be efficient and adequate for its purposes. Throughout the period the Company borrowed money from local merchants and thus provided investment in the proper season. It is however not possible, in the absence of any systematic account in the Company’s records, to compute the amount borrowed annually by the Company for such purposes. Still some idea could be formed from scattered information in the records. Table 1 indicates the amount of the Company’s debts to the indigenous merchants in different factories under certain specific dates.58 Generally the Company used to borrow money mainly from Kasimbazar and from there send out money to different factories, specially to Patna and Dacca by bills of exchange or letters of credit on the issuing merchants’ agents. The Company also borrowed money in Hugli, Balasore and Dacca. In other words, wherever the factors needed money and found it available in the local market, they resorted to borrowing. But it seems that by borrowing at Kasimbazar the Company gained certain advantages. Besides being the resort of numerous shroffs and merchants, Kasimbazar’s proximity to Rajmahal enabled the Company to pay off the debt after coining its treasure, thus saving interest charges which were always very high. As a result the Company sent out a higher proportion of its treasure and

72 | Companies, Commerce and Merchants Table 4.1 Date

Place

Company's debts to local merchants (in Rs.)

18 May 1683 29 October 1683 11 June 1684 15 September 1685 27 April 1685

Kasimbazar Kasimbazar Kasimbazar Dacca Kasimbazar

250,000 350,000 100,000 80,000 270,000

6 October 1685 21 December 1695 29 February 1696 15 February 1700 26 May 1701 4 February 1702 15 August 1702

Kasimbazar Calcutta Calcutta Calcutta Kasimbazar Kasimbazar Calcutta

250,000 147,000 300,000 300,000 250,000 200,000 700,000

merchandise to Kasimbazar for sale there. But later on, specially during the first two decades of the 18th century when Calcutta rose to prominence and became the resort of important indigenous merchants, the Company, it seems, borrowed mainly in Calcutta. It would have been of great interest if it were possible to compute the amount of money supplied yearly by the Kasimbazar merchants to the Company. But here again the paucity of detailed information stands in our way. However, we can compile the full amount of the Company’s debt for one year from March 1683 to February 1684. In these twelve months the Kasimbazar merchants provided the Company with about Rs. 200,000. Between February 1683 and January 1684 Rs. 168,000 were paid by the Company to the Kasimbazar merchants as payment of debts while another Rs. 76,000 remained unpaid. During these twelve months the Company paid out about Rs. 20,000 to the Kasimbazar merchants as interest for debts.59 Some idea regarding the amount of money borrowed at other factories can be formed from the information scattered here and there in the records. In 1684 the Hugli Council asked the Balasore factory to take up Rs. 100,000 at interest not exceeding 1 per cent per month.60 In 1699 the Company’s treasurer received Rs. 40,000

Problem of Financing EIC’s Investments in Bengal | 73

at interest from Metersen (Mitra Sen or Mathura Singh?). In the same year the Calcutta Council agreed to borrow another Rs. 60,000 from him.61 As early as 1682 the Company borrowed Rs. 50,000 in Dacca from the same merchant.62 Only at Patna, it seems the Company did not borrow much locally though it is not possible to ascertain any reason for it. The Patna factory was generally provided with money from other factories. In 1679 the Kasimbazar factors took up Rs. 30,000 at 1¼ per cent per month from Sukanand Shah and sent the amount to Patna.63 Though the local capital market in India helped the Company to overcome the difficulties resulting from a shortage of fund for investment in the proper season, there were certain factors which inhibited it from borrowing freely in Bengal. The chief deterrent in this respect was the high rate of interest prevailing in Bengal during this period and which ranged between 12 to 18 per cent per annum.64 This rate was rightly considered very high by the Company as money was available at 8 per cent per annum in Madras or 9 per cent at Surat.65 Consequently the Directors urged their factors in Bengal not to borrow money locally unless it was absolutely necessary. As early as 1677 they wrote to Bengal ‘. . . we desire what may be (necessary) to avoid paying interest which is so high in the country but when you see there is absolute necessity for it for a little time till our own stock can be coined, we leave it unto you to do what may be requisite therein’.66 The exorbitant rate of interest in Bengal was regarded by the Court as the ‘rank poison’ to their commerce and hence they asked the factors to prevent running into debt ‘the interest of which eats deep and insensibly’.67 But as Company could hardly avoid borrowing money altogether, it accepted it as a necessary evil and tried to beat down the rate of interest by various means. In the early ‘eighties the Court of Directors claimed to have reduced the rate of interest at Surat to 6 per cent by sending ‘great stocks of money’ there. They reported ‘. . . money was grown so plentiful there that any man in full credit might take up what he would at 4 per cent’. Such a rate of interest was of considerable advantage to the Company which asked Surat to go on buying goods throughout the year by which it would

74 | Companies, Commerce and Merchants

save about 20 per cent in the price of goods while the interest for such a period (six months at the most) would be only 3 per cent. With the expectation of such advantages, the Bengal factors were asked to reduce the interest of money to that prevailing at Surat or to 7, 8 or 9 per cent at most ‘by any contrivance or diligence or by any contract with the great moneyed men of the Bay’. The Court further wrote, presuming such rates would be available in Bengal, that it would ‘probably be our advantage to be always in debt there £ 100,000 or thereabout’.68 In 1682 the Directors asked the Bengal Council to begin an indigenous bank with a capital of £ 200,000 from the indigenous merchants there.69 But it seems the Company did neither send a sufficiently large stock to Bengal in an attempt to reduce the rate of interest as it did in Surat nor could it form an indigenous bank to relieve it from borrowing money at exorbitant interest. It also tried, though in vain, to form a joint stock of merchants who would provide investments with their own money. The problem of financing the investment was made more difficult for the Company because of the fact that the rate of interest as also the availability of money depended to a large extent on the rate of exchange to Agra. If the latter rate was high, money would become scarce in Bengal and consequently the rate of interest would also be high. Sometimes even at this high rate of interest it was difficult for the Company to procure any money. In 1682 the Kasimbazar factors wrote that the place was ‘unprovided of cash by reason the exchange to Agra is so exceeding high’.70 This was the pattern of the credit market throughout the period. Even as late as 1700 the factors in Kasimbazar reported – ‘We cannot get money at interest here being very little ready money in the country and the exchange current from hence to Delhi and Agra is but 6 per cent and the shroffs make use of what ready money they have that way’.71 Again the merchants or shroffs who lent money to the Company would often demand it back when the exchange to Agra took a sudden rise so that they could employ it more profitably. In 1684 the Kasimbazar factors reported that the merchants demanded their principal and had become ‘very importunate with us for

Problem of Financing EIC’s Investments in Bengal | 75

it’. They further wrote – ‘We cannot well avoid paying now, the exchange running high aloft which is the reason they want it to employ that way to their better advantages’.72 Any rise in the rate of exchange to Agra also impeded the sale of treasure by the Company. In 1678 the factors in Kasimbazar reported that they failed to come into contract with Gujarati merchants for sale of their treasure as the latter employed all their money in exchange to Agra, following a sudden rise therein.73 The mechanism of this operation can be understood as follows. A favourable rate of exchange on Agra causes the Indian merchants in Bengal to engage in arbitrage transactions thus causing a temporary tightness in the local money market. Since the sale of the Company’s silver required liquid funds, the merchants were obviously not in a position to offer attractive prices in view of their operations in bills of exchange. There were other factors which hindered the Company from borrowing money locally for financing the investment. Sometimes the official exploitation of the Company in other parts of India led to its loss of credit in Bengal. Thus in 1702 Janardan Seth, the Company’s broker, failed to borrow money on behalf of the Company in Hugli where a report was current that the Dutch and the English factories in Surat had been plundered by the government to the extent of above six lakhs of rupees to make satisfaction for the piracies committed on the ‘mocco’ (Mocha) and Malacca shipping in the previous year.74 The late arrival of Europe ships also sometimes led to the loss of credit for the Company. The Calcutta factors wrote in 1702 that Fatechund Shah refused to accept their letter of credit to pay the English ten thousand rupees at Patna as ‘no ship was yet arriving from England.’75 Again most often the merchants clamoured for their money as soon as the ships arrived from England, thus aggravating the Company’s problem of finance. In a general report in 1669 the Company’s factors wrote – ‘If we chance to get into merchants’ debts, they call for their money as soon as our ships arrive and nothing will serve their turns but silver, they will not stay coining it because they will have the advantage themselves.’76 Sometimes the merchants who lent

76 | Companies, Commerce and Merchants

money were factors or agents of other merchants and demanded payment of their money when their masters asked for it, thus putting the Company in an awkward position. The Kasimbazar factors reported in 1685 that three of their merchants to whom they owed Rs. 50,000 at interest had been ‘very importunate’ with them for their money as the latter’s masters ‘called upon them for it’.77 In the same year Sibram Poddar and others who were poddars to the Dutch, and to whom the English Company was indebted for Rs. 60,000, demanded their money back, part of which, as the factors believed, belonged to the Dutch.78 But despite all these limitations, the credit market in Bengal was the most important as an additional source of supply for financing the Company’s investments. Apart from indigenous credit market, the Company often turned to other sources to replenish its finance in Bengal. Of these the Dutch were the most important source of supply for the English Company, especially in the early years of its trade in Bengal. The servants of the Dutch East India Company generally remitted money to Europe through the English Company. The general practice was that these factors deposited their money with the Company in Bengal and received a bill of exchange which their agents or correspondents cashed in Europe. In 1664 the Court of Directors made an agreement with John Lethieulier, a London merchant, to receive Rs. 20,000 to 25,000 from Jan Velters who was a factor of the Dutch East India Company in Bengal. Accordingly in 1665 Jan Velters paid Rs. 25,000 to the English factory in Hugli and received a bill on the Company at 2s. 6d. per rupee.79 This was obviously a contrivance on his part for getting money remitted to Europe without the knowledge of his employers. Similarly other Dutch factors remitted money through the English Company. The practice became so common that the Company authorised its factors in Bengal in 1669 to take up from the Dutch up to £ 10,000 regularly at exchange.80 It was not only the ordinary factors but even the Chiefs or Directors of the Dutch factories in Bengal seem to have indulged in the same practice.81 The English factors in Hugli reported in 1681 that the Dutch Director there offered to pay Rs. 10,681 into the

Problem of Financing EIC’s Investments in Bengal | 77

Company’s treasury and to take bill as usual for it on the Company in England and that they had agreed to the transaction.82 For obvious reasons the Company preferred taking up money by this sort of exchange than borrowing locally, and in 1674 the Court of Directors gave liberty to the Bengal Council to take up of the Dutch and draw upon them to the value of £ 20,000 annually.83 However it is not possible to calculate precisely the exact amount of money which was actually received from the Dutch factors in Bengal for lack of quantitative data, except perhaps for one or two particular years. In 1669 the English Company received Rs. 65,000 (£ 8,125) from the Dutch against bills of exchange.84 Again in 1673 the amount was Rs. 110,000 (£ 13,750) and next year it decreased to Rs. 60,000 (£ 7,511,5s).85 But sometimes, especially during the Anglo-Dutch wars, the Dutch source of supply was not available, thus aggravating the Company’s already acute problem of financing the Bengal trade. In 1669 the factors wrote that the Dutch had stopped further business with them in bills of exchange.86 Again in 1674 it was reported that no money was to be had by exchange from the Dutch due to the war between the English and the Dutch, despite all assurance from the Company to honour and pay the bills as in peace time.87 However, it seems, up to the ‘eighties of the 17th century, the Dutch factors provided a substantial part of the Company’s finance in Bengal. Even in 1681 the Court directed the factors in Bengal to take about 40,000 or 50,000 rupees at the rate not exceeding 2s. 6d. per rupee from John Lethieulier’s correspondents who were mostly Dutch factors in Bengal.88 But the Dutch sources seem to have dried up towards the close of the century when their trade was much reduced compared to that of the English. Besides, the Dutch, the English Company’s servants, free merchants and other Europeans also supplied the Company with money for the necessary investments in Bengal. In the early years, the Company’s servants generally paid money into the Compnay’s treasury not in their own name but in the name of indigenous merchants thus concealing their private fortune from the Company. In 1679 Richard Mohun, a factor in Bengal,

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deposited money in a country merchant’s name and received a bill in return.89 Sometimes, however, these factors preferred to lend money to the Dutch Company as they deemed it more profitable. In 1674 the Bengal Agency reported taht some factors found it to their greater advantage to lend what money they could spare to the Dutch Company at 1¼ per cent interest per month.90 Generally the factors deposited money with the Company against bills of exchange which they sent to their correspondents in England. A few illustrations of such transactions can be noted here. Abraham Adams, who was accountant at Fort William, on his departure for England in 1716 deposited Rs. 27,728.6.3 and received a bill of exchange for £ 3,812.13.1 (at 2s. 9d. per rupee) on the Court of Directors.91 Even the President of the Company’s affairs in Bengal remitted money to England by bills of exchange on the Court. In December 1717 the principal and interest of money deposited by Robert Hedges, the President in Bengal, amounted to Rs. 40,045 for which he received a bill of exchange on the Court at 2s. 9d. per rupee.92 The succeeding President, Samuel Frake, paid Rs. 10,000 into the Company’s treasury in 1718 against a bill of exchange on the Directors for £ 1,375 (at 2s. 9d. per rupee).93 In the same year Henry Frankland, storekeeper at Fort William and a member of the Bengal Council, deposited Rs. 80,000 for which he received a bill of exchange on the Court for £ 11,000 (at 2s. 6d. per rupee).94 Besides the Company’s servants, other Europeans too lent money to the Company at interest. In 1699 Noel Argons, a Frenchman, offered to lend Rs. 15,000 to the Company at 1 per cent interest per month.95 Derrickson, a free merchant it seems, received a bill of debt from the Company in 1715 for his principal and interest amounting to Rs. 30,731.0.6.96 Apart from short-term direct borrowings which were really bridging finance, the Company also tried to explore other available sources in an attempt to create funds required for its investment in Bengal and thus engaged itself in several branches of inter-Asiatic trade. Similarly in order to tap yet another source of income, it encouraged the freighting of its ships by indigenous merchants and carried goods of these traders to different Asian

Problem of Financing EIC’s Investments in Bengal | 79

ports on freight. The inter-Asiatic trade and freight voyages not only provided additional sources of funds for investment but they also saved the Company the demurrage of its ships while in Asia. These ships which failed to sail for England in the proper season were obliged to stay on, thus incurring heavy demurrage. Under the circumstances the Company asked its servants to use their best efforts to employ those ships in inter-Asiatic commerce and freight voyages. These commercial ventures eased, with little doubt, the problem of financing the investment for the Company though in the absence of adequate data, any accurate estimate of the proceeds from such ventures is not possible. Throughout the period, the branch of the inter-Asiatic trade in which the Company was mostly engaged was the Bengal-Persia trade. As early as 1652 the Company decided to lade a ship in Bengal for a voyage to Persia.97 In 1657 the Court directed the Bengal factors to send one ship annually with suitable cargoes to Persia.98 The ship Aun arrived at Gombroon in 1659 from Bengal with commodities on the Company’s account as well as a considerable quantity of freight goods.99 But it appears that the Company never sent ships regularly on trading voyages to Persia. In 1682 the factors in Gombroon urged the Company to send one or two ships there regularly from Bengal. They pointed out that the Dutch sent that year two ships from Bengal laden with cloth and sugar by which they ‘seldon got less than 50 or 60 per cent’ so that one of the ships of 400 tons gained by one voyage at least fifty five or sixty thousand rupees, besides the freight they got from Gombroon to Surat.100 In 1683, however, the English Company sent two ships to Persia from Bengal – one of them, the Hare, carrying 2,171 bags of sugar valued at Rs. 21.733.4, the other, Henry and William, laden with 2,821 bags of sugar and various other goods amounting to Rs. 56,760.101 A large part of the profit thus earned in Persia went to Bengal in the form of silver abbasis and gold ducats. The freight voyages were generally undertaken to and from Surat and Persia. Whenever the Company failed to procure sufficient tonnage for freight to Surat or Persia, it filled up the ships with cargoes on its own account. Thus in 1690, besides the

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freight goods, about 200 tons were required to make up the full tonnage of the ship Kempthorne and the Company ordered to provide 5,000 or 6,000 mds. of rice and 1,000 mds. of wheat to make up her tonnage in a voyage to Surat.102 Individual Indian merchants also quite frequently freighted Company’s ships for particular voyages to Surat or Persia either jointly or on their separate account. A few illustrations of such freighting of ships by indigenous merchants would not be inappropriate here. In 1701 several Hugli merchants – Mathuradas, Brindabandas, Khoja Padroes and Khoja Phanous – freighted one of the Company’s ships for a voyage to Surat for Rs. 20,000.103 Again in 1702 Khoja Sarhaud Israeli, the famous Armenian merchants in Bengal, chartered the Company’s ship Colchester for a trading voyage to Gombroon and Basra for Rs. 38,000.104 Janardan Seth, the Company’s broker in Calcutta, chartered the Hester in 1707 for Persia at Rs. 30,000.105 Khoja Sarhaud freighted the Howland in the same year for Persia at Rs. 34,000.106 The earnings from such voyages either on freight or on the Company’s own account were not negligible. In 1714 the ship Hanovers’ voyage to Surat produced about Rs. 59,548.107 The estimated profit of the Cardigan’s voyage to and from Persia in the same year was about Rs. 40,000.108 In 1717 the small ship Arabella’s earnings in her Surat voyage amounted to well over Rs. 17,000.109 Notes 1. The term ‘investment’ is used here in the same sense as the Company did to denote its purchases in India. 2. The shipping season in Bengal was generally from September to January. 3. D.B., January 1659, vol. 84, f. 411. 4. O.C., 18 January 1651, no. 2200, vol. 22; E.F.I., 1651-4, pp. 13-14. 5. O.C., 18 January 1651, no. 2200, vol. 22. 6. O.C., 27 Jan. 1652, no. 2242, vol. 22. 7. O.C., 10 December 1652, no. 2297, vol. 22. 8. Factory Records, Hugli, vol. 1, Diary, 26 September 1678. 9. Ibid., vol. 1, Diary, 15 February 1679; vol. 2, f. 17. 10. Ibid., vol. 2, ff. 95-6; Master’s Diary, vol. II, pp. 258-9.

Problem of Financing EIC’s Investments in Bengal | 81 11. Factory Records, Hugli, vol. 1, Diary, 25 September (1678); vol. 7, pt. II, f. 115. 12. Ibid., vol. 1, Diary, 18 September 1677. 13. Ibid., vol. 7, pt. II, f. 33. 14. Ibid., vol. 1, Diary, 1 August 1678. 15. Ibid., vol. 5, pt. II, f. 112. 16. D.B., 12 December 1677, vol. 88, f. 522; Factory Records, Hugli, vol. 1, Diary, 1 August 1678. 17. D.B., 14 January 1686, vol. 91, f. 48. 18. Perhaps referring to the temporary governorship of Prince Azam. Generally after stabilizing their position, these governors started amassing vast fortunes. 19. Factory Records, Hugli, vol. 2, f. 14; Factory Records, Kasimbazar, vol. 1, Diary, 15 February, 24 April, 25 June, 27 July 1677; Factory Records, Hugli, vol. 10, f. 185; B.M. Addl. Mss., 34,123, ff. 2a, 3a. For the price of gold and gold mohar, see, Irfan Habib, The Agrarian System of Mughal India, pp. 384-7, K.N. Chaudhuri, ‘Treasure and Trade Balances, the East India Company’s Export Trade, 1660-1720’, Economic History Review, vol. XXI, 1968, pp. 486-90. 20. Factory Records, Hugli, vol. 2, pt. 1, ff. 14, 17. 21. D.B., 14 January 1686, vol. 91, f. 48. 22. D.B., 12 December 1677, vol. 88, f. 522 (In this letter the Company wrote to Bengal that it sent a greater quantity of gold than formerly); Factory Records, Hugli, vol. 1, Diary, 1 August 1678; Shaista Khan left Bengal in 1677 only to come back in 1680 while in the interim period two subadars Fidai Khan and Prince Azam ruled Bengal. The factors reported in 1677 that ‘the Prince at Patna lately had paid his soldiers in gold mohars which is reason they are so much fallen that uncoined gold is dearer than coined gold’. Vide, Factory Records, Kasimbazar, vol. 1, Diary, 27 July 1677. 23. Factory Records, Hugli, vol. 1, Diary, 16 November 1677; Factory Records, Kasimbazar, vol. 1, Diary, 18 and 30 August 1677, 16 and 29 September, and 20 October 1679; D.B., 14 January 1686, vol. 91, ff. 48-9; D.B., 8 January 1718, vol. 99, f. 372. 24. B.M. Addl. Mss., 34, 123, f. 42a. 25. Factory Records, Kasimbazar, vol. 1, Diary, 17 August 1678. 26. Ibid., Kasimbazar, vol. 1, Diary, 29 September 1679. 27. Ibid., vol. 1, Diary, 7 September 1682. 28. Factory Records, Hugli, vol. 1, Diary, 25 September, 13 October 1678, vol. 6, part II, f. 165; Home Misc., vol. 803, f. 458. 29. Factory Records, Malda, vol. 1, Diary, 17 October 1680. 30. Ibid., Hugli, vol. 1, Diary, 25 September, 13 October 1678. 31. Ibid., Kasimbazar, vol. 2, Consult., 7 September 1682.

82 | Companies, Commerce and Merchants 32. Ibid., vol. 1, Diary, 28 August 30 August, 16 September 2 October 1679. 33. Master’s Diary, vol. II, pp. 306-8. 34. Factory Records, Kasimbazar, vol. 1, Diary, 24 December 1679, 21 February 1680; 2 March, 8 March, 1680; 27 August 1680. 35. Ibid., Calcutta, vol. 7, pt. 1, f. 11, D.B., 14 January 1686, vol. 91, f. 48; D.B., 12 January 1705, vol. 95, f. 389. 36. Home Misc., vol. 803, f. 458; D.B., 7 April 1708, vol. 96, ff. 262-3. 37. Factory Records, Kasimbazar, vol. 1, Diary, 24 February 1677. Factory Records, Hugli, vol. 1, Diary, 1 August 1678; Factory Records, Kasimbazar, vol. 2, Diary, 7 September 1682. In 1683 the Kasimbazar factors reported that they were advised from Rajmahal that a general parwana came from Dacca fixing the customs as follows (vide, Factory Records, Kasimbazar, vol. 3, Diary, 31 January 1683). Of the English – 3½ per cent Of the Dutch – 4 per cent Of the Muslims – 2½ per cent

Of the Hindus – 5 per cent Of the Armenians – 7½ per cent

8. Factory Records, Hugli, vol. 9, f. 76. 3 39. Ibid., vol. 10. f. 185. 40. D.B., 12 January 1705, vol. 95, f. 389. 41. Ibid., 7 February 1707, vol. 96, f. 98a. 42. D.B., 7 April 1708, vol. 96, ff. 222-3, 260. 43. B.P.C., Range, 1, vol. 1, f. 528; D.B., 5 January 1711, vol. 97, f. 125. 44. Ibid.,. It seems by 1708 Murshid Quli had established another mint at Murshidabad, vide, D.B., 7 April 1708, vol. 96, ff. 262-3. 45. O.C., 18 June 1687, no. 5618, vol. 47; Home Misc., vol. 68, f. 35. 46. S. Bhattacharya, The East India Company and the Economy of Bengal, London, 1954, pp. 31-3. 47. By an act of 1694 the Company was ordered to export goods valued at least £ 100,000 a year to the East. 48. Factory Records, Misc., vol. 3, f. 100; E.F.L. 1668-69, p. 311. 49. Home Misc., vol. 803, f. 456. 50. In 1672 the Company bartered broodcloth, lead etc. for goods provided by Khemchand and other Balasore merchants but at 20 per cent loss, vide, Factory Records, Hugli, vol. 4, pt. 1, f. 4. 51. D.B., 23 August, 1674, vol. 88, f. 153. 52. D.B., 12 December 1677, vol. 88, f. 520. 53. D.B., 26 February 1703, vol. 95, f. 49. 54. D.B., 12 January 1705, vol. 95, f. 389. 55. Factory Records, Calcutta, vol. 10, pt. III, f. 2. 56. O.C., 18 January 1651, no. 2200, vol. 22; E.F.I., 1651-54, pp. 13-14; O.C., 8 January 1702, no. 7820, para II, vol. 63; O.C., 24 December 1702, no. 8097, para 15, vol. 65.

Problem of Financing EIC’s Investments in Bengal | 83 57. D.B. 28 January 1659, vol. 84, f. 411; D.B., 18 January 1706, vol. 95, f. 518; Rawl. A. 302, f. 250. 58. Factory Records, Hugli, vol. 9, ff. 63, 155; vol. 10, ff. 109, 164; Factory Records, Kasimbazar, vol. 4, pt. 1, ff. 71, 145; Factory Records, Misc., vol. 3A, f. 392; Factory Records, Calcutta, vol. 6, pt. 1, ff. 6-7, 26; vol. 10, pt. III, f. 43; O.C., 4 February 1702, no. 7852, para 3, vol. 63; O.C., 15 August 1702, no. 7996, vol. 64. 59. Compiled from Cash Account of Factory Records, Kasimbazar, vol. 3. 60. Factory Records, Hugli, vol. 10. f. 86; Factory Records, Balasore, vol. 1, Diary, 22 April 1684. 61. Factory Records, Calcutta, vol. 3, pt. II, ff. 51-52, 61. 62. Ibid., Dacca, vol. 1, pt. II, f. 57. 63. Ibid., Kasimbazar, vol. 1, Diary, 25 March, 1679. 64. Ibid., Kasimbazar, vol. 1, Consult. 15 October 1679, vol. 3, Consult. 8 February 1683; vol. 4, pt. 1, f. 154; Factory Records, Hugli, vol. 6, f. 164; vol. 10, ff. 86, 99-100, 108, 248; Factory Records, Balasore, vol. 1, Diary, 22 April 1684; Factory Records, Calcutta, vol. 2, pt. 1, ff. 16-41; vol. 3, pt. II, f. 48; vol. 6, pt. III, f. 14; vol. 8, pt. II, ff. 71-72; Factory Records, Dacca, vol. 1, pt. II, f. 57; Rawl. A. 302, f. 250; O.C., November 1684, no. 5264, vol. 44; D.B., 13 February 185, vol. 90, f. 436. 65. D.B., 5 July 1682, vol. 90, f. 8; 12 January 1705, vol. 95, f. 381. 66. D.B., 12 December 1677, vol. 88, f. 520. 67. D.B., 5 July 1682, vol. 90, f. 8; 18 January 1705, vol. 95, f. 519. 68. D.B., 5 July 1682, vol. 90. f. 8. There is little doubt that the large stock sent by the Company to Surat greatly reduced the rate of interest there. The Surat General Letter stated in 1683 – ‘It is very true that the large stocks Your Honours sent out lately annually was the real cause that the rate of interest fell and not unlikely but at sometimes when Your Honours or the Dutch’s occasions require no money, men of good reputations might for small sums procure after the rate of 4 p.c. per annum.’ Vide, O.C., 30 November 1683, no. 5651, vol. 43. 69. D.B., 28 August 1682, vol. 90, f. 22. 70. Factory Records, Kasimbazar, vol. 2, Consult, 7 September 1682. 71. Ibid., Calcutta, vol. 10, pt. II, f. 92. 72. Ibid., Kasimbazar, vol. 4, pt. I, f. 1. 73. Ibid., vol. 1, Diary, 17 August 1678. 74. Factory Records, Calcutta, vol. 8, pt. II, f. 54. 75. O.C., 15 August 1702, no. 7996, vol. 64. 76. Rawl. A. 302, f. 250. 77. Factory Records, Kasimbazar, vol. 4, pt. 1, f. 108. 78. Ibid., vol. 4, pt. 1, ff. 111-12. 79. D.B. 21 December 1664, vol. 86, f. 460; O.C., 1 September 1665, no. 3069, vol. 29.

84 | Companies, Commerce and Merchants 80. O.C., 11 September 1669, no. 3344, vol. 30. 81. Velters himself was the chief of the Dutch factory at Piply. 82. Factory Records, Hugli, vol. 3, pt. 1, f. 7. 83. D.B., 17 August 1674, vol. 88, f. 131. 84. O.C., 30 November 1669, no. 3377, vol. 30. 85. D.B., 23 December 1674, vol. 88, f. 153; Factory Records, Hugli, vol. 4, pt. 1, £ 114. 86. O.C., 30 June 1669, no. 3303, vol. 30. 87. D.B., 7 July 1673, vol. 88, f. 48; 31 October 1673, vol. 88, f. 75, 23 December 1674, vol. 88, f. 153. 88. D.B., 5 January 1681, vol. 89, f. 276. 89. O.C., 1 October 1679, no. 4660, vol. 40. 90. Factory Records, Hugli, vol. 4, pt. II, f. 20. 91. B.P.C., Range 1, vol. 3, f. 117. 92. Ibid., Range 1, vol. 3, f. 460. 93. Ibid., Range 1, vol. 4, f. 1a. 94. Ibid., Range 1, vol. 4, f. 3. 95. Factory Records, Calcutta, vol. 3, pt. II, f. 49. 96. B.P.C., Range 1, vol. 3, f. 108a. 97. O.C., 12 February 1652, no. 2257, vol. 22; E.F.I., 1651-54, p. 111. 98. D.B., 31 December 1657, vol. 85, ff. 15-16. 99. O.C., 2 April 1659, no. 2730, vol. 26. 100. O.C., 16 May 1682, no. 4820, vol. 42. 101. Factory Records, Hugli, vol. 6, pt. II, ff. 4-5. 102. Ibid., Calcutta, vol. 1, pt. 1, f. 36. 103. O.C., 23 December 1702, no. 7837, vol. 63. 104. Factory Records, Calcutta, vol. 4, pt. 1, ff. 18, 20-2. 105. D.B., 7 April 1708, vol. 96, ff. 255-6. 106. B.P.C., Range 1, vol. 1, f. 411. 107. C. & B., Abstr., vol. 1, ff. 508, 524. 108. B.P.C., Range 1, vol. 2, f. 399a. 109. Factory Records, Misc., vol. 7, f. 37.

chapter 5

Textile Trade and Industry in Bengal Suba, 1650-1720*

An attempt is made in this paper to analyse the nature, pattern and organization of textile trade and industry in Bengal Suba in the second half of the 17th century and first two decades of the 18th century. It is indicated here that the export trade in Bengal textiles had a phenomenal growth resulting from a great demand for these commodities in the European markets and there was a corresponding increase in textile production in Bengal during this period. So far as the European trade in Bengal textiles is concerned, we have ample quantitative data, but our information about the textile trade carried on by the Asian merchants is very scanty. Moreover, we are handicapped in our analysis by the paucity of material on the organization of the textile industry. But despite these limitations, it is possible to indicate the broad pattern and organization of textile trade and industry in Bengal during the period under review. In the overall picture of the English Company’s export trade textiles were most important both in volume and value. It is common knowledge that the European Companies began to display interest in the Indian textile trade in the early 17th century for the purpose of bartering cotton piece-goods for pepper and spices in the Indonesian archipelago. And the direct trade in textiles between Europe and India developed as an essential by-product of this ‘earlier and more urgent necessity’. The most striking feature of the English East India Company’s textile trade * Indian Historical Review, New Delhi, vol. I, no. 2, September 1974, pp. 262-78.

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from Bengal was a boom in export in the early 1680s under the stimulus of a rapid expansion in demand for calicoes in the European markets which continued vigorously, with the exception of a brief interruption following the Bengal war in 1686, into the following decades. I The multiplicity of the types of textiles exported from Bengal renders their identification and proper division into different categories an exceedingly difficult task. One finds at least 75, if not more, different names of piece-goods in contemporary records. It is not easy to identify some of them – such as umbers, mahmudiaties, atchabannies, abrowahs, bulchols, coopes, doodamies, etc. However, this limitation notwithstanding, the piecegoods exported by the Company can be divided into three main types – first, silk piece-goods; secondly, mixed piece-goods, that is, piece-goods of mixed silk and cotton; and thirdly, cotton piece-goods, plain or painted. In addition, there was a category of miscellaneous goods consisting of quilts, tablecloths, plushes, velvets, etc. Bengal silk piece-goods were known to the English as the taffatie or taffeta and the Dutch termed it armosijnen.1 The word taffeta was current in medieval Europe in a rather vague sense to imply fine cloth, usually of a silky and glossy quality. When the Europeans introduced the term into India, it became mixed with Persian tafta, ‘a glossy twist’, already in use as a term for silk. Most of the Bengal taffetas were produced in areas around Kasimbazar. Some of the different types of taffaties were known by such names as restaes (striped taffaties) or gold pumbers (a sort of taffaties of deep gold colours and made of thicker than ordinary silk).2 Among other silk piece-goods exported by the English Company were sarcenetts, jamwars and silk lungees produced mainly in Kasimbazar area, silk handkercheifs, neck cloths and atlasses woven mostly in Hugli and the Balasore area. Silk handkerchiefs were also procured in Dacca. Taffetas, though the most important single item in the list of the Company’s

Textile Trade and Industry in Bengal Suba | 87

export from Bengal in the second half of the 17th century, lost their predominance in the first two decades of the 18th century. It seems that throughout the period under review mixed fabrics and cotton goods comprised the largest bulk export. The mixed piece-goods exported by the Company were mainly allabanees, cuttanees, carridaries (or choradarries), chucklaes, cherconnaes, cushtaes, doreas, elatches, ginghams, jamdanees, nehallewars, nillaes, peniascoes, sooses, seersuckers and mandilla. Of these, ginghams and nillaes, woven in the neighbourhood of Hugli and Balasore, enjoyed a predominance in the Company’s export list during the second half of the 17th century while doreas, woven in Hugli and the Malda region, ruled the roost in the first two decades of the 18th century. But it was cotton piece-goods which numerically far surpassed other piece-goods, whether of silk or mixed varieties in the Company’s export list. Of the calicoes again, plain cotton or plain muslin goods comprised the bulk of the Company’s export. The painted cotton goods generally known as chintz began to be exported only in the last decade of the 17th century and the European demand for Indian chintz of all kinds was soon at its peak.3 The chintz came mainly from Patna and were of a cheaper and comparatively inferior grade to those from Coromandel and Gujarat. Patna also provided such cotton piece-goods as emerties and luckowries. Among other cotton piece-goods exported by the Company were chillaes, baftas, dungarees (the Dutch dongerijs), dimities, photaes, orungshies, chandanees and putlas. But it was the better known muslin that enjoyed supremacy in the Company’s export list. The Company, however, did not export much of the very finest and most expensive Bengal muslin, famous from Roman times, perhaps partly because the limited supply was monopolised by local merchants for exclusive sale to the nobility and partly because of the unsuitability of this material for the climate in Europe. The muslin exported by the Company comprised such different varieties as allaballees, addaties, chowtars, cossaes, serhaudconnaes, gurralis, humhums, mahmudbannies, mulmuls, nainsook, sannoes, tanjeebs, terrendums, seerbands and rehings. Most of these were woven in

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areas around Dacca and Malda, though some like mulmuls and mahmudbannies were also produced in the neighbouring regions of Hugli and others like sannoes around Balasore. The embroidered piece-goods were mostly on the finer varieties of muslin such as mulmuls, tanjeebs, cossaes or humhums. The quality of the different types of muslin woven in different areas varied widely, as did their prices. We refrain from an attempt at their classification according to fineness and price as such an attempt is fraught with the danger of producing misleading results.4 II An analysis of the Company’s orders for Bengal piece-goods reveals that in the early years the demand for silk and cotton piece-goods was insignificant in the overall structure of the Company’s export trade from Bengal. In February 1651 the factors in Bengal were asked to invest only one-sixth of their small capital in cloth, mainly sannoes and atlasses.5 An indication of the first boom in the demand for Bengal textiles is to be found in the order sent out in 1675-6 for 98,000 pieces while in 1669-70 the order was only for 26,850 pieces. In other words, within the span of six years the order for textiles had increased by four times. But it was from about the beginning of the 1680s that there was a remarkable rise in the demand for textiles from Bengal. In the year 1680-1 the Company ordered for 206,400 pieces which went up to 229,200 pieces next year, eventually rising to 662,800 pieces in 1682-3 and 682,300 pieces in 1683-4. This, however, was followed by a slump in the demand. But from about the middle of the 1690s there was again a sharp rise. In 1695-6 the Company ordered 417,500 pieces and up to 1716-17 the order ranged between 250,000 and 300,000 pieces. Again, a boom began in 1717-18 when 415,000 pieces were ordered, which rose to 480,000 pieces in 1719-20. The Dutch order too was considerable and seems to have ranged between 250,000 and 300,000 pieces per year in the first two decades of the 18th century.

Textile Trade and Industry in Bengal Suba | 89

An obvious question that arises is: what were the precise underlying factors for the unprecedented growth of textile exports from Bengal at the beginning of the 1680s? The plausible answer is that it was due partly to the greater competitive power of the Indian piece-goods in prices in comparison with the traditional fabrics manufactured in Europe and partly to a revolutionary change in the consumer taste in England and the Continent. A contributory factor was, however, the Act of 1678 which forbade the importation of French silks and cloths together with French wine, salt and paper.6 Though Bengal silks and piece-goods did not compare favourably in quality with French and Italian fabrics, the former had the advantage of being very much cheaper and hence available to a larger section of the people. Moreover, there was a deliberate attempt on the part of the Company to make Bengal piece-goods, especially taffetas, look like Italian silks or fabrics. As early as 1659 the Directors wrote to the Bengal factors that taffetas would be gummed in England which ‘would then be as glossy as Italian silks’.7 Again, in 1663 they asked the factors to ‘cause all taffaties to be made as near to the Italian fabrics as you can’.8 So far as the change in consumer taste was concerned, the ‘Indian craze’ set in about the 1680s and was a marked feature of the last decade of the 17th century.9 It is unnecessary to describe this trend in fashion,10 but it obviously operated as an active economic factor. The nature and extent of this fashion is revealed by J. Cary’s pamphlet of 1695 which states: It was scarce thought about twenty years since that we should ever see Calicoes, the Ornaments of our greatest Gallants (for such they are, whether we call them Muslins, shades or anything else) when they were then rarely used, save in Shrouds for the Dead, and chiefly among the Poor who could not go to the Price of finer Linnen, and yet were unwilling to imitate the Rich; but now few think themselves well dresst till they are made up in Calicoes, both Men and Women, Calico Skirts, Neckcloths, Cuffs, Pocket-Handkerchiefs for the former, Headdresses, Nightroyls, Hoods, Sleeves, Aprons, Gowns, Petticoats and what not for the latter besides India-Stockings for both Sexes’.11

90 | Companies, Commerce and Merchants

No less revealing than this was the speech by Pollexfen before the Board of Trade in 1696 describing the state of Indian commodities in 1681. He said: As ill weeds grow apace, so these manufactured goods from India met with such a kind reception that from the greatest gallants to the meanest Cook Maids, nothing was thought so fit to adorn their Persons as the Fabrick from India.12

The European Companies were well aware of this great change in consumer taste and there began a race for procuring novelties. The Directors of the English Company wrote in 1681: Note this for a constant and general Rule that in all flowered Silks you change the fashion and flower every year as much as you can, for English Ladies, and they say the French and other Europeans will give twice as much for a new thing not seen in Europe before though worse, than they will give for a better silk of the same fashion worn the former year.13

In July 1682 the Directors perhaps made the most pointed remark about the change in fashion: ‘. . . nothing pleases so much as variety everyone desiring something that their neighbours have not like it’.14 The English Company traded not only in silk and mixed and cotton piece-goods from the 1680s but also in such miscellaneous commodities as plushes, velvets, satins and quilts. In April 1681 the Directors wrote to Hugli Agency: Set your weavers’ inventions on work to make Plushes, Velvets, and Satins as fine, rich and as strong as the best usually worn and of the same breadths; this is nothing so difficult but may be effected where the material silk and midwife labour are so cheap as with you.15

In December that year the factors were asked to send Flanders and French diaper – commonly used in England – which ‘may be made and brought from India upon much easier term than from any place of the world and that would be a national advantage, also as a profit to us and an increase of the English navigation if we could introduce into common use the Indian Diapers for Napkins and Tablecloths’.16 Next year the Company asked the

Textile Trade and Industry in Bengal Suba | 91

Bengal factors to send 500 silk quilts yearly as ‘the use of Rugs and Blankets grows out of request’ ‘by reason of moths and the increase of the riches of our nation’.17 In the same letter the Directors asked the factors ‘for the setting afoot of a linen manufacture in the Bay for sailcloth and such kind of cloth as Lockerams, Dowlas, Holland and other foreign kinds which this nation is yearly supplied with, from France, Germany, Flanders and Holland to the great diminution of our wealth and the increase of theirs, without any kind of benefit to the English navigation’.18 All these only indicate that the Company was eager to expand its trade from Bengal in as many varieties of textiles as possible. As noted earlier, silk piece-goods, mainly taffetas, held an undisputed supremacy in the Company’s export list from Bengal throughout the second half of the 17th century. In 1684 the Court of Directors wrote to the Agent and Council in Hugli: ‘Plain taffaties of all sorts are certainly the most staple commodity India affords and it is impossible for you ever to send us too many of them’.19 They wrote in the same vein four years later: ‘Your taffaties are a noble commodity of which you can never send enough being well made and well bought’.20 It was only from the beginning of the 18th century that silk piece-goods as well as mixed ones lost their predominance in the Company’s export following the Act of 1700 prohibiting such goods in England.21 The national concern, however, over the large imports of silks and piece-goods and its impact on English domestic industries was gaining ground from about the beginning of the 1680s. We shall not enter into the details of the increasing opposition to import of silks and manufactured goods or the impact of such imports on English silk and weaving industry which has already been discussed by Shaffat Ahmed Khan.22 We note a few things only to indicate the nature and extent of the opposition to import of Indian manufactured silks and how the Company met this. As early as 1677 concern was voiced over the rapid increase in Indian imports in these words: ‘One commodity more ruins us and that is Calico which destroys more the use of Wool than all things besides’.23 Similarly in 1680 a pamphleteer tried to

92 | Companies, Commerce and Merchants

pinpoint the grave danger to the English silk industry resulting from the steep rise in the import of Indian textiles. He wrote: The result is that masters break; Journeymen run away, having no Trade. Some fly to the Mint and Privileged places. Some to Holland; some to Ireland. Some starve to death at home with their Wives and Children. Multitudes turn upon the parishes. Houses empty. Prisons full.24

The Company, however, tried to justify the import of wrought silks by pointing out that a great part of these were again shipped out to France, Holland and other foreign countries. Wrought silks, the Company argued, were, moreover, the ‘strongest, cheapest and the most durable that come from any part of the world’. Nor did their wearing hinder, it was argued, the silk manufacture in England; ‘they do only hinder the importation of the like quantity from France and Italy’. Still the Company was forced to confess that ‘wrought silks, flowered or striped, do a little impede the growth of silk manufactures in England’.25 The Company justified the import of calicoes on the ground that it ‘is a most useful and necessary commodity and serves instead of the like quantities of French, Dutch and Flanders Linens’. It argued that the nation thus saved not only ‘two to three 100 thousand pounds in its expense; but also as it hinders so far the enriching those Neighbour-Nations, from whose greatness this Kingdom might fear most prejudice’.26 However, the result of the Act of 1700 prohibiting the import into England ‘of wrought silks, Bengals and Stuffs mixed with silk or herba’ was an increase in the import of white calicoes and muslins which were then printed in England. The Act no doubt caused concern among Bengal factors who wrote in 1702: All white goods are so very cheap in England and goods worked with silk and cotton being forbid to be worn, sells for loss so that we know not what to order about Cloth Investments until we received our Masters’ advices.27

But the Act does not seem to have vitally affected the export of textiles from Bengal, except for a few years immediately following its enactment. Therefore, in 1720 another Act was passed

Textile Trade and Industry in Bengal Suba | 93

prohibiting the use or wearing of printed calicoes in England. But as these articles were allowed to come to England on condition of their being reshipped, the export of cotton and silk piece-goods from Bengal continued to increase steadily even after 1720.28 III On the supply side the competition was a triangular one among the English, Dutch and indigenous merchants. The main centres of supply of Bengal textiles were Kasimbazar, Dacca, Malda, Hugli, Balasore and Patna,29 where indigenous traders were already engaged in an extensive trade in piece-goods long before the advent of the European Companies. Even in Malda – as Richard Edwards reported in 1676, a few years before the establishment of the English factory there – the chief traders were the ‘Factors of Agra, Gujarat and Benaras Merchants who yearly send them fifteen to twenty five Patelas30 whose lading consists of cossaes, mulmuls and mundeels and elatches of all sorts, valued at about one Lack each Patela and about the half of that amount by landing said goods and raw silk’. Besides, about three lakhs of rupees went yearly to Dacca in elatches and coarse cloth and about the same value to petty merchants of Rajmahal and Murshidabad and other places.31 It was quite natural that indigenoub merchants, besides the Dutch, should have offered keen competition to the English in all the centres of supply. It is difficult to ascertain the impact of this triangular competition on the market prices of textiles. However, from incidental references it can be said in general that the presence of too many buyers enhanced the prices. It was reported in 1676 that the Dutch who were in Malda before the English were able to buy muslins at a much cheaper rate than when English demand afterwards had increased the competition. Thus pieces measuring 10 yards by 1¼ yards cost at first Rs. 6 to 10 per piece against Rs. 9 to 15 in Master’s time (about 1676). That means the rise in price was about 50 per cent.32 But sometimes concentration of too many weavers at one

94 | Companies, Commerce and Merchants

place resulted in lowering the prices of their products, the heavy demand notwithstanding.. Mathias Vincent reported in 1676 that the English factory set up at Kasimbazar induced a large number of weavers to gather there which resulted in the lowering of prices of taffaties. A piece of taffatie, as Vincent stated, which used to cost Rs. 15 about 12 or 13 years ago, was then ‘made and sent home’ at about six or seven rupees, that is, the price fell by well over 50 per cent.33 The English factors, however, often complained of dearer prices of textiles resulting from competition from other merchants. It is very much evident from the Company’s records that it was apprehensive about its weavers being lured away by the Dutch. In 1684 the Dacca factors reported that Mathuradas, Raghunath and Ramnarain – all Company’s merchants – sent many agents to Dacca and the neighbourhood and they feared that the weavers would raise the price of goods ‘to see so many buyers’.34 The rivalry and competition between the Old and New Company also led to a sharp rise in the prices of textiles in the early years of the 18th century. The factors of the New Company reported in 1700 that ‘goods became exceeding dear at the aurungs even beyond what was usual for tho’ they did use to be dear at the ports in time of shipping yet now many goods were dear or dearer at the marts for investments, the demand was so great’.35 There is little doubt that the Indian merchant-middlemen found the trade in piece-goods quite profitable and were sure of a market for what they could provide and that was the reason why at the end of our period even the shroffs ‘fell into the dealing so largely in piece goods’.36 IV As indicated earlier, it is not possible to build up a coherent history of the price movements of textiles and their fluctuations throughout the period under review. Textiles were manufactured in Bengal at this time at the level of cottage industry and the technique of weaving varied from one place to another. The Company’s exports were composed of a wide range of varieties which differed from one another in size, quality, texture and colours.

Textile Trade and Industry in Bengal Suba | 95

This multiplicity of types was naturally reflected in an equally wide range of prices. Consequently it is not very easy to estimate what effect the movement of prices had on the purchases by the Company since the same type of cloth could display a wide variation in price even in one particular year depending on size, quality and the place of production.37 However, it seems from the contracts between the Company and Calcutta merchants in the second decade of the 18th century that the price of calicoes (the size and the place of production remaining constant) did not show much fluctuation.38 Of course, it is certain that the Company derived sufficient profit from the textile trade39 and was not concerned much even if the cost prices went up. As early as 1670 the Directors wrote to Bengal: ‘We find the Calicoes in your parts to be dearer than in other places, yet we are unwilling wholly to leave of the trade thereof in the Bay’.40 Turning to the actual exports, we find that the textiles exported by the Company up to the 1670s were significant neither quantitatively nor financially. In the two years 1663-4 and 1664-5, the Company exported only about 24,000 pieces on an average at the invoice price of £14,681. The quantity was reduced to 8,085 pieces costing £5,549 in 1668-9, rising eventually to 20,336 pieces next year and valued at £10,253. A remarkable increase in the export of piece-goods is to be found in the export list of 1670-1 when 37,739 pieces were despatched to England at the cost price of £23,577. The next year both the quantity and value were almost doubled, the number of piece-goods exported being 75,975 costing £41,739. It seems that from then onward the quantities and total value of textiles exported by the Company remained almost steady till the beginning of the 1680s. In the two years 1675-6 and 1676-7 81,779 pieces were annually exported on an average at the value of £40,698. In 1678-9 the Company exported 75,408 pieces valued at £50,363. But the tremendous growth in the total quantity of piece-goods as well as their value began in the 1680s which continued, though with interruption caused by various factors, throughout the period under review. The following table illustrates the continuous growth of textile trade from Bengal.

96 | Companies, Commerce and Merchants Table 5.1: Quinquennial Total of Textile Export from Bengal41 Years

Total no. of pieces

Total Value

Average no. of pieces

Average Total value

1681/2-1685/6 1694/5-1698/9 1699/1700-1704/5 (Excluding 1703-4) 1705/6-1709/10 1710/11-1714/15 1715/16-1719/20

1,040,491* –

£561,988 £333,035 £569,435

208,098 – –

£112,397 £ 66,607 £113,887

£450,043 £914,446 £970,759

– 249,381 307,794

£ 90,005 £182,889 £194,152

– – 1,246,907 1,538,972

Note: *Excluding the number of pieces exported by Persian Merchant in 1685-6 which is not mentioned in the invoice. In this year two ships were despatched to England. The other ship, Eagle, carried 203,372 pieces of piece-goods.

It is clear from the above table that the general tendency in textile export, despite the two periods of slump during 1694-5 to 1698-9 and 1705-6 to 1709-10, was one of steady growth both in volume and value. We cannot yet compute the total value of the Dutch export of textiles from Bengal during this period. But from the number of pieces exported by the two Companies, it is apparent that from about the beginning of the second decade of the 18th century the English surpassed the Dutch at least in textile trade from Bengal. The Dutch during this decade exported on an average about 203,853 pieces annually while the English export stood at 278,588 pieces.42 Finally, it is interesting to see what percentage the total value of annual textile export constituted of the total value of the English Company’s annual export from Bengal. With the exception of a few years (for example, in 1668-9 and 1704-5 when the percentage slid to 38.5) the total value of annual textile export formed roughly about 70 to 90 per cent of the total value of the Company’s exports.43 So it can rightly be asserted that throughout the second half of the 17th century and the first two decades of the 18th century textiles constituted the most important article in the structure of the English Company’s export trade from Bengal.

Textile Trade and Industry in Bengal Suba | 97

Percentage in Total Export

Fig. 5.1: Percentage of Export Commodities from Bengal in Total Export Value of the English Company

Note: Dotted lines represent parts of the curve in which data are not available.

V The European Companies procured textiles for export mainly through merchant-middlemen as they could not deal directly with the producers in most cases. They had to give dadni or advance to middlemen who in their turn paid advances to weavers and artisans in the proper time of the year. Thus one finds that the dadni system was widely in use and that both cash advances and giving out of raw materials were established practices. Textile production in Bengal, as in other parts of India, was organized as a cottage industry by the weavers and artisans in their own homes. These people with little capital in their hands generally had to depend largely on the advance either in cash or in kind from the merchant-middlemen for whom they produced the commodities. Thus the merchant-middlemen had some control over the quality, size and quantity of production. But as yet there was

98 | Companies, Commerce and Merchants

no full-fledged putting-out system involving deep penetration of capital into production. The merchant giving out advances was only interested in the finished products and thus remained largely outside the production organization. And despite the increased demand for textiles and competition among buyers, both European and Asian, it seems that the weavers and artisans had hardly any bargaining power which remained mostly in the hands of these merchant-middlemen. The activities of the European companies undoubtedly gave an impetus to textile production in Bengal. The European demand for Bengal textiles was a new phenomenon in the history of the country’s export trade and assuming, in the absence of any evidence to the contrary, that the supply for European markets did not seriously affect Bengal’s traditional exports to other regions, it can rightly be said that the production of textiles had definitely gone up during this period, though it is not possible to measure this in any quantitative terms. A cursory glance, however, at the export list of the European Companies will give a rough idea of the extent of expansion of textile trade. Towards the close of the period under study the English and the Dutch Companies exported annually from Bengal on an average about 525,000 pieces of different textiles. Only an expansion in production could meet such a huge demand for Bengal textiles. The significant point is that the increase in production could be made without any fundamental change in the technique or in the organizational aspect of the production system. The question naturally crops up – how then was this expansion in production possible? In the absence of any direct evidence only a tentative hypothesis can be put forward. So far as the textile industry was concerned, the expansion in production was achieved by picking up the slack in the economy. The fact that a considerable increase in the total output could be brought about without any significant innovation in the technique of production obviously points to the existence of a possible over-capacity in the textile industry over short period or the creation of new supplies of skilled labour which was the most important factor in the production system. This is further confirmed by the fact that when

Textile Trade and Industry in Bengal Suba | 99

the English settled down in Kasimbazar, there was such a huge congregation of weavers there that it resulted in the lowering of prices of cloth.44 It is probable that these weavers were not fully employed earlier and also that quite a few of them were previously agricultural producers, taking to weaving only as a subsidiary employment and now becoming exclusively weavers giving up agriculture as their primary occupation. It appears that despite the promise of ‘great wages’ and all material inducement the weavers in Bengal were somewhat reluctant to leave their traditional abodes and settle down in some other places and the English Company failed to persuade Bengali weavers to go and settle down in Madras. This is rather interesting in view of the fact that the Coromandel weavers were ‘surprisingly mobile’. ‘Such was their caste and lineage’ that Bengali weavers feared to lose these by crossing salt water. The Company even failed to persuade the taffeta-weavers to move from Kasimbazar and settle in Hugli. But Bengali weavers and artisans never lacked enterprise. The English factors reported that the weavers were willing to engage in any new work though they demanded higher price for any cloth other than those made traditionally. On various occasions they demanded payment of the cost of alteration in their looms for meeting the specified requirements of piece-goods by the Company. The activities of the European Companies were responsible for introducing certain new elements in the organization of commerce and production, though not on any extensive scale. But they might hardly be called innovations, as their overall impact was not particularly significant. Before the arrival of the European Companies the Asian as well as the Portuguese merchants used to buy from the markets or manufacturers as best articles as they could get at any given time. But the European Companies of monopolistic merchant capital, catering to the European craze for ‘Indienness’ and trading for a higher margin of profit, insisted on supplies conforming to samples with rigid and specific demands as to size, colour and quality and thus introduced the idea of specific standardization which was something new in the region. But the point may not be stretched too far because

Table 5.2: English Company’s Textile Exports (in pieces) Years 1663-4 1664-5 1668-9 1669-70 1670-1 1671-2 1675-6 1676-7 1678-9 1681-2 1682-3 1683-4 1684-5 1685-6 1690-1 1692-3 1693-4 1694-5 1695-6 1696-7 1697-8 1698-9 1699-1700 1700-1 1701-2 1702-3 1704-5 1705-6 1706-7 1707-8 1708-9 1709-10 1710-11 1711-12 1712-13 1713-14 1714-15 1715-16 1716-17 1717-18 1718-19 1719-20

Quantity (pieces)

Value in £

26,383 21,133 8,085 20,336 37,739 75,957 84,402 79,157 75,408 164,479 168,789 187,004 316,829 – 71,130 17,987 89,052 71,539 – 125,747 – – – – – – 38,250 81,224 – – – 272,222 284,907 298,624 275,553 197,503 190,320 271,126 179,097 275,375 337,642 475,750

16,951 12,412 5,549 10,254 23,578 41,739 38,204 43,193 50,363 80,640 78,641 96,416 148,813 157,480 34,538 9,339 36,858 26,308 70,490 56,617 60,258 119,364 144,441 196,950 165,522 37,314 25,211 54,640 49,876 103,256 75,848 166,423 203,196 210,824 219,093 149,048 132,287 178,015 115,366 174,606 205,275 297,500

Source: Computed from A.G.D., Range II, 28, 30, 32, 37, 41, 43, 46, 49, 52, 55, 58.

Table 5.3: Percentage of Textiles in Total Export Value from Bengal English Company Years 1663-4 1664-5 1668-9 1669-70 1670-1 1671-2 1675-6 1676-7 1678-9 1681-2 1682-3 1683-4 1684-5 1685-6 1690-1 1692-3 1693-4 1694-5 1695-6 1696-7 1697-8 1698-9 1699-1700 1700-1 1701-2 1702-3 1704-5 1705-6 1706-7 1709-10 1710-11 1711-12 1712-13 1713-14 1714-15 1715-16 1716-17 1717-18 1718-19 1719-20 Source: See note on Table 5.2.

Textiles 71 67 38 62 83 77 71 71 52 55 50 67 71 83 83 83 62 83 77 77 91 77 77 71 71 71 38 77 59 83 91 91 83 83 83 83 66 71 83 91

102 | Companies, Commerce and Merchants

while on the one hand the local artisans’ production system was rather indifferent to any rigid standardization, the severe competition amongst too many buyers in the market on the other was likely to make the merchants and producers somewhat reluctant to specific standardization as they were sure of being able to sell off their wares to one buyer or the other. Before the arrival of the European Companies the Asian and the Portuguese merchants Table 5.4: Contracts with Calcutta merchants showing the different varieties of three principal muslins and their prices for four years (cide, Beng. Pub. Consult, Range 1, vols. 2-4). 1710

1713

1716

1719

Cossaes Malda Orrua Cogmary Cogmary Cogmary Colligaum Mulmuls

Co x Co. 40 x 2¼ 40 x 2¼ 40 x 2 40 x 3 40 x 2½ 40 x 2½

Rs. as. 9-12 6-10 9-8 13-0 – 10-8

Rs. as. 9-12 7-0 9-8 13-0 – 10-8

Rs. as. 9-12 7-0 9-8 13-0 10-8 –

Rs. as. 9-12 7-0 9-8 13-0 10-8 –

Malda Savagepore Santapore

40 x 2 40 x 2¼ 40 x 2¼

13-12 8-12 13-8 16-0

– – 14-12 11-12

Santapore Dacca Dumree Cossajura Coincola Flowered with silk Flowered with silk thread Tanjeebs Santose Dacca Dacca Flowered with silk Flowered with silk thread

40 x 3 40 x 2 40 x 2¼ 40 x 2 40 x 2 40 x 1 40 x 1

– 16-0 12-0 13-6 – – 16-0

20-0 13-0 – 12-0 11-12 22-0 15-0

– 8-12 14-12 11-12 22-0 – – – 12-0 – – 15-0

– – 14-12 11-12 13-4 16-0 8-0 – 12-0 – – 15-0

40 x 2¼ 40 x 2¼ 40 x 2 – 40 x 1

7-12 8-8 7-0 – 13-0

7-12 – 7-0 20-0 13-0

– – – – –

6-14 – 7-0 20-0 13-0

Textile Trade and Industry in Bengal Suba | 103

never fixed a definite price of the commodities they ordered at the time of giving out advances and did so only when the products were delivered to them. The European Companies, however, fixed the price according to samples at the time of giving out the dadni and this was a novelty in the organization of commerce in the region. They also sometimes set up establishments for the processing of cloth – especially bleaching and dyeing as also for winding or reeling of silk – employed weavers and artisans purely as wage-workers and even brought throwsters, weavers and painters from Europe who instructed local artisans and weavers in those arts and tried to improve the quality and colour of the piece-goods or raw silk. These establishments no doubt enlarged the range of the manufacturing system in the region, though they were not entirely new institutions in the country. The royal karkhanas were there and though they produced for use rather than for market, they must have served as models for the merchants to engage in such enterprises. There is evidence that such establishments under Indian auspices were operating in the 17th century, though perhaps on a small scale. As early as 1620 the visiting English factors at Patna intended to start a ‘Corconna’ with about a hundred workmen to wind silk,45 obviously following the practice of the local merchants. It is very probable that Bernier referred to such private ‘manufactories’ when he observed that ‘rich merchants and tradesmen . . . pay the workmen rather higher wages’.46 Luillier who visited Bengal in 1702-3 remarked that the big native merchants ‘apart from their large numbers of agents . . . maintain a great number of workers whom they make to work for very little’.47 So it seems that small private manufactories under Indian auspices were already there and perhaps the European activities only extended the range of such establishments. Manuscript Sources and Abbreviations AGD BPC

Accountant General’s Department, Range II, India Office (Commonwealth Relations) Library, London. Bengal Public Consultations, India Office Library.

104 | Companies, Commerce and Merchants DB Despatch Books, India Office-Library. EFI English Factories in India, ed. W. Foster. KA Koloniaal Archief, Algemeen Rijksarchief, The Hague. OC Original Correspondence, India Office Library. Factory Records (India Office Library): Calcutta, Hughli, Miscellaneous

Notes 1. ‘een Indische sijden stof; taf’. 2. D.B., 89, f. 266; 93, ff. 32-6. 3. Irwin’s contention (John Irwin and P. R Schwartz, Studies in IndoEuropean Textile History, p. 45) that ‘Chintz goods were of insignificant importance in Bengal trade’ does not seem to be tenable as in the second decade of the 18th century the English Company exported quite large number of chintz, numerically surpassed only by such cotton piece-goods as baftas, cossaes, emerties, gurrahis, mulmuls, romalls and tanjeebs. In 1711-12 the Company exported 21,397 pieces of chintz at the invoice price of Rs. 85,050. The Dutch Company ordered during the first two decades of the 18th century on an average about 10.000 pieces a year. It is true, however, that Bengal chintz could never compete in importance with those of western India and the Coromandel. 4. Irwin classified the varieties of muslin ‘according to the maximum prices paid’ in the following order of fineness: tanjeebs, mulmuls, nainsooks, terrendums, aliballies, seerhaudconnaes, etc. (op. cit., pp. 49-50). But this classification seems to be completely erroneous if we look at the contracts made by the Company with Calcutta merchants in the first two decades of the 18th century (cf. B.P.C., Range I, 1-4). Seerhaudconnaes which finds sixth place in Irwin’s classification was actually the most expensive and hence, deserves the first place, if, as Irwin claims, maximum prices paid is to be the criterion of fineness of cloth. Both in 1710 and 1711 the Company paid Rs. 26 per piece of seerhaudconnaes (42 co. × 2 co.) while for tanjeebs (Santose, 42 co. × 2¼ co.) the maximum price paid during these years was only Rs. 7¼ per piece (B.P.C. Range I. .2, ff. 11-7, 81a-85a). The price of ordinary tanjeebs whether from Dacca or Santose (sizes varying between 40 co. × 2 co. and 40 co. × 2¼ co.) throughout the second decade of the 18th century ranged between Rs. 6.14 ans and Rs. 8.8 ans while the maximum price paid for flowered tanjeebs woven with silk was only Rs. 20 per piece (40 co. × 2 co.). Even for the mulmuls the Company had to pay more than it did for tanjeebs. The maximum price for

Textile Trade and Industry in Bengal Suba | 105 mulmuls Sevagepore (40 co. × 2¼ co.) was Rs. 8.12 ans and Rs. 16 for mulmuls Dacca (40 co. × 2 co.) and mulmuls Santapore (40 co. × 2¼ co.). And for flowered mulmuls woven with silk the Company paid Rs. 22 per piece (40 co. × 2 co.). So it is clear that mulmuls were more expensive than tanjeebs and as such should precede tanjeebs in order of fineness. Again, in Irwin’s classification even nainsooks and terrendums preceded seerhaudconnaes while actually they should come only after the latter, if maximum price paid is the criterion of fineness. While a piece of seerhaudconnaes (42 co. × 2 co.) cost Rs. 26 in 1710, a piece of tansook or nainsook (42 co. × 2 co.) and terrendum (40 × 2¼ co.) cost only Rs. 18 and Rs. 12.8 ans respectively. 5. O.C:, 19 Feb. 1651, no. 2208, 22; EFI, 1651-4, p. 45; O.C., 25 February 1651, no. 2210, 22; EFI, 1651-4, p. 47. 6. E. Lipson., An Introduction to the Economic History of England, III (Revised Edition, London, 1956), 104. 7. D.B., 28 January 1659, 85, f. 199; EFI, 1655-60, pp. 275-6. 8. D.B., 2 January 1663, 86, f. 202. 9. K. Glamann, Dutch Asiatic Trade, 1620-1740 (The Hague, 1958), p. 142. 10. For description of fashion see Slomann, Bizarre Designs in Silks. 11. J. Cary, A Discourse concerning the East India Trade (London, 1696), p. 4. 12. India Office Tracts, 83, Tract no. 7, p. 50. 13. D.B., 20 May 1681, 89, f. 352. 14. D.B., 5 July 1682, 90, f. 7. 15. D.B., 22 April 1681, 89, f. 331. 16. D.B., 30 December 1681, 89, f. 437. 17. D.B., 5 July 1682, 90, f. 7. 18. Ibid. 19. D.B., 30 October 1684, 90, f. 382. 20. D.B., 27 August 1688, 91, f. 575. 21. The Act of 1700 laid down that ‘from September 29, 1701 all manufactured silks, Bengals and stuffs mixed with silk or herba, of the manufacture of Persia, China or East Indies and all calicoes painted, dyed, printed or stained there which are or shall be imported into this kingdom of England, dominion of Wales and Town of Berwick on Tweed, shall not be worn or otherwise used within this Kingdom and also of £200 penalty on the persons having or selling any of them’, D.B., 93, f. 271. 22. S.A. Khan, East India Trade in the Seventeenth Century (London, 1923). 23. Col. Birch quoted in ibid., p. 163. 24. Quoted ibid., p. 159.

106 | Companies, Commerce and Merchants 25. Childe, ‘The East India Trade in the most National of all Foreign Trades, 1681’, India Office Tracts, 83, Tract no. l, pp. 18-19; Reply to the Allegations of the Turkey Co., quoted in S.A. Khan, op. cit., pp. 158-9. 26. Papillon, The East India Trade a most Profitable Trade to the Kingdom (London, 1677), p. 10. 27. Factory Records, Calcutta, 8, pt. II, f. 149. 28. S. Bhattacharya, The East India Company and the Economy of Bengal (London, 1954), pp. 158-9. 29. Geographical analysis of piece-goods in the Company’s orders for Bengal Areas Kasimbazar

Orders sent out November 1681

Orders sent out August 1682

Orders sent out December 1683

84,100 pieces

222,600 pieces+ 20 bales

208,00 pieces+ 20 bales

Hugli

23,500 pieces

110,200 pieces

158,300 pieces

Balasore

72,500 pieces

162,000 pieces+ 16 bales

158,000 pieces+ 16 bales

Dacca

21,300 pieces

81,500 pieces+ 12 bales

71,500 pieces+ 12 bales

Malda

27,800 pieces

86,500 pieces+ 20 bales

86,500 pieces+ 20 bales

229,200 pieces

662,800 pieces+ 68 bales

682,300 pieces+ 20 bales

Source: Compiled from D.B., 89 and 90.

0. A large flat-bottomed boat. 3 31. R.C. Temple, ed, The Diaries of Streynsham Master, I (London, 1911), 399-400; Factory Records, Misc., xiv, ff. 334-6. 32. Temple, op. cit., i, 139, 399; Factory Records, Misc., xiv, ff. 335-6. 33. Temple, op. cit., i, 139; ii, 11; Factory Records, Misc., xiv, ff. 327-8. 34. Factory Records, Hugli, x, f. 207. 35. O.C., no. 7211, 58. 36. D.B., 3 Feb. 1720, 100, f. 222. 37. See Table 3. 38. Ibid. 39. The Company realized a profit of about 450 per cent from the sale of the piece-goods brought by the ship Tavistock in 1704.5, A.G.D., Range II, 49, ff. 23,55. 40. D.B., 29 November 1670, 87, f. 404. 41. Computed from relevant volumes in A.G.D., Range II. 42. Speaking generally of the textile trade about the close of the 17th century, K. Glamann observes: ‘The Dutch Company still maintained its leading position but it was a near thing. The competition was severe’. For Dutch export see relevant volumes in K.A.

Textile Trade and Industry in Bengal Suba | 107 43. 44. 45. 46.

See Table 5.2. Irwin, op. cit., pp. 31-2. EFI, 1618-21, pp. 197-8. F. Bernier, Travels in the Mughal Empire, 1656-68, tr., A. Constable, 2nd edn, revised by V.A. Smith (London, 1916), pp. 228-9. 47. Quoted in Indrani Ray, ‘The French Company and the Merchants of Bengal (1680-1730)’, The Indian Economic and Social History Review, VIII, no. l (March 1971), 50.

chapter 6

Bengal Merchants and Commercial Organisation in the Second Half of the Seventeenth Century*

An attempt is made in this paper to analyse the trading activities of the Bengal merchants and examine the nature and character of their commercial organisation vis-à-vis the English East India Company trading in Bengal. The appearance of the European Companies gave rise to a new situation in the commercial life of Bengal in the second half of the seventeenth century. These Companies entered the market as buyers and sellers of goods, and created problems in their supply and delivery. There is evidence to show that the quantities of goods entering trade flows were now greater than before, and the increased demand put great pressure on supplies. Again, the Bengal merchants, who had a long experience of dealing with individual traders from various parts of Asia, had to deal for the first time with foreign Companies of monopolistic merchant capital during this period. It will be our aim to study the response of the traditional merchants in their methods and organisation of trade to this new situation. The activities of the Bengal merchants had certain distinct features. They acted as brokers to the European Companies which could not deal directly with the producers for provision of goods for Europe. But they were not merely brokers but also traders operating, exclusively with their own capital. All of them were primarily merchants – buyers and sellers of different commodi*Bengal Past and Present, vol. XC, part II, sr. no. 170, July-December 1971, pp. 184-216.

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ties, and their business extended to any class of goods which was expected to yield a profit. They also acted simultaneously as shroffs or money-changers and bankers, received deposits and arranged remittances by means of bills of exchange or letters of credit on their various agents in the different trade marts of Bengal. Occasionally they served as middlemen, specially in the transactions between the European Companies and the ruling class. These Companies, on their part, on various occasions made use of the merchants’ influence with the ruling nobility to win favour or privileges for them. But despite that, the European Companies most often mistook the Bengal merchants as mere brokers and tried, though unsuccessfully, to coerce them into submission following trade disputes. Time and again they tried to break the rings and the bargaining position of the Bengal merchants, specially their monopolistic designs but only in vain. Throughout the period the Bengal merchants maintained their credit and influence quite independent of the European Companies. The term ‘Bengal merchants’ is used here in a wide sense and includes all the indigenous merchants trading in Bengal as opposed to the Europeans, and geographically Bengal means the Mughal Suba of Bengal comprising the present provinces of Bengal (East and West), Bihar and Orissa. We shall discuss the subject under the following heads – (i) position of English, trade in Bengal; (ii) Bengal merchants and the English East India Company; (iii) Bengal merchants’ overseas trade; (iv) some estimate of their wealth; and (v) finally, our conclusions. Position of English Trade in Bengal It will be helpful to begin with a brief description of the foundation and early development of English trade in Bengal, and take a quick glance at its main features. During the second half of the 17th century the European Companies, mainly the Dutch and the English, built up an extensive commercial complex in Bengal. Though the English trade in Bengal began as early as 1633 through Balasore, it was only after the foundation of the Hugli

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factory that the English started trading there on a large scale. By the ‘sixties of the 17th century they had already; established inland factories at Kasimbazar, Patna and Dacca, besides those at Balasore and Hugli, and in 1676 they had founded the Malda factory.1 From the very beginning, the factors of the Company were hopeful of a lucrative trade in Bengal. They wrote home in the late ‘fifties – ‘Bengal is a rich province. Raw silk is abundant. The taffaties are various and fine. The saltpetre is cheap and of the best quality. . . . Our operations are going so extensive that we shall be obliged to build new and large warehouses.’2 Indeed the trade of the Company in Bengal expanded in rapid strides. The investment of the Company in Bengal in 1669 was £34,000 rising to £85,000 in 1675 while in 1681 it went up to £150,000 and reached a peak of £250,000 in 1682.3 These figures indicate how rapidly the trade of the Company increased in Bengal. In fact, in the last quarter of the century, its Bengal trade assumed an increasing importance in the total trade complex of the English Company. Political instability, Maratha threat and the oppressions of local governors in Surat, and local feuds and internecine wars in Caromandel injected an element of uncertainty into the trade of these two centres and were partly responsible for a corresponding stimulus to trade in Bengal which enjoyed relative political stability. Indeed the importance of Bengal trade in the second half of the 17th century lay in the fact that it was a ‘rising trade’. The chief preoccupation of the English Company in Bengal was to provide investment for Europe-trade, though it derived a lucrative profit from inter-Asiatic trade directed from Bengal. Thus both for European trade and inter-Asiatic trade the Company had to make a large annual investment. The commodities mostly in demand throughout the period comprised silk and cotton piece-goods, raw silk, cotton and floretta yarn, saltpetre, sticklac, tincall and sugar (mainly for Surat and Persia). To pay for these goods the Company imported different types of woollen cloth – such as broadcloth, cloth rashes, perpetuanoes – lead, copper, vermilion, quicksilver and iron. But these imports from Europe had only a limited market in Bengal – a feature shared

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by the rest of India – and hence in order to finance the increasing volume of exports from Bengal, the Company had to import bullion which it sold in the local market or, as in a later period, had them coined in local mints. Sometimes when the shipment of goods and bullion was late – which happened most frequently – the Company borrowed money from the indigenous merchants. Throughout the period, a chronic shortage of fund for making investments in the proper time of the year forced the Company’s servants to borrow money locally. The general pattern of the Company’s organisation of trade in Bengal was that in every factory it had several merchants or brokers of whom one acted as the chief and through whom the Company transacted its entire business in the country. It is against this background – the general trade complex of the English East India Company – that we shall analyse the position and activities of the Bengal merchants. Bengal Merchants and the English East India Company In this section we shall discuss the activities of several important merchants in the different trade marts of Bengal, especially with reference to their relation and transactions with the English East India Company. Every important merchant, it appears, had one main centre of his activities though he managed his commercial organisation through a network of gomastas or agents in almost all the trade centres of Bengal. The two Balasore merchants, Khemchand and Chintaman Shah, played a significant role in the commercial life of Bengal in the second half of the 17th century. These two merchants were generally referred to in the records of the English Company as ‘Chimcham’ and ‘Chintamund Saw’. They were the most influential merchants at Balasore on their own account, taking a prominent part both in the internal and external trade of the country, sometimes trading jointly and at other times on separate accounts. For many years they were the principal brokers to the English Company at Balasore for providing commodities for the investment of the Company. But their role as independent traders and merchants was no less important than that as

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brokers to the Company. Perhaps that was the reason why they could bargain effectively with the Company, even in the face of the threat of being deprived of their position as chief brokers. Of the two merchants, Khemchand seems to have enjoyed greater repute and better position than his partner and colleague Chintaman. As early as 1669 Khemchand entered into an engagement to supply goods for the Company’s investment.4 Generally this investment at Balasore at this period consisted mainly of such piece-goods as sannoes, nillaes and ginghams, and occasionally, if cheap and of good quality, doreas and cossaes also.5 Khemchand was mentioned in the records of June that year as the ‘chief merchant of Balasore’. But soon the Company became concerned at the high rates charged by him and the Hugli factors wrote in October 1670 that they endeavoured ‘to redress by drawing the provision out of Khemchand’s hands whom we find not fitting to be much longer employed in your business’.6 However he still enjoyed in 1672 the title of chief broker and merchant to the Company. In that year when Safsi Khan succeeded Safi Khan as the governor of Orissa, Khemchand and two other merchants, Haricharan and Jairaj Shah, accompanied Boremull [Puranmall?] to Cuttack to obtain a parwana for the English trade in that province.7 The Balasore merchants generally provided the commodities for the Company’s investment accepting payment half in Europe-goods and half in ready money.8 But sometimes influential merchants would not provide goods for investment without an advance in cash. Such a situation arose in 1673 when the financial position of the Company at Balasore was precarious throughout the year. On the one hand, the provision of cargo for an unusually large number of ships which had arrived at the end of the previous year9 had depleted the sources of the Balasore factory, on the other, due to the Dutch war, no money was available on bills of exchange from the Dutch who usually provided funds to the English Company in this way. Khemchand was fully aware of the financial difficulties of the English and was unwilling to provide any investment for the Company without an advance in cash. The disappointed factors reported

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– ‘Khemchand keeps aloof off and seeing we have no money to advance here is unwilling to take off our goods.’10 However, the Company was finally able to barter some of the lead and broadcloth for piece-goods but this resulted in a financial loss of about 20 per cent for the Company.’11 Khemchand was seldom subservient to the Company and owned his position as a merchant and banker quite independent of the English. Streynsham Master, who was in Bengal during 1676-80 to reorganise the Company’s trade, reported that Khemchand and Chintaman were the only ‘money’d men amongst the merchants’ at Balasore and that there were ‘no other merchants so able and capable to procure the said goods or that can undertake them cheaper’.12 He stated on 30 August 1676 that Khemchand was ‘very high and indifferent whether he dealt with the Company or not.’13 However, in order to prevent bad debts by which the Company suffered considerably at Balasore, Master entered into a contract with the Balasore merchants in which he insisted that for all money ‘advanced on account’, the leading merchants, Khemchand and Chintaman Shah, should be mutual securities, both for their own transactions as well as those of their less wealthy colleagues. According to this agreement, the investment was to be divided into ten parts, viz. four parts to be assigned to Khemchand, two to Chintaman and the remaining four among the smaller merchants at the joint discretion of the chief of the factory, Khemchand and Chintaman. These merchants obliged themselves, in return for a full advance on the whole investment, to repay any arrear within a month after the departure of the ships for Europe, and in default, to pay 1½ per cent interest until the arrears were settled. Failure to supply goods contracted for entailed forfeiture of the merchant’s share or shares, as the case might be, in the investment. The contract was to remain in force during the Company’s pleasure ‘unless the merchants through their defaults shall cause a breach thereof.’14 A careful analysis of this contract between the Company and the Balasore merchants brings to light certain interesting points. Khemchand was, with little doubt, the most influential merchant and the chief broker to the Company at Balasore and was

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responsible for providing 40 per cent of the Company’s investment. Chintaman was only next to Khemchand in influence and credit providing 20 per cent of the investment. In the selection of other merchants for providing investment, both Khemchand and Chintaman, besides the chief of the factory, had an effective voice. But they had no right to terminate the contract, even if they desired to do so, and were thus tied to the Company. Thus Master sought to protect the Company by this contract from loss through ‘persons of small or no estates employed in the investments’ by taking security of Khemchand and Chintaman on behalf of other merchants. Despite the contract, Khemchand and Chintaman could exert their independence, as we find, they refused, to the surprise of the Company’s factors, to stand security for three merchants ‘since their affairs were esteemed desperate’.15 Again they declined to give security for some merchants fearing the latter would supply inferior goods. The Hugli Council appreciated this stand of Khemchand and Chintaman which is evident from their letter: ‘We admire Khemchand and Chintaman should refuse to be security for those persons who provide any goods of the investment enordered with you. . . . The security deseired, you may tell, was for persons, which, when they have considered, we suppose, they will not be so scrupulous as you may now represent.’16 The Hugli Council gave permission to Khemchand and his fellow merchants to build a warehouse in the Balasore factory ‘at their own charge’ for various goods for investment to be stored in ‘until they were priced’. The main condition attached by the Council for building this warehouse was that the merchants had to do it in the Company’s name, and that they could bring or put no other goods therein except in case of ‘very great exigency and then to advise and have licence from Hugli for their so doing.’17 Khemchand not only provided investment for the English but sometimes used to purchase Europe-goods from the Company for trading in those articles in the country. At one time he proposed that he might be allowed to buy entire supply of broadcloth – which formed quite a substantial part of the Company’s imports into Bengal – imported yearly by the English. He

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made this proposal to the Company as early as 1675 but nothing seems to have come out of it, and in 1677 the Company rejected his offer and entered into a contract with Sukanand Shah, an eminent merchant and shroff at Kasimbazar, who agreed to buy all the broadcloth imported into Bengal.18 Khemchand, however, had to accept Europe-goods in part payment for the Company’s investment and he used to sell these commodities in the inland markets,19 though sometimes the ‘clogging of them’ in the hands of the Indian merchants (as these articles had little sale in Bengal) was a positive deterrent for their continued sale to the traders by the Company. That these two Balasore merchants were very influential is evident from the fact that they acted as brokers between the Company and the prospective buyers, specially when the latter were high officials of the State. In 1673, in order to avoid difficulties in financial transaction, the Hugli Council instructed Hall at Balasore that if Malik Qasem, the then faujdar of Balasore, wanted to buy guns from the Company, he must pay cash, or Khemchand should buy them for him. The Company decided that Khemchand could buy as many guns as he wanted at eight rupees per maund but Raja Mansingh, another prospective customer for whom Khemchand was acting as a broker, would have to pay nine rupees per maund.20 In 1679 Chintaman approached the Balasore factors with a letter from Malik Qasem desiring to provide the latter with a quantity of iron ordnance. The factors declined to deal with the governor except through the brokers and finally transacted the business through Khemchand and Chintaman.21 In the same year in regard to a dispute with the Dutch concerning a house and a piece of ground at Balasore, the factors were directed to get the ‘quanungo’s chaup’, if necessary, by means of Khemchand or Kalyan Roy.22 Khemchand and his fellow merchants often formed rings and bargained effectively with the Company which had to yield, though very reluctantly, to their terms. In 1680, despite all persuasion and threats by the Company, the merchants ‘obstinately refused to give any more than 208 (rupees) for 100 p. Rials . . . unanimously joining together and with one consent declaring

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as much . . .’.23 The Balasore merchants were shrewd enough to realise that time was on their side and that the Company would have to yield if it did not want to lose the full investment for the year. The Company ultimately surrendered with the following remark – ‘. . . delay in a business of such import being of consequence, we having well weighted the thing . . . (as) the investment of this year enordered on Balasore may be much retrenched, if not wholly lost, those people appearing resolute at this pinch of time as well knowing our necessity of taking their goods, we judged best to give order. . . .’24 The Company’s investment at Balasore for 1681, mainly in nillaes, ginghams and sannoes, amounted to Rs, 138,000,25 An advance of Rs. 25,000 was paid to the merchants and distributed among them according to their respective shares in the following manner:26 Khemchand Nimdas Hira Shah Goculchand Syed Nyamatullah Enayat Khan Gangaram Sibram Bihary Nilu Shah Bhikary Shah

Rs. 12,000 Rs. 1,255 Rs. 828 Rs. 1,875 Rs. 875 Rs. 875 Rs. 1,656 Rs. 575 Rs. 575 Rs. 575 Rs. 1,011 Rs. 25,000

It is clear from the above list that Khemchand was still by far the most influential merchant at Balasore providing 48 per cent of the total investment of the Company there. However, when the Company decided to enlarge the investment for that year by an additional amount of Rs. 35,000, Chintaman Shah (who was excluded earlier) was allowed to have a share in the investment, but it was small, and though greater than that of other merchants, not comparable at all to that of Khemchand.27 Chintaman Shah, who was even in 1679 referred to as ‘one of the Company’s chief merchants’,28 received a severe reprimand

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in July 1680 from the Hugli Council for ‘boggling’ about a debt he owed to the Company.29 He was excluded from any share in the investment for 1681 for three reasons – his dealing with the Interlopers, his being in ‘serious debt’ (as Sir James Fawcett says), and his engagement with nawab Rashid Khan.30 The Balasore Consultation of 21 June 1681 states that the Hugli Council gave ‘express order’ not to employ Chintaman Shah anymore as he was acting for the nawab. This seems a curious and small reason for his exclusion, the Company generally considering trade with rival English Interlopers or bad debts as the principal reason for discontinuing the services of a particular broker. The actual debt owed by Chintaman to the Company could hardly be considered serious, since it stood in the Company’s book at Rs. 5,729 : 3 : 4 only.31 Khemchand, however, came forward and put pressure on the Company by saying that without Chintaman’s help he would not be able to go through with the investment, and he also offered to stand security for his colleague.32 Chintaman, too, as security for his debt gave an obligation for Rs. 5,000 owing to him by the factor of the King of Siam,33 the interest of which stood at about 600 rupees. The Hugli Council left the whole matter to the Balasore factors ‘who seemed willing to give another imprest to Chintaman’.34 It is interesting to note that the Company at this time began to realise the disadvantages of depending too much on the syndicate formed by Khemchand, Chintaman and their fellow merchants for providing Company’s investment at Balasore. Early in 1679 Mathias Vincent, the Agent in Hugli, wrote that the Balasore goods would not come down to their usual prices until Khemchand and ‘those that hang on him or side with him would be thrown off’.35 In 1681 the Hugli Council resolved that the best way of providing the investment at Balasore was not by ‘these great merchants.’36 As a result and in accordance with the Court’s order to encourage and employ new merchants ‘who depend not on any of the knott of Khemchand etc.’,37 the Balasore factors entered into a contract on 27 September 1681 with ‘Rewadass & Company’ for providing such goods as were wanting to complete

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the full investment for the year and distributed an advance of Rs. 20,000 amongst these merchants in the following manner38 – Rewadass Bulchund Shyamdas Abhiram

Rs. 5,500 Rs. 3,500 Rs. 5,750 Rs. 5,250 Rs. 20,000

The Hugli Council was glad that ‘Rewadass & Company’ agreed to supply goods at a more reasonable rate than that of Khemchand and his fellow merchants. This belied the apprehension of the Balasore factors that the merchants there were too afraid of Khemchand to enter into a separate contract with the Company.39 However, it did not diminish in any way the influence and position of Khemchand and Chintaman as principal merchants of Balasore. Even in 1682 Khemchand was still in a position to dictate his terms to the Company, though by then, it appears, he had lost the title of chief merchant. The investment for that year amounting to Rs. 198,700 was proportioned by the Hugli Council in the following manner – Khemchand and Chintaman Rs. 55,000 (Chintaman’s share being Rs. 20,000), Rewadass Mahta and Mahmud Hussain Rs. 37,500, Rajaramdas Rs. 21,000, Hira Shah Rs. 20,000 and the rest among 13 other merchants.40 Khemchand immediately declared that he would not accept any share in the investment unless he might be allowed such a part of it as in ‘proportion to his late title of chief merchant’ and that he would receive no ‘imprest’ money nor make any provision of goods for the Company.41 The Hugli Council directed the Balasore factors to distribute Khemchand’s share, in case of his refusal to accept it, amongst others or new merchants, and they resolved not to have a chief merchant in any factory ‘on whom the rest shall have dependence’.42 The factors at Balasore were not happy with the decision of the Hugli Council. They wrote back that the resolution would be of ‘ill consequence and much to the prejudice of the Company’s affairs’. They reported that a ship on private account had already arrived at Balasore while several others were expected and that

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Khemchand still persisted in his refusal knowing well he would find other customers (e.g. the Interlopers) for his goods. Actually, as the factors stated, he had made an investment for rupees one lakh and sent gomastas to different inland marts to secure as many weavers as they could and purchase all the goods ‘they meet with’. The Balasore factors concluded – ‘it will be very material and requisite he be continued in this year’s business, if not, we doubt the moity of the goods enordered here will be not got in’.43 By 1684, however, Khemchand’s position was definitely on the wane, at least, in the eyes of the Company’s chief factor at Balasore, who stigmatised him as ‘an encourager of Interlopers’, ‘a base unworthy person’, ‘not worth a cowry of our Company’s investment’, and that he ‘fell short in the investment which is considerable’.44 As such, it appears, he was replaced by Chintaman Shah as the Company’s chief merchant.45 Chintaman began to gain confidence of the Company from, 1682. In that year his gomasta lent Rs. 10,000 to the Company at Malda at 1 per cent interest – per mensem (general rate being 1¼ to 1½ per cent p.m.). In March 1684 the Company procured bills of exchange from both Khemchand and Chintaman, in each case amounting to Rs. 8,500.46 Both Khemchand and Chintaman Shah had regular transactions with the Interlopers who visited Balasore during this period, albeit the Company’s warning ‘not to have any dealings’ with them, directly or indirectly, under ‘pain of incurring the Honourable Company’s displeasure and forfeiting their employments’.47 We have already noticed that Khemchand was branded as an ‘encourager of Interlopers’, and perhaps that was the reason for his losing the title of chief merchant of the Company at Balasore. Time and again the Company tried to dissociate the Bengal merchants from the Interlopers but with little success. In 1683 the Hugli Council directed the Balasore factors not to fail in reasoning and confirming their promises to Khemchand and the rest of the merchants that they would have ‘considerable and sufficient’ investment for that year from the Company, and to impress upon them that it would be an ‘everlasting discredit to

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leave their old masters, by whose employments they have most of them got their estates’.48 In another instruction of the same year, the Balasore factors were asked to be ‘frequent in minding’ Khemchand and Chintaman of their promise and obligations not to trade with the Interlopers ‘in hopes that shame may work upon them, esteeming them persons that make so great scruple to break through all obligations when they stand in competition with their interest’.49 But all these efforts were to prove ineffective. The Balasore merchants never refrained from their dealings with the Interlopers. Even in 1684 Chintaman’s gomasta was found buying a considerable quantity of piece-goods in Dacca, presumably for supplying the Interloping ships and to the great prejudice of the Company’s affairs. Though the Hugli Council declared that they would not encourage ‘such villains in making preparations for Interlopers’, they could hardly prevent these transactions between the Bengal merchants and the Interlopers.50 Despite the pronounced displeasure of the Company with the activities of Khemchand and Chintaman, it could hardly dispense with the services of these merchants. Their assistance was essential not only for providing the full investment at Balasore, but for keeping up good relations with the ruling class, as these merchants had great influence on the latter. In April 1685, the Hugli Council directed the chief of the Balasore factory to employ Chintaman Shah to negotiate with Mahmud Khan and thus to please Malik Burcoordar, the faujdar of Hugli, who seemed to have become incensed with the Company at the time. Again in that very year Khemchand and Chintaman were employed ‘as Company’s merchants’ to clear up an affair with the government ‘for peace sake’.51 By the close of the ‘eighties of the century, both these merchants had lost their influence and power to a great extent. Khemchand died in November 168752 and the Company took summary proceedings against his partner and colleague Chintaman Shah following doubts about his solvency. Chintaman was alleged to be considerably indebted to the Company and there being little likelihood of recovering his debt, the Company decided to recover it by seizing his ships. Accordingly, when a

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ship arrived in November 1686, of which Chintaman was a part owner, the other being Khemchand, Captain Nicholson captured it.53 The Balasore factors wrote in 1687 that Chintaman was not ‘worth anything’.54 But it appears from later records that until his death, Chintaman traded considerably on his own account. In 1691 he offered to buy the English ship Bengal Merchant for Rs. 17,000.55 In the same year, at least, two of his ships sailed on trading voyages to Tenasserim and the Maldives.56 Even in 1695 his ship Fatechund ‘burthen 10,000 mds.’ sailed for the Maldives.57 After his death in 1695, the Company put a peon (on the pretext of a debt amounting to Rs. 10,138 which Chintaman owed to the Company) on his ship which came from the Maldives with Rs. 16,000 worth of cowries, and several other commodities, thus preventing its sale or letting on freight. His son-in-law, Ram Roy, pleaded on the basis of his papers that Chintaman’s loss through the seizure of his ships and their cargoes by the Company during the war in 1686 was much more than the debt he owed. However, the Company found other creditors of Chintaman clamouring for satisfaction out of the ship and finally made a settlement with Ram Roy who agreed to pay Rs. 700 yearly until the debt was cleared.58 Turning to Hugli, we find Mathuradas was the chief merchant of the Company there at least from the ‘seventies of the century though his name as chief merchant can only be traced from 1680 onwards. It is apparent from his own statement that he rose into prominence as a merchant through his dealings with the Company.59 Like Khemchand and Chintaman at Balasore, he played a significant role in the commercial life of Bengal not only as the chief merchant of the Company but as the most influential merchant on his own account in Hugli. Like other Bengal merchants of the time, he handled a wide variety of commodities, buying Europe-goods from the Company and also providing investment for Europe. In 1679 the Company made a contract with him for 6,000 pieces of romalls, valued at Rs. 30,000 payable to him half in money and half in goods. In the same year he bought 1,500 tolas of gold from the company for about Rs. 20,000.60 Next year the Company agreed to sell him 13 chests of treasure

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(11 chests of fine bar silver and 2 of rials valued at about 1 lakh of rupees) on the same terms and rates as in the contract with Sukanand Shah of Kasimbazar.61 Like Khemchand and Chintaman Shah, Mathuradas was not simply a broker to the English Company but a merchant of considerable credit and influence, quite independent of the Company. He traded on his own account as also with other Europeans, notably the French and the Interlopers. He operated his business, much to the annoyance of the English Company, with monopolistic designs. The Kasimbazar factors complained in 1682 that Mathuradas stayed there for about a month giving considerable sum of money for raw silk and even endeavoured to entice away some of the Company’s picars.62 In the same year they reported that the picars demanded unreasonable prices and two of their ringleaders, Chaturmal and Govindji in collusion with Mathuradas, succeeded in luring away a great number of picars who promised not to deal with the Company and pay a penalty of Rs. 1,000 in case of any breach therein. Mathuradas offered these picars, as the factors reported, ‘a great price’.63 The Court directed the Bengal Council to free itself from the monopolising clutches of Mathuradas and others by forming a joint stock of a hundred merchants but the Company failed to organise such a joint stock in Bengal.64 In 1684 Mathuradas, still the chief merchant of the Company, was found buying up cloth around Dacca, much to the displeasure and hindrance of the Company.65 The Company was further displeased with him when he was found very ‘importunate’ to get back his principal of Rs. 14,000 with interest from the Company. As a result perhaps, when the Company resettled in Bengal after a brief withdrawal following the war of 1686-88, it tried to get rid of Mathuradas. Job Charnock, the agent in Bengal, wrote to Stanley in Hugli to contract with Sudanand, Chaturmal and other merchants and not ‘to have anything to do with Mathura, that notorious villain’, and to ‘utterly reject him’.66 He advised Charles Eyre at Dacca to procure from the nawab ‘as much as possible that he (Mathuradas) may be discountenanced in such a manner as to leave Bengal’.67 It appears that the English received

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a parwana from the nawab on Ali Akbar, the faujdar of Hugli, warning Mathuradas that if he indulged in future in his ‘ill behaviour’ to the English, it would result in his total expulsion from the country. But it was hardly put into effect, the obvious reason being the credit and influence enjoyed by Mathuradas.68 The faujdar, as the factors reported, was severely displeased with the parwana and wrote to the diwan that a person who brought Rs. 18,000 to the King’s treasury could hardly be turned out of the country.69 The Company also soon realised that it was not possible to procure full investment in Bengal without the cooperation of Mathuradas who by 1691 had become one of the most influential merchants in Hugli. The Court directed the Bengal agency to adjust all differences with Mathuradas and to hold a ‘fair correspondence’ with him. They further wrote that they had reports not only from Englishmen but from Indians and Armenians that he was ‘completely rich’ and ‘his masters in Dacca are men of very great estates, money’d men and who can upon occasion take up what money they please at small rates under 6 per cent per annum and make very great investments beforehand in whatever goods you shall order either at Malda, Dacca, Patna or Benaras’. The Company knew it could not buy commodities from Mathuradas or cause him to provide goods altogether so cheap as it could by giving out money in advance to picars. But now as the Bengal goods were ‘fetching’ a very good price in England and the Continent, the Company’s main concern was for a greater investment, and therefore it asked the Bengal Council to enlarge investment even by allowing Mathuradas 10 to 12 per cent commission if he would provide sufficient commodities for the Company.70 In August 1693, Mathuradas visited Sutanuti factory and undertook to provide commodities worth more than rupees one lakh with his own money.71 Later in that year the Court directed the Bengal Council to ask Mathuradas to provide as much raw silk as he could, allowing him ‘competent profit to his content’, it (silk) being ‘the very best commodity that could be sent from India’.72 Apart from Mathuradas’ monopolistic designs, the great concern of the Company was his dealings with the Interlopers and

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the French who frequented Bengal during this period. Occasionally, he acted as broker to the French Company also.73 It can be assumed that his attempt to buy raw silk or piece-goods in the inland marts was motivated mainly by the desire to supply the Interlopers and the French. In fact, he was the mainstay of the Interlopers in Bengal as is evident from the Court’s letter in 1693 – ‘. . . no Interloper, if they could (meaning, if the Bengal Council could reconcile Mathuradas), would adventure to Bengal, their hopes and confidence of making a voyage being singly in that man’. In order to frustrate the activities of the Interlopers in Bengal, the Court gave instruction to settle all quarrels with Mathuradas and reconcile him by allowing a substantial profit in his investment for the Company.74 Mathuradas was a typically shrewd merchant, always aiming at maximum bargains, even ready to go back on his words when there was a chance of a greater profit. The Bengal Council reported in 1693 that though he had entered into an agreement with Agent Ellis to provide an investment for Rs. 70,000, with the arrival of the French as prospective buyers, Mathuradas informed the Council that he was not going to comply with the contract. Thomas Pitt, the great Interloper (who later on became the governor of Fort St. George) was a friend of Mathuradas.75 Though Mathuradas was the chief merchant of the English Company in Hugli and provided a large part of the Company’s investment, he was not in the least subservient to it. When implored by the Company not to deal with the Interlopers, he shrewdly replied that being a merchant in the ‘King’s country’, he was free to correspond and deal with anyone he liked.76 The Company, however, tried repeatedly to dissociate him from the Interlopers but with little success. A very interesting report in this respect was sent by the Bengal Council in 1694 which is worth quoting here at length: . . . We sent for Mathuradas from Hugli and made him many fair promises by way [of] encouragement in order to the withdrawing him from the Interlopers, telling him how that he had no occasion to creep to such a sort of people whose residence and trade was but for a year, that our house was the most safe and securest hold and more for his

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reputation and credit to be concerned with so ancient a people as the Rt. Hon’ble Company who were able to protect him from any affront or injury he might at one time or other receive from the government,77 that we would always keep his hands employed and be concerned with him so far as he could . . . manage . . . provided he would not deal with the Interlopers, Your Honours’ enemies and many more expressions to this effect, upon which he made many solemn declarations that he knew no better house than ours and that his first rise was from us whom he would serve to the utmost of his power, that he had no occasion to serve a new people’s interest when the old was so potent and fresh in his memory, that he would endeavour to disengage himself from the Interlopers as soon as possible, and much more to this effect was his disclosure but notwithstanding all his promises, we cannot but acquaint Your Honours he was proved false to your interest by continually corresponding with and assisting the Interlopers in all their designs . . . he is a person whose covetousness blinds all other considerations whatever which makes him rich at all. . . .78

As the Company could not dispense with the services of Mathuradas, the Bengal Council continued to carry on as friendly a correspondence with him as possible, and at the beginning of 1694 gaye him an advance for goods amounting to Rs. 170,000.79 The Court of Directors advised the Bengal Council in 1696 that in spite of all the allegations against Mathuradas being true, they should keep him in employment as ‘he has a great stock and potent friends’ and asked them to send his goods with a distinctive mark so that the Company could know for itself the quality of goods supplied by him. In the same letter, however, they pointed out that the last consignment of goods delivered by him to Captain Dorill was ‘very good and some of such sort of which our factors could never send’.80 The question might well be asked here why Mathuradas was suddenly considered so indispensable to the Company after all the disparaging remarks about him earlier. The obvious answer is that the Company knew he was a merchant of very large credit and influence who could assist it not only for providing investment for Europe but also supplying money at low rates of interest. In 1696 the Directors wrote to Bengal – ‘If your stock should fall short, we may reasonably expect that Mathuradas

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. . . should be willing to assist you at moderate interest, we being well assured he can have credit of the great men in Dacca at 4 per cent per annum.’81 Perhaps this was why the Company could not get rid of him. He even attempted to monopolise the sale of some of the Europe-commodities imported into Bengal. Quite a few times he offered to buy all the broadcloth imported annually by the Company. In 1698 he was about to enter into a contract with the Company to buy silver worth rupees two lakhs but ultimately abandoned it fearing exaction from the nawab.82 But the Company was gradually becoming more concerned at his ‘monopolising temper’ and the hindrance created by his formation of ‘rings’ with other merchants. It seems that the Bengal Council was really exasperated when in 1699 Mathuradas, in collusion with two other eminent merchants, Udaycharan and Goculchand, refused to accept the Company’s dadney or advance, unless his two compatriots Nainsook and Prananath (who were debtors to the Company) were reinstated as merchants to the Company, and Golabray (whose father was alleged to be his enemy) was turned out of the Company’s service. ‘This insolence in Mathuradas,’ the Calcutta factors reported, ‘is owing greatly to the countenance he hath from this Agency, for upon Captain Dorill’s arrival he was at the brink of destruction, his credit ruined, and could not have subsisted above a year longer, but the erroneous account that was given of him to the Rt. Hon’ble Company gained their esteem and got him credit again after he received their imprest money.’83 The Company, however, did not comply with his demands and when the Council found that he had made no application for dadney, divided the ‘imprest’ money designed for him to the amount of Rs. 250,000 amongst other merchants.84 But soon Mathuradas reconciled himself with the Company and received dadney for investment amounting to Rs. 100,000.85 In 1700 Mathuradas seemed to have been assisting the New Company more actively and stood security for it for the payment of customs if it failed to procure the Emperor’s farman for a free trade in Bengal.86 Early in that year, following his failure to obtain a nishan from the

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Prince, the Old Company’s factors reported that he had become ‘the ridicule of the province’, ‘his reputation sunk’ and that he became entirely the New Company’s ‘creature’.87 But by 1702, as the Fort William General Letter reports, Mathuradas was ‘grown very old and going off the stage who hath been a bird raised up to pick at your own eyes’. It adds further – ‘Although he is grown very rich since the New Company’s settling in Hugli, yet without the interest of the English within five years would be brought to as low an ebb as he was on Captain Dorill’s arrival.’88 In that very year in which this letter was written, he was turned out of the New Company’s services and his brother Bullubdas was replaced by Jaykrishna as broker.89 But this apparently did no harm to the trading activities of Mathuradas’ firm. With his brother, two sons – Bittaldas and Dwarakadas – and two other friends, Paran and Gossairam, he traded considerably maintaining gomastas in all the trading centres of Bengal. Even in 1703, after the union of the two Companies, the Court of Directors were still so apprehensive of his credit and influence that they wrote . . . ‘his monopolising temper hath been such as to make us look upon him [as] dangerous.’90 Mathuradas’ real crisis and actual ruin came not from the withdrawal of the patronage of the English Company, but from his speculation in revenue farming. The English factors reported in 1705 – ‘. . . that family has suffered much by Mathuradas, his engagement with government and farming revenues which involved them in many troubles from which he has not been able to free himself perfectly though his endeavours have cost him a great expense of time and money’. He died in 1706, ‘worth but little money’ and it was said that his family ‘was near ruined before he died by his engagement to the government.’91 Among the Kasimbazar merchants, the two most influential ones were Sukanand and Chaturmal Shah. Both of them, it appears, were mainly shroffs or bankers, though more frequently than not, they traded in other commodities as well and provided part of the Company’s investment in Bengal. The names of both these merchants were mentioned frequently in the records of the

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Company as eminent merchants of Kasimbazar. Before his death in 1680, Sukanand Shah was definitely a merchant of greater influence and credit than Chaturmal. He used to buy quite a substantial part of the treasure imported by the Company and most often lent money to the Company for its investment in different factories. He performed the function of a banker too, issuing bills of exchange or letters of credit in favour of the Company whenever it needed them. A few examples of his transactions of this nature with the Company can be cited here. In May 1677, the Company procured from him letters of credit on his gomasta at Patna to pay Job Charnock what money he required at the usual rate of interest. In March 1679, the English factors borrowed Rs. 30,000 from him for sending to Patna. In October that year he issued bills of exchange for Rs. 20,000 each to Patna and Dacca in favour of the Company. Next year his gomasta Paramanand Shah gave Rs. 20,000 to the factory at Malda and the Company further requested Sukanand to supply it with more money.92 That he was a great shroff on whom the Company relied greatly is evident from a Kasimbazar letter – ‘We finding no market for our treasure unless dispose of it underrate much to the disadvantage of the Honourable Company, our chief and ablest shroff [Sukanand] being dead.’93 Though mainly a shroff, Sukanand traded in other commodities as well, sometimes making attempts at monopoly, especially of Europe-goods imported into Bengal. In 1677 he proposed to buy all the broadcloth and silver brought by the Company yearly to Bengal. Though Khemchand had made the same proposal to buy broadcloth two years earlier, the Company ultimately negotiated with Sukanand and agreed to sell all its broadcloth to him. But he did not get the exclusive monopoly to buy all the silver imported by the Company. As late as 1680, a few days before his death, he again made an offer for the same but only in vian.94 Chaturmal was another eminent shroff at Kasimbazar who had substantial transactions with the Company. From time to time he used to buy treasure from the Company and sometimes managed the affairs of the Company at the mint at Rajmahal. He

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had an efficient gomasta there whose help was frequently sought by the Company.95 His son Domurmal and several gomastas like Udaychand and Fatehchand helped him in his multifarious trading operations. Occasionally he used to buy lead, tin, copper plates etc. from the Company whenever he found the transaction profitable.96 He had close correspondence with Mathuradas and seems to have assisted the latter in his various investments. We have noticed earlier that the Company had complained once that Chaturmal and Mathuradas were the ringleaders who incited the silk picars at Kasimbazar to refuse to deliver silk at the Company’s price and offered them lucrative prices if sold to Mathuradas. Throughout the period the rings formed by the merchants and their bargaining position were great concern for the Company. Despite the fact that they also acted as brokers to the Company, the Bengal merchants could effectively bargain with the Company which in most cases – as we have seen earlier – had to submit to their terms. These were definitely not isolated instances. Even as late as 1702 the Company had to yield to the pressure of the Armenian merchants. The Council in Calcutta reported that since the Armenian merchants were ‘holding together to beat down’ the freight of goods for Gambroon and Basra, they contracted with Khoja Surhaud Israeli who offered thirty eight thousand rupees ‘to have the whole ship for the voyage’.97 The Company, however, tried to break such rings and the bargaining position of the Bengal merchants, especially their monopolistic designs, by fostering the formation of a joint stock in every factory in Bengal. The advantages of such a joint stock were well summed up by the Court of Directors in 1684. First, it would save the Company from making any bad debt; secondly, it would make it easier to dispose of Europe-commodities by distributing those annually among the joint stock merchants at the time of the contract, and thirdly, in case of the late arrival of ships from Europe and the consequent shortage of funds (which occurred quite frequently), the joint stock merchants would provide goods with their own funds.98 From the early ‘eighties of the century

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directions were sent to different inland factories to form a joint stock of merchants, with about 100 shares, each amounting to a value of Rs. 500 or Rs. 1,000. These merchants, it was proposed, should choose from among themselves a chief merchant who was to be the president and seven or eight to be his council. This body was to handle the whole business of the joint stock.’99 The model was obviously borrowed from Madras where the Company had already fostered such a joint stock of merchants in 1680, though such a system was actually first organised in Pulicat sometime earlier.100 In Bengal, however, the Company failed to organise a joint stock.101 It may well be asked why the Company failed in Bengal while it could organise such a joint stock in Madras. In the absence of any direct evidence, it may be argued that the influence, power and credit of the Bengal merchants – who perhaps apprehended that a joint stock, with its various obligations to the Company, would reduce their independence and curtail their bargaining position and monopolistic designs – frustrated the attempts of the Company. It is interesting to note that in Madras, too, there was considerable apathy among the great merchants to form a joint stock and only by offering Pedda Yenkatadry the post of first and chief merchant and giving 25 out of 100 shares to the ‘company’ of Yenkatadry and Cussa Muddo Verona, while 7 other chief merchants had only 2¾ shares each, that the Company had succeeded.102 Of course, it should be noted that the social and political factors in Madras were quite different from those in Bengal. The strong caste affiliations of the merchants in Madras and the fact that they lived there under the Company’s rule made it easier for the Company to organise them into a joint stock. But the position in Bengal was quite different. There were too many great merchants like Khemchand, Chintaman and Mathuradas who could easily defy the Company and carry on their own business which Yenkatadry and his fellow merchants in Madras perhaps could not. The fact that during the ‘eighties of the century, the English Company’s trade in Bengal was greater than that in Madras precludes any suggestion that a joint

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stock was essential in Madras for a greater investment there than anywhere else. In Surat, too, though the investment was not as big as it was in Bengal, the Company did not or perhaps could not organise a joint stock of merchants. In the beginning of the 18th century, however, the Bengal Agency wrote to the Court that a joint stock of merchants would not work to the benefit of the Company in Bengal.103 The reasons for such assertion could not be traced in the records of the Company. Bengal Merchants’ Overseas Trade It has already been suggested that the Bengal merchants were active both in the inland and overseas trade on their own account irrespective of their business with the Company. In fact, the merchants of Bengal had a long established tradition in overseas trade and kept it alive throughout the 17th century. The Portuguese traveller Barbosa found in the beginning of the 16th century many merchants in the ‘ports of Bengala’ who owned ships and traded to Malabar, Cambay, Pegu, Tenasserim, Sumatra, Ceylon and Malacca.104 At the end of the 15 th century every year four or five ships sailed from Bengal to Malacca or Sumatra with provisions and textiles.105 Bengal ships also traded with the Red Sea ports of Aden and Jeddah.106 At the beginning of the 17th century, Pyrard de Laval found Bengal merchants in the islands of Maldive and named one ‘Mohammed Coca’ as an honourable, rich and discreet merchant of Bengal.107 At the time of the Mughal attack on Hugli in 1632, there were at least 12 or 13 local merchants there who operated with large capital.108 The first attempt of the Dutch Company to open up trade with Bengal after the fall of the Portuguese was frustrated by the opposition of the muslim merchants of Hugli.109 In 1645 the Danes seized several ships of the Bengal merchants by way of reprisal for injuries suffered at the hands of the local authorities in Bengal. In 1665 out of 12 muslim ships to Achin, 4 belonged to the merchants of Bengal.110 When Bowrey visited Bengal in the ’seventies of the century, the nawab and the merchants of Hugli,

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Balasore and Pipli had about ‘20 saile of ships of considerable burthen that annually traded to sea’.111 As regards the activities of the several merchants – discussed in the previous section – in the external trade of the country, we can have some idea of the ventures of the two Balasore merchants. Both Khemchand and Chintaman took active part in overseas trade during this period. They owned ships which sailed on trading voyages to different countries and sometimes these ships were owned jointly by them. It is a great pity that the Balasore factory records, which could have given us a graphic picture of the foreign trade of these two merchants, are extant only for the years 1679 to 1687, and that too with many gaps in between. The records of the Dutch Company which are more detailed in their information fail to give us an unbroken series of lists of ships with their cargoes that either left or arrived at Hugli and Balasore. The Dutch factors claimed that they collected these lists yearly from the custom house in the ports of Bengal. Since it will give an unreliable picture if only one consolidated list is drawn up chronologically of the trading vessels of the two Balasore merchants by combining the two series, it would be better to consider the two tables derived separately from the two different sources. Table 6.1: (on the basis of Balasore Factory Records)112 Owner

Arriving from

Commodities brought

Date of entry in Bal. Fact. Records

Khemchand

Tenasserim

21 elephants

20 March 1680

Khemchand

Tenasserim

elephants

29 Jan. 1684

Khemchand





29 Jan. 1684

Chintaman

Tenasserim

elephants

5 Feb. 1684

Khemchand

Achin



21 Mar. 1684

Khemchand & Chintaman

Cochin China

elephants, chanks, cloves

1 April 1684

Khemchand & Chintaman

Tenasserim

elephants

5 May 1684

Chintaman

‘Coringo’ (?)

elephants

6 May 1684

Khemchand & Chintaman





15 Nov. 1686

Table 6.2: (on the basis of the records of the Dutch East India Company)113 A. Outbound ships Owner

Destination

Khemchand

Tenasserim

Khemchand Khemchand Chintaman

Khemchand Chintaman

Khemchand

Chintaman

Chintaman Khemchand

Khemchand

Commodities

200 mds. ghee, 100 mds. oil, piecegoods. Gale (Ceylon) 500 mds. rice, piece-goods. Gale 1,000 mds. rice, piece-goods. Jaffnapatnam 700 mds. rice, 10 mds. cummin, 100 mds. long pepper, 4 mds. opium, 50 mds. peas, piece-goods. Gale 1,400 mds. rice, piece-goods. Maldives 600 mds. rice, 50 mds. butter, 325 piece-goods. Gale 7,000 mds. rice, 5 mds. candy sugar, piece-goods. Maldives 5,500 mds. rice, 50 mds. oil, 50 mds. butter, 800 piecegoods. Gale 600 mds. rice, piecegoods. Gale 13,000 mds. rice, 400 mds. sugar, 20 mds. candy sugar, 2,200 piece-goods. Achin 9,000 mds. rice, 800 mds. sugar, 30 mds. silk, 10 mds. opium, 250 mds. oil, 150 mds saffron, 300 mds. butter, 120 mds. cummin, 100 mds. peas.

Date of entry Name of ships 7 Jan. 1682

Guruprosad

28 Jan. 1682 Bhagabatprosad 4 Feb. 1682 ‘Mosiaheddy’ 25 Feb. 1682 Krishnaprosad

21 Feb. 1683 Bhagabatprosad 25 Feb. 1683 Keshari

3 Mar. 1683

‘Moemeddy’

18 Feb. 1684



21 Feb. 1684



9 Mar. 1684



9 Mar. 1684



134 | Companies, Commerce and Merchants B. Inbound Ships Owner

Destination

Khemchand

Tenasserim

Khemchand

Khemchand

Chintaman

Khemchand Chintaman Khemchand

Chintaman

Khemchand

Commodities

22 elephants, 50 mds. staff copper, 40 mds. spelter, 90 mds. tin, 2 casks of porcelain Gale 7 elephants, 40 mds. arrack, 12 lbs. nutmeg Gale 11 elephants, 225 mds. arrack, 2,000 coconuts, 800 ‘cahan’ cowries Jaffnapatnam 5 elephants, 4000 cowries, 1 md. nutmeg, ½ md. mace, 1½ md. cinnamon Tenasserim 19 elephants, 50 mds. tin. Maldives 1,800 ‘cahan’ cowries, 500 coconuts Gale 14 elephants, 1000 ‘cahan’ cowries, 200 mds. arrack, 10 mds. cinnamon, 8 mds. nutmeg Gale 9 elephants, 750 mds. arrack, 36,000 cowries Achin 22 elephants, 18 seers gold

Date of entry Name of ships 6 May 1682

Guru-prosad

10 Aug. 1682

Bhagabatprosad

12 Sept. 1682

‘Mosiaheddy’

21 Sept. 1682

Prosad

11 May 1683



1 Sept. 1683



Oct. 1683



March 1685



May 1685



The two tables, especially the second one, help us to form a fairly good idea of the direction and composition of the external trade of the two Bengal merchants. It is apparent that in overseas trade, as in inland trade, Khemchand was more active than his partner and colleague Chintaman. Khemchand’s trade was mainly with Gale in Ceylon though he traded at the same time with Tenasserim and Achin also. Chintaman was more concerned with the Islands of Maldive though his trading vessels went to Jaffnapatnam and Gale also. The commodities exported

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by these merchants to the Eastern Islands comprised mainly rice, butter, oil, sugar, ghee and piece-goods. Besides these, they also exported long pepper, opium, silk, saffron, little peas etc. The most import item of import was elephant. No ship of these merchants came home without elephants. Obviously elephants were quite a profitable commodity to sell to the nawabs, zamindars and other high officials of the state. Other items of import consisted of tin, cowries, cinnamon, copper, nutmeg, spelters, arrack, porcelain and even gold. The two merchants, it appears, confined their overseas trade to the islands in the Eastern Seas and had no trade with the western, coast of India. This was perhaps due to the fact that they could hardly withstand the competition of the Surat merchants who were the principal participants in this branch of trade. It seems that the Bengal-Surat trade was a monopoly of the Surat merchants. Out of ten indigenous ships that left Bengal for Surat between December 1681 and January 1684, all except one (which belonged to Zulphicar Khan, the Siamese King’s gomasta in Bengal) belonged to Surat merchants and not a single one to Bengal merchants.114 Even the ships of the great Surat merchant Abdul Gaffur traded with Bengal, and as this branch of trade was quite profitable, the Surat merchants tried to exclude other competitors from it.115 Except for Mathuradas, we do not have any evidence of other Bengal merchants’ (discussed in the previous section) overseas trading activities which probably implies that they did not take part in it. But Mathuradas was definitely engaged in the external trade of the country, though it seems, on a limited scale. As early as 1683 his gomasta at Patna, Ramdas, was reported to be procuring goods for a ship intended to sail for Surat.116 In 1700 a ship belonging to him was captured by the Portuguese for want of a pass and taken to Goa.117 It seems Thomas Pitt, who was then governor of Fort St. George, assisted him in his overseas trading ventures. Sometimes he freighted English ships, as in 1702, together with Armenian merchants for commercial voyages to Surat.118 But it is quite certain that his activities in the external trade of the country were not as extensive as those of his fellow merchants, Khemchand and Chintaman.

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An interesting feature in the composition of Bengal merchants engaged in overseas trade in the 17th century was the presence of subadars, faujdars and other members of the ruling class in Bengal. As early as the ‘forties of the century we find the subadar of Bengal Shah Shuja had his own ships engaged in overseas trade. He even tried to monopolise some sectors of the province’s external trade and made himself the sole purchaser of elephants, one of the chief items of the Dutch Company’s imports into Bengal.119 In 1651 a ‘junk’ belonging to the faujdar of Hugli went to Gombroon with different menchandise and to bring back horses as a return cargo.120 The Dutch Company refused many applications made by ‘governor Jaffer’ in 1654 for muslim vessels to Khedda, Colombo and Cochin. However, it was ultimately obliged to grant two passes for two of the nawab’s vessels to Tenasserim and Achin, and one for the faujdar’s to the Islands of Maldive. The Dutch also issued three more passes for the vessels of nawab Nawajish Khan, the faujdar of Rajmahal and Ahmed Beg, ex-faujdar of Hugli.121 Again in 1656 the faujdar of Hugli applied for a pass for his vessel to Colombo and Shah Shuja had asked for three passes for Colombo, Cochin and Jaffnapatam. But all these requests were politely refused because of Shah Shuja’s attempt to monopolise some sectors of the province’s external trade. The Dutch Company similarly refused a request for the services of one of their mates for a ship sailing for Persia.122 A cursory glance at the list of the Bengal ships that were engaged in overseas trade between 1682 and 1684 reveals that except for the ships of the two Balasore merchants, all the others belonged to the members of the ruling class. Buzurg Umeed Khan, the nawab of Patna, sent between December 1681 and December 1682 four ships to Tenasserim, Gale and Siam with different merchandise. Malik Qasem, the faujdar of Hugli (for sometime also of Balasore), despatched four ships between January 1682 and January 1683 to Tenasserim, Gale and the Islands of Maldive (2). Between January 1682 and March 1684, four ships of nawab Nurullah Khan of Orissa traded to Pegu and the Maldives. Even Nawab Shaista Khan, the subadar of Bengal, had

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a share in this branch of trade. In January 1682, one of his ships sailed for the Islands of Maldive and another for Tenasserim. Nasib Khan, the shahbandar of Balasore, who was referred to by Bowrey as an eminent merchant,123 sent between January 1682 and January 1683 three ships to the Islands of Maldive (2) and Tenasserim. The next shahbandar, Shuja Khan, was equally interested in overseas trade and sent four ships between January 1683 and February 1684 to the Islands of Maldive (2), Achin and Gale.124 Though the evidence cited above is fragmentary, nevertheless it helps us to form some idea of the extent, direction and composition of the external trade of the nobility in Bengal. It appears that most of the trading voyages of the ruling class were confined to the eastern seaports. The main items of export and import varied little from those handled by the two Balasore merchants. A good idea of the size of the various ships of the Bengal merchants can be formed from the details of several ships seized by the Company during the war (1686-88) in Bengal. The English Company captured a ship named Balasore, 55 tons, belonging to Malik Burcoordar, the faujdar of Hugli. The English further seized and appropriated as prize several other ships of the Bengal merchants – Hugli 600 tons, Achin Merchant 300 tons. Dacca Merchant 400 tons, and Katherina, 270 tons, besides Doorea Daulat 400 tons, belonging to the King of Siam.125 Bowrey stated that he saw a ship of Nasib Khan, the shahbandar of Balasore, which was about 500 or 600 tons.126 So it can safely be asserted that at least some of the ships of the Bengal merchants were of the same size as the big ships of the European Companies engaged in Indo-European trading voyages. The nobles and the members of the ruling family also freighted their goods in the ships of individual merchants or the European Companies. Thus as early as 1653 we find the faujdar of Hugli sent 11 bales of goods in one of the English Company’s ships.127 Malik Qasem, a faujdar of Hugli, also transported his goods in 1672 on a Company’s ship.128 The nobles often acted through their agents or gomastas. Haji Mohammed, an agent of Malik Qasem, made a trip to Gambroon with sugar and other commodities vendible there in one of the English ships. As return

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cargo he brought, besides 4 horses, – hing 7 bales, rose water 1 chest, attar 10 chests, fruits 29 jars, almonds 150 mds., arrack 2 chests and 8 sheep. The Company brought all these commodities freight free, except the horses, and assisted Malik Qasem’s agent with money in Gambroon as it expected to gain a ‘profitable influence in Hugli out of it’.129 In 1687 the English captured a Spanish ship carrying considerable quantity of goods belonging to the nawab of Cuttack from Tenasserim.130 It seems that from the ’nineties of the 17th century freighting of European ships by Bengal merchants for trading voyages to Surat and Persia became a general practice. Important Bengal merchants like Benarasi Seth, Janardan Seth and Khaja Sarhaud Israeli used to freight Company’s ships for such ventures. Wealth of the Bengal Merchants It is not possible to give a precise idea of the wealth or working capital of the Bengal merchants due to complete absence of any material of that kind in contemporary records, except for some fragmentary evidence here and there regarding the total value of the contracts made by the English Company with these merchants or the total value of the cargoes of a particular ship belonging to a particular merchant. To rely on this kind of evidence for making even a conjecture about the wealth of the merchants would not only be unscientific but also ridiculous. But it may be possible to have some very rough idea of the wealth of at least one of the merchants, namely Khemchand. There is little doubt that he was a rich merchant and perhaps the richest at Balasore during the ’seventies and ’eighties of the century. That explains why he was quite often mulcted of quite substantial sums by the greedy and apprehensive faujdars of Balasore or nawabs of Orissa. As early as 1672 Safshi Khan, the governor of Orissa, arrested Khemchand who accompanied Boremull (Puranmall?) with two other merchants, Hari Charan and Jairaj Shah, to the nawab to obtain a parwana for the English. The nawab imprisoned Khemchand without any charge against him and it seems only to extract some money from him. Khemchand had to buy

Bengal Merchants and Commercial Organisation | 139

his release by complying and giving security to pay Rs. 10,000 in 17 days and Rs. 20,000 in three months.131 But this did not appear to have affected in any way the financial position of the wealthy merchant. The English factors wrote – ‘Khemchand . . . notwithstanding his present troubles . . . hath estate sufficient to indemnify our masters which is sufficient for our proceeding in delivering him this day his share of the 25,000 rupees being 7,500.’132 Thomas Bowrey gives a vivid description how nawab Rashid Khan extracted a large sum of money from Khemchand in 1674. The ‘hungry’ nawab, as Bowrey relates, fell on Khemchand, ‘a great Banjan merchant’ and ‘great broker to the English East India Company’ and demanded rupees one lakh from him. Before he appeared in front of the nawab, Khemchand took off his gold turban, jewels and rings, put on ‘mean clothes’, ‘thereby to plead poverty’. Then be began to ‘bemoan’ his sad accident and the loss he had lately received (referring to the robbery of Rs. 1,500,000 while going to the country for his daughter’s marriage – the truth of which was attested to by Bowrey). But the nawab was little moved by the story and declared that he was well satisfied now that the report of Khemchand’s wealth was not untrue. After many apologies and feeding the nawab’s courtier, he got off by paying Rs. 50,000 to the nawab.133 If we believe Bowrey, it is anyone’s guess how wealthy Khemchand was – who could part with fifty thousand rupees in cash to satisfy the nawab and spend fifteen lakhs of rupees in one daughter’s marriage only while he had several other children – especially bearing in mind that none of these transactions hampered his normal activities either in inland trade or overseas ventures. But as we have noticed earlier, Khemchand’s fortunes declined considerably at the close of the ’eighties of the century. Still at the time of his death, as the English factors at Balasore reported, he ‘left clear in money and goods ninety odd thousand rupees’.134 There is no doubt that the Bengal merchants carried on their trading transactions with large capital though their fortunes never gave rise to such fabulous tales as did the wealth of Virji Vora or Abdul Gaffur of Surat. We have some evidence as to the size of particular transactions of the Bengal merchants. Golabray

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(Golap Ray ?), who was mainly a shroff in Dacca and once stood security for the customs to be paid by the English Company, was accepted by the nawab as security for Rs. 350,000 for the Raja of Coochbehar.135 In 1699 the share of the investment designed for Mathuradas by the Company amounted to Rs. 250,000.136 Bearing in mind that he used to provide investment not only for the Old and the New English East India Companies but for the French and the Interlopers, it might well be said he was worth several lakhs of rupees. Khaja Sarhaud, the Armenian merchant, had once contracted with the Company to supply goods worth Rs. 250,000,137 though his main trade was independent of his contracts with the Company. Jarrardan Seth, who was the Company’s broker at Calcutta, was reported to be worth several lakhs of rupees.138 Conclusions It may rightly be concluded on the basis of evidence and discussion made earlier that the Bengal merchants throughout the period held fast to their traditional organisation though they had to extend the methods generally practised but there was hardly any innovation to encompass the new situation arising with the appearance of the Europeans. At the same time it can be asserted that the commercial aptitudes of the Bengal merchants were certainly not inferior to those of the Europeans. The former could perhaps claim to be what Adam Smith called a speculative merchant who ‘enters into every trade when he foresees that it is likely to be more than commonly profitable and quits it when he foresees that its profits are likely to return to the level of other trades’.139 It is very difficult to make an estimate of the rate of profit in order to measure the incentive to trade during this period. Still it may be said that the merchant traded on profitmotive and hence the rate could not be less than the current rate of interest which was roughly 15 to 20 per cent during the period under study. So it may be conjectured that the rate of net profit was at least 25 to 30 per cent if not more. We find the faujdar of Hugli once borrowed three lakhs of rupees at 25 per cent from

Bill for 6,000 rupees, executed by Khemchand and Chintaman, payable to Bros. Douglas (?) with interest, dated ah 1096 (ad 1683). The manuscript has impressions of sales of the executants, each bearing the date ah 1093 (ad 1682). The signature of the executants are torn.

Khemchand and Chintaman’s signature in the contract with the Company at Balasore in 1679; O.C. 4648, vol. 40.

Bengal Merchants and Commercial Organisation | 143

the nawab140 and surely the former expected substantial profit after paying so high a rate of interest. An analysis of the trading activities and methods of these merchants reveals keenest competition among buyers and sellers, an eager search for exclusive information, the organisation of rings and commercial monopoly which the European Companies tried to foil by fostering the formation of joint stock associations of local merchants but only in vain. S. Arasaratnam’s contention141 that such joint stocks flourished and were established in almost every important factory of the Dutch and the English Companies and that supply through these joint stock partnerships had become the norm by 1700 does not seem tenable at all so far as Bengal is concerned, though it may be valid for Coromandel. In Bengal trade or business was the concern of individuals rather than of groups acting in common interest though we hear about such joint ventures as Khemchand Chintaman & Company, or lower down the scale, Rewadas & Company at Balasore or Ramnarain Raghunath & Company in Hugli – which were exceptions rather than rules. The merchants in Bengal, as in other parts of India, operated with their own capital and there was hardly any close financial link between the merchant and the public – a feature which was fast developing in England in the 17th century through the joint stock companies. In fact it can be asserted that as a result of the growth of the joint stock companies, the ownership of capital was divorced from management in England and these companies could undertake commercial ventures with limited liability to individual merchants. These joint stock associations may rightly be called the precursors of modern industrial type of organisations. In India, however, commercial venture was mainly the risk of individual merchant. It is true that sometimes the merchants acted as depositors of funds or even traded with capital supplied by the nobility for investment in the trade but the risk of any disaster or loss was his own. The remarkable growth of a financial machinery for credit and exchange,142 and the specialised activities of a large class of merchants, especially the shroffs, undoubtedly point towards the fact that merchant capital and commercial organisations

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were highly developed in Bengal. No doubt the European Companies from time to time dominated the markets for particular commodities but they hardly ever dominated the ‘commercial outlook’ – that position was held by individual Bengal merchants who, it appears, through their wealth and abilities controlled the entire wholesale trade within the area of their operations. Of course it is true that none of the Bengal merchants ever held the position comparable in credit and influence to that enjoyed by Virji Vohra, the great merchant prince of Surat, Molla Abdul Gaffur, or the Parrack family of Surat or even the Malaya family of Coromandel but, nevertheless they played a significant role in the commercial life of Bengal. Finally it is of great interest to note that most of the prominent Bengal merchants during this period were not local people but outsiders mainly from Gujarat or Rajasthan as their names, and in case of Khemchand and Chintaman their signatures suggest.143 Of the 18 prominent merchants who supplied raw silk and piece-goods to the Dutch Company in Kasimbazar, as many as nine were Gujaratis.144 This is rather peculiar since both in Surat and Madras all the prominent merchants were local people, and this only historically traces the fact that Bengalis had never been and are still not business-minded. Manuscript Sources and Abbreviations AGD

Accountant General’s Department, Range 11, India Office (Commonwealth Relations) Library, London. BM Addl Mss British Museum Additional Manuscripts. DB Despatch Book, India Office Library. EFI English Factories in India, ed., W. Foster. EFI, ns English Factories in India, new series, ed., C. Fawcett. Factory Records (India Office Library): Balasore, Calcutta, Hugli, Kasimbazar, Miscellaneous. KA Koloniaal Archief, Algemeen Rijksarchief, The Hague. Master’s Diary The Diaries of Streynsham Master, ed., R.C. Temple. OC Original Correspondence, India Office Library.

Bengal Merchants and Commercial Organisation | 145

Notes 1. H. Yule (ed.), The Diary of William Hedges, vol. III, London, 1889, pp. 194-5. 2. C.R. Wilson, Early Annals of the English in Bengal, vol. I, London, 1895, p. 34. 3. D.B., 20 November 1668, vol 87, f. 201; 23 December 1674, vol. 88, f. 155; 5 January 1681, vol. 89, f. 277; 18 November 1681, vol. 89, f. 404. 4. O.C., 28 May 1669, no. 3282, vol. 30; 12 October 1669, no. 3352, vol. 30. 5. On 2 October 1680 the Company made an agreement with the Balasore merchants for the provision of 10,000 ginghams, 14,000 nillaes and 15,000 Sannoes vide, Consultation of 2 October 1680, Factory Records, Balasore, vol. 1. It is interesting to note that in 1663 when the Company’s trade at Balasore was still in its infancy, the Company ordered the following commodities from Balasore, cf., Factory Records, Hugli. vol. 1, Consult. 20 June 1663:

Ginghams Cotton yarn Sticklac Sannoes Cowries

... ... ... ... ...

6000 pcs. 500 mds. 500 mds. 6444 pcs. 900 mds.

... ... ... ... ...

Rs. 24,000 Rs. 8,000 Rs. 2,000 Rs. 24,000 Rs. 9,000

6. Factory Records, Misc., vol. 3, f. 140. Here and in all other extracts from the records of the Company quoted hereafter, I have modernised the spelling. 7. Factory Records, Hugli, vol. 7, pt. 1, ff. 34-40; E.F.I., n.s., vol. II, p. 339. 8. Factory Records, Msic, vol. XIV, f. 324; Master’s Diary, vol. II, p. 86. 9. Six ships came to Bengal in 1672 and left with a cargo valued at about Rs. 547,718, vide, E.F.I., n.s, vol. II, p. 343. 10. Factory Records, Hugli, vol. 4, pt. 1, f. 54. 11. Ibid., pt. 1, f. 4. 12. O.C., 1 September 1679, no. 4647, vol. 40; Master’s Diary, vol. 1, p. 101; vol. II, pp. 217, 219. 13. Factory Records, Misc., vol. XIV, f 48; Master’s Diary, vol. 1, p. 303. 14. B. M. Addl. Mss., 34, 123, ff. 43a-44a; O.C., 3 September 1679, no. 4648, vol. 40; Master’s Diary, vol. II, pp. 222-4. 15. O.C., 1 Sept. 1679, no. 4647, vol. 40; Master’s Diary, vol. 1, p. 101; vol. II, p. 219. 16. O.C., 1 October 1679, no. 4659, vol. 40. 17. O.C., 15 November 1678, no. 4522, vol. 39; Factory Records, Hugli, vol. 1, Consult. 14 November 1678.

146 | Companies, Commerce and Merchants 18. Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May, 16 June, 9 and 13 August 1677; Factory Records, Balasore, vol. 1, Consult. 28 July 1677. 19. In 1677 the Kasimbazar Diary mentioned that Khemchand used to supply Europe-goods there for sale through his gomasta, vide, Factory Records, Kasimbazar, vol. 1, Diary, 18 September 1677. 20. Factory Records, Hugli, vol. 4, pt. 1, f. 98; E.F.I., n.s., vol. II, p. 365. 21. Factory Records, Hugli, vol. 7, pt. III, f. 43. 22. Ibid., vol. 5, pt. 1, ff. 41-2. 23. Ibid., vol. 2, pt. II, f. 95. 24. Ibid., vol. 2, pt. II, ff. 95-6. 25. In 1677 the Company’s investment at Balasore amounted to Rs. 187,000 while in 1682 it was for Rs. 198,700, vide, Factory Records, Hugli, vol. 7, pt. II, f. 21; O.C., 17 June 1682, no. 4823, vol. 42. 26. Factory Recods, Balasore, vol. 1, Diary & Consult., 21 June 1681. 27. Ibid., Diary & Consult., 22 August 1681. 28. Master’s Diary, vol. II, p. 236. 29. Factory Records, Hugli, vol. 6, pt. 1, ff. 21-22. 30. E.F.I., n.s., vol. 4, p. 272; Sir James Fawcett completely ignores Chintaman’s engagement with the nawab as a reason for discontinuing his services as a broker by the Company, ibid., vol. 4, p. 272. Chintaman occasionally acted as agent or gomasta of nawab Rashid Khan of Orissa, vide, O.C., 25 March 1681, no. 4726, vol. 41; Factory Records, Hugli, vol. 3, pt. 1, ff. 20-1. 31. Factory Records, Balasore, vol. 1, Diary & Consult., 21 June 1681. 32. Ibid., Hugli, vol. 3, pt. 1, f. 44; O.C., 8 July 1681, no. 4742, vol. 41; Factory Records, Balasore, vol. 1, Diary & Consult., 21 June 1681. 33. The King of Siam had regular trade with Bengal during this period. In 1682 four of his ships came to Bengal with different commodities, of which, elephants comprised the main bulk, vide, K.A., vol. 1267, f. 1398. 34. O.C., 8 July 1681, no. 4742, vol. 41; Factory Recods, Hugli, vol. 6, pt. 1, f. 29; Factory Records, Balasore, vol. 1, Diary & Consult., 21 June 1681. 35. O.C., 9 February 1679, no. 4576, vol. 39. 36. Factory Records, Hugli, vol. 3, pt. 1, f. 44. 37. D.B., 5 January 1681, vol. 89, ff. 256-7; Factory Records, Hugli, vol. 6, pt. 1, f. 29. 38. Ibid., Balasore, vol. 1, Diary & Consult., 29 August, 17 October 1681. 39. Ibid., Hugli, vol. 6, pt. 1, ff. 41-2. 40. O.C., 17 June 1682, no. 4823, vol. 42; Factory Records, Hugli, vol. 6, pt. 1, f. 57.

Bengal Merchants and Commercial Organisation | 147 41. Ibid., 27 June 1682, no. 4824, vol. 42; Factory Recards, Hugli, vol. 6, pt. 1, f. 58. 42. O.C., 17 June 1682, no. 4823, vol. 42; Factory Records, Hugli, vol. 6, pt. 1, f. 58. 43. O.C., 14 July 1682, no. 4829, vol. 42. 44. Factory Recorus, Hugli, vol. 10, ff. 11-12. 45. E.F.I., n.s., vol. 4, p. 344; Factory Records, Balasore, vol. 1, Diary, 13 March 1684; Factory Records, Hugli, vol. 6, pt. II, f. 9. 46. Factory Records, Hugli, vol. 10, f. 47; Factory Records, vol. 1, Cash Account of March 1684. 47. Ibid., Balasore, Diary & Consult., 2 October 1680. 48. O.C., 2 May 1683, no. 4941, vol. 43. 49. O.C., 30 May 1683, no. 4947, vol. 43. 50. O.C., undated, no. 5264, vol. 44; Factory Records, Hugli, vol. 6, pt. I, f. 195. 51. O.C., 2 April 1685, no. 5355, vol. 45; 9 May 1685. no. 5378, vol. 45. 52. Factory Records, Hugli, vol. 11, f. 187. 53. Ibid., Balasore, vol. 1, Consult., 16 November 1686. 54. Ibid., Hugli, vol. II, f. 189. 55. Ibid., Calcutta, vol. 1, pt. II, ff. 95, 127; vol. 5, pt. II, ff. 132, 142. 56. Ibid., Calcutta, vol. 1, pt. II, ff. 31, 36; one of these ships was named Jagganatprosad. 57. Ibid., Calcutta, vol. 9, pt. II, ff. 19, 45. 58. Ibid., Calcutta, vol. 2, pt. I, ff. 162, 195; vol. 9, pt. II, ff. 89-90, 105, 124, vol. 10, pt. 1, f. 3. 59. O.C. 14 December 1694, no. 5949, vol. 50. 60. Factory Records, Hugli, vol. 2, pt. 1, ff. 68, 95-6. 61. Ibid., vol. 2, pt. II, f. 98; The value of 13 chests of treasure is calculated on the basis of the data found in Factory Records, Hugli, vol. 2, pt. II, f. 101 and A.G.D., Range 11, vol. 41, ff. 21, 26. 62. Factory Records, Kashimbazar, vol. 2, Diary, 2 June 1682. 63. Ibid., vol. 2, Diary, 17 June 1682; vol. 4, pt. 1, f. 29. 64. D.B., 5 September 1683, vol. 90, f 219. 65. Factory Records, Hugli, vol. 6, pt. II, f. 152; vol. 10, f. 207. 66. Factory Records, Calcutta, vol. 5, pt. 1, f. 7. 67. Ibid., vol. 5, pt. 1, f. 15. Similar instructions were issued time and again by Job Charnock to different factories, vide, Factory Records, Calcutta, vol. 1, pt. 1, ff. 21, 30, 41; vol. 9, pt. 1, f. 40. 68. Ibid., vol. 9, pt. 1, f. 76. 69. Ibid., vol. 9, pt. 1, f. 150. As the Hindus generally paid 5 per cent as customs during the period, the value of Mathuradas’ annual trade [exclusive of the investment provided for the Company, since these

148 | Companies, Commerce and Merchants commodities for the Company’s investment were exempted from customs duty and carried by the Company’s dastak] could not be less than about 4 lakhs of rupees. 70. D.B., 22 January 1692, vol. 92, f. 179. 71. O.C., 19 August 1692, no. 5886, Letter no. 22, vol. 50. 72. D.B., 27 October 1693, vol. 92, ff. 297-8. 73. Factory Records, Calcutta, vol. 6, pt. II, f. 50. 74. D.B., 10 April 1693, vol. 92, f. 256. 75. B.M. Addl. Mss., 22,842, vol. 1, f. 74; O.C., 14 October 1693, no. 5886, Letter no. 34, vol. 50. 76. Factory Records, Calcutta, vol. 3, pt. II, f. 130. 77. The Company claimed in 1677 of ‘giving him all assistance in our power which was not a little serviceable to him with late troubles by securing him from the claws of the government when a more eminent merchant than himself felt the smart’. Vide, Factory Records, Calcutta, vol. 6, pt. II, f. 51. The trouble referred to here was probably caused by Mathuradas’ transactions with Sobha Singh who rebelled against the Mughals in 1696. 78. O.C., 14 December 1694, no. 5949, vol. 50. 79. Factory Records, Misc., vol. 3A, f. 268; O.C., 14 December 1694, no. 5949, vol. 50. 80. D.B., 14 May 1696, vol. 92, f. 494. 81. Ibid., f. 495. 82. Factory Records, Calcutta, vol. 3, pt. 1, f. 121. 83. Ibid., vol. 3, pt. II, ff. 128-9. 84. Ibid., vol. 3, pt. II, ff. 140-1. 85. Ibid., vol. 3, pt. II, f. 155. 86. Records of Fort St. George, Letters to Fort St. George, 1699-1700, Madras, 1921, p. 42. 87. Ibid., p. 41; Factory Records, Calcutta, vol. 7, pt. III, f. 14. 88. O.C., 24 December 1702, no. 8097, vol. 65. 89. O.C., 28 August, 22 September, 29 September 1702, no. 7913, vol. 64; O.C., 24 December 1702, no. 8097, vol. 65. 90. D.B., 26 February 1703, vol. 95, f. 58. 91. O.C., 28 December 1705, no. 8416, vol. 68; 29 Dec. 1706, no. 8408, ff. 27, 56-7, vol. 68. 92. Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May 1677; Diary, 13 May 1680. 93. Ibid., Kasimbazar, vol. 2, Diary & Consult., 24 September 1680. 94. Ibid., Hugli, vol. 1, Diary & Consult., 28 July 1677; 9 August 1677; Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May, 16 June, 9 and 13 August 1677. 95. Ibid., vol. 6, pt. II, f. 154; Factory Records, Kashimbazar, vol. 4, pt. 1, f. 30.

Bengal Merchants and Commercial Organisation | 149 96. Ibid., Kasimbazar, vol. 1, Diary & Consult., 13 August 1677; 5 January, 18 January 1678. 97. Ibid., Calcutta, vol. 4, f. 18. Khaja Sarhaud Israel was one of the most influential Armenian merchants in Bengal during the nineties of the 17th and early part of the 18th centuries, trading extensively on his own account, as also providing, investment for the Company. In 1697 the Company contracted with him for the provision of commodities worth Rs. 250,000, vide, Factory Records, Calcutta, vol. 3, pt. II, ff. 228-9. 98. D.B., 5 March 1684, vol. 90, ff. 260-1. 99. Ibid., 21 December 1683, vol. 90, f. 245; O.C., 4 September 1684, no. 5190, vol. 44. 100. Records of Fort St. George, Diary if Consultation Book, 1680-81, Madras, 1912, p. 43. 101. It is interesting to note the different observations on the question of forming a joint stock from different factories in Bengal. From Dacca – ‘. . . this can never be done here, the people . . . are as wicked and envious sort of people as the world affords and they are for destroying (not assisting) one another, they will be and are sometimes 2 or 3 most (and will be not more) in partnership all equal.’ From Malda – ‘we do not apprehend which way it will make for Hon’ble Company’s interests to have the country merchants jointly . . . they yearly joining hand in hand for their own interest, will leave no stone unturned whereby they may raise the prices of what goods are to be provided and lower what goods are to be sold . . . it is observed the best policy in this country is to deal distinct not having one merchant present at contracting with another by which means may bring them to comply at cheaper and more reasonable terms.’ From Patna – ‘We much doubt of bringing our old or any new petremen to it, we knowing by experience, they are unwilling to trust their own brothers, much less to be securities for one another which makes us fear, the abler sort will not be brought to it.’ Vide, Factory Records, Hugli, vol. 10, ff. 165, 182-3, 195. 102. Records of Fort St. George, Diary & Consultation Book, 1680-81, op. cit., pp. 44-5, 48. 103. D.B., 5 March 1702, vol. 93, f. 542. 104. D. Barbosa, The Book of, ed. M.L. Dames, vol. 2, London 1921, p. 145. 105. M.A.P. Meilink Roelofz, Asian Traue and European Influence, The Hague, 1962, p. 3. 106. H.L. Chablani, The Economic Condition of India during the Sixteenth Century, Delhi, 1929, p. 60. 107. Pyrard de Laval, The Voyages of, tr. Grey & Ball, vol. I, London, 1888, pp. 236, 259, 332-3.

150 | Companies, Commerce and Merchants 108. Sebatian Maurique, Travels of . . . , ed. Luard and Hosten, vol. 2, Oxford, 1927, p. 397. 109. T. Raychaudhuri, Jan Company in Coromandel, 1605-90, The Hague, 1962, p. 76. 110. Dagh Register, 9 and 10 March 1665, quoted in R.K. Mukherjee, Economic History of India, p. 120. 111. Bowrey, A Geographical Account of Countries Round the Bay of Bengal, 1669-79, ed. R.C. Temple, Cambridge, 1905, pp. 168, 17980. 112. The list is prepared from the diaries of various dates in the Factory Records, Balasore, vol. 1. 113. The list is prepared from K.A, vol. 1267, ff. 1338-41, 1339-1402; vol. 1276, ff. 1178vo, 1264vo, 1266; vol. 1292, ff. 498vo, 535; vol. 1303, ff. 309vo-310. 114. K.A., vol. 1267, ff. 1337vo-40; vol. 1276, ff. 1176vo; vol. 1292, ff 498vo, 499, 533-534vo. 115. K.A., vol. 1276, f. 1264vo; vol. 1292, f. 498vo. 116. Factory Records, Hugli, vol. 9, f. 151. But no mention of this ship is to be found in the Dutch records. 117. B.M. Addl. Mss. 22,842, vol. 1, f 74. 118. O.C., 23 December 1701, no. 7807, vol. 63; 27 January 1702, no. 7837, vol. 63. 119. Raychaudhuri, op. cit., p. 76. 120. O.C., 8 May 1651, no, 2219, vol. 22; E.F.I., 1651-4, p. 63. 121. Translation of Dutch Records, India Office Library, vol. 18T, no. D.L. The possession of a pass from a Company rendered the ship of an individual merchant immune from seizure and confiscation by the ships of that particular Company. 122. Ibid., vol. 18T, no. DL. The pass system, its impact on the composition, extent and direction of the foreign trade of the merchants of Bengal and the various objects for which the European Companies enforced it, has been discussed by Om Prakash, ‘The European Trading Companies and the Merchants of Bengal, 1650-1725’, Indian Economic and Social History Review, New Delhi, vol. 1, no. 3, 1964. 123. Bowrey, op. cit., p. 74. 124. K.A., vol. 1267, ff. 1336 8vo; 1341; vol. 1276, ff. 1176vo-1179; vol. 1292, ff. 498vo, 533vo-535. 125. O.C., 18 April, 24 May, 1 November, 6 December, 12 December 1687, no. 5576, vol. 47. 126. Bowrey, op. cit., p. 74. 127. E.F.I., 1651-4, p. 188. 128. E.F.I., n.s., vol. II, p. 345. 129. Records of Fort St. George, Diary & Consultation Book, 1672-78, Madras, 1910, pp. 43-4.

Bengal Merchants and Commercial Organisation | 151 130. O.C., 12 December 1687, no. 5576, vol. 47. 131. Factory Records, Hugli, vol. 7, pt. 1, ff. 39, 43a; E.F.I., n.s., vol. 4, p. 339. 132. Factory Records, Hugli, vol. 7, pt. 1, f. 45a. 133. Bowrey, op. cit., pp. 152-6. 134. Factory Rerords, Hugli, vol. 11, f. 187. 135. Ibid., Hugli, vol. 10, f. 119. 136. Ibid., Calcutta, vol. 3, pt. II, ff. 140-1. 137. Ibid., ff. 228-9. 138. D.B., 13 January 1714, vol. 98, f. 196. 139. Quoted by Lucy S. Sutherland, A London Merchant, 1695-1774, Oxford, 1962, p. 19. 140. O.C., 28 May 1669, no. 3282, vol. 30. 141. S. Arasaratnam, ‘Indian Merchants and Their Trading Methods (Circa 1700)’, Indian Economic and Social History Review, March 1966, vol. III, no. 1, p. 86. 142. Tavernier’s general statement (vide, Tavernier, Travels in India, ed. Ball, vol. 1, London, 1889, pp. 28-9) that in India a village must be very small if it had not a money changer or shroff who acts as a banker to make .remittances of money and issue letters of exchange seems to hold good for Bengal in the 17th century. 143. O.C., 3 September 1679, no. 4648, vol. 40; 13 March 1684, no. 5110, vol. 43; 2 February 1686, no. 5471, vol. 45. 144. K.A., vol. 1311, f. 1132.

chapter 7

Saltpetre Trade and Industry in Bengal Suba, 1650-1720*

In the second half of the 17th century, saltpetre was an important item in the export list of the European Companies trading in Bengal. As an essential ingredient of gunpowder it was in great demand in the West. Besides as it could be used as saleable ballast, its export was of additional advantage to the Companies which otherwise hid to take the uneconomic method of using iron as ballast to make the deep sea ships sailworthy, It was only in the early ’twenties of the seventeenth century that the shortage of saltpetre in England and the increasing difficulty in obtaining supplies of gunpowder had turned the attention of the English Company to the possibility of importing this chemical from India. The first supply however reached England only in 1626.1 And once established the saltpetre trade displayed a consistent growth, though the real expansion did not take place till after the Civil War commenced. The chief sources of saltpetre supply till the beginning of the ’forties were mainly Coromandel and Gujarat. Thevenot, the French merchant, recorded in 1666 the process of its manufacture in Ajmer from whence it was carried to the seaports of Western India and purchased by the Europeans ‘to ballast their ships and to sell elsewhere’.2 But Coromandel seems to have supplied the main bulk of this commodity to the Europeans before 1640s. In 1624 and 1625, 270,000 lbs. (Dutch) and 286,431 lbs. (Dutch) respectively of saltpetre were exported to Batavia *Proceedings of the Indian History Congress, Chandigarh, 1973, pp. 26370.

Saltpetre Trade and Industry in Bengal Suba | 153

from Coromandel in the late ’thirties however Bengal saltpetre supplemented those from the Coast.3 From the ’fifties Bengal definitely replaced Coromandel as the chief source of supply. Saltpetre was produced in Bihar mainly in the neighbourhood of Patna where it was available in abundance. The discovery of this source revolutionized the Company’s saltpetre trade and led to its tremendous expansion in the second half of the 17th and first half of the 18th centuries. A Dutch report of 1688 gives interesting details regarding the annual output, the names of the parganas producing saltpetre, and the officials who owned or administered these tracts. According to this, the total output a year amounted to 226,200 mds. (raw) and when refined (dobaracabessa) the figure stood at 127,238 mds. Of this amount, as the report runs, 1,200 mds. were sent to Hugli, 3,000 mds. to Dacca, and 7,000 mds. were retained for Patna gunpowder factory. The rest amounting to 105,238 mds. were left for export.4 The saltpetre procured at Patna was considered the best in quality for the manufacture of gunpowder. Moreover the price of Bengal saltpetre was cheaper than that of other places.5 It was reported in 1650 that saltpetre cost only Re. 1 per maund at Patna, though the customs and freight for bringing it to Hugli would raise the price to Re. 1.12 annas per maund.6 Again from the point of transportation, Bengal saltpetre enjoyed another advantage. The cheaper and more convenient transport down the Ganges enabled the Company to despatch cargoes of saltpetre from Patna to Hugli for lading Europe-bound ships and also for supplying Madras with ballast for its vessels. All these considerations coupled with the enhanced demand from England and Europe encouraged the Company to drive an extensive trade in Bengal saltpetre. There were generally three varieties of saltpetre – the refined one called dobara-cabessa or culmy, the twice boiled or dobara and the crude variety termed katcha or raw.7 The European Companies generally exported refined saltpetre as otherwise it could not be used for making gunpowder. Moreover the export of raw or crude variety was uneconomic as it increased freight charges while custom duties remained the same on both refined

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and crude varieties.8 The Companies often undertook the refining in their own factories. The Dutch Company procured large quantities of saltpetre from Patna and shipped it direct to Batavia after refining it, at Hugli or Pipli. As a matter of fact, as early as 1640-1, the Dutch set up a refinery at Pipli with copper kettles imported from Holland.9 Tavernier stated in the ’sixties of the 17th century that the Dutch refined saltpetre at a ‘large village called Chapra, situated on the right bank of the Ganges’, about twenty miles above Patna.10 The English Company too, it seems, refined its saltpetre at Singhee or Patna.11 The refining, in order to remove impurities, was usually done by the Indian methods of evaporation in which earthen vessels were used. In 1652 the English factors reported that the great difficulty in refining was for want of convenient copper pans. Refining in great earthen pots was tedious and troublesome because those pots very often broke in the middle of processing. As suitable copper pans were not locally available, the Company decided to divert to this purpose appliances which had been sent out for making sugar at Assada in Madagascar.12 The cost of refining, however, was very small being only 1/4 of an anna per maund,13 The English Company once attempted to refine saltpetre at Calcutta but abandoned the experiment as it was found to be too expensive.14 An examination of the orders for saltpetre sent from England reveals that the quantities ordered depended on two main factors. First, in times of war the quantities required to be sent from Bengal naturally went up while in peace time they were greatly reduced. Secondly, the quantities ordered depended on the requirement of the ships for their ballast or ‘kinteledge’. Saltperte was used as ballast not only for Bengal ships but also for ships sailing from Madras, Masulipatnam, Bantam or Bencoolen. The order for Bengal saltpetre increased steadily from the foundation of the English factory in Hugli in 1651 till 1681 when for the first time there was a sudden decline in the quantities ordered. There were two obvious reasons for this reduction in the order. There was then little demand for saltpetre in Europe which by then was temporarily relieved of war. Secondly, it was from 1681

Saltpetre Trade and Industry in Bengal Suba | 155

that there was a sudden boom in the demand for Bengal silk and piece-goods which shifted the emphasis in the Company’s export trade in favour of the latter commodities. In the early years of the Company’s trade in Bengal, saltpetre definitely ranked as the primary object of commerce, and not merely a make-weight. In 1651, the factors in Bengal were instructed to invest half of their capital in saltpetre alone and in case the factors ran up debts the Court gave special instruction that ‘let it be for this commodity’.15 In the early years of its trade, the order was generally for 200 to 600 tons, while in the ’eighties it went upto 800 to 1,000 tons a year, the highest order being for 1500 tons in 1682. The Dutch East India Company’s order for saltpetre from Bengal for Holland itself far surpassed that of the English Company throughout the period, and the former also supplied its other Asiatic factories, specially Bantam and Ceylon from Bengal. In the first two decades of the eighteenth century the demand for Bengal saltpetre for Holland only stood consistently between 3,000,000 to 3,500,000 Dutch lbs.16 The supply condition in saltpetre trade was more or less smooth enough for securing an extensive trade in that commodity. The only inhibiting factor was the occasional attempts by local officials to monopolize the trade. Mir Jumla made such an attempt but with little success.17 The next subadar Shaista Khan tried to monopolize the trade and sent his gents to Patna who ‘obstructed and hindered’ the procurement of saltpetre by the Europeans. When the English appealed to him, he demanded 20,000 mds. of saltpetre from them on the pretext of his Arakan war.18 Prince Azim-us-Shan made a similar attempt in 1699. He sent an agent to Patna to buy between 40,000 and 50,000 mds. of saltpetre on the plea of making gunpowder for his intended attack on Arakan. But ultimately his initial plan of making cent per cent profit on an investment of rupees one lakh failed miserably.19 The saltpetre was generally procured through assomies or petremen to whom money was advanced in the right season.20 Often murchant-middlemen were also employed for procuring saltpetre. In May 1683, the Company contracted for 4,120 mds.

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of saltpetre (at Re. 1¼ p.md.) with three able ‘petremen’; ‘Bucktmall,’ ‘Muluckchand’ and ‘Siabray’ who had provided all the Company’s saltpetre in the previous year, and now gave good security against fulfilment of the contract.21 But official rapacity occassional ly made the petremen hide out in which case the Company had to deal with the merchant-middlemen who demanded a greater price than the ordinary petremen or assomies. Thus in 1684, the Patna factors reported that they dealt with one merchant, namely Probhat (‘Perevott’) who would not deal at the same price as the assomies on the ground of the trouble given by the nawab and his officers.22 In general, the competition in the saltpetre market was confined mostly among the European Companies specially the English and the Dutch. Both these Companies were apprehensive, not without much reason – that the others try to engross the trade, As a consequence the English Company asked their factors to carry on with the investment in saltpetre even in the time of war when they could hardly send the commodity for want of shipping.23 This competition amongst the Europeans had often its impact on the prices. The English factors once claimed that the price of saltpetre was much reduced when the Dutch had left Patna.24 The interlopers too were competitors in the market specially in the ’eighties of the seventeenth century. In 1684 the Patna factors reported that Purusuttom Das and Jadu Das – who were formerly Dutch gomasta, and provided the interlopers with saltpetre in the various years – again procured for the interlopers great quantities of refined saltpetre which made the coarse variety scarce and raised their price. But when the interlopers failed to come, the two merchants, hard pressed by the creditors for money, tried to sell the commodity for whatever prices they could get. But the English and the Dutch Companies ‘plagued them sufficiently’ and agreed not to buy an ounce of them so that ‘they might be sufficient losers and be made examples to prevent others’ from following their steps in future.25 An analysis of the price of saltpetre shows a general upward trend throughout the period, though with exceptions during certain years.26 Of course, it is difficult to find out precisely the cost

Saltpetre Trade and Industry in Bengal Suba | 157

price of saltpetre as it depended on certain factors, e.g., the place and time of purchase as also on the variety bought. As noted earlier, the price of saltpetre at Patna in December 1650 was Re. 1 per md. while with charges for freight, it amounted to Re. 1¼ at Hugli. But the English bought the same variety for the ships despatched that year at Re. 15/8 per md.27 In other words, the English had to pay 5 per cent more for the commodity during the shipping season. The price at Patna was about 40 to 50 per cent cheaper than that in Hugli.28 In 1659-60 the English factors procured saltpetre at Re. 11/8 per md. at Patna which indicates a 12½ per cent rise in price than that in 1650-1.29 At the end of our period, i.e. in 1719-20 the average price of saltpetre was about Rs. 5 per md. This was generally the price in Hugli and definitely it shows a rise of about 300 per cent from that in the beginning of our period. This tremendous rise in the price over the period can only be explained by the competition among the European Companies and their heavy demand on the supply. When the English first began their trade in saltpetre in 1650-1, there was only the Dutch Company who used to export the commodity from Patna. So the former found saltpetre very cheap. But with the growth of the English trade and the heavy demand by the Europeans on the market, the price soared accordingly. The other contributory factors for fluctuations in prices appear to be the occasional attempts at monopoly by local rulers as also the uncertain weather conditions. It was reported that more saltpetre was procurable in dry seasons than during the rains.30 During 1663-4 and 1664-5 the price of saltpetre was Rs. 3 per md. while the treble refined variety cost Rs. 3¾. It ranged between Rs. 2 to Rs. 3.2 from 1668-9 to 1675-6 with a sudden rise to over Rs. 4 during the years 1676-7 and 1678-9. In the ’eighties however the average price was about Rs. 2 with the lowest figure of Rs. 1.6 in 1682-3. But in the ’nineties the average price was over Rs. 3 per md. During the first decade of the 18th century it went up high and stood at Rs. 4 per md. which was the trend in the second decade too, only with the exception of 1712-13 when the price went up to Rs. 6 per md. However it must be pointed out that fluctuations in cost price of saltpetre

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did not have any determining influence or the amount procured by the European Companies. The main considerations were the ballast requirements for the returning ships and the market conditions in Europe. The quantities of saltpetre actually exported by the English Company from Bengal over the period under review show fluctuations though the general trend was one of expansion, reaching the peak in the ’eighties and then sloping downwards in the ’nineties, only to rise gradually again in the subsequent years. These fluctuations depended on various factors which can be generalised as the demand from England, the available supply and the requirement for the Company’s shipping from Bengal. In 1663-4 the Company exported 943,650 lbs. of saltpetre which rose to 990,450 lbs. in 1664-5. There was a phenomenal rise in 1668-9 when 1,977,300 lbs. were exported from Bengal, though the figure fell later to as low a level as 712,950 lbs. The boom in the export of saltpetre began in 1681-2 and continued upto 1685-6. The following table will indicate the fluctuations in the export of saltpetre from the ’eighties till the end of the period under review.31 Saltpetre Export: Quinquennial Total English Exports Years 1681/2-1685/6 1690/1-1695/6* 1696/7-1700/1 1701/2-1706/7** 1710/11-1714/15 1715/16-1719/20

Quantities

Average

6,298.208 lbs. 2,652,964 lbs. 2,226,132 lbs. 3,785,486 lbs. 4,202,514 lbs. 5,352,689 lbs.

1,259,641 lbs. 530,592 lbs. 445,226 lbs. 757,097 lbs. 840,502 lbs. 1,070,537 lbs.

Notes: * Excluding 1691/2; **Excluding 1703/4.

The Dutch East India Company exported a far greater quantity of saltpetre from Bengal than its English counterpart. In 1669-70 the Dutch export to Holland and the Asiatic factories amounted to 3,343,440 Dutch lbs.32 Even in the first two decades of the 18th century the Dutch export to Holland far surpassed that of the English. During the three years 1701-2, 1702-3, 1704-5 the

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Dutch exported to Holland 8,494,754 lbs. (Dutch) at an average of 2,381,918 lbs. yearly. The average annual export to Holland during the quinquennial periods 1705-6 and 1710-11 and 171112 to 1715-16 was 2,999,789 lbs. (Dutch) and 3,884,405 lbs. (Dutch) respectively which indicates that the Dutch trade in Bengal saltpetre was far greater than that of the English.33 Though the quantities of saltpetre exported annually by the English Company seem to be impressive, the total value of this annual saltpetre trade in proportion to the value of total exports of the Company was not so. In the ’sixties the total value of saltpetre exported annually from Bengal constituted about 20 to 25 per cent of the total value of export, rising to 50 per cent in 1668-9. But its share during the slump which began in 1681-2 was only 4 per cent of the total value of the Company’s exports from Bengal, though that year witnessed a boom in the absolute quantities of saltpetre exported by the Company. This decline in value continued till 1685-6 when it formed only 1.5 per cent of the total value of the exports. There was a sudden rise in 1704-5 when it stood at 22.7 per cent but gradually went down again Then onward it varied between 3 to 4 per cent of the total value of the Company’s exports. Manuscript Sources and Abbreviations AGD

Accountant General’s Department, India Office Library, London Beng. Public Consult. Bengal Public Consultations, India Office, London. DB Despatch Book, India Office Library, London. KA Koloniaal Archief, Rijksarchief, The Hague. EFI English Factories in India, ed. W. Foster. Fact. Records Factory Records, Hugli, Calcutta, Patna, Misc, I.O.L., London.

Notes 1. Court Book, IX, p. 320, 5 January 1627. 2. S.N. Sen (ed.), Indian Travels of Thevenot and Careri, New Delhi, 1949, p. 74.

160 | Companies, Commerce and Merchants 3. T. Raychaudhuri, Jan Company in Coromandel, The Hauge, 1962, pp. 168-9. 4. K.A. 1343, ff. 748vo-749vo. 5. Price of Patna Saltpetre was just half of that of Ahmedabad saltpetre, c.f. Moreland, From Akbar to Aurangzeb, London, 1923, p. 121; Price of saltpetre at Hugli was £6 per ton while at the Coast it was £8 to £9 in 1659-60, D.B., vol. 84, ff. 411-12; vol. 85, ff. 334. 6. O.C., 15 Dec. 1651, no. 2188, vol. 22. 7. Fact. Records; Hugli, vol. 10, f. 235. 8. D.B., vol. 95, f. 232. 9. T. Raychaudhuri, op. cit., pp. 169-70. 10. Tavernier, Travels in India, trans V. Ball, London, 1889, vol. 1, p. 122. 11. Fact. Records, Misc., vol. 3, f. 63; vol. XIV, ff. 331-2. 12. O.C., 14 January 1652, no. 2246, vol. 22. E.F.I., 1651-4, p. 95. 13. Bengal Public Consultations, Range 1, vol. 6, f. 488a. 14. D.B., 3 February 1720, vol. 100, f. 224. 15. O.C., 10 February 1651, no. 2208, vol. 22; ibid., 25 February 1651, no. 2210, vol. 22. EFI, 1651-4, pp. 45, 47. 16. For the list of Dutch Company’s orders for Bengal goods, see K.A. vols. 1556, 1581, 1584, 1622, 1636, 1653, 1669, 1688, 1720, 1734, 1746, 1776, 1804. 17. E.F.I., 1661-1704, pp. 69-71. 18. Fact. Records, Hugli, Consult. 11 July 1674; E.F.I., 1661-4, pp. 395-6. 19. Fact. Records, Calcutta, vol. 3, pt. II, f. 87. 20. Fact. Records, Hugli, vol. 10, f. 194. 21. Fact. Records, Patna, vol. 1, pt. IV, f. 18. 22. Fact. Records, Hugli, vol. 10, f. 194. 23. D.B., vol. 86, ff. 504-5; vol. 86, ff. 522-3, vol. 87, f. 39. 24. Fact. Records, Calcutta, vol. 11, pt. II, ff. 2-3. 25. Fact. Records, Hugli, vol. 10, f. 235. 26. See Table 11. 27. O.C., 15 December 1650, no. 2188, vol. 22; E.F.I., 1651-4, pp. 337-8. 28. D.B., 28 January 1659, vol. 84, f. 414. 29. O.C., 15 December 1659, no. 2833, vol. 26; E.F.I., 1655-60, p. 29. 30. O.C., 1 September 1665, no. 3069, vol. 29. 31. See, relevant volumes of A.G.D. 32. K.A., 1164, ff. 380-2vo., The Dutch lb. is equivalent to 1.09 English lb. approx. cf. T. Ray Chaudhuri, op. cit., p. 223. 33. For the list of Dutch export from Bengal, see K.A. vols. 1556, 1581, 1584, 1622, 1653, 1669, 1688, 1720, 1734, 1746, 1776, 1804.

chapter 8

Continuity or Change in the Eighteenth Century? Price Trends in Bengal, c. 1720-1757*

Interestingly enough, there has been a surprising concensus among historians (e.g. K.K. Datta, Brijen K. Gupta, K.N. Chaudhuri and even P.J. Marshall in his latest book in the New Cambridge History of India Series) that there was a sharp and steady rise in the prices of commodities in Bengal during the period from around the 1720s to the 1750s. This has an important bearing on the ‘Change or Continuity’ thesis in the context of the eighteenth century. If the price rise was a continuous process from the nawabi regime, then it is implied that the steep rise in prices in the 1760s, which is amply documented in the Company records and acknowledged as such even by P.J. Marshall, was nothing but a continuity of the trends prevalent in the pre-Plassey period. At the same time, this assumption minimizes the role of the Company and its servants in destroying Bengal’s economy by various monopolies, oppressions and ruthless exploitation in the post-Plassey period. In the backdrop of all this, it would be interesting to re-examine the price trends in Bengal in the pre-colonial period, and see how far the general thesis of the upward movement of prices in the first half of the eighteenth century, held so far by most of the authorities on the subject, can stand a close scrutiny in the light of the new evidence found in the European archives. * The Calcutta Historical Journal, vol. XV, nos. 1-2, July 1990-June 1991, pp. 1-25.

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As we have just noted, there is a complete unanimity among historians that prices of commodities in Bengal from 1720 to 1760, especially from the early 1740s, show ‘a fairly sustained and marked increase’ which was ‘particularly strong for raw siIk and Bengal textiles’ as also for rice.1 With the help of such sophisticated devices as ‘weighted moving-average’ of price series, histogram and, polynomial and linear trend of prices of several commodities, these authorities conclude that ‘the general synchronic trends are clearly visible’ and that there was a gradual rise in prices over the period as a whole.2 But the general emphasis so far has been on the ‘sharp increase’ in prices from around the early 1740s. The significant point to note is that the ‘secular upward’ trend in the movement of prices is linked to the ‘phenomenal increase’ in the European export trade from Bengal and the consequent influx of bullion into the country. Along with this, as the authorities hold, the contributory factors for the rise in prices during the period were the Maratha invasions which seriously disrupted the economy, and the keen competition among the European Companies for the export commodities. ‘Marked and Sustained’ Increase? It is clear from the above that for the supposed rise in price movement, a lot of emphasis has been put on the European trade which brought in its train bullion into the province. It has been stated clearly that the ‘foreign demand for export goods, which were all paid in cash, stimulated domestic demand for food grain and other consumer products’ which ‘in its turn could have exerted some pressure on prices’.3 There is no denying the fact that there was a significant increase in European trade and a consequent inflow of bullion in the first half of the eighteenth century. It is also probable that as a result of this, there was an expansion in the economic activity of Bengal and an increase in money supply. But the extent of the impact of these on the overall economy and the price movements over the period are yet to be determined precisely. Moreover, as we have argued elsewhere,4

Continuity or Change in the Eighteenth Century? | 163

even in the mid-eighteenth century, the European trade was not the most important factor in the commercial life of Bengal; the volume of the export trade carried on by the Asian merchants from Bengal was much larger than that of the Europeans. The Europeans were not the only importers of bullion and for that matter, not even the largest at that. The Maratha incursions, no doubt, resulted in dislocation in the economy but it was not so serious as it was mainly local in character and only a temporary phase. The competition among the European traders as also among the European and Asian merchants was certainly there but this need not be overemphasized. Even taking for granted for the sake of argument that the price of export goods such as textiles and raw silk registered a rise over the period under review, it may be argued, as has been done by a recent authority, that ‘such a sectoral rise might only reflect a failure of the supply of these goods to increase as fast as the demand for them, and may not necessarily indicate a general price rise in the economy’.5 In order to prove the latter, we have to look for movements in the price of the so-called wage-goods. The most important among these are staple food items like rice and wheat. But at the present state of our knowledge, such an exercise is fraught with the danger of a wide margin of error because of the lack of precise information in the face of numerous varieties of staple food items, especially rice. One suspects that such an attempt might only lead to extremely erratic behaviour of the prices of provisions, as has been demonstrated in a recent study of Bengal prices on similar lines for the period 1650-1720.6 Further, the explanation based on the quantity theory of money that the increasing European demands for export commodities which were paid in cash enhanced the demand for staple food like rice and other consumer goods has recently been subjected to doubt. A recent authority explains the phenomenon in a different way.7 Though the extent of increase in the velocity of money circulation as a result of European trade cannot be precisely determined, the increasing European trade implied that the ‘monetized transactions as a proportion of total transactions in the economy would have gone up’. Besides, over the period

164 | Companies, Commerce and Merchants

of more than 35 years from 1720 to 1757, ‘natural increase in population would have necessitated a secular rise in output and transaction if the per capita output and availability were not to go down’. All these factors, it has been pointed out, would gravitate towards checking a general rise in prices which could have been the result of an increase in the supply of money following the influx of bullion connected with the European trade.8 Price of Textiles Be that as it may, as has been pointed out earlier, we should look into the prices of major food grains, especially rice, the staple food of Bengal, to determine whether there was any sharp rise in prices in general over the period, and not in the prices of major export commodities like textiles and raw silk where the great demand for such goods on the part of Asian merchants and Europeans might have resulted in such a rise. But as even the latest studies emphasize this aspect to prove a general rise in prices and as ‘evidence of a sustained and marked increase in prices’,9 let us examine how far and if at all, the prices of these commodities show a secular upward trend during the period under review. One has to take into account here that even earlier authorities pointed out a ‘sharp increase’ in the prices of textiles and raw silk, and asserted that between 1738 and 1754, prices of these goods increased by no less than 30 per cent.10 The latest study on the period, quoting earlier authorities, also came to the same conclusion.11 The main and the only basis of the above conclusion by earlier authorities regarding the steep rise in the price of textiles is a complete misreading (and out of context too) of an entry in the Bengal Public Consultations under December 1752.12 The particular Consultation refers to a letter from Dacca of 4 December 1752 wherein the Dacca factors were trying to answer the allegations from Calcutta regarding the bad quality of textiles sent by them, pointing out that the sample of 1738 was not ‘fit standard for judging’ the quality of cloth sent from Dacca in the former

Continuity or Change in the Eighteenth Century? | 165

year. The reasons for the badness of the quality of cloth, as the Dacca factors wrote, were:13 . . . as the Copass [kapas – cotton] or country cotton has not been for the two years past under 9 or 10 rupees and the price of rice at the same time very dear, whereas in 1738 the Coppas did not exceed Rs. 2 or Rs. 2-8 and the rice very cheap, mostly 2 maunds 20 seers to 3 maunds for a rupee to which may be added which is well known to all the purchasers of cloth that the prices of all sorts of cloths have risen near 30 per cent, some more, since the year 1738, and that they now labour there and has done so for these two years past under the inconvenience of a French factory continually emulating the Hon’ble Company’s trade and have advanced the price of all cloth both coarse and fine and obliged them to be less severe with their dellols in prizing their cloth. . . .

It is amply clear from the above that this is a desperate bid on the part of the Dacca factors – scrupulousness not being their strong point which was true also of other Company servants working in India at that time – to justify the badness of cloth and hence the emphasis on 30 per cent increase in the price of cloth between 1738 and 1752. As the ‘muster’ (sample) of 1738 had been the standard, so 1738 becomes the target date and for no other reason. Moreover, if one carefully examines the above passage, one could seldom miss the stress on ‘these two years past’ which signifies that the quality of cloth sent by them deteriorated mostly in those two years and not really for the whole of the period from 1738 to 1752. There is the specific reference to ‘near 30 per cent’ increase in the price of cloth during the period but, if at all true, that applied to Dacca only, and could hardly be taken as an evidence of a general phenomenon of price increase throughout Bengal. Besides, one can rightly suspect the validity of the evidence which was produced in self-defence in the face of the allegation of malpractice. One who has gone carefully through the Company records can hardly fail to observe that throughout the period, whenever an allegation was made regarding badness of investments, the factors always answered in the same vein – that it was because of the high price of staples like rice and cotton, competition from other Asian and/or Euro-

166 | Companies, Commerce and Merchants

pean merchants, and the general increase in the price of export commodities. One should accept such ‘evidence’ or ‘excuses’ with due caution. Still the fact remains that a distinguished authority has demonstrated with diagrams, polynomial and linear trends as also time series that ‘a fairly sustained and marked increase [in prices] is particularly strong for raw silk and textiles’ during the period under review.14 How can one reconcile this with the fact, as we shall see shortly, that the increase in prices of these two main export commodities was hardly so spectacular as has been presumed to be? The answer is not far to seek. The weighted average, diagrams, polynomial and linear trend etc., so well illustrated by K.N. Chaudhuri, do not however take into account the most crucial factors which determined the price of either textiles or raw silk. There were numerous varieties of textiles and even within the same category (e.g. muslins or fine calicoes), there were different types (e.g. in muslin, there were khasas, mulmuls etc.) and the price of each type (e.g. khasa) depended on several factors such as the size, quality, the aurung in which it was produced, etc.15 The same was the case with raw silk, the price of which depended on the particular variety (e.g. ‘Gujarat’, ‘Kumarkhali’ etc.), fineness and racolta (band – Indian term for the harvest).16 If all these factors are not taken into consideration in minute details while working out the cost price, the results are bound to be misleading. Just by deflating the total cost price by the total amount exported to find out per unit cost price does not reveal the real picture as has happened in this case.17 Hence even with such scientific tools of analysis used by K.N. Chaudhuri, the results – showing a secular upward trend – can hardly be taken for granted. For any precise study of the movement of textile prices, one has to take into account very meticulously how many pieces of a particular type of cloth, of what length and width, of which aurung and of what quality were exported at what total price from which only one can get the exact picture of the price movement. To give an illustration, if we are looking into the price of khasa, just taking into account the total pieces of khasas

Continuity or Change in the Eighteenth Century? | 167

exported and their total price to find out the unit price of khasa could be quite erroneous. We have to know whether the khasa was ordinary, fine or superfine (i.e. the quality), whether its measurement was 40 co. × 3 co.18 or 40 co. × 2¾ co. or 40 co. × 2½ co. etc. (i.e. its actual size), whether it was produced in Jagannathpur or Cogmaria or Orrua (i.e. the aurung in which it was produced) etc. Because, the price of khasa will depend on all these factors and hence we have to take all these variables into consideration. This is almost an impossible task as in all the export invoices, whether of the Dutch or the English Company, what we get is the total number of khasas exported with their total cost price without any indication whatsoever about their size, quality or aurung. Again, if the unit price of the textiles in a particular year is arrived at just by dividing the total cost price by the total number of pieces exported by the Companies, without taking into account the composition of different categories such as muslins, fine calicoes, ordinary calicoes etc. which varied over the period in the total textile export, then the picture of price movement could be very much distorted. Thus the steady upward trend in K.N. Chaudhuri’s time series can be explained by the fact that while the share of the more expensive category of textiles, muslins, (as also silk piece-goods) steadily increased in the first quinquennial period of 1740s and 1750s, that of the cheapest variety, ordinary calicoes, remained the same during this period,19 and not because of any real increase in the price of textiles. That the unit price of textiles could vary widely depending on the category of textiles and place of procurement is amply clear from the unit price of the textiles exported by the Dutch Company in 1753/4 for which such breakdowns are available. Thus, the unit price of textiles sent from Patna, mostly ordinary calicoes, worked out to be f. 6.13 and from Dacca, mostly muslins and fine calicoes, f. 20.04, from Hughli, mostly medium quality, f. 9.56 and from Kasimbazar, silk piece-goods and ordinary calicoes, f. 7.85.20 The only evidence from which we can get an exact picture of the price movement in textiles is the contract the Companies entered into with the dadni merchants for supply of goods every

168 | Companies, Commerce and Merchants

year. In these contracts we find the particular details of the size, quality and the aurung of each type of cloth which are absolutely essential for a proper scrutiny of the movement of price of textiles. Until and unless we know these details of the variables, nothing definitive can be said about price movement. As is well known, the prices were arrived at after days’ of bargaining and wrangling between the Company and the merchants. Though the Companies sometimes tried to pay lower prices for cloth delivered by the merchants, it was mainly on the ground of inferior quality supplied than agreed for in the contract, and the original contract price was never altered. So let us see what are the general trends as revealed in these contracts over the period for which we select six years namely, 1732, 1741, 1744, 1751, 1752 and 1754. These particular years are chosen for such an analysis because 1732 was a normal year without any political disturbance or natural calamity, 1741 was the year just prior to the Maratha invasions, 1744 was the year when the impact of these incursions which began in 1742 could naturally be expected to be reflected in the price movement. The Maratha invasions stopped in 1751 and 1752 was the year immediately after the peace with the Marathas while 1754 was the normal year after the famine of 1752. As such these years would give us a broad spectrum of the period with its ups and downs, whether political or economic. For our present analyses, we first take up the Dutch contracts for these six years and see how the prices moved in the two main types of muslins, khasas and mulmuls, which were the staples in the export list of the Europeans (Table 8.1).21 It is quite evident from the above Table 8.1 that between 1734 and 1754, there was absolutely no increase in the price of the 20 different types of khasas and mulmuls that were noted in the list of contract, except khasa Nadona which seems to be, from its price, a medium or low quality khasa. What is extremely significant, as is apparent from this Table 8.1, is that the price of all the different khasas and mulmuls, except khasa Nadona, actually went down in the period 1751-4 from the level between 1732 and 1744. In other words, the prices of khasas and mulmuls in

Continuity or Change in the Eighteenth Century? | 169 Table 8.1: Contract Price of Khasas and Mulmuls, 1732-1754 (Select Years), Dutch Company Textile Type

Measure (covid)

Cossa Ordn. 40 x 3 Cossa fine 40 x 3 Cossa ordn. 40 x 2⅝ Cossa ordn. 40 x 2¼ Cossa ordn. 40 x 2½ Cossa ordn. 40 x 2 Cossa ordn. 40 x 1¾ Cossa ordn. 40 x 1½ Cossa Nadona 25 x 2¼ Mulmul ordn. 40 x 3 Mulmul fine 40 x 3 Mulmul ordn. 40 x 2⅝ Mulmul ordn. 40 x 2¼ Mulmul fine 40 x 2¼ Mulmul ordn. 40 x 2 Mulmul ordn. 40 x 1¾ Mulmul ordn. 40 x 1¾ Mulmul ordn. 40 x 1½ Mulmul fine 40 x 1½ Mulmul ordn. 40 x 1¼

1732 Price Rs. As 15.00 18.00 13.00 11.00 x 9.12 8.10 7.8 3.14 15.00 18.00 13.00 11.00 14.00 9.12 8.10 10.8 x x 7

1741 Price Rs. As 15.00 x 13.00 11.00 x 8.00 7.00 x 3.14 15.00 18.00 13.00 11.00 14.00 9.12 8.10 x 7.00 9.00 x

1744 Price Rs. As 15.00 x 13.00 11.00 x 9.12 8.10 7.8 3.14 15.00 x 13.00 11.00 14.00 9.12 8.10 x 7.00 x x

1751 Price Rs. As 14.11 x 12.11 x 10.13 9.8 8.7 7.6 4.6 x 17.10 12.11 10.12 13.11 9.8 8.7 10.4 x 8.13 6.14

1752 Price Rs. As 14.11 x 12.11 10.13 x 9.8 8.7 7.6 4.6 x 17.10 12.11 10.12 13.11 9.8 8.7 10.4 6.14 8.13 x

1754 Price Rs. As 14.11 x 12.11 10.13 x 9.8 8.7 7.6 4.6 14.11 17.10 x 10.12 13.11 9.8 x 10.5 6.14 8.13 x

Source: Contracts with Merchants, VOC 2241, ff. 649-661; VOC 2537, ff. 1427-8; VOC 2629, f. 218; VOC 2783, ff. 236-7; VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.

the period from 1732-54 will negate the thesis of a ‘fairly marked and sustained’ increase in the prices of textiles in general during the period. But one might argue that khasas and mulmuls were finer varieties of calicoes, and perhaps the price rise was reflected in not-so-fine and medium types of textiles. So let us see how the prices moved in these varieties of textiles during the years under consideration. In Table 8.2 we note the contract prices for several types of textiles coarser than muslins and which were prominent in the export list of the Dutch Company. The price trend that emerges from Table 8.2 is undoubtedly different from the one in Table 8.1. Out of the 6 types of coarser

170 | Companies, Commerce and Merchants Table 8.2: Contract Prices of Coarser Textiles,1732-54 (Select Years), Dutch Company Textile Type

Measure (in covid) 24 x 2 18 x 2¼ 24 x 3 18 x 2¼

1732 Price Rs. As. 4.8 4.00 4.12 3.8

1741 Price Rs. As. 4.8 4.00 4.12 3.8

1744 Price Rs. As. 4.8 4.00 x 3.8

1751 Price Rs. As. 4.15 4.3 5.7 3.7

1752 Price Rs. As. 4.15 4.8 5.12 3.7

1754 Price Rs. As. 4.15 4.8 5.12 3.7

Sanoes Kharadaries Aliabanies Ginghams (plain) Ginghams (check) Humhums (Ordn.)

18 x 2¼

4.12

4.12

4.12

4.7

4.7

4.7

14 x 3

5.00

5.4

5.4

5.11

5.11

5.11

Source: same as in Table 8.1.

textiles, the price of 4 went up by about 10 to 20 per cent while the price of two others actually show a downward trend from the period 1732-44 to 1751-4. Though it is difficult to explain such mixed trends in prices of these textiles, one possible explanation could be that most of these piece-goods were produced in the areas around Hugli, which was one of the worst affected by the Maratha raids. Secondly, the competition among the buyers, whether Asians or Europeans, was more severe for these coarser varieties than in finer muslins. But then we cannot explain, at the present state of our knowledge, the slide in the prices of the two types of ginghams in the period 1751-4 from the level in 173244. Still what is apparent from the prices of the coarser types of textiles is that there is hardly anything which can be termed ‘a marked and sustained increase’ in prices over the period. However, so far as the price of coarsest textiles is concerned, there seems to have been a perceptible rise in the 1750s from the level of the 1730s (Table 8.3). But it is extremely difficult to measure the increase in prices over the period because the measurement of the textiles procured by the Dutch varied, and there is no precise data how the price of any of the coarsest textiles of the same length and width rose during the period (Table 8.3). In Bengal, the price of the same type of textile often jumped when

Continuity or Change in the Eighteenth Century? | 171 Table 8.3: Contract Price of Coarsest and Cheapest Textiles, 1732-54 (Select Years), Dutch Company Textile Type Measure (in covid)

Garras Garras Garras Garras Guinees Guiness Salampuris Salampuris

36 x 2½ 30 x 2½ 30 x 2¼ 24 x 2½ 75 x 2½ 75 x 2¼ 37½ x 2½ 37½ x 2¼

1732 Price Rs. As. per corge*

1741 Price Rs. As. per corge

1744 Price Rs. As. per corge

1751 Price Rs. As. per corge

1752 Price Rs. As. per corge

1754 Price Rs. As. per corge

x x 45 x x 118 x x

x x 48 x x 121.8 x 60.12

x x x x x x x x

84 70 x 56 175 x 87.8 x

84 70 x 56 175 x 87.8 x

84 70 x 56 175 x 87.8 x

Source and note: Same as in Table 8.1 and VOC 2783, ff. 248-9; 2840, f. 680. Per corge means per 20. Generally the coarset textiles were contracted per corge.

the traditional measurement was even slightly altered – a fact which is borne by numerous references in the Company records. Yet, in all probability, the price of the coarsest textiles went up considerably as will be apparent from Table 8.3. The explanation for this is not far to seek. Most of these textiles were produced in Birbhum, Burdwan and Kasimbazar areas which were the most affected by the Maratha invasions. Besides, the keenest competition in the market was for this variety which was the reason why the merchants were most reluctant to contract for these textiles which, as they alleged, brought them little or no profit while they were extremely eager to contract for finer varieties. Often the Companies had to impose the contract for these ordinary calicoes on the unwilling merchants.22 Taking up the contracts of the English Company, it can be asserted that though no uniform and precise trend is to be found in the prices of muslins like khasa and mulmul, yet an upward trend is discernible on the whole. In case of more expensive khasas like khasa Cogmaria (40 × 3), while the price was Rs. 11.8 in 1732, it came down to Rs. 9.8 in 1741 and 1742 but rose again to Rs. 10.8 in 1744 and remained at the same level up to

172 | Companies, Commerce and Merchants

1751. Similarly in case of khasa Cogmaria fine (40 × 2½), the price came down from Rs. 8.00 in 1740 to Rs. 7.6 in 1741 and remained at Rs. 7.12 from 1744 to 1751 (Table 8.4). Similarly, in case of mulmul Santipur fine (40 × 3) while the price was Rs. 17.8 in 1740, it came down to Rs. 16.8 in 1741 and 1751. Again mulmul Balasore (20 yd × 1 yd) was priced at Rs. 11.00 in 1744 and 1750 while in 1751 it was Rs. 10.8 (Table 8.4). What is clear from Table 8.4 is that there was sharp increase in the price mainly of the cheaper varieties of khasas and mulmuls. Thus while the price of khasa Burron (40 × 2) was between Rs. 4.12 and Rs. 5 in 1732 and 1741, it went up to Rs. 5.12 in the period from 1744 to 1751. The same upward trend is visible in case of khasa Kumarkhali (40 × 2) (Table 8.4). More or less the same picture is to be found in the price of cheaper mulmuls. For example, while mulmul Santipur (40 × 2¼) cost Rs. 7.12 in 1741, the price was Rs. 9.12. In 1750 and 1751. The increase in price is more marked in the case of mulmul Santipur (40 × 2) over the period (Table 8.4). In other words, though there was a sharp increase in the price of cheaper types of muslins, the price of more expensive types actually went down. So it is difficult to maintain that there was a marked and sustained increase in the price of textiles as a whole over the period. There was, however, a marked and, to some extent, sharp rise in the price of coarse calicoes in the contract of the English Company. It will be apparent from Table 8.5 that the price of photaes fine (20 × 2¼) went up from Rs. 3.12 in 1740 and 1742 to Rs. 4.8 in the period from 1744 to 1751. More marked was the rise in the price of garras. While the price of garras fine (72 × 2¼) was Rs. 106 per 20 pieces in 1740, it rose to Rs. 112 in 1742 and to Rs. 160 in 1750 and 1751. Similarly, garras fine (36 × 2½) cost Rs. 53 to Rs. 56 per 20 pieces in 1740 and 1742 respectively but the price moved up to Rs. 80 in 1750 and 1751. This only indicates clearly that there was a sharp increase in the price of coarse textiles in the contracts of the English Company – a trend which was not so very clear in the Dutch contracts. But as we have explained earlier, the coarse categories of textiles were produced mostly in the areas which were badly affected by

Table 8.4: Contract Price of Khasas and Mulmuls, 1732-51 (Select Years), English Company Textile Type

Cossa Orrua Cossa Orrua Cossa Cogmaria Cossa Cogmaria fine -do-doCossa Burron Cossa Kumarkhali Cossa Malda F. Golden -doCossa Serry Mulmul Santipur -doMulmul Santipur fine -do-do-doMulmul Balasore Mulmul Cossajura Mulmul Cossajura fine -do-doMulmul Serry Mulmul Serry fine

Measure (in covid)

1732

1740

1741

1744

1750

1751

Price Rs. As.

Price Rs. As.

Price Rs. As.

Price Rs. As.

Price Rs. As.

Price Rs. As.

40 x 2¼ 40 x 2 40 x 3

8.00 x 11.8

8.00 7.2 9.8

7.12 6,12 9.8

8.14 7.14 10.8

8.14 7.14 10.8

8.14 7.14 10.8

40 x 3 40 x 2½ 40 x 2¼ 40 x 2

15.8 x x 5

x 7.10 8.00 4.12

x 7.10 7.6 4.12

x 8.2 7.12 5.12

x 8.2 7.12 5.12

x 8.8 7.12 5.12

x

4.12

4.12

5.12

5.12

5.12

40 x 2½ 40 x 3 32 x 1¾ 40 x 3 40 x 2¼

x x x 14 x

19.00 x 57 p.c. x x

19.00 x 64 p.c. 10.00 7.12

x 17.8 x x x

x 17.8 x 11.00 9.12

x 17.8 x x 9.12

40 x 3 40 x 2¼ 40 x 2 40 x 2 20yd x 1yd

x x x x

17.8 x x x

16.8 9.8 8.4 6.12

x 9.12 8.4 x

x x x 8.4

16.8 x x 8.4

x

x

x

11.00

11.00

10.8

40 x 2

x

11.0

x

x

x

x

40 x 2 40 × 2¼ 40 x 3 36 x 1¾

x x x x

x x x x

x x x x

x

x 22.8 30.0 55 p.c. 92.8 p.c.

x x x x

36 x 1¾

19.0 21.0 30.0 55 p.c. 82.8 p.c.

x

x

x

40 x 2

Source and note: BPC, vol. 9, f. 61; vol. 14, ff. 91-2; vol. 15, ff. 89, 233-4; vol. 17, f. 70; vol. 23, ff. 186-7; vol. 24, ff. 238-9. From 1744 onward, the ‘medium price’ is noted here. For 1752 no such price is available while the contract system was abolished in 1753; p.c. means per corge or per 20.

174 | Companies, Commerce and Merchants Table 8.5: Contract Price of Coarse Calicoes, 1732-51 (Select Years), English Company Textile Type

Measure (in covid)

Photaes fine -do-doGarras Garras fine Garras Garras fine

28 x 2¾ 28 x 2¼ 28 x 2½ 72 x 2¼ 72 x 2¼ 36 x 2¼ 36 x 2¼

1732 Price Rs. As. 4 x x x x x x

1740 1742 Price Price Rs. As. Rs. As. x x 3.12 3.12 2.12 2.12 93 p.c. 99 p.c. 106 p.c. 112 p.c. 46.8 p.c. 49.8 p.c. 53 p.c. 56 p.c.

1744 Price Rs. As. x 4.8 x x x x x

1750 1752 Price Price Rs. As. Rs. As. x x 4.8 4.8 x x x x 160 p.c. 160 p.c. x x 80 p.c. 80 p.c.

Source and note: Same as in Table 8.4.

the Maratha inroads. Moreover, there was always the keenest competition among various groups of merchants for the coarser textiles for which the demand was great and which often pushed up the prices. Still, what is obvious from the contract prices in the Dutch and English records is that though prices of certain types of textiles went up, especially in the late 1740s and early 1750s from the level of the 1730s, there is nothing to establish that the prices of textiles in general went up sharply during the period under review. Silk Price Turning to raw silk, we find a slightly different picture from that in the case of textiles. In the Table below (Table 8.6) we note the price of raw silk for several years from 1733 to 1753 to see the movement of prices in this important export commodity. The trend of raw silk prices that emerges from Table 8.6 is somewhat erratic and shows wide fluctuations over the period; But what is clear is that the rise in the price of raw silk between 1733 and 1745 is almost negligible and does not support the thesis of a general increase in prices in Bengal from the early 1740s. What is significant is that there was a marked increase in the price of raw silk in 1747 and 1748 from the level of 1733 or 1745. But this seems to have been a temporary phenomenon as

Continuity or Change in the Eighteenth Century? | 175

from June 1748 the prices began to fall and remained more or less at the same level except in February 1751 when there was again a slight increase from the level of June 1748. In short, it can be stated that the price rise in silk was not so precipitate as most historians would have us believe. That the price trend is to some extent erratic is because of the fact, which we analysed in detail elsewhere,23 that silk was one of the most sensitive articles Table 8.6: Price of Raw Silk Procured by the English, 1733-53 Date March 1733

January 1745

April 1747

January 1748

June 1748

October 1749

February 1751

March 1752

April 1753

Variety of Silk

Price per seer (Rs. As.)

November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali November bund Gujarat Kumarkhali

5 : 12 6:6 5 : 12 5 : 14 6:7 5 : 11 9:4 9 : 13 9:1 9:4 9 : 13 9:1 7:8 8:1 7:5 7:7:9 6 : 13 8:8:9 7 : 13 7 : 14 8:7 x 7 : 12 8:5 x

Source: Fact. Records, Kasimbazar, vol. 5, 7 March 1733, vol. 6, 19 January 1745; vol. 7, 2 June 1748, vol. 10, 22 February 1751; BPC, vol. 19, 22 April 1747; vol. 22, 31 October 1749; vol. 25, 16 March 1752, vol. 26, 18 April 1753; C & B Abstr., vol. 5, 10 January 1748.

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the production of which, right from the mulberry plantation, depended so much on the whims of nature. Moreover, as we have argued elsewhere, the demand of the Asian merchants was one of the major factors which determined the price of silk in the market. An important point that is reflected in the above Table 8.6 is that the English Company was not exporting the cheaper Kumarkhali silk from around 1752 and was concentrating more on the comparatively expensive varieties like Gujarat and November bund. As such, the unit price of silk is bound to go up from that of the earlier period and so the rise in the unit price after 1752 would not necessarily mean any intrinsic rise in the price of the commodity. From the analysis made here, it can be said that the dominant trend in silk price over the period can hardly be described as a ‘marked and sustained’ increase in prices. Price of Food Grains As pointed out earlier, rice is the most important food item the price of which should be looked into to determine any precise price movement in Bengal during the period under review. But the main difficulty here is the wide variety of rice and its equally wide price variation depending on quality. This is well illustrated in Table 8.7 which indicates the different varieties of rice and their prices. So it is not a simple case of fine or coarse rice only; when the price of coarse rice can vary so very widely from 4 mds. 15 seers to 7 mds. 20 seers per rupee (the difference being about 71 per cent), there is a grave risk in taking the price of rice as an indicator of price movement until and unless one can be absolutely sure of the exact quality of rice when its price is taken into account. Otherwise the result could be extremely erratic and gravely misleading. Yet depending on such data and sometimes even fragmentary at that, recent authorities including the latest on the subject have made such assertions as ‘Rice which was sold at 100 to 120 seers for a rupee in 1738, was being sold only thirty seers for a rupee’ in the mid-1740s as evidence to show

Continuity or Change in the Eighteenth Century? | 177 Table 8.7: Price of Rice, 1729 Variety

Mds. seer

per Rupee

1–10 1–23 1–35 4–15 4–25 5–25 7–20

– – – – – – –

Fine Rice Bansephool 1st sort 2nd sort 3rd sort Coarse Rice – Desna Coarse Rice – Poorbie Coarse Rice – Munsurah Coarse Rice – Kurkashallee Source: Sixth Report (1782-3), Appendix 15.

that ‘production declined and prices soared’ or that by the 1740s ‘Bengal’s advantages seemed to be disappearing’.24 Basing his evidence on earlier authorities, the most recent authority affirms that ‘between 1738 and 1754 it was thought that the price of rice in Calcutta had risen by three or four times’ and reiterates that ‘local shortages’ led to ‘greatly increased food prices’.25 Now let us see how far such assertions are borne by hard evidence. Regarding the price of rice in 1738, earlier authorities26 solely depended on the letter written by the Dacca factors to Calcutta in 1752 in answer to the allegation of inferior quality of cloth supplied by the former which we have quoted earlier. Not only that, the letter was written in self defence but one has to take into account the fact that the Dacca factors were writing in 1752 about the prevailing price of rice in 1738 for which they probably depended mostly on their own imagination which again might have been coloured by their desperate attempt to cover up their shortcomings. Moreover, the significant fact that it referred to price of rice only in Dacca is ignored by our authorities. It is too much to expect that the price of rice would be the same in Calcutta and Dacca so that the price of rice in the latter place in 1738 could be compared with that in the former place in 1752 or 1754. Again, numerous references in the Company records clearly indicate that the price of rice in Calcutta mostly depended on the supply of the commodity from Bakherganj and Douleah

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in south-eartern Bengal, without which the city was ‘reduced to the greatest necessity and misery’ and that the price of rice in Calcutta was often manipulated by the city’s rice merchants who took advantage of the fluid situation in the growing city.27 As a matter of fact, as is indicated in Table 8.8, the price of rice in Calcutta in 1738 was 30 seers per ‘Madras’ rupee at which rate the Fort Wiiliam Council decided to buy rice for the garrison (coarse, of course, but yet which quality even in the coarse variety ?) while in 1744 the rate was 30 seers for ‘common sort’. The Council blamed the importers of rice for raising the price to such an ‘exorbitant’ rate and asked the Calcutta zamindar not to permit the coarse rice to be sold under 1 md. per ‘Arcot’ rupee.28 It will also be clear from Table 8.8 that in 1754 fine rice was sold at 32½ seers per rupee while the coarse variety was sold at 1 md. per ‘Arcot’ rupee. Hence the assertion of our authorities that the Table 8.8: Price of Rice in Bengal, 1738-54 Date 12 June 1738 2 April 1739 31 May 1743 31 May 1743 7 January 1744 7 January 1744 20 September 1751 20 September 1751 October 1751 2 January 1752 2 January 1752 October 1752 19 February 1753 10 June 1754 10 June 1754 10 June 1754

Place

Mds. Seer

per Rupee

Quality

Calcutta Calcutta Dacca Dacca Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta

0-30 1-30 0-35 1-10 0-30 1-00 0-35 1-10 1-32 0-35 1-10 1-16 0-25 0-32½ 0-35 1-00

‘Madras’ Rup. ‘Madras’ Rup. Dasmasha ” Dasmasha ” Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup. Arcot Rup.

Coarse (?) (for garrison) ‘very good sort’ ‘fine’ ‘ordinary’ ‘common sort’ ‘coarse’ ‘good Nov. sort’ ‘ordinary’ ? ‘good Nov. sort’ ‘ordinary’ ? ? ‘fine’ ‘middling’ ‘coarse’

Source and note: BPC, vol. 13, f. 262vo, f. 527; vol. 16, f. 401vo; vol. 24, f. 323; vol. 25, f. 297vo; vol. 26, ff. 56vo-57; vol. 27, ff. 224vo-25; Fact. Records, Dacca, vol. 2, 31 May 1743. Arcot or Madras rupees were coined by the English in Arcot/Madras and ‘Dasmasha’ rupees were used in Dacca.

Continuity or Change in the Eighteenth Century? | 179

price of rice had gone up ‘three to four times’ between 1738 and 1754 is hardly tenable. While it is obvious from the above Table 8.8 that no clear trend of the price of rice emerges, one has to take into consideration in analyzing the Table that some of the prices shown were during the times of scarcity and famine, and not under normal conditions. In 1738, for example the price was affected by the severe storm and flood that swept Bengal in September and October 1737.29 Again, after the Maratha invasions were over and when monsoon failed, there was famine in 1752 which is said to have resulted in ‘worst shortages in 60 years’ and the price of rice had reportedly gone up sharply to 25 seers a rupee. At the same time one should note here that the price was reported by Holwell who was prone to exaggeration and also that he emphasized the sharp rise because of the large export of rice from Calcutta on the one hand and the delay in the import from Douleah on the other.30 But Orme’s assertion that the price of rice in Murshidabad rose by 6 times its previous level seems to be an obvious exaggeration and can hardly be corroborated by contemporary evidence.31 That the abnormal price rise in early 1753 was only a temporary phenomenon and that prices came down to their normal level in 1754 become quite evident from Table 8.8. As such, the price of rice can hardly be taken as an index of price movement because of the lack of precise data as also the anomaly of the data available to us at this stage. Maratha Invasions, European Trade and Prices Historians including the latest authorities have unduly emphasized the effects of the Maratha invasions and the impact of the European trade while dealing with the price movement in Bengal.32 The report of the two English warehousekeepers, Manningham and Frankland, came in handy to substantiate the thesis of price rise in Bengal from the 1740s.33 As we have argued elsewhere,34 the report was self-contradictory, motivated and written with the ulterior objective of changing over from the dadni to the gomasta system. Hence it should be handled

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with more caution. Moreover, the very fact that these two Company servants wrote that the ‘necessaries of life had been greatly enhanced over the previous ten or twenty years’ only betrays the casual nature of their assertion. As they wrote in 1753, it could have meant price rise either from about 1733 or 1743 which is a very curious position as our authorities assert that the marked and sustained increase in prices took place only in early 1740s and by implication that the price situation was completely different in the early 1730s and early 1740s. Hence one part of the assertion of the two Englishmen (‘since the last 20 yrs’) becomes superfluous. If the increase of prices is to be dated from early 1740s, the report then, no doubt, tallies with the thesis of our authorities but as we have seen in our analysis earlier, that was not the case at all. So there is hardly any justification for relying so much on the report of Manningham and Frankland as evidence of price rise. Like most of the historians, these two Englishmen, too, have attributed the alleged price increase in Bengal to a condition of real scarcity following the Maratha invasions. There is no denying the fact that the Maratha incursions resulted in serious dislocation in the economy of some areas of Bengal. But the impact of the invasions has been greatly exaggerated. The Marathas caused destruction generally along the lines of their march, leaving the remaining part of the country more or less unaffected. Even in the affected areas, as Richard Becher, a Company official present in Bengal during the period, pointed out, the Marathas were obliged to return at the approach of the rainy season, and the inhabitants were again safe till next January. So they immediately began to work and arranged to raise and sell their crops before next year’s impending invasion.35 That the country was not so much impoverished is proved by the fact that the zamindars paid Alivardi Rs. 10 million at one time and Rs. 5 million at another besides their annual revenue to enable him to meet the increased military expenditure.36 The argument that many merchants in Bengal ‘were crippled by losses and exactions’ following the Maratha invasions and that as a result

Continuity or Change in the Eighteenth Century? | 181

of this both the English and the Dutch Companies increasingly turned to direct dealings with the artisans is hardly tenable. As we have shown elsewhere,37 the Dutch Company made such an experiment for a few years only from 1747 to 1749 in view of the ‘bankcruptcy’ of several merchants in a particular aurung but reverted to contracts with dadni merchants from 1750. The change over in the English Company’s investment pattern from dadni to gomasta system in 1753 was not because of any decline of Bengal merchants but was actually the result of the Fort William Council’s attempt to resolve its commercial crisis concerning private trade by cutting out the dadni merchants.38 Again, historians rely too much on contemporary vernacular literature and Persian chronicles to corroborate the disastrous effects of the Maratha invasions. That these are mostly exaggerated accounts is clear from the very nature of the evidence. For example, the poet Gangaram wrote ‘rice, pulses, dal of all sorts, oil, ghee, flour, sugar, salt began to be sold at one rupee per seer. . . . All of them from the lowest to the highest, including the nawab himself, had to subsist on boiled roots of banana trees’.39 It is simply absurd that rice, oil, ghee (butter oil), sugar, salt were all sold at one rupee per seer. Equally, unbelievable is the assertion that even the nawab subsisted on roots of banana trees. Even making allowance for the poetic effusion, the above can hardly be taken as evidence of the impact of the Maratha invasions. The author of Riyaz refers to human beings living on banana roots to avert death by starvation. But if even true, this was a description mostly of Burdwan city when its granaries were burnt down and the supply of imported grains was completely cut off by the Marathas for a short while.40 Another Bengali poet, Bharatchandra, gives an account of Nalini’s shopping in Burdwan but the prices she paid for different articles though regarded as ‘abnormal’ cannot be compared with earlier prices (for lack of precise data) to see if they were really so.41 The simple fact that the total value of the investments of the major European Companies, especially the English and the Dutch, as also the export by Asian merchants was hardly affected during

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or after the Maratha incursions is sufficient proof that the invasions had really no long-term disastrous effects on the overall economy of Bengal.42 The assertion of a recent authority that ‘prices were rising with a high level of European purchases financed by imports of silver in the decade or so before the battle of Plassey’ (in 1757), though in line with the general assumption that there was an upward movement in prices from the early 1740s (the period referred to coinciding with the commencement of the Maratha invasion) can hardly be tanable.43 Of the two major European exporters of Bengal goods, the Dutch fell far behind the English from the 1720s. As far as the English were concerned, and they were the most dominant of the European Companies in Bengal during this period, there was hardly any remarkable increase in their total exports from Bengal in the 1740s and 1750s as compared with the level in the 1730s which will be evident from Table 8.9. It is well beyond doubt from Table 8.9 that the value of the English exports, though fluctuated a little from 1726-7 to 17545, the increase or decrease in the average annual value was only marginal. Though there was a trend of decline from the mid1740s, this was more than compensated by the increase in Dutch exports during this period which will be evident from Table 8.10.44 In other words, the total European export from Bengal Table 8.9: Quinquennial Total of English Export from Bengal, 1727-55 Years 1726/7-1730/1 1731/2-1735/6 1740/1-1744/5 1745/6-1749/50 1750/1-1754/5

Total value (£s.)

Average annual value (£s.)

2,289,323 2,046,150 2,401,785 2,173,524 2,033,235

457,865 4,09,230 480,357 434,705 406,648

Source and note: Computed from K.N. Chaudhuri, Trading World, pp. 509-10 with one year lag. As the real boom in English exports began in 1726/27 when the value of the export amounted to over 0.5 million pounds, the second highest in the first half of the eighteenth century, our computation here began with that year. Again as the increasing purchases of the Europeans and consequent price rise are linked up, presumably from the 1740s, we concentrated here mainly on the period 1740-55.

Continuity or Change in the Eighteenth Century? | 183 Table 8.10: Quinquennil Total and Average Annual Value of English and Dutch Exports, 1730-55

(in Florins)

Years

1730/1-1734/5 1740/1-1744/5 1750/1-1754/5

English

Dutch

Average Annual Value of Exports to Europe

Average Annual Value of Exports to Europe

Average Annual Value of Total Exports (Europe and Asia)

5,082,453 5,764,284 4,879,785

2,020,460 2,390,558 3,417,306

3,489,567 3,475,770 4,480,104

Source and note: Dutch exports compiled and computed from export invoices in VOC records. The figures for English exports calculated with one-year lag from K.N. Chaudhuri, Trading World, pp. 510-11. The rate of conversion used is £1 = f. 12

remained more or less stable from the early 1730s to the mid1750s which would substantiate our two important assertions that neither the Maratha invasions had a disastrous effect on the economy nor that the increasing purchases of the European Companies pushed up the prices. Moreover, it can be pointed out, for the sake of argument, that had there been even an increase in the European exports from Bengal, it would not have necessarily resulted in a spurt in prices. As an authority has argued recently, the overall increase in the prices of the export commodities ‘wold have constituted a clear signal for reallocating resources to increase the output of these goods’.45 It is beyond any doubt that Bengal was one of the most fertile provinces of Mughal India, supplied food grains and other provisions to not only several other parts of the country but quite a few neighbouring countries also. As such it can be argued, as has been done by the said authority, that ‘the availability of a food surplus created a margin within which a relative shift from food to commercial crops in response to challenging demand could be affected without generating unduly severe strains’.46 Regarding the impact of the influx of bullion as a result of the European trade, as we cannot estimate the total supply of money in the economy, it is not possible to have any idea of the relative significance of the addition to the money sup-

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ply as a consequence of the import of precious metals by the Europeans. In all probability, not all the silver brought by the Companies was converted into Mughal coins, and as such did not mean an automatic and corresponding increase in money supply. Most often that not, the Companies had to sell their silver to the banking house of Jagat Seth which because of its many sources of income did not always have to coin the silver in the mint.47 Moreover, leaving aside the ‘Oriental penchant for hoarding’ which is explained as one of the major factors why the import of precious metals had had no pressure on prices,48 there is little doubt that the nawabs of Bengal and the merchant princes amassed a huge fortune during this period. Even after paying the revenue to Delhi to the tune Rs. 13 million a year from the early eighteenth century to at least the early 1740s, the nawabs of Bengal could enrich their treasury to such an extent that after the battle of Plassey, the British were astounded to find ‘20 million of rupees in gold and silver’ in the royal treasury. If we are to believe the author of Tarikh-i-Mansuri, besides the above amount, there was a hidden treasure in the harem which contained ‘no less than 80 million rupees’ in gold, silver and jewels, and which was appropriated by Mir Jarfar, Rai Durlabh and Raja Nabakrishna, Clive’s munshi.49 At the same time, we have indicated elsewhere the amount of the enormous wealth accumulated by the merchant princes namely, the Jagat Seths, Umichand and Khwaja Wazid.50 Then there were the fabulously rich zamindars and mansabdars who attained their prosperity in the first half of the eighteenth century. All this will only indicate that quite a substantial part of the precious metals brought in by the trade did not possibly filter down to the primary producers and that a large chunk of it was appropriated by the upper section of the society. The main factor, however, for the absence of any marked price rise in Bengal was the basic question of demand and supply. Whatever the level of demand was, the fact that Bengal could easily provide it without requiring any change in the basic technology mitigates against any marked rise in prices. If the supply side could meet the demand easily without having any significant pressure on

Continuity or Change in the Eighteenth Century? | 185 Table 8.11: Percentage Share of Different Categories of Textiles Exported by the Companies, 1730-55 (First Five Years of Each Decade) Textile Categories Ordn. Calicoes Fine Calicoes Muslins Silk Piece-Goods Mixd. Piece-Goods Miscellaneous

1730s 46.39 14.99 20.22 10.43 7.97

Total

Dutch Exports 1740s 1750s 39.84 55.68 19.89 12.66 26.21 17.78 10.08 11.18 3.98 2.70







100

100

100

English Exports 1730s 1740s 1750s 46.01 30.59 30.80 20.29 22.48 19.16 24.44 34.08 39.26 3.18 4.55 6.36 5.97 7.88 3.72 0.11 0.42 0.70 100

100

100

Source: Dutch exports collected and computed from export invoices in VOC records, English exports computed from detailed data supplied by K.N. Chaudhuri.

Figure 8.1: Share of Different Categories of Textiles in Dutch and English Exports (1730-55)

Source: As in Table 8.11.

the structure and organization of the industries (as is evident especially in the textile and silk sectors), the demand which brought in precious metals in consequence need not necessarily have much effect on the price level. All the evidence analyzed so far will confirm this.

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Thus it can be reasonably concluded that there was hardly any sustained and marked increase in the prices of commodities in Bengal in the pre-Plassey period. The sharp rise of prices in the 1760s was not a continuum of the earlier trends – it was only a post-Plassey phenomenon for which the Company and its servants with their new onslaughts on various sectors of the province’s economy were primarily responsible. And so far as the sharp and upward movement of prices in the post-Plassey period is concerned, it was a complete break from the trends in the nawabi regime in which, as we have tried to establish here, there was nothing definitive in the price movement which can be described as either ‘sustained’ or ‘marked’ increase. Notes † This paper is a part of the manuscript of the book ‘Pre-Modern Industries and Maritime Trade in South Asia – Bengal in the First Half of the Eighteenth Century’, which I completed as a Fellow-in-Residence at the Netherlands Institute of Advanced Study during the academic year 1990-1. But when published the title of the book was changed to From Prosperity to Decline: Bengal in the Eighteenth Century, New Delhi, 1995. 1. For example, see K.K. Datta, Bengal Suba, 463-9; Brijen K. Gupta, Sirajuddaullah, p. 33; K.N. Chaudhuri, Trading World, pp. 99-108; P.J. Marshall, East Indian Fortunes, p. 35; Bengal, pp. 73, 142-3, 1634, 170. 2. K.N. Chaudhuri, Trading World, pp. 99-108, 159. 3. Ibid., p. 108. 4. See my Presidential Address, Medieval India Section, Indian History Congress, Golden Jubilee Session, Gorakhpur, 1989, ‘Trade, Bullion and Conquest – Bengal in the Eighteenth Century’. 5. Om Prakash, Dutch Company, p. 250. 6. Ibid., pp. 251-3. K.N. Chaudhuri, however, shows with histogram etc. a steady increase in the price of rice during the period under review. 7. Ibid., p. 253. 8. The whole question is discussed in details by Om Prakash, pp. 253-6. 9. K.N. Chaudhuri, Trading World, p. 102; following him; P.J. Marshall, Bengal, p. 73. Chaudhuri depends on polynomial and linear trend of textile and silk prices (pp. 103-4, 107-8) which shows a ‘strong and gradual’ rise in prices but as we shall see the method followed is suspect to wide margin of error.

Continuity or Change in the Eighteenth Century? | 187 10. K.K. Datta, Bengal Suba, p. 464; Brijen K. Gupta, Sirajuddaullah, p. 33. 11. P.J. Marshall, East Indian Fortunes, p. 35; Bengal, p. 73. 12. BPC, vol. 26, f. 214, Consult. 11 December 1752; Bengal and Madras Papers, vol. II, p. 34; James Long, Unpublished Records, p. 40, doc. no. 103 13. All emphasis mine. 14. K.N. Chaudhuri, Trading World, pp. 100-8, 533-4, 544-5. 15. See my forthcoming paper ‘European Companies and Bengal Textile Industry – The Pitfalls of Applying Quantitative Techniques’, in Modern Asian Studies. 16. See my forthcoming paper ‘Silk Trade and Industry in Pre-Colonial Bengal, circa, 1700-1757’, in the Journal of the Economic and Social History of the Orient. 17. K.N. Chaudhuri, Trading World, pp. 506, 546. 18. co. is covido, measuring 18 inches. 19. See Table 8.11 and Figure 8.1. 20. Collected and computed from export invoices in VOC records, VOC, 2811, ff 6vo-7, 20-20vo, 46-46vo, 99-99vo; 2821, ff. 635-6; 2840, ff. 39, 441-2. 21. For the wide variation in the price of the same type of textiles, e.g., khasa and mulmul, depending on size, quality and aurung, see my forthcoming paper in Modern Asian Studies. 22. See my article ‘Merchants, Companies and Rulers’ in the Journal of the Economic and Social History of the Orient, February 1988. 23. See my forthcoming paper in JESHO. 24. Brijen K. Gupta, Sirajuddaullah, p. 33; P.J. Marshall, East Indian Fortunes, p. 35. 25. P.J. Marshall, Bengal, p. 73; East India Fortunes, p. 35. 26. K.K. Datta, Bengal Suba, pp. 463-4; Brijen K. Gupta, Sirajuddaullah, p. 33. 27. BPC, vol. 26, ff. 56vo-57, 19 Feb. 1753; ff. 152-4, 24 May 1753; ff. 336-36vo, 19 November 1753; vol. 27, f. 181, 10 June 1754; ff. 244vo-5, 12 August 1754; ff. 378-78vo, 5 December 1754. 28. BPC, vol. 16, f. 401vo, 7 January 1744. 29. S. Bhattacharyya, East India Company, pp. 214-15. 30. BPC, vol. 26, ff. 56vo-57, 19 February 1753. 31. Orme, Historical Fragments, p. 405. P.J. Marshall, however, depended on Orme and Holwell’s description of the effects of the famine in Caicutta (Holwell, India Tracts, p. 165) as evidence of the marked rise in food prices, P.J. Marshall, Bengal, pp. 18, 73. 32. K.K. Datta, Bengal Suba, pp. 465-8; K.N. Chaudhuri, Trading World, pp. 99-108; P.J. Marshall, Bengal, pp. 73, 142-4.

188 | Companies, Commerce and Merchants 33. Manningham & Frankland’s report, BPC, vol. 26, Annex to Consult. 7 June 1753. Both K.N. Chaudhuri (pp. 99, 102) and P.J. Marshall (East Indian Fortunes, p. 35), depended a lot on this report. 34. See my article ‘Merchants, Companies and Rulers’, in JESHO, February 1988. 35. Richard Becher’s letter to Governor Verlest, 24 May 1769, quoted in W.K. Firminger, Fifth Report, pp. 183-4. 36. Ibid. 37. See my article, ‘Merchants, Companies and Rulers’, in JESHO, February 1988. 38. For details, see ibid. 39. Gangaram, Maharastrapurana, lines 234-42. 40. Rivaz, p. 340. 41. Bharatchandra quoted in K.K. Datta, Bengal Suba, p. 466. 42. For the value of Dutch and English exports, see my paper ‘The Asian Merchants and Companies in Bengal’s export trade, circa, midEighteenth Century’, presented at the International Conference on ‘Merchants, Companies and Trade’, held at Maison Des Sciences de l'Homme, Paris, May 1990. 43. P. J. Marshall, Bengal, pp. 163-4. 44. As a matter of fact, the average total export of the English and Dutch Companies was the highest in the first quinquennial period of the 1750s. 45. Om Prakash, Dutch Company, p. 238. 46. Ibid. 47. See my article, ‘Merchants, Companies and Rulers’, in JESHO, February 1988. 48. For example, Earl J. Hamilton, ‘American Treasure and the Rise of Capitalism, 1500-1700’, Economica, 27, November 1929, 338-57; Rudolph C. Blitz, ‘Mercantilist Policies and the Pattern of World Trade’, 1500-1750, Journal of Economic History, 27, March 1967, pp. 39-55, quoted in Om Prakash, Dutch Company, p. 250. 49. Tarikh-i-Mansuri, tr. H. Blochmann, Journal of the Asiatic Society, no. 2, 1867, pp. 95-6. 50. See my article ‘Merchants, Companies and Rulers’, in JESHO, February 1988.

chapter 9

European Companies and the Bengal Textile Industry in the Eighteenth Century The Pitfalls of Applying Quantitative Techniques*

Bengal textiles enjoyed a unique place and an indisputable supremacy in the world market for centuries before the invasion of the machine-made fabrics in the early nineteenth century following the industrial revolution of the West and political control of the Indian subcontinent by the English East India Company. It need not be emphasized that the products of the Bengal handloom industry reigned supreme all over the accessible Asian and North African markets in the middle ages, and later became one of the major staples of the export trade of the European Companies. Most travellers from Europe starting with Tome Pires, Varthema and Barbosa in the sixteenth century to Bernier, Tavernier and others in the seventeenth singled out especially textiles of Bengal for comments on their extraordinary quality and exquisite beauty. But it was not only in the field of high quality cloth that Bengal had a predominant position; it was also the main production centre of ordinary and medium quality textiles. Long before the advent of the Europeans, the Asian merchants from different parts of the continent and Indian merchants from various regions of the country derived a lucrative trade in Bengal textiles. Though any quantitative data on the volume or value of * Modern Asian Studies, 27, 2 (May 1993), pp. 321-40.

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textile exports by Asians from Bengal in the seventeenth or early eighteenth century is hard to come by, it can be established from the Dutch and English sources that the total value of the textile export by Asian merchants from Malda, one of the main centres of textile production in Bengal (besides several others equally, probably more, important areas like Hughli, Kasimbazar, Dacca, etc.) in the 1670s (i.e. prior to the significant penetration of the textile market by the Europeans) was between Rs. 2 and 3 million a year.2 It was only from around the third quarter of the seventeenth century that there was a sudden boom in the textile exports of the Companies from Bengal which revolutionized the pattern of the Asiatic trade of the Companies. From then onward till the mid-eighteenth century, Bengal became the chief partner of the Companies’ export trade to Europe. There should be little doubt, thanks to the researches of several scholars in the past few decades, that the large exports of Bengal textiles by the North European Companies in the first half of the eighteenth century – not only because of ‘price advantage’ of these textiles but also as a result of the ‘Indian Craze’ in contemporary Europe – certainly gave a boost to the Bengal textile industry. But the impact of the European trade on Bengal in general, and on this traditional and highly developed Bengal industry in particular, seems to have been overestimated – much beyond the proportion it really deserves – by historians.3 What is more, a recent study went to the extent of estimating the new jobs created by the increased purchases of the Europeans in the early eighteenth century, by applying quantitative techniques and came up with a very impressive figure.4 An extremely novel and welcome experiment by itself, no doubt, but the point to argue is whether its results could be accepted as reasonable. The classical debate5 between Fogel and Elton as protagonists of ‘cliometric’ and ‘traditional’ history respectively notwithstanding, historians today are in general more receptive to ‘scientific’ history, ‘born of the marriage contracted between historical problems and advanced statistical analysis’. But as both the reputed scholars agreed that ‘neither traditional nor cliometric methods are free of pitfalls’,6 one should perhaps be very cautious while applying

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quantitative technique. Of course, the pitfalls are not inherent to the method itself as much as they arise from ‘inept applications of the method’. The quantification made in Om Prakash’s study has become all the more significant because on the one hand it has become the model of another recent article which tries to quantify the full time job equivalents of the nineteenth century textile industry7 while on the other all the latest studies on eighteenth-century Bengal or trade in general cite Prakash to show in concrete terms how important the impact of the European trade was on the Bengal economy.8 As such, the aim of this paper is to re-examine the nature of the data on which the quantification was based and see how far the conclusion arrived at in that study could be taken for granted, even giving due allowance for the margin of error involved in such a process. The significant conclusion of Prakash is that ‘the Dutch (and English) trade in Bengal was a net contribution to the growth of the trade from the region’, that it generated ‘a significant increase of income, output and employment’ and that it created the equivalent of around 100,000 new jobs in the textile industry.9 Though one may raise the question how significant the ‘net contribution’ in the context of the Bengal economy as a whole really is, here we shall take up only the question of the full time job equivalent for our consideration. It should, however, be noted, in all fairness, that Prakash made it clear that ‘these figures are extremely crude and subject to a significant margin of error’.10 But still, as it often happens, later authorities found the conclusion too tempting to take note of this caution and hence took the figure of 100,000 full time job equivalents created by the Dutch and English exports of Bengal textiles almost for granted.11 That is why it becomes imperative to re-examine the issue and see if Prakash’s acknowledgement of ‘significant margin of error’ is in fact far more significant than he expected it to be and whether the figures of employment attributed by him to have been generated by the Dutch and English exports could at all be accepted even after allowing reasonable margin of error involved in such quantitative analysis.

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Crucial Factors in the Estimation of Full Time Job Equivalents The procedure followed by Prakash was to find out the total square yardage per piece of textiles by multiplying the length by width, both measures given in cobidos which was taken as 27 inches, and then multiplying the square yardage per piece by the total number of pieces exported. Then he calculated how many looms would have been needed to produce the total square yardage of textiles exported and finally how many weavers, spinners, bleachers, etc. would have been employed in the total number of looms required to produce the total square yardage of textiles exported by the Dutch and English Companies. He also classified the piece-goods into various categories such as muslin, fine and coarse calicoes, silk, etc. and made assumptions, based on later sources, about how many pieces in each of these categories could be produced in a loom per year. There are three crucial factors, besides several other minor ones, on which the whole estimate of the full time job equivalent is based. These are: (a) the actual measure of cobido/covid, the unit in which the dimension of all the textiles was expressed in the records; (b) the classification of the textiles into various categories like muslin, fine and coarse calicoes, and silk and mixed piece-goods;12 (c) the actual size of the piece-goods procured in Bengal by the Dutch and English Companies.

(a) Cobido/covid It is common knowledge that all Bengal textiles were measured in cobido/covid; both length and width were indicated in this unit. The cobido (in Dutch records) or covid (in English Records) was, however, a measure (Portuguese for cubit) with large local variations in different parts of India. But Prakash takes cobido as 27 inches and makes his significant calculations with the cobido measuring precisely 27 inches. As this is the most significant part of his calculations, since he multiplies the length (given in cobido) and width (again in cobido) by the total number of

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average annual exports of textiles by the Dutch Company (as also the English) to find out the total square yardage exported, let us see whether cobido could at all be taken as measuring 27 inches. Prakash cites only two grounds for taking the cobido as 27 inches: first, Pieter van Dam’s Beschryvinge van de OostIndische Compagnie and secondly, the assertion that the Heeren XVII (the Dutch Directors) used the two units, cobido and ell ‘interchangeably’ and as the ell was 27 inches, so the cobido was ‘the equivalent of 27 inches’.13 His first evidence is not so much a reference to Pieter van Dam’s Beschryvinge as to the editor’s glossary. It seems that F. W. Stapel who edited van Dam’s works took the liberty of simply establishing an arbitrary average on the basis of some random quotations from Hobson-Jobson, most of which actually pertain to Gujarat14 and hence can hardly be taken for granted. Stapel makes the following entry:15 ‘cobido: de Indische ellemaat, niet overal even lang, maar gemiddeld ongeveer 70 cm. zie HobsonJobson invoce covid.’ But if one consults Hobson-Jobson, as suggested by Stapel, one finds a significant hint there that ‘the measure [covid] has been forgotten under this name in Bengal though used under the native name hath’. Here is a definite indication that the covid and the Bengali ‘hath’ were equivalent measures or units, a point to which we shall return in due course. The main point to stress at this juncture is that when the whole estimate of full time job equivalent hinges so critically on the actual measure of cobido, we should be much more cautious than just depending on a secondary source like Stapel who in his turn depends on another secondary source, Hobson-Jobson. The second argument that the Heeren XVII used cobido and ell ‘interchangeably’, meaning thereby that they were the same unit of measurement, and that as the ell was 27 inches, the cobido, too, was 27 inches, seems to be more serious than the first one. But the big question is: was it really so? Great pity it is that Prakash gives no reference whatsoever either in his earlier article (1976) or in his book (1985) for so vital a statement made by him. As a result, we had to take the trouble of verifying his statement in the vast mass of Dutch records. Luckily for us,

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however, he gave us a clue as to where to look for them, indicating that the Dutch Directors used the units ‘interchangeably’ in their orders for goods to be sent from Bengal. So we turned to the volumes containing the Resolutions of Heeren XVII in the V.O.C. archives. But in the 15 odd volumes that I looked into for a corroboration of the statement, for the period from about 1680 to 1750, unfortunately I came across not a single instance where the Heeren XVII used both the units as the same or ‘interchangeable’ ones. What we found, instead, is in absolute contradiction of Prakash’s claim, and a definite indication of what the actual measurement of cobido was. No doubt the Dutch Directors used both units when sending out annual orders for Bengal but what he missed is not ‘interchangeably’, which makes all the big difference.16 As a matter of fact, it is the very evidence in the Resolutions of Heeren XVII which conclusively establishes that the cobido was 2/3 of ell and hence only 18 inches, and under no circumstances 27 inches. In the ‘Eijsch [order] van Bengale’ (dt. 26 November 1688), the Heeren XVII asked for 6000 malmals of which 1000 were to be ‘van 3 cubido off twee ellen’ (of 3 cobido or 2 ell), making it absolutely clear that ‘3 cobido’ was equal to ‘2 ell’ or in other words, cobido was only 2/3 of ell and hence only 18 inches as the ell was 27 inches.17 In another instance, in the orders sent out for ships returning in 1757, the Heeren XVII asked for fine romals ‘van 1 el of 1½ cobido’ which establishes beyond any doubt that covid was only 18 inches.18 As the unit cobido is so very vital in the estimate of the extra employment generated by the Dutch and English export of Bengal textiles, we should not depend on only a single source of evidence, however significant it may have been. We shall try to produce more evidence to establish that the cobido measured only 18 inches and not 27 inches as claimed by Prakash. In a handbook prepared for training the Dutch East India merchants in the early eighteenth century the following note is to be found, significantly after the glossary of ‘Zijde Stoffen’ (Silk textiles) and ‘Catoene Lijwaten’, all exported from Bengal:19 ‘De goederen in Indien worden gemeten met Cubidos. Een Cubido of cavido is

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2/3 El Amsterdamsch, en een El Amsterdamsch is 1½ Cubidos.’ So it is more than conclusive from the above that the cobido was only 2/3 of ell and as the ell was 27 inches, the cobido was only 18 inches. However, it may be noted that even in Bengal, there were perhaps slight differences in the measure of cobidos as prevalent in different parts of the province. In a comprehensive survey drawn up by Martinus Koning and Otto Willem (dt. Hughli 23 August 1762), three different cobidos are mentioned – one for Hugli, two others for Kasimbazar.20 In Hugli it was equivalent of ‘een voet en 5 duijm Rijnlands ruijm’. Taking ‘Rijnlandse voet’ at 31.39 cm. and the ‘duijm’ at 2.616 cm., the Company’s cobido in Hugli would amount to somewhat over 44.47 cm. and therefore come close to the hath-value i.e. 18 inches. The two cobidos current in Kasimbazar are referred to by the compilers as ‘Comp.’s cobido’ and ‘Bazaars cobido’, the former being equal to 2/3 ‘Elle Hollands’ or approximately 45.86 cm. and the latter 4/7 ‘elle’ or approx. 39.31 cm. But as we are concerned with the Comp.’s textiles and the Comp. cobido being 45.86 cm., we should have little doubt that the cobido was 18 inches only. This is more or less confirmed by the Dutch traveller Stavorinus who wrote about Bengal in early 1770s:21 The measures of length are cobidos and gass or goss. At Chinsurah a cobido is one foot five inches Rhineland measure. The general length of cobido is taken to be from the elbow of a full grown man, to the tip of the middle finger, in the same manner as the cubit of the ancients. A gass or goss is two cobidos, being at Chinsurah, two feet and ten inches Rhineland measure.

Turning to English sources, one finds unmistakable references in Taylor’s famous description of Dacca Cloth Manufacture in the eighteenth century that in Bengal both textiles and thread were measured in the traditional Begali hath (haut – from elbow to the tip of the middle finger – a tradition that still lingers on), each hath measuring, according to him, ‘nineteen and a half inches’ in Dacca,22 i.e. slightly more than our 18 inches cobido (perhaps a local variation) but certainly much closer to our findings than Prakash’s assumption. Again, the English traveller

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Thomas Bowrey who was in Bengal in the 1670s states categorically that the ‘covet . . . contains 18 inches, and is called hawt’.23 It is long ago (1923) that Moreland came to the conclusion that ‘covads’ in the East Coast was used as a synonym for hasta [or hath] and ‘not as denoting a different unit’. He also cited an instance where 100 cobidos were equivalent to 70 Dutch ells and asserted that on the East Coast the cobido was ‘about 18 inches’ while in Gujarat it was nearly 27 inches.24 Prakash however mentions Moreland and Bowrey in his article (1976) but thinks that ‘the figure of 18 inches to a covid suggested by Moreland [here a ‘suggestion’ of course] and Bowrey [it is contemporary and categorical statement and hence could hardly be a ‘suggestion’] appears to be too low’.25 Unfortunately he gives no explanation whatsoever as to why he considers it so. Be that as it may, after a close scrutiny of Prakash’s evidence for taking cobido as 27 inches and our counter evidence that it was only 18 inches, one should have little doubt that the estimate of 100,000 jobs created in the textile industry by the export of the two Companies should be reduced by at least 1/3 at this stage of our analysis. In other words, the margin of error in the said estimate turns out to be at least 33 per cent which is rather too high to be accepted as ‘scientific’ even by the most optimist among historians.

(b) Classification of Textiles This is again very crucial for the estimate of full time job equivalents generated by exports of the two Companies because according to Prakash while only 15 pieces of muslins could be produced in a loom per year, the number is 36 in case of fine calicoes, 80 for ordinary calicoes and 45 for silk and mixed piecegoods.26 Even taking for granted that this is a valid assumption, the fact remains that until and unless one could be absolutely sure about the classification of textiles into various categories, the result could be highly misleading. I have sounded this caution quite sometime back when in a long note in my book I pointed out it is not only difficult but risky, too, to make such a

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classification, giving specific examples how Irwin’s classification according to maximum price paid, as he claimed, could often be quite misleading.27 In this particular case, one needed all the more caution because if a ‘muslin’ turned out to be actually fine calico, the margin of error for that particular variety could be around 250 per cent (as the rate of production per loom is assumed to be 15 and 36 respectively) and if the muslin was really silk piece-goods, the margin of error would be 300 per cent (the rate being 15 and 45 per loom per year) while it could be even over 500 per cent if the muslin turned out to be coarse calico (the rate of production being 15 and 80 respectively). Here again, unfortunately for us, Prakash does not give any specific reference which was the basis of his classification of the various piece-goods except one vague statement that for 18 years a ‘detailed breakdown by category of textiles exported was available’28 (presumably in the export invoices in the Dutch records). Admittedly limited as my knowledge of Dutch records is compared to that of Prakash, I did not find any export invoice in the eighteenth century where breakdown by category of textiles is given. What we find instead is the total number of a particular type of textiles. The only instance where I came across such breakdown was for a lone year (1753-4) and that, too, just only stating ‘fijne’ or ‘grove’ (coarse) ‘lijwaten’ and ‘zijde stoffen’ – no mention of muslin or mixed piece-goods – sent out from different factories. This was found not in the export invoices but in a General Letter from Hughli to Batavia.29 Even in the auction lists of various Kamers (Chambers of Commerce), the textiles were divided only into two categories – ‘Coetene Lijwaten’ and ‘Zijde Stoffen’.30 According to Prakash’s classification, there were about 25 particular types which come under the category of finest textiles, muslin, of which the principal types exported were (in his words ‘in descending order of fineness, workmanship and cost’)31 tanzeb, terrindam, khasa, malmal, resta and rehing. Among these, the staple varieties were khasa and malmal. Of these 25 items, at the most 10 could undoubtedly be said to be muslin, 6 are quite doubtful32 and more importantly as many as 9 were defi-

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nitely not muslin. We can make such a definitive statement on the basis of several important pieces of evidence. First, Louis Taillefert, who was in Bengal for many years and became the Director of the Dutch factories in Bengal twice (in 1755 and then from 1760 to 1763), left a ‘memorie’ for his successor George Louis Vernet giving detailed information about various types of Bengal textiles, including the aurungs in which some of them were produced.33 Secondly, occasional description of a particular piece-good in the list of orders sent out by the Heeren XVII. Thirdly, the description of a piece of textiles in the export invoice of a particular ship and last, the geographical distribution of the piece-goods exported as is categorically mentioned in the export invoices from 1752-3 onwards. Depending on these sources, we can exclude 9 items, namely chanderbani, cottabani, dotani, kamkhani, maypoost, mohanbani, ragibegi, rudrabani and resta from the author’s list of muslin, as except kamkhani which was at best fine or medium calico,34 all others were actually silk piece-goods. Though we have evidence for all these items to show that they were silk textiles, for lack of space and the risk of repetition, we give one particular instance of our evidence which conclusively proves our point. We enlist our evidence for dotani, because of all these varieties, this was perhaps exported in larger quantities than the others. (1) Silk piece-good in Taillefert’s list. He also categorically mentioned that it was mainly produced in Baluchar, a well-known aurung for producing silk textiles. He writes: ‘Dotanijs of Armosijnen bloemen: en beijde zijden even schoon in Balloetsjer gemaakt wordende’ (HR 246, 7 November 1763). Armosijnen were undoubtedly silk piece-goods, and are even acknowledged as such by Prakash. (2) In the list of orders sent out by Heeren XVII (V.O.C. 122, KA 271, 7 April 1740), the entry is: ‘Armosijnen met bloemen een bijde zijden even schoon genaamt Dotanijs’.) (3) In the export invoice of the ship Coxhorn (V.O.C. 8774, HB, 24 November 1733, ft. 253-5) the entry for 100 pcs. of Dotanijs is as follows: ‘Dotanijs of Armosijnen met bloemen’.

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(4) The price of Dotanijs in the invoice of the ship Haaften (V.O.C. 2304, HB, 3 November 1734, f. 208) works out to be only f. 5 which could hardly be the price of any muslin in the first half of the eighteenth century. So if more than one third of the muslins in the list of Prakash (which could be produced only 15 pcs. per loom per year) turned out to be silk piece-goods (45 pcs. per loom per year) or ordinary calico (80 pcs. per loom per year), then the gross margin of error in the estimate of the full time job equivalents could be anybody’s guess. Coming to the list of fine calicoes, out of 19 varieties as many as 8 were certainly not fine calicoes. Golmandal (or Pansjes Nakjes both in Taillefert’s ‘memorie’ and Heeren XVII’s Resolutions, V.O.C. 117, orders sent out 26 February 1720 and identified as silk piece-goods by Taillefert), sjoukoria, taffachela (both silk piece-goods, according to Taillefert, produced in Kagera, the famous aurung for silk piece-goods near Company’s village Kalkapur in Kasimbazar), lungi (silk piece-goods produced in Raendhe in Taillefert’s list and in the invoice of the ship Coxhorn, V.O.C. 8774, HB 24 November 1733, ff. 253-5 described as ‘enkelde geruite Armosijnen’) were obviously silk piece-goods,35 while bafta, chila, fota and chintz were ordinary calicoes. The price of these last four varieties would conclusively show that they were certainly not fine calicoes. While the average price of bafta, fota, and chintz was f. 7, 6 and 4 respectively, which more or less correspond to the prices of ordinary calicoes from Bihar like amriti (f. 7), dariabadi (f. 6), dongrijs (f. 6) etc., fine calicoes like bethilas (f. 12-13), chowtars (f. 12) etc. would have been much more expensive.36 If this was so, the margin of error in the estimate of new jobs created becomes too unwieldy to be accepted by historians. This is also confirmed by the English records. While the price of bafta, chila, fota, and chintz varied between Rs. 3 and 3.5, the price of fine calicoes like chowtars and dysooksies ranged from Rs. 5.5 to 7 in the early 1750s which only indicates that the former were ordinary calicoes.37

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(c) Actual Size of Piece-goods Procured In the calculation made by Prakash, the size of the piece-goods procured in Bengal plays a major role because to find out the total square yardage exported by the two Companies, the total number of pieces was multiplied by the square yardage per piece.38 The total square yardage, as he claims, has been ‘arrived at on the basis of extensive information available in the Dutch and English Company records’. He holds that the muslins in Dutch records measured 27 to 37 yds for length and 3/4 to 2¼ yds for width and hence takes per piece to be 30 sq. yds.39 Let us see how far justified his claim is. It is true that the average size of the staple muslins like khasa and malmal was 40 co. × 2 co.40 But Prakash takes the cobido as 27 inches which should actually be 18 inches and hence the average size of a muslin would have been only 20 sq. yds and not 30 sq. yds. More serious is his claim (and which again plays a major role in his calculations) that the ‘dimensions found in the English records broadly correspond with these figures’, i.e. 30 sq. yds for muslins. He states that ‘for example, the sizes of tanzebs, khasas and malmals (all muslins) mentioned in these records [English] were 30 yards for length and between ¾ and 2¼ yds for width’.41 But a distinguished authority on the English trade made it absolutely clear quite sometime back that the khasas and malmals exported by the English measured on an average 24 yds in length and 1-1.5 yds in width.42 Even earlier than this, I have given a full table of different types and sizes of khasas and malmals exported by the English (of course in cobidos as that was the common measure of cloth in Bengal).43 Perhaps Prakash was so much engrossed in his idea of cobido being 27 inches, he ignored all such evidence. Fortunately we could find some evidence in the English Company records about the size of these piece-goods in yards which will put to rest all doubts about their dimension in yards as also the actual measure of the cobido. In their orders sent out to Bengal, the Directors used both the units, cobido and yards but certainly not interchangeably. For almost all the types of khasa they wanted, they mentioned the width

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varying between 1 and 13/8 yds (in Dutch records the width being between 1½ co. and 3 co.) taking it for granted that the length would be 20 yds (which in Dutch records was 40 co.). Yet in one case they mentioned particularly the size of khasas as 20 yds × 1 yd. In the case of malmal again on two occasions in the same year they mentioned the size as 20 yds × 1 yd and 20 yds × 1½ yd. The same is the case with tanzebs or several other piece-goods like kharidaries (20 yds × 1 yd), soosies (20 yds × 1 yd) etc.44 So there should be little doubt that the average dimension of the muslins exported by the English (as also the Dutch) was 20 yds ×1 yd, and not 30 yds × 1 yd as claimed by Prakash and on the basis of which he made his estimate of full time job equivalent. After taking all the above factors into consideration, the magical figure of 100,000 new jobs created by the Dutch and English export of textiles from Bengal should be reduced, even at the conservative estimate, by more than half. In other words, the margin of error in the estimate of full-time job equivalents would amount to more than 50 per cent at the minimum which by any account is too high to be accepted.

(d) Other Methodological Problems There are other methodological problems with such calculations made to find out the additional employment generated in Bengal’s textile industry. Two illustrations here will suffice to substantiate our point. First, the piece-goods in most of the types that were exported from Bengal varied in size, especially so far as the width is concerned, and on occasion, even in length too. Hence for any reasonable estimate which would be within the acceptable margin of error, one has to take into account how many pieces, of what length and width of a particular type (e.g. khasa or malmal) was exported from Bengal. This is almost impossible because in the Dutch export invoices one just finds the total number of a particular type of piece-goods (say, khasa), without any indication of how many pieces of what length and width were actually exported. That can only be found in the

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annual contracts made by the Company with the merchants. But that is no indication of how many pieces, and of what length and width, were finally delivered by the merchants, and secondly, how many of those delivered were finally exported to Europe. Our point will be clear if we give an illustration (see Table 9.1) of the varieties in the size and number of two staple muslins, khasas and malmals, from the Dutch Company’s contract with merchants for 1752.45 It is clear from Table 9.1 that there are many variables as to the number of pieces exported and their actual size which should be taken into account in any quantitative estimate which is admittedly quite a complicated process. Secondly, even within the same type of piece-goods, the price variation could be quite large not only depending on the actual size but also on the aurung where it was produced, both of which are reflected in Table 9.1. For example, while the same khasa Jagannatpur (24 × 2¼) costs Rs. 10:13, that of Nadona (24 × 2¼) only Rs. 7:2. Again while the price of malmal fine is Rs. 17:10, the same malmal (ordinary) costs only Rs. 7:6 and so on, indicating thereby that the price of piece-good should be taken into account while determining how many pieces, whether muslins or calicoes, could be produced in a loom per year. Moreover one should also take into account the fact that sometime even the so-called fine calicoes or even coarse calicoes could be more expensive than the so-called muslins implying thereby that price is also a factor to indicate the number of pieces that could be woven in a loom per year.46 Hence the assumption that so many pieces of muslins or fine calicoes etc. could be produced in a loom per year, giving weightage only to the criterion whether it is muslin or fine calico etc. could be quite erroneous. The sort of evidence that we have at the moment does not categorically identify for certain the numerous piece-goods on the basis of fineness and workmanship. What we can do at best with available information is to classify them according to their prices.47 So the price of piece-goods should be considered a major factor in all quantitative estimates we are talking about inasmuch as it reflects, besides the cost of raw material and workmanship,

European Companies and the Bengal Textile Industry | 203 Table 9.1: Dutch Company’s Contract with Merchants for Textiles, 24 June 1751 Name of Piece-goods Cossas Cossas Cossas Jagannatpur Cossas Hendial with gold border Cossas Jagannatpur Cossas Hendial Cossas Jagannatpur Cossas Jagannatpur Cossas fine Hendial with gold border Cossas fine Hendial with gold border Cossas Nadona Cossas Nadona Cossas Bourang Malmal fine Malmal fine Malmal fine Haripal Malmal fine Haripal Malmal fine Haripal Malmal (assorted) Malmal Malmal Malmal Malmal Malmal Malmal ordinary Malmal ordinary

No. of Pieces

Length (co.) x breadth (co.)

Price per Piece

3000 840 6000 2000 2000 2000 2960 1200

40 x 2 40 x 2⅜ 40 x 2¼ 40 x 2¼ 40 x 2 40 x 2 40 x 21/5 40 x 1½

14:11 12:11 10:13 11:6 9:8 9:8 8:7 7:6

500

40 x 3

18:15

1500 1000 2000 4000 200 300 100 350 50 1000 400 4500 500 1200 400 4000 1200

40 x 2¼ 40 x 2¼ 25 x 2¼ 38 x 1⅞ 40 x 3 40 x 2¼ 40 x 2¼ 40 x r¾ 40 x 2¼ 40 x 3 40 x 2⅝ 40 x 2¼ 40 x r¾ 40 x 2 40 x 1½ 38 x 2¼ 40 x 2

14:3 7:2 4:6 6:10 17:10 13:11 12:4 10:4 8:13 14:11 12:11 10:12 8:7 9:8 6:12 7:6 6:12

Source: V.O.C. 2821, HB, 20 February 1753, ff. 91-5, Contract. dt. 24 June 1752.

the cost of labour involved [and hence the number of pieces that could be produced in a year in the loom] in the production of a particular piece-good. As such, any estimate of the number of pieces that could be produced in a loom per year needs to be related to their respective prices also. For example, let us con-

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sider the prices of a few piece-goods that were exported during 1753-4 and 1754-5 for which years we have the export invoices with area-wise breakdown of textiles exported by the Dutch (see Table 9.2). Table 9.2 makes it clear that the price of khasa or malmal (except the finest one from Junglebary), the so-called muslins, could be much less than that of doreas (so-called fine calicoes). If that is so, how can one expect that only 15 of these khasas or malmals could be produced in a loom per year while two or three times more expensive doreas could be produced at the rate of 36 pcs. per loom per year? This only corroborates our point that only dividing the textiles into different categories for any computation of the full time job equivalents would be futile unless we also take into account other important variables like price, number and size of the piece-goods exported. But all this does not in any way detract from the merits of the study which is undoubtedly a welcome addition to our knowledge of the trading world of Asia and Europe in the pre-modern period, and even the ‘rough’ estimate attempted by Prakash is a novel exercise. The main point to emphasize is that most of the historians working in this field so far (not excluding myself, as would be apparent from my earlier study of 1975) were perhaps overestimating the impact of the European trade. In the process the export trade, especially the overland trade, by Asian merchants from Bengal has been overlooked for long. The obvious reason for this was the abundance of quantitative data in the Table 9.2: Prices of Piece-goods Exported by the Dutch during 1753-4 and 1754-5 Piece-goods

Supposed category

Coassas (assorted) Cossas Junglebarry Doreas Doreas Malmal (assorted)

muslin muslin fine calico fine calico muslin

Area Hugli Dacca Hugli Dacca Hugli

Price per Piece (florin) f.13-15 f.72-73 f.25-29 f.46-51 f.11-13

Source: Computed from the export invoices of the Dutch Ships, 1753-4 and 1754-5, V.O.C., 2811, HA, 10 Nov. 1753, 5 January 754, ff. 20-20vo., 46-46vo. V.O.C., 2829, HA 10 November 1754, 19 January 1755, ff. 134vo.-135vo., 185-85vo. I Re:=1.5 fl.

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European archives while evidence, especially of a quantitative nature, of the Asians’ trade is so hard to come by. But a careful search in the indigenous sources as well as in the European archives would possibly yield interesting information which might reveal an altogether different picture than is generally believed now. From my own humble efforts, I am in a position now to suggest with quite some quantitative evidence that even in the mid-18th century, the export trade of Asian merchants from Bengal, especially in the two key export commodities, textiles and raw silk, was much larger than that of the European Companies.48 The total value of Bengal textiles exported by Asian merchants was worth at least about Rs. 4.5 to Rs. 5 million in the mid-18th century.49 However, it is in the silk export that the Asians had a decidedly far superior position inasmuch as while the value of their export (exclusively by Asians as our sources state) was estimated at around Rs. 5.5 million on an average in a year in the early 1750s,50 the total European export of raw silk could be valued at Rs. 1 million at the most.51 The average annual volume of raw silk exported by Asians in the first five years of the 1750s works out to be 1.45 million lb. while the English and Dutch export for this period was only 0.086 million lb. and 0.073 million lb. respectively.52 At the same time it is significant to note that like the Europeans, the Asians too had to bring in mostly silver/cash to Bengal for their purchases53 and as such it can be reasonably argued that it was the Asians and not the Europeans who were the major importers of bullion/silver into Bengal even in the pre-Plassey period, i.e. prior to 1757.54 So far as Bengal’s textile industry was concerned, one has to consider carefully the fact that while the total textile exports of the two major European Companies, the English and Dutch, could hardly be worth more than Rs. 4.5 million around mid18th century,55 the total value of cloth production for exports from Dacca only was estimated at Rs. 2.85 million.56 It need not be emphasized that areas like Hughli, Kasimbazar, Malda and Patna actually produced more medium and ordinary piece-goods than Dacca for export to different parts of Asia and Europe. As a matter of fact the Dutch Company (probably the same would

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have been the case, more or less, with the English too)’ exported more than 50 per cent of the total value of its textiles from the Hughli area (possibly including Malda where piece-goods were procured through dadni merchants of Hugli), 25 to 38 per cent from Kasimbazar and 8 to 12 per cent from the Patna area while the share of Dacca varied from around 5 to 10 per cent in the mid-18th century. This will be apparent from the table of Dutch textile exports for 1753-4 and 1754-5 for which we can find area-wise breakdown (see Table 9.3). If, along with the above facts, we take into consideration the fact that an estimate of the late 18th century puts the value of cloth production of Bengal (for local consumption only) at Table 9.3: Geographical Distribution, Unit Price and Share of Different Areas in the Total Value of Dutch Textile Export from Bengal to Holland, 1753-4 and 1754-5 a. 1753-4 Place

Hugli Kasimbazar Dacca Patna Total

No. of Pieces

141,105 77,565 12,600 48,420 279,800

Total Value [florins] 1,348,532 608,709 251,494 296,815 2,505,550

Unit Price [florins]

Share (percentage) in Total Value

9.56 7.85 20.04 6.13

53.82 24.30 10.04 11.84 100.00

Average unit price of textiles = f. 8.9 b. 1754-5 Place

Hugli Kasimbazar Dacca Patna Total

No. of Pieces

Total Value [florins]

Unit Price [florins]

104,534 997,865 9.55 93,609 763,663 8.16 5,000 85,630 17.13 23,289 145,125 6.23 226,432 1,992,283 Average unit price of textiles = f. 8

Share (percentage) in Total Value 50.07 38.33 4.30 7.30 100.00

Source: Collected and Computed from the Bengal Export Invoices in Dutch Records.

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Rs. 60 million58 which could well have been the case for mid18th century, then the European export of Bengal textiles was in all probability a small fraction of the total output and hence should be placed in its proper perspective. Notes 1. This paper was written while I was a fellow-in-residence at the Netherlands Institute of Advanced Study, Wassenaar, The Netherlands, in 1990-1. 2. The report of the Dutch factor, Henry Cansius, in 1670 put the value of textile exports by the Asians at Rs. 0.8 to 1 million while Richard Edwards of the English Company estimated it between Rs. 2.25 and 3.75 million in 1676. For Cansius’ report, see Verenigde Oost-Indische Compagnie, 1278 (henceforth V.O.C., earlier Koloniaal Archief, 1168, henceforth K.A.) 7 September 1670, ff. 2173-4, Algemeen Rijksarchief, The Hague. The first reference to this report I saw in Om Prakash, The Dutch East India Company and the Economy of Bengal (Princeton, 1985), pp. 99-100, where it is mentioned under K.A. 1168. The series has since been changed to V.O.C. For Edwards’ report, see Factory Records, Miscellaneous, vol. 14, ff. 334-6, India Office Records, London (henceforth IOR). 3. K.K. Datta, Studies in the History of Bengal Suba (Calcutta, 1936), pp. 463-6; S. Bhattacharya, The East India Company and the Economy of Bengal (London, 1954), p. 17; K.N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge, 1978), pp. 239, 247, 261, 272-5; P.J. Marshall, ‘Bengal – the British Bridgehead’, in New Cambridge History of India (Cambridge, 1987), pp. 65-7. 4. Prakash, The Dutch East India Company, pp. 242-4. 5. William Fogel and G.R. Elton, Which Road to the Past? Two Views of History (New Haven and London, 1983). 6. Ibid., p. 124. 7. Michael J. Towney, ‘Employment in the Nineteenth Century Indian Textiles’, Explorations in Economic History 20 (1983), pp. 37-57, esp. pp. 48-9. 8. Marshall, ‘Bengal’, p. 66; Niels Steensgaard, ‘Asian Trade and World Economy from the 15th to the 18th centuries’, in T.R. de Souza (ed.), Indo-Portuguese History: Old Issues, New Questions (New Delhi, 1985), p. 232; J.F. Richards, ‘The Seventeenth-Century Crisis in South Asia’, Modern Asian Studies 24, 4 (1990), pp. 634-5. Richards, however, referred to the general conclusion without quoting the figure.

208 | Companies, Commerce and Merchants 9. Om Prakash, ‘Bullion for Goods: International Trade and the Economy of Early Eighteenth Century Bengal’, Indian Economic and Social History Review, (henceforth IESHR) XIII, 2 (April-June 1976), pp. 15987; The Dutch East India Company, pp. 242-8, 256. The exact estimate is 87 to 111 thousand. 10. Prakash, The Dutch East India Company, pp. 242, 246; ‘Bullion for Goods’, p. 172. 11. Marshall, ‘Bengal’, p. 6; Steensgaard, ‘Asian Trade and World Economy’, p. 232. l2. Prakash, The Dutch East India Company, p. 243, Table 8.1; pp. 61-5. 13. Ibid., pp. 65, 244; ‘Bullion for Goods’, p. 182. 14. H. Yule and A.C. Burnell, Hobson-Jobson, a glossary of Anglo-Indian Words and Phrases, etc. (new edn., W. Crooke, London 1903; facsimile reprint, 1968), p. 268. 15. F.W. Stapel (ed.), Pieter van Dam’s Beschryvinge van de Oost-Indische Compagnie (The Hague, 1932), vol. II, pt II, p. 451. 16. As for example, in the order sent out on 14 November 1701, the Heeren XVII asked for 4000 pcs. of malmal ‘van 36 cobidos lang en 2 co. breet’, and 1300 milmil ‘van ell breet’, V.O.C, 113 (K.A. 262). For the order sent out in 1733, they asked for 15,000 pcs. of Cossas ‘van 3 cobido – 1½ cobido’ while asked for 800 sanoes of 16 ‘ellen lang’ (V.O.C. 120, K.A. 269). Again in 1740, they asked for 60,000 pcs. of garras of ‘30 a 31 cobido lang’ while the order sent out in 1733 was for 60,000 pcs. of garras ‘van 21 ellen lang’ (V.O.C. 122, KA. 271). 17. V.O.C. 110 (K.A. 259), order sent out in November 1688. 18. V.O.C. 7381, ‘Eijsch’ for ships returning in 1757. 19. De Koophandel van Amsterdam, by Le Moine De L’Espine, ed. by Issac Le Long, Tweede Deel, Negende Druk (6th edn., Rotterdam, 1780), p. 91. While discussing the problem of cobido with Dr B.J. Slot, Keeper of the 1st Section, Algemeen Rijksarchief, he thought there might be a book like this, and we found out this edition and the subsequent information in the book. I am thankful to Dr Slot for his help and cooperation. 20. Collectie Hope, No. 73(13), Algemeen Rijksarchief. I owe this information to Huub Meens of Maastricht, Netherlands, for which I am grateful to him. 21. J.S. Stavorinus, Voyages to the East Indies, 1768-71, trans. S.H. Wilcocke, vol. I (London, 1798), p. 463. 22. Home Misc. 456F, ff. 135-6, 173, 175, IOR. 23. Thomas Bowrey, A Geographical Account of Countries Round the Bay of Bengal, 1669-79, ed. R.C. Temple (Cambridge, 1905), p. 218. 24. W.H. Moreland, From Akbar to Aurangzeb (London, 1923), pp. 318, 338.

European Companies and the Bengal Textile Industry | 209 25. Prakash, ‘Bullion for Goods’, p. 182. But I could not find the reference in his book. 26. Prakash, The Dutch East India Company, p. 243, Table 8.1. 27. S. Chaudhuri, Trade and Commercial Organization in Bengal, 16501720 (Calcutta, 1975), pp. 194-5, fn. 141. 28. Prakash, The Dutch East India Company, p. 243, sources for Table 8.1. 29. V.O.C. 2862 (K.A. 2754); HB, 14 March 1755, ff. 898-9. 30. Auction Notice, Dt. 16 September 1755, Resolutions of Heeren XVII, V.O.C. 7380. 31. Prakash, The Dutch East India Company, pp. 61-5, with footnotes, especially 18, 23, 29, 30. 32. The doubtful varieties are: achiabani (coarse calico according to K. N. Chaudhuri, p. 503), asisbegi (like rajibegi?), ektani (like dotani?), kabulkhani (like kamkhani?), mobessabani (like mohanbani?), and gerberry (produced in Malda, according to Taillefert). 33. Hoge Regering van Batavia (henceforth HR), 246, 7 November 1763, Algemeen Rijksarchief. Taillefert actually wrote two ‘memories’, the first one dt. 27 October 1755, V.O.C. 2829 (K.A. 2741). 34. Prakash might raise the question that kamkhani was identified as fine muslin by Irwin also. The latter states that it was produced near Patna which is confirmed by our sources (V.O.C. 2594, HB, 4 January 1744, ff. 286vo., 288). But Bihar was certainly not an area producing fine muslin. Secondly, if price is any indication which both our author and Irwin claim it is, kamkhani is at best a medium or coarse calico because the price of kamkhani in the export invoices works out to be around f. 4.5 (V.O.C. 2617, HB, 24 January 1745, ff. 157vo-58, Invoice of Hofwegen) while the price of muslin during the period would have been at least f. 15 to 20 (V.O.C. 2629, HB, 4 January 1744, ff. 199218, Contracts with Merchants). 35. Prakash can argue again that he mentioned silk lungi, silk taffachela, silk sjoukoria, etc., as a separate category from lungi, taffachela, etc. But the problem is that nowhere in the records of the early 18th century do we find these distinctions, and Taillefert never mentions such different categories of the same brand of piece-goods. Nor do we find such distinction in Irwin, K.N. Chaudhuri or Hameeda Hossain. 36. The unit price of these piece-goods computed from the total cost price and the number of pieces exported by the ships Bevalligheid (V.O.C 2794, HB, 20 Dec. 1752, ff. 7vo.-8; 2829, HA, 10 November 1754, ff. 134vo-35vo.) and Ruijskenstein (V.O.C. 2829, HZ, 19 January 1755, ff. 185-85vo.). There is also great doubt whether sanu could be considered fine calico as is done by Prakash. Even Irwin contends that sanu was a ‘plain cotton cloth of ordinary quality’, and baftas and

210 | Companies, Commerce and Merchants chintz as ‘white’ or ‘calico’ (John Irwin and P.R. Schwartz, Studies in Indo-European Textile History (Ahmedabad, 1966), pp. 59, 62, 70) while K. N. Chaudhuri, The Trading World of Asia, pp. 503-5, classifies baftas as ‘plain white . . . medium to superior’, chintz ‘printed . . . medium to superior’ and sanu as ‘plain white’. Still now salu (a corrupt form of sanu?) is considered a cheap coarse cloth in Bengal. It is strange that Prakash places nainsook which means ‘pleasure of eye’ under fine calicoes. It was actually one of the finest and most expensive muslins (Taylor – 'a thick muslin’), the price being f. 73 per piece in 1754-5 (V.O.C. 2811, HA, 5 January 1754, ff. 46-46 vo.), V.O.C. 2829, HA, 19 January 1755, ff. 185-85vo.). Similarly dorea and humhum were not, in all probability, fine calicoes but muslins. According to K.N. Chaudhuri, humhum was muslin while Irwin thinks that it was ‘plain cotton cloth of varying quality’. Both of them however hold that dorea was mixed piece-goods, which is rather doubtful. If these two types were muslins, that will certainly strengthen Prakash’s position. 37. Collected and computed from Bengal General Journals and Ledgers, vol. 54, IOR. 38. Prakash, The Dutch East India Company, p. 243, Table 8.1. 39. Ibid., p. 244, note for Table 8.1. 40 . V.O.C. 2821, HB, 20 February 1753, ff. 91-95, Contract with Merchants, 24 June 1752. 41 . Prakash, The Dutch East India Company, p. 244, note for Table 8.1. 42 . K.N. Chaudhuri, The Trading World of Asia, p. 504. 43. S. Chaudhuri, Trade and Commercial Organization, p. 267, Appendix E. 44. Despatch Book (henceforth D.B.), vol.107, 13 December 1738, ff. 53647; DB. 108, 3 February 1740, ff. 364-76, IOR. 45. V.O.C. 2821, HB, 20 February 1753, ff. 91-5, Contract dt. 24 June 1752. 46. For example, the price of guineas, a well-known coarse calico, was f. 13-14 (because of its size? 75 co. × 2¼ co.) in the period 1752-3 to 1754-5 while the price of ordinary malmal (a muslin) of Hugli was f. 11-13, ordinary khasa, (again a muslin) of Hugli from f. 13-15 and bethila (a fine calico) from f. 11-12 in the same period. Collected and computed from Dutch export invoices, V.O.C. 2794, 2811, 2829. 47. Prakash classifies the various piece-goods even in the same category in ‘descending order’ on the basis of ‘fineness, workmanship and cost’. Om Prakash, The Dutch East India Company, pp. 61, 62, 64. This is an extremely doubtful hypothesis. See for example, the prices of tanzebs, terendams, khasas, malmals (in ‘descending order’ of Prakash) for 1753-4 and 1754-5. Tanjeb Dhaka -f. 42-63 Tanjeb Daudpur (Hughli) -f. 10-11.

European Companies and the Bengal Textile Industry | 211

Terendam Santipur (Hugli) -f. 19 Khasa (Hugli) -f. 13-15 Malmal Santipur (Hugli) -f. 38 It is clear from this that Tanjeb Dhaka is the most expensive and hence finest quality but not Tanjeb Daudpur which is less expensive than Terendam Santipur while Malmal Santipur should precede in order of fineness both Tanjeb Daudpur and Terendam Santipur as also Khasa Hugli. 48. See for example, Trade, Bullion and Conquest: Bengal in the Eighteenth Century, Presidential Address, Medieval India Section, Golden Jubilee Session, Indian History Congress, Gorakhpur, December 1990. I have discussed the whole issue in greater detail in my paper ‘The Asian Merchants and Companies in Bengal’s Export Trade, circa mid-Eighteenth Century’, presented at the International Conference on ‘Merchants, Companies and Trade’ held at Maison des Sciences de l’Homme, Paris, 31 May-1 June 1990. It has since been published as Merchants, Companies and Trade: Europe and Asia in the Early Modern Era, Cambridge, 1999. 49 . Dutch Director Louis Taillefert’s ‘memorie’, V.O.C. 2849 (K A. 2741), 27 October 1755, ff. 188 vo.-189. 50 . Bengal Public Consultations (henceforth B.P.C.), Range 1, vol. 44, Annex to Consult. 19 June 1769, IOR; Eur. Mss. D. 283, f. 21; H. Verelst’s letter to the Court of Directors, 5 April 1769, Fort William – India House Correspondence (henceforth FWIHC), vol. V., ed. N.K. Sinha (New Delhi, 1960), pp. 18-19. 51. The Dutch export is computed from export invoices in Dutch records and the English export is taken from K.N. Chaudhuri, The Trading World of Asia, p. 534. The value of both the Dutch and English export was calculated at the rate of Rs. 7 per seer, the rate at which the Asian export was estimated in the sources. That the average price of tanna silk was about this is corroborated by other sources also, e.g. Factory Records, Kasimbazar, vol. 12, Consult. 6 January 1756, IOR; B.P.C., Range 1, vol. 26, f. 114, Consult. 18 April 1753, vol. 25, f. 86vo., Consult. 16 March 1752. 52 . All the English and Dutch silk converted into small English lb 53 . Taillefert’s ‘memorie’, V.O.C. 2849, 27 October 1755, f. 245vo. Luke Scrafton, Reflections on the Government of Indostan (London, 1760), p. 20; B.P.C., Range I, vol. 11, ff. 288 vo.-289, 28 August 1736; FWIHC, vol. V, pp. 18-19. 54 . The Asian merchants imported into Bengal a few commodities like cotton etc.but their total value compared to the value of exports from Bengal was quite negligible. 55 . The Dutch trade to Europe valued at around Rs. 1.5 million (computed from export invoices in Dutch records) and the English trade around

212 | Companies, Commerce and Merchants Rs. 2.5 to Rs. 3 million (K.N. Chaudhuri, The Trading World of Asia, p. 545) in the mid-18th century. 56. Taylor’s Report, Home Misc. 456F, f. 93. 57. See, for instance, the Geographical Analysis of Orders for Piece-goods from London in early 1680s, S. Chaudhuri, Trade and Commercial Organisation, p. 201, fn. 166. 58. H.T. Colebrooke, Remarks on the Husbandry and Internal Commerce of Bengal (Calcutta, 1804), p. 170.

chapter 10

European Companies and Pre-Modern South Asian Commercial System A Study of Bengal in the Eighteenth Century*

It is almost common knowledge by now, thanks to the researches of several trade historians in the last few decades, that the European Companies trading in South Asia in the seventeenth and eighteenth centuries had to adjust themselves to the prevalent commercial system and tradition in the given areas of their trade. Seldom were the cases when the Companies could affect notable changes in the traditional system of commerce in the South Asian countries they traded with. Of course it should be admitted in all fairness that the activities of these Companies resulted in certain innovations as also modifications in the existing system which were in a way novel in the commercial order of the time, though these were probably not very significant in the overall structure of pre-modern South Asian commercial system. In this essay† I shall examine the Investment Pattern of the European Companies, mainly the English and Dutch East India Companies, which were the major foreign trading concerns in *Calcutta Historical Journal, vol. XI, nos. 1-2, July 1986-June 1987, pp. 138-65. The award of fellowship/travel grant/contingency from various institutions like the Commonwealth Commission in the U.K., British Council, Indian Council of Historical Research, Indian Council of Social Science Research and Maison des Sciences de l’Homme (Paris) enabled me to do most of the research for this paper in the U.K., the Netherlands and India, and finalise the draft of this paper.



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Bengal in the first half of the eighteenth century, and see how the Companies tried to achieve the twin goals of Investment and Procurement within the broad framework of the traditional commercial system. A few questions crop up in this connection. Did the Companies have to change the small details within the broad structure of traditional system? What were the problems they had to face in their investments? How did they try to solve them and with what success? In the course of the discussion I shall try to answer these questions as far as possible, given the limitations of the source material. Though the illustrations will be taken mainly from the English East India Company, supplemented by those of the Dutch Company, the broad conclusions will be applicable to all the European Companies trading in Bengal, and for that matter, with minor changes in detail and allowance for local variations, will be valid in general for all the European Companies trading in different parts of South Asia during the period under review. Investment Pattern The succesful investments1 of the European Companies in Bengal depended not primarily on the economic laws of supply and demand. The Companies had to face many a problem in securing their investments which were peculiar to the Indian situation. Their servants in India were not familiar with the market mechanism of the country and most often ignorant of the local language. Under the circumstances they had to depend for investments on a group of merchant-middlemen, generally under a Chief merchant often called broker by the Companies, in every major trading centre. Thus the Companies appointed local brokers in most of their factories and depended solely on them for the provision of their investments. The brokers helped the Companies in making contracts with local merchants – most often recommended by the brokers themselves – for provision of goods for the return voyage of the ships. These merchants, however, were required to be paid advance or dadni by the Companies on the amount contracted for. The dadni merchants in

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their turn gave advances to weavers, artisans and other primary producers through their gomastas or agents scattered through various production centres or aurangs to ensure the supply of goods at proper time and according to specified standards. The Companies, however, also purchased goods with ‘ready money’ at the shipping season but this invariably entailed paying a much higher price than at the normal time. Naturally they preferred, in order to minimise the cost price of commodities bought for export, the investment by dadni or advance payment system. The Institution of Broker As the European Companies had to resort to the dadni system or advance payment to merchants for their investments, they had to depend largely on the brokers who were responsible for the money advanced to the merchants. The merchants who worked on behalf of the Company for procuring the investments with such advances were called dadni merchants. Thus the practice of employing a broker became an integral part of the Companies’ machinery for providing investments in Bengal. The custom of engaging a broker who was intimately connected with the investments of the Europeans in India was reported as being common by travellers like Fryer and Ovington during the last quarter of the seventeenth century.2 In Calcutta, Kasimbazar, Dacca and other factories in Bengal, the English Company contracted for the investments with the dadni merchants through the brokers who also helped in pricing and sorting of commodities brought in by those merchants. As the Company’s investment in Calcutta was quite considerable, the office of the broker there became quite important and influential one. The office of the broker was equally important in Surat where one had to buy the office by offering a substantial sum but it was not the case in Calcutta.3 It is important to note that these brokers, though employees of the European Companies were themselves merchants of repute and substantial credit, and quite often conducted their own business quite independent of the Companies through their host of relatives and gomastas. As

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such, whenever these brokers were dismissed from the Companies’ service, it did not absolutely ruin them as would be evident from the various evidence to be found in the Company records. Calcutta Brokers The two main families which provided most of the brokers to the English Company in Calcutta and Kasimbazar were the Seths and Katmas respectively. As the investments in Calcutta largely consisted of silk and cotton piece-goods produced by Bengali weavers, none could better play the role of a broker than the Seths who were themselves of the weaving caste. They together with the Basaks of the same caste were then perhaps the most powerful groups, both economically and socially, in their community. Being firmly established in the site of Calcutta for generations before the arrival of the English and already acquiring great fortune by trade with the Europeans, not only did the Seths and Basaks command respect of the weavers’ community, but also as their virtual leaders they could alone persuade them to work for the Company under their guidance. As the dadni merchants of Calcutta mostly belonged to their community, they could also exercise direct control over them as they wished. It was therefore not for nothing that the Seths filled the most important post of the Company’s broker in the first half of the eighteenth century almost by hereditary succession.4 Towards the close of the seventeenth century Jayakrishna was the broker to the Company in Calcutta on a salary of Rs. 1,000 per annum but was dismissed from service in 1699 for accepting dosturee or brokerage from the dadni merchants.5 Janardan Seth who was described by the Calcutta Council ‘as the person best qualified for a broker’ was appointed to the post on condition that he would be allowed 3/4 per cent brokerage on the value of total investment in Calcutta, in lieu of a regular salary.6 Though a broker to the Company, Janardan was also an eminent merchant who supplied part of the Company’s investment throughout the tenure of his office till he died in February 1712.7 The Court of Directors in London looked down upon Janardan as a villain

European Companies and Pre-Modern Commercial System | 217

who, it alleged, through his malpractices cheated the Company, monopolised all the trade and thus amassed vast fortune for himself.8 In January 1714 it wrote to the Calcutta Council: ‘No wonder that the late broker Janardan declared himself several lack of Rupees who but a few years ago was Mr. Beard’s servant and not worth one hundred rupees’.9 After Janardan’s death, his brother Baranasi Seth was appointed the Company’s broker. But the Directors regarded him too as the chief source of all the mischief leading to bad quality and high price of the English investments in Bengal. By now, it seems, the broker’s power was immense and the Court was not prepared to tolerate such a position. The Directors ordered in 1716 that the broker’s power and the ‘Confederacy of the present merchants’ set up by him with his ‘Relatives and Creatures’ must be broken.10 They wrote indignantly to Calcutta: ‘The exorbitant power of your broker is what we will never again bear with nor with those who are his advocates and support nor will we suffer any broker to rival much less to overstep our President’.11 Again they complained, not without reason, that Baranasi was not only a broker but ‘by himself and creatures’ sold most of the goods provided for the Company.12 When Robert Hedges succeeded Russell, he wrote frequently to the Court of Directors about the misdeeds of the broker and tried to curtail his power. He reported to the Directors that the President had set a bad example of depending wholly on Baranasi Seth and that he was so indifferent to investment that Baranasi and his family provided two-third of the investments, and influenced the sorting and pricing also. Till this was ‘cured’, held Hedges, there was no possibility of getting goods at cheaper rates. ‘Benarse Seat ruled as much abroad as in the Warehouse, Revenues rose or fell as he pleased, the Collectors being his Creatures.’13 Such was the power of the Seths as broker. But Hedges was not entirely in favour of removing Baranasi Seth but wanted only ‘to hinder his power which prejudices the Company’s Affairs’, because ‘it cannot be the Company’s interest that the Chief Merchant should be Broker for if so Goods will come dear’.14 The Court of Directors however was adamant and following its order, Baranasi

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was replaced in April 1715 by Ramkrishna Khan, a merchant of repute and influence in Calcutta.15 Both the Court of Directors and the Calcutta Council seemed gratified with Ramkrishna’s appointment which resulted in better and cheaper investments for the Company. But the Directors at the same time cautioned the Calcutta Council in the following words: ‘It will be incumbent on all of you to prevent this Broker getting the ascendant the last had. Encourage and support him in his place while he diligently performs his Duty but don’t let him overstep you or be in effect Your Master.’16 But Ramkrishna could not enjoy the coveted post for long and died in November 1716 when Harinath was made broker on the rcommendation of Robert Hedges.17 In the beginning this Harinath appeared to be ‘able, diligent and faithful’ from the goods he provided. But despite this, the Council observed that ‘if he should prove unfaithful will turn him out with disgrace and suffer no broker to have too great authority.’18 But Harinath was primarily a servant of Hedges and the Council soon found him to be ‘unskilled in goodness or value of muslins and of mean capacity and no repute.’19 The Council wrote home that ‘we wonder Mr. Hedges should put him in when he would not trust him in his own Affairs but Barnarse Seat.’20 In April 1719 the Calcutta Council declared in a long minute that Harinath was altogether unsuitable for his job, and as it was looking for ‘an honest experienc’t man to direct the merchants in making the species of cloth’, it thought the only competent person then in Calcutta for the office of the broker was the much maligned Baranasi Seth.21 Thus Baranasi was reappointed broker in 1719. The reasons for reinstating Baranasi in the broker’s office, as the Council put it, were that he ‘is perfectly capacitated for business and as honest as of his cast[e].’22 The Council wrote home: ‘The large and early investment will show his capacity, the goods are generally better made and cheaper than for sometime past.’23 That Baranasi Seth was a capable man and that he was quite successful as a broker is evident from the Council’s letter of 31 January 1722: ‘. . . none but he could have influenced the merchants and secured the last and this years Investment on credit,

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he being bound with each merchant for what they borrowed of the shroffs, this shows his zeal for the Company’s Interest.’24 The Court of Directors too wrote to Calcutta Council appreciating the services rendered by Baranasi.25 It is evident from the records of the Company that the Seths were the only persons in Calcutta in the 1st half of the 18th century, who as the social and economic leaders of the weaving community, could serve best the interest of the Company. The case of Baranasi Seth proves beyond doubt there was none else in Calcutta in his time who could secure the Company’s investments on better terms. Despite many a pious resolution by the Company, the power of the Seths could hardly be curbed, and as brokers they continued to exercise absolute control over the Company’s investments. Baranasi died in October 1724 and was succeeded by his brother Bishnudas Seth.26 Justifying his appointment the Council wrote to the Directors that he appeared ‘the properest Person on many Accounts, and principally in regard to his Credit in the Country which is apparent from the recommendation of all the Government of Hugly in his favour and his being a very Substantial Man, which will enable him upon an emergency to assist our Hon’ble Masters Affairs as Barnassoeseat did three years agoe.’ As to his capacity for the post, it pointed out that ‘we think him equal to any of the rest and the trust Barnassoeseat reposed on him by leaving him the sole Direction of his Affairs, show the good an opinion he had both of his Integrity and Capacity.’27 Notwithstanding this confidence on the new broker and his being presented with a ‘seerpaw’ and a horse as ordered by the Court, his conduct was called into question as early as January 1728.28 It was alleged that he together with Umichand, a dadni merchant, has engrossed most of the investments, especially of the finer sorts, to the exclusion of most other merchants. On 21 July 1731 the Calcutta Council noted that the broker in collusion with Umichand has monopolised under fictitous names ‘much the largest part of the Company’s investment’ and corrupted ‘most if not all black servants in the cottah.’29 Two members of the Council, Wastell and Bourchier, wanted immediate dismissal

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of Bishnudas. But the Council led by President Deane gave the following reasons for not turning out the broker ‘at this season of the year’: ‘It is incontestable that the Merchants, who contract for investment, borrow large sums of money to carry it on before money is advanced, that many goods are purchased and that the Broker must be engaged on that account for relations and friends in a large sum of money and security for all the Merchants in general, wherefore his being displaced will immediately bring his creditors upon him and make advantages to themselves (at the several aurungs) by his disgrace. . . .’30 It was further argued by the Council that only recently the discredit of the Company’s broker at Kasimbazar resulted in ‘our credit almost gone with the shroffs and entirely ruined with Futtichund who was the only person that could assist us in any pressing occasion.’31 This throws some very interesting light on the ramifications of the dadni system as also the delicately balanced credit mechanism on which the system was primarily based. It is interesting to note that two members of the Calcutta Council, Humphrys Cole and Edward Carteret, submitted the results of their ‘enquiry into the state of the Broker’s affairs’,32 wherein they came to the conclusion that ‘the charges laid against him [broker] are unfairly represented and insufficiently proved’. They have shown in their report that the names of the merchants in the dadni list were not fictitious, only sometimes the contract in the name of one particular merchant was fulfilled by another, sometime a part of it and at other times the whole amount. Thus the contract in the name of Kunjabehari Seth ‘who broke two years ago’ was performed by Jagannath Seth and Gangacharan Basak. Similarly the contract in the name of Santosh Ghose who became insolvent was carried out by Krishna Chandra Khan and Balaram Pramanick. There was practically nothing unusual in this sort of commercial practice which seems to be quite in vogue during the period under review. We learn from the same report that Gangacharan Basak provided all the ‘soosies’ contracted by Umichand while the latter supplied ‘Booran Cossaes’ contracted by the former. As to the main leaders of the move to remove the broker, namely Samsundar Seth, Jagannath Seth

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and Paramananda Basak who complained that ‘they have not the sums sett down to them’, the report retorts: ‘If they have it not, its given at their desire to severall of their dependents, which the Broker is ready to prove, and this has been so many years’. Regarding the fact that the entire investment of Malda was given to Umichand and his brother Kissenchand, the report affirms that ‘they were the fittest men he [broker] knows to procure those goods’ and it was given to them as others were reluctant to contract for Malda goods. However in deference to the wishes of the Court of Directors, the Calcutta Council ultimately decided to remove Bishnudas Seth from the office of broker in March 1732, and Samsundar Seth, the son of the former broker Baranasi Seth was appointed broker in preference to Jadu Seth because the latter’s ‘great age and Infirmity of body will oblige him to leave a great share of the management to his son, who none of us think fit in anything of that consequence’.33 It is interesting to note that the office of the broker passed on from one member of the Seth family to another without hindrance. This only means that there was no way out of the Seth family for the Company in procuring its investments in Bengal. Meanwhile the Court of Directors remonstrated to the Calcutta Council: ‘. . . it appears that the greatest part of our Investment was provided by the relations and Friends of the late Broker, you must be guarded against this practice, which is naturally attended with bad consequences on a supposition that you are guided by his Judgment in the sorting or prizing our goods, and otherwise we dont see any use he is of, indeed it is alleged he is security for the money advanced to the merchants, but that amounts to a very great sum . . . it would be much better to pay every individual merchant yourselves than to entrust a middle person.’34 The Directors were apprehensive that the broker and the servants of the Company bought goods on their own accounts and sold them to the Company at an advanced price which, if it had been the case, ‘easily accounts for the high prices given for silk, gurrahs and other goods’ provided both at Calcutta and Kasimbazar. So they laid down a standing rule that ‘none of our Covenant Servants or Brokers be directly or

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indirectly concerned in the goods prized’ on the point of being dismissed from Service and suggested the abolition of the post of Broker.35 The Calcutta Council stressed in its reply that it would guard against all the evils connected with investment as pointed out by the Court but ‘as to having no broker cannot think it for the Company’s Interest, it being certainly necessary to have somebody of Wealth and Reputation in that Capacity’.36 But the Court of Directors was hardly convinced and was now determined to abolish the post of broker. It is worth quoting at length from the letter it wrote to Calcutta touching upon the evils which grew out of the office of broker and the reasons for abolishing it: ‘And whereas by means of our Brokers, several of our servants have been enabled to get credit amongst the shroffs and merchants to our great prejudice and loss, and we have good reason to believe that in all our factorys many other evils have been brought upon us in the course of Investments by their Influence, Therefore we do absolutely abolish the Said office of Broker, not only at Calcutta but also in our subordinate factorys, requiring you and all our Servants, to make our future contracts without the intervention of such a person, who by his influence and interest may not only abuse us in our Dadney, as has been formerly done, but also greatly prejudice us, by admitting or debarring merchants to or from transacting with us, who are not suited to his interest.’37 This raised considerable alarm both in Calcutta and Kasimbazar. The Kasimbazar Council became very much concerned and wrote to Calcutta about the serious consequences the abolition of the broker’s office would have in the procurement of investment as also the void it would create in the Company’s relations with the government at a time when it was expecting a ‘revolution’ in the government. It pointed out further that ‘the continuation of a broker there is absolutely necessary for the safety of the Hon’ble Company’s estate . . . the security of their money and effects there’.38 The Calcutta Council deliberated on the issue and came to the conclusion that ‘we cannot abolish that office here no more than at Kasimbazar without running a great risk of the Company’s estate’ and in view of the ill consequences

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that may attend our contracting with private merchants without some such person being security for the Dadney advanced them’.39 So Samsundar Seth was continued in the office of broker for the time being and was confirmed in his office on 15 February 1739.40 The Dacca letter to Calcutta pointing out the consequences of abolishing the broker’s post is revealing. The factors at Dacca wrote that it ‘will be Irritating the great men at Dacca by whose intercession this post [of broker] was given him [Manickchand] by which their business may be prejudiced if not entirely stopped’.41 Meanwhile the question whether the broker should be retained or not was debated by the Calcutta Council and in January 1739 it wrote to the Court listing up the reasons in favour of retaining the broker’s office.42 These reasons were: First, the principal ‘end’ in employing a broker was to secure the dadni advanced to the merchants and if the post is abolished, there would be no security for the money advanced as the broker only was responsible for the amount advanced. Secondly, the broker only knew the ‘real circumstances’ of the merchants and thus could advise the Council who are the merchants to be trusted with money. Thirdly, if the post was abolished, ‘many parties will arise among tbe merchants’ who could be suppressed ‘by a Man of Fortune and Figure being at the Head’. Fourthly, ‘though some few merchants have indisputable fortunes yet giving the investment to so few will be very prejudicial by their advancing the prices more than a greater number can, who are a check upon one another’ and hence the necessity for a large number of dadni merchants over whom the broker should rule. The Court of Directors, however, was insistent on abolishing the office of the broker. In its general letter of 21 March 1740 it wrote that the dadni charged to the Company’s accounts as paid to the merchants was not duly received by them and ‘the Broker was doubtless Privy thereto’. It further alleged that the money was diverted to provide goods for the ‘enormous’ Private trade of the Company’s servants. ‘And a Broker’, the letter pointed out, ‘is the Middle Person who cloaks all such collusions and malpractices, beside the Dustore of One Rupee nine annas per

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cent, or whatever is allowed to the Broker by the Merchants is a tax upon us, and our Investment comes out so much dearer to us.’43 Hence it enjoined upon the Calcutta Council that its earlier order directing to abolish the broker’s post be absolutely complied with at Calcutta, Kasimbazar and other subordinate factories. It further directed the Council to procure the goods on the best and cheapest terms by contracting with the most reputable merchants.44 The Calcutta Council at last decided on 3 January 1741 that the office of the broker would be abolished after that year’s investment was completed and that it would henceforth contract for goods with the ‘most substantial merchants’.45 In July that year it informed the Court that ‘they laid aside the office of the Broker’ at Calcutta and other subordinate factories, and that the merchants entered into ‘Joint Security Bonds’ with Samsundar Seth, Bishnudas Seth and Umichand in three ‘setts’.46 In December the Council called the merchants and informed them that the office of the broker was abolished, and to secure the Company from bad debts proposed they should become ‘jointly and separately bound one for the other for all sums advanced on Dadney’ which the merchants refused. They presented three lists of merchants who proposed to be bound ‘one for the other’ with Samsundar Seth for the first list, Bishnudas Seth and Umichand the second, and Ramkrishna Seth for the third ‘who are esteemed men of fortune and credit which was agreed to’.47 Captain Fenwick who claimed to have been in the East India Company’s service for thirty years emphasized in 1747-8 the necessity of employing a broker as ‘the best times [regarding investments] have been under the management of the broker’. In advocating the re-appointment of the broker, he stated the important functions of the broker as follows: ‘I shall state the duty of a broker against the maxim of having none; as he ought to be an excellent merchant himself so he ought to know every merchant’s Capacity, Integrity and Circumstances he introduces to the Council to be employed; for it is not sufficient that he is answerable for the contracts, as to the sums, but that such people do conduct their affairs, that the Company be not disappointed

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of any part of their Investments. He ought to be so good a judge of cloth, even to know at first sight in what part of the country every sortment is fabricated.’48 Interestingly enough a few years later the Court of Directors changed its mind and asked Calcutta Council to revive the office of broker. It wrote to Calcutta in January 1753: ‘We have taken great pains to enquire into the utility of the office of a Broker at Calcutta and . . . it appears to us that the reviving that office upon the old footing will be of great service to the Company, as it will be the best means of carrying on our investment with regard to the quantity, quality and price.’ And it empowered Calcutta Council to appoint such a person as broker who ‘from his circumstances, capacity and reputation may be the best able to serve us’.49 But by the time the suggestion reached Calcutta, the Company’s pattern of investment has been changed from dadni to gomasta system.50 The Calcutta Council wrote back that ‘such an office can be of no manner of use in the present model of conducting the business’.51 Even as late as 1755 the Directors asked the Calcutta Council to revive the office of broker52 but the gomasta system for the procurement of investments had by then been firmly established, and there was absolutely no scope for a broker in the new system of investment. . Kasimbazar Brokers The Company’s broker in Kasimbazar from about the second decade of the eighteenth century was a merchant named Kantu. He claimed to have served seven Chiefs at Kasimbazar but was brought to discredit in 1730 following his insolvency which resulted, as he alleged, from the extortions and undue privileges wrested from him by Stackhouse, the then Chief of the Company. He was indebted to Fatechand Seth, the famous banker, to the tune of Rs. 2,15,000 which he borrowed for the transactions of the Company’s business. The Company seized Kantu’s effects but Fatechand insisted that Kantu be reinstated in the office of broker and that he be paid the sum owed to him by Kantu. The affair dragged on for sometime and ultimately the

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Company paid Fatechand a part of his due but dismissed Kantu as broker.53 Fatechand knew well the importance of the position of a broker of the Company and objected to Kantu’s being called a ‘Dellol.54 It appears from the proceedings of the Kasimbazar factory that Kantu was not only a broker to the Company but a substantial merchant on his own account, often freighting goods on European ships. In 1730 the proceeds of his dosutties55 sent to Manila amounted to Rs. 4,053 which was appropriated by the Company following his dismissal. He had connections with Calcutta investment too as we find that Baranasi Seth was his ‘bondsman’.56 As Company’s broker the dasturi or commission on investment that he earned amounted to Rs. 1,20,000 (at the rate of Re. 1- 9 ans. per cent) but tbe Calcutta Council observed that ‘as he is to be esteem’d at the Durbar and the Country round as our Broker, he is obliged to live up to that character and the numerous family depend upon will make that amount barely sufficient to defray his expenses.’57 The Kasimbazar Council dismissed Kantu in June 1730 and tried to appoint either Burro Datta or Hathu (Huttoo) Katma, the two substantial merchants of Kasimbazar but both refused on the plea that the season had far advanced for investment and that it would be impossible to make the investment unless the Company’s dispute with Fatechand was resolved.58 In October the Council sent for Burro Datta and acquainted him of his being appointed broker but was surprised to find he declined accepting the post directly, desiring time to consult his brother who was at Hugli.59 However it ultimately appointed Hathu Katma, ‘a man of unquestionable credit and the properest person for that post’ as broker. He was also reported to be ‘a man of considerable estate’ and his father Nidhi Katma offered to be his security.60 He enjoyed the position for sometime but was dismissed in early 1737 following a complaint from Calcutta that he took four annas per seer for Mr. Barker, the chief at Kasimbazar, on the silk provided by the merchants, and the Calcutta Council ordered his immediate removal, and the appointment of a new broker. Accordingly Bally [Balai ? Balaram ?] Katma was appointed broker because of his ‘great experience’ in the Company’s affairs

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and the ‘great wealth that is in his family’. His security bond was signed by Benode Katma.61 Balai Katma continued in the post till 1741 when the office was altogether abolished in all the factories in Bengal. The Kasimbazar Council was very much concerned at the abolition of the broker’s office and wrote to Calcutta: ‘. . . consider how impracticable it is for us to come at the knowledge of the worth of any of the merchants here when there is no broker whose interest it is to tell us the truth and such an one has many ways to learn more exactly who are fit to be trusted than we can possibly do. . . .’62 Even some time after the abolition of the broker’s post, the Kasimbazar Council wrote to the Court in 1748 underlining the bad effects of it: ‘. . . the abolishing of the office of broker has been by experience found highly detrimental to your Honours’ affairs, especially in contracts for the investment, the merchants being come to such a pitch as to fix what prices they pleased on their goods, which evil they conceived could be cured by no other method than by a ruler over them, of Wealth and Credit of their own cast[e].’63 There can be hardly any doubt that the Indian broker of the European Companies played a crucial role in securing their investments and as such a significant function in the commercial life of Bengal in the first half of the eighteenth century. He was the essential link between the indigenous commercial agencies and the centralised investment organization of the European Companies. Hume, the agent of the Ostend Company in Bengal, wrote in 1730: ‘The English and Dutch, who are the greatest Traders in this Country, do their business wholly by their Brokers who are their principal merchants. Notwithstanding they have numbers of Rich men Established in their bounds, who need no Security but they find their business the best regulated by having their Merchants act in Concert, by means of their Broker, everyone taking upon him according to his force, they know one another better than they can be known by Europeans.’64 But the broker notwithstanding, as Hume pointed out, the dadni merchants had to make the contracts in their own names, and the Company was at liberty to reject or receive the merchants known to be of

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credit and substance though not recommended by the broker. Hume elaborates further the advantages of the system: ‘By which you secure yourselves from having a Cabal being formed among your Merchants to prejudice you in the price of your goods.’65 The brokers also played a vital role in the relation between the European Companies and the local administration. They often acted as mediators between the two parties and often helped diffuse a crisis. The post of the broker was so important and significant that even the ruling elite took active interest in the appointment of a broker. The Companies too on their part always tried to appoint someone who had influence with the local administration or at the durbar. The point is clearly borne out by the fact that when ‘Sabra’, the Company’s broker at Dacca, died, the Council there reported that ‘great solicitations have been made to us by the Dellols and Persons of the Greatest Importance’ to appoint his nephew Manickchand as the broker. The Dacca Council ‘not being able to find out a more proper person having great Interest at the Durbar, worth some money and much esteem’d in the place’ agreed on 27 January 1738 to appoint Manickchand the broker at Dacca.66 The above analysis of the activities of the brokers and their relation with the English Company brings to relief certain interesting aspects of the role played by the brokers in the commercial sector of Bengal’s economy. They were essentially middlemen who organized the procurment of the Company’s investments, and though they were the Company’s employees and as such subordinate to it, yet they were in no way subservient to it. They were not only mere brokers of the Company – that was only one facet of their activities – but merchants of repute and substantial credit, carrying on their own trade independent of the Company. This is very well illustrated by the career of Baranasi Seth, Bishnudas Seth, Samsundar Seth etc. The dismissal of Baranasi from the office of broker hardly affected his position as an independent merchant, and he carried on his trade quite independent of the Company which was ultimately forced to re-employ him in the exalted office. Bishnudas’ dismissal too had little effect on his own independent business, and later the

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Company accepted him as a ‘substantial merchant’ to be security for a group of merchants after the abolition of the broker’s post. Samsundar too was regarded as a ‘man of fortune and credit’ by the Company even after he ceased to be a broker and accepted him as security for another group of merchants. More often than not these brokers had a strong link with the ruling elite which sometime even intervened in or tried to influence the appointment of a broker, as we have seen in the case of Bishnudas Seth in Calcutta and Manickchand in Dacca. There can be hardly any doubt that men like Baranasi Seth, English Company’s broker at Calcutta, Indranarain Chaudhuri, French Company’s broker at Chandernagore and Harekrishna Roy, Dutch Company’s broker at Chinsurah were men of considerable wealth and social eminence in Bengal in the first half of the eighteenth century. Problems in Investments and Measures Adopted The European Companies had to face many a problem in securing their investments in Bengal. One of the major problems throughout the period under review was a chronic shortage of working capital. The problem of inadequate funds for investments was accentuated by the poor demand for the European Companies’ imports to Bengal. Though the quantity of merchandise imported by the Companies was not generally large, the market for even this small amount was strictly limited. The only items for which there was a steady demand in Bengal were bullion and specie. But as their supply was seasonal and limited, the Companies had to explore additional means for financing their investments in Bengal. Moreover the Companies had to confront some peculiar problems in Bengal in converting the bullion and specie into local currency. Another difficulty that the Companies had to face was to provide funds for investment in the proper season which generally started after the shipping season was over. As the price of most of the commodities went up considerably (sometimes even by 40 to 50 per cent)67 during the time of shipping, the Companies had to start contracting for goods just after the departure of Europe-bound ships, that is, gener-

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ally from February or March, and hence they always needed a stock to be left for such investments in India after paying for the previous year’s supplies. Here we shall try to examine the various problems the Companies had to encounter in securing their investments and the measures adopted to solve them. Chronic Shortage of Capital The main problem which plagued the English Company as well as the Dutch and French was the chronic shortage of liquid capital to secure the investments almost throughout the period under review. After the Europe ships had left by February or March at the latest, and when it was the best time for giving out dadni or advance for next year’s investment, the Companies were left with little money. The problem was aggravated by the fact that often the Companies failed to pay the arrears due to merchants for the previous year’s investment. Almost every year at this time, with the departure of Europe ships and the time for investment approaching, the merchants would clamour on the one hand for payment of their arrears for the previous year and an advance for the next year’s investments on the other. The Council of the different European factories was often in a helpless position. The Calcutta Council of the English Company noted in 1720 that their merchants were ‘very uneasy and daily complaining for want of usual advancement on Dadney besides their last years arrears due to them’.68 The situation was sometimes exasperating as is apparent from the Fort William Consultations of 29 May 1721: ‘There being due . . . [a large amount] to our merchants on balance of the past year’s account and we having no money to clear off those balances or advance them on this years contract . . . they are very clamorous for either money or bills at Interest to be given them alleging they cannot perform the new contract without being forced to borrow all the money they can gett at Interest to send to the aurungs’.69 The problem continued to plague the Company. Even as late as 8th August the same year (1721) the Council noted in desperation: ‘We as yet having no news of any ship from England, Our merchants

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are very clamorous for the Dadney to be advanced them on the goods contracted for this year, and insist upon giving them Bills of Debt for that and the Balance of their last years account.’70 Local Credit Market Naturally the Companies had no other way of solving the problem of shortage of working capital but by borrowing from the local credit market. Luckily for the Companies, the credit market in Bengal was highly organized and efficiently managed. There was indeed a remarkable growth of the financial machinery for credit and exchange, and the specialized activities of a large class of merchants, especially the shroffs, undoubtedly point towards the fact that merchant capital and commercial organization were highly developed in early eighteenth century Bengal. So the European Companies tried to solve the problem of acute shortage of working capital by borrowing heavily from the local money market. Though there is no systematic account of the amount borrowed yearly in different factories, quite a few references here and there in the records give an indication of the sum borrowed at different times in different factories. Towards the beginning of the eighteenth century, the English Company’s debts to merchants in Calcutta and Kasimbazar at certain specific dates amounted to around Rs. 7 lakhs and Rs. 2½ lakhs respectively.71 In 1720-1 the Company’s debt in Bengal amounted to Rs. 24 lakhs while the amount of debt turned out to be Rs. 55½ lakhs in 1747-8 (this too exclusive of interest).72 The Dutch Company also borrowed from the local capital market. Its debt to the Kasimbazar merchants (with interest) in September 1724 amounted to Rs. 14,72,418.73 Even at the risk of a little digression, it is worthwhile to have a close look at the name of the merchants to whom the Company was indebted. It is a pity that the list which could have thrown significant light on the social composition of the merchants and the regions they came from gives only the first name of most of the merchants, leaving us in darkness about their last names. Yet the list provides with certain interesting clues. Though the names are often

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mentioned as Ramnath, Jadu, Kunja, Kartick, Paran etc. (typical Bengali names!), luckily enough the Katmas are mentioned with their full names.74 The list mentions name like Lahorimal, Onupchand, Teakchand, Bhirguram etc. who probably came from other parts of India (West or North?). But the most interesting part is that we find the Panjabi merchants with the surname of Kapur (Caporeij in Dutch, Coppree in English) whom we meet for the first time in the records. Among the main creditors of the Company, the house of Jagat Seth is unfailingly there even in that early period. In two separate entries the credit of the house to the Company totalled Rs. 2,55,986.75 The Katmas were not lagging much behind. According to the list, wherein there are as many as 8 Katmas, the Company owed them Rs. 2,06,794 of which the breakdown is as follows: Balai76 [Bolley] Loknath Panchu [Poutsjou] Raghu [Raggo] Ramchand [Ramsjent] Satu77 [Satoe] Bhuban [Bouwaan] Jagu [Jegu]

Katma Katma Katma Katma Katma Katma Katma Katma

– – – – – – – –

Rs. 16,294 Rs. 13,036 Rs. 16,796 Rs. 49,259 Rs. 26,735 Rs. 34,608 Rs. 18,919 Rs. 31,147 Rs. 2,06,794

Of the 79 merchants in the iist, the Company owed more than Rs. 20,000 to only 20 merchants, and besides the House of Jagat Seth and the Katmas, the prominent creditors of the Company were the following:78 Onupchand Gopinath Kunja Nimoe Ramballabh Kommelain(?) Lahorimal Golabray (Golap Ray ?)

– – – – – – – –

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

43,064 36,321 34,310 44,010 33,281 31,839 62,948 52,608

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Coming back to the story of the borrowings by the European Companies, we find that the Ostend and the French Company also borrowed freely from the local capital market. The Ostend Company was lent money by the local shroffs and merchants. Alexander Hume, the Chief of the Company in Bengal, reported in 1730 that among other merchants, Nainsook Babu, a near relation of Jagath Seth Fatechand, had lent large sums of money to the Company.79 Similarly the French too relied heavily on the local money market for securing its investment. Fatechand was indispensable to them as their most important money lender. Though Dupleix described Fatechand as the ‘greatest of Jews’ and ‘our chopping-block’, he often had to seek loan of one to three lakhs from him.80 He had to borrow money also from the rich and powerful family of merchants and money-lender of Kasimbazar – the Katmas.81 Of course the most substantial lender to the European Companies was the house of Jagat Seths in the period under review. Even in the early years between 1718 and 1730, the English Company borrowed from the Jagat Seth at Murshidabad on an average more than 4 lakhs of rupees a year.82 In the three years between 1755 and 1757 the Dutch debt to the house of Jagat Seths amounted to Rs. 23,85,803.83 In 1757 alone the Dutch borrowed 4 lakhs from the Seths and the French debt at the time of the fall of Chandernagore amounted to one and a half million of rupees.84 Captain Fenwick estimated the French debt in 1747-8 to be ‘upward of 17 lakhs’ while Watts wrote to Clive on 18 February 1757 that the French owed some 13 lakhs to the Seths.85 Though the English Company borrowed money locally in all the factories in Bengal, Kasimbazar was one of the main centres where it procured money freely for investments. The reason was two-fold: first, a lot of the Company’s investment was made here; secondly, because of the presence of a large number of big merchants and shroffs from various parts of India in Kasimbazar which was the most important trade mart of Bengal in the first half of the eighteenth cntury, money was freely available. The Council at Kasimbazar often borrowed quite a large amount of money for securing the investments at the right season. Thus we

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find in March 1728 it borrowed Rs. 4 lakhs for giving advances for investments.86 But the Court was not very happy with this large amount of borrowings at high interest. It wrote to Calcutta with great concern that ‘upwards of 4000 £ sterling was paid for interest’ at Kasimbazar during the year May 1730 to April 1731, besides Rs. 6,43,832 ‘running at the extravagant rate of twelve percent per annum from that time’ and that the Kasimbazar factors had borrowed another Rs. 2,57,180 afterwards. It asked the Calcutta Council that high rate of interest (at 12 per cent) which was ‘canker to the Company’s estate’ should be rooted out.87 But despite all the reprimands from the Directors, the different factories in Bengal borrowed heavily from the local credit market almost throughout the period under study. Even as late as 1745 the Company’s debt at Calcutta amounted to Rs. 9 lakhs whereas in Kasimbazar and Dacca it was computed at Rs. 10 lakhs.88 The English debt at Dacca in 1749 amounted to Rs. 7,55,400. Of this amount as big a sum as Rs. 5,84,000 was due to the house of Jagat Seth and the rest to ‘several other shroffs’.89 In Calcutta in the course of a single day only in 1743 the English Company borrowed a sum of Rs. 8,25,000 from the following merchants:90 Bishnudas Seth Chaitanya Charan Seth Anunchand Hazarimal Gangabishnu [Mendrew ?] Rashbehari Seth Rashbehari Seth Ramkrishna Seth Krishna Chandra Datta Kunja Katma Sabram[?] Dulichand

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

1,10,000 50,000 1,00,000 80,000 40,000 50,000 50,000 75,000 50,000 51,000 1,00,000 69,000 8,25,000

And just a week later, the Company borrowed of the Jagat Seths a sum of Rs. 3,26,750 for paying advances for its investments.91

European Companies and Pre-Modern Commercial System | 235

In this connection it should be emphasized that the mainstay of the capital market in Bengal in the first half of the eighteenth century was the famous banking house of the Jagat Seths. The house had grown itself gradually into a great financial institution during the period under review.92 It came to the rescue of the European Companies, which as we have seen earlier, suffered from a chronic shortage of working capital. So they borrowed heavily and freely from the house throughout the period of our study. The extent of the reliance on this banking house by the English Company will be evident from the fact that even in the subordinate factory at Dacca where the investment was quite small compared to that in Calcutta or Kasimbazar, it borrowed a sum of Rs. 4,70,000 in the period between 3 December 1744 and 20 October 1745.93 In Kasimbazar the Company owed the Seths an amount of Rs. 8,36,037 in 1746 and Rs. 6,30,213 including interest in 1748.94 Even in 1751 the English debt to the banking house in Kasimbazar amounted to Rs. 5,62,820.95 In Calcutta on one single occasion in 1742 the Calcutta Council borrowed Rs. 2 lakhs from the Jagat Seths.96 The Company preferred to borrow from Jagat Seth Fatechand ‘as he might prove serviceable at the Durbar’.97 The Jagat Seths lent money to the Europeans at the rate of 12 per cent per annum which was the prevalent rate at the time. But consequent to a request from the English Company to reduce the rate of interest to 9 per cent the banking house lowered the rate accordingly in 1740.98 Following this the interest rate charged by other shroffs or bankers was also reduced to 9 per cent.99 But still the Company preferred borrowing from the Seths. The Kasimbazar Council noted in 1741: ‘Futtychund having favoured us in lowering the Interest and as we are apprehensive he may be displeased, should we take up money of other people and so raise the interest again on us, agreed that we give him preference.’100 It borrowed Rs. 2,01,000 from the house on 8 March 1741 but on 27 March when informed by Fatechand that he could not lend more than Rs. 50,000, it decided to borrow from the following merchants:101

236 | Companies, Commerce and Merchants Dayaram Mayaram Prankissen Harryballav Das Jagat Seth Lahorimal Harkissen

Rs. 20,000 Rs. 20,000 Rs. 10,000 Rs. 50,000 Rs. 50,000 Rs. 1,50,000

In Kasimbazar, however, the Katma family dominated the list of merchants from whom the Company borrowed in the ’thirties as will be apparent from the following list dated 26 March 1733:102 Golab Katma

Rs. 40,000

Indranarayan Katma

Rs. 60,000

Chuckoo [Chaku] Katma Rs. 50,000 Raghunath Katma

Rs. 25,000

Priti [Preet] Katma

Rs. 25,000

Lahorimall Mansookray

Rs. 30,000

Manikchand Ananchand Rs. 40,000 Lalaram Singh

Rs. 30,000

In June 1733 the Company owed Rs. 72,800 to Sachi Katma alone.103 In Calcutta too the Company borrowed from other merchants and shroffs, the Seths of Calcutta predominating the list of such merchants as would be evident from the following list.104 Anandchand105 Bishnudas Seth Sebaram [Katma] Ramkrishna Seth Baburam Katma Shyamal Das Sahibram(?)

Rs. 1,00,000 Rs. 60,000 Rs. 50,000 Rs. 50,000 Rs. 50,000 Rs. 50,000 Rs. 50,000

Rashbehari Seth Anandchand Anandchand Laksmichand Seth Nidhiram Das Anandaram Seth

Rs. Rs. Rs. Rs. Rs. Rs.

50,000 49,000 45,000 45,000 40,000 38,859

Total

Rs. 6,77,859

Not that the Company always borrowed from big shroffs or merchants; it borrowed even from small merchants too and also in small amount as was available. This is apparent from the list of borrowings in Kasimbazar on 24 April 1743:106

European Companies and Pre-Modern Commercial System | 237 Thakurjee Acherjee

Rs. 20,000

Dayaram Thakur

Rs. 50,000

Nainsook Nath

Rs.

Buckorsingh [?]

Rs.

8,000

Satu Katma

Rs. 10,000

Jamuna Das

Rs.

3,000

Anandaram Coppree [Kapur] Rs. 10,000

Kissenchunder

Rs.

3.000

Gobindram Karfarma

Kirtichand Katma

Rs.

3,300

5,000

Rs. 35,000

Dayaram Mayaram

Rs. 15,000

Total

Rs. 1,62,300

Similarly in Dacca too the Company procured money from the local credit market even in small amount for securing its investments. Thus we find that as late as April 1750 it borrowed an amount of Rs. 77,000 at 9 per cent from the following merchants:107 Kinkar Das Santiram Sobharam Poddar Harri Krishna Das Motiram Shaw Soberam[?] Onupchand Kissenchand Balaram Roy Koosalchand Motichand

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

8,000 7,000 7,000 12,000 15,000 4,500 4,000 4,500 15.000 77,000

Generally the practice was to borrow money from merchants and shroffs in large amount either at Calcutta or Kasimbazar, and then to send the money to the subordinate factories in cash or by bills of exchange. As the biggest creditor of the Company was the house of Jagat Seth which had its kuthees108 or agencies in all the trade marts of Bengal (and also in most trade centres all over India), the Company borrowed from the house in all the subordinate factories. But as mentioced earlier, the Company also freely borrowed from other shroffs and merchants. It is interesting to note that in Calcutta many of the merchants from whom the Company quiet often borrowed money were themselves dadni merchants of the Company. The point is well borne out by the fact that on 15 May 1746 the Company borrowed Rs. 8,96,731 at 9 per cent interest from the following merchants of whom many were Company’s dadni merchants.109

238 | Companies, Commerce and Merchants Bishnudas Seth

Rs. 50,000

Brindaban Seth

Rs.

40,000

Sebakchand Seth

Rs. 43,000

Brigolldut [?] Seth

Rs.

30,000

Gokulchand Seth

Rs. 30,000

Raghunath Seth

Rs.

32,000

Krishna Chandra Seth

Rs.

33,000

Raghumitra [and? ] Samjee

Rs. 21,000

Brajamohan Basak

Rs. 30,000

Madhu Seth

Rs.

22,731

Anandchand

Rs. 100,000

Harimohan Basak

Rs.

29,000

Kebalkissen Mendrew [?]

Rs. 24,000

Gopimohan Basak

Rs.

26,000

Jagganath Khan

Rs.

32,000

Radhakissen Gindary [Girdhary?]

Rs. 21,000

Rashbehari Seth

Rs. 1,31,500

Krishna Gobinda Chaudhuri

Rs.

31,000

Chaitan Basak

Rs. 25,500

Harrynarayan Khan

Rs.

25,000

Ramkrishna Seth

Rs. 41,000

Jayakrishna Katma

Rs.

32,000

Govinda Chandra Seth

Rs. 24,000

Nantu Katma

Rs.

25,000

Total

Rs. 8,96,731

It is significant to note that not only the merchants, bankers and shroffs lent money to the European Companies, often members of the ruling elite too invested their money with these Companies. The most conspicuous case of such money lending by the ruling class, as to be found in the records, is that of Kissendeb [Krishnadeb] Poddar who was the diwan of Hakim Beg, the pachotra daroga,110 and an important member of the administration.111 This Kissendeb was reported to have great influence with the nawab and Hakim Beg, and a ‘person of very great interest and authority in the government’.112 He lent the English Company in Kasimbazar the following sums on different dates.113 2 January 1 March 25 March 17 May 11 November 6 April 4 May 16 August

1750 1751 1751 1751 1751 1753 1753 1753

– – – – – – – –

Rs. 25,000 Rs. 50,000 Rs. 50,000 Rs. 25,000 Rs. 25,000 Rs. 50,000 Rs. 100,000 Rs. 10,000

European Companies and Pre-Modern Commercial System | 239

It appears that most of the money that Kissendeb lent the Company belonged to his master Hakim Beg. Perhaps that is why after Kissendeb’s death, Hakim Beg demanded from the Company in Kasimbazar the repayment of an interest note due to Kissendeb for Rs. 100,000 [principal] and the Kasimbazar Council paid the amount with interest to Hakim Beg on 31 May 1754.114 Problems in Borrowing



There is little doubt that the capital market in Bengal eased to a great extent the European Companies’ problem of chronic shortage of working capital for investments. But it was not all smooth sailing for the Companies as they had to face various problems in borrowing in the local money market.

(a) Short term Loans One of the main difficulties in borrowing from Bengal’s credit market was that as a general rule money was lent only on a short term basis throughout the period under review and there was no tradition of long term loan. As a result, the shroffs and merchants, including the banking house of Jagat Seths, demanded money as soon as the Europe ships arrived with their supply of treasure. It was as impossible for the Companies to repay so many creditors as it was to pay the merchants’ arrears. Even the Jagat Seths often threatened the Companies with stoppage of their business if their money was not repaid at the usual time. The English factory at Dacca reported in November 1749 that Jagat Seth Mahtab Rai’s gomasta ‘absolutely insisted on the payment of the sum due to his master threatening in rough terms that in case of non-payment he would immediately put a stop to our Business’.115 In Kasimbazar in 1749 it was with great difficulty that the Company could borrow from the Seths Rs. 1,20,000 which it agreed to pay the nawab in connection with the dispute of the Armenian ships.116 The Kasimbazar Council wrote to Calcutta that the Seth’s gomasta Ruidas ‘complained

240 | Companies, Commerce and Merchants

heavily of our not having paid them anything this season of the large debt the Company owed them at that factory notwithstanding so much treasure had been imported by several ships lately arrived’.117 The Seths were often importunate in recovering their money and insisted on being repaid the loan with the arrival of the ships which put the Company into great inconvenience. The Kasimbazar letter of 25 August 1750 illustrates the point clearly: ‘. . . the Seats on the arrival of the treasure sent to demand it and gave them to understand that they expected the whole of their debt at that factory should be paid off out of the money which might arrive by this year’s shipping and instead of being able to raise a further credit with them it was with the utmost difficulty they could obtain their consent to apply any part of what was lately sent them to the use of the investment. . . .’118 The desperate situation that sometimes the factors were confronted with is amply clear from the Dacca letter wherein the factors reported in 1751 that the gomasta of the Seths insisted that the ‘whole of the Debt to be immediately paid him’ and they requested the Kasimbazar Council to prevail on Seth Mahtab Rai not to insist on the payment of any of the money that it might send them ‘as it would stop their business and render it unpracticable for them to purchase any Ready money goods’.119 A close study of the Company records reveals that in Bengal during this period money was lent for short term, generally for a few months and the interest was calculated at a monthly rate, and the loan not carried beyond a year.

(b) Occasional Scarcity The Companies’ problem was aggravated by the fact that there was occasional scarcity in tbe credit market resulting from various factors, the most important of which was the reluctance of the money-merchants and shroffs to show up money for fear of exactions from the government. Though this was true in general for the whole period under review, it became more acute in the wake of the Maratha invasions in Bengal in the ’forties and the early ’fifties. Even the great banking house of the Jagat Seths was

European Companies and Pre-Modern Commercial System | 241

not free from the fear psychosis. Of course one should remember that the nawab, Alivardi Khan, harassed by the Maratha incursions was badly in need of money to raise and maintain a large army, and hence spared almost none who possessed any money. So though very good friends of the nawab they were, the Seths were extremely scared of Alivardi’s extortions. This is evident from Kasimbazar letter of 1746: ‘. . . they have not a prospect of borrowing more . . . for the scarcity of money is so great that it has been with some difficulty Futtichand’s house has been able to pay for the bullion sold them. . . .’120 The Kasimbazar Council further added that ‘at last it appears to us that if they [the Seths] have money, they don’t care to produce it for fear of the Government’. If this was the position of the Seths who were the closest ally of the nawab and who wielded so much power in the political and economic life of Bengal during this period, one can well imagine the attitude of other shroffs and money merchants. Similar was the occasional scarcity of money in the credit market in Calcutta. Sometime the Calcutta Council would take up money at interest in Calcutta and send it to Kasimbazar and other subordinate factories. In 1746 the Calcutta Council wrote to the Kasimbazar Council that it tried hard to procure money at interest in order to supply Kasimbazar but ‘the scarcity of rupees being so great that nobody can lend us that’. It recommended to Kasimbazar to borrow ‘sufficient money’ to secure the investments. But Kasimbazar Council also found it extremely difficult to borrow from the capital market.121 The situation was no better at Patna, ‘they [Patna factors] being out of cash and none of the shroffs in town caring to lend any money at interest’.122 The impression one gets from the records of the Companies is that sometime this scarcity of money in the credit market was quite an inconvenience for the Companies, especially in the ’forties of the eighteenth century. A significant as also an important factor for the occasional scarcity of money in Bengal’s capital market was the fact that the availability of money depended to a large extent on the rate of exchange to Agra. If the latter rate was high, money would become scarce in Bengal, the reason being the shroffs and money

242 | Companies, Commerce and Merchants

merchants would then employ their money in the exchange to Agra, which was more profitable than lending even at 12 per cent. This was the general pattern of money market in Bengal throughout the second half of the seventeenth century and early decades of the eighteenth. Our point is well borne out by the letter of the Kasimbazar Council which noted in 1700: ‘We cannot get any money at interest here being very little ready money in the country and the exchange current from hence to Delhi and Agra is but 6 per cent and the shroffs make use of what ready money they have that way’.123 From about the third decade, however, one does not find reference in the records to money being employed in exchange to Agra. Probably by this time the banking house of the Jagat Seth had already extended its sway in the money and exchange marts of Northern India which perhaps resulted in a stability in the market, and the wide fluctuation in the exchange rate eliminated.

(c) High Rate of Interest The high rate of interest, which was the prevalent rate in Bengal till 1740, was quite a deterrent for the Companies’ borrowing in the local money market. The Home authorities always discouraged taking up money at 12 per cent which they considered ‘exorbitant’ and hence ‘rank poison’ to their commerce. They often advised the different factories to ‘desist’ from running into debt, ‘the interest of which eats deep and insensibly’.124 But as we have noted, the servants of the Companies in Bengal could hardly avoid borrowing money and accepted the high interest rate as a necessary evil. Though the house of Jagat Seth and consequently other shroffs reduced the rate of interest to 9 per cent in 1740, it was often difficult for the English Company to borrow money at that rate, especially in the subordinate factories. As if taking advantage of the helpless condition of the Company, the merchants and shroffs occasionally tried to impose a higher rate of interest. The Dacca factors wrote in August 1746 that ‘as we find it will be

European Companies and Pre-Modern Commercial System | 243

impossible for us to raise any more money here under the rate of 12 per cent per annum Interest’, they desired the Calcutta Council’s permission to borrow money at that rate of interest.125 The latter wrote back immediately that it ‘positively ordered that on no account they give more than 9 per cent for money at interest for it would be of utmost ill consequence to our Honble Masters should they give a higher premium to any one person and we doubt not that who have money to spare will let them have it at the same rate as we get everywhere else’.126 But the Dacca factors replied on 16 September 1746 that they saw no possibility of borrowing money at 9 per cent ‘having already tried all the shroffs in the place who insist on 12 per cent’.127 Even as late as 12 October they wrote to Calcutta that ‘they are sorry to inform us that all their endeavours to obtain money from the shroffs of that place at the rate of 9 per cent per annum have been fruitless’.128 The Calcutta Council believed that the situation in Dacca would improve with the coming of Europe ships with treasure. So when three ships from Europe arrived in October, it wrote to Dacca that ‘we hope the arrival of these ships will give them credit to Borrow money at the usual rate’.129 But the Dacca factors reported in November that they ‘can get no credit there’.130 There was no improvement in the situation even in 1747 when the factors from Dacca reported that they could take up no money there under 12 per cent interest.131 On the contrary the situation deteriorated as no Europe ships arrived even by November. The Dacca factory wrote that ‘no one being willing to lend them a single rupee their credit being quite gone, none of the Company’s ships arriving with any treasure’.132 However, with the arrival of five ships from Europe with treasure, the Calcutta Council hoped ‘it will raise their credit to enable them to go on with the Investment’.133 But that was not to be. The Dacca factory reported in January 1748 that without a supply of money either from Calcutta or Kasimbazar ‘it will be impossible to send down any Goods this season as they could get no money there’.134

244 | Companies, Commerce and Merchants

Minting The problem would have been much less for the Companies if they could coin freely the treasure which was imported to Bengal to pay for the export commodities. But despite their best efforts almost throughout the period, the Companies failed to obtain free minting privilege in Bengal. The main obstacle to such a privilege to the Companies was the house of Jagat Seth who, it seems, from the early third decade of the eighteenth century monopolised the business of the mint. The English factors at Dacca reported as early as January 1722 that they tried to obtain the use of the mint but ‘Futtichund Shroff who it is said Trades for the Nabob hindered, fear it will never be granted, the Nabob gets so much by it’.135 Nonetheless the Court of Directors urged upon the Calcutta Council to try to get the privilege of minting coins and wrote in one of its letters: ‘We hope our now constituted President and Council will give us a convincing specimen of their ability and zeal for our Service among other things in obtaining the grant of Coynage. We have so often and with such earnestness prest you to endeavour and shew’d you the loss we suffered and wherein in the sale of Silver and by the batta on our Madras rupees we can’t add thereto.’136 But all the efforts on the part of the Company came to nothing. Alexander Hume, the chief of the Ostend Company in Bengal, wrote in 1730 that he did not earnestly try for the minting privilege ‘lest the Company lost a good friend in Fatechand who has the Tansal [tancsalmint] almost wholly in his hands’.137 The Company’s servants in Bengal, however, did not desist from trying to secure coining privileges in the Murshidabad mint. But they were at the same time conscious of the reality of the situation. Thus the Calcutta Council ‘forbid’ Patna in 1741 applying to the Court [Durbar at Delhi] for the ‘liberty of the mint’ as this would be of no use so long as Fatechand Seth was alive and ‘in these unsettled times’.138 Next year the Kasimbazar Council suggested that in view of the government’s great need for money to ward off the Marathas, ‘possibly a sum properly applied might even procure the liberty of the mint’.139 But after

European Companies and Pre-Modern Commercial System | 245

serious consideration it gave up the idea because such a step might ‘exasperate Futtichund so far as to make him impede the Company’s business’.140 Even as late as 1753 William Watts wrote from Kasimbazar that the establishment of a mint at Calcutta ‘could not be effected with the Nabob as it would be overset by Jagatseat . . . as he is a great gainer by being the sole purchaser of all Bullion imported’.141 Though the Company secured the privilege of establishing a mint in Calcutta by the Treaty of Alinagar (February 1756), and established its protectorate over Bengal following the battle of Plassey (June 1757), the Seths still remained the main obstacle to Company’s minting coins. The Bengal General Letter to the Court of Directors pointed out in December 1759 that as the coining of siccas in Calcutta interfered so much with the interest of the Seths that ‘they will not fail of throwing every obstacle in our way to deprecate the value of our money in the country, notwithstanding its weight and standard is in every respect as good as the siccas of Murshidabad so that a loss of Batta will always arise on our money, let our influence at the Durbar be ever so great’.142 Of course soon the story was very different, the Seths approaching their doom fast and the English having the stranglehold over the political and economic life of Bengal.143 Selling Bullion The European Companies would have been in a much better position than they actually were, had it been possible for them to sell the imported treasure in the open market or pay for their investments in bullion. But as a result of the monopoly of the mint business by the house of Jagat Seth, they were forced to sell their treasure imported to Bengal, both bullion and specie, to the banking house. The dadni merchants too were in general reluctant to accept bullion for their supplies, and only occasionally and very rarely agreed to be paid in bullion.143 In 1746 the English Company offered bullion to the merchants in payment of what was ‘due to them on account the investment’ but they refused it alleging that nothing but ‘Rupees would pass at the

246 | Companies, Commerce and Merchants

aurungs [and] that they could no ways turn the Bullion into Rupees but by selling it to Juggutseat’s House who they were well assured would not buy it of them’.144 Obviously the Companies had little choice but to sell the bullion to the Jagat Seths and they had to accept whatever price the house offered. Though according to an estimate of Hedges (the then President in Bengal) and Feake in 1718, 240 sicca weight of English standard silver produced nearest to 218¾ sicca rupees, and the shroffs and merchants received sicca Rs. 210: 7: 9 for 240 sicca weight of silver after paying 5 per cent custom duties, the house of Jagat Seth generally paid Rs. 203 for 240 sicca weight.145 On a visit to the Kasimbazar factory in September 1743 Fatechand Seth informed the English that the nawab had tried the French silver in his own presence and adjusted the value at 205 siccas for 240 sicca weight and that if he found the English silver of the same fineness, he would allow the same rate to them. The Calcutta Council advised Kasimbazar to agree to the rate and to dispose of the bullion ‘lying dead’ (125 chests) there which would help them to pay the debts and lessen the ‘heavy load of interest’.146 Fatechand made a trial of the English silver at the mint in November 1743 and submitted the valuation made at the mint as also the rates at which he would take it:147 Estimates

Value in the Mint

Fatechand’s rate

Pillar Dollars

206 siccas per 240 sicca wt. @ 205 siccas per 240 sicca wt. @ 207 siccas per 240 sicca wt. 2:7:3 siccas each

204 siccas per 240 sicca wt @ 203 siccas per 240 sicca wt @ 205 siccas per 240 sicca wt 2:6:9 siccas each

Mexico French Crowns Duccatoons

@

@

As the English silver consisted mainly of Mexico dollars, this rate was lower than what Fatechand said he would take at. While the Kasimbazar Council made representation to him, he shrewdly replied that he had not then tried the silver and that he would expect some profit over the value in the mint for his

European Companies and Pre-Modern Commercial System | 247

troubles which he thought ‘little enough in the price he proposed to give’.148 The Calcutta Council advised Kasimbazar that if representation to Fatechand proved ‘ineffectual’, then to let him have the silver but at the same time ‘to acquaint him that we cannot think of Importing any more silver if this is to be made a precedent of’.149 Fatechand knew well that the Company was bound to import treasure in order to pay for its investments in Bengal and hence was least concerned with the English representation. The French and the Dutch too were in the same difficulty. The Kasimbazar Consultation of 18 November 1743 noted: ‘The French are in the same dilemma as us having their bullion in the factory without being able to come to terms with him [Jagat Seth Fatechand] nor have the Dutch coined a Rupee having had a dispute with the Government which is not yet adjusted.’150 The Court of Directors, knowing little as it did about Bengal’s money market, thought of some alternative measures of freeing from the clutches of Fatechand Seth. It instructed the Calcutta Council in 1745 in the following manner: ‘By delivering our silver to the merchants at the current value as part of their dadney, it may prevent Fatehchund’s lowering it according to his will and pleasure, on his shuffling in such an unheard of manner. Some of the other great shroffs should have been tryed, whereas offers being made to him only, flung the Power wholly into his hands off getting it at his own price’.151 But as we have seen earlier the dadni merchants were almost ‘averse’ to take bullion in lieu of their supplies and no other shroff would even dare buy bullion from the Company. The death of Fatechand in 1744, the Court earnestly hoped, would change the situation for better and it expected that the Company’s bullion would now yield a higher price by Bengal Council’s ‘prudent management of his young successors in the Business’.152 Bat unfortunately for the Directors, that was not to be as will be seen shortly. Fatechand’s successors, Jagat Seth Mahtab Rai and Maharaja Swaroopchand actually tried to reduce the rate that was allowed by their grandfather. In June 1745 the Company requested the Seths to buy the bullion imported recently which they ‘agreed to take at the prices paid

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for the last provided we will send it up there [Kasimbazar] for they will receive it nowhere else’. When the Kasimbazar Council proposed to them. ‘to raise the price to what Futtichund formerly paid’ for the Company’s silver, they absolutely refused to advance anything on the last price alleging that it was not owing to them but the government that the price was lowered.153 Again in June 1746 the English wanted to sell their silver but Swaroopchand offered no more than the ‘last price given namely 203 sicca rupees for 240 sicca weight’.154 In October of the same year again the Seths agreed to take English bullion but refused to give ‘more than last year’.155 The Calcutta Council assessed the situation well and wrote to Kasimbazar: ‘We cannot pretend to dispute the price of bullion with Futtichund’s house at this time and that we agree to let them have it at the price of last year’.153 Soon the Jagat Seths raised another difficulty for the Company in the sale of its imported treasure. The Kasimbazar Council reported to Calcutta in November 1746 that Seth Mahtab Rai had started an objection in Kasimbazar price of silver at the rate of 203 siccas for 240 sicca weight stating that as he received the bullion in Calcutta he was expected to pay no more for it than it was sold there. If the Company wanted the Kasimbazar price, he was to be allowed the charges of sending the silver from Calcutta to Kasimbazar.157 The Calcutta Council advised Kasimbazar to acquaint him that his gomasta demanded earlier the charges of carrying the silver to Kasimbazar but later on relinquished the demand. At the same time it urged Kasimbazar Council ‘in case be persists in requiring it of them, they must agree to it rather than alter the price of the bullion’.158 Next year the Seths refused to pay more than Rs. 201 siccas for 240 sicca weight ‘alleging by way of excuse to the imposition that the profit thereon is not near so great as formerly occasioned by Rupees being made of finer silver than usual’.159 The Calcutta Council wrote in utter desperation that ‘we must submit thereto as we had it not in our power to resist their imposition, there being no other purchasers’.160 The Seths demanded a deduction of one per cent in the price of silver that they bought from the English in view of the charges and risk involved in bringing the silver from Calcutta to

European Companies and Pre-Modern Commercial System | 249

Kasimbazar. The Calcutta Council strongly objected to this and asked Kasimbazar Council not to give in to the Seths’ demand.161 But the Company could not hold against the Seths for long and agreed in October 1750 to allow the Ssths ‘to deduct half per cent in consideration of the risque and charges up’.162 Madras and Arcot Rupees The Company’s problem was accentuated by the fact that the Madras and Arcot rupees which it imported to Bengal were current only at a batta or discount which again was manipulated by the house of Jagat Seth to its advantage. One of the reasons why the Company wanted the minting privilege for coining sicca rupees was that ‘at most aurungs Madras rupees go for no more than Current whereas siccas at 3, 4 or 5 per cent more, the merchants at Fort William take them at 10 per cent’.163 The Kasimbazar Council reported in 1731 that at the ‘instigation’ of Fatechand, a representation was made to the nawab (though not true at all) that the English brought only Madras and Arcot rupees and no bullion that season whereupon the nawab had forbidden the currency of those rupees, and ordered that they should be received only as bullion. Fatechand was the first to pay obediance to the order by putting fifty thousand rupees into the mint to be melted down. But the other shroffs were ‘very clamorous upon the occasion, as they are likely to be great sufferers by it’.164 The batta or discount on Madras and Arcot rupees rose or fell according to the manipulation of the Jagat Seths. The house could influence the nawab to issue orders relating to the batta on Madras and Arcot rupees in its favour. This is quite clear from the Bengal General Letter of 24 January 1737: ‘Futtichund has this year again influenced the Nabob to lessen the value of Madras and Arcot Rupees and procured orders that 107¾ of either should pass for no more than 100 siccas . . . they used to pass 103½ Madras for 100 siccas’.165 Again in 1738 the nawab issued an order ‘forbidding Arcot rupees to go current’ and asking all persons that had any in their possession to bring them to

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Fatechand’s house to be changed into siccas ‘which he had settled at twelve and half per cent Batta on Arcot Rupees’.166 Similarly in 1750 the Seths obtained an order from the nawab which ‘forbids all persons besides themselves from purchasing any silver or taking any Arcot rupees’.167 The Company was helpless in the face of these impositions and could hardly do anything but to submit with a grudge. Even as late as 1752 the diwan Roy Kiritchand ordered that all money whether bullion or rupees must be sent to the mint at Murshidabad to be coined into siccas or disposed off to the house of Jagat Seth, and that the Company should not pay any money to its merchants except in new siccas as ‘no others are to pass current in the country’. The Company found that on disposing of the Arcot rupees to Jagat Seth’s house ‘they will allow us only 87: 11: 3 sicca rupees for 100 Arcot rupees and ninety two siccas for one hundred Bombay Rupees, by which a difference arises on the Arcot Rupees of about 14 per cent and on Bombay 9 per cent which is 7½ per cent more than the Batta was on Arcot Rupees in the year 1750’.168 The dadni merchants too were often reluctant to take Madras or Arcot rupees in payment for their supplies because of the fact they suffered loss in exchanging those rupees for siccas, thus adding to the Company’s difficulties. In 1738 the Kasimbazar Council acquainted the merchants that it expected they would take Madras rupees in part of dadni at the usual batta but they represented that they would be great sufferers by it as the government would oblige them to pay a duty of 2½ per cent and that they would be at further loss in ‘putting them off’. The Council knew well that the only remedy was to seek the help of the Jagat Seths in the matter. So it asked the broker to ‘solicit his [Fatechand’s] interest for the currency of them [Madras rupees] again’. Fatechand Seth was shrewd enough to tell the English broker that ‘the French had been the sole occasion of our complaint by agreeing to pay a custom on Madras and Arcot rupees and that it was not in his power to be of any service to us he himself not being exempted from this custom’. But it was ultimately he who came to the rescue of the Company and told the broker that he was willing to take 106¼ Madras rupees for 100 siccas which

European Companies and Pre-Modern Commercial System | 251

was half per cent more than ‘we could Put them off for anywhere else’.169 Throughout the period, however, the Company tried to coerce the merchants to take part of their dadni in Madras and Arcot rupees. The Kasimbazar Council reported in 1752 that it had paid their merchants with Madras rupees at 106 rupees per 100 siccas which was ‘the lowest batta they could take them at, and at which rate there is a less loss arising to the Company than on any other sort’.170 Intra-Asiatic and Freight Trade Though the local credit market eased to a great extent the Company’s problem of shortage of working capital, it often tried to augment its resources by engaging in Intra-Asiatic and freight trade as also borrowing from the servants of the European Companies including its own. The Intra-Asiatic trade and freight voyages not only provided additional sources of funds for invesment but also saved the Company the demurrage for its ships lying idle in Bengal. The Dutch and the French too did the same. The ships which failed to sail for Europe in the proper season were obliged to stay on, thus incurring heavy demurrage. Under the circumstances the Companies asked their servants to use their best efforts to employ these ships in Intra-Asiatic commerce and freight trade. These commercial ventures certainly helped the Companies to some extent to solve the problem of shortage of liquid capital, though in the absence of adequate data it is not possible to make any accurate estimate of the proceeds from such ventures. Only occasional references to the earnings of some of the ships are to be found in the records. In the first two decades of the eighteenth century the Intra-Asiatic trade was mostly in the Bengal-Surat-Persia sector. This trend was continued in the rest of our period though the trade to Surat declined a bit from about the early ’thirties. The Indian and Armenian merchants at Hugli and Calcutta often freighted European ships for particular voyage to Surat or Persia either jointly or on their separate account, especially in the first two decades of the 18th century.171 A few illustrations of the Intra-Asiatic and freight voyages will

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give an indication of the earnings from such endeavours. It was reported in January 1728 that the ship Hertford ‘being ordered a country voyage’ sailed for Surat ‘with a tolerable good freight’.172 In the preceding year ship Sarum’s earnings on a voyage to Surat produced only Rs. 18,550, ‘Surat almost being ruined by country Government’.173 Consequent to the prospects of a poor freight, the ship Compton was let out in October 1728 for a freight voyage to Jeddah for a sum of Rs. 20,000 which was proportionate to the sum for which Walpole was let out the previous year.174 The Calcutta Council reported in 1737 that the earning of Halifax’s voyage to Surat was Rs. 48,304.175 In November 1754 the Company let out ship St. George to Captain Rannie for Rs. 40,000.176 But even in Intra-Asiatic trade and freight voyages the Company had to face various difficulties. The English Company had to compete with other European Companies and Muslim shipowners. As other European Companies, mainly the Dutch and the French, were also engaged in Intra-Asiatic trade, the English Company had to face their rivalry. In freight trade, the main competitors were the French and Muslims. The Calcutta Council reported in 1727 that two Muslim ships arrived from Surat and the super cargoes told the merchants at Murshidabad that their ships were safer than those of the English who were then at war with Angria. They further informed the merchants that they would carry goods ‘at half freight and no expence in boat hire’. And they secured most of the freight goods.177 Next year the Council wrote that the Muslim ships ‘have run away with the major parts of the freights at Rs. 4 and 4½ per maund’. It further added that ‘were the English to lower theirs to 4 Rupees per maund the Moors would still sink under even to 1 Rupee per maund because [they] can afford to take less’.178 In July that year the Council noted that the ship Compton could be set up for a freight voyage to Surat but ‘cannot expect many freight Bales because the French and Moors take in Bales at freight’.178 In 1729 a French Captain came to Bengal in a large Muslim ship with a French pass and ‘has got the major part of the freight by

European Companies and Pre-Modern Commercial System | 253

agreeing for it at Surat at an under rate’.180 The Court of Directors too pointed out the lowering of earnings from freight trade, especially to Surat, because of the ‘badness of Trade, and the low freights which the Moors ships carrying goods for who sailing at much less charge than our shipping can afford to do’.181 Borrowing from Europeans The English Company also borrowed from local Europeans including servants of various European Companies, free merchants and ships’ Captains. These short-term borrowings which were really bridging finance did to some extent ease the Company’s problem of cash shortage for investments in the proper season. In the early decades of the eighteenth century the Company’s servants deposited money with the Company against bills of exchange on the Court of Directors to be paid in England As for example, Abraham Adams, the accountant at Calcutta, deposited Rs. 27,728 at Calcutta against a bill of exchange on the Court prior to his departure for England in 1716.182 Even the Presidents of the Fort William Council remitted money to England by this method. Thus we find Robert Hedges, the President in Bengal, transferred Rs. 40,045 by means of a bill on the Court in 1717.183 Samuel Feake, the next President, received a bill on the Court for his deposits amounting to Rs. 10,000 in 1718,184 In the same year Henry Frankland who was the export warehouse keeper paid a sum of Rs. 80,000 into the Company’s treasury in Calcutta for which he received a bill of exchange on the Court for £ 11,000.185 As a matter of fact the Company borrowed money locally from the Europeans in Bengal almost throughout the period under review, though it is difficult to compute the amount borrowed yearly by the Company. However, an idea of the amount borrowed from the Europeans could be given for some particular years. In the period of one year from June 1746 to May 1747 the English Company borrowed from the Europeans Rs. 475,640 while next year, from June 1747 to May 1748, the amount borrowed was Rs. 510,967.186

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Summing up To sum up, it can be said with little doubt that the European Companies were able to solve, though with some difficulty, the problems facing them in securing their investments in Bengal. This will be evident from the increasing volume of the European trade during the period under review. The Companies tried to solve their main problem in procuring investments – the acute shortage of working capital – by recourse to borrowing from local credit market which was highly efficient and well organized, and this local money market was the main source of borrowings of the Companies. They also borrowed from local Europeans including their servants and free merchants, and tried to augment their finances by earnings from Intra-Asiatic trade and freight voyages. The main obstacles in borrowing from local capital market were the tradition of short-term loan extending not beyond a few months generally, the occasional scarcity of money in the market and the high rate of interest. The Companies could hardly modify this traditional system. The interest rate was, however, lowered but that was surely granted as a grace rather than anything else by the house of Jagat Seths. They faced various problems in converting the bullion and failed to procure any minting privilege. Neither could they sell the imported bullion and specie in the open market nor could they freely impose the Madras and Arcot rupees on the merchants and markets. In all these they were hindered and harassed by the Jagat Seths who were the most powerful economic force in Bengal under the patronage of the nawabs. Thus the Companies could do little to change even the small detail in the traditional commercial organization. The only new element, if any, that they could introduce in the traditional system was perhaps the office of broker or Chief merchant. Though the brokers were not unknown in the traditional organization of commerce, the role played by the brokers of the European Companies in the commercial and social life was something new in the traditional system. The brokers of these Companies were altogether a new institution in the commercial life of the country, quite different from the

European Companies and Pre-Modern Commercial System | 255

traditional Indian broker in their functions and importance. The other new elements introduced by the Europeans were mainly in the field of organization of trade and procurement system which will be discussed in a later paper. It is also interesting to note that a study of the European investments gives us an insight, however inadequate, into the working of the complex structure of traditional commercial organization, credit machinery and capital market, and the mercantile class in the pre-Colonial period. Manuscript Sources and Abbreviations BPC

Bengal Public Consultations, India Office Library and Records (IOLR) OC Original Correspondence, IOLR VOC Verenigde Oost-Indische Compagnie (earlier K.A. – Koliaal Archief), Algemeen Rijksarchief, The Hague DB Despatch Book, IOLR C & B Abstr. Coust and Bay Abstracts, IOLR Hume’s Memorie The Memorie of Alexander Hume, 1730, Stadsarcbief Antwerpen, General Indische Compagnie, 5769 Orme Mss Orme Manuscripts, IOLR Fact Records Factory Records, Calcutta, Dacca, Kasimbazar, IOLR NAI National Archives of India Beng. Letters Recd Bengal Letters Received, IOLR

Notes 1. The term ‘investment’ is used here in the same sense as that in which the Companies used to denote their purchases in India. 2. S. Chaudhuri, Trade and Commercial Organization in Bengal, Calcutta, 1975, p. 144; John Fryer, A New Account of East India and Persia, 1672-81, vol. 1, London, 1909, p. 217; J. Ovington, A Voyage to Surat in the Year 1689, London, 1929, p. 401. 3. It was reported that Vithaldas Parekh paid Rs. 100,000 to become the broker of the Company at Surat. Another broker, Rustomjee Maneckjee, paid Rs. 20,000 as customary present to the English Company, vide, O. C. 7222, para 48, vol. 58, 14 September 1700. The

256 | Companies, Commerce and Merchants Bengal factors reported in 1703 that ‘it was never the custom here in Bengal for brokers to buy their places’, vide, O. C. 8110, vol. 65, 25 January 1703. 4. For a detailed study of the Seths of Calcutta. See, Benoy Ghose, ‘Some Old Family Founders in the 18th Century Calcutta’, Bengal Past and Present, vol. 79, pp. 42-55. 5. Factory Records, Calcutta, vol. 2, pt. I, f. 133. 6. Ibid., vol. 3, pt. II, f. 90. 7. B.P.C., Range 1, vol. 2, f. 189a. 8. For details of the Court’s allegations against Janardan Seth, see, S. Chaudhuri, op. cit., p. 145 9. D.B., vol. 98, f. 106, 13 January 1714. 10. B.P.C., Range 1, vol. 2, f. 189a, C & B Abst., vol. 1, f. 342. 11. D.B., vol. 99, f. 189, 15 February 1716. 12. Ibid., vol. 98, f. 462, 12 January 1715. 13. Quoted in Benoy Ghose, op. cit., p. 47. 14. C. & B. Abst., vol. 1, f. 472. 15. B.P.C., Range 1, vol. 30, ff. 26a, 31a; C. & B. Abstr., vol. 2, f. 28. 16. D.B., vol. 99, ff. 76-7, 18 January 1717. 17. C & B. Abstr., vol. 2, f. 175, para 57, 6 December 1718. 18. Ibid., vol. 2, f. 79, para 42, 27 November 1716. 19. Ibid., vol. 2, f. 175, para 58, 6 December 1718. 20. Ibid., vol. 2, f. 276, para 72, 28 December 1720. 21. B.P.C., Range 1, vol. 4, ff. 46-46a; C. & B. Abstr., vol. 2, f. 175, para 59, 6 December 1718. 22. C & B. Abstr., vol. 2, ff. 236-7, para 82, 29 November 1719; f. 320, para 60, 31 January 1722. 23. Ibid., vol. 2, f. 237, para 83, 29 November 1719. 24. Ibid., vol. 2, f. 320, para 60, 31 January 1722. 25. D.B., vol. 101, f. 463, para 36, 14 February 1723. 26. C. & B. Abstr., vol. 2, f. 437, para 53, 9 January 1725. On 6 December 1718 the Bengal Council referred to Bishnudas as a weak brother of the family, the most unqualified, vide, C. & B. Abstr., vol. 2, f. 172, para 35. But Benoy Ghose holds that Bishnudas was son of Janardan and nephew of Baranashi Seth, vide, Benoy Ghose, op. cit., p. 49. 27. B.P.C., Range 1, vol. 5, f. 568, 9 November 1724. 28. C & B. Abstr., vol. 2, f. 586, para 54, 28 January 1728. 29. B.P.C., Range 1, vol. 8, f. 419, 21 July 1731. 30. Ibid., ff. 434, 434a, Annex to Consult., 9 August 1731. 31. Ibid., f. 434a, Annex to Consult., 9 August 1731. 32. Ibid., ff. 435-36, Annex to Consult., 9 August 1731. It is surprising that K.N. Chaudhuri completely ignored this report which throws interesting sidelight on the working of the dadni system. 33. B.P.C., Range 1, vol. 9, f. 9-9a, 13 March 1732; C & B. Abstr., vol. 3,

European Companies and Pre-Modern Commercial System | 257 f. 233, para 4, 26 June 1732. Benoy Ghose (op. cit., p. 49) holds that Samsundar was Bishnudas’ eldest son but a Fort William General (C & B Abstr., vol. 2, para, 82, 29 November 1719) mentions categorically that Samsundar was Baranasi’s son. 34. D.B., vol. 106, f. 182, para 38, 29 January 1734. 35. Ibid., f. 183, para 41, 29 January 1734. 36. C & B., Abstr., vol. 4, ff. 66-7, para 52, 24 January 1735. 37. D.B., vol. 107, ff. 414-15, para 17, 19, 21, 2 February 1738. 38. B.P.C., Range 1, vol. 13, f. 429a, 20 December 1738, f. 456a, 17 January 1739. 39. Ibid., f. 434, 23 December 1738. 40. For the Council’s reasons for confirming Samsundar Seth, see, C & B. Abstr., vol. 4, f. 308, para 99, 24 December 1739. 41. B.P.C., Range 1, vol. 13, f. 324a, 14 August 1738. 42. C & B., Abstr., vol. 4, ff. 285-6, paras 108-9, 29 January 1739. 43. D.B., vol. 108, f. 155, para 95, 21 March 1740. 44. Ibid., para 96-7, 21 March 1740. 45. C & B. Abstr., vol. 4, f. 348, para 160, 3 January 1741. 46. Ibid., f. 372, para 4, 26 July 1741. 47. Ibid., f. 379, para 98, 11 December 1741. 48. Orme Mss., India VI, f. 1513, Letter of Captain Fenwick on Company’s affairs in Bengal. 49. D.B., vol. III, f. 537, para 38, 24 January 1753. 50. For this change over and motives behind it, see my forthcoming article in the Journal of the Economic and Social History of the Orient, February 1988. 51. C & B. Abstr., vol. 5, f. 428, para 62, 3 September 1753; Beng. Letters Recd., vol. 22, ff. 428-9; FWIHC, vol. l, p. 692. 52. D.B., vol. 112, f. 214, para 48, 23 January 1755. 53. For Kantu’s affair, see, B.P.C., Range 1, vol. 8, ff 203-3a, 219, 226a, 234-34a, 236a, 237, 248-48a, 249-49a, 256, 257-60. 54. B.P.C., Range 1, vol. 8, f. 257, 10 July 1730. 55. Cotton piece-good. 56. Ibid., f. 203, 28 April 1730. 57. Ibid., f. 249-49a, 22 June 1730. 58. Ibid., f. 248a, 22 June 1730. 59. Ibid., f. 298, 5 October 1730. 60. Ibid., f. 321, 7 December 1730. 61. Fact. Records, Kasimbazar, vol. 5, Consult. 5 February, 21 February and 19 March 1737; C & B. Abstr., vol. 4, f. 210, para 4, 15 February 1737; B.P.C., Range 1, vol. 12, f. 162, 16 April 1737. 62. Ibid., vol. 6, Consult. 16 September 1742. 63. Beng. Letters Recd., vol. 21, ff. 283-4, 10 January 1748; B.P.C., Range 1, vol. 19, f. 239, 15 May 1747, FWIHC, vol. 1, p. 232.

258 | Companies, Commerce and Merchants 64. Hume’s Memoirs. I am gratefully indebted to Prof. K.N. Chaudhuri for allowing me to make a photocopy of this document from his own copy of the same. 65. Ibid. 66. Fact. Records, Dacca, vol. 2, Consult. 27 Janury 1738. 67. D.B., 28 January 1659, vol. 84, f. 411. The shipping season in Bengal was generally from September to January. 68. B.P.C., Range 1, vol. 4, f. 274a, 18 August 1720. 69. Ibid., ff. 404a-405, 29 May 1721. 70. Ibid., f. 432, 8 August 1721. 71. S. Chaudhuri, op. cit., p. 114. For the Company’s borrowings and debts in Calcutta and Kasimbazar in the first two decades of the 18th century, see, Ibid, pp. 114-16. One lakh is one hundred thousand. 72. D.B., vol. 101, f. 372, para 32, 21 December 1722; C & B., Abstr., vol. 5, f. 117, para 261, 10 January 1748. 73. V.O.C, 2030, ff. 156-8, 16 March 1725; all fractions rounded to nearest figure. 74. One wonders why – was it because the Katmas were the most influential merchant and trader family (specialised in money lending and trade in silk, silk piece goods?) 75. The house used to lend money in the name of Jagath Seth but sometimes also in the name of and referred to as Manickchand and Anandchand, or simply Anandchand. 76. The same Balai Katma – the Company’s broker, see Section on Kasimbazar broker. 77. Satu might have been the same as Hatu, in Kasimbazar broker section. 78. Taking only amount exceeding Rs. 30,000. 79. Hume’s ‘Memorie’. 80. Indrani Ray, ‘Some Aspects of French Presence in Bengal, 1731-40’, Calcutta Historical Journal, vol. 1, no. 1, July 1976, p. 99. 81. Ibid, pp. 100-1. 82. J.H. Little, The House of Jagat Seth, Calcutta, 1967, p. X (Introduction by N.K. Sinha); see also Kantu Papers. B.P.C., Range], f. 256, Annexure to Consult, 29 June 1730. 83. Computed from V.O.C. 2874. 84. J. H. Little, op. cit., p. xi, Introduction by N.K. Sinha. 85. Orme Mss., India VI, f. 1525; Watts’ letter to Clive, 18 February 1757, quoted in S.C. Hill, Bengal in 1756-57, vol. II, London, 1905, p. 229. 86. B.P.C., vol. 6, f.564a, 12 March 1728. 87. D.B., vol. 105, ff. 688-9, para 100, 6 February 1733; C & B. Abstr., vol. 3, para 86, f. 345, 2 December 1733. At the rate of 2s. 6d per rupee, the Company paid an interest of Rs. 32,000 at the rate of 12 per cent interest at Kasimbazar in the year 1731-2.

European Companies and Pre-Modern Commercial System | 259 88. C & B. Abstr., vol. 5, f. 59, para 18, 11 August 1745. 89. Fact. Records, Dacca: Consult. 8 September 1749. 90. B.P.C., Range 1, vol. 16, f. 177, 6 June 1743. 91. Ibid., vol. 16, ff. 184a, 203a, 13 June 1743. 92. For a detailed study of the rise and growth of the banking house of the Jagat Seths and the role of these Seths in the economic and political life of Bengal, see my forthcoming article in the Journal of the Economic and Social History of the Orient, February 1988. This house was not related to the Seths of Calcutta. 93. Fact. Records, Dacca, vol. 2, Consult. 30 July 1746. 94. Ibid., Kasimbazar, vol. 7, 15 April 1746; 22 August 1748. 95. Ibid., vol. 10, Consult. 11 November 1751. 96. B.P.C., Range 1, vol. 15, f 84a, 29 March 1742. 97. C & B. Abstr., vol. 3, f. 345, para 86, 26 December 1733. 98. B.P.C., Range 1, vol.14, ff 317, 317a, 11 December 1740, f. 337, 26 December 1740. 99. Ibid., vol. 14, f. 338, 26 December 1740. 100. Fact. Records, Kasimbazar, vol. 6, Consult. 5 February 1741. 101. Ibid., vol. 6, Consult. 24 April 1743. 102. Ibid., vol. 5, Consult. 26 March 1733. 103. Ibid., vol. 5, Consult. 14 June 1733. 104. B.P.C., Range 1, vol. 17, ff. 106-6a, 17 May 1744. 105. This Anandchand, and Manickchand Anandchand definitely refer to the house of Jagat Seths, c.f., V.O.C. 2849 (K.A. 2741), f. 128. 106. Factory Records, Kasimbazar, vol. 6, Consult. 24 April 1743. 107. Ibid., Dacca, vol. 3, Consult. 19 April 1750. 108. Agency house, subordinate office. 109. B.P.C., Range 1, vol. 18, f. 236, 15 May 1746. 110. Daroga of the customs houses. Jan Karseboom, the chief of the Dutch Company in Bengal, describes Hakim Beg in 1755 as ‘Daroga van de Pansjoutra of thol platsen’ (Daroga of Pachotra or Tollplaces [custom houses]), and ‘een grote favoriet van den Nawab’ (a great favourite of the Nawab), V.O.C. 2862 (K.A.) 2754, ff. 125vo, 127vo. 111. He emerged as the key figure in the Nawab’s relations with the English Company when Alivardi gave him the charge of the nawab’s relations with the Europeans in Bengal in 1750, B.P.C. Range 1, vol. 23, f. 306a, 25 August 1750. 112. Fact. Records, Kasimbazar, vol. 10, 10 October 1751; vol. 11, 2 December 1751. 113. Computed from Fact. Records, Kasimbazar, vols. 9, 10, 12. 114. Fact. Records, Kasimbazar, vol. 12, Consult. 4 May 1753; 31 May 1754. 115. Fact. Records, Dacca, vol. 3, 9 November 1749; B.P.C., Range 1, vol. 22, f. 420a, 15 November 1749.

260 | Companies, Commerce and Merchants 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143.

144. 145. 146.

For this, see my forthcoming article in JESHO. B.P.C., Range 1, vol. 22, f. 338-338a, 20 October 1749. Ibid, vol. 23, f. 303a, 25 August 1750. Beng. Letters Recd., vol. 22, f. 117; Home Misc. (NAI), vol. 16, p. 189, para 83, Letters to Court, February 1751; C & B. Abstr., vol. 5, f. 275. Fact. Records, Kasimbazar, vol. 7, Consult. 22 June 1746; B.P.C., Range 1, vol. 18, f. 265a, 30 June 1746. B.P.C., Range 1, vol. 18, f. 272, 7 July 1746. Ibid., vol. 18, f. 302a, 29 July 1746. Fact. Records, Calcutta, vol. 10, pt. II, f. 92. D.B., vol. 95, f. 519, 18 January 1705. Ibid.,, Dacca, vol. 2, Consult. 19 August 1746. B.P.C., Range 1, vol. 18, f. 354a, 5 September 1746. Fact. Records, Dacca, vol. 2, Consult. 16 September 1746. B.P.C. Range 1, vol. 18, f. 391a, 12 October 1746. Ibid., f. 408, 16 October 1746. Ibid., f. 434, 11 November 1746. Ibid., f. 76a, 31 July 1747. Ibid., f. 235a, 24 November 1747. Ibid., f. 283a, 28 December 1747. Home Misc. (NAI), vol. 13, f. 85, para 70, Letter to Court, 10 January 1748; Beng. Letters Recd., vol. 21, f. 237; FWIHC, vol. 1, pp. 203-4 C. & B. Abstr., vol. 2, f. 321, para 77, 31 January 1722. D.B., vol. 101, f. 162, para 56, 16 February 1722. Hume’s Memoire. C. & B. Abstr., vol. 4, f. 336, para 124, 3 June 1741. B.P.C., Range 1, vol. 15, f. 334a, 19 October 1742. C & B. Abstr., vol. 4, f. 430, para 8, 30 January 1743; B.P.C., Range 1, vol. 16, f. 92, 29 March 1743. Ibid., vol. 5, f. 399, 12 February 1753; Beng. Letters Recd., vol. 22, ff. 384-5, 8 Feb. 1753. Public Letter to Court (NAI), sr. no. 6, f. 25, para 60, Bengal General Letter to the Court of Directors. 29 December 1759. C. & B. Abstr., vol. 5, f. 69, para 14, 4 February 1746; f. 80, para 66, 30 November 1746; B.P.C., vol. 24, f. 49, 31 January 1751. Occasionally however Umichand and some of the substantial dadni merchants were paid in bullion as is evident from the records of the Company. Beng. Letters Recd., vol. 21, ff. 49-50, para 66, 30 November 1746. C. & B. Abstr., vol. 2, f. 175, para 62, 6 December 1718; vol. 4, f. 454, para 46, February 1744. B.P.C., Range 1, vol. 16, ff. 272a-273a, 19 September 1743.

European Companies and Pre-Modern Commercial System | 261 147. Ibid., f. 332a, 9 November 1743. 148. Ibid., ff. 332a-333, 9 November 1743. 149. Ibid., f. 333, 9 November 1743. 150. Fact. Records. Kasimbazar, vol. 6, Consult. 18 November 1743. 151 D.B., vol. 108, f. 288, para 15, 7 February 1745. 152. D.B., vol. 109, f. 463, pata 19, 7 May, 6 & 12 June 1746. 153. B.P.C., Range 1, vol. 17, f. 604, 13 June 1745. 154. Ibid., vol. 18, ff. 265a-266, 30 June 1746. 155 Ibid., f. 394, 14 October 1976. 156. B.P.C., Range I, vol. 18, f. 398, 15 October 1746. 157. Ibid., f. 431, 8 November 1746. 158. Ibid., f. 431a, 8 November 1746. 156. Ibid., vol. 19, f. 292a,. 23 June 1747; Beng. Letters Recd.; vol. 21, f. 2S5, 10 January 1748; FWIHC, p. 233. 160. Beng. Letters Recd., vol. 21, ff. 289-90, para 195. 10 January 1748; B.P.C., Range 1, vol. 20, f. 187a, 9 October 1747; FWIHC, vol. 1, p. 236. 161. Ibid., vol. 21, ff. 198a-200a, 22 September 1748. 162. Ibid., vol. 23, f. 356a, 20 October 1750; C. & B. Abstr., vol. 5, f. 278, paras 126, 127, 4 February 1751; FWIHC, vol. 1, pp. 482-3. 163. C & B. Abstr., vol. 2, f. 175 para 61, 6 December 1718. 164. B.P.C., Range 1, vol. 8, ff, 451a-452, 13 September 1731; C & B. Abstr., vol. 3, f. 172, para 2, 5 January 1732. 165. C. & B. Abstr., vol. 4, f. 198, para 60, 29 January 1737. 166. Fact. Records, Kasimbazar, vol. 2, Consult. 20 March 1738; B.P.C., Range 1, vol. 13, f. 216, 3 April 1738. 166. B.P.C., Range 1, vol. 23, f. 28, 11 January 1750. 168. Fact. Records, Kasimbazar, vol. 11, 31 January 1752; C. & B. Abstr., vol. 5, f. 357, para 79, 18 September 1752. 169. B.P.C., Range 1, vol. 13, ff. 183-83a, 2 March 1738. 170. C. & B. Abstr., vol. 5 f. 356; B.P.C., Range 1, vol. 25, f, 162, 8 June 1752; FWIHC, vol., f. 6. 171. For English Company’s Intra-Asiatic trade, and Freight voyages by Indian and Armenian merchants in early 18th century, see, S. Chaudhuri, op. cit., pp. 124-5. 172. C. & B. Abstr., vol. 2, f. 583, para 18, 28 January 1728. 173. D.B., vol. 104, ff. 420-1, para 6, 21 February 1729; C & B. Abstr., vol. 2, f. 583, para 19, 28 January 1728. 174. B.P.C., Range 1, vol. 6, f. 656, 7 October 1728. 175. C. & B. Abstr., vol. 4, f. 233, 30 November 1737. 176. B.P.C., Range 1, vol. 27, f. 334, 7 November 1754. 177. C & B. Abstr., vol. 2, ff. 524-5, para 15, 28 January 1727. 178. Ibid., ff. 583, para 18, 28 January 1728.

262 | Companies, Commerce and Merchants 179. 180. 181. 182. 183. 184. 185. 186.

Ibid., vol. 3, f. 26, para 18, 31 July 1723. Ibid., vol. 3, f. 30, para 16, 2 February 1729. D.B., vol. 104, ff. 420-1, para 6, 21 February 1729. B.P.C., Range 1, vol. 3, f. 117. Ibid., vol. 3, f. 460. Ibid., vol. 4, f. 1a. Ibid., vol. 4, f. 3. Computed from relevant volumes of B.P.C., Range 1.

chapter 11

General Economic Conditions under the Nawabs*

Throughout the seventeenth century, the Mughal Suba of Bengal was regarded as Zannat-abad or ‘the realm of Paradise’ an epithet ascribed to it by the second Mughal emperor Humayun.1 Aurangzeb is said to have styled Bengal as the ‘Paradise of Nations’. Indeed no Mughal farman, nishan or other official papers ever mentioned Bengal without adding ‘the Paradise of India’ – an appellation given to it par excellence as pointed out by Jean Law, the chief of the French factory at Kasimbazar.2 That Bengal under the nawabs in first half of the eighteenth century was equally prosperous and flourishing as Europe in the seventeenth century is evident from the fact that the near-contemporaneous author of the Persian chronicle Riaz-us-Salatin describes Bengal as zannat-al-bilad or ‘Paradise of Nations’.3 The myth of wealth of Bengal as also the cheapness of its wares during the period under review is enthusiastically-pointed out by most of the contemporaneous European accounts of Bengal. Charles Grant described Bengal of the pre-British period as ‘easy in its finances, moderate in its expenditure, free from charges and cares of independent dominion, its inhabitants enjoying in the occupation of agriculture and commerce, public peace and abundance’.4 Harry Verelst ascribed the prosperity of nawabi Bengal to the cheapness and quality and the prodigious traffic of her manufactures. ‘Besides the large investments of the European nations’, according to him, ‘the Bengal raw silk, cloths etc. to a * History of Bangladesh, vol. II, Dhaka, 1992, pp. 30-66.

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vast amount were dispersed to the West and North inland as far as Guzrat, Lahore and even Ispahan.’5 Bengal had, in fact, all the prerequisites for a prosperous economic life. The rich fertility of its soil was conducive to its flourishing agriculture. The natural products of Bengal were hence various and abundant which enabled it to export its surplus agricultural products to various parts of India as also to several neighbouring countries – a tradition which was so markedly pointed out by most of the foreign travellers in the seventeenth century and which was continued even during the nawabi regime.6 The shipping lists in the Dutch archives of Asian vessels which left Bengal ports in the first half of the eighteenth century bear ample testimony to the fact that during the prePalashi period Bengal exported rice, wheat, sugar, ghee and other provisions to various ports of India and the eastern Islands.7 The handicrafts manufacturing industry of Bengal, especially in the field of textile and silk production, was at its peak during the rule of the Bengal nawabs supplying the enormous demands of both Asia and Europe, and bringing in its trail the huge amount of silver from those parts to Bengal. All these economic activities flourished inasmuch as Bengal under the nawabs enjoyed enviable political stability which was rare in many other parts of contemporary India. The nawabi regime established by Murshid Quli Khan had a succession of capable rulers in Shujauddin Khan and Alivardi who provided the Suba with almost half a century of stable political condition, the Maratha and Magh incursions notwithstanding, which was not only so very essential for peace and prosperity but also for vigorous pursuits in the field of agriculture, commerce, industry and other economic activities. Hence it is no wonder that the general economic condition of Bengal under the nawabs was much more prosperous than it was in the subsequent period of the Company rule. This is corroborated in no uncertain terms by Richard Becher, a Company official, who had been in Bengal for many years both before and after the battle of Palashi. He wrote: ‘It must give pain to an Englishman to have reason to think that since the accession to the Dewanee

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the condition of the people of this country has been worse than it was before, and yet I am afraid the fact is undoubted.’8 The stable political condition and efficient administration not only fostered a flourishing agriculture but stimulated manufacturing and export trade. There is no denying the fact that the traditional manufactures of Bengal enjoyed a supremacy both in Asia and in Europe even during the seventeenth century but it was in the first half of the eighteenth century that the production of these manufactures reached a new height under the compulsion of supplying the unprecedented demand from both Asian and European markets. It was during the nawabi regime that the exports of the European Companies, especially the English and Dutch East India Companies, from Bengal shot up phenomenally. There was abundant production of textiles and raw silk – the two major products of Bengal’s famous manufacturing industries – to meet the demands of the Asian and European markets. It is now known that the Asian merchants, exclusive of the European investments, exported raw silk from Bengal to the tune of Rs. 48 lakhs per annum on an average in late ’40s and early ’50s of the eighteenth century. This is not surprising if we take into account what William Bolts wrote about Bengal under the nawabs: A variety of merchants of different nations and religions, such as Cashmeerians, Multanys, Pathans, Sheiks, Sunniasys, Paggayahs, Betteeas and many others used to resort to Bengal in Caffeelahs or large parties of many thousands together with troops of oxen for the transport of goods from different parts of Hindostan.9

Luke Scrafton corroborates this when he writes: Till of late years inconceivable numbers of merchants from all parts of Asia in general, as well as from the rest of Hindostan in particular, sometimes in bodies of many thousands at a time, were used annually to resort to Bengal with little else than ready money or bills to purchase the produce of these provinces.10

So it is conceivable that Bengal’s commerce, both inland and foreign, exclusive even of the Europeans, was in a flourishing

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state under the nawabs. This meant that the despotism of the nawabs never degenerated into absolute oppression. Commerce and manufactures were encouraged by the nawabs. As a result up to the battle of Palashi, Bengal had a favourable balance of trade with all other countries including Europe. The flourishing condition of Bengal in the first half of the eighteenth century, as N.K. Sinha pointed out rightly, became a ‘subject of celebrity’ in the second half of the century.11 Communication System As the economic condition of a country is largely dependent on its communication system, it is imperative that a detailed analysis of Bengal’s roads and communication network during the nawabi regime is made here. Almost all contemporaneous accounts of Bengal affirm that in the first half of the eighteenth century, the whole province of Bengal was covered with a network of good roads which connected every part of the province with one another and this created a congenial atmosphere for vigorous economic activity. In his Description of the Roads in Bengal and Bihar (1788), James Rennell gave a long list of the main roads of the province in the eighteenth century. The major cities of Bengal – Murshidabad, Hugli, Dhaka, Patna and Calcutta – were connected by roads with Nepal and Bhutan in the east; Ganjam district of Orissa in the south; Singbhum, Palamau and Chotanagpur in the south-west; Benares and Ghazipur in the west; Batia of Bihar in the north-west; Sylhet, Jayantia and Khaspur in the north-east, and Chittagong and Rajghat in the south-east.12 It is significant to note in this connection that not only the prominent cities but even smaller places like Burdwan or Nagore had important roads running from and to the different parts of the country. There were two main roads from Burdwan to Calcutta running through Chandannagore. Besides, many other roads from Burdwan connected other manufacturing centres and trade marts like Dhaniakhali, Tamluk, Budgebuz, Nadia, Jalangi, Rajmahal, Radhanagore, Chandrakona and

General Economic Conditions under the Nawabs | 267

Farukabad.13 Similarly Kasimbazar was connected by fine roads with various other parts of the country. A vital road was 281 miles long from Kasimbazar to Patna via Rajmahal. Other roads from Kasimbazar connected it with Burdwan, Jalangi, Dhaka, Rampur Boalia, Meenkhat, Dinajpur, Birbhum, Malda, Rangamati, Goalpara, Kandi and Surul (in Birbhum).14 Such instances can be easily multiplied. There is ample evidence that major Bengal towns and production centres were well connected by roads with important places in northern Indian plains. A major connecting route was the 522 miles long road from Calcutta through Kasimbazar and Rajmahal to Patna from where Delhi and Agra could be reached via Allahabad and Mathura. The Surman embassy to the Mughal emperor Farrukhsiyar took this road to Delhi.15 The roads in Bengal not only connected one important centre with other similar centres in different parts of the province but also a single district was intersected by many roads, running from one part of it to another. Rennell, for example, mentioned many roads running across the Birbhum district. Of these, the main ones were from Nagore to Deoghar, Kumirabad, Maluti and Maragram. Three other roads starting from Nagore ended at Suri. Besides, there were roads from Nagore to Krishnanagore, Ilambazar, Ukhara, Pachet (Ranigunge) and Supur. A striking feature of Bengal’s communication system during the nawabi regime was that even most interior parts of the country were also connected by roads with the distant towns. These roads were constantly in use and have been carefully noted by Rennell. For example, roads from Calcutta ran to places like Patchwary (in Santhal Parganas) and Pakur. However, it is to be noted that all roads were not in good shape. The road from Barasat to Jessore was particularly bad. As Rennell observed: After leaving Barasat, we seldom found the roads good, they being excessive narrow, rough and crooked and very frequently running across paddy fields so that when the ground is ploughed there are no traces of road to be found.16

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Still, from all contemporary accounts it can be asserted that Bengal under the nawabs had a system of communication of ‘reasonable quality by any pre Industrial standard.’17 The interior part of eastern and northern Bengal, especially the tract lying east of Dhaka, was not provided with so many good roads as the western part owing chiefly to the presence of numerous rivers and creeks in the area. The important places in these parts however were connected by roads with cities of note in almost every direction. For instance, there were two roads from Calcutta to Dhaka and two others went up to Bakarganj. Calcutta was again connected with Chittagong by two roads and another went up to Sylhet to Dhaka. For obvious reasons, as Rennell pointed out, most of the roads in eastern part of Bengal were not in very good condition during the rainy season as they were mostly mud roads. On the land route between Bengal and Bihar, Maricha (Mircha of the English Company records) was an important centre of communication and for transportation of goods. Here at Maricha which stood at the head of a creek joining the Ganges with the Jalangi and Bhagirathi, goods were transhipped from larger to smaller boats on their way from Patna to Calcutta. The boats laden with saltpetre and silk goods at Patna and Futwa travelled via Bhagalpur and Colgong to Maricha where in the drier season the boats had to be changed because of the shallowness of water. If the level of water was sufficiently high, the boats came down to Calcutta via Nadia.18 Boats carrying broadcloth and treasure from Calcutta to Patna followed the same route. In fact, Maricha occupied a strategic position for the business of the European Companies between Bengal and the upper regions. Whenever the Bengal nawab considered that he had a grievance against the Company and wanted them to comply with his demands, the usual method adopted was to station soldiers at this place and prevent the transport of goods either way.19 In Bengal under the nawabs, as it was in earlier times, the most important means of communication was the river highway. The Ganges and the Brahmaputra with their numerous tributaries and channels afforded facilities for reaching the most interior

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areas of Bengal. It is worth quoting Rennell’s observation at length here: The Ganges and the Burramooter Rivers, together with their numerous branches and adjuncts intersect the country of Bengal . . . in such a variety of directions, as to form the most complete and easy inland navigation that can be conceived. So equally and admirably diffused are those natural canals . . . that, after excepting the lands contiguous to Burdwan, Birboom, etc. . . . we may safely pronounce that every other parts of the country has, even in the dry season, some navigable stream within 25 miles at farthest, and more commonly within a third part of that distance.20

He further states that 30,000 boatmen were constantly employed in Bengal’s inland navigation which carried ‘all the salt and a large proportion of the food consumed by ten millions of people’ in the Kingdom of Bengal. The inland waterway was the main route through which Bengal’s commercial exports and imports to the tune of about two million sterling per annum (around Rs. 160 lakhs) were transported.21 The large number of tributary rivers, nulluhs and creeks, running almost through every part of the province, especially eastern Bengal, provided excellent means of communication through which even remote villages in the interior were within easy reach of merchants and travellers. Rennell wrote: The Kingdom of Bengal, particularly the Eastern Front, is naturally the most convenient for trade within itself of any country of the world; for the rivers divide into just a number of branches that the people have the convenience of water carriage to and from every principal places.22

The Dutch traveller Stavorinus who visited Bengal in the late eighteenth century made a similar remark: The country is everywhere intersected, with large and broad channels. . . . All merchandise is conveyed, by means of these passages, with great facility, from one place to other, throughout the land, and the chief branches of the river communicate hereby with each other. . . . They are agreeably bordered on either side, with many towns and villages, and with pleasant fields, of arable and pasture land; which renders the face of the country very beautiful.23

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Of the two chief navigational routes from Calcutta to north India in the eighteenth century the first, passing through the Jalangi and Nadia led towards Kashi and the second through Bhagirathi and Suti went up to Munger and Patna in Bihar. The latter was most commonly used. The riverine route from Calcutta to Dhaka passed through the Jalangi to Padma from where through Padma and the Ichamati to Jaffarganj and through Dhaleswari to Dhaka. The whole of eastern Bengal was so well connected with rivers and their tributaries that transportation of goods posed little difficulty. Alexender Dow rightly observed: The easy communication by water from place to place, facilitated a mercantile intercourse among the inhabitants. Every village had its canal, every Pergunna its river, and the whole Kingdom the Ganges, which falling, by various mouths, into the Bay of Bengal, lays open the ocean for the export of commodities and manufactures.24

In view of the analysis which undoubtedly testifies to a reasonably good system of communication in pre-colonial Bengal, the popular concept that Bengali villages remained economically independent and self-sufficient unit during nawabi regime is not true. As a matter of fact the well-organized communication system helped Bengal’s continuous contact with the outside world on the one hand and the various important production centres and trade marts within the province itself on the other. So the suggestion of largely self-sufficient Bengali villages living in isolation from one another in nawabi Bengal is totally inappropriate. In this connection it is relevant to note that many Bengali artisans during this period produced for distant markets. Peasants in Bengal were also engaged in the cultivation of cash crops like cotton, sugarcane, mulberry, oil seeds, etc. Even rice, especially the among winter crop, was produced as cash crop since quite a large amount was meant for export to different parts of India, Asia and the East Indies. A significant aspect of Bengal economy of this period was the extent of monetization so much so that revenue payments were generally made in cash which circulated very wide, though cauris were mostly used in small and daily transactions. Credit was freely available to all sections

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of the society though the terms for ordinary people might have been stringent. Moreover credits were transferred and bills of exchange were widely issued and discounted. Indigenous banking and credit system were highly organised and efficient during this period.25 It has been argued by Marshall that by mid-eighteenth century Bengal had ‘to a degree developed an integrated economy with marked regional specialization’.26 Some areas specialized in producing grain surpluses, some concentrated on cash crops and yet others on particular lines of textiles and silk production. A widely spread network of markets facilitated exchange. Besides, big wholesale markets had developed at strategic points such as the one at Bhagawangola near Murshidabad which was the greatest grain market in nizamat Bengal. Narayanganj near Dhaka was another such whole sale market. Large local markets, called ganj, abounded in many parts of Bengal while small scale transactions took place in the village hats which met generally twice a week. It is significant that one documented village market of 1770s in Murshidabad had three stalls dealing in cauris and two money changer’s stalls in a total of its thirteen shops.27 This economic integration was no doubt aided by the satisfactory system of communication through land and river routes. A clear indication of economic integration was the rough uniformity of prices in major centres throughout Bengal about mideighteenth century. But this was mainly confined to big towns and places in the vicinity of navigable rivers. Wide fluctuations in grain prices were frequently noticed in remote countryside, even over short distances from year to year and from month to month in a given year. The economic integration was also indicated by the extent of commercialization of agriculture and handicrafts in the mid-eighteenth century. The process was further helped by the presence of merchants from all over India with extensive network and their involvement in a wide range of enterprise. The richest among these merchants were at the same time bankers, shipowners and dealers in different commodities, and operated through their gomastas or agents in various kuthees or business branches in different parts of the country.

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Market Price and Wages

Market Market places abounded in nizamat Bengal. Every important city or village had its own market while bazars and nearby hats were conspicuous in places which were not centres of trade. Markets in the city comprised shops which stocked not only articles of necessity but luxury as well. Ramprasad, the contemporary poet, gave a description of the market in the city of Burdwan which was then, according to the author of Sier-ul-Mutakherin, ‘famous for populousness and plenty of provisions superior to most cities in Bengal.’28 He writes: Beyond these the poet [Sundara] saw the King’s market with thousands of foreign merchants sitting there. There were hundreds of shopkeepers and countless gems, pearls and rubies. There were various kinds of fine and beautiful cloths. . . . There were many bilati (foreign) articles of fancy price and fashionable designs which were however heaped together for want of customers. Everything was cheap and easily available.29

Though the above is an account of the jewelry and cloth departments of the market in Burdwan, a city market in general contained various other shops dealing in different articles. Vijayaram’s Tirthamangal gives several descriptions of various specialised shops in a city market.30 The poet thus described the market of Bhagwangola: The boat soon reached the market place at Bhagwangola and all shouted out ‘Hari’, ‘Hari’. They were highly pleased to see the market and walked through the whole city on foot. The market, beautiful to look at, extended 4 kos (8 miles) and was full of numerous soukaris (shell workmen), Kausaris (brass smith) and weavers. The streets were full of grocers’ shops and they all spoke highly of the market. There were also numerous grain golas (barns) there.31

Holwell testifies that Bhagwangola was the ‘greatest market’ for grain, oil and ghee ‘in Indostan or possibly in the known world’. The volume of trade at this important mart can be gauged from the fact that here the customs on grain only amounted to

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Rs. 3 lakhs per annum.32 Holwell also refers to several markets in Rani Bhawani’s zamindari of Natore – Bhawaniganj, Shibganj, Swarupganj and Jamalganj – the very names implying that they were mainly markets for grains.33 In Calcutta in mid-18th century there were about 10 or 11 bazars – Shobha Bazar, Shyam Bazar, Bagh Bazar, Hatkhola Bazar, Charles Bazar, Begum Bazar, John Nagar, Mandi Bazar, New Bazar etc.34 A host of officials appointed by the nawab or the zamindar looked into the affairs of markets throughout Bengal – the prices and quality of commodities, weights and measures. These officials maintained strict order in all the city markets and bazars or hats in the villages. An important function of the kotwal was to look after the markets and to prevent any malpractice or abuse in the markets. The officials checked regularly weights and measures, the quality of the commodities sold and regulated prices of articles. Anyone violating the regulations was subjected to severe punishment. This is well illustrated by contemporary vernacular literature: Neither could anybody sell in less than the proper weight nor could anybody cheat others by increasing price. The Gazi punished him who violated the regulations; the customers as well as the shopkeepers were all under his orders.35

So it is evident that the markets were organised and controlled by the zamindars through their officials in their respective localities, much to the convenience of the people in general. From this it can be presumed as well that not only the big city market were regulated by the nawab’s or zamindar’s officials but the regulations were also enforced in rural areas. Otherwise the above reference in Samser Gazir Punthi, which presumably refers to rural areas, would have been less categorical. In Calcutta the English Company maintained strict vigilance over prices, weights and measures. Any one acting contrary to the rules was severely punished.36 The Bengal nawabs in general and Murshid Quli in particular kept strict surveillance over the markets and prices in the country.

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The author of Riyaz-us-Salatin makes the following observation on Murshid Quli’s reign in this regard: He exerted himself to render the prices of food-grains cheap, and did not allow rich people to hoard up stocks of grains. Every week, he had the price-current reports of food-grains prepared, and compared them with prices actually paid by the poor people. If these latter were charged one dam over the prices stated in the price-current report, he had the dealers, mahaldars and weighmen punished in various forms, and had them patrolled through the city, placed upon asses.37

The general statement by near-contemporaneous Persian chroniclers that Shujauddin’s reign was ‘marked by peace and prosperity’, and that ‘he uprooted from his realm the foundation of oppression and tyranny’ or that after the Maratha invasions were over, Alivardi ‘applied himself with judgement and alacrity to the repose and security of his subjects and never afterwards deviated in the smallest degree from those principles’38 could well be taken as indications that both Shujauddin and Alivardi took great care in regulating markets and prices throughout the province of Bengal.39

Prices At the present state of our knowledge it is extremely difficult to say anything definitive about movement of prices in the first half of the eighteenth century. Though there was possibly a slight increase, which in all probability was only marginal, in prices of commodities, especially of provisions from about early 1740s, one fails to observe a ‘fairly sustained and marked increase’ in prices in the period between 1720 and 1760. In recent years there has been attempts to study the price movements with particular reference to several commodities, such as textiles, raw silk, rice etc.40 The method used for the purpose seems to have been to apply the simple rule of dividing the total price paid for the total quantity of the commodity for finding out the unit price. But this does not take into account many variables and hence might lead to misleading results. In case of textiles there were hundreds of varieties which differed widely in prices. Again the price of the

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same category of textiles varied greatly depending on the quality, size and the aurung in which it was produced. As to the raw silk, there were several varieties – in each variety again the price varied depending on the season in which it was produced. An important factor which should be taken into consideration is the quantity of each variety exported for both raw silk and textiles. For rice too the price depended on the quality – even ‘coarse’ rice varied in price depending on degree of ‘coarseness’ and the place where it was bought.41 While analysing the price movement in Bengal and trying to explain the sharp price rise in Bengal from about early 1740s (which as we shall see later was not really the fact), historians have in general put too much emphasis on several factors.42 These are: (a) The ‘phenomenal increase in the European trade and bullion imported by the European Companies’ during the period between 1720 and 1760; (b) the Maratha invasions and consequent dislocation in the economy; (c) the competition among European Companies; (d) imposition of heavy duties; (e) natural calamities. There is no denying the fact that there was a significant increase in European trade in the first half of the eighteenth century and a consequent influx of bullion. It is also probable that as a result of this there was an expansion in the economic activity of Bengal and an increase in money supply. But the extent of the impact of these on the overall economy and the price movement over the period are yet to be determined precisely. Moreover, as we have argued elsewhere,43 even in the mid-eighteenth century, the European trade was not the most important factor in Bengal’s commercial economy, the volume of the export trade carried on by the Asian merchants from Bengal was much larger than that of the Europeans, and the Europeans were not the only importers of bullion and for that matter not even the largest at that. The Maratha invasions no doubt resulted in dislocation in the economy but it was mainly regional in character and only a temporary phase. The competition among European traders was certainly there but this would have hardly affected the general price level. The Bengal nawabs and zamindars took resort to abwabs (additional imposts) and

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levied other tolls but their effects need not be overemphasized. Natural calamities were there affecting prices but their impact was only temporary and often local in nature. Even taking for granted for the sake of argument that the price of export goods such as textiles and raw silk registered a rise over the period under review, it may be argued, as has been done by a recent authority, that such a sectorial rise might only reflect a failure of the supply of these goods to increase as fast as the demand for them, and may not necessarily indicate a general price rise in the economy. As solid evidence of the latter, one would have to look for movements in the prices of so-called wage-goods, the most important among which would be staple food items like rice and wheat.44 But at the present state of our knowledge this exercise is fraught with the danger of a wide margin of error because of the lack of precise information in the face of immense staple food varieties, especially rice. One suspects such an attempt at this stage might only lead to extremely erratic behaviour of the prices of provisions, as has been the case of a recent study on Bengal prices on similar lines for 16501727.45 Further, the explanation based on the quantity theory of money that foreign demands for export goods which were paid in cash stimulated domestic demand for food grains and other consumer products which in turn exerted pressure on prices has recently been challenged. One writer explains the phenomenon in a different way. Though the extent of increase in the velocity of money circulation as a result of European trade could not be precisely determined, the increasing European trade implied that the monetized transactions as a proportion of total transactions in the economy would have gone up. Moreover over the fairly long period that we are concerned with, natural increase in population would have necessitated a secular rise in output and transaction if the per capita output and availability were not to go down. All these factors would tend to check a general rise in prices consequent upon an increase in the supply of money caused by an increased inflow of precious metals.46 There is hardly any doubt that in Bengal people in general ‘had far more to eat and his condition was far better in the early

General Economic Conditions under the Nawabs | 277

eighteenth century than in the nineteenth’.47 For the common man the most important factor was the price of rice which was his staple food, and during Murshid Quli’s administration the ruling price of rice was 5 to 6 maunds per rupee. As the author of Riyaz-us-Salatin points out, other provisions too were similarly cheap so much so that by spending one rupee in a month ‘people ate polao and qaliah daily’. Even discounting the obvious exaggeration in the statement, his observation that ‘owing to this cheapness, the poor people lived in ease and comfort’ is quite significant.48 As a matter of fact near-contemporaneous Persian chronicles and European records point out that Murshid Quli exerted him to render the prices of food grains cheap, often prohibiting any hoarding and even sometime their export in times of scarcity and famine.49 During Nawab Shujauddin Khan’s time, the low prices of provisions became legendary. According to most Persian chronicles including the Sier-ul-Mutakherin Shujauddin’s reign was marked by peace and prosperity. John Shore went to such an extent as to say in 1789 that it was ‘moderate, firm and vigilant, and seems the only part of the whole period (from Murshid Quli to Mir Qasim), with an exception perhaps of the last years of Alivardi Khan, in which the conduct of the government was in any respect calculated for the improvement of the country.’50 It was during Shuja’s viceroyalty that the western gates of the city of Dhaka, which were not to be opened since the departure of Shaista Khan unless the price of rice came down to the level of 8 maunds per rupee, were reopened.51 He too prohibited the export of grains from Bengal at times of scarcity.52 Both Ghulam Hussain and Karam Ali state that Alivardi’s administration was marked by an all-round lenity and that the nawab was very careful to promote the comfort and welfare of his subjects. Despite the imposition of abwabs, the latter period of Alivardi’s reign was on the whole one of unbroken prosperity for Bengal. Alivardi’s government did not hesitate to impose embargo on rice export during the years of scarcity from Bakarganj to Calcutta where an estimated 400,000 mds. of rice were imported annually for its own consumption and re-export.53 The Calcutta Council at the instance

278 | Companies, Commerce and Merchants

of Holwell (the zamindar of Calcutta) and the rice merchants of Calcutta tried to lift the embargo but to no avail.54 Whenever there was any scarcity of food grains, Alivardi waived the duties on grains to be imported to Murshidabad and prohibited the chaukis from collecting any tolls from boats laden with foodstuff for the capital.55 As argued earlier, the movement of price should be looked into in the prices of major food grains, especially rice, the staple food of Bengal and not in the prices of major export commodities like textiles and raw silk where the heavy demand for such goods on the part of the Asians and Europeans might have resulted in such a rise in prices when the supply failed to meet such a demand. But as even recent authorities emphasize this aspect to prove a general rise in prices and as ‘evidence of a sustained and marked increase in prices,56 let us examine how far and if at all the prices of these commodities show a secular upward trend in the first half of the eighteenth century. One has to take into account here that even earlier authorities like K.K. Datta and Brijen K. Gupta57 emphasized the ‘sharp increase’ in prices of textiles and raw silk during the period under review and even asserted that between 1738 and 1754 prices of these commodities increased by no less than 30 per cent. The latest work on this period by P. J. Marshall, quoting the earlier authorities, arrived at the same conclusion.58 The main and the only basis of the above conclusion regarding the sharp increase in the price of textiles, as referred to both by K.K. Datta and Brijen K. Gupta, is a complete misreading (and out of context too) of an entry in the Bengal Public Consultations under 11 December 1752.59 The particular Consultation refers to a letter from Dhaka of 4 December 1752 wherein the Dhaka factors were trying to answer the allegation from Calcutta regarding the bad quality of textiles sent by them pointing out that the sample of 1738 was not the ‘fit standard for judging’ the quality of cloth sent from Dhaka in 1752. The reason for the badness of the quality of cloth, as the Dhaka factors wrote, was: as the copass [kapas-cotton] or country cotton has not been for these two years past under 9 or 10 rupees, and the price of rice at the same time very deer, whereas in 1738 the Copass did not exceed Rs. 2 or

General Economic Conditions under the Nawabs | 279

Rs. 2-8 and the rice very cheap, mostly 2 maunds 20 seers to 3 maunds for a rupee to which may be added which is well known to all the purchasers of cloth that the prices of all sorts of cloths have risen near 30 per cent, some more, since the year 1738, and that they now labour there and has done so for these two years past under the inconveniency of a French factory continually emulating the Hon’ble Company’s trade and have advanced the price of all cloths both coarse and fine and obliged them to be less severe with their dellols in prizing their cloth. . . .

It is amply clear from the above that this is a desperate bid on the part of the Dhaka factors – scrupulousness not being their strong point which was true also of other Company servants working in India at that time – to justify the badness of cloth and hence the emphasis on 30 per cent increase of cloth price between 1738 and 1752. As the ‘master’ of 1738 was to be the standard, so 1738 becomes the target date and for no other reason. Moreover if one carefully examines the above passage, one could hardly miss the stress on ‘these two years’ which signifies that the quality of cloth sent by them deteriorated mostly in those two years and not really for the whole of the period from 1738 to 1752. There is the specific reference to ‘near 30 per cent’ increase in the price of cloth during this period but, if at all true, that applies only to Dhaka and could hardly be taken as an evidence of a general phenomenon of price increase throughout Bengal. Besides one can rightly suspect the validity of the evidence which was produced in self defence in the face of allegation of malpractice. One who has gone carefully through the Company records can fail to see that throughout the period whenever the allegation was made regarding the badness of investments the factors always answered in the same vein that it was because of the high price of staples like rice and cotton, competition from other Asians and/or European Companies, and general increase in the price of the export commodities. One should accept such ‘evidence’ with due caution. Let us now examine the procurement prices of textiles and raw silk in Bengal during this period to find out the price trend. As recent historians emphasize that the prices in Bengal showed a definite upward movement from early 1740s (conveniently to

280 | Companies, Commerce and Merchants

coincide with the Maratha invasions!), we should make a comparative study of the prices of a few staple export goods in the export list of the European Companies in early 1730s and early 1740s. These are contract price with Indian merchants who provided the export commodities and the prices were arrived at after hard bargaining on both sides and hence quite reliable. Though the Companies sometime paid lower prices to the merchants for cloths delivered, it was mainly on the ground of inferior quality than contracted for and the contract price was generally not altered. It is more than evident from the Table 11.1 that there was absolutely no increase in the prices of the two principal piece goods contracted for export by the Dutch East India Company between 1732 and 1754. One might argue that these were finer varieties of calicoes, and perhaps the price rise was reflected not in the finer textiles but in coarse categories. So let us see how the prices moved in the latter during the years under consideration. In Table 11.2 we find the contract prices of some of the coarser textiles which were prominent in the export list of the Company. The data from Table 11.2 shows that even in the case of coarser calicoes, except a slight rise in the price of photaes, there is hardly any change in the price between 1732 and 1744. Turning to raw silk, we find a slightly different picture. In the Table 11.3, we note the prices of raw silk for several years from 1733 to 1753 to see the movement of prices in this important export commodity. The trend of price that emerges from Table 11.3 does not show a secular upward movement of prices during the period under review. The rise in the price of raw silk between 1733 and 1745 is almost negligible which disproves the thesis of a rise in prices in Bengal from early 1740s. There was marked increase in the price of raw silk in 1747 and 1748 as is evident from Table 11.3. But this was a temporary phenomenon as from June 1748 the prices began to fall and remained more or less at the same level except in February 1751 when there was again a slight increase from the price level of June 1748. In short, the price rise

Malmal fine

Malmal

400

100

Cossa Nadona

800

Malmal fine

Cossa

500

Malmal

Cossa

600

100

Cossa

4000

300

Cossa

Cossa fine

Cossa fine

150

7000

Cossa

450

500

Cossa

Cossa fine

600

Piece-good

200

No. of Pcs.

40" x 2⅝"

40" x 2⅝"

40" x 3"

40" x 3"

25" x 2¼"

40" x 1½"

40" x 1¾"

40" x 2"

40" x 2¼"

40" x 2¼"

40" x 2⅝"

40" x 2⅝"

40" x 3 "

40 co. × 3 co.

Length & breadth

Contract Price with Merchants 1732

16

13

18

15

3–14

7–8

8–18

9–12

14

11

16

13

18

Rs. 15–0–0

Price Per Pc.



200

100

600

2000

700

800

3000



5000



1000



1500

No. of Pcs.



Malmal

Malmal fine

Malmal

Cossa Nadona

Cossa

Cossa

Cossa



Cossa



Cossa



Cossa

Piece-good



40" x 2⅝"

40" x 3"

40" x 3"

25" x 2¼"

40" x 1½"

40" x 1¾"

40" x 2"



40" x 2¼"



40" x 2⅝"



40 co. × 3⅞ co.

Length & breadth

Contract Price with Merchants 1744

Table 11.1 : Textile Prices, 1732 and 1744: Dutch Company



13

18

15

3–14

7–8

8–10

9–12



11



13



15

Price Per Pc. Rs.



Malmal



800

40" × 1½"



40" × 1¾" 7



8–10

9–12

14

Rs. 11

Price Per Pc.

1000

200

1000

1200

150

3000

No. of Pcs.

Malmal

Malmal fine

Malmal

Malmal

Malmal fine

Malmal

Piece-good

40" × 1½"

40" × 1¾"

40" × 1¾"

40" × 2"

40" × 2¼"

40" × 2¼"

Length & breadth

Contract Price with Merchants 1744

7

10–8

8–10

9–12

14

11

Price Per Pc. Rs.

Source: For 1732, V.O.C. 2241 (K.A. 2133), ff. 649-61, Hughli to Batavia, 3 March 1732. For 1744, V.O.C. 2629 (K.A. 2521), ff. 199-218, Hughli to Batavia, 4 January 1744.

Malmal

500

40" × 2"

40" × 2¼"

Malmal fine

Malmal

400

40" × 2¼"

Length & breadth

Malmal

Piece-good

1600

3800

No. of Pcs.

Contract Price with Merchants 1732

Table 11.1 (contd.)

Photaes

Cotton Rumals

Desi

5,000

20,000

4,000

4" x 1½"

15" x 1"

24 x 2¼"

18 co. x 2¼ "

24 co. × 2 co.

Length & breadth

Source: Same as in Table 11.1. Corge (*) is twenty.

Sannoes

Choraderries Kharraderies

800

Piece-good

6,000

No. of Pcs.

Contract Price with Merchants 1739

13 per corge

50 per corge

50 per corge*

4 : per pc.

4 : 8 per pc.

Price Per Pc. (Rs.)

1,000

50,000

6,000

2,000

1,000

No. of Pcs.

Desi

Cotton Rumals

Photaes

Choraderries Kharraderies

Sannoes

Piece-good

4" x 1"

15" x 1"

24 x 2¼"

18 co. x 2¼ "

24 co. × 2 co.

Length & breadth

Contract Price with Merchants 1744

Table 11.2: Price of Coarser Textiles, 1739 and 1744: Dutch Company

13 per corge

50 per corge

57 per corge

4 : - per pc.

4 : 8 per pc.

Price Per Pc. Rs.

Table 11.3: Price of Raw Silk 1733-53: English Company Date March 1733

Category

Price Per Seer

Novemberbund

Rs.

5 : 12

–do– Guzarat –do– Kumarkhali January 1745 Novemberbund

Rs. Rs. Rs.

6:6 5 : 12 5 : 14

–do– –do– April 1747

Guzarat Kumarkhali Novemberbund

Rs. Rs. Rs.

6:7 5 : 11 9:4

–do– Guzarat –do– Kumarkhali January 1748 Novemberbund

Rs. Rs. Rs.

9 : 13 9:1 9:4

–do– –do– June 1748

Guzarat Kumarkhali Novemberbund

Rs. Rs. Rs.

9 : 13 9:1 7:8

–do– Guzarat –do– Kumarkhali October 1749 Novemberbund

Rs. Rs. Rs.

8:1 7:5 7:–

–do– Guzarat –do– Kumarkhali February 1751 Novemberbund

Rs. Rs. Rs.

7:9 6 : 13 8:–

–do– –do– March 1752

Guzarat Kumarkhali Novemberbund

Rs. Rs. Rs.

8:9 7 : 13 7 : 14

–do– –do– April 1753

Guzarat Kumarkhali Novemberbund

Rs. Rs. Rs.

8:7 – 7 : 12

–do– –do–

Guzarat Kumarkhali

Rs. Rs.

8:5 –

Source K.F.R. vol. 5, Consult, 7 March 1733 –do– –do– K.F.R. vol. 6, Consult, 19 January 1745 –do– –do– B.P.C. Range 1, vol. 19, f. 2090, Consult. 22 April 1747 –do– –do– C&B Abstr. vol. 5, f. 114, 10 January 1748 –do– –do– K.F.R. vol. 7, Consult, 2 June 1748 –do– –do– B.P.C. Range 1, vol. 22, ff. 350-50vo, Consult. 31 October 1749 –do– –do– K.F.R. vol. 10, Consult. 22 February 1751 –do– –do– B.P.C., Range 1, vol. 25, f. 8600, Consult, 16 March 1752 –do– –do– B.P.C. Range 1, vol. 26, f. 114, Consult. 18 April 1753 –do– –

Sources & Abbrev: K.F.R. – Kasimbazar Factory Records; B.P.C. Bengal Public Consultations, C & B Abstr. – Coast & Bay Abstracts

General Economic Conditions under the Nawabs | 285

in silk was not so precipitate as most historians would have us believe. That the price trend is to some extent erratic is because of the fact that silk was one of the most sensitive articles the production of which right from the mulberry plantation depended much on natural factors. Still then the dominant trend in silk price is certainly not one of sustained and marked increase. As pointed out earlier, rice is the most important item the price of which should be looked into for determining any price movement. But the main difficulty here is the wide variety of rice and its equally wide price variation depending on its quality. This is well illustrated in Table 11.4 which indicates the variety and price of rice in 1729. Table 11.4: Price of Rice, 1729 Variety Fine rice, Bausephool 1st sort 2nd sort 3rd sort Coarse Rice called Desna Coarse Rice called Poorbie Coarse Rice called Munsurah Coarse Rice called Kurkashallee

mds. seer 1-10 1-23 1-35 4-15 4-25 5-25 7-20

per rupee " " " " " " "

" " " " " " "

Source: Sixth Report (1782-3), Appendix 15.

So it is not a simple case of fine or coarse rice only; when the price of coarse rice can vary so very widely from 4 mds. 15 seers to 7 mds. 20 seers per rupee (the difference being about 71 per cent),60 there is grave risk in taking the price of rice as an indication of price movement until and unless one can be absolutely sure of the exact quality of rice when its price is taken into account. Otherwise the result could be extremely erratic and gravely misleading. Yet depending on such data and sometime even fragmentary at that, recent authorities including the latest on the subject have made such assertions as ‘Rice which was sold at 100 to 120 seers for a rupee in 1738 was being sold only 30 seers in mid 1740s’ as evidence to show that ‘produc-

286 | Companies, Commerce and Merchants

tion declined and prices soared’61 or ‘By the 1740s . . . Bengal’s advantages seemed to be disappearing’.62 Basing his evidence on earlier authority, Marshall affirms that ‘between 1738 and 1754 it was thought that the price of rice in Calcutta has risen by three or four times’63 and the same authority reiterates that ‘local shortages’ led to ‘greatly increased food prices’.64 Now let us see how far these statements are borne by solid evidence. Regarding the price of rice in 1738, both our earlier authority (K.K. Datta) and a recent one (Brijen K. Gupta)65 depended solely on the letter written by the Dhaka factors to Calcutta in 1752 in reply to the allegation of inferior quality of cloth supplied by the former which we have referred to earlier. Not only the letter was written in self defence but one has to take into account the fact that the Dhaka factors were writing in 1752 about the prevailing price of rice in 1738 for which they probably depended on mostly their own imagination which again might have been coloured by their desperate attempt to cover up their shortcomings. Moreover the significant fact that it refers to rice price only in Dhaka is ignored by our authorities. It is not to be expected that the price of rice would be the same in Calcutta and Dhaka. Again numerous references in the Company records clearly indicate that rice price in Calcutta often depended on the supply of the commodity from Bakarganj and Doulea without which the city was ‘reduced to the greatest necessity and misery and that the price of rice in Calcutta was often manipulated by the city’s rice merchants who took advantage of the fluid situation in the growing city’.66 As a matter of fact, as is indicated in the following Table 11.5, the price of rice in Calcutta in 1738 was 38 seers per Madras rupee at which rate the Fort William Council decided to buy rice for the garrison (coarse rice of course but yet which quality even in the coarse variety ?) while in 1744 the rate was 30 seers for ‘common sort’. The Council blamed the importers of rice for raising the price to such ‘exorbitant’ rate and asked the Calcutta zamindar not to permit the coarse rice to be sold under one maund per Arcot rupee.67 It will also be clear from Table 11.5 that in 1754 fine rice only was sold at 33 seers per rupee while the coarse variety

Dhaka

Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta Calcutta

Calcutta Calcutta Calcutta Calcutta

31 May 1739

7 January 1744 7 January 1744 20 September 1751 20 September 1751 2 January 1752 2 January 1752 11 February 1753

10 June 1754 10 June 1754 10 June 1754 16 February 1756

Seer

32½ seer 35 seer 1 md. 37 seer

30 seer 1 md  __ 35 seer 1 md 10 seer 35 seer 1 md 10 seer 23 seer

9 pissary (?)

–  30 1 md.  30 9 pissary (?)

Mds.

Rupee

per per per per

Arcot Arcot Arcot Arcot

per Madras rup. per Madras rup. per (Das Masa rupee) per (Das Masa rupee) per (Madras) rupee per Arcot per Arcot per Arcot per Arcot per Arcot per Arcot

Per

fine middling coarse ?

"Coarse Sort" Coarse Good Nov. Sort Ordinary Good Nov. Sort Ordinary ?

Ordinary

Coarse (for garrison) Very good sort Fine

Quality

B.P.C., vol. 16, f. 401vo. B.P.C., vol. 16, f. 401vo. B.P.C., vol. 24, f. 323. B.P.C., vol. 24, f. 323. Beng. Gen. Lett. Recd., vol. 22 Beng. Gen. Lett. Recd., vol. 22 H.P., vol. 3, f. 68, Consult, 11 February 1753 B.P.C., vol. 27, f. 224vo-45 B.P.C., vol. 27, f. 224vo-45 B.P.C., vol. 27, f. 224vo-45 H.P., vol. 5, f. 712, Consult, 16 February 1756

D.F.R., vol. 2, Consult, 31 May 1739

B.P.C., vol. 13, f. 262vo. B.P.C., vol. 13, ff. 527-27vo D.F.R., vol. 2, Consult, 31 May 1739

Source

Sources & Abbrev: D.F.R. – Dhaka Factory Records; B.P.C. Bengal Public Consultations, Beng. Gen. Latt. Recd. – Bengal General Latters Received; H.P. – Home Public Series, National Archives of India.

Calcutta Calcutta Dhaka

Place

12 June 1738 26 March 1739 31 May 1739

Date

Table 11.5: Price of Rice in Bengal, 1738-54

288 | Companies, Commerce and Merchants

was sold at 1 md. per Arcot rupee. Hence the assertion of our authorities that the price of rice had gone up three to four times between 1738 and 1754 is hardly tenable. While it is evident from Table 11.5 that no clear trend in price of rice emerges, one has to take into consideration in analysing the table that some of the prices shown in it were during times of scarcity and famine, and not under normal conditions. In 1738, for example, the price was affected by the severe storm and flood which swept Bengal in September and October 1737.68 Again, when monsoon failed there was a famine in 1752 which resulted in worst shortages in 60 years and consequently the price of rice (as shown in the table) rose sharply in early 1753 to 23 seers per rupee. But Orme’s assertion69 that the price of rice in Murshidabad rose by 6 times than its previous level seems to be an exaggeration.70 That the abnormal price rise in early 1753 was only a temporary phenomenon and that prices came back to their normal level in late 1753 and 1754 become clear from this table. The fact that the price of rice could hardly be taken as an index of price movement because of the lack of precise data as also the anomaly of the data available to us at this stage is amply clear from Table 11.6 from the prices of provisions in Bengal for three years in the early 1730s. It is really difficult to reconcile the price of rice available in this table with the ones in Table 11.5. This only reiterates our point that even the price of rice which is the most important index of any price movement in our period cannot be relied upon for the anomalies in the available data. Hence no definitive assertion can be made as yet about the price rise during the period under review. Historians including the latest authorities have unduly emphasized the effects of the Maratha invasions and the impact of the European trade while dealing with the price movement in Bengal.71 The report of the two English warehouse keepers, Frankland and Manningham, came in handy to substantiate the thesis of price rise in Bengal from 1740s.72 As we have argued elsewhere, the report was self contradictory, motivated and written with the ulterior objective for changing over from dadni to

30 seer per sicca ruppe 1 md. per sicca ruppe 5 20 seer per sicca ruppe 68 lb. at Rs. 6 68 lb. at Rs. 8 : 8 32 puns. per current rup.

Source: K.A. 2045, ff. 8074-74vo; K.A. 2087 f. 430; K.A. 2133, ff. 963-4.

Fine rice Coarse rice (grove) Wheat Mustard Oil Butter Cauri

January 1730 20 seer per sicca ruppe 35 seer per sicca ruppe 30 seer per sicca ruppe 68 lb. at Rs. 6 – 32 puns. per current rup.

30 seer per sicca ruppe 68 lb. at Rs. 6 68 lb. at Rs. 10 32 puns. per current rup.

March 1732

20 seer per sicca ruppe 35 seer per sicca ruppe

March 1731

Table 11.6: Price of Provisions in Dutch Sources, 1731-3

290 | Companies, Commerce and Merchants

gomasta system.73 Hence it should be handled with more caution. Moreover the very fact that these two warehouse keepers wrote that the ‘necessaries of life had been greatly enhanced over the previous ten or twenty years’ only betrays the casual nature of their assertion. As they wrote in 1753, it could have meant price rise either from about 1733 or 1743 which is a very curious position as our authorities assert that the sustained and marked increase in prices took place only in early 1740s and by implication that the price situation was completely different in the 1730s and 1740s. Hence one part of the assertion of the two English men (‘since last 20 years’) becomes superfluous. If the increase in prices is to be dated from early 1740s, the report no doubt tallies with the thesis of our authorities but, as we have seen from our earlier analysis, that was not the case at all. So there is hardly any justification for relying so much on the report of Frankland and Manningham as evidence of price rise. Like most of the modern historians, these two English men too have attributed the alleged price increase in Bengal to a condition of real scarcity following the Maratha invasions. There is no denying the fact that the Maratha incursions resulted in serious dislocation in the economy of some areas of Bengal. But the impact of the invasions has been greatly exaggerated. The Marathas caused destruction generally along the lines of their march, leaving the remaining part of the country more or less unaffected. Even in the affected areas as Richard Becher points out the Marathas were obliged to return at the approach of the rainy season and the inhabitants were again safe till January. They immediately began to work and arranged to raise and sell their crops before next year’s impending invasions.74 That the country was not so much impoverished by these incursions is also proved by the fact that the zamindars paid Alivardi Rs. 1 crore at one time and Rs. 50 lakhs at another besides their annual revenue to enable him to meet the increased military expenditure.75 The argument that many merchants in Bengal were ‘crippled by losses and exactions’ following the Maratha invasions and that as a result both the English and the Dutch Companies increas-

General Economic Conditions under the Nawabs | 291

ingly turned to direct dealings with the artisans through their agents is hardly tenable any more. As we have shown elsewhere76, the Dutch Company made such an experiment for a few years only from 1747 to 1749 in a particular aurung and there too it reverted to contracts with dadni merchants from 1750 whereas the change over in the English Company’s investment pattern from dadni to gomasla system in 1753 was not because of any decline of Bengal merchants but was actually the result of the Fort William Council’s attempt to resolve its commercial crisis concerning private trade by cutting out the dadni merchants. Again historians rely too much on contemporary vernacular literature and Persian chronicles to corroborate the disastrous effects of the Maratha incursions. That these are mostly exaggerated accounts is clear from the very nature of the evidence. For example, Gangaram writes: ‘rice, pulses, dal of all sorts, oil, ghee, flour, sugar, salt began to be sold at one rupee per seer. . . ’. All of them from the lowest to the highest, including the nawab himself, had to subsist on boiled roots of plaintain trees.’77 It is simply absurd that rice, oil, ghee, sugar and salt – all were sold at one rupee per seer. Equally so is to believe that even the nawab subsisted on roots of banana trees. Even making allowance for the poetic effusion, the above can hardly be taken as evidence of history. The author of Riyaz-us-Salatin refers to human beings living on banana roots to avert death by starvation. But this was a description mostly of Burdwan city when its granaries were burnt down and the supply of imported grains was completely cut off by the Marathas for a short time.78 Bharatchandra gives an account of Malini’s shopping in Burdwan but the prices she paid for articles though regarded ‘extraordinary’ cannot be compared with earlier prices (for lack of price data) to see if they were really so.79 The simple fact that the total investments of the European Companies, especially the English East India Company, were not largely affected during or immediately after the Maratha invasions is sufficient proof that these invasions had really no disastrous effects on the overall economy of Bengal.80 The assertion of a recent authority81 that ‘prices were rising with large scale European purchases financed by import of silver

292 | Companies, Commerce and Merchants

in the decade or so before the battle of Plassey’ though in line with the general assumption that there was a upward movement in prices from early 1740s and the period referred to coincides with the commencement of the Maratha invasions, can hardly be tenable. Of the two major European exporters of Bengal goods, the Dutch fell behind the English from about the close of 1720s. As far as the English were concerned, there was hardly any remarkable increase in their total exports from Bengal in the 1740s as compared with the level in the 1730s which is evident from the table below: Table 11.7: Quinquennial Total of English Exports from Bengal 1727-55 Years

Total Value

1727-31

£2,289,323

Average Total Value £457,865

1732-6

£2,046,150

£409,230

1741-5

£2,401,785

£480,357

1746-50

£2,173,524

£434,705

1751-5

£ 2,033,235

£406,648

Source: Calculated on the basis of the figures in K.N. Chaudhuri’s The Trading World of Asia and the English East India Company, pp. 509-10.

It is clear from Table 11.7 that the European exports in the 1730s were almost at the same level as those in the ’forties and early ’fifties. Hence the question of the ‘increasing purchasing’ of the European Companies in the 1740s and 1750s pushing up the prices in Bengal does not arise. Moreover, had there been even an increase in the European export from Bengal, it would not have necessarily resulted in a spurt in prices. As Om Prakash82 has argued, the overall increase in the export commodities would have constituted a clear signal for reallocating resources to increase the output of these goods. It is beyond any doubt that Bengal was one of the most fertile regions of Mughal India and was the granary for not only several other parts of the country but for quite a few neighbouring countries too. According to the said authority, ‘the availability of a food surplus created a margin within which a relative shift from food to commercial

General Economic Conditions under the Nawabs | 293

crops in response to changing demand could be effected without generating unduly severe strains.’83 However, there was an unmistakable sign of marked increase in prices in early 1750s of one category of items in the export list of the European Companies namely, the textiles. The contract price of these textiles between 1741 and 1751 indicate a definite and substantial rise during the period as will be evident from the Table 11.8. The somewhat marked rise in the price of the textiles in 1751 from the level of 1741 can be easily explained. These textiles are mostly produced in Birbhum and Burdwan districts which were worst affected by the Maratha incursions and hence the rise in prices of the textiles manufactured in these areas. It is to be noted here that the merchants were extremely reluctant to supply these coarsest piece-goods to the European Companies from about mid 1740s while they were only too eager to contract for finer varieties. Often the Companies had to impose the contract for coarsest textiles on the unwilling merchants. As to the impact of the imposition of abwabs and other tolls, this may not be overemphasized. The subadari abwabs were first imposed by Murshid Quli Khan and later on followed by Shujauddin and Alivardi Khan. No doubt these established dangerous precedents and though were levied from zamindars, the latter were authorized to collect these from the raiyats. But, as John Shore maintained, the peasants were not perhaps quite adversely affected by these exactions. He holds that owing to the growth of commerce and increased imports of specie, ‘the resources of the country were at that period, adequate to the measure of exaction.’84 Though Shore’s contention is a mere hypothesis without any quantitative evidence, neither the prices in Shujauddin’s time nor in Alivardi’s reign when the abwabs were levied on a large scale85 show any remarkable increase which only indicates that the impact of the abwabs or other tolls was only marginal. As we have seen earlier, Shujauddin’s reign became legendary for cheapness of provisions and the later period of Alivardi’s rule was on the whole one of ‘unbroken economic prosperity’.86 Regarding natural calamities like flood,



Gerras





Salamporis

Dongeries



80,000





50,000

10,000

37½ co x 2¼ co 27 co x 1¾ co

-

30 co x 2¼ co -

75 co x 2¼ co -

Length & breadth

Rs. 60.12 per corge Rs. 31 per corge



Rs. 48 per corge –

Rs. 121.8 per corge –

Rate

Rs. 15,500

Rs. 151,875





Rs. 194,000



Rs. 364500

Total Amount

10,000

10,000

6,000

5,000

12,000

25,000

20000

No. of pcs.

Dongeries

Salamporis

Boureng

Boureng

Gerras

Gerras

Guineas

Piece goods 75 co x 2¼ co 36 co x 2¼ co 30 co x 2¼ co 36 co x 2¼ co 24 co x 2¼ co 37½ co x 2¼ co 27 co x 1¾ co

Length & breadth

Rate Rs. 175 per corge Rs. 84 per corge Rs. 70 per corge Rs. 50 per corge Rs. 70 per corge Rs. 87 : 8 per corge Rs. 50 per corge

Contract Price, 1751

Rs. 25,000

Rs. 43,750

Rs. 46,800

Rs. 25,000

Rs. 42,000

Rs. 105,000

Rs. 175,000

Total Amount

Source: For 1741, V.O.C. 2537 K.A. 2429), ff. 1427-1428, Hugli to Batvia, 26 November 1741; For 1751 , V.O.C. 2783 (K.A. 2675), ff. 82-4 (pt. I), HB, 21 December 1751.

Guineas

Piece goods

60,000

No. of pcs.

Contract Price, 1741

Table 11.8: Price of Coarsest Textiles 1741 and 1751: Dutch Contracts

General Economic Conditions under the Nawabs | 295

famine, drought, their impact on prices was only temporary and often localised, and hence need not be overstressed.

Wages If the nawabi regime in Bengal was marked by low prices, it was a period of low wages too. A Dhaka letter of 28 August 1736 mentioned that ‘men who helped the weavers’ earned one pun cauris a day and ‘their rice’.87 According to Taylor, the wage of a weaver in Dhaka in mid-18th century was from one to one and a half Arcot rupees and that of his assistant from 8 ans. to 12 ans. per month.88 He further states that the head weaver who buys the thread, the weaver who makes the cloth and the journey man who assists the weaver earn about (all who work for weaving one mulboos khas) Rs. 47 in six months working together.89 The best spinners in Dhaka who were mostly women earn about 12 ans. to 14 ans. per month working about 3 hours a day on an average.90 In Calcutta there was a slight increase in the wages of ordinary labourers in the 1750s. The Fort William Council decided to raise wage of a coolie to 2 pun cauris per day in March 1751 which was raised to 2 pun 10 gondas per day in November 1751 because of dearness of rice and further increased to 2 pun 12 gondas per day in January 1753.91 In the charges of the Mayor’s Court, Calcutta, from November 1752 to May 1753 the peon’s wage is recorded at Rs. 2-4 ans. the black sergeant’s at Rs. 2-4 ans. and the European sergeant’s at Rs. 10 per month.92 The Fort William Council recorded a list of wages93 of different types of workers in Calcutta before 1757 and in 1757 which indicate a slight increase in wages. It seems that the income of an average person in Bengal under the nawabs was admittedly very low. But yet the satisfaction which a man could get for his money was considerable. As the purchasing power of money was very high, a man could have plenty to eat by spending only a few annas per month. A common man in nawabi Bengal had far more to eat and his condition was far better in the early eighteenth century than under the Company’s rule in the late eighteenth and early nineteenth centuries.

296 | Companies, Commerce and Merchants

Notes 1. Abul Fazl, Ain-i-Akbari, vol. I, text ed. Blochmann, 390, trans. Jarret, vol. II, 122-3; Al Badauni, Muntakheb-ut-Tawarikh, text ed. Maulvi Ahmed Ali, vol. I, 349, trans. Ranking, vol. I, 458. 2. S.C. Hill, Bengal in 1756-7, vol. 3 (London, 1905), 160. 3. Ghulam Husain Salim, Riyaz-us-Salatin, text ed. Maulvi Abdul Hak Abid (Calcutta, 1890), 4, trans. Maulavi Abdus Salam (Calcutta, 1904), 4. 4. Parliamentary Papers, House of Commons, vol. VIII, quoted in N.K. Sinha, The Economic History of Bengal, vol. II (Calcutta, 1968), 230. 5. Verelst to Court of Directors, 5 April 1769, Bengal Public Consultations, (B.P.C.), vol. 44, f. 324, para 6. 6. For some of the observations of the travellers in the 17th century, see S. Chaudhuri, Trade and Commercial Organization in Bengal, 16501720 (Calcutta 1975), 4-5. 7. For Dutch shipping lists, see relevant volumes in Verenigde Oost Indische Compagnie (henceforth V.O.C.), earlier Kolonial archief (K.A.) in Algemeen Rijksarchief, The Hague. 8. Richard Becher’s letter to Governor Verelst, 24 May 1769, quoted in W.K. Firminger, Historical Introduction to the Bengal Portion of the Fifth Report, rpt. (Calcutta, 1962), 183. 9. William Bolts, Considerations on Indian Affairs (London, 1772), 200. 10. Luke Scrafton, Reflections on the Government of Indostan (London, 1760), 20. 11. N.K. Sinha, Economic History of Bengal, vol. 1, 230. 12. James Rennell, Description of the Roads in Bengal and Bihar (London, 1778), 10-69. 13. James Rennell, Journals (Calcutta, 1910), 97-108. 14. Ibid. 15. K.K. Datta, Studies in the History of Bengal Suba, 1740-1770, vol. I, (Calcutta, 1936), 391. 16. Rennell, Journals, 86-7. 17. P. J. Marshall, Bengal: The British Bridgehead (Cambridge, 1987), 13. 18. B.P.C., vol. 14, f. 313, 21 November 1739. 19. S. Bhattacharyya, The East India Company and the Economy of Bengal (London, 1954), 47. 20. James Rennell, Memoirs of the Map of Hindustan (London, 1793), 245, 335. 21. Ibid. 22. ‘An Unpublished Letter of Major James Rennell, 31 August 1765’, Bengal Past and Present, July-September 1933. 23. J.S. Stavorinus, Voyage in the East Indies, trans. S.H. Wilcoke, vol. I (London, 1798), 399.

General Economic Conditions under the Nawabs | 297 24. Alexander Dow, The History of Hindostan, vol. III, 2nd reprint (New Delhi, 1985), lxii. 25. Marshall, Bengal, 13. 26. Ibid. 27. Marshall, Bengal, 13. 28. Ghulam Hussain Khan, Seir-ul-Mutakherin (hereafter Seir), vol. II, (Calcutta, 1902), 377. 29. Ramprasad, Vidyasundar, 6. 29. Vijayaram, Tirthamangal, 40, 43, 62, 190, 192, 203. 30. Ibid., 39-40. 31. J.Z. Holwell, Interesting Historical Events (London, 1765), 194. 32. Ibid., 193. 34. B.P.C., Range 1, vol. 25, f. 234, Consultations, 9 October 1752. 35. Samser Gajir Punthi, Typical Selections etc., pt. II, 1853. 36. Letter of the Court of Directors to Bengal, 11 February 1756, quoted in Datta, Bengal Suba, 462. 37. Riyaz-us-Salatin, 280-1. 38. See for example, J.N. Sarkar (ed.), History of Bengal, vol. II. (Dhaka, 1948), 424, 434, 449; Seir, vol. I, 325; Riyaz, 290-1. 39 Calendar of Persian Correspondence, vol. II, 191, 197, quoted in K.K. Datta, Alivardi and His Times, 2nd edn (Calcutta, 1963), 140. 40. K.N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge, 1978), 99-104. 41. For such variation, see Table 11.4, Price of Rice, 1729. 42. For instance, see Datta, Bengal Suba, 463-9; Chaudhuri, Trading World, 99-108. 43. See the chapter on ‘Nawab Sirajuddaula and Battle of Palashi’, in History of Bangladesh, vol. I. 44. Om Prakash, The Dutch East India Company and the Economy of Bengal (Princeton, 1985), 250. 45. Ibid., 251-3. 46. Chaudhuri, Trading World, 102, 108. 47. Bhattacharyya, East India Company, 206. 48. Riyaz, 280-1. 49. B.P.C., vol. 6, f. 297vo, Consultations 12 June 1727; Riyaz, 208; Salimullah, Tarikh-i-Bangla, f. 65 b, quoted in Abdul Karim, Murshid Quli Khan and His Times (Dhaka, 1963), 73. 50. Shore’s Minutes, 18 June 1789 in W.K. Firminger, Fifth Report, vol. II, 9. 51. J.N. Sarkar (ed.), History of Bengal, 427. 52. B.P.C., Range 1, vol. 13, 20 July 1738, vol. 13, f. 298. 53. J.C. Sinha, Economic Annals of Bengal (London, 1927), 19. 54. B.P.C., Range 1, vol. 26, (T: 152-4, 24 May 1753; ff. 336-36vo., 19 November 1753; vol. 27, f. 181, 10 June 1754.

298 | Companies, Commerce and Merchants 55. Ibid., vol. 26, IT. 336vo, 19 November 1753. 56. Chaudhuri, Trading World, 102. 57. Datta, Bengal Suba, 464, Brijen K. Gupta, Sirajuddaullah and the East India Company (Leiden, 1962), 33. 58, P.J. Marshall, East India Fortunes (Oxford, 1976), 35; Bengal, 73. 59. Bengal and Madras Papers, vol. II, p. 34, Fort William Consultations, 11 December 1752; B.P.C., vol. 26, f. 214, Consultations, 11 December 1752; James Long, Unpublished Records of the Government, ed. M.P. Saha (Calcutta, 1973), 40, document no. 103. 60. Chaudhuri, Trading World, 99; Marshall, Bengal, 73, 142; East India Fortunes, 35. 61. Gupta, Sirajuddaullah, 33. 62. Marshall, East India Fortunes, 35. 63. Ibid. 64. Marshall, Bengal, 73. More significantly, Marshall states: ‘Shortages and dislocations probably contributed to a very marked price rise which began in western Bengal in the 1740s.’ Ibid., 73. He however depends mostly on Chaudhuri, Trading World for such assertion. 65. Datta, Bengal Suba, 463-4; Gupta, Sirajuddaullah, 33. 66. B.P.C., vol. 26, ff. 56vo.-57, 19 February 1753; ff. 152-4, 24 May 1753; ff. 336-36vo., 19 November 1753; vol. 27, f. 181, 10 June 1754, ff. 244vo.-245, 12 August 1754; ff. 378-78vo., 5 December 1754. 67. B.P.C., Range 1, vol. 16, f. 401vo., 7 January 1744. 68. Bhattacharyya, East India Company, 214-15; see also Hugli Faujdar Pir Khan’s letter to the President of the Fort William Council wherein he accused that the export of rice by the Company and Calcutta merchants was responsible for famine and shortage of food grains, B.P.C., Range 1, vol. 13, f. 298, Annexure to Consultations, 20 July 1738. 69. Robert Orme, Historical Fragments of the Mogul Empire (London, 1905), 405. 70. Marshall however depended on this and Holwell’s description of the effects of the famine in Calcutta (Holwell, India Tracts, 2nd edn. London, 1764, 165) as evidence of marked rise in food prices, see Marshall, Bengal 18, 73. 71. Datta, Bengal Suba, 465-8; Chaudhuri, Trading World, 99-108; P.J. Marshall, Bengal 73, 142-3. 72. Frankland and Manninghams’ report, B.P.C., Range 1, ff. 164-5, 7 June 1753. Both K.N. Chaudhuri and P. J. Marshall relied heavily on this report; Chaudhuri, Trading World, 99, 102; Marshall, East India Fortunes, 35. 73. S. Chaudhuri, ‘Merchants, Companies and Rulers – Bengal in the Eighteenth, Century’, Journal of the Economic and Social History of the Orient, Leiden, XXXI (1988), 82-9.

General Economic Conditions under the Nawabs | 299 74. Richard Becher’s Letter to Governor Verelst, 24 May 1769, quoted in W. K. Firminger, Fifth Report, 183-4. 75. Ibid. 76. S. Chaudhuri, ‘Merchants, Companies and Rulers’. 77. Gangaram, Maharastrapurana, 234-42. 78. Riyaz, 340. 79. K.K. Datta, Bengal Suba, 466. 80. For the investments of the Companies, see relevant chapter in this volume. 81. P.J. Marshall, Bengal, 163-4. 82. Om Prakash, Dutch East India Company, 238, 250-1. 83. Ibid., 238. 84. W.K. Firminger, Fifth Report, vol. II, 120. 85. For details, ibid. 86. J.C. Sinha, Economic Annals of Bengal, 19. 87. B.P.C., vol. II, ff. 288vo.-289, 28 August 1736. 88. Home Misc., 456 F, f. 205. 89. Ibid., f. 145. 90. Ibid., f. 129. Taylor says that women spinners could produce quarter of a sicca weight of thread in a month and the price of this sort of thread was Rs. 3 to Rs. 3:8 an. per sicca weight. 91. B.P.C., vol. 24, f. 38, 22 March 1751; f. 374, 15 November 1751; Coast & Bay Abstracts, vol. 5, f. 325, para 63, 2, January 1753. 92. B.P.C., vol. 26, f. 138vo, Mayor’s Court Account, 1st May to 1 November 1753. 93. B.P.C., vol. 29, f. 26, Annex, to Consultations, 13 January 1757.

chapter 12

The Traffic in ‘Drug’ in Bengal Suba A Study of Opium Trade and Production, 1700-1757

The trade in opium from Bengal was quite lucrative in the first half of the eighteenth century. The major exporter of the commodity was the Dutch East India Company while the English and the French were also involved, though to a lesser extent, in the trade. The Indian merchants, especially the Marwaris, had a minor share in the opium export from Bengal. The Dutch exported opium mainly to Batavia from where it was sent to different parts of the Indonesian archipelago. Other Europeans and Indian merchants traded the commodity to several parts of India. This paper examines the role of the Dutch and the other traders in the opium export from Bengal and in that connection tries to look at the production side of the commodity in the Bengal suba, in the first half of the eighteenth century. It was the Dutch East India Company which exported a substantial amount of opium to Batavia, and it appears that the English or the French Company’s share in the trade was quite small in the early years. However, a small amount of opium was exported on account of the English and French private traders. So the Dutch Company did not face much competition from their European rivals in opium trade as they did in the textile and silk market until the battle of Plassey in 1757, after which the English tried to monopolise the opium trade in Bengal. The Dutch first exported * Presented in the Indian History Congress, 2001.

The Traffic in ‘Drug’ in Bengal Suba | 301

opium to Malabar from the Malwa region, procured at Surat. But as the price of this variety began to increase at an alarming rate, they turned their attention to Bengal opium.1 Though the Dutch Company exported a large amount of opium from Bengal to Malabar in the 1660s and 1670s, gradually it was the Indonesian archipelago which became the biggest consumer of Bengal opium. A Dutch estimate of 1683 put the annual demand in the entire archipelago at around 116,000 Dutch ponds.2 In Bengal opium was produced mainly in Bihar, though there is reference that it was also produced in Rangpur in North Bengal. According to an estimate of 1688, 8,700 maunds of opium were produced in 48 parganas of Bihar in a normal year, of which about 5,400 mds. were of very good quality. Of the total produce, about 10 to 12.5 per cent was consumed in Bengal and Bihar, 34.5 to 46 per cent sent to Agra and Allahabad region, and the remaining 41.5 to 55.5 per cent was exported to other national and international markets. The Dutch export around this time amounted to 1,000 mds.3 The total production remained more or less the same in the first half of the eighteenth century, though the Dutch export increased considerably by this time. The Dutch Director Sichtermann stated in his ‘Memorie’ in 1744 that if there was a good harvest, the total output would be 4,000 chests or 8,000 mds, of which 2,000 to 3,000 mds. were bought by the Indian merchants and the rest, 5,000 to 6,000 mds., left to the Europeans, the Dutch order never exceeding 1,800 chests or 3,600 mds.4 Towards the end of our period, Taillefert also mentioned in 1755 that in a normal year the total production of opium in Bihar amounted to 8,000 mds. which does not take into account the output in Bhagalpur and Purnea. Of this amount the distribution pattern was as follows (see Table 12.1). The best quality opium, as Taillefert reported, was produced in the districts of Arra, Munir (Munger?), Patna, Bihar and Saran. The seeds were generally sown in October and November, and in a good year the yield per bigha could amount to 11 to 12 pounds, which the opium growers made into 2 or 3 cakes. He also stated that the opium produced in Bhagalpur and Purnea was of a bad

302 | Companies, Commerce and Merchants Table 12.1: Total Production and Distribution of Bihar Opium, 1755 Indian Merchants bought: Local Consumption (Bengal & Bihar): English and French bought: Dutch bought: Total

2,000 maunds 1,000 maunds 1,600 maunds 3,400 maunds 8,000 maunds

Source: Taillefert’s ‘Memorie’, VOC, 2849, f. 196, 27 October 1755.

quality and could not be compared with the Bihar opium.5 In his instruction to the next Director, Sichtermann (‘Memorie’, 1755) also advised not to buy Bhagalpur or Purnea opium.6 Later on, in his ‘Memorie’ of 1763, Taillefert made a further categorization of the opium produced in Bihar. The best quality opium which was known as Bihar opium was produced mainly in the districts of Bihar, Jahanabad, Futwari and Kashmar while the opium from Mogra, Barbigha, Saran, and Munir was also good but of a quality inferior to the so-called ‘Bihar’ opium.7 Though the Dutch were the main buyers of opium, it was difficult for them to control the supply market. The competition from other Europeans and Indian rivals often raised the price of opium in Patna. There was also the occasional attempt by big Indian merchants, especially those active in Bihar trade, to monopolise the opium trade. The English Company reported as early as 1731 that the Calcutta merchant Umichand tried to monopolise the trade of the commodity through an ‘unlawful grant’ from the faujdar of Rangpur.8 But it was the Armenian merchant Khwaja Wazid of Hugli who virtually controlled the opium trade in Bihar from at least the late 1740s. He managed his opium business, like his saltpetre trade in the early 1750s, through his agent Mir Afzal and his brother Khwaja Ashraf who were operating in Bihar. The Dutch Director Huijghens reported in 1750 that the Company could procure only 1,479 mds. of opium at Rs. 115 per md. through a bribe of Rs. 1,000 to the Bihar administration which prevented Khwaja Ashraf from collecting all the opium he had contracted for by December the year before. Wazid showed his displeasure over the incident

The Traffic in ‘Drug’ in Bengal Suba | 303

by insisting on payment by the Dutch in Patna against a bill for Rs. 25,000.9 The main difficulty of the Dutch in opium procurement was the shortage of liquid capital. Huijghens emphasized in his ‘Memorie’ the need for ready cash for buying opium because it was not possible to buy it on credit due to the keen competition in Patna. Sometimes the situation was quite bad for the Company. In January 1750 the Dutch got hold of 900 mds. of opium but were required to pay for it in cash. Though the Company servants got permission to draw bills of exchange for Rs. 200,000 in the name of the Company in Hugli, they could only collect Rs. 20,000. So the Company made a request to the house of Jagat Seth for two bills of exchange for Rs. 100,000 and Rs. 25,000 each payable in Patna after 41 days at the rate (‘agio’) of 3¼ per cent.10 The Dutch generally entered into contract with paikars who were given an advance for buying opium. But Sichtermann reported in 1744 that the practice was abandoned because of the ‘bankruptcy’ of the paikars who would generally tend to deliver opium when it was not properly dried. So the Company had to take the extra trouble of drying the commodity. From then onward, it appears that the Dutch bought opium against ready money from the dealers in the market.11 The competition from Indian merchants and other European rivals often raised the price of opium and stood in the way of procurement of the full amount specified in the Dutch order from Bengal. In 1741 the Dutch reported that they could collect only 1,6000 mds. of opium which was only 2/3 of the amount ordered for that year. The main reason, according to the factors, was the purchase by the Marwari and other Indian merchants which raised the price to about Rs. 124 per maund. But next year when the Marwari merchants and the English were not that active in the opium market, the price came down by 9 to 10 per cent.12 In 1744 Sichtermann reported that the Dutch could buy the previous year 2,600 mds. of opium for the price of 2,000 mds. which was the amount ordered, by waiting for the price to come down and then buying in the open market. He suggested that the best way to beat down the price was not to let the dealers

304 | Companies, Commerce and Merchants

know the amount the Dutch required. If they came to know that, they would artificially manipulate the price. The English and the French, according to Sichtermann, exported Bengal opium to Coromandel, Malabar, Surat and Malacca. The Dutch tried to stop their trade but to no avail.13 The comparative position of the different buyers in the opium trade can be gauged from a Dutch report of 1747 which outlined the share of different rivals in the five from 1741 to 1745.14 Table 12.2: Total Opium Production and Share of Different Buyers (in Maunds), 1741-5 Year 1741 1742

Total Production 4,280 4,796

Dutch

English & French 1,725 846

1,600 3,200

Indian Merchants 955 750

1743

4,516

2,600

1,316

600

1744

4,669

1,600

1,000

1 ,869

1745

3,380

1,210

240

720

Source: VOC 2661, ff. 143-4, HB 12 January 1747.

Dutch Export of Opium Unlike most commodities in the Dutch export from Bengal, the export of opium shows a secular upward trend from the early 1730s to early 1750s, though rising very slowly but steadily. While the average annual export in the first five years of the 1730s amounted to 148,003 lbs. or 2,041 mds., it was 156,774 lbs. or 2,162 mds. in the first quinquennial period of the 1740s, rising to 192,782 lbs. or 2,659 mds. in the early 1750s. Table 12.3: Dutch Opium Export to Batavia: Quinquennial Total and Annual Average, 1730-5 Years 1730/1-1734/5 1740/1-1744/5 1750/1-1754/5

Total (lb.) 740,015 783,870 963,911

Average (lb.) 148,003 156,774 192,782

Average (md.) 2,041 2,162 2,659

Source: Collected and computed from export invoices in VOC records.

The Traffic in ‘Drug’ in Bengal Suba | 305

What emerges from Table 12.3 is quite interesting because while the intra-Asiatic trade of the Dutch Company in general and to Batavia in particular was marked by a gradual decline throughout the period from 1730-55,15 the trade in opium to Batavia was steadily increasing during the same period. This only indicates that opium was a high profit-yielding commodity in the intra-Asiatic trade – the reason why the English Company and its ser vaults monopolised the opium trade after the Plassey revolution. The Dutch Director Taillefert described in 1763 how the British were eliminating the Indian and other European merchants from the opium trade and the manner in which they were forcing the producers and dealers to sell opium to them at a very low price. Manuscript Sources and Abbreviations BPC HR VOC

Bengal Public Consultations, India Office Records, British Library, London. Hoge Regering van Batavia, Algemeen Rijksarchief. Verenigde Oost-Indische Compagnie, Algemeen Rijksarchief, Den Haag.

Notes 1. Om Prakash, Dutch East India Company and the Economy of Bengal, Princeton, 1985, p. 145. 2. Ibid., p. 153; for Dutch trade in opium in the 17th century, see, ibid., pp. 145-56. 3. VOC, 1454, ff. 764vo-768vo, 30 June 1688; Om Prakash, Dutch Company, pp. 57-8. 4. Sichtermann’s ‘Memorie’, VOC, 2629, ff. 946-9, 14 March 1744. 5. Taillefert’s ‘Memorie’, VOC, 2849, f. 193, 27 October 1755. 6. Sichtermann’s ‘Memorie’, VOC, 2629, f. 949, 14 March 1744. 7. Louis Taillefert’s ‘Memorie’, HR 246, ff. 158-9, 17 November 1763. 8. BPC, vol. 8, ff. 400-400vo, 21 June 1731. 9. Huijghen’s ‘Memorie’, VOC, 2763, f. 458, 20 March 1750; VOC, 2732, f. 9vo, HB, 11 February 1750; f. 79, 27 January 1750. 10. VOC, 2732, ff. 78-9, HB, 27 January 1750. 11. Sichtermann’s ‘Memorie’, VOC, 2629, ff. 948-9, 14 March 1744.

306 | Companies, Commerce and Merchants 12. VOC, 2518, f. 166vo, HB, 26 November 1741; 2556, ff. 167-9, HB, 16 December 1742. 13. Sichtermann’s ‘Memorie’, VOC, 2629, ff. 946-7, 14 March 1744. 14. The amount is given in ‘Kisten’ (chests) in the report, each ‘kisten’ weighing 2 mds., c.f., VOC, 2165, Pt. II, f. 84, HB, 30 November 1730; 2829, f. 65vo; HB, 31 August 1754. 15. For the value of the Dutch Intra-Asiatic trade from Bengal to different parts of Asia in the first quinquennial period from 1730-55, see S. Chaudhury, Delhi, 1995, chapter 3.

chapter 13

International Trade in Bengal Silk and the Comparative Role of Asians and Europeans, c. 1700-1757*

It is almost common knowledge by now, thanks to the penetrating research by several scholars in the field, that Bengal silk was an important commodity in international trade in the seventeenth and eighteenth centuries. But the general assumption so far has been that it was the Europeans rather than the Asians who played the major role in the export of raw silk from Bengal. As a corollary to this and taking into consideration the dominant position of the European Companies in Bengal textile trade, historians have maintained even in recent studies that around the mid-eighteenth century, European trade was the most important factor in Bengal’s commercial economy.1 There is no denying the fact that the Companies were the most dominant factor in Bengal’s seaborne trade but that does not necessarily imply that they were far ahead of Asians in Bengals export trade as a whole. For the above does not take into account Bengal’s export trade by overland routes which had always been extremely significant. It is generally assumed that with the fall of the great empires – Mughal, Safavid and Ottoman – and the consequent decline of ports like Surat, the overland trade was doomed. The reason for this sort of assumption, it seems, was mainly the lack of data regarding India’s overland trade compared to the abundance of quantitative material in the Company archives on European exports from Bengal. It is also possible that the fascination of *Modern Asian Studies, 29, 2, 1995, pp. 373-86.

308 | Companies, Commerce and Merchants

the sea and preoccupation with the European market, as also the nature of the surviving evidence, have obscured the significance of the traditional and continuing trade through the overland route from India. Moreland thought that India’s overland trade in the seventeenth century was of small importance and that the important development took place at sea.2 In this paper it will be argued that the volume of silk export by the Asian merchants from Bengal even in the mid-eighteenth century was much larger than that of the European Companies. From the quantitative evidence we have now, admittedly not very exhaustive (hopefully we would be able to unearth more material on this aspect from both European and indigenous sources), it can be shown that the share of the Asian merchants even in the important European export commodity, raw silk, was much higher than that of the Europeans. There is no dearth, actually an abundance, of qualitative evidence in the European archives which indicates the Asian lead in Bengal’s export trade over the Companies, especially in the silk trade. Though the European Companies exported a large amount of raw silk from Bengal, they could hardly control the silk market in Bengal as they were only minor partners in the field. The privilege was enjoyed by the large number of Asian merchants active in Bengal’s silk market. The English Council at Kasimbazar made this amply clear in several letters to Calcutta. As early as 1733, the English Council at Kasimbazar wrote that it is ‘not in their power to command the (silk) market which will rise according to the demand there is’.3 Again in 1744 the Kasimbazar factors referred to their inability to control the silk market in no uncertain terms: ‘though the price is so much higher than the last year, it is not in our power to help it as we cannot command the market which has been higher lately’.4 It was in the silk investment that the European Companies had to face the stiffest competition from various groups of Asian merchants operating in Bengal. Of these groups, the Gujaratis were the most important and it can be safely asserted that their operation acted as ‘a general indicator’ of the trends in the Bengal silk market.5 In 1726 the Kasimbazar Council entered into contract with the

International Trade in Bengal Silk | 309

silk merchants in a hurry, apprehending that the extraordinary demand of the Gujaratis would raise the price further.6 Apart from the Gujaratis, the different groups active in Bengal’s silk market were the merchants from Lahore, Multan, Benares, Gorakhpur, Hyderabad, Delhi (Calwars), Agra and Jangipur in Murshidabad district, the last one acting as gomastas or agents of Benares merchants. And of course, the Armenians too were there, and another group referred as ‘Burdelwalis’ in records, probably from North India, was also active in the procurement of silk. As a matter of fact, even in the mid-seventeenth century, the connection between North India and the Bengal silk market was extremely close. It may be noted in this connection how John Kenn of the English Company pointed out the close link between the silk and money markets in Kasimbazar and those in North India when he wrote in 1661: ‘According as this silk sells in Agra, so the price of silk in Kasimbazar riseth and falleth. The exchange of money from Kasimbazar to Patna and Agra riseth and falleth as the said silk findeth a vent in Patna and Agra.’7 It is significant to note that sometimes the demand of this group of merchants, not including the Gujaratis, had its impact on the silk market and enhanced the price of raw silk. As a young factor in the Kasimbazar factory, Warren Hastings reported in 1756 from Powa, one of the silk aurungs on the other side of the river Padma, that the prices of pattani or unspun silk suddenly rose there, not because of the purchases of Gujarati merchants but ‘the arrival of every considerable foreign merchants at the aurungs’. He identified these merchants as ‘Calwars’, Gorakhpuris and Jangipuris ‘who are reported to have bought upwards of six or seven lack (lakh = 0.1 million) of rupees for the provision of putney (pattani), especially the finest sorts which they are daily buying up notwithstanding its dearness’.8 An intelligent person as he was, Hastings tried to analyse as also rationalize the behaviour of these indigenous merchants who were buying up silk without the least regard for price. He wrote:9 For the two former [Calwars and Gorakhpuris] coming from the distance of Dillee and Benares are in a manner necessitated by the long journey they had taken for this commodity, to take it at such a rate

310 | Companies, Commerce and Merchants as the market affords; nor are the latter [Jangipuris] less free in this respect, for tho Jungapoor lies but a few days’ journey from hence yet as they are most of them gomastahs and their constituents living likewise as far off as Benares they are obliged to comply with whatever orders they receive from thence, let the price be ever so great.

He adds further reflecting on the remarkable behaviour of the merchants from the Delhi-Agra region and how it affected the silk market.10 . . . the Calwars by their eager manner of purchasing serve not a little to encrease the expectations of the country people and consequently the price of Putney in general tho’ they provide only the finest sorts of all, for wherever they meet with any silk that strikes their fancy, they spare no price for it.

If Hastings’ report is correct (we don’t see any reason why it should not be as he collected the information on the spot), then it is evident that Indian merchants, even excluding the Gujaratis who were the most important group among them, exported silk worth Rs. 0.6 to Rs. 0.7 million from the not-so-important silk producing centre of North Bengal only. If that is so, one can only guess what could have been the value of the exports by the Asian merchants from Kasimbazar, the most important certre of silk manufacture and trade in Bengal, and where the Asian merchants including those from Gujarat, Lahore, Multan, Benares, Agra, Gorakhpur, etc. were vigorously active in buying silk. A report of 1731 indicates that in Kasimbazar the Lahore merchants bought silk worth Rs. 0.3 million and the Burdewalis to the tune of Rs. 0.2 million by mid-March of that year.11 It is interesting to note here that unlike the Europeans, the Asians bought all varieties of silk from Bengal. The English factors reported in 1741 that the price of Rangpur silk had gone up because the Gujarati and Hyderabad merchants had bought up a ‘great quantity’ to send up with the convoy of the King’s treasure. Edward Eyles, a servant of the English Company, wrote from Daudpur (in Rangpur district) in January 1742 that the gomastas of the merchants from Gujarat, Hyderabad, Benares and ‘other merchants’ had already bought a lot of Rangpur silk and some of those gomastas were still ‘buying daily’.12 The silk

International Trade in Bengal Silk | 311

merchants of Kasimbazar were extremely reluctant to contract for Rangpur silk for the Company because of the enhanced price of the commodity resulting from the great demand of the Benares merchants, ‘there being no less than eleven Families come from thence and are buying up all the Putney they can lay their hands on’.13 Table 13.1: Quinquennial Total of English Exports, Raw Silk, 1730s-50s Years

Total (grt.lb.)

Average (grt.lb.)

Average (small lb.)

Average (maunds)

1730/1-1734/5 1735/6-1739/40 1740/1-1744/5 1745/6-1749/50 1750/1-1754/5

702,907 714,004 596,051 300,001 286,620

140,581 142,801 119,210 60,000 57,324

2 10,872 214,201 178,815 90,000 85,986

2812 2856 2384 1 200 1146

Source and Note: Compiled and computed from K.N. Chaudhuri, op. cit., p. 534. 1 great lb. = 1.5 small lb. In Bengal silk was weighed in maunds and seers, 40 seers making a maund. One Bengal maund was equivalent to 75 lbs. i.e.. lb. avoirdupois or what was called small lb.

Now taking up the actual export of raw silk by the European Companies, one finds that throughout the second half of the seventeenth century the Dutch export was much larger than that of the English. Even in the first two decades of the eighteenth century, the Dutch lead was maintained. But as the Dutch trade declined in general in the 1720s, the English export of raw silk from Bengal surpassed that of the Dutch towards the end of the 1720s.14 As a matter of fact, the English export of raw silk reached its peak in the 1730s and Table 13.1 indicates the average annual export by the English Company which fell sharply from around the mid-1740s, reaching its nadir in the early 1750s in the whole period from 1730 to 1755. It is evident from the table that the maximum annual average of raw silk exported by the English Company was 2,856 mds. or 0.21 trillion lbs in the peak period of the 1730s and never crossed 3,000 mds. or 0.23 million lbs. Indeed, from the mid-

312 | Companies, Commerce and Merchants

1740s till the mid-1750s, the average annual English export was even less than half of that in the boom period of the 1730s. Table 13.2: Quinquennial Total of Dutch Exports, Raw Silk, 1730s-50s Years 1730/1-1734/5 1740/1 -1744/5 1750/1-1754/5

Total (Dutch lbs) 335,319 308,448 333,210

Average (Dutch lbs) 67,064 61,689 66,642

Average (Eng. lbs) 73,100 67,241 72,640

Average (maunds) 975 897 969

Source: Collected and computed from Bengal Export Invoices in Dutch Records, Algemeen Rijksarchief, Den Haag.

As against this, the Dutch export of raw silk was more or less steady from the 1730s through the 1750s, with a marginal decline in the 1740s and recovering again in the early 1750s, which will be apparent from Table 13.2.15 It is clear from the table that the Dutch export of Bengal raw silk in the period between 1730 and 1755 never crossed 1,000 mds or 0.08 million lbs, though it was probably higher than the figure for the late 1720s and certainly much lower than the average annual export in the first two decades of the eighteenth century.16 In other words, in the crucial period of the late 1740s and early 1750s, the total average annual export of Bengal raw silk by the two major European Companies which were actively involved in Bengal trade, certainly did not exceed 2,500 mds or 0.19 million lbs, even taking the English export at 1,500 mds. and the Dutch at 1,000 mds.17 Adding to this the export of raw silk by other European Companies which could not have been more than 1,000 mds. at the maximum,18 the total European export of raw silk would have been 3,500 mds. or 0.26 million lbs in a year on an average at the most. The important question that crops up is what was the amount of raw silk exported by the Asian merchants from Bengal as against the European exports? We are fortunate enough to unearth a complete list of silk exports by the Asians from Bengal from 1749 to 1767 from the records at the India Office Library. The report was prepared by W. Aldersey, who was the chief of

International Trade in Bengal Silk | 313

Kasimbazar factory in 1769, in response to an official query as to the causes of the decline in silk trade and industry in Bengal. Aldersey specifically mentions that he had collected the information from Murshidabad customs house and that it included the raw silk exported by ‘natives only on which Duties have been collected’.19 On the basis of his list, we present here the quinquennial total of silk exports by the Asians from 1749 to 1758 for a comparative study of the Asian and European exports of raw silk (see Table 13.7 and Figure 13.1), the full details of which are given in Tables 13.4 and 13.6. Table 13.3 clearly indicates that the Asians were far ahead of the Europeans in the export of raw silk from Bengal. While the export by the Asian merchants in the late ’forties and early ’fifties amounted on an average to 19,803 mds. or about 1.5 million lbs in the mid-fifties, the Europeans exported only about 3,500 mds. or 0.26 million lbs in a year on an average during the same period. In other words, it can be said that the European export was less than 1/5 of what was exported by the Asian merchants around this time. Again the total value of the European export of raw silk, taking it to be 3,500 mds. a year and at the rate of Rs. 7 per seer (40 seers making a maund) which is the rate at which the Asian export is valued in the said English Company records, would have been around only Rs. 0.98 million. On the other hand, the total value of the silk exported by the Asian merchants is estimated at around Rs. 5.5 million on an average during the period from 1749 to 1753 and Rs. 4.1 million in the next five years, i.e. from 1754 to 1758. So as far as the total value of the raw silk exported by the Europeans and Asians is Table 13.3: Quinquennial Total of Silk Export by Asians, 1749-58 Years

Total (mds)

Average (mds)

Average (lbs)

Total Value (Rs)

Avg. Value (Rs)

1749-53 1754-8

99,016 74,692

19,803 14,938

14,85,240 11,20,380

2,77,24,365 2,09,13,345

55,44,873 44,82,669

Source: BPC, Range 1, vol. 44, Annex to Consult. 19 June 1769; for the complete list, see Table 13.6.

314 | Companies, Commerce and Merchants

concerned, the European share was thus only between 1/5 and 1/4 of the Asian share. As such, and considering the fact, attested by many contemporaries including the Dutch Directors and English Officials in Bengal,20 that the Asians too had to bring in silver/cash to Bengal for buying raw silk, textiles and other commodities, the assertion that the Europeans were the major importers of bullion into Bengal in the pre-Plassey period can hardly be tenable. It would be worthwhile to investigate the direction/destination of the exports by the Asian merchants, especially of raw silk, because it was exported in such huge quantity even in the late 1740s and early 1750s. However, one has to keep in mind that evidence of such nature is hard to come by in our sources.21 We are extremely fortunate to find some data regarding the direction/destination of raw silk exports by the Asian merchants from Bengal during 1775-7. By reading back from the evidence of 1770s, it is possible to provide some idea of the direction/ destination of the Asian silk trade in the pre-Plassey period. One has to remember in this connection that in the 1770s there was a precipitate decline of the Asian merchants’ trade under the ruthless repression of the English Company and its servants backed by political power – a process which started immediately after Table 13.4: Volume and value of Raw Silk Exported by Asian Merchants, 1759-67 Year

Volume (in maunds)

Value (in rupees)

1759 1760 1761 1762 1763 1764 1765 1766 1767

14,394 13,056 10,562 5,953 6,601 8,326 7,191 5,180 6,599

40,30,387 36,55,791 29,57,229 16,66,845 18,48,333 23,31,193 20,13,525 14,50,307 18,47,832

Note: The total quantity for the quinquennial period 1763-7 amounts to 33,897 maunds and the average 6779 maunds. For this table the source is the same as in Table 6.

International Trade in Bengal Silk | 315

1757-8. The decline of the Asian merchants’ trade is evident from the report of Aldersey which we quoted earlier and Table 13.4 from his report will bear our point. It is apparent from this table that the average annual export of the Asian merchants during the quinquennial period from 1763 to 1767 stood at 6779 mds. which tallies more or less with the figure of exports from 1775 to 1777 which was on an average 7025 mds. The destination as well as the total amount of silk export by the Asian merchants from 1775 to 1777 is recorded in the Patna Customs House Register, and for the three years combined the totals are shown in Table 13.5. From the table, it is quite clear that during this period the maximum amount of silk from Bengal went to Mirzapore which was a distribution centre rather than a manufacturing one, and it can be assumed that this silk was re-exported from Mirzapore in northern and western directions. The next highest amount was destined for Lahore while Multan and Aurangabad came third and fourth in descending order of total quantity exported. If this was the destination/direction of Bengal silk exported in the mid-1770s it can be reasonably assumed that the destination/direction of Bengal silk exported by the Asian merchants in the late 1740s to mid-1750s would have been almost similar. So there could be little doubt that the Asians had a predominant position in Bengal’s silk trade and that even in the Table 13.5: Destination/Direction and Triennial Total of Silk Exported by Asian Merchants, 1775-7 Destination/Direction (in descending order of total qnty) Mirzapore Lahore Multan Aurangabad Agra Benares Delhi

Total Quantity (in maunds) 12,568 3,851 1,649 1,471 598 511 427

Note: average annual export = 7,025 mds. Source: Board of Revenue, Misc. Proceedings, Range 98, Vols. 18, 20, 22, IOLR.

316 | Companies, Commerce and Merchants

mid-eighteenth century their exports of raw silk from Bengal by far surpassed those of the European Companies. The supremacy of the Asian merchants is also confirmed by one Sadananda Bandopadhyay who was the gomasta of a Gujarati merchant in Kasimbazar and was himself in the silk business for thirty years, who stated, referring to the 1750s in all probability, that there were ten merchants in Murshidabad who exported Bengal raw silk to the tune of 13,000 to 20,000 maunds annually.22 It was Louis Taillefert, the Dutch Director in Bengal, who clearly pointed out in 1763 that the procurement of raw silk by the gomastas of traders from Lahore and Multan had gone up to a great extent since the beginning of the eighteenth century.23 That Bengal’s traditional export by the Asian merchants was extremely significant even in the pre-Plassey period, i.e. before the mid-eighteenth century, is stated in unequivocal terms by the Table 13.6: Volume and Value of Raw Silk Exported by Asian Merchants, 1749-58 (‘Extracts from Customs Office Receipts at Murshidabad’) Year

Volume (Maunds)

Volume (Eng. lbs)

Value (Rs.)

1749 1750 1751 1752 1753 1754 1755 1756 1757 1758

20,037 19,571 23,740 17,615 18,053 15,249 12,269 7,635 21,347 18,192

15,02,775 14,67,825 17,80,500 13,21,125 13,53,975 11,43,675 9,20,175 5,72,625 16,01,025 13,64,400

56,10,423 54,79,786 66,47,095 49,32,221 50,54,840 42,69,594 34,35,310 21,37,762 59,77,045 50,93,634

Note: After this table there is a note which runs: ‘The above account includes only the Trade on which Duties were really paid to the pachotra Daroga (Royal Customs House) but besides this there was formerly carried on a very considerable trade in these articles by Juggutseats House and others who had interest with the Nizamat for these goods to pass Duty free. . . . The above is the trade of Natives only on which Duties have been paid.’ (emphasis mine). Source: BPC, Range 1, vol. 44, Consult. 19 June 1769, IOLR. The figures in the table are rounded off to the nearest digit.

International Trade in Bengal Silk | 317

Company officials who were in Bengal both before and after Plassey, though these have been overlooked by historians in general. Harry Verelst, a responsible official of the Company, wrote referring to Bengal in the pre-Plassey period:24 ‘Besides the large investment of the European nations, the Bengal raw silk, cloths etc. to a vast amount were dispersed in the West and North inland as far as Guzzrat, Lahore and even Ispahan.’ Another official, William Bolts stated:25 A variety of merchants of different nations and religions, such as Cashmeerians, Multanys, Patans, Sheiks, Sunniasys, Paggayahs, Betteeas and many others used to resort to Bengal in Caffeelabs or large parties of many thousand together with troops of oxen for the transport of goods from different parts of Hindustan.

In conclusion, it can perhaps be reasonably asserted on the basis of the evidence advanced and analysis made above that there can be hardly any doubt about the supremacy of the Asian merchants in the export of Bengal silk even in the mid-eighteenth century. The role of the Europeans in the international trade in Bengal silk was important, no doubt, but the European share in this vital sector of Bengal’s commercial economy was rather small compared with that of the Asians. Quantitatively, the Asian export of raw silk was around Rs. 4.8 million on an average annually while that of the Europeans hardly exceeded Rs. 0.98 million in the mid-eighteenth century. Even in the textile export from Bengal, the Asians had an edge over the Europeans.26 The average annual value of the total English and Dutch exports Table 13.7: Comparative Position of Asian and European Silk Exports (Quantity and Value) Years 1749-53 1749-58 1754-8

Asian Exports Av. Qty (lbs)

Av. Val. (Rs.)

1.5 million

5.5 million

1.1 million

4.1 million

European Exports Av. Qty (lbs)

Av. Val. (Rs)

0.26 million

0.98 million

Source: Asian Exports computed from Table 13.6 and European Exports from Tables 13.1 and 13.2)

318 | Companies, Commerce and Merchants Fig. 13.1. Asian and European silk exports. 1749-53: Asian exports; 1749-58: European exports; 1754-8

Source: As in Table 13.7.

(including all the commodities) in the first quinquennial period of the 1750s was about Rs. 5.5 million while the total value of the Asian exports of Bengal silk and textiles can be computed at Rs. 8.5 to Rs. 10 million at the minimum.27 If that be so, and considering the fact that both the Asians and Europeans had to bring in silver/cash to Bengal to buy export commodities, perhaps there emerges a strong case for reconsidering the theory that the Europeans were the major importers of bullion into Bengal in the period prior to Plassey. Similarly, in the light of all this evidence it is quite reasonable to argue that we need to revise a part of the explanation advanced recently for the British conquest of Bengal which brought in the issue of European trade and consequent influx of bullion.28 All this only reiterates the point made by Thomas Naff that ‘the realities of eighteenth century, even as we perceive them in the present limited state of our knowledge, are far more interesting and complex than the

International Trade in Bengal Silk | 319

conventional portrait (of decline) which does not fully reveal the interplay of countervailing forces’.29 The point to emphasize is that it is high time that historians try to have a fresh look at the comparative position of the European trade and the trade of the Asian merchants operating both within and without the Indian sub-continent. The search for more qualitative as well as quantitative data on the Asians’ trade, especially the overland trade, should go on, and then both the European trade and the Asians’ trade should be placed in their proper perspective. This will enable us to have a comprehensive picture of the trade as a whole around the mid-eighteenth century which is so crucial for the proper understanding of the background as also the implications of the British conquest of Bengal in 1757, and how the Company and its servants systematically eliminated the Asian rivals in Bengal trade in the post-Plassey period. Manuscript Sources and Abbreviations BPC

Bengal Public Consultations, India Office Library and Records, henceforth IOLR). B M Addl Mss British Museum Additional Manuscripts, British Library. C&B Abstr Coast and Bay Abstracts, IOLR. Fact. Records Factory Records, IOLR. HR Hoge Regering van Batavia, Algemeen Rijksarchief, The Hague. Mss Eur Manuscripts European, IOLR. VOC Verenigde Oostindische Compagnie, Algemeen Rijksarchief.

Notes 1. K.N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge, 1978), p. 24; P.J. Marshall, Bengal – The British Bridgehead (Cambridge, 1987), pp. 64-7; C.A. Bayly, Indian Society and the Making of the British Empire Cambridge, 1987), pp. 49-50. 2. W.H. Moreland, India at the Death of Akbar (London, 1920), p. 218; From Akbar to Aurangzeb (London, 1923), p. 58.

320 | Companies, Commerce and Merchants 3. C & B. Abstr., vol. 3, para. 36, 26 December 1733. 4. Fact. Records, Kasimbazar, vol. 6, f. 337, 23 January 1744. 5. K.N. Chaudhuri, Trading World of Asia, p. 354. 6. BPC, Range 1, vol. 6, f. 172, 21 February 1726. 7. B. M. Addl. Mss., 34, 123, f. 42; C.R. Wilson, Early Annals of the English in Bengal, vol. I (Calcutta, 1895), p. 376. 8. Fact. Records, Kasimbazar, vol. 12, Consult. 27 January 1756. 9. Ibid. K.N. Chaudhuri’s contention that the ‘products bought by the Gujaratis did not directly compete with those shipped to Europe’ is hardly tenable. 10. Fact. Records, Kasimbazar, vol. 12, Consult. 27 January 1756. 11 . BPC, vol. 8, ff. 381-81vo, 22 March 1731. 12 . BPC, vol. 15, f. 33vo, 15 January 1742. 13 . Fact. Records, Kasimbazar, vol. 6, Consult. 12 March 1744. 14 . Kristof Glamann, Dutch-Asiatic Trade, 1620-1740 (Copenhagen and the Hague, 1958), p. 131. 15. Floretta yarn or mochta silk was not included in the computation as it was not really regarded as raw silk, was of a much inferior variety and cheaper quality than the varieties like tanny, adapangia, Gujarat, tanna banna etc. Even in the sale of the different chambers in Holland, this was not advertised as raw silk like tanny, cabessa etc. but as floretta yarn (cf., Notice of auction, 16 September 1755, Resolutions of Heeren XVII, VOC, 7380). Om Prakash, The Dutch East India Company and the Economy of Bengal (Princeton, 1985), pp. 202, 218, too, dealt with raw silk and floretta yarn separately. But even if we include floretta yarn in our computation, it hardly alters the picture because in the early 1740s the average annual export of floretta yarn was only 84 mds. while in the early 1750s it was 184 mds. (computed from Dutch records) on an average in a year. 16. Prakash, The Dutch East India Company, p. 218. 17. The Dutch export of Bengal raw silk to Japan, which was an important branch of trade of the VOC in the second half of the 17th century (see, Om Prakash, p. 126) was only 6,154 Dutch lbs on an average in the quinquennial period 1740-5 while in the 5-year periods from 1730 to 1735, and 1750 to 1755, it was nil. I have collected and computed all this from the Bengal export invoices in the Dutch records in Algemeen Rijksarchief, Den Haag. 18. Among other European Companies, only the French were of some importance. The Ostend Company had to abandon its trade in 1744 while the Danish Company was permitted to establish its factory only in 1755. Though the French private trade increased remarkably in the early 1750s, the volume of their corporate trade seems to have been much smaller than that of the English or Dutch. Even assuming, as did P.J. Marshall (Bengal, p. 66), that the value of the French Company’s

International Trade in Bengal Silk | 321 trade was about half of that of the English or Dutch trade, the French export of raw silk would have been around 500 mds. at the most. And raw silk does not seem to have been a staple commodity in the European private trade to Western India, Red Sea or Persian Gulf area (c.f., VOC 2304, f. 211, HB, 20 November 1734). Hence it could be reasonably assumed that the export of raw silk by other Europeans (i.e. excluding the English and Dutch Companies) could not have been more than 1000 mds. at the maximum on an average in a year in the early 1750s. 19. BPC, Range 1, vol. 44, Annex to Consult. 19 June 1769. This is more or less corroborated by other English and indigenous sources. See, for example, Mss. Eur. D 283 f. 21, IOLR; Verelst’s letter to the Court of Directors, 5 April 1769, Fort William – India House Correspondence (henceforth FWIHC), vol. V, ed. N.K. Sinha (New Delhi, 1959), pp. 18-19. For the indigenous account, see, N.K. Sinha, The Economic History of Bengal, vol. 1 (Calcutta, 1965), 3rd edn, p. 112. 20. ‘Memorie’ of Dutch Director Taillefert, VOC, 2849 (K.A. 2741), 27 October 1755, f. 245vo; BPC, Range 1, vol. 11, ff. 288vo.-289, 28 August 1736; FWIHC, vol. V, pp. 16-18. 21. I do not think that for my present thesis it is absolutely essential to show where the silk was exported to. Contrary to an opinion expressed in private conversation by a distinguished historian of the period that my thesis ‘stands or falls on this very question’ of identifying the destination of the raw silk exported from Bengal, I maintain, as some experts in the field do, that so long as I know the volume and value of raw silk exported by the Asian merchants, it is more than sufficient for my present thesis. However, I agree that it is worth investigating the destination of the raw silk exports from Bengal so that we can have a comprehensive idea of the silk trade as a whole. 22. Proceedings of the Board of Trade, 13 March 1791, quoted in N.K. Sinha, Economic History of Bengal, vol. I, pp. 111-12. 23. Taillefert’s ‘Memorie’, HR, 246, f. 141, 17 November 1763. 24. H. Verelst to the Court of Directors, 2 April 1769, BPC, Range 1, vol. 44, f. 324, para. 6. 25. William Bolts, Considerations on Indian Affairs (London, 1772), p. 200. 26 . S. Chaudhury, ‘Sirajudaullah, the English Company and the Plassey Conspiracy – A Reappraisal’, Indian Historical Review, XIII, nos. 1-2, pp. 126-7; ‘European Trading Companies and Export Trade in the Eighteenth Century’, ch. 7 in History of Bangladesh, vol. II (Dhaka, 1992), pp. 183-224; ‘The Asian Merchants and Companies in Bengal’s Export Trade, circa, mid-Eighteenth Century’, paper presented at the International Conference on ‘Merchants, Companies and Trade’, held at Maison des Sciences de l’Homme, Paris, 30 May-

322 | Companies, Commerce and Merchants 1 June 1990; subsequently published in S. Chaudhury, M. Morineau, eds., Merchants, Companies and Trade: Europe and Asia in the Early Modern Era, Cambridge, 1999. 27 . S. Chaudhury, ‘Continuity or Change in the Eighteenth Century? Price Trends in Bengal, circa, 1720-57’, Calcutta Historical Journal, vol. XV, nos. 1-2. July 1990-June 1991, p. 22; ‘The Asian Merchants and Companies’, paper presented at Maison des Sciences de l’Homme. 28. Brijen K. Gupta, Sirajuddaullah and the East India Company, 1755-57 (Leiden, 1962), p. 32; P.J. Marshall, Bengal, pp. 65, 67; C.A. Bayly, Indian Society, pp. 49-50 29. Thomas Naff and Roger Owen (eds), Studies in Eighteenth Century Islamic History (Southern Illinois University Press, 1977), pp. 4-5 quoted in Ashin Das Gupta, ‘India and the Indian Ocean in the Eighteenth Century’, in Ashin Das Gupta and M.N. Pearson (eds), India and the Indian Ocean (Calcutta, 1987), p. 33.

chapter 14

Merchants, Companies and Rulers Bengal in the Eighteenth Century*

An attempt has been made in this paper1 to analyse the trading activities of Asian merchants, and the nature and character of their commercial organization vis-à-vis the European Companies trading in Bengal in the first half of the eighteenth century. The Asian merchants engaged in trade in Bengal had certain distinct features. They often acted as brokers, agents or merchants to the European Companies supplying their investments or buying their imports. At the same time they traded with their own capital, quite independently of the European Companies. They were primarily merchants – buyers and sellers of different commodities – and their operations extended to any class of merchandise which was expected to yield a profit. They also acted simultaneously as shroffs or money changers and bankers, received deposits and arranged remittances by means of bills of exchange or letters of credit on their various agents in different trade marts of Bengal as also in other parts of India. The term Asian merchants has been used here in preference to Bengal merchants in view of the fact that merchants from various parts of Asia including the Arabs, Turks, Persians, Mughals and Armenians as also from different parts of India traded in Bengal in the first half of the eighteenth century. From a close and critical analysis of the trading activities of the Asian merchants, we would attempt to make a few generalizations and deductions as to whether the sum total of the activities of the * Journal of the Economic and Social History of the Orient, vol. XXXI, pt. 1, February 1988, pp. 74-109.

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Asian merchants can be described merely as peddling trade, how far the Asian merchant was an independent entity without a close link with the political and ruling elite, whether the change over in the English Company’s investment pattern from dadni to gomasta system was due solely to the decline of the merchants in Bengal, and whether these merchants were subservient to the European Companies. The first section of this essay will be mainly concerned with the examination of the relation between the Asian merchants and the European Companies as borne out by the investment policy of these Companies. The second section will deal with the activities of the merchant princes namely, the Jagat Seths, Umichand and Khwaja Wazid, and their role in the commercial sector of Bengal’s economy. The last section will sum up the major findings of our inquiry into the various aspects of the trading activities of the Asian merchants, and the nature and character of their commercial organization vis-avis the European Companies trading in Bengal in the first half of the eighteenth century. I It is almost common knowledge that the European Companies in Bengal as elsewhere in India except Madras procured their investments through the dadni system, which rested on a contractual agreement between the merchants and the Company. The former undertook to supply the Company a specific quantity of export commodities by a certain date and organized their purchase and transport from the production centres. The Company in return paid them a certain proportion of the total value of the goods in advance known as dadni, the rest being paid on delivery. The risk of default of weavers, artisans or other producers were underwritten by the merchants. At each principal factory the Companies employed a number of Asian merchants whose financial standing and integrity were assured in the local market. An indigenous merchant middleman, often called broker by the European Companies, was appointed in each factory, and he was

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responsible for money advanced to the dadni merchants as also for the timely supply of the export commodities. The amount of dadni or advance given to the merchants against the contract for goods was a bone of contention between the merchants on the one hand and the English Company on the other throughout the period. In the first two decades of the eighteenth century the merchants received from the Company generally between 70 to 75 per cent of the total cost of the investments. It appears that the full amount of the dadni was not paid all at once but by instalments. Again, sometimes only a part of the dadni was paid in cash, the rest by bills of debt. In 1718 the Calcutta Council reduced the dadni to 60 per cent of the total cost of investment. It was again reduced to 50 per cent in 1722 of which 20 per cent was paid in cash and the rest by bills of debt.2 Other European Companies – the Dutch, French and the Ostend Company – too paid dadni or advance to secure their investments.3 The English Company, however, could not stick to the principle of 50 per cent advance against contracts for goods in the face of protest and insistence from the dadni merchants. In the ’forties the dadni was again raised to 70 per cent on the whole quantity of goods contracted for, obviously under pressure from the merchants.4 In 1749 the Company came to a new understanding with the merchants who agreed to provide one-third of the investment for ready money and two-thirds on dadni but the amount of dadni was raised to 85 per cent.5 The Company was always apprehensive of the dadni merchants and tried its best to foil any combination of them which would be detrimental to its interests. The merchants too on their part tried to evade the impositions of the Company and make as much profit as possible on the procurement of investments. In order to guard against any monopoly by merchants’ group, the Calcutta Council took rather an unusual measure in 1733 and wrote to the Court of Directors: ‘Finding it necessary to employ some of the poor merchants to prevent a combination of the Rich, they thought it for the Company’s advantage to employ them accordingly as

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it prevents their going to the Dutch and French who give them great encouragement, but at the same time give the preference to the substantial ones, keeping both as independent of the broker as possible’.6 The Kasimbazar merchants seem to have enjoyed more independence vis-à-vis the European Companies than their counterparts in Calcutta. Often they formed rings of their own fraternity and foiled the Company’s attempt to coerce them. In 1741 the merchants refused to pay penalty for deficiency in the previous year’s contract stating emphatically that ‘they never had paid any penalty nor would not now’. The Kasimbazar Council reported to Calcutta in utter frustration: ‘Having taken into consideration the refusal of the merchants we are of opinion that should they remain obstinate in their refusal to comply that it is not in our power to force them’.7 The merchants in Kasimbazar further refused to give any security for the dadni advanced to them. The Council’s letter to Calcutta on 26 February 1742 brings to bold relief the independence of the mercantile class in Kasimbazar: ‘. . . as to giving security as demanded of them [the merchants] is what they would not do on any account that some of them did business for Guzzeraters, Multaners, Armenians and other merchants and for greater amounts than with us and yet no such thing was ever demanded of them . . . besides there were none among them but what were esteemed men of credit and many of them substantial men. . . . In short that none of them would submit to the reproaches/as they call it/of giving security. . . .’8 Ultimately the Council ‘finding no hope of gaining their point of getting them to give security’, thought it better to contract with the merchants for raw silk at the earliest.9 Despite the virtuous recommendation of the Court of Directors that ‘all manner of Combinations among the merchants must be prevented’,10 the Kasimbazar Council had often to face such ‘rings’ of merchants which it failed to break on most occasions. It was noted in the consultation of 23 April 1743 that when the merchants were asked to pay the previous year’s balances, eight prominent merchants told the Council ‘that they had

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entered into a contract not to depart from their demands on the Company . . . and that whoever of them makes up his account with the Company shall forfeit 10,000 Rupees and pay the others’ Ballances and this contract they have lodged in the hands of Sautoo Cotma’.11 Finding the merchants ‘so obstinate’, the Council decided to contract with other merchants. The Kasimbazar merchants were very sensitive about giving security for the dadni paid by the Company and tried to hold their ground against the Company as long as possible. The Council at Kasimbazar reported on 27 January 1744 that the merchants alleged that as several of them did business on a large scale with traders from various parts of India and Asia, ‘having it known they had given security would destroy all such trade because those other merchants they did business with would look on it that they were not responsible without it . . .’. The merchants stood firm in their resolution not to give security and told the Council that ‘they would not do business on such terms for even a report that security was demanded of them would hurt their credit abroad’.12 However the Kasimbazar Council finally succeeded in bringing the silk merchants ‘to be joined in security, three or four of them together for the Dadney they advance them’.13 But the Company had a limited success only since it failed to get any security whatsoever from some prominent merchants dealing in silk piece-goods, and who, it seems, were ready to forgo Company’s contract rather than give security. The Calcutta Council noted in 1744: ‘. . . it is impossible to get the quantity of silk piece-goods ordered without employing many other merchants residing at Muxidabad and Sidabad and other places some of whom being wealthy in good credit will not be persuaded to give any security, particularly Ram Singh, Gosseram and Ramnaut Echenaut, without whose assistance they [Kasimbazar Council] fear they shall fall very short in the article of Taffaties which the above-mentioned chiefly deal in and provide the very best and which the other merchants do not care to meddle with as they are liable to occasion bad debts among the weavers . . . they absolutely refused to give [security] as they are

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very substantial people, and they apprehend no risque of any money entrusted with them, and in case they throw them out of Dadney, the Dutch and the French will gladly employ them. . . .’14 Needless to say the Calcutta Council gave its consent to Kasimbazar to contract with these merchants despite their refusal to render any security for the dadni advanced. Turning to Calcutta we find that after the abolition of the broker’s office in 1741, the merchants there contracted with the Company giving proper securities for the dadni advanced. But they were not very happy with the system and in a joint petition in 1744 informed the Council that they ‘cannot agree to this method again when we contract for next year’s investment’.15 The Council informed the merchants on 8 March 1745 that it would not make any change in the system. On 14 March the Council asked the merchants to divide themselves into three sets or groups as usual but the latter absolutely refused to do so and insisted on dividing into six or seven sets for the security of the Company’s dadni which was ultimately accepted by the Council.16 The Seths and the Basaks were the most important merchant families of Calcutta who provided the lion’s share of the Company’s investments. In fact throughout the period of our study many members of the Seth family traditionally held the post of broker and the great commercial influence of this family reduced the Company’s textile merchants in Calcutta to a ‘closed corporation’. Even the Court of Directors in London was aware of the importance of and services rendered by the Seth family and wrote to Calcutta appreciating the Seths’ assistance in the Company’s business.17 But the Seths were shrewd merchants, not to be satisfied only with sweet words, and ready to bargain hard with the Company whenever the occasion arose. Indeed they were the leaders of the Calcutta merchants who came to serious disagreement with the Company regarding the investment and dadni in 1747. Consequent to the disturbed political situation in Bengal which the Maratha incursions resulted in, the Court of Directors asked the Calcutta Council in 1746 to reduce and if possible to dispense with the dadni payments altogether and

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to provide investment with ‘ready money’ goods.18 The Calcutta Council put the proposal before the merchants on 19 March 1747 and the latter refused ‘in a body’ to agree to it, submitting detailed arguments for not discontinuing the dadni.19 The Kasimbazar merchants too refused to accept the new proposals for investments of the Company. The Council at Kasimbazar reported to Calcutta: ‘. . . to both of which propositions they are extremely averse that they think it impossible for them ever to bring them to agree thereto’.20 Meanwhile the tussle and bargaining went on between the merchants and the Council in Calcutta. As for the final answer the merchants, obviously led by the Seths, told the Council on 25 May 1747 that they could contract ‘on no other terms’ than the following: that they would provide one-fourth of the investments for ready money and the rest three-fourths on dadni of which 85 per cent to be advanced ‘as last year’. Finding the merchants ‘obstinate’, the Council decided to try to contract with some other merchants on better terms.21 Accordingly the Company entered into a contract with sixteen merchants of whom seven were new (including two Dutch dadni merchants, Otteram and Gosseram Occoor, and a few Kasimbazar merchants led by the Katmas) for about one-third of the Company’s investment amounting to about 8 lakhs of rupees.22 The Seths and other merchants gave a new proposal that they would undertake the remaining two-thirds of the investment on condition that 50 percent of the dadni would be paid within August and the rest, 35 per cent, on delivery of goods, ‘but if there are new men introduced into the Dadney they will do no business at all’.23 The Calcutta Council noted in utter exasperation: ‘As the Seths and other merchants obstinately refuse to contract with us unless upon their own terms and impertinently refuse to let us employ any other merchants agreed that we look out for such as will contract.’24 The commercial organization of the Calcutta merchants was caste-based. When asked to contract for invesment for 1748, the Calcutta Council noted the reaction of the Seths thus: ‘The Seats being all present . . . informs us that last year they dissented to the employing of Tillickchund, Gosseram Occoor and Otteram

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they being of a different cast[e] and consequently they could not do any business with them upon which account they refused the Dadney and the same objection to make they propose taking their shares of the Dadney if we should think proper to consent thereto. . . .’25 The majority of the Council was in favour of employing the Seths and the contract was made accordingly. But all was not well with the Company’s investment policy and its relations with the merchants gradually deteriorated to such an extent that there was no point of return. The Maratha invasions and the nawab’s desperate need for resources to meet the challenge resulted in a serious dislocation of the country’s economy, and it seems the dadni merchants were not in a position now to accept contract from the Company until and unless they were commensurate with the rapidly declining profit and the growing hazards in conducting the business in textiles. The first serious disagreement arose in 1751 when the merchants refused to sign the accounts as prepared by the Council wherein the merchants were charged penalty for deficiency in delivery of goods26. Though the Seths too refused ‘in a body’ to sign the account, the lead this time was given by the Basaks. Sobharam Basak, the leading member of the Basak family, refused to sign the account, pointing out much to the chagrin of the Calcutta Council, that ‘he esteemed his contract of no validity and paid no regard to it’. The Council retaliated with the only measure it could take and reported: ‘. . . Sooberam bysaack persisting in an obstinate refusal and it appearing to us most probably from this and some other circumstances that he had been greatly instrumental in working up several of the other merchants to the same refusal . . . dismissed him from Dadney and forbid him coming to the factory.’27 Ramkrishna Seth too refused to sign the contract and he too was dismissed from the Company’s dadni contract and forbidden entry to the factory. But he was soon readmitted to the Company’s service at the request of his nephew Laksmi Chandra Seth, and so was Sobharam Basak.28 There was a big deficiency in the investments again in 1752. When the Council wanted an explanation from the merchants, they replied that the shortfall in supply was ‘owing to our cut-

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ting them in the prices, the dearness of cloth at the aurungs and our sorting their goods by old musters whereby they suffered a considerable loss . . .’.29 As a result when the Company asked the merchants to sign their accounts, the latter objected to the manner in which the account was drawn. They informed the Council clearly and firmly that they would not undertake any business for 1753.30 The Calcutta Council, anxious as it was to contract for the investments for 1753, asked the merchants for their terms. The merchants were reluctant to enter into any contract as they had ‘suffered these three years past by the Company’s business’. They made it amply clear that they would not on any account undertake the investment upon the same terms they did the previous year. But as they ‘served the Company almost from their infancy and lived under the English protection, they would do their utmost to forward their business’, and only as such were willing to contract on their own terms and no others.31 The Council regarded these terms as ‘extremely unreasonable’ and asked the merchants if they would not recede from what they had proposed. The reply came from Ramkrishna Seth, obviously the leader of the dadni merchants, that he would contract only on the terms the merchants had offered, otherwise ‘he absolutely refused to undertake any part of the investment himself’.32 The Council acted swiftly and perhaps in utter desperation. It noted: ‘Esteeming this preemptory behaviour of Ramkissen Seat’s to be extremely insolent and meriting our Resentment and as an example made of so considerable a person may have a good effect upon the rest of the merchants and reduce them to offer us better terms, Ramkissenseat was told we had no further business for him as a Dadney merchant and ordered to withdraw’.33 But this was hardly of any avail as the subsequent events would prove. Five days later the merchants were called again and acquainted by the Council of the Court of Directors’ orders regarding investment.34 The merchants flatly refused contracting on these terms. They were in an advantageous position in the bargain inasmuch as the time factor was in their favour. It was the beginning of June and the Council must come to an agreement if it wanted to secure full investment for the year. So the

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Council was almost solicitous and asked the merchants if they could offer any other terms ‘more reasonable’ and particularly if they would undertake the investment at an advance of dadni of less than 85 per cent. The merchants answered in the negative. The Council had now no other alternative but to arrange for investment by some other means. The merchants were called again and were told ‘they were no more Hon’ble Company’s Dadney merchants’. Thus ended the dadni system of investment which had its life for about a hundred years and was replaced by the gomasta system under which the gomastas (paid agents or servants) procured the export commodities from different aurangs or manufacturing centres.35 In his brilliant work on Asian trade and the English Company, K.N. Chaudhuri holds that the change over from the dadni to the gomasta system for the procurement of the English Company’s investment was due to the decline of the Bengal merchants. He relies for his conclusion heavily on the report of Charles Manningham and William Frankland (1753), the two export warehouse keepers in Calcutta, and finds corroborative evidence in the memorie of the Dutch Director Jan Kerseboom. And he concludes: ‘. . . the textile trade of Bengal and the merchants connected with it were already approaching the end of the road. That end came in 1753 . . .’.36 But a careful and critical reading of the two documents mentioned by K.N. Chaudhuri hardly justifies the conclusion that there was an absolute decline of the merchants in Bengal that necessitated the change over from dadni to gomasta system. It is true that in his memorie written in 1755 Kerseboom referred to four Santipur merchants who, as reported by a servant of the Raja of Nadia in whose territory lay Santipur, were ruined men and no money-lenders or bankers [wisselaars of banquiers] were willing to stand security for them. The excuse given by these shroffs was that the trade had become extremely hazardous and dangerous too.37 As such the Dutch Company decided to procure their investment through gomastas who would buy cloth at the aurangs of Santipur.38 The Dutch Company, however, found considerable difficulty in finding a sufficient number of capable gomastas and in main-

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taining uniformity of standards. This experiment which the Company tried out from 1747 to 1749 did not work satisfactorily and hence from 1750 the Dutch entrusted the merchants again, both rich and poor, who were divided into five groups [vief ploegen], with contracts for fine goods. The most important point which escaped K.N. Chaudhuri’s attention was that Kerseboom did not refer to any decline in the position of the Company’s merchants in Chinsurah which like Calcutta for the English was the main procurement centre of the Dutch Company. Neither did Kerseboom’s memorie mention anything about the Kasimbazar merchants who played an important role in the procurement of the Company’s investments. It seems Kerseboom’s report was mainly concerned with the Santipur merchants and the problems arising out of procurement there.39 So to make Kerseboom’s reference to the decline of Santipur merchants a general issue and to conclude from that a general decline of the Bengal merchants seem hardly logical. However it should be borne in mind that in the early ’fifties the merchants were passing through a critical period consequent to the disruption in the economy as a result of the Maratha invasions and the indiscriminate exactions of the State but these did not seem to have seriously impaired either their credit or their ability to carry on business whether for the Europeans or other Asian merchants. So far as the report of Manningham and Frankland is concerned only a superficial reading of it would give the impression that a change over from dadni to gomasta system was essential because the dadni merchants were no longer capable of fulfilling the contracts and that their credit was very much in doubt. A careful study of the document will reveal that the change was necessary because the merchants were reluctant to contract with the Company except absolutely on their own terms and the Company had no other way but to switch over to the gomasta system, and the decline in the position of Bengal merchants was not really the deciding factor. It was the independence, the uncompromising attitude and the strong determination not to recede from their terms that sealed the fate of the dadni system. As the report notes: ‘We are by necessity obliged to have recourse

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to the present method [gomasta system], as the only one left, for whilst our merchants’ proposals are so very contrary to the Interests and Commands of our Hon’ble Employers they render it impossible for us to consent thereto . . . by their proposals they seem to think we are absolutely in their hands and must submit to their demands however extravagant, on a supposition that it is not in our power to procure an investment without them’.40 The report however tried to make out a case that ‘the original intent and design of conducting the Investments by means of Dadney merchants’, which were to lessen the Company’s risk at the aurangs and to secure a timely supply of goods etc., had now become ineffectual. There is also a specific hint in the report that many of the merchants were not in a position to pay back the security money in case of their failure to supply goods against the advance paid earlier. It is true that in the early ’fifties the merchants were deficient in their supply of goods to the Company but the deficiency in investment had nothing to do with their financial solvency. It was only quite natural under the condition in which Bengal was passing through in the early ’fifties. The authors of the report seem to have been confused and have made contradictory statements in their enthusiasm for changing over to the gomasta system which one suspects would have been more beneficial for the Company servants’ private trade. The report advocated the change as the dadni merchants’ terms for investment ‘have reduced us to an absolute necessity of pursuing other measures which can only be by a ‘new sett of merchants’ or employing gomastas. But ‘to obtain a new sett of merchants is not in our power’. One wonders why? Was it because of the power and influence wielded by the dadni merchants led by the Seths and Basaks? One would like to argue if there was really any decline of the merchants of Calcutta as suggested by K.N. Chaudhuri, then how did the report of Manningham and Frankland could talk of investment by ‘new sett’ of merchants? Did the Company’s servants want to get rid of the dadni merchants as the latter were too powerful to be coerced to assist the servants’ private trade?

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Perhaps one can reasonably suspect that the Calcutta Council was motivated to make the change in the procurement system by the ulterior object of augmenting the private trade interests of its members. The Company’s servants in Calcutta were concerned about the decline in their private trade from the early ’fifties. It was in 1753 that Manningham and Frankland wrote to Clive: ‘. . . the situation of trade since you left us has continued so bad’.41 So one can reasonably argue that the change over to the gomasta system was the result of the Calcutta Council’s attempt to resolve its commercial problems by cutting out the dadni merchants. The abuse of dastak [permit] increased considerably under the gomasta system and the private trade of the Company’s servants no doubt increased after the abandonment of the dadni system.42 It is too well known a fact to emphasize how the gomastas became the main instruments of coercion in the post-Plassey period. There is ample evidence to prove that there was no decline in the position of Bengal merchants, especially the dadni merchants of Calcutta. The Seths and Basaks were still the leading and dominant merchant families of Calcutta in the 1750s while Hari Krishna Roy was the influential Dutch broker at Chinsurah. The most important thing one has to remember in this connection is that despite all wars, depredations and troubles the credit market in Bengal was not at all destroyed because of the great financial resources of the Jagat Seths. It is in evidence that this banking house used to finance extensively both the Asian and European traders in Bengal. The financial solvency of the Jagat Seths was never in question even in the 1750s. The house used to finance also the dadni merchants of Calcutta.43 Moreover when merchant princes like Omichand and Khwaja Wazid were still operating in full swing and playing a dominant role in Bengal’s commercial life, and who had extensive trade connections with Calcutta merchants, the thesis of the general decline of the Bengal merchants becomes wholly untenable. The Bengal merchants divided into hereditary occupational caste groups and it was usual for their families to serve the European Companies for generations. Such were the Seths and

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Basaks of Calcutta, the Katmas of Kasimbazar and the Mullicks of Jugdea. Some of these merchants rose to their positions from weaving and other castes. It seems that because of the caste affiliation, the merchants could organize themselves into a strong ‘combination’ whenever necessary, especially for bargaining with the European Companies or other Asian merchants. Such ‘combination’ of merchants was to be found in all major trading centres. After the dismissal of the dadni merchants, the Calcutta Council noted on 23 June 1753 that ‘it is certain the merchants have assembled themselves of a night lately’.44 In a dispute regarding the sorting and pricing of silk in 1754, when the Council asked the Kasimbazar merchants to give their replies, ‘they all sent us word separately that what the Punch/or Whole Body assembled/agreed to, they would . . .’.45 The best illustration of this sort of combination of merchants and the severe restrictions for adherence to the common agreement is to be found in the Kasimbazar consultation of 21 October 1754. The Council noted: ‘Our merchants having entered into and signed a punch or agreement whereby they are bound not to allow of our taking the 10 per cent penalty for the short delivery of goods in the year 1752, and that in case of our discharging any of them from our Employ, the whole body should quit our Business, and that any one or more, should for private ends violate these agreements, he or they should be liable to pay a penalty both to the merchants dismissed and to the Government with several other restrictions’.46 II The commercial life of Bengal and, to a great extent, its economy in the last three decades of the first half of the eighteenth century were dominated by the merchant princes namely, the famous banking house of the Jagat Seths, the well known Omichand and the Armenian merchant Khwaja Wazid. The Jagat Seths played a very prominent role in Bengal’s economy from the early decades of the century. Omichand came into prominence in the ’thirties and Wazid in the ’forties. These merchant princes collectively

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predominated both the commerce and financial administration of Bengal. The Bengal money market which financed both trade and government was closely controlled by them. They were able to dominate Bengal’s trade and industry through their farming of leading commodities and commercial privileges. As financiers, traders and administrators, they played a crucial role for the European Companies. The fortunes of these merchant princes were inextricably linked with those of the European trading Companies. Through their control of the credit market, their coinage of specie, provision of goods for exports and purchase of imports, the merchant princes had a close relationship with the Europeans. It is to be emphasized, however, that their position depended to a very great extent upon their influence at the nawab’s court. Their commercial farms were political in nature, and seem to have been extended in the ’forties and ’fifties of the eighteenth century. The Jagat Seths were least dependent upon the European Companies but their fortunes were closely tied to those of the mercantile and commercial community of Bengal that relied upon the Europeans. The only direct link between the European Companies and the Seths arose out of the latter’s monopoly of the mint and the former’s need for liquid capital for financing their investments. A major source of income for the banking house was the coining of the bullion and specie the European Companies used to import to Bengal for paying for their export commodities. Another good source of income for the Seths was lending money to the Companies which were perenially in short supply of cash. The European Companies freely borrowed money from the Jagat Seth’s Kuthees (agencies or branches) in Calcutta, Kasimbazar, Dacca, Hugli, Patna etc. Robert Orme who was the English Company’s official historian and was in Bengal in the early 1750s described the Jagat Seths as ‘the greatest shroff and banker in the known world’.47 Captain Fenwick writing on the ‘affairs of Bengal in 1747-48’ referred to Jagat Seth Mahtab Rai as a ‘favourite of the Nabob and a great Banker than all in Lombard Street joined together’.48 Luke Scrafton wrote to Clive in 1757 that ‘Juggutseat is in a manner the goverment’s banker:

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about two-thirds of the revenues are paid into his house, and the government give their draught [draft] on him in the same manner as a Merchant on the Bank . . .’.49 Referring to the merchant princes in general and the Jagat Seths in particular, Clive wrote: ‘The city of Murshidabad is as extensive, populous and rich, as the city of London, with this difference that there are individuals in the first possessing infinitely greater property than any of the last city’.50 The financial credit and prestige of the house which migrated from Nagar in Marwar were raised to such a great height by Manickchand and Fatechand that the Mughal emperor conferred on the latter the title of Jagat Seth or ‘Banker of the World’ as a hereditary distinction in 1722. The house of Jagat Seth reached the zenith of its prestige and prosperity during the time of Fatechand who after wielding great influence in the commercial, economic and political life of Bengal for nearly thirty years died in 1744. He was succeeded by his two grandsons Jagat Seth Mahtab Rai and Maharaja Swaroopchand.51 The major sources of the huge income, tremendous power and great prestige of the house of Jagat Seths were derived from their farms of Murshidabad and Dacca mints, two-thirds of the province’s revenue collection, their control over rates of exchange, interest rates, bill-broking and the provision of credit. By 1720 the Seths had established an absolute monopoly of the mint, obviously with the support of Murshid Quli, the subadar of Bengal. The Fort William Council wrote in 1721: ‘. . . Futtichund having the entire use of the mint, no other shroff dare buy an ounce of silver . . .’.52 The English East India Company was trying for a long time to have minting privileges and the Kasimbazar Council was asked to secure the privileges from the nawab. The Council negotiated with some high officials of the darbar but ‘are informed that while Futtichund is so great with the Nabob, they can have no hopes of that Grant, he alone having the sole use of the mint nor dare any other shroff or merchant buy or coin a rupee’s worth of silver’.53 As the minting of coin was a great source of income, the Jagat Seths were determined to maintain the privilege at all cost. As late as 1743 the Kasimbazar factors reported: ‘. . .but this [mint-

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ing privilege] they can never hope while Futtichund subsists and has that weight with the government which his usefulness to them and great influence at Court naturally gives him . . .’. 54 The European Companies were thus forced to sell all their treasure – both bullion and specie – to the house of Jagat Seth, and under the circumstances they had no other alternative but to accept the price the banking house offered. So great was the control and power of the Jagat Seths over Bengal’s money market that the rates of exchange fixed by the house were accepted by all concerned. Through his great influence on the Bengal administration which he gained by virtue of his steady financial support to the nawab, Fatechand could induce the government to take such measures and pass such regulations for the rate of money exchange as would favour the house. There are several instances of this in the Company records.55 The batta [discount] on recoinage was another source of considerable profit to the house of Jagat Seths. According to Luke Scrafton’s estimate in 1757 the Seths coined Rs. 50 lakhs a year and the profit on this account amounted to Rs. 3½ lakhs.56 The batta on various foreign coins and coins from different parts of India was also a source of great profit to the Seths. The House was the receiver and treasurer of government revenues. It received land revenue payments made by the zamindars and amils [collectors]. It also received other government collections. The Jagat Seths gradually became security for most of the renters. The Seths charged an interest of 12 per cent per annum for the sum they used to lend to the European Companies. On 11 December 1740 the Calcutta Council was informed by Kasimbazar that the Seths would be willing to reduce the rate of interest from 12 to 9 per cent if a request from the Company was made to do so.57 The Calcutta Council wrote to Jagat Seth on that very day requesting a reduction in the rate of interest. On 21 December the English at Kasimbazar borrowed Rs. 60,000 of Jagat Seth’s house at the new rate of 9 per cent.58 From then onward the Company borrowed money at Calcutta, Dacca, Patna etc. at 9 per cent from Jagat Seth’s house. In one day on 29 March 1742 the Company borrowed a sum of Rs. 200,000 at 9 per cent interest of the Seths at Calcutta.59 The Dutch and the French too

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borrowed freely from the Jagat Seths. That the Jagat Seths could reduce the interest rate is an indication of their total control over the credit market in Bengal and northern India. The house of Jagat Seths became rather an institution at least from the ’forties of the eighteenth century, and was a guide to the conduct of the merchants, shroffs and bankers. The Kasimbazar Council reported on 7 June 1742 after Jagat Seth’s retreat from Murshidabad because of the Maratha invasion that ‘no merchant or shroff of any consequence will think themselves safe in the city till Juggutseat comes to reside there’ and that the nawab solicited Jagat Seth to return to the city, ‘his presence being as necessary to the Nabob as to the merchants’ and ‘his conduct being the general guide to all of them’.60 On 14 June it noted that the merchants came back from their places of retreat after Jagat Seth’s arrival in the city.61 Again when Fatechand left Murshidabad in the wake of the Maratha incursion in 1743 the Kasimbazar factors wrote to Calcutta on 6 June: ‘It is wholly impracticable to raise money there for never was known so great a scarcity occasioned by the retreat of Futtichund . . .’.62 They noted on 2 July ‘. . . Futtichund is returned and money is more plenty here . . .’.63 From the early eighteenth century the Jagat Seths were permanent members of the darbar and exerted such an influence over the nawab and his administration that seems unparalleled in the history of Bengal. It may be said that from the time of Manickchand, the influence of the Seths ‘was of chief importance in deciding the result of every dynastic revolution, and they were always in constant communication with the ministers of the Delhi Court’.64 A striking example of the power of the Jagat Seths at Delhi was the manner in which they obtained farmans ratifying the appointment of Bengal nawabs. Fatechand did not exert his influence in Delhi to obtain an imperial farman for Sarfaraj, Murshid Quli’s grandson. But he supported the cause of Shujauddin who succeeded Murshid Quli in 1727 and this facilitated the new nawab’s confirmation by the imperial authority. Shujauddin was therefore more generous than Murshid Quli in his favours to Fatechand. In 1730 when the Kasimbazar Council

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tried to influence the government for the ‘currency of their trade’ through Haji Ahmed and Alumchand, the two most important persons in the darbar besides Jagat Seth, they ‘answered the Nawab has such a regard for Futtichund, it was out of their power to serve us in opposition to him and continue to advise us to make up the affair with him as well as we can’.65 Haji Ahmed told the Kasimbazar factors in 1730 that ‘Futtichund’s Estate was esteemed as the King’s treasure and the Nabob was resolved to see him satisfied’.66 Fatechand was one of the prime movers of the revolution of 1740 which brought Alivardi into power. It is well known the Seths played a major role in the revolution of 1757 which brought about the downfall of Sirajuddaulah. Jean Law, the chief of the French factory at Kasimbazar wrote: ‘It is this family [Jagat Seth] who conducted all his [Alivardi’s] business and it may be said that it had long been the chief cause of all the revolutions in Bengal’.67 As to the wealth of the house of Jagat Seths, it is extremely difficult to form a correct estimate. Gholam Hossein writes: ‘Their wealth was such that there is no mentioning it without seeming to exaggerate and to deal in extravagant fables’.68 ‘As Ganges pours its water into the sea by a hundred mouths,’ wrote a Bengali poet, ‘so wealth flowed into the treasury of the Seths’.69 In the early ’sixties of the eighteenth century William Bolts estimated that the house possessed a capital of 7 krors [70 million] of rupees, ‘as his countrymen calculate’.70 N.K. Sinha thinks in their hey day they must have owned at least 14 krors.71 Luke Scrafton made the following estimate of the annual income of the Jagat Seths in 1757:72 The Jagat Seth’s Estimated Annual Income 1757 On 2/3 of revenue at 10%

Rs. 10,60,000

Interest from zamindars at 12%

Rs. 13,50,000

On recoining 50 lakhs at 7%

Rs. 3,50,000

Interest on 40 lakhs at 37½%

Rs. 15,00,000

Interest from Batta or Exchange rates 7 to 8 lakhs

Rs. 7,00,000 Rs. 49,60,000

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When the Marathas, guided by Mir Habib, led a lightning raid into Murshidabad in 1742, they succeeded in plundering Jagat Seth’s house and carried away two krors of rupees (3 lakhs according to Karam Ali, the author of Muzaffarnama) besides a quantity of other goods. The translator of Seir Mutaqherin was struck with the remarkable fact that this huge sum was all in Arcot rupees and adds ‘so amazing a loss which would distress any monarch in Europe, affected him so little, that he continued to give government bills of exchange at sight of full one cror at a time’.73 Another merchant prince, the famous Omichand, played a major role in the commercial life of Bengal, especially in the last three decades of the first half of the eighteenth century. An upcountry merchant from Agra,74 on being domiciled in Bengal in the second decade of the eighteenth century, he began his commercial operations in Calcutta under the aegis of Bishnudas Seth, a dadni merchant and also at one time the broker of the English Company.75 He had established himself as a leading merchant by the early 1730s. His activities were mainly in two areas, the Bihar economy based upon Patna, and the region centred upon Calcutta with the Company’s investments, financial activities and country trade. In 1731 he along with the Company’s broker Bishnudas Seth was accused of malpractice in the dadni investment. But the Council did not think it prudent to dispense with Omichand’s services and thought it proper to give him a small share of the dadni ‘for fear he should leave us to go to the French or other European nations . . .’.76 In 1735 Omichand was again accused of indulging in fraudulent practices in the investment and the Calcutta Council decided not to ‘let him have any more Dadney . . . and to record him disqualified ever to serve the Company as a merchant again’.77 However he was restored as a dadni merchant again in 1739 and provided investment for the Company until 1753 when the dadni system was replaced by the gomasta system. In 1747 he proposed to undertake one-third of the Company’s total investment ‘in equal porportion for ready money’. While most of the Council agreed to Omichand’s proposal, John Jackson dissented stating that ‘he thinks it imprudent

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to lift up any particular one too high above the rest’.78 In reply to Jackson, John Forster of the Council noted that Omichand was ‘not raised above them by this contract with us but was before their superiority, his natural and acquired capacity for business, his extraordinary knowledge of the Inland trade and his greater command of money all which qualities I think render him a proper person to deal with for ready money . . .’.79 Omichand was given a contract for one-third of the investment amounting to about Rs. 9 lakhs.80 Omichand was not only a dadni merchant but did quite substantial business independent of the Company. Like other merchant princes of the time he tried to monopolize trade in certain commodities. As early as 1731 the English factors at Kasimbazar reported that ‘Omichund’s gomastah had by fraudulent practices obtained an unlawful grant from the Phousdar of Rungpore, for engrossing all the opium of that place . . .’. His brother and gomasta Samjee employed vakil (political agent) of his own at the darbar to represent their interest, and gave valuable presents to government officers.81 It seems that Omichand also tried to monopolize the trade in grain.82 The Court of Directors wrote from London in 1734 that Omichand ‘is no longer worthy of our protection’.83 But the Company could hardly do without transacting business with Omichand, especially for Bihar goods. He was closely connected with Alivardi Khan’s government at Patna from the late 1730s and in 1741 he farmed the mint.84 His brother Deepchand controlled the faujdari of Sarkar ‘Syrang’ which was the major centre of saltpetre production in Bihar.85 The combination of Omichand, Deepchand and Khwaja Wazid had complete control of the Bihar trade and a similar domination over smaller traders and contractors. Omichand was mainly concerned with saltpetre trade and opium business the latter of which he monopolized.86 He was a major contractor with the Company for saltpetre. Through the influence over Bihar administration and farming of centres of saltpetre production, Omichand and Deepchand almost monopolized the saltpetre trade.

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Omichand had a close connection with the administration at Murshidabad. When his name was struck off the list of the Company’s dadni merchants in 1735, Haji Ahmed, Alivardi’s brother and one of the most influential persons in the court, sent word to the Company to reinstate Omichand as a dadni merchant and that he (Haji) would be security for any sum advanced to him.87 Such a strong support from Haji Ahmed only indicates the great extent of Omichand’s influence on the administration. His farming of territories producing saltpetre and the mint at Patna, his monopoly of opium trade etc. could only be procured and maintained through a strong connection with the ruling elite of the country. Clearly he was very influential at the court and could retain the affection of Alivardi with exotic presents.88 He also won over the confidence of the next nawab Sirajuddaulah. He has generally been portrayed as a villain for his role in the Plassey conspiracy. But there should be little doubt as to his capacity, independence and business acumen as a merchant. Orme,who knew him well, wrote: ‘Among the Gentoo merchants established in Calcutta, was one named Omichund, a man of great sagacity and understanding, which he had employed for forty years with unceasing diligence to increase his fortune . . . he was become the most opulent inhabitant in the colony. The extent of his habitation, divided into various departments; the number of his servants continually employed in various occupations, and a retinue of armed men in constant pay, resembled more the state of a prince than the condition of a merchant’.89 There can be no doubt that Omichand was a wealthy merchant. He could provide one-third of the Company’s investment amounting to Rs. 10 lakhs without needing to receive any payment in advance. In 1750 the Company owed him more than Rs. 16 lakhs.90 At the time of Sirajuddaulah’s sack of Calcutta in 1756 an amount of Rs. 4 lakhs in cash besides ‘many valuable effects’ were found in his treasury.91 If the annual income of his brother Deepchund of Patna was at least Rs. 1 lakh,92 Omichand’s earnings can only be guessed. He was the owner of the most of the best houses and ‘had many other interests’ in Calcutta. ‘The whole body of Omichand’s peons and armed domestics’ numbered three hun-

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dred.93 In his will after distributing about Rs. 1,60,000 among the members of his family, he gifted away the entire residue as debottur to Sri Govind Nanakji. After payment of Rs. 37,000 to the Magdalen House and Foundling Hospital in England, this estate was valued at Rs. 42 lahks.94 Like Omichand, the Armenian Khwaja Wazid played a significant role in Bengal’s commercial life in the ’forties and ’fifties of the eighteenth century. The Armenian merchant prince’s commercial empire was based upon Hughli, the commercial capital of Bengal. He had extensive business transactions with the French and the Dutch, and through Omichand with the English. He seems to have been extremely devious and had a passion to extend his commercial interest at any cost. His allegiance was swung by the prospect of commercial advantages. Through political influence, he seems to have consolidated his commercial position throughout the 1740s. By virtue of his great influence on the nawab he managed to gain virtual control over the trade and commerce of Bihar by the late 1740s. Backed by the court he had risen from being a leading Armenian merchant to a monopolist in Bengal’s two major extractive commodities – saltpetre and salt. Wazid obtained the saltpetre monopoly in 1753. The Fort William Council reported on 2 April 1753: ‘Coja Wazeed . . . procured a licence to deal in saltpetre exclusive of any other purchasers’.95 The monopoly in salt trade was even more lucrative and was farmed in 1752 for Rs. 25,000 or Rs. 30,000 a year with Wazid importing salt on favourable customs duties. Batson wrote in 1763: ‘Coja Wazeed of Hughly had the salt farm of Bengal for many years for an inconsiderable sum. . . .’96 An English document of 1752 notes:97 ‘Salt on account of Coja Wazeed is exempted from these duties and pays only: Import: per 100 md. one rupee which is Rs. 0.8 per cent Export: per 100 md. one rupee which is Rs. 0.8 per cent Total: per 200 md. two rupee which is Rs. 1.0 per cent Wazid was also active in maritime commerce in the 1740s and greatly enhanced his position in the country trade by the acquisi-

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tion of a fleet of trading vessels which dominated the maritime trade of Hugli in the 1750s. The Dutch Director Kerseboom and the Fort William Council referred to Wazid’s trading house at Surat.98 Wazid operated his business with monopolistic design. He had tried through his influence with Bengal administration to monopolize the trade of Bihar suba. As a merchant his influence and power were so great that he would never enter into any contract which would require other merchants to stand security for him.99 The tremendous influence Khwaja Wazid exerted in the Murshidabad court, next only to that wielded by the Jagat Seths, is reflected in the fact that he often acted in the role of an intermediary between the Calcutta Council and the nawab, and this indicated the growing importance of the merchant princes in the Bengal politics. There is little doubt that Wazid was closely connected to the Murshidabad darbar. In the course of the Calcutta Council’s debate whether the saltpetre contract should be made with Coja Wazid, the owner of the commodity, or Omichand, Wazid’s close link with the government came out clearly. Most of the Council members referred to him either as a darbar official or closely connected with it.100 Orme described Wazid as ‘the principal merchant of the Province’101 while Watts and Collet of the Kasimbazar factory noted in 1756: ‘Coja Wazeed the greatest merchant in Bengal . . . resides in Hughley and has great influence with the Nabob. . . .’102 Jan Kerseboom the chief of the Dutch factory wrote in 1755 that Khoja Wazid was lately given the title of ‘Faqqur Tousjaar’ [Fakhr-ut-tujar] meaning ‘supporter of the treasure’. He mentioned that Wazid was truly the maintainer of the riches of the rulers in the court of Nawab Alivardi Khan. He gave the nawab rich presents willingly rather than under compulsion and the Dutch chief recommended that Wazid’s friendship should be cultivated as he could prove very useful to the Company.103 Of the merchant princes joining the Plassey conspiracy, Wazid was the last to join the bandwagon. He was a shrewd, talented and unscrupulous operator who belonged to Siraj’s inner circle of advisers. He had been a serious obstacle to the success of a coup

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until May 1757. He joined the conspiracy as he badly needed a revolution to restore the political backing for his commercial empire. But the gamble failed. Plassey brought about the downfall of the merchant princes – sooner or later. After 1757 both Khwaja Wazid and Omichand felt the consequenses of an altered and hostile environment. With Plassey went the foundations of their commercial empires: court backing for trade monopolies and contracts for investments with the European Companies. III In his unique narrative of the trading world of Asia in the early seventeenth century, J.C. van Leur emphasized the function performed by the small trader and the pedlar in the distribution of commercial goods. Though he carefully distinguished between the small peddling trade and the large wholesale merchants to be found in India and China, yet at the same time he adds: ‘But all that does not change the fact that there appears to be only one conclusion regarding international Asian trade. . . . It was a small-scale peddling trade, a trade in valuable high quality products’.104 Niels Steensgaard, in his excellent study of the overland caravan trade in the early seventeenth century, had reinforced the peddler thesis of Van Leur and stressed that the ordinary entrepreneurial character of the Asian trade was a sum of peddling activities. He admits that the peddling trade could make use of fairly sophisticated commercial methods, but he concludes: ‘Nevertheless the ordinary entrepreneur operates on the pedlar level, and there is nothing in the sources to indicate the existence of comprehensive coordinated organizations – of an Armenian, Turkish or Persian version of a Fugger, Cranfield or Tripp’.105 As has been rightly pointed out by K.N. Chaudhuri, the activities of Armenian, Turkish or Persian merchants have not yet been studied in depth from original sources for us to believe uncritically in such a categorical statement. It can be proved from evidence in European sources that the existence of a man like Hovannes or banjaras106 does not justify the conclusion that trade in India or the Middle East was carried on only at the peddling level. In

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India the true pedlars were those who were engaged mostly in local trade. They went from village to village with their pack bullocks collecting wares and selling those in a similar way. But the Armenian merchants were a different category. They were a group of ‘highly-skilled arbitrage dealers’, ready to deal in any commodity that offered the prospect of a profit. There were among them, as the case study of Bengal discussed earlier would endorse, merchants whose status was equal to that of the most successful merchant of London and Amsterdam. The case of Khwaja Surhaud Israel107 and Khwaja Wazid, the two prominent Armenian merchants in Bengal in the first half of the eighteenth century, will bear the point out. The European trading Companies in Bengal generally contracted for procurement of export commodities with substantial merchants who could handle large volumes of trade. The commercial empires and the trading world of Omichand and Khwaja Wazid, and most important of all, the business world of the Jagat Seths – as have been examined earlier – were not ones which correspond to the world of Hovannes but were the Indian equivalent of the business world of the Medici family or Fuggers or the Tripps. We have seen earlier how extensive were the trading activities of Omichand and Khwaja Wazid who monopolized several sectors of Bengal’s economy. The Jagat Seths were the most powerful economic force in the state. It is apparent that the business houses headed by such wealthy and influential merchants as the Jagat Seths, Omichand and Khwaja Wazid were akin to a Fugger or Cranfield in their ability to undertake extensive and organized commercial ventures. It can be safely asserted that the Asian entrepreneurial structure included both great and small merchants, though in its organization it was more similar to the Venetian fraterna than the impartial business form of joint stock Companies. The trading activities of Asian merchants in Bengal, however, confirm Van Leur’s thesis that the merchant gentleman in Asia was a ‘political animal’. His contention that the patrician merchants were closely connected with the ruling hierarchy and in some sense carried on political trade, is corroborated by the

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experience of Asian merchants in Bengal. He writes: ‘. . . the wealthy merchant class was allied to the mighty who exercises social and political authority’.108 This observation conforms well to the cases of the merchant princes of Bengal – the Jagat Seths, Omichand and Khwaja Wazid. We have seen earlier how the power and wealth of the merchant princes were closely allied to the favour from the darbar. The sources of the immense wealth and the great influence of Jagat Seths, as observed earlier, were dependent on court support. So much was the ruling support necessary for the eminence of the Jagat Seths that when it was gradually withdrawn after the battle of Plassey, the house crashed headlong. Similar was the case with Omichand and Khwaja Wazid. One of the main props of their rise to such a great height to eminence in the commercial life of Bengal especially in the ’forties and ’fifties of the eighteenth century was the darbar backing. This close alliance between the merchant princes and the ruling elite, and the great political influence enjoyed by them are in flat contradiction to the findings of Michael Pearson and Ashin Das Gupta.109 In their admirable studies of Gujarat and Surat in the sixteenth and the first half of the eighteenth century respectively, both portrayed the merchant as an independent entity, with hardly any close connection with the ruling hierarchy. But the State was quite concerned about the affairs of the merchants. That the State cared for the merchants and that the latter could turn to the State for redress of their grievances will be borne out by the affairs of 1748-9. Two Armenian ships carrying goods of the Hughli merchants from Jedda and Basra were captured in 1748 by the English fleet. The Hugli merchants represented the affair to Nawab Alivardi Khan who directed the Company to compensate the merchants’ losses, and wrote: ‘The Syeds, Mogulls, Armenians &ca merchants of Hooghly have complained. . . . These merchants are the Kingdom’s benefactors. Their imports and exports are an advantage to all men and their complaints are so grievous I cannot forbear any longer giving ear to them. . . .’110 So great were the political influence and power of the merchants that in their letter to the Calcutta Council the

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Hugli merchants dared write: ‘The skirts of the government are in our hands and we will not cease seeking their justice until we have full satisfaction’.111 As regards K.N. Chaudhuri’s contention that the decline of the Bengal merchants in the early 1750s forced the East India Company to change its investment pattern from the dadni to the gomasta system, it can be safely asserted there was really no decline of the merchants in Bengal, and that the change in the investment system was due to other considerations. The prominent merchant families of Calcutta, the Seths and Basaks, and the Katmas of Kasimbazar were still pre-eminent and quite substantial merchants in the early ’fifties. Moreover merchant princes like the Jagat Seths, Omichand and Khwaja Wazid were in their heydays during these years. So long as these merchant princes were there, Bengal’s credit market was as strong as ever, and there was no paucity of capital for smaller merchants to thrive on their trade. The fact of the matter was that the Calcutta merchants were reluctant to contract for investment on earlier terms as the prices of provisions and staples like cotton and thread as also the wages of weavers and artisans had gone up as a result of the devastations caused by the Maratha invasions, and this left little profit to induce the merchants to trade with the Company without a substantial rise in the prices of export commodities and an adequate advance payment to both of which the Company’s response was in the negative. On the other hand as the private trade of the Company’s servants was dwindling in the early fifties, they saw an opportunity in the introduction of the gomasta system to augment their private trade interest. Nor were the merchants subservient in any way to the European Companies. The Asian merchants in Bengal held fast to their ground in the first half of the eighteenth century and successfully resisted attempts to dictate terms to them by the East India Companies, let alone by individual Europeans.112 Partnership or interdependence as distinct from a later period of subjugation was the keynote of the relationship between Asian merchants and European traders. This only confirms the views held by historians from case studies of different parts of India.113

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Throughout the first half of the eighteenth century the merchants maintained their traditional organization of commerce without any serious strain, though they had to extend the methods generally practiced. There was hardly any innovation to encompass the new situation arising out of the expanded demand for Bengal commodities from the European Companies. The commercial aptitude of the merchants in Bengal was no less inferior to that of the European traders. An analysis of the trading activities and methods of these merchants reveals the keenest competition among buyers and sellers, an eager search for exclusive information, the organization of rings and commercial monopoly which the European Companies tried to foil but often with little success. But trade or business was the concern of individuals rather than of groups acting in common interest. Men tended to act as individual merchants, as members of families, at most one in a group thrown together in the course of business. Impersonal cooperation in institution of business, as had already been developed in Europe by this time, was unknown. Even cooperation at personal level was not easy to come by. As in other parts of India, a commercial venture was mainly the risk of the individual merchant. The remarkable growth of financial machinery for credit and exchange, thanks to the house of the Jagat Seths, and the specialized activities of a large class of merchants, undoubtedly point towards the fact that merchant capital and commercial organization were highly developed in Bengal in the first of the eighteenth century. The general picture of merchant community and commercial organization that one finds in European records is one of a long established and highly skilled tradition. The expertise in financial and trading methods was confined to closed commercial groups and was acquired through hereditary channels. Business transactions more often than not took place within the same caste or communal group. Even within the Hindu community, as the case of the Seths in Calcutta will bear out, one caste group would be reluctant to do business with members from other castes. But the main trait of a merchant for succes in business was his honesty and integrity. It was impossible for

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a merchant in the early half of the eighteenth century Bengal to establish his name without a reputation for honesty. Omichand was an exception, not a rule. The European Companies no doubt dominated the markets from time to time for particular commodities but they hardly ever dominated the ‘commercial outlook’. That position was held by individual Asian merchants who, it appears, through their wealth, influence and business acumen controlled the entire wholesale trade within the area of their operations. The affluence and wealth as also the trading and commercial empire of the merchant princes – the Jagat Seths, Omichand and Khwaja Wazid – compare favourably with the credit and influence of Virji Bohra, Mulla Abdul Ghafur or the Parekhs of the seventeenth century Surat. It is interesting to note that the merchant princes of Surat were indigenous merchants belonging to the locality. But the merchant princes of Bengal, like the prominent merchants in Bengal in the second half of the seventeenth century,114 were all outsiders, none of them belonging to the soil. This is perhaps the historical evidence of the fact that Bengalis in general had seldom been keen about the profession of a merchant. Notes 1. The award of a Commonwealth Academic Staff Fellowship m 1978-9 by the Commonwealth Scholarship Commision in UK enabled me to do most of the research for this paper in U.K.: and the Netherlands. The research in India was possible through a grant from the Indian Council of Historical Research, New Delhi. 2. Coast and Bay Abstract (henceforth C & B Abst.), vol. 2, f. 319, para. 55, 31 January 1722, India Office Library (henceforth IOL), London. 3. For Ostend Company, see Memorie of Alexander Hume, 1730, Stadsarchief Antwerpen, Generaal Indische Compagnie, 5769 I am indebted to Professor K.N. Chaudhuri for letting me have a photocopy of this document from his own copy 4. Bengal Public Consultations (henceforth BPC), Range 1, vol. 17, f 72a, 30 April 1744, I.O.L. 5. C. & B. Abst., vol. 5, f. 193, 13 January 1750; K.K. Datta, ed., Fort William-India House Correspondence and Other Contemporary Papers Relating thereto [1748-57], vol. 1 (Delhi, 1958) (henceforth FWIHC).

Merchants, Companies and Rulers | 353 6. Ibid., vol. 3, f. 264, para. 124, 16 January 1733. 7. Factory Records, Kasimbazar, vol. 6, 25 December 1741, IOL. 8. Ibid., vol. 6, 26 February 1742. 9. Ibid. 10. Despatch Book (henceforth DB),vol.108,f.623,para.45,4 February 1743, IOL. 11. Factory Records, Kasimbazar, vol. 6, 23 April 1743. 12. Ibid., vol. 6, 27 January 1744. 13. BPC, Range 1, vol. 17, f. 27a, 25 February 1744. 14. Ibid., f. 66, 23 April 1744, Factory Records, Kasimbazar, vol. 6, 19 April 1744. 15. BPC, Range 1, vol. 17, f. 119, annex, to consult., 28 May 1744. 16. Ibid., f. 482a, 8 March 1745; f. 488a, 14 March 1745; C. & B. Abst., vol. 5, f. 57, para. 4 & 5, 11 August 1745. 17. BPC, Range 1, vol. 19, f. 147a, 16 March 1747. 18. DB, vol. 109, f. 465, para. 33-39, 6-12 June 1746. 19. For the merchants’ arguments, see, BPC, Range 1, vol. 19, ff. 151a-152; C & B Abst., vol. 5, para. 32, f. 108; Bengal Letter Received (IOL), vol. 21, ff. 213-14, para. 32; FWIHC, vol. 1, pp. 190-1. 20. BPC, Range 1, vol. 19, ff. 209a-210, 22 April 1747. 21. Ibid., f. 255-55a, 25 May 1747, f. 257, 28 May 1747, Bengal Letters Received, vol. 21, ff. 216, 218, FWIHC, pp. 92-3. 22. BPC, Range 1, vol. 19, f. 280, 13 June 1747, C & B Abst., vol. 5, f. 109, para. 39, 13 June 1747, Bengal Letters Received, vol. 21, ff. 220-1, FWIHC, vol. 1, p. 194. 23. BPC, Range 1, vol. 19, f. 286, 16 June 1747. 24. Ibid., f. 289a, 18 June 1747. 25. Ibid., vol. 21, f. 69, 18 May 1748; C & B Abst., vol. 5, para. 33, pp. 1345; FWIHC, vol. 1, p. 298. 26. For merchants’ reasons for refusing to pay penalty, see, C & B Abst., vol. 5, f. 303, para. 123, 20 August 1751, FWIHC, vol. 1, p. 523. 27. BPC, Range 1, vol. 24, ff. 133, 134a, 17 and 20 May 1751, C & B Abst. vol. 5, ff. 303-4, para. 126, 20 August 1751, FWIHC, vol. 1, pp. 523-4. 28. BPC, Range 1, vol. 24, ff. 136, 137a, 23 and 27 May 1751, C & B Abst. vol. 5, f. 304, para. 130, 128, 20 August 1751, FWIHC, vol. 1, p. 524. 29. C. & B. Abst., vol. 5, f. 354, para, 42, 18 September 1752; FWIHC, vol. 1, p. 594. 30. BPC, Range 1, vol. 26, ff. 66a-67, 1 March 1753, C & B Abst., vol. 5, f. 401, para. 32; FWIHC, vol. 1, pp. 680-1. 31. For the merchants’ terms, see, BPC, Range 1, vol. 26, ff. 157a-158, 31 May 1753. 32. Ibid., f. 158, 31 May 1753, C & B Abst., vol. 5, f. 425; Bengal Letters Received, vol. 22, para. 30-1, ff. 416-17, FWIHC, vol. 1, pp. 680-1, 3 September 1753.

354 | Companies, Commerce and Merchants 33. BPC, Range 1, vol. 26, f. 158, 31 May 1753, C & B Abst., vol. 5, f. 425; Bengal Letters Received, vol. 22, f. 417, para. 31, FWIHC, vol. 1, p. 681. 34. For these orders, see, BPC, Range 1, vol. 26, f. 161, 4 June 1753. 35. Ibid., f. 161a, 4 June 1753, C & B Abst., vol. 5, ff. 425-6; Bengal Letters Received, vol. 22, ff. 417-19, para. 32-5; FWIHC, pp. 682-3, para. 335, 3 September 1753. 36. K.N. Chaudhuri, The Trading World of Asia and the English East India Company, 1660-1760 (Cambridge: Cambridge University Press, 1978), pp. 311-12. 37. Koloniaal Archief (henceforth KA), Algemeen Rijksarchief, The Hague, vol. 2791, ff. 94-5. 38. That the gomasta system was not to replace dadni system as a whole, and that gomastas were employed only in Santipur are quite evident from Kerseboom’s report: ‘The Company decided to employ several gomastas in this village [Santipur]. . . ’. KA 2791, f. 95vo. 39. KA 2791, ff. 93vo-96. 40. BPC, vol. 26, f. 165a, annex to consult., 7 June 1753. 41. Eur G37, Box 27 [IOL], 1 September 1755. 42. N.K. Sinha, The Economic History of Bengal, vol. 1 (Calcutta: Firma K.L. Mukhopadhyay, 1965), pp. 8-9. 43. BPC, Range 1, vol. 12, f. 263, 26 Sept. 1737, vol. 22, f. 345a, annex, to consult., 26 October 1749. 44. Ibid., vol. 26, f. 181a, 23 June 1753. 45. Factory Records, Kasimbazar, vol. 12, 21 February 1754. 46. Ibid., vol. 12, 21 October 1754. 47. Orme Mss., India, VI (IOL), f. 1455. 48. Ibid., f. 1525. 49. Ibid., XVIII, f. 5041. 50. Quoted in J.H. Little, The House of Jagat Seth (Calcutta: Calcutta Historical Society, 1967), p. 2. 51. Factory Records, Kasimbazar, vol. 7, 3 January 1745; BPC, Range 1, vol. 17, f. 437, 4 January 1745; C & B. Abst., vol. 5, f. 28, para. 49, 9 January 1745. 52. BPC, Range 1, vol. 4, f. 462a, 9 November 1721. 53. Ibid., vol. 4, f. 438a, 28 August 1721. 54. Factory Records, Kasimbazar, vol. 6, 16 March 1743. 55. BPC, Range 1, vol. 11, f. 349, 8 November 1736; vol. 12, f. 17, 13 December 1736; Bengal Letters Received, vol. 21, f. 507, 13 January 1750; BPC, Range 1, vol. 25, f. 43, 3 February 1752. 56. Orme Mss., India, XVIII, f. 5043, 17 Dec. 1757, Luke Scrafton to Clive. 57. BPC, Range 1, vol. 14, ff. 317-17a, 11 December 1740. 58. Ibid., vol. 14, f. 337, 26 December 1740.

Merchants, Companies and Rulers | 355 59. Ibid., vol. 15, f. 84a, 29 March 1742. 60. Factory Records, Kasimbazar, vol. 6, 7 June 1742; B.PC, Range 1, vol. 15, f. 188, 10 June 1742. 61. Factory Records, Kasimbazar, vol. 6, 14 June 1742; BPC, Range 1, vol. 15, f. 194a, 21 June 1742. 62. Factory Records, Kasimbazar, vol. 6, 6 June 1743, BPC, Range 1, vol. 16, f. 181a, 10 June 1743. 63. Factory Records, Kasimbazar, vol. 6, 2 July 1743. 64. W.W. Hunter, A Statistical Account of Bengal, vol. IX (London: Trubner &Co., 1875), p. 254. 65. BPC, Range 1, vol. 8, f. 260, 13 July 1730. 66. Ibid., vol. 8, f. 234a, 2 June 1730. 67. S.C. Hill, Three Frenchmen in Bengal (London, New York: Longmans, Green and Co., 1903), p. 77. 68. Syed Gholam Hossein Khan, Seir-Mutakherin, trans. Nota Manus [Raymond Mustafa], vol. II (Calcutta: T.D Chatterjee, 1902), p. 458. 69. Quoted in J.H. Little, op. cit., p. 3. 70. William Bolts, Considerations on Indian Affairs (London: J. Almon, 1772), p. 158. 71. J.H. Little, op. cit., p. xvii. 72. Orme Mss., India, xviii, f. 5043, Luke Scrafton to Col. Clive, 17 December 1757, Eur G23, Box 37 (IOL). 73. Quoted in J.H. Little, op. cit., p. 120; J.N. Sarkar, Bengal Nawabs (Calcutta: Asiatic Society, 1952), p. 29. 74. Omichand and his brother Deepchand have been referred to as ‘Agrawallah’ dwelling in Azimabad in 1747, c.f., Factory Records, Patna, vol. 2, 3 April 1742; in another document Omichand was referred to as ‘formerly of Agra’, see, BPC, Range 1, vol. 17, f. 276a. 75. N.K. Sinha, op. cit., p. 6. 76. BPC, Range 1, vol. 8, f. 419, 21 July 1731, vol. 9, ff. 17a-18, 23 March 1732. 77. C. & B. Abst., vol. 4, f. 82, para. 144, 24 January 1735. 78. BPC, Range 1, vol. 19, f. 277a, 8 June 1747, Bengal Letters Received, vol. 21, ff. 219-20; FWIHC, vol. 1, pp. 193-4. 79. BPC, Range 1, vol. 20, ff. 109-9a, 15 August 1747. 80. Ibid., vol. 19, f. 298, 25 June 1747. 81. Ibid., vol. 8, ff. 400-400a, 21 June 1731, vol. 9, f. 22a, 3 April 1732. 82. DB, vol. 105, ff. 453-54, para. 124, 11 February 1732. 83. Ibid., vol.106, f. 182, para. 39, 29 January 1734. 84. G & B Abst., vol. 4, f. 376, 11 December 1741. 85. BPC, Range 1, vol. 17, f. 769, 16 December 1744. 86. Home Misc. Series, [IOL], vol. 192, f. 64. 87. Factory Records, Kasimbazar, vol. 5, 21 January 1736.

356 | Companies, Commerce and Merchants 88. S.C. Hill, Bengal in 1756-57, vol. II (London: J. Murray, 1905), pp. 63-4. 89. Robert Orme, A History of the Military Transactions of the British Nation in Indostan, vol. II, Sec. I (London: J. Nourse, 1768), pp. 50-1. 90. BPC, Range 1, vol. 23, f. 186, 1 July 1750. 91. Orme, op. cit., vol. II, Sec. I, p. 78. 92. BPC, Range 1, vol. 17, f. 372a, 1 December 1744. 93. Orme, op. cit., vol. II, Sec. I, pp. 60, 128. 94. Home Misc. Series, vol. 420, ff. 25, 29; N.K. Sinha, op. cit., vol. I, p. 245. 95. BPC, Range 1, vol. 26, f. 110, 2 April 1753, Bengal Letters Received, vol. 22, para. 18, f. 410. 96. Orme Mss., OV 134, f. 13. 97. Mss. Eur., D 283, f. 22 [IOL]. 98. KA 2791, S.C. Hill, Bengal in 1756-57, op. cit., vol. II, p. 87. 99. BPC, Range 1, vol. 26, f. 132a, 3 May 1753, C. & B. Abst., vol. 5, f. 424, Bengal Letters Received, vol. 22, f. 412. 100. BPC, Range 1, vol. 26, ff. 131a-132a, 3 May 1753. 101. Orme, op. cit., vol. II, Sec. I, p. 58. 102. Records of Fort St. George, Diary and Consultation Book, 1756 (Madras, 1943), vol. 86, p. 32; Orme Mss., OV 19, p. 104. 103. K.A. 2791, f. 128vo. 104. J.C. van Leur, Indonesian Trade and Society, Essays in Asian Social and Economic History (The Hague, Bandung: W van Hoeve Ltd., 1955), pp. 132-3, 197-201, 219-20. 105. Neils Steensgaard, Carracks, Caravans and Companies: the Structural Crisis in the European-Asian Trade in the Early Seventeenth Century (Copenhagen: Lund Studentlittaratur, 1973), p. 30 106. Steensgaard refers to Hovannes’ journal which indicates only small scale transaction of the Armenian merchant; banjaras were grain merchants who traded in Indian villages while moving from one part of the country to another and were involved in small retail trade. 107. For Khwaja Surhaud Israel, see, S. Chaudhury, Trade and Commercial Organization in Bengal, 1650-1720 (Calcutta: Firma K.L. Mukhopadhyay, 1975), pp. 94, 96, 124, 131, 134, 135 108. J.C. van Leur, op. cit., p. 204. 109. M.N. Pearson, Merchants and Rulers in Gujarat (Berkeley, Los Angeles, London: University of California Press, 1976); Ashin Das Gupta, Indian Merchants and the Decline of Surat, c. 1700-1750 (Wiesbaden: Franz Sterner Verlag, 1979). 110. BPC, Range 1, vol. 22, f. 96, annex, to consult., 9 January 1749. 111. Ibid., vol. 22, ff. 134a-135, annex, to consult., 20 February 1749.

Merchants, Companies and Rulers | 357 112. For such situation in the late seventeenth and early eighteenth century, and some of the important Bengal Merchants, see, S. Chaudhury, op. cit., pp. 62-85; I. Ray, ‘The French Company and the Merchants of Bengal’, Indian Economic and Social History Review (Delhi), VIII (1971), pp. 46-8. 113. P.J. Marshall, East Indian Fortunes (Oxford: Clarendon Press, 1976), pp. 44-5; S. Arasaratnam, ‘Trade and Political Dominion in South India, 1750-1790: Changing British Indian Relationships’, Modern Asian Studies (Cambridge), vol. 13, pt. 1, Febr 1979, pp. 21-2; Holden Furber, Rival Empires of Trade in the Orient, 1600-1800, (Minneapolis: University of Minnesota Press, 1976), pp. 315-16. 114. S. Chaudhury, op. cit., p. 98.

chapter 15

The Asian Merchants and Companies in Bengal’s Export Trade, c. Mid-eighteenth Century*

There has long been a surprising consensus among historians that the European East India Companies, especially the English and the Dutch, were the major exporters from Bengal and that they were the principal sources through which silver entered Bengal throughout the first half of the eighteenth century. This implies that the exports of the Asian merchants from Bengal were not at all significant compared with the volume of exports by the Europeans, and hence the Asians had little role in the bullion imports into Bengal during this period. Interestingly enough, the increasing European trade and consequent influx of bullion are said to have had a close connection with the British conquest of Bengal in 1757. It has been argued that, as a result of IndoEuropean oceanic trade, a ‘community of interest’ had developed between the Hindu mercantile-banking class of Bengal and the European Companies.1 Even the latest studies emphasize the role of European trade as the major source of bullion imports and in fostering close relations between the European Companies and

* The final draft and revised version of this essay was written at the Maison des Sciences de l’Homme (MSH), Paris, in May-June 1992. I am thankful to the MSH for the help and assistance extended to me during this period. This was published in Sushil Chaudhury & Michel Morineau, eds., Merchants, Companies and Trade: Europe and Asia in the Early Modern Era, Cambridge, 1999, pp. 300-20.

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the commercial-banking class in Bengal. These authorities even suggest that the interest of the Indian merchants, landholders and warrior class ‘had become far too closely intertwined with the fate of the Europeans’ so that the expulsion of the British from Calcutta ‘could not be borne long’ by the ruling elite and hence the Plassey revolution of 1757 which signalled the British conquest of Bengal.2 The aim of this chapter is to re-examine the whole issue in the light of new evidence and to try to see how far the European trade was the most important factor in the commercial economy of Bengal in the mid-eighteenth century – an assumption which has been taken for granted for too long. There is no denying the fact that the Europeans were dominant in Bengal’s seaborne trade but that does not necessarily imply that they were far ahead of the Asians in Bengal’s export trade as a whole or the largest importer of bullion for that matter. For the above does not take into account Bengal’s export trade by overland routes which had always been extremely significant. It is generally assumed that with the fall of the great empires – Mughal, Persian and Ottoman – and the consequent decline of important ports like Surat, the overland trade was doomed. The reason for this sort of assumption, it seems, was mainly owing to the lack of data regarding India’s overland trade compared with the abundance of quantitative material in the Company archives on European exports from Bengal. It will be argued in this essay that the volume of exports by the Asian merchants from Bengal even in the mid-eighteenth century was much larger than that of the European Companies. From the qualitative as well as quantitative evidence we have now, admittedly not exhaustive (hopefully we will be able to unearth more material on this aspect from both European and indigenous sources), it can be shown that the share of the Asian merchants even in the two most important European export commodities, namely raw silk and textiles, was much higher than that of the Europeans. Among recent historians, it was Sukumar Bhattacharyya who first emphasized the overwhelming role of the European trade in Bengal’s economy. He even went to the extent to suggest that,

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around 1740, the Bengali economy became virtually dependent on the English East India Company.3 Implied corroboration of Bhattacharyya’s thesis is to be found in Brijen K. Gupta’s book which was published in 1962.4 In my own work of 1975, I too put emphasis on European trade though I was more cautious than others.5 In his seminal study, K.N. Chaudhuri (1978) emphasizes the major role of the Companies in Bengal’s export trade in no uncertain terms: The development of European trade with Bengal in the late seventeenth century had the effect of shifting the balance radically in favour of the seaborne trade. During the first half of the eighteenth century Europe was unquestionably Bengal’s chief trading partner and its textile industry had not only expanded at a rapid rate to keep pace with the increased demand but had also fully adjusted its output to the special specifications required for selling in Europe.6

Om Prakash’s notable contribution on the Dutch Company (1985) also reiterates the great significance of European trade in the Bengali economy.7 Two latest studies on the subject in the New Cambridge History of India series, by P.J. Marshall and C.A. Bayly, extremely commendable in many ways, also state in unequivocal terms the major role played by the European Companies in Bengal’s commercial economy and that the Companies were the main importers of bullion into Bengal in the mid-eighteenth century.8 Marshall writes: ‘Through their [merchants’] enterprise Bengal maintained a favourable balance of commodity trade with areas like the Middle East, the Philippines and above all Europe which settled their deficits in bullion. The European companies were the main importers of bullion.’9 The main reason for such assertions is not only the lack of sufficient information regarding the export trade of Asian merchants from Bengal but also possibly the Eurocentric view of the historians working in this field. The qualitative as well as the quantitative evidence on Bengal’s export trade by the Companies and Asian merchants in and around the mid-eighteenth century will give us a rough idea of their comparative position as far as possible within the limitation of the paucity of material in general on this aspect. But first

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let us see what was the situation of the Asian trade from Bengal around 1670, i.e. prior to significant penetration of Bengal’s silk and textile markets by the European Companies. The descriptive material in both the Dutch and the English archives leaves little doubt that there was a thriving trade carried on by the Asian merchants in silk and textiles from Bengal. A Dutch report on Malda, one of several important centres of textile production, in 1670 states that textiles worth Rs. 0.8 to 1 million were sold in the district for export to places like Pegu, Agra, Surat, Persia, etc. Henry Cansius, who prepared the report, gives a detailed breakdown of the aurungs or production centres in the district and the value of the amount produced in each aurung for export.10 This is the nearest quantitative evidence one gets in the Dutch records of the textile export by the Asian merchants from an important centre of textile production in Bengal before the large-scale European participation in this sector of Bengal’s export trade. A similar report by Richard Edwards of the English East India Company in 1676, a few years before the establishment of the English factory in Malda, states that the ‘chief trade’ in the district was carried on by the ‘factors of Agra, Gujarat and Benares merchants who yearly send them 15 to 25 pattellas [a large flat-bottomed boat] whose lading consists of Cossaes, mulmuls . . . mundils and elaches11 of all sorts, valued at about [Rs.] 1 lakh each pattella and about the half of that amount by landing said goods and raw silk’.12 In other words, the textile export of Asian merchants from Malda by riverine routes is estimated at Rs. 1.5 to 2.5 million and that by land at about Rs. 0.75 to 1.25 million (including silk in the latter case).13 Even assuming that the value of the silk export (though silk was not an important product of Malda as compared with textiles) was half of the total value of the export by land (i.e. the share of silk and textiles being Rs. 0.375 to 0.625 million each), the value of the total textile export, combining the export by riverine and land routes, stands at between Rs. 1.9 and 3.1 million. So the value of textile exports by Asian merchants from Malda, according to Edwards’ estimate, could have been around Rs. 2 to 3 million which is no doubt higher than the estimate of Cansius. In the light of the two

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divergent estimates, though it is extremely difficult to arrive even at a rough figure, perhaps it would be safe to assume, on the conservative side, that the textile export by the Asian merchants from Malda alone could have been anything between Rs. 1 and 3 million in the 1670s. Here one has to take note of the fact that Malda, though an important centre of textile production, was certainly not the major one. The honour goes to areas in and around Hughli, Dhaka and Kasimbazar. In an account of the textile export from Dhaka in 1747, the annual export from the district was estimated at Rs. 2.85 million.14 Though Dhaka was famous from the time of the Romans for the production of legendary muslin, it also produced fine and ordinary calicoes in large quantities.15 Similarly Kasimbazar, though famous for its silk piece-goods, also produced mixed piece-goods and coarse textiles. Even in the late 1740s and early 1750s, especially in the first quinquennial period of the 1750s, the Asian merchants exported from Bengal silk textiles alone worth around Rs. 0.63 million a year on average.16 Besides, there were other important traditional centres of textile production like Birbhum, Hughli, Balasore, Santipur in Nadia and Radhanagar in Midnapore, etc. So if the value of textiles exported by the Asians from Malda alone could possibly be valued at Rs. 1 to 3 million in the 1670s, the value of the total amount of textiles exported from several other important production centres could be anybody’s guess. Coming to the mid-eighteenth century, one finds quite a lot of qualitative evidence in the European archives which indicates the Asian lead in Bengal’s export trade over the Companies, especially in the silk trade. Though the European Companies exported a large amount of raw silk from Bengal, they could hardly control the silk market in Bengal as they were only minor partners in the field. The privilege was enjoyed by the large number of Asian merchants active in Bengal’s silk market. The English Council at Kasimbazar made this amply clear in several letters to Calcutta.17 In 1744 the Kasimbazar factors referred to their inability to control the silk market in no uncertain terms: ‘Though the price is so much higher than the last year, it is not in

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our power to help it as we cannot command the market which has been higher lately.’18 It was in the silk investment that the European Companies had to face the stiffest competition from various groups of Asian merchants operating in Bengal. Of these groups, the Gujaratis were the most important and it can be safely asserted that their operation acted as ‘a general indicator’ of the trends in the Bengal silk market.19 In 1726 the Kasimbazar Council entered into contract with the silk merchants in a hurry, apprehending that ‘the extraordinary demand of the Gujaratis would raise the price further’.20 Apart from the Gujaratis, the different groups active in Bengal’s silk market were the merchants from Lahore, Multan, Benares, Gorakhpur, Hyderabad, Delhi (‘Calwars’), Agra and Jangipur in Murshidabad district, the last acting as gomastas or agents of Benares merchants. And of course, the Armenians too were there and another group referred to as ‘Burdelwalis’ in the records, probably from North India, was also active in the procurement of silk. It is significant that sometimes the demand of these groups of merchants, even excluding the Gujaratis, had its impact on the silk market and enhanced the price of raw silk. As a young factor in the Kasimbazar factory, Warren Hastings, reported in 1756 from Powa, one of the silk aurungs on the other side of the river Padma, the prices of pattani or unspun silk suddenly rose there not because of the purchases of Gujarati merchants but because of ‘the arrival of every considerable foreign merchants at the aurungs’. He identified these merchants as ‘Calwars’, Gorakhpuris and Jangipuris ‘who are reported to have bought upwards of six or seven lack [1 lack =0.1 million] of rupees for the provision of putney [pattani], especially the finest sorts which they are daily buying up notwithstanding its dearness’.21 An intelligent person as he was, Hastings tried to analyse and also rationalize the behaviour of these indigenous merchants who were buying up silk without the least regard for price. He wrote: For the two former [Calwars and Gorakhpuris] coming from the distance of Dillee and Benares are in a manner necessitated by the long journeys they had taken for this commodity, to take it at such a rate as the market affords; nor are the latter [Jangipuris] less free in this

364 | Companies, Commerce and Merchants respect, for tho’ Jungapoor lies but a few days’ journey from hence yet as they are most of them gomastahs and their constituents living likewise as far off as Benares they are obliged to comply with whatever orders they receive from thence, let the price be ever so great.22

If Hastings’ report is correct (we do not see any reason why it should not be, as he collected the information on the spot), then it is evident that Indian merchants, not including the Gujaratis who were the most important group among them, exported silk worth Rs. 0.6 to 0.7 million from the not-so-important silkproducing centre of North Bengal only. If that is so, one can only guess what could have been the value of the exports by the Asian merchants from Kasimbazar, the most important centre of silk manufacture and trade in Bengal, and where the Asian merchants, including those from Gujarat, Lahore, Multan, Benares, Agra, Gorakhpur, etc., were vigorously active in buying silk. Now, taking up the actual export of raw silk by the European Companies, one finds that throughout the second half of the seventeenth century the Dutch export was much larger than that of the English. Even in the first two decades of the eighteenth century, the Dutch lead was maintained, as is apparent from Table 15.1. But as the Dutch trade declined in general in the 1720s, the English export of raw silk from Bengal surpassed that of the Table 15.1. Quinquennial totals of Dutch and English exports: raw silk, 1700-20 Years Total 1700/1-1704/5 1710/11-1714/15 1715/16-1719/20 (Dutch for three years only, 1715/16-1717/18)

(Dutch lb) 754,648 751,054 625,653

Dutch exports Average Average (Dutch lb) 150,930 150,211 208,551

(Eng. lb) 164,514 163,730 227,321

English exports Total Average (Eng. lb) 476,283 259,292 635,225

(Eng. lb) 95,256 51,858 127,045

Sources: Prakash, Dutch East India Company and the Economy of Bengal, p. 218 for Dutch exports; S. Chaudhury, Trade and Commercial Organization in Bengal, pp. 254-5 for English exports. All calculations are in English small pounds. The Dutch pond is converted at rate of 1 Dutch pond = 1.09 lb avoirdupois.

The Asian Merchants and Companies | 365 Table 15.2. Quinquennial totals of English exports: raw silk, 1730s-50s Years 1730/1-1734/5 1735/6-1739/40 1740/1-1744/5 1745/6-1749/50 1750/1-1754/5

Total (great lb) 702,907 714,004 596,051 300,001 286,620

Average (great lb) 140,581 142,801 119,210 60,000 57,324

Average (small lb) 210,872 214,201 178,815 90,000 85,986

Average (mds) 2,812 2,856 2,384 1,200 1,146

Source: Compiled and computed from K.N. Chaudhuri, Trading World, p. 534. 1 great lb = 1.5 small lb. In Bengal silk was weighed in maunds (mds) and seers, 40 seers making a maund. One Bengal maund was equivalent to 75 lb, i.e., lb avoirdupois or what were called small lb.

Dutch towards the end of the 1720s.23 As a matter of fact, the English export of raw silk reached its peak in the 1730s. Table 15.2 indicates the average annual export by the English Company, which fell sharply from around the mid-1740s, reaching its nadir in the early 1750s in the period 1730 to 1755. It is evident from table 15.2 that the maximum annual average of raw silk exported by the English Company was 2,856 mds. or 0.21 million lb in the peak period of the 1730s and never exceeded 3,000 mds. or 0.23 million lb. Indeed, from the mid-1740s till the mid1750s, the average annual English export was even less than half of that in the boom period of the 1730s. As against this, the Dutch export of raw silk was more or less steady from the 1730s to the 1750s, with a marginal decline in the 1740s, recovering again in the early 1750s. This is apparent from the figures in Table 15.3: Quinquennial totals of Dutch exports: raw silk, 1730s-50s Years

Total (Dutch lb)

Average (Dutch lb)

Average (Eng. lb)

Average (mds)

1730/1-1734/5

335,319

67,064

73,100

975

1740/1-1744/5 1750/1-1754/5

308,448 333,210

61,689

67,241

897

66,642

72,640

969

Source: Collected and computed from Bengal export invoices in Dutch records, Algemeen Rijksarchief, The Hague.

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Table 16.3.24 It is clear from this table that the Dutch export of Bengal raw silk in the period 1730 to 1755 never exceeded 1,000 mds or 0.08 million lb, though it was probably higher than the figure for the late 1720s and certainly much lower than the average annual export in the first two decades of the eighteenth century.25 In other words, in the crucial period of the late 1740s and the early 1750s, the total average annual export of Bengal raw silk by the two major European Companies involved actively in Bengal trade certainly did not exceed 2,500 mds. or 0.19 million lb, even taking the English export at 1,500 mds. and the Dutch at 1,000 mds.26 Adding to this the export of raw silk by other European Companies, which could not have been more than 1,000 mds. at the maximum,27 the total European export of raw silk would have been 3,500 mds. or 0.26 million lb in a year on average at the most. The important question that arises is what was the amount of raw silk exported by the Asian merchants from Bengal as against the European export? We are fortunate to have unearthed a complete list of silk exports by the Asians from Bengal from 1749 to 1767 from the records at the India Office Library. The report was prepared by W. Aldersey, who was chief of the Kasimbazar factory in 1769, in response to an official query as to the causes of the decline in the silk trade and industry in Bengal. Aldersey specifically mentions that he collected the information from Murshidabad customs house and that it included the raw silk exported by ‘natives only on which Duties have been collected’.28 From his list, we have computed here the quinquennial totals of silk exports by the Asians from 1749 to 1758 for a comparative study of the Asian and European exports of raw silk (see Table 15.10 and Figure 15.1), the full details of which are given in Tables 15.5 and 15.7. Table 15.4 clearly indicates that the Asians were far ahead of the Europeans in the export of raw silk from Bengal. While the export by the Asian merchants amounted on average to 19,803 mds. or about 1.5 million lb in the early fifties and 14,938 mds. or about 1.1 million lb in the mid-fifties, the Europeans exported only about 3,500 mds. or 0.26 million lb in a year on average

The Asian Merchants and Companies | 367 Table 15.4: Quinquennial totals of silk exports by Asians, 1749-58 Years 1749-53 1754-8

Total (mds)

Average (mds)

Average (lb)

Total value (Rs.)

Average value (Rs.)

99,016 74,692

19,803 14,938

1,485,240 1,120,380

27,724,365 20,913,345

5,544,873 4,182,669

Source: BPC, Range 1, vol. 44, Annex to Consultation, 19 June 1769, IOR; for the complete list, see Table 15.7.

during the late forties through the mid-fifties. In other words, it can be said that the European export was less than one-fifth of what was exported by the Asian merchants around this time. Again the total value of the European export of raw silk, taking it to be 3,500 mds. a year and at the rate of Rs. 7 per seer (40 seers making a maund), which is the rate at which the Asian export was valued in the said English Company records, would have been only around Rs 0.98 million. On the other hand, the total value of the silk exported by the Asian merchants is estimated at around Rs. 5.5 million on average during the period from 1749 to 1753 and Rs. 4.1 million in the next five years from 1754 to 1758, i.e. Rs. 4.8 million on average during the entire period. So as far as the total value of the raw silk exported by the Europeans and Asians is concerned, the European share was thus only between one-fifth and one-quarter of the Asian share. As such, and considering the fact, attested by many contemporaries including the Dutch Directors and English officials in Bengal,29 that the Asians too had to bring in silver/cash to Bengal for buying raw silk, textiles and other commodities, the assertion that the Europeans were the main importers of bullion into Bengal in the pre-Plassey period can hardly be tenable. So far as the export trade in textiles is concerned, we are admittedly on much less firm ground than in the silk trade. Yet, as we have seen earlier, before the penetration of the Europeans in the textile market, Malda, one of several major textile-producing areas – but surely not as important as Dhaka, Hughli and Kasimbazar – alone exported textiles worth about Rs. 1 to 3 million to its traditional markets. And as yet we have no definitive

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evidence that the supply for the ‘great’ demand in the European markets from around the 1680s seriously affected Bengal’s traditional exports to other regions or that Bengal met the European demand by diverting the supplies from her traditional buyers. So it can be assumed that, even in the late seventeenth or first half of the eighteenth century, Bengal continued to supply her traditional markets while at the same time meeting the new European demand. This seems to be quite evident from the presence of merchants from various parts of Asia in different textile aurungs of Bengal procuring cloth side by side with the agents/merchants of the Companies. In the European records there are regular references to the stiff competition faced by the Companies from Asian merchants in Bengal’s textile market. The quantitative evidence that we have for Asian textile exports, meagre though it is, also indicates that the Asian merchants had a definite edge over the Companies even in this sector of Bengal’s export trade. In an estimate of the total textile exports from Dhaka in 1747, the Asian share – including that of the Armenians – stood at twothirds of the total compared with one-third for the Europeans, including European private trade.30 The Asian lead in the textile trade in general is confirmed by the Dutch sources which refer to advances given for investments in textiles (which were about 50 per cent around this time31) to the tune of Rs. 7.6 million by the Asians and Europeans excluding the Dutch, of which the combined English and French share could not have been more than Rs. 3 million.32 Hence the Asian share would have been about Rs. 4.5 to 5 million. This seems quite plausible in view of the fact that, from among several important centres, the export by Asian merchants from only two (Malda and Dhaka for which we have some rough quantitative data, as seen earlier) was quite substantial. The Asian merchants, however, unlike the Europeans it seems, bought quite a large amount of textiles from the aurungs and spot markets in the same manner as they bought most of their silk without giving out advances. So, even if we ignore the Dutch report which is used here mainly as corroborative evidence despite its vagueness, our main hypothesis will remain unaltered.

The Asian Merchants and Companies | 369

It would be interesting to note here that in the Danish account of the ‘Cloth Production and Trade’ in late eighteenth-century Bengal, when the trade of the Asian merchants declined considerably for reasons explained later, the total annual production of garahs, one of the staple piece-goods of export from Bengal, was estimated at 400,000 pieces, of which only 160,000 pieces were supposedly exported annually to Europe.33 The significant fact one should remember is that areas like Hughli, Kasimbazar, Malda and Patna actually produced more medium and ordinary piece-goods (these were the main staples of the Bengal textile export) than Dhaka for export to different parts of Asia and Europe. As a matter of fact the Dutch Company (probably the same would be the case, more or less, with the English too34) exported more than 50 per cent of the total value of its textiles from the Hughli area (possibly including Malda where piecegoods were procured through dadni merchants of Hughli), 25 to 38 per cent from Kasimbazar and 8 to 12 per cent from the Patna area while the share of Dhaka varied from 5 to 10 per cent in the mid-eighteenth century. This will be apparent from an analysis of Dutch textile exports for 1753-4 and 1754-5 for which we could find area-wise breakdown.35 Fortunately we have been able to find precise information regarding the export of silk piece-goods from Bengal by the Asian merchants which will undoubtedly confirm the Asian lead in textile exports. This was included in the report of W. Aldersey on the silk trade which we have already referred to. According to the report, the total value of silk textiles exported by the Asians in the period between 1749 and 1753 amounted to Rs. 0.63 million, and Rs. 0.43 million from 1754 to 1758, on average in a year.36 It will be obvious from the computation in Table 15.9, showing the comparative position of the Asians and Europeans in the export of silk textiles from Bengal (piece-wise) in the first quinquennial period of the 1750s, that the Asians had a definite edge over the Europeans in this sector. Though the table does not take into account the French export for lack of precise data, it can well be assumed that the French share could not have been more than half of the Dutch or English export,37 i.e. between

370 | Companies, Commerce and Merchants

12,000 and 15,000 pieces at the uppermost limit. Thus the average annual European export of silk textiles would have been around 67,000 to 70,000 pieces while the Asian export was more than 91,000 pieces. It is to be noted in this connection that silk textiles were perhaps not a staple in the Asian export from Bengal. It was cotton piece-goods – ordinary, medium and fine – which comprised the bulk of the Asian export to the Middle East and Central Asia. That the demand in these areas was for the latter categories of textiles is evident from an analysis of the Dutch exports to the Persian Gulf region where, in the first quinquennial periods of the 1740s and the 1750s, the share of silk textiles was nil.38 If that is so, and considering the rough estimates of the textile export from Malda and Dhaka, and also that the Asians advanced about Rs. 4.5 to 5 million (generally at 50 per cent) for textiles, though they also bought a large amount from the spot markets, perhaps the total value of the Asian textile export could have been in the range of Rs. 9 to 10 million. That this is not an overestimation can be established from other indirect evidence and assumptions. If the share percentage of the textiles exported by the Dutch and the English from Dhaka ranged between 5 and 10 per cent in the early 1750s, the share of Dhaka textiles in the Asian exports could be assumed to have been no more than 10 per cent.39 In the estimate of the textile export from Dhaka in 1747, the value exclusively for the Asian export is mentioned as Rs 1.15 million,40 which means that the total value of the Asian textile export from Bengal could have been around Rs. 11.5 million. Adding up the value of silk exports by Asians (Rs. 4.8 million on average) with that of textile exports (Rs. 9 to 10 million), the total value of Asian exports of textiles and raw silk could have been at least Rs. 13 to 14 million a year, leaving aside minor exports like sugar, opium, grains, etc. As against this, the total value of the exports by the European Companies (including all commodities) during this period would not have been more than Rs. 8 to 9 million at the most. One has to bear in mind that these are crude estimates and possibly subject to a wide margin of error. But still they give us a clear indication of

The Asian Merchants and Companies | 371

the comparative position of the Asians and Europeans in Bengal’s export trade in the mid-eighteenth century. Here it has to be emphasized that the Asian lead in silk exports was so overwhelming that even a near-equal position in textile exports with the Europeans would give the Asians an indisputable supremacy in Bengal’s export trade. For example, the Asians exported the highest amount of silk in 1751 when its value was estimated at Rs. 6.6 million which was only a little less than the value of the total exports (including all commodities) of the European Companies. That there was a big difference in the volume and value of the export trade by the Europeans and Asians from Bengal will also be absolutely clear from qualitative evidence in several contemporary sources. To cite just one, describing the European trade, Harry Verelst, an official of the English Company, said that it was ‘large’, but when he referred to the Asian trade, he used the word ‘vast’. As such it can be asserted, though tentatively in view of the paucity of quantitative evidence at our disposal at the moment, that the export of the Asian merchants from Bengal around the mid-eighteenth century was still larger than that of the European Companies. And considering the fact that everyone – whether Asians or Europeans – had to import into Bengal bullion/cash for their purchases, the Asian import of bullion into Bengal would have been much higher than that of the European Companies. The Asian merchants, no doubt, imported into Bengal a few commodities like cotton, salt, non-precious metals and few luxury items, but their total value compared with the Asian exports from Bengal was negligible.41 That bullion and specie comprised the main bulk of the imports by Asian merchants will be evident from contemporary observers like Verelst, Scrafton (whom we will quote later), etc. who refer to this fact in no uncertain terms. It would be worthwhile to investigate the direction/destination of the exports by the Asian merchants, especially of raw silk because it was exported in such huge quantities even in the late 1740s and the early 1750s. However, one has to keep in mind that evidence of such nature is hard to come by in our sources.42

372 | Companies, Commerce and Merchants

We were extremely fortunate to have found some data regarding the direction/destination of raw silk exports by the Asian merchants from Bengal during 1775-7. By reading back from the evidence of the 1770s, it is possible to provide some idea of the direction/destination of the Asian silk trade in the prePlassey period. One has to remember in this connection that in the 1770s there was a precipitate decline of the Asian merchants’ trade under the ruthless repression of the English Company and its servants backed by political power – a process which started immediately after 1757-8. The decline of the Asian merchants’ trade is evident from the report of Aldersey which we quoted earlier and the table from his report (Table 15.5) will bear out our point. It is apparent from Table 15.5 that the average annual export of the Asian merchants during the quinquennial period from 1763 to 1767 stood at 6,779 mds, which tallies more or less with the export figure from 1775 to 1777 which was on average 7,025 mds. The destination as well as the total amount of the silk export by the Asian merchants from 1775 to 1777 is recorded in the Patna Customs House Register and, for the three years combined, the totals are as given in Table 15.6. From this table, it is clear that during this period the maximum amount of silk from Bengal went to Mirzapore, which was a distribution centre rather than a manufacturing one, and it can be assumed Table 15.5: Volume and value of raw silk exported by Asian merchants, 1759-67 Year 1759 1760 1761 1762 1763 1764 1765 1766 1767

Volume (mds) 14,394 13,056 10,562 5,953 6,601 8,326 7,191 5,180 6,599

Value (Rs.) 4,030,387 3,655,791 2,957,229 1,665,845 1,848,333 2,331,193 2,013,525 1,450,307 1,847,832

Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR.

The Asian Merchants and Companies | 373 Table 15.6: Destination/direction and triennial total of silk exported by Asian merchants, 1775-7 Destination/direction (in descending order of total quantity) Mirzapore Lahore Multan Aurangabad Agra Benares Delhi

Total quantity (mds) 12,568 3,851 1,649 1,471 598 511 427

Source: Board of Revenue, Misc. Proceedings, Range 98, vols. 18, 20, 22, IOR. Average annual export = 7,025 mds.

that this silk was re-exported from Mirzapore in northern and western directions. The next highest amount was destined for Lahore, while Multan and Aurangabad came third and fourth in descending order of total quantity exported. If this was the destination/direction of Bengal silk exported in the mid-1770s, it can be reasonably assumed that the destination/direction of Bengal silk exported by the Asian merchants in the late 1740s to the mid-1750s would have been similar. That Bengal’s traditional export by the Asian merchants was extremely significant even in the pre-Plassey period, i.e., before the mid-eighteenth century, is stated in unequivocal terms by the Company officials who were in Bengal both before and after Plassey, though these have been overlooked by historians in general. Harry Verelst, a responsible official of the Company, wrote referring to Bengal in the pre-Plassey period: Besides the large investment of the European nations, the Bengal raw silk, cloths etc. to a vast amount were dispersed in the West and North inland as far as Guzzrat, Lahore and even Ispahan. . . . From this view then of the state of trade heretofore in the Provinces . . . it will clearly follow that the whole amount of the Trade of the Provinces was a clear gain to them by an exchange of their produce for bullion. . . . If these facts are admitted we can no longer be at a loss for the sources of the prodigious Ancient riches of Bengal, as there flowed in every year an increase of specie equal to the Amount of the export of the Country.43

374 | Companies, Commerce and Merchants Table 15.7: ‘Extracts from Customs Office Receipts at Murshidabad, 1749-58’, volume and value of raw silk exported by Asian merchants Year

Volume (mds)

Volume (Eng. lb)

Value (Rs.)

1749 1750 1751 1752 1753 1754 1755 1756 1757 1758

20,037 19,571 23,740 17,615 18,053 15,249 12,269 7,635 21,347 18,192

1,502,775 1,467,825 1,780,500 1,321,125 1,353,975 1,143,675 920,175 572,625 1,601,025 1,364,400

5,610,423 5,479,786 6,647,095 4,932,221 5,054,840 4,269,594 3,435,310 2,137,762 5,977,045 5,093,634

Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR. After this table there is a note which reads: ‘The above account includes only the Trade on which Duties were really paid to the pachotra Daroga [Royal Customs House] but besides this there was formerly carried on a very considerable trade in these articles by Juggutseats House and others who had interest with the Nizamat for these goods to pass Duty free. . . . The above is the trade of Natives only on which Duties have been paid.’

Another official, William Bolts, stated: A variety of merchants of different nations and religions, such as Cashmeerians, Multanys, Patans, Sheiks, Sunniasys, Paggayahs, Betteeas and many others used to resort to Bengal in Caffeelahs or large parties of many thousands together with troops of oxen for the transport of goods from different parts of Hindustan.44

That these Asian merchants bought Bengal goods with cash brought from outside Bengal is corroborated by Luke Scrafton who wrote: Till of late years [meaning pre-Plassey period mainly] inconceivable numbers of merchants from all parts of Asia in general, as well as from the rest of Hindostan in particular, sometimes in bodies of many thousands at a time, were used annually to resort to Bengal with little else than ready money or bills to purchase the produce of these provinces.45

After all this, one need not have much doubt about the exports of Asian merchants from Bengal and their import of silver/cash

The Asian Merchants and Companies | 375 Table 15.8: ‘Extracts from Customs House Receipts at Murshidabad from 1749 to 1757’, volume and value of silk textiles exported by Asian merchants Year

Volume (no. of pieces)

Value (Rs.)

1749

140,256

841,586

1750

77,872

467,232

1751

124,675

748,050

1752

92,475

554,850

1753

89,978

539,868

1754

74,978

449,868

1755

75,062

450,372

1756

50,532

303,192

1757

91,162

546,972

1758

65,162

390,972

Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR. The note after table 15.7 is applicable to this table too.

Table 15.9: Quinquennial total and average of silk textile exports from Bengal: comparative position of Asians and European Companies, 1750-1/1754-5 Years

Asians (pieces)

European Companies (pieces) Dutch English Total 12,890 12,760 25,650

1750-1

124,675

1751-2

92,475

39,628

20,041

59,669

1752-3 1753-4 1754-5 Total Average

89,978 74,978 75,062 457,168 91,434

27,777 29,029 40,883 150,207 30,041

32,615 24,663 34,160 124,239 24,848

60,392 53,692 75,043 274,446 54,889

Source: Asian export, BPC, Range 1 vol. 44, Consultation, 19 June 1769, IOR; Dutch export collected and computed from export invoices in VOC records; English export computed from data supplied by K. N. Chaudhuri.

in the mid-eighteenth century, the amount of which, as we have argued in this chapter, was greater than that of the Europeans. In conclusion, the main point to emphasize is that it is high time that historians tried to have a fresh look at the compara-

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tive position of the European trade and the trade of the Asian merchants operating both within and without the Indian subcontinent. It is important to note that even with the precipitate decline of the Great Mughal Empire around the mid-eighteenth century, the demand for high-quality Bengal textiles, not to speak of the common and cheap varieties, did not show any marked decline. The successor states and others like the Bengal nawabs, the nawab wazir of Oudh, the Rohilla chieftains of the north and the Nizam in the south vied with each other to make their courts miniature replicas of the Mughal darbar. As a result, the ‘craze’ for fine Bengal textiles did not diminish to any appreciable extent which is obvious even from Taylor’s report of Dhaka cloth manufacture in 1747. Despite wars and political instability in the mid-eighteenth century in general, there is no positive evidence that these hampered the trade of Asian merchants to any great extent. Shrewd, efficient and well known for their ability to thrive on a very low margin of profit and against heavy odds, the Asian merchants seem to have kept alive their traditional trade to western and northern India, and even to Central Asia and the Middle East, bypassing war-torn or politically unstable areas as and when this became necessary.46 Political instability or decay might dampen trade in general but at the same time neither can lessen the basic needs for food and clothing. Thus, as no alternative source of supply seems to have emerged till the mid-eighteenth century, it is reasonable to assume that Bengal and other production centres of the essential items continued to supply their traditional markets through the Table 15.10: Comparative position of Asian and European silk exports (quantity and value), 1750s Years 1749-53 1749-58 1754-8

Asian exports Av. qty (lb) Av. value (Rs.) 1.5 million 5.5 million

European exports Av. qty (lb) Av. value (Rs.) 0.26 million

1.1 million

0.98 million

4.1 million

Source: Asian exports computed from table 15.7 and European exports from tables 15.2 and 15.3.

The Asian Merchants and Companies | 377 Figure 15.1. Asian and European silk exports

Asian merchants operating in the overland routes which might possibly have changed their courses in response to the exigency of the given situation. That the overland trade was still quite active and significant in the mid-eighteenth century is the impression one gets from a close scrutiny of the European sources.47 The search for more qualitative as well as quantitative data on the Asians’ trade, especially the overland route, should go on, and then both the European trade and the Asian trade should be placed in their proper perspectives. This will enable us to have a comprehensive picture of the trade as a whole around the mideighteenth century which is so crucial for a proper understanding of the background to, and the implications of, the British conquest of Bengal in 1757 (which indeed laid the foundation of the British Empire in India), and how the Company and its servants systematically eliminated the Asian rivals in Bengal trade and ruined the Bengal handloom industry in the post-Plassey period.

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Notes 1. Though Hill hinted at this many years ago (S.C. Hill, Bengal in 1756-7 (London, 1905), vol. I, pp. xxiii, lii), for a later version of the thesis see Brijen K. Gupta, Sirajuddaullah and the East India Company, 1756-57 (Leiden, 1962), p. 32. Implied in the thesis is the emphasis on the role of the Hindu/Jain banking and commercial class and hence the indirect corroboration of the schism in the Bengali society along communal lines which was propounded by Hill. I have tried to refute the schism thesis in my article, ‘Sirajuddaullah, the English Company and the Plassey Conspiracy’, Indian Historical Review, 13, nos. 1-2 (July 1986-January 1987), pp. 111-34. 2. For example, P.J. Marshall, Bengal – the British Bridgehead (Cambridge, 1987), pp. 65, 67; C.A. Bayly, Indian Society and the Making of the British Empire (Cambridge, 1987), pp. 49-50. 3. Sukumar Bhattacharyya, The East India Company and the Economy of Bengal, 1704-1740 (London, 1954). 4. Gupta, Sirajuddaullah and the East India Company, especially pp. 324. 5. S. Chaudhury, Trade and Commercial Organization in Bengal, 16501720 (Calcutta, 1975). 6. K.N. Chaudhuri, The Trading World of Asia and the English East India Company, 1660-1760 (Cambridge, 1978), p. 24, emphasis mine. 7. Om Prakash, The Dutch East India Company and the Economy of Bengal, 1630-1720 (Princeton, 1985). 8. Marshall, Bengal, pp. 65-7; Bayly, Indian Society, pp. 49-50. 9. Marshall, Bengal, pp. 64-5, emphasis mine. 10. Report by Henry Cansius on Malda, 7 September 1670, Koloniaal Archief (henceforth ‘KA’) 1168, ff. 2173-4, quoted in Prakash, Dutch East India Company and the Economy of Bengal, pp. 98-9. 11. All piece-goods produced in Malda. 12. Factory Records, Miscellaneous, vol. 14, ff. 334-6, India Office Records (henceforth ‘IOR’), London. 13. It is strange that Om Prakash makes a complete misreading of the document. As he writes: ‘The Edwards estimate is somewhat problematic in so far as it talks of 15 to 25 boats each carrying goods worth about Rs. 100,000, but at the same time seems to imply that only half of this value was accounted for by textiles and raw silk.’ Om Prakash, ‘On Estimating the Employment Implications of European Trade for the Eighteenth Century Bengal Textile Industry’, Modern Asian Studies, 27, no. 2 (May 1993), p. 393. It is absolutely clear from the report that Edwards first talks exclusively of textile exports (even specifying the types of textiles as cossaes, mulmuls, etc.) by riverine

The Asian Merchants and Companies | 379 routes (and hence says pattellas) and then by land routes (‘landing’ is nothing but land) as opposed to export by rivers. 14. ‘Taylor’s Report on Dhaka Cloth Production’, textile export from Dhaka in 1747, Home Misc. Series, 456 F, f. 93, IOR. This also indicated the value of the textiles sent for the emperor, nawab and the Jagat Seths, amounting to Rs. 5.5 million. 15. Ibid. 16. See Table 15.8 below. 17. For example, Coast and Bay Abstracts, vol. 3, para. 38, 26 December 1733, IOR. 18. Factory Records, Kasimbazar, vol. 6, 23 January 1744, IOR. 19. Chaudhuri, Trading World, p. 354. 20. Bengal Public Consultations (henceforth ‘BPC’), Range 1, vol. 6, f. 172, 21 February 1726, IOR. 21. Factory Records, Kasimbazar, vol. 12, Consultation, 27 January 1756, IOR. 22. Ibid.; K.N. Chaudhuri’s contention that the ‘products bought by the Gujaratis did not directly compete with those shipped to Europe’ is hardly tenable. 23. Kristof Glamann, Dutch-Asiatic Trade, 1620-1740 (Copenhagen, The Hague, 1958), p. 131. 24. Floretta yarn or mochta silk was not included in the computation as it was not really regarded as raw silk, was a much inferior variety and cheaper quality than the varieties like tanny, adapangia, Gujarat, tanna banna, etc. Even in the sale of the different chambers in Holland, this was not advertised as raw silk like tanny, cabessa, etc., but as floretta yarn (see Notice of auction, 16 September 1755, Resolutions of Heren XVII, VOC, 7380). Prakash (Dutch East India Company and the Economy of Bengal, pp. 202, 218) too dealt with raw silk and floretta yarn separately. But even if we include floretta yarn in our computation, it hardly alters the picture because in the early 1740s the average annual export of floretta yarn was only 84 mds. while in the early 1750s it was 184 mds. (computed from Dutch records). 25. See Table 15.1 above. 26. The Dutch export of Bengal raw silk to Japan, which was an important branch of trade of the VOC in the second half of the seventeenth century (see Prakash, Dutch East India Company and the Economy of Bengal, p. 126), was only 6,154 Dutch lb on average in the quinquennial period 1740-5, while in the periods from 1730 to 1735, and 1750 to 1755, it was nil. I have collected and computed all the above evidence from the Bengal export invoices in the Dutch archives. 27. Among other European Companies, only the French were of some importance. The Ostend Company had to abandon its trade in 1744

380 | Companies, Commerce and Merchants while the Danish Company was permitted to establish its factory only in 1755. Though the French private trade increased remarkably in the early 1750s, the volume of their corporate trade seems to have been much smaller than that of the English or Dutch. Even assuming, as did P.J. Marshall {Bengal, p. 66), that the value of the French Company’s trade was about half that of the English or Dutch trade, the French export of raw silk would have been around 500 mds. at the most. And raw silk does not seem to have been a staple commodity in the European private trade to Western India, the Red Sea or Persian Gulf area (VOC, 2304, f. 211, HB 30 November 1734). Hence it could be reasonably assumed that the export of raw silk by other Europeans (i.e. excluding the English and Dutch Companies) could not have been more than 1,000 mds. at the maximum on average in a year in the early 1750s. 28. BPC, Range 1, vol. 44, Annex to Consultation, 19 June 1769. This is more or less corroborated by other English and indigenous sources. See, for example, Mss. Eur D 283, f. 21, IOR; Verelst’s letter to the Court of Directors, 5 April 1769, N.K. Sinha (ed.), Fort William-India House Correspondence (henceforth FWIHC) (New Delhi, 1959), vol. V, pp. 18-19. For the indigenous account see N.K. Sinha, The Economic History of Bengal (3rd edn, Calcutta, 1965), vol. I, p. 112. 29. ‘Memorie’ of Dutch Director Tailleffert, VOC, 2849 (KA 2741), f. 245v, 27 October 1755. See also Luke Scrafton, Reflections on the Government of Indostan (London, 1760); BPC Range 1, vol. 11, ff. 288v.-9, 28 August 1736; FWIHC, vol. V, pp. 16-18. 30. Taylor’s Report, Home Misc. Series, 456 F, IOR. The share of the European private trade was only about 5 per cent of the total value of exports. So private trade does not seem to have been very significant. 31. See S. Chaudhury, ‘Merchants, Companies and Rulers’, JESHO, 31, no. 1 (1988). 32. ‘Memorie’ of Dutch Director Taillefert, ff. 188vo-9. Taillefert talks of Rs 6 million sent to textile centres for some years but categorically mentions the June resolution of 1741 which referred to Rs 7.6 million as the amount given as an advance by various buyers other than the Dutch. We accept the latter sum because first, it seems to be in the official resolution; secondly, Taillefert in all probability spoke of the late 1740s and the early 1750s when textile trade and industry was to some extent disrupted as a result of the Maratha invasions. The official resolution of 1741 refers to the period prior to the Maratha incursions when things were normal, and trade and industry flourished as usual. But both could have been mere guesses. 33. Ole Feldebeck, ‘Cloth Production and Trade in Late Eighteenth Century Bengal’, Bengal Past and Present, 86 (July-December 1967), pp. 128-9.

The Asian Merchants and Companies | 381 34. See, for instance, the geographical analysis of orders for piece-goods from London in the early 1680s: S. Chaudhury, Trade and Commercial Organization, p. 201, n. 166. 35. S. Chaudhury, ‘European Companies and the Bengal Textile Industry in the Eigh teenth Century: the Pitfalls of Applying Quantitative Techniques’, Modern Asian Studies (May 1993), p. 339, table 3. 36. W. Aldersey’s Report, BPC, Range 1, vol. 44, Consult. 19 June 1769, IOR. 37. P. J. Marshall also estimated on the basis of Martineau that the French Company’s purchase may have been half of those of the Dutch and English, Marshall, Bengal, p. 66. 38. For the percentage share of different textile categories exported to Persia by the Dutch during 1730-50, see S. Chaudhury, From Prosperity to Decline: Eighteenth Century Bengal (New Delhi, 1995), ch. 7, table 7.10. 39. Though the markets for the European and Asian exports were different, the demand for the various categories of Bengal textiles in these markets was more or less the same. The detailed analysis of the percentage share of different categories of textiles exported by the Companies (see S. Chaudhury, ‘Continuity or Change in the Eighteenth Century? Price Trends in Bengal, circa 1720-1757’, Calcutta Historical Journal, 15, nos. 1-2 (July 1990-June 1991), p. 24, Table 11) establishes that the bulk of the exports comprised ordinary, medium and fine cotton piecegoods. The demand in the Middle East and Central Asia, which was the main area of Asian exports, was also for the same varieties as will be apparent from the analysis of the Dutch textile export to the Persian Gulf region (see n. 38). 40. Leaving aside the amount sent for the emperor at Delhi, the breakdown of the value of the export is as follows: Upper Provinces Rs. 100,000, Pathans Rs. 150,000, Mughals for foreign consumption Rs. 400,000, Armenians to Basra, Mocha and Jedda Rs. 500,000. 41. Thus Om Prakash’s contention (Modern Asian Studies, 27, no. 2 (May 1993), p. 355) that ‘the bulk of the imports into Bengal was without any question in the form of goods’ rather than precious metals is hardly tenable. 42. I do not think that for my present thesis it is absolutely essential to show where the silk was exported to. Contrary to an opinion expressed in private conversation by a distinguished historian of the period that my thesis ‘stands or falls on this very question’ of identifying the destination of the raw silk exported from Bengal, I maintain, as some experts in the field do, that so far as I know of the volume and value of raw silk exported by the Asian merchants, it is more than sufficient for my present thesis. However, I agree that it is worth investigating the

382 | Companies, Commerce and Merchants destination of the raw silk exports from Bengal so that we can have a comprehensive idea of the silk trade as a whole. 43. H. Verelst to the Court of Directors, 2 April 1769, BPC, Range 1, vol. 44, f. 324, para, 6, emphasis mine. 44. William Bolts, Considerations on Indian Affairs (London, 1772), p. 200. 45. Scrafton, Reflections on the Government of Indostan, p. 20, emphasis mine. 46. Tavernier noted in the mid-seventeenth century how merchants abandoned the route by way of Multan and resorted to the route by way of Kabul even though this took them ten days more. Jean-Baptiste Tavernier, Travels in India, 1640-67, tr. V. Ball (London, 1889), vol. II, pp. 56-8. 47. For example, on the basis of these sources, N.K. Sinha writes: ‘In spite of occasional disturbances the cotton cloth and silk stuff of Bengal must have sold almost as before in different parts of India and the neighbouring regions.’ Sinha, Economic History of Bengal, vol. I, p. 110. That the caravan trade was still flourishing in the late seventeenth and eighteenth centuries was reiterated by Morris Rossabi, ‘The Decline of the Central Asian Caravan Trade’ in J.D. Tracy (ed.), The Rise of Merchant Empires (Cambridge, 1990), p. 368. He writes that ‘the caravan trade did, in fact, prosper in the seventeenth and eighteenth centuries. But this new commerce did not traverse . . . Persia, and the Middle East. All of these were bypassed. . . . The caravans travelled north through southern Siberia and northern Central Asia, as Russian merchants dominated the trade. Russians, with the help of peddlars from Bukhara, revived the caravan commerce.’

chapter 16

The Inflow of Silver to Bengal in Global Perspective, c. 1650-1757*

It is common knowledge by now that the singular product for the origin and development of world trade in the modern era was silver. The huge demand for Indian commodities, especially textiles and raw silk, in the world market attracted buyers from various parts of the world, and almost all these traders had to bring precious metals, mostly silver, to India for the procurement of these commodities. So the influx of silver to India in the seventeenth and the early half of the eighteenth century resulted from India’s favourable balance of trade with the rest of the world. There is no doubt that as the Europeans – mainly the Dutch and the English East India Companies – were important partners of India’s export trade during this period they were responsible for importing large quantities of silver into India. In this essay one of our objectives is to explain why within India Bengal was the main destination of most of the silver that came through the European agencies. But the more important question that we shall address is whether these Europeans were the major importers of bullion/silver into Bengal. The conventional wisdom1 has it that the Europeans, as major partners of Bengal’s export trade during the period under review, were the chief agents of the huge inflow of silver to Bengal – a hypothesis that we shall try to refute here. Another related question is what * Paper presented in the XIIth International Economic History Congress, Madrid, 1998, session B-6, ‘Monetary History in Global Perspective, 15001800’ and later published in Global Connections and Monetary History, ed. D. Flynn et al., Ashgate, 2003.

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was the source of silver that the Asian merchants brought to Bengal in order to finance their exports, which far overshadowed those of the European Companies even in the mid-eighteenth century.2 For a proper understanding of the silver inflow to Bengal in the global context, it is necessary to have an overview of European trade in India, especially Bengal. The major European Companies, especially the Dutch and the English Companies, were interested at the beginning of their Asiatic trade only in procuring spices in the East Indies, mainly in the Indonesian archipelago. With silver obtained from the ‘new world’, the Companies went to these islands to buy spices. But to their utter astonishment, they found that it was not silver but cheap Indian coarse textiles which were in great demand in these islands. So they turned their attention to India for cheap, coarse piece-goods so that they could buy spices in the Indonesian archipelago in exchange for these Indian textiles. But since trade with Bengal was not yet their objective, they preferred the Coromandel coast for procuring Indian calicoes for exchange in the Spice Islands. However, when the Coromandel trade became uncertain and expensive because of wars, famines, and political instability, the Companies turned their attention to Bengal. Soon they realized that trade in Bengal had certain advantages. Bengal was the largest producer of not only cotton piece-goods but also of highquality and inexpensive raw silk, which was in great demand in Europe, replacing Persian and Italian silk. A third lucrative item of trade for the Companies was saltpetre.3 Thus the Asiatic trade of the European Companies, which began as a bilateral trade between Europe and the Spice Islands, changed its character completely in the course of time. From the original bilateral trade, it changed to triangular trade between Europe, India (for cheap cotton piece-goods) and the Spice Islands (where Indian textiles were exchanged for spices to be exported to Europe). Finally it became bilateral again, mainly between Europe and Bengal, with the marked difference from about the 1680s that Bengal emerged as the chief partner of the Asiatic trade of the European Companies. By the beginning of the eighteenth century,

The Inflow of Silver to Bengal in Global Perspective | 385

Bengal supplied about 40 per cent of the average annual value of Asian commodities the Dutch Company sent to Holland. More than 50 per cent of the total value in textiles the Dutch exported from Asia was in the form of Bengal textiles. Thus in the early eighteenth century Bengal became the most important theatre of the Dutch Company’s activity not only in India but in the whole of Asia.4 The case of the English Company was similar. The Bengal trade was often described by the English factors as the ‘best flower of the Company’s garden’, or ‘the choicest jewel’.5 A significant feature of Bengal-Europe trade was that the European Companies had to import into Bengal mostly treasure to procure the export commodities. This phenomenon of West to East flow of silver is generally seen in the global context as a reaction to Europe’s trade deficit with Bengal, though perhaps the cause of the trade in silver might have centred in India/Bengal, as has been suggested recently by Flynn and Giraldez for the case of China.6 Whether the demand-side causation was of Asian origin in the case of Bengal, as it was probably in the case of China, needs careful investigation which has not yet been done. However, the amount of treasure imported by the Companies can be gauged from the fact that the proportions of precious metals to the total value imported by the Dutch in the second half of the seventeenth and the first two decades of the eighteenth century works out at 87.5 per cent.7 The pattern was not very different in the case of the English Company. While the average proportion of treasure in the total English imports into the East Indies as a whole came to about 75 per cent, this proportion in Bengal varied between 90 and 94 per cent in the first two decades of the eighteenth century.8 It does not seem that the situation changed to any significant extent for the rest of the period under review. The main reason for this was that Bengal was highly self-sufficient and as such the market for any import commodities, other than silver, was severely restricted. In fact, Bengal was one of the most prosperous subas (provinces) of the erstwhile Mughal empire. From around the mid-seventeenth century, if not earlier, it had become one of the most important centres of international trade. Its fertile land, rich and varied agricultural output, the

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high level of skill of its innumerable weavers and artisans, and its excellent and highly developed financial and communication networks made it the most valuable prop of the Mughal empire. In the late seventeenth and early eighteenth century it had such a favourable balance of trade that it earned the ill reputation of being the ‘sink’ where everything disappeared without the least prospect of return.9 Even earlier, the French traveller Bernier wrote in the 1660s that ‘the rich exuberance of the country . . . has given rise to a proverb that the Kingdom of Bengal has a hundred gates open for entrance but not one for departure’.10 The rich prospects of trade in Bengal, and the comparative peace and stability in the region in contrast to the disintegration of the Mughal empire in the first half of the eighteenth century, attracted to the province traders from different parts of India and Asia as well as from Europe. Grose, who visited Bengal in 1756-7, noted that the ‘foreign and domestic trade of Bengal are very considerable, as may appear from the great number of Persians, Abyssinians, Arabs, Chinese, Gujarats, Malabarians, Turks, Moors, Jews, Georgians, Armenians and merchants from all parts of Asia who resort there’.11 At this stage one would like to compute the total amount of silver imported by the Europeans into Bengal. But no such exact computation has yet been done. If we consider this for other regions of India, especially Gujarat, which was one of the most important theatres of European activities in the seventeenth century, the conclusion arrived at by a recent scholar is that the English and Dutch imports of silver were not the principal or even the only source of silver imported into Gujarat.12 It has been suggested that during the last quarter of the seventeenth century, the Red Sea and Persian Gulf trade, carried on mainly by Asian merchants, still brought in large quantities of silver.13 Another scholar has shown recently that Gujarati ships took Rs. 4 million worth of textiles to Mocha and Jeddah annually at the turn of the eighteenth century.14 If this figure reflects sale prices and the entire value was received in bullion, the annual inflow of silver from the Red Sea to the Gujarat ports, according to a recent calculation, should have amounted to 44.5 metric

The Inflow of Silver to Bengal in Global Perspective | 387

tons – a figure far in excess of the Cape-route imports by the Europeans. This indicates that the larger part of the silver entering Gujarat during the 1690s and later was not simply taken to the Gujarat mints (considering the output of these mints) but a substantial amount was also taken to inland regions.15 The issues of mints in Bengal were so few as to render implausible any suggestion that these could at any time have absorbed a large part of the bullion imported into Bengal. The total estimated output of the Bengal mints in the seventeenth century was even less than the estimated imports of silver by the English Company alone, leaving aside the Dutch and other Europeans.16 The reason for this was perhaps that the Bengal mints were not very popular with bullion importers. The European Companies had serious misgivings about the exchange rates for bullion and specie at the Bengal mints, which were much lower than those allowed in other mints. The Companies confronted serious difficulties in converting the imported silver to local currency in the face of the machinations of the house of Jagat Seth, the greatest banker of the then known world.17 For all practical purpose the Seths had the monopoly of minting coins in the imperial mint. Although both Asian and European merchants in theory were free to coin money at the mint by paying the requisite charges, the Jagat Seths manipulated things in such a way that it was next to impossible for anyone except themselves to coin money. Thus, the European Companies were forced to sell their bullion to the Seths, who imposed a rate much lower than the market rate.18 To obviate this sort of difficulty, the English Company began to explore the possibility of getting its silver coined at the Madras mint, and from 1692 it began to mint rupees at Madras for export to Bengal.19 But since the Madras rupees were not generally accepted in Bengal, except at a disadvantageous discount, the Company sold the treasure it imported to local merchants, without taking it to the mint.20 Possibly these merchants, instead of getting the silver coined in the Bengal mints, took it to the inland mints. This seems the only persuasive explanation for the low level of output of the Bengal mints compared to the large quantities of silver imported into the region.

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Again, it has now been suggested that the recent evidence helps put the size and influence of the bullion received through the English and the Dutch in a proper perspective. The transfer of treasure to India through the activities of the Dutch and the English Companies before 1660 was by no means substantial when compared to the treasure imported through other channels. Even the additions to Indian silver stock made through the Companies’ trade after 1660 were not on such a scale as to enhance phenomenally the silver stock already accumulated in India. Though the silver influx through the Companies certainly increased after 1675, it is difficult to subscribe to the view expressed recently that ‘the huge influx of bullion which resulted from the new demand was only one indication of the growth in income and employment’.21 It is too simplistic to speak of income benefits of bullion influx without any concrete proof of how a mere infusion of precious metals could expand employment in India, unless India re-exported it to obtain capital or wage-goods. It has been argued now that since silver steadily depreciated in value, India stood to lose a great deal in the long run by receiving and retaining that metal.22 Again, even if a simple mercantile approach is adopted and the import of bullion is considered virtuous in itself, it is yet to be established not only whether the English and the Dutch Companies were the main agents in the transfer of American silver to India, but even (in view of the trade through the Levant) that the Companies were the irreplaceable media by which Indian exports could reach Europe to meet the expanding demand for them. In this context it should be borne in mind that the inflow of silver to Bengal was not a new phenomenon that can be associated with the coming in of the Europeans. Even in the pre-modern era, Bengal had a favourable balance of trade with other regions and the traders from those places had to bring in precious metals to meet the trade deficit on their part. As early as 1415 we hear of Chinese trade missions bringing gold and silver to the delta for purchasing Bengal goods.23 Another Chinese visitor remarked a decade later that long-distance merchants in Bengal settled their accounts with tankas (silver rupees).24 The

The Inflow of Silver to Bengal in Global Perspective | 389

pattern continued throughout the next century. The Venetian traveller, Caesar de Federici, wrote in 1569, ‘Silver and Gold from Pegu [Burma] they carried to Bengala, and no other kind of Merchandize’.25 That Bengal’s traditional export trade was quite substantial even in the sixteenth century (and brought in its train large quantities of gold and silver) is evident from Ludovico di Varthema, who wrote, ‘Fifty ships every year are laden in this place with cotton and silk stuffs. . . . These same stuffs go through all Turkey, through Syria, through Persia, through Arabia Felix, through Ethiopia and through all India.’26 Another foreign traveller remarked that ‘the balance of trade was against all nations in favour of Bengal, and it was the sink where gold and silver disappeared without the least prospect of return’27 – an observation almost similar to that of Godinho, made recently in relation to the inflow of silver to China.28 Even in the first half of the eighteenth century when the European Companies’ trade reached its peak, they were not the major importers of silver into Bengal. That honour belonged to the Asian merchants. But the conventional wisdom has it, repeated even in the most recent works, that it was the Europeans, as major partners of Bengal’s export trade, who were responsible for the huge influx of silver to Bengal and that they were the chief importers of precious metals. Let us examine some of these assertions. One of these authorities states categorically: The development of European trade with Bengal in the late seventeenth century had the effect of shifting the balance radically in favour of the seaborne trade. . . . During the first half of the eighteenth century Europe was unquestionably Bengal’s chief trading partner and its textile industry had not only expanded at a rapid rate to keep pace with the increased demand but had also fully adjusted its output to the special specifications required for selling in Europe.29

Another scholar holds almost the same opinion: ‘Through their [the merchants’] enterprise Bengal maintained a favourable balance of commodity trade with areas like the Middle East, the Philippines and above all Europe which settled their deficits in bullion. The European companies were the main importers of bullion.’30

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The main reason for such assertions is not only the lack of sufficient information regarding the export trade of Asian merchants from Bengal, but also the Eurocentric view of the historians working in the field. There is no denying that the Europeans were the dominant factor in Bengal’s seaborne trade, but that does not necessarily imply that they were far ahead of the Asians in Bengal’s export trade as a whole, or that they were the largest importers of bullion. The above claims do not take into account Bengal’s export trade by overland routes which had always been extremely significant. It is generally assumed that the fall of the great empires – Mughal, Persian and Ottoman – and the consequent decline of important ports like Surat doomed the overland trade. The reason for this sort of assumption, it seems, owed mainly to the lack of data regarding India’s overland trade compared with the abundance of quantitative material in the Company archives on European exports from Bengal. But from the qualitative as well as quantitative data we have now, admittedly not very exhaustive, it can be shown that the share of the Asian merchants even in the two most important European export commodities, namely raw silk and textiles, was much higher than that of the Europeans. As such, it was the Asians and not the Europeans who were the major importers of bullion into Bengal. A tentative estimate of the average annual value of textile exports by the Asian merchants shows that it could have been in the range of Rs. 9 to 10 million, while the European export of Bengal textiles was at the most Rs. 5 to 6 million.31 An estimate of total textile exports from Dhaka, one of the most important centres of textile production, especially of expensive and fine quality muslins, indicates that the Asian share stood at two-thirds of the total, compared to only one-third for the Europeans, including private traders.32 The Asian lead in the textile trade in general is confirmed by Dutch sources that refer to advances given for investments in textiles (which were about 50 per cent around this time33) by Asian and European merchants – excluding the Dutch – to the tune of Rs. 7.6 million, of which the combined English and French share could not have

The Inflow of Silver to Bengal in Global Perspective | 391

been more than Rs. 3 million.34 Hence the Asian share would have been about Rs. 4.5 to 5 million. This seems quite plausible in view of the fact that among several important centres, the export by Asian merchants from only two (Malda and Dhaka, for which we have some quantitative data) was quite substantial. Moreover, the Dutch report refers to the month of June, when most of the European Companies, who procured their export commodities mainly through dadni (the advance system), had already contracted for their required amount. Though the Asians, too, bought their wares through dadni, it seems that they collected quite a large amount of textiles on the spot markets without giving out advances, as they did in buying most of their silk.35 So even if we ignore the Dutch account used here (despite its vagueness) mainly as corroborative evidence, our main hypothesis will remain unaltered. In the case of silk exports, where we are on a much more solid ground than in the case of textiles, the Asians were far ahead of the Europeans. The total value of the silk exported by Asian merchants is estimated around Rs. 5.5 million on average in the five years from 1749 to 1753, and Rs. 4.1 million in the next five years from 1754 to 1758. In contrast, the total value of silk exported by all the Europeans during this period was less than 1 million rupees.36 Thus, while the value of Asian silk exports even in the mid-eighteenth century was to the tune of Rs. 4.8 million a year on an average, the average annual value of the European silk exports was only one-fifth to one-quarter of Asian exports of the commodity.37 Adding up the average annual textile and silk exports, the Asian share comes to around Rs. 14 to 15 million, while the total average value of the European export of these two commodities would have been about Rs. 6 to 7 million. In other words, the value of exports from Bengal by Asian merchants was more than double the value of exports by the Europeans. The suggestion may be made here that the Asian merchants, unlike the Europeans, perhaps did not bring in silver/bullion for their purchases in Bengal, but instead brought in merchandise from other parts of Asia and raised purchasing capital by sell-

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ing those goods in the local markets.38 This suggestion is wholly untenable. True, Asian merchants brought in some commodities from the eastern archipelago, Ceylon and elsewhere in the second half of the seventeenth century, but the volume and value of these goods were insignificant compared to the huge exports from Bengal carried by Asian merchants. Second, this overseas trade to the East dried up in the first half of the eighteenth century, when the seaborne trade was diverted to the West, mainly under the aegis of the servants of the English Company and private traders. Here again the volume and value of the commodities brought in by the Asian merchants were quite negligible. In this context it has to be borne in mind that the goods exported by Asian merchants from Bengal were mainly carried via the overland route and, as foreign travellers and Company officials of the period attest in unequivocal terms, for this overland trade they had to bring in silver/cash. As far as the intra-Asian trade of the Dutch Company is concerned, as has been shown recently, this trade declined considerably in the first half of the eighteenth century, and hence Dutch imports of commodities were quite negligible.39 We have enough evidence to show that the Asians, like the Europeans, had to import into Bengal the bullion and specie needed for procuring export goods. Indeed, all the traders even from the pre-modern era up to the mid-eighteenth century had to buy these commodities for export from Bengal with silver or cash, as the evidence we have clearly shows that nothing else was accepted. William Bolts, one of the responsible officials of the English East India Company who lived in Bengal for many years in the 1750s and the 1760s, stated categorically in reference to the pre-Colonial period: In former times it was customary for merchants from all the inland parts of India, and from Tartary, to resort to Bengal with little else than money or bills to purchase the commodities of those provinces. A variety of merchants of different nations and religions such as Cashmeerians, Multanys, Pathans, Sheiks, Suniassys and many others used to resort to Bengal annually, in Caffeelahs or large parties, of many thousands together (with troops of oxen for the transport of goods) from different Darts of

The Inflow of Silver to Bengal in Global Perspective | 393 Hindostan; by which the inland importation of bullion into Bengal always far exceeded the whole importation by sea from Europe and the gulfs of Arabia and Persia.40

The above assertion of William Bolts leaves absolutely no doubt that it was the Asian merchants and not the Europeans who were the major importers of bullion into Bengal, and that their imports of precious metals ‘far exceeded’ those of the Europeans. Another Company official of about the same period who became governor of Bengal in the 1760s wrote: Besides the large investment of the European nations, the Bengal raw silk, cloths, etc, to a vast amount were dispersed in the West and North inland as far as Guzzrat, Lahore and even Ispahan. . . . From this Point of view of the state of the trade heretofore in the provinces . . . it will clearly follow that the whole amount of the Trade of the Provinces was a clear gain to them by an exchange of their produce for bullion. . . . If these facts are admitted we can no longer be at a loss for the source of the Prodigious Ancient riches of Bengal, as there flowed in ever year an increase of specie equal to the Amount of the export of the Country.41

That the Asian merchants bought Bengal goods with silver or cash brought from outside Bengal is corroborated by yet another Company official, Luke Scrafton, who was in Bengal for many years in the mid-eighteenth century: Till of late years (meaning the period prior to the British conquest of Bengal in 1757] inconceivable numbers of merchants from all parts of Asia in general, as well as from the rest of Hindostan in particular, sometimes in bodies of many thousands at a time, were used annually to resort to Bengal with little else than ready money or bills to purchase the produce of these provinces.42

After all the evidence cited above, one need not have much doubt about the exports of the Asian merchants from Bengal and their imports of bullion or cash into Bengal even in the mid-eighteenth century, the amount of which was far greater than that of the Europeans. The question that crops up here is what were the sources of silver with which the Asian merchants made their purchases in Bengal. At this state of our knowledge it is not possible to give any definitive answer, and we can only make a few tentative suggestions. There is no evidence that the traditional

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trade of Bengal – before the emergence of the Europeans on the scene – with China, Burma, and other neighbouring regions that brought in silver and gold to Bengal either declined or was diverted after the coming in of the Europeans. It is thus possible that the Chinese, Burmese, and other merchants from the East continued to bring precious metals even in the seventeenth and the early eighteenth centuries. Again, it has been suggested recently that the route around the Cape of Good Hope was not the only way through which silver and gold were channelled into Asia.43 Precious metals were also exported via the Levant, the Baltic, and Russia to the trading centres of the Red Sea and the Persian Gulf. There was the direct link between Spanish America and Asia that was maintained by the famous ‘Manila-galleons’ bringing silver from Acapulco to the Philippines. Silver and gold were found in Asia as well, the most important sources being Japan, China, and Sumatra. However, it appears that the precious metals entering Asia via the Middle East were the most important sources of capital for the Asian merchants who bought Bengal commodities with silver. Silver could be bought in Mocha, in Persia and sometimes in Surat, whose merchants could hold their own position in competition with the European Companies.44 The ups and downs of trade in silver in this region were easily adjusted. For example, when the Persian supply of silver failed around 1680, the Dutch Company turned its attention to Surat, where silver rupees or sometimes ducats could be bought for export to Bengal and the Coromandel. But when Persia regained its position as supplier of silver and gold, the export from Surat ceased. When Persian trade deteriorated after 1730, other trading centres such as ‘Bussorah and Khara’ were then able to deliver some silver and gold. In the middle of the eighteenth century it would be Surat again that would provide silver to other regions of India, including Bengal. In conclusion, it can be said that the great demand for Bengal commodities in the world market brought in its train a huge amount of silver to the province. This was because Bengal enjoyed a favourable balance of trade throughout the period

The Inflow of Silver to Bengal in Global Perspective | 395

under review and hence precious metals poured into Bengal in exchange for its manufactures. Everyone, whether the Europeans or Asians, had to bring in silver or cash to make purchases in Bengal, as nothing else was accepted. And it was the Asians, and not the Europeans, who were the major importers of silver into Bengal in the seventeenth and the first half of the eighteenth century. Notes 1. K.R. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge, 1978), 24; P.J. Marshall, Bengal, the British Bridgehead (Cambridge, 1987), 64-5; C.A. Bayly, Indian Society and the Making of the British Empire (Cambridge, 1987), 59-60. 2. S. Chaudhury, ‘The Asian Merchants and Companies in Bengal’s Export Trade, circa Mid-Eighteenth Century’, in S. Chaudhury and M. Morineau, eds. Merchants, Companies and Trade: Europe and Asia in the Early Modern Era (Cambridge, 1999), 300-20. 3. For details, see S. Chaudhuri, Trade and Commercial Organization in Bengal, 1650-1720 (Calcutta, 1975), 11-16. 4. Om Prakash, The Dutch East India Company and the Economy of Bengal (Princeton, 1985), 8. 5. Original Correspondence, 4 December 1689, no. 5686, vol. 48, India Office Library and Records (henceforth IOL&R), London; Despatch Book, 2 July 1684, vol. 90, f. 330, IOL&R. 6. Dennis O. Flynn and Arturo Giraldez, ‘Born with a “Silver Spoon”: The Origin of World Trade in 1571’, Journal of World History 6.2 (1995): 202-3, 206-8. 7. Prakash, Dutch Company, pp. 65-8. 8. Chaudhury, Trade and Commercial Organization, 208; Chaudhuri, Trading World of Asia, 512. 9. Alexander Dow, History of Hindostan (London, 1770), III: lxii. 10. Francois Bernier, Travels in the Mogul Empire, A.D. 1656-68, A. Constable, ed. (Oxford, 1934), 440. 11. John Henry Grose, A Voyage to the East Indies (London, 1772), II: 234. 12. Shireen Moosvi, ‘The Silver Influx, Money Supply, Prices and Revenue Extraction in Mughal India’, Journal of the Economic and Social History of the Orient 30 (1987): 72. 13. Ibid. 14. Ashin Das Gupta, ‘Gujarati Merchants and the Red Sea Trade, 17001725’, in Blair B. Kling and M.R. Pearson, eds, The Age of Partnership (Honolulu, 1979), 124.

396 | Companies, Commerce and Merchants 5. Moosvi, ‘The Silver Influx’, 56, 58, 70, Tables, 2, 3, and 6 respectively. 1 16. Ibid., 70, Table 6. 17. For the House of Jagat Seth, see S. Chaudhury, From Prosperity to Decline: Eighteenth Century Bengal (New Delhi, 1995), 109-16. 18. For details, see ibid., 77-84. 19. Chaudhuri, Trade and Commercial Organization, 103-10. 20. Ibid., 103-7. 21. Chaudhuri, Trading World of Asia, 462. 22. Moosvi, ‘The Silver Influx’, 93. 23. W.W. Rockhill, ‘Notes on the Relations and Trade of China with the Eastern Archipelago and the Coast of the Indian Ocean during the Fourteenth Century’, T’oung Pao 16.2 (1915): 444; quoted in Richard M. Eaton, The Rise of Islam and the Bengal Frontier (Delhi, 1994), 96. 24. Rockhill, ‘Notes on the Relations and Trade of China’, 437; quoted in Eaton, The Rise of Islam, 96. 25. Quoted in Eaton, The Rise of Islam, 96. 26. Ibid., 97. 27. Dow, History of Hindostan, I: ciii. 28. Quoted in Flynn and Giraldez, ‘Born with a “Silver Spoon”’, 206. 29. Chaudhuri, Trading World of Asia, 24. 30. Marshall, Bengal, 64-5. 31. For a detailed argument for the above estimate, see Chaudhury, From Prosperity to Decline, 202-11. Om Prakash’s contention in this respect is hardly tenable. See Om Prakash, ‘On Estimating the Employment Implications of European Trade for Eighteenth Century Bengal Textile Industry – A Reply’, Modern Asian Studies 27.2 (1994): 341-56. 32. Home Miscellaneous Series, vol. 456F, ff. 93-5, IOL&R. 33. See Chaudhury, From Prosperity to Decline, 93-108. 34. Taillefert’s ‘Memorie’, Verenigde Oost Indische Compagnie (hence forth VOC), Algemeen Rijksarchief, The Hague, vol. 2849, 27 October 1755, ff. 188v-189. Taillefert speaks of Rs. 6 million sent to textile centres for some years, but mentions categorically a resolution of June 1741 that refers to Rs. 7.6 million as the amount given as advance by various buyers other than the Dutch. We accept the latter sum because, first, it is mentioned in the official resolution; secondly, Taillefert in all probability spoke of (while mentioning Rs. 6 million) the late 1740s and early 1750s when textile trade and industry was to some extent disrupted as a result of the Maratha invasions. The official resolution of 1741, on the other hand, referred to the period prior to the Maratha incursions when things were normal, and trade and industry flourished as usual. It should be noted, however, that both figures could have been mere guesses, given the diffusion of the industry and the presence of numerous buyers in Bengal. 35. Chaudhury, From Prosperity to Decline, 145-8, 228-36.

The Inflow of Silver to Bengal in Global Perspective | 397 36. Ibid., 249-54. 37. S. Chaudhury, ‘International Trade in Bengal Silk and the Comparative Role of the Asians and Europeans, circa 1700-57’, Modern Asian Studies 29.2 (1995): 373-86. 38. Prakash, ‘Estimating the Employment Implications of European Trade’, 341-6. 39. Chaudhury, From Prosperity to Decline, 195-202. 40. William Bolls, Considerations on Indian Affairs (London, 1772), 200; emphasis mine. 41. Harry Verelst to Court of Directors, 2 April 1769, Bengal Public Consultations, vol. 44, f. 324, IOL&R; emphasis mine. 42. Luke Scrafton, Reflections on the Government of Indostan (London, 1760), 20; emphasis mine. 43. Femme S. Gaastra, ‘The Dutch East India Company and Its IntraAsiatic Trade in Precious Metals’, in W. Fischer, R.M. McInnis, and J. Schneider, eds, The Emergence of a World Economy (Wiesbaden, 1986), 103, 44. Ibid., 104.

chapter 17

Was there a Crisis in Mid-eighteenth Century Bengal?*

In recent years several noted historians have propounded the thesis that there was a ‘crisis’ in Bengal in the mid-eighteenth century which ultimately brought in the British. Earlier the ‘crisis’ was seen only in Bengal’s body-politic but it is now being said that this was the case in the economic sphere too. The ‘crisis’ in Bengal politics is explained with emphasis on the breakdown of the ‘new class alliance’ of military aristocrats, merchant-bankers and zamindars which sustained the nawabi regime from Murshid Quli to Alivardi Khan. As an indication of the economic ‘crisis’, it has been pointed out that prior to Plassey (1757), economic conditions deteriorated, trade and industry languished, merchants were impoverished, prices of different commodities sky-rocketed, and the exports of the English Company declined – all presumably because of the disastrous impact of the Maratha incursions in the 1740s. The aim of this paper† is to examine this thesis in the light of new evidence found in European and Indian archives. *Richard B. Barnett, ed., Rethinking Early Modern India, New Delhi, 2002, pp. 129-52. † Subsequent to the presentation of this paper in the workshop at Charlottesville, Virginia, in October 1994, my book From Prosperity to Decline: Eighteenth Century Bengal came out in 1995 (Manohar, Delhi) wherein I have incorporated some of the material used in the article. But the main thrust of this paper has not been discussed in detail in the book. I am grateful to the Maison des Sciences de l’Homme, Paris for their support during the preparation of this paper.

Was there a Crisis in Mid-eighteenth Century Bengal? | 399

‘Crisis’ in the Body-politic? Of late, historians are keen on explaining the origin of the Anglo-Nawabi conflict in 1756-7 (which resulted in the Plassey revolution and the British conquest of Bengal) in terms of one broad generalization, namely, the breakdown of the alliance among military aristocrats, merchant-bankers, and zamindars that underpinned the nawabi regime from Murshid Quli till Alivardi Khan. Near-contemporaneous Persian chronicles written mostly at the behest or under the patronage of British ‘masters’ came in handy, and a selective use of European sources helped build the general thesis that with the accession of the young Nawab Siraj-ud-Daulah (April 1756) the ‘class alliance’ broke down and everything began to fall apart, and that the British had to intervene almost in a fit of ‘absent-mindedness’ in order to avert the ‘crisis’ in Bengal’s body politic. Hence the obvious conclusion is that Plassey should be explained as the consummation of an internal crisis arising out of the alienation of the dominant ruling class by the nawab which inevitably brought in the British. The actual role of the British in the Plassey conspiracy against the nawab is thus conveniently lost in the maze of ‘theorization’ and the young nawab remains the villain of the piece. To use the age-old cliche, this is nothing but old wine in new bottles – the ghost of S.C. Hill (1905) is very much alive beneath the facade of the broad generalization.1 There is little doubt that the appointment of Murshid Quli as the diwan of Bengal heralded a new era in the history of Bengal. Not only did it witness the setting up of a new pattern of provincial administration, but it convulsed the entire Bengal polity as well. Murshid Quli, a man of proven ability, was sent to the province with specific instructions to try to increase the revenue. But the process of increasing revenue collection led to significant changes in the landholding and political structure of Bengal resulting as they did in the ‘formation of a new, regional group’. These changes can be described as the emergence of big zamindaris with a consequent decline in the total number of zamindaris, the increasing importance of larger zamindaris

400 | Companies, Commerce and Merchants

in the political system of the province, the enhancement in the power of the moneylender and banking class.2 The Mughal mansabdars who were the most dominant ruling group earlier became less powerful in the changed circumstances because they no longer found support or assistance from the centre. Hence they compromised to share power with local elements. The various socio-economic groups which so far remained subdued now got an opportunity to assert themselves. One of these groups, especially the bigger and stronger zamindars who emerged as a result of Murshid Quli’s revenue reorganization, became much more powerful in the new set-up. As the demands of revenue increased, so did the power of the zamindars. In fact, the history of the large zamindars shows that Murshid Quli made it a policy to increase the power of the loyal and big zamindars. They also became partners in the new ruling group. Similarly, the merchant-bankers who began to play a significant role in the administrative and revenue reform of Murshid Quli were drawn into the new ruling councils. Thus, a new power-bloc was created in Bengal in the first half of the eighteenth century. Yet it would not be correct to view the new ruling alliance as a bureaucratic superstructure or as a solid bloc. It was a group of different people with divergent interests who came close to rally-round the nawab to enhance their own interests. In the particular setting of Bengal politics, their policy was directed towards strengthening his position on the one hand and their personal interests on the other. The nawab on his part needed the help of the insulated Mughal mansabdars, the landed magnates, and the merchant-bankers to run the administrative machinery and generate economic resources. Murshid Quli found a group of people from various sections looking at him at the head of the administration as their sole benefactor. He and his successors utilized the services of this group to fill a vacuum created in the peculiar circumstances of the early eighteenth century. A pyramid-type structure was evolved in Bengal with the nawab at the apex and the members of the ruling alliance deriving their power from him.

Was there a Crisis in Mid-eighteenth Century Bengal? | 401

Moreover, there was no conscious attempt on the part of the government to share power with the various groups so as to forge a ‘partnership’. The emergence of the big zamindars was the result of Murshid Quli’s prime concern – revenue reforms. The merchant-banking class came into prominence because of the administrative reorganization and the fostering of trade and commerce. The Mughal mansabdars were rendered less powerful as a consequence of the decline of the central authority. The relationship between the government these segmented groups had more of a personal character, but no institutional basis.3 It was an arrangement in which new vistas of glory were open to efficient and successful adventurers by meeting the increased state demand. At the same time the state became assured of the help and support of those who received the benefit of it. The most striking example of the personalized character of the alliance was the house of Jagat Seths. Starting as a mere usurer, the house, by developing a personal relationship with the government became the ‘direct beneficiary’ and built up the richest banking house in Bengal. Since the relationship in the new alliance was based on personal vested interests, the prime concern of the various groups was to protect and promote their own interests, even if that meant a change in alignments. This is well illustrated throughout the first half of the eighteenth century. After Murshid Quli’s death, according to his wishes his grandson, Sarfaraj Khan, became nawab. But when Sarfaraj’s father, Shujauddin, then deputy governor of Orissa, wanted the masnad (throne) for himself, the former gave into the pleading of Murshid Quli’s widow,4 and there was no scope for any intervention by the new ruling groups. Even the great banker, Jagat Seth, reported the English factors, was not very sure in the beginning of his position in the changed circumstances.5 That the new alliance was purely based on personal relationships is demonstrated by the fact that the two adventurer brothers, Haji Ahmed and Alivardi Khan, who were to play crucial roles in Bengal politics later on, were appointed to high posts by Shujauddin as they were his personal friends.6 Nei-

402 | Companies, Commerce and Merchants

ther belonged to the important mansabdar or zamindar groups when they were inducted into the administrative machinery. Thus the new alliance was not a monolith. It showed definite cracks under stress. When Sarfaraj became nawab after Shujauddin’s death, he wanted to give promotions and mansabs to his father’s old officers. But the triumvirate of Haji Ahmed, Chand (diwan) and Jagat Seth, whom he allowed to continue to act as councillors according to his father’s last instructions, opposed the move. Thus, a rift was created in the court. It was the personal intrigues of the triumvirate which brought about the revolution of 1740 in favour of Alivardi Khan. The personal ambition and conspiracy of a few persons resulted only in the deposition of Nawab Sarfaraj Khan, not either the latter’s inefficiency and corruption so much nor the new ruling group’s concerted effort. The author of Riyaz writes: ‘This Revolution in the Government threw the City (Murshidabad – the capital) as well as the Army and the people of Bengal, into a general and deep convulsion.’7 Even in the battle of Giria where Sarfaraj died fighting, quite a sizeable group of important mansabdars and zamindars like Ghaus Khan, Mir Sharifuddin, Mir Muhammed Bakir Khan, Bijay Singh, and Raja Ghandarab Singh fought on the side of Sarfaraj, while another group joined Alivardi’s army, thus clearly indicating the division in the mansabdar-zamindar alliance on personal and other considerations.8 That personal ambition was the driving force, with little regard for cohesion, is clearly reflected in Mir Jafar’s (the commander-in chief) conspiracy to assassinate Nawab Alivardi Khan in 1747.9 Thus the suggestion even in recent studies that the alienation of the dominant ruling class by the new and young Nawab Sirajud-daulah (1756-7) broke down the new ‘class alliance’ and led to the subsequent political crisis resulting in the British conquest is not tenable. The so-called ‘class alliance’ was in fact an exigent arrangement at a personal level and had no institutional base, and hence quite fragile. Moreover, there was nothing unusual about this political situation in the mid-eighteenth century. With every succession question since the death of Murshid Quli (17289), the ruling clique was divided; so it was in 1756-7. Though a

Was there a Crisis in Mid-eighteenth Century Bengal? | 403

dominant group with the active support of the British opposed the succession of Siraj-ud-daulah, there was another group including merchant princes, zamindars and military aristocrats who supported the young nawab. This was the pattern in 1728-9 as also in 1739-40. So Plassey can hardly be explained as the consummation of an internal political crisis in Bengal in 1756-7. Economic ‘Crisis’? It should be made clear that no one actually speaks of economic ‘crisis’ as such in the mid-eighteenth century Bengal.10 But if one reads carefully some of the latest authorities,11 one would find that there are explicit and positive hints on this point. The ‘crisis’ is seen in deteriorating economic conditions, a decline of trade and industry, the impoverishment of merchants, soaring prices of different commodities, and the decline in the exports of the English Company in the period prior to Plassey. For all this, it is generally presumed, the Maratha invasions of the 1740s (which, it is argued, had disastrous effects on the Bengal economy), were mainly responsible. But let us first examine whether the Maratha invasions were as disastrous in their impact on the economy as most historians would have us believe. There is no denying the fact that they resulted in serious dislocation in the economy of some areas of Bengal, but the impact has been greatly exaggerated. The Marathas caused destruction generally along the line of their march, leaving the remaining part of the country more or less unaffected. Even in the affected areas, as Richard Becher, a Company official present in Bengal during the period, pointed out, the Marathas were obliged to return home at the approach of the rainy season, and the inhabitants were again safe till the following January. So they immediately went back to work and arranged to raise and sell their crops before the next year’s impending invasion.12 That the country was not that much impoverished is proved by the fact that the zamindars paid Alvardi Rs. 10 million at one time and Rs. 5 million at another, besides their annual revenue, to enable him to meet the increased military expenditure.13 The

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argument that many merchants in Bengal ‘were crippled by losses and exactions’ following the Maratha invasions, and that, as a result of this both the English and the Dutch Companies increasingly turned to direct dealings with the artisans, is not tenable. As we have shown elsewhere,14 the Dutch Company made such an experiment for a few years only from 1747 to 1749 in view of the ‘bankruptcy’ of several merchants in a particular aurung but reverted to contracts with dadni merchants from 1750. The change over in the English Company’s investment pattern from the dadni to the gomasta system in 1753 was not because of any decline of Bengal merchants, but was actually the result of the Fort William Council’s attempt to resolve its commercial crisis concerning private trade by cutting out the dadni merchants.15 Again, historians rely too much on contemporary Bengali literature and Persian chronicles to corroborate the disastrous effects of the Maratha invasions. That these are mostly exaggerated accounts is clear from the very nature of the evidence. For example, the poet Gangaram wrote ‘rice, pulses, dal of all sorts, oil, ghee, flour, sugar, salt began to be sold at one rupee per seer. . . . All of them from the lowest to the highest, including the Nawab himself, had to subsist on boiled roots of banana trees.’16 It is simply absurd that rice, oil, ghee, sugar, salt were all sold at Re. 1 per seer. Equally unbelievable is the assertion that even the nawab subsisted on roots of banana. Even making allowance for poetic license, the above can hardly be evidence of the impact of the Maratha invasions. The author of Riyaz refers to human beings living on banana roots to avert death by starvation. But if even true, this was description mostly of Burdwan city when its granaries were burnt down and the supply of imported grains was completely cut off by the Marathas for a short while.17 Another Bengali poet, Bharatchandra, gives an account of Malini shopping in Burdwan but the prices she paid for different articles, said to be ‘abnormal’, cannot be compared with earlier prices (for lack of precise data) to see if they were really so.18 The simple fact that the total value of the investments of the major European Companies, especially the English and the Dutch, as also the export by Asian merchants, was hardly affected during

Was there a Crisis in Mid-eighteenth Century Bengal? | 405

or after the Maratha incursions is sufficient proof that the invasions had really no long-term disastrous effects on the overall economy of Bengal.19 That trade and industry were not seriously affected by the Maratha inroads is evident from the level of European and Asian exports in the mid-eighteenth century. The English Company’s exports to Europe reached its zenith in the first quinquennial period of the 1740s. As a matter of fact, English exports from Bengal had increased substantially from the early 1730s. Though there was a slight decline in the average annual value of the English exports between 1750 and 1755, it can be asserted that the average annual value of the English exports did not show any marked decline over the period from 1730 to 1755, which is evident from Table 17.1. It is important to note that the slight decrease in the average annual value of the English exports in the first half of the 1750s was balanced (as far as Bengal is concerned) by the increase in the value of the Dutch exports during this period. So there is no reason to believe that the decline in the English exports was due to any economic ‘crisis’ in Bengal. Dutch exports in the 1720s declined to some extent but picked up from the early 1730s. As a matter of fact, the value of Dutch exports shows a steady increase throughout the period from the early 1730s to the middle of the 1750s. It is interesting to note that the Dutch, who lagged far behind the English in the early 1730s, almost caught up with them in early 1750s. Of course, Dutch exports included those to different parts of Asia as well. Table 17.2 will bear the point out. As far as Asian exports are concerned, they were quite substantial even in the mid-eighteenth century. Perhaps the total value of Asian textile exports could have been in the range of Rs. 9 million to 10 million.20 That this is not an over estimation can be established with reference to indirect evidence and assumptions. If the share percentage of the textiles exported by the Dutch and English from Dhaka ranged between 5 and 10 per cent in the early 1750s, the share of Dhaka textiles in Asian exports could be assumed to have been no more than 10 per cent.21 In the estimate of the textiles exported from Dhaka in

406 | Companies, Commerce and Merchants Table 17.1: Quinquennial Total and Average Annual Value of English Exports, 1730-55 Years 1730/1-1734/5

Total

Average

Florins

£ 2,117,689

£ 423,538

f. 5,082,453

1740/1-1744/5

£ 2,401,785

£ 480,357

f. 5,764,284

1750/1-1754/5

£ 2,033,244

£ 406,649

f. 4,879,785

Source and note: Computed from K.N. Chaudhuri, Trading World, pp. 509-10, with a one-year lag.

Table 17.2: Quinquennial Total and Average Annual Value of English and Dutch Exports, 1730-55 (in Florins) Years

English Average Annual Value of Exports to Europe

Average Annual Value of Exports to Europe

5,082,453 5,764,284 4,879,785

2,020,460 2,390,558 3,417,306

1730/1-1734/5 1740/1-1744/5 1750/1-1754/5

Dutch Average Annual Value of Total Exports (Europe and Asia) 3,489,567 3,475,770 4,480,104

Source and note: Dutch exports compiled and computed from export invoices in VOC records. The figures for English exports calculated with one-year lag from K.N. Chaudhuri, Trading World, pp. 510-11. The rate of conversion used is £ 1= f. 12.

1747, the value exclusively for Asian export is mentioned as Rs. 1.15 million22 which means that the total value of the Asian textile export from Bengal could have been around Rs. 11.5 million. We are on much stronger ground so far as the Asian export of silk is concerned. The total of silk exports by Asians can be computed from W. Aldersey’s report as is given in Table 17.3. Table 17.3: Quinquennial Total of Silk Export by Asians, 1749-58 Years

Total (mds.)

Average (mds.)

Average (lb.)

Total Value (Rs.)

Average Value (Rs.)

1749-53

99,016

19,803

14,85,420

2,77,24,365

55,44,873

1754-8

74,692

14,938

11,20,380

2,09,13,345

41,82,669

Source: B.P.C., Range 1, vol. 44, Annex. to Consult., 19 June 1769

Was there a Crisis in Mid-eighteenth Century Bengal? | 407

Adding up the value of silk exports by Asians (Rs. 4.8 million on an average) with that of textiles (between Rs. 9 million and 10 million), the total value of Asian exports of textiles and raw silk could have been at least Rs. 13 million to 14 million a year, leaving aside minor exports like sugar, opium and grains. As regards the decline of Bengal merchants, there is ample evidence to show that there was actually none. The Setts and Basaks were still the leading and dominant merchant families of Calcutta in the 1750s, while Hari Krishan Roy was the influential Dutch broker at Chinsurah. The most important thing one has to remember in this connection is that despite all wars, depredations and troubles, the credit market in Bengal was not at all destroyed, largely owing to the great financial resources of the Jagat Seths. There is evidence that this banking house used to extensively finance Asian as well as European trade in Bengal. The financial solvency of the Jagat Seths was never in question, even in the 1750s. The house used to finance the dadni merchants of Calcutta.23 Moreover, when merchant princes like Umichand and Khwaja Wazid were still operating in full swing and playing a dominant role in Bengal’s commercial life with their extensive trade connections with Calcutta merchants, the thesis of the general decline of the Bengal merchants becomes wholly untenable.24 As regards the contention that the decline of the Bengal merchants in the early 1750s forced the East India Company to change its investment pattern from the dadni to the gomasta system,25 it can be safely asserted that there was really no decline of the merchants in Bengal, and that the change in the investment system was due to other considerations. The prominent merchant families of Calcutta, the Setts and Basaks, and the Katmas of Kasimbazar were still prominent and quite substantial merchants in the early 1750s. Moreover, merchant princes like the Jagat Seths, Umichand, and Khwaja Wazid saw their heyday during these years. So long as these merchant princes were there, Bengal’s credit market was as strong as ever, and there was no paucity of capital for the smaller merchants to thrive in their own trade. The fact of the matter was that the dadni merchants

408 | Companies, Commerce and Merchants

refused to contract for investment in 1753 except absolutely on their own terms. In view of the uncertainty of trade in the troubled times, they rejected the Company’s terms that the dadni should not exceed 30 per cent as opposed to 85 per cent earlier, that the contract should be made on ‘old musters’ which were prepared in normal times, that a penalty of 10 per cent would be levied on any deficiency of supply26 which the merchants thought, not without some justification, were extremely unreasonable. On the other hand, as the private trade of the Company’s servants was dwindling in the early 1750s, they saw an opportunity in the introduction of the gomasta system to augment their private trade interest. As to the question of price trends there has been complete unanimity among historians that from 1720 to 1760, especially from the early 1740s, prices of commodities show ‘a fairly sustained and market increase’, ‘particularly strong for raw silk and Bengal textiles’, as also for rice.27 With the help of such sophisticated devices as the ‘weighted moving-average’ of price series, the histogram and the assessment of polynomial and linear trend of prices of several commodities, these authorities conclude that ‘the general synchronic trends are clearly visible’ and that there was a gradual rise in prices over the period as a whole.28 But the general emphasis so far has been on the ‘sharp increase’ in prices from around the 1740s. Even assuming for the sake of argument that (he prices of export goods such as textiles and raw silk registered a rise over the period under review, it may be argued that ‘such a sectorial rise might only reflect a failure of the supply of these goods to increase as fast as the demand for them, and may not necessarily indicate a general price rise in the economy’.29 In order to prove the latter, we have to look for movements in the price of the socalled wage-goods. The most important among these are staple food items like rice and wheat. But at the present state of our knowledge, such an exercise is fraught with the danger of a wide margin of error because of the lack of precise information on the numerous varieties of staple food items, especially rice. One suspects that such an attempt might only lead to extremely erratic

Was there a Crisis in Mid-eighteenth Century Bengal? | 409

behaviour of the prices of provisions, as has been demonstrated in a recent study of Bengal prices on similar lines for the period 1650 to 1720.30 Even so, in order to determine whether there was any sharp rise in prices in general one should look into the prices of major food grains, especially rice, the staple food of Bengal, and not at the prices of major export commodities like textiles and raw silk where the demand for such goods on the part of Asian and European merchants might have resulted in such a rise. But as even the latest studies emphasize this aspect to prove a general rise in prices and as ‘evidence of sustained and marked increase in prices’,31 let us examine how far, or if at all, the prices of these commodities show a secular upward trend during the period under review. One has to take into account here that even earlier authorities pointed out a ‘sharp increase’ in the prices of textiles and raw silk, and asserted that between 1738 and 1754 these increased by no less than 30 per cent.32 The latest study on the period, quoting earlier authorities, also arrived at the same conclusion.33 The sole basis of that conclusion regarding the steep rise in the price of textiles is a complete misreading (and out of context too) of an entry in the Bengal Public Consultations under December 1752.34 The particular consultation refers to a letter from Dacca of 4 December 1752 wherein the Dacca factors were trying to answer allegations from Calcutta regarding the bad quality of their textiles, pointing out that the sample of 1738 was not fit standard for judging’ the quality of cloth sent from Dacca in the former year. The reasons for the badness of the quality of cloth, as the Dacca factors wrote, were:35 as the Copass [kapas or cotton] or country cotton has not been for the two years past under 9 or 10 rupees and the price of rice at the same time very dear, whereas in 1738 the Coppas did not exceed Rs. 2 or Rs. 2-8 and the rice very cheap, mostly 2 maunds 20 seer to 3 maunds for a rupee to which may be added which is well known to all the purchasers of cloth that the prices of all sorts of cloths have risen near 30 per cent, some more, since the year 1738, and that they now labour there and has done so for these two years past under the inconvenience

410 | Companies, Commerce and Merchants of a French factory continually emulating the Hon’ble Company’s trade and have advanced the price to all cloth both coarse and fine and obliged them to be less severe with their dellols in prizing their cloth. . . .

Clearly, this is a desperate bid on the part of the Dacca factors – scrupulousness not being their strong point, true also of other Company servants working in India at that time – to justify the poor quality of the cloth and hence the emphasis on a 30 per cent increase in its price between 1738 and 1752. As the ‘muster’ (sample) of 1738 had been the standard, so 1738 becomes the target date and for no other reason. Moreover, if one carefully examines the above passage, one cannot miss the stress on ‘these two years past’ which signifies that the quality of cloth had deteriorated in those years and not really for the whole of the period from 1738 to 1752. There is the specific reference to ‘near 30 per cent’ increase in the price of cloth during the period but, if at all true, that applies only to Dacca, and not all of Bengal. Besides, one can rightly suspect the validity of evidence produced in self-defense against allegations of malpractice. One who has gone through the Company records carefully can hardly fail to observe that throughout the period, whenever an allegation was made regarding bad investments, the factors always answered in the same vein – that it was because of the high price of staples like rice and cotton, competition from other Asian and/or European merchants, and the general increase in the price of export commodities. One should accept such ‘evidence’ or ‘excuses’ with caution. However, the fact remains that a distinguished authority has demonstrated with diagrams, polynomial and linear trends, as also time series, that ‘a fairly sustained and marked increase (in prices) is particularly strong for raw silk and textiles’ during the period under review.36 How can one reconcile this with the fact, as we shall see shortly, that the increase in prices of these two main export commodities was not particularly spectacular. The answer is not far to seek. The weighted average, diagrams, polynomial and linear trend, etc. do not take into account the most crucial factors which determined the price of either textiles or raw silk. There were numerous varieties of textiles and even

Was there a Crisis in Mid-eighteenth Century Bengal? | 411

within the same category (e.g. muslins or fine calicoes), there were different types (e.g. in muslin, there were khasas, mulmuls, etc.) and the price of each type (e.g. khasa) depended on size, quality, and the aiming in which it was produced, which will be evident in the Table 17.4. Table 17.4: Dutch Companys Contract with Merchants for Textiles, 24 June 1752 Name of Piece-goods Khasa Khasa Khasa Jagannatpur Khasa Hendial with gold head Khasa Jagannatpur Khasa Hendial Khasa Jagannatpur Khasa Jagannatpur Khasa fine Hendial with gold head Khasa fine Hendial with gold head Khasa Nadona Khasa Nadona Khasa Bourang Mulmul Fine Mulmul fine Mulmul fine Haripal Mulmul fine Haripal Mulmul fine Haripal Mulmul (assorted) Mulmul (assorted) Mulmul (assorted) Mulmul (assorted) Mulmul (assorted) Mulmul (assorted) Mulmul ordinary Mulmul ordinary

No. of Pieces 3,000 840 6,000 2,000 2,000 2,000 2,960 1,200 500 1,500 1,000 2,000 4,000 200 300 100 350 50 1,000 400 4,500 500 1,200 400 4,000 1,200

Length (co.) × Breadth (co.) 40 × 3 40 × 2⅜ 40 × 2¼ 40 × 2¼ 40 × 2 40 × 2 40 × 24/5 40 × 2½

Price per Piece (Rs. as.) 14.11 12.11 10.13 11.6 9.8 9.8 8.7 7.6

40 × 3

18.15

40 × 2¼ 40 × 2¼ 25 × 2¼ 38 × 1⅞ 40 × 3 40 × 2¼ 40 × 2¼ 40 × 1¾ 40 × 1⅓ 40 × 3 40 × 2⅝ 40 × 2¼ 40 × 1¾ 40 × 2 40 × 1½ 40 × 2¼ 40 × 2

14.3 7.2 4.6 6.10 17.10 13.11 12.4 10.4 8.13 14.11 12.11 10.12 8.7 9.8 6.12 7.6 6.12

Source:. VOC 2821, HB, 20 Feb. 1753, ff. 91-5, Contract, dt. 24 June 1752.

412 | Companies, Commerce and Merchants

The same was the case with raw silk, the price of which depended on the particular variety (e.g. ‘Gujarat’, Kumarkhali), fineness and racolta (band – Indian term for the harvest).37 If all these factors are not taken into consideration in working out the cost price, the results are bound to be misleading. Just by deflating the total cost price by the total amount exported to find out per unit cost price does not reveal the real picture as has happened in this case.38 Hence even with the scientific tools of analysis used by K.N. Chaudhuri, the results – showing a secular upward trend – can hardly be taken for granted. For a precise study of the movement of textile prices, one has to take into account how many pieces of a particular type of cloth, of what length and width, of which aurung and of what quality were exported at what total price – from which alone one can get the exact picture of price movements. To give an illustration, if we are looking into the price of khasa, just taking into account the number of exported and their total price, to find the unit price, could be quite erroneous. We have to know whether the khasa was ordinary, fine or superfine, whether its measurement was 40 co. × 3 co.,39 40 co. × 2¾ co., or 40 co. × 2¼ co., and whether it was produced in Jagannatpur or Cogmaria or Orrua (i.e. the aurung in which it was produced). The price of khasa will depend on all these factors and hence we have to take all these variables into consideration. This is almost an impossible task as in all the export invoices, whether of the Dutch or the English Company, what is given is the total number of khasas exported, and the total cost price. There is no mention of size, quality, or aurung. Again, if the unit price of the textiles in a particular year is arrived at just by dividing the total cost price by the total number of pieces exported without taking into account the composition of different categories such as muslins, fine calico or ordinary calicos (which varied over the period in the total textile export) then too the picture of price movement could be distorted. Thus the steady upward trend in K.N. Chaudhuri’s time series can be explained by the fact that while the share of the more expensive category of textiles, muslins, and silk piece-goods steadily increased in

Was there a Crisis in Mid-eighteenth Century Bengal? | 413

the first quinquennial period of 1740s and 1750s, that of the cheapest variety, ordinary calicos, remained the same,40 and not because of any real increase in the price of textiles. That the unit price of textiles could vary widely depending on the category of textiles and place of procurement is amply clear from the unit price of the textiles exported by the Dutch Company in 1753-4 for which such breakdowns are available. Thus the unit price of textiles sent from Patna, mostly ordinary calicos, worked out at f. 613; from Dacca, mostly muslins and fine calicos, f. 20.04; from Hughli, mostly medium quality, f. 9.6; and from Kasimbazar, silk piece-goods and ordinary calicos, f. 7.85.41 The only accurate evidence of price movement in textiles is the contract the Companies entered into with the dadni merchants for supply of goods every year. In these contracts we find the particular details of the size, quality and the aurung of each type of cloth which are absolutely essential for a proper scrutiny of the movement of price of textiles. Until and unless we know these details of the variables, nothing definitive can be said about price movement. As is well known, the prices were arrived at after days’ of bargaining and wrangling between the Company and its merchants. When the Companies tried to pay lower prices for cloth delivered by the merchants, it was mainly on grounds of inferior quality and the original contract price was never altered. So let us see what are the general trends, as revealed in these contracts over the period for which we select six years, namely, 1732. 1741, 1744, 1751, 1752 and 1754. These particular years are chosen for such an analysis because 1732 was a normal year without political disturbance or natural calamity, 1741 was the year just prior to the Maratha invasions, and 1744 was the year when the impact of these incursions could be expected to be reflected in the price movement. The Maratha invasions stopped in 1751; 1752 was the year immediately after the peace with the Marathas, while 1754 was the first normal year after the famine of 1752. As such these years would give us a broad spectrum of the period with its ups and downs, whether political or economic. For our present analysis, we take up the Dutch contracts for these six years to see how prices moved in the two main types

414 | Companies, Commerce and Merchants

of muslins, khasas and mulmuls, which were the staples in the export list of the Europeans (Table 17.5).42 It is evident from Table 17.5 that between 1734 and 1754 there was no increase in the price of twenty different types of khasas and mulmuls that were noted in the list of contract, except for khasa Nadona which seems to be, from its price, a medium or low quality fabric. What is extremely significant, as is apparent from this Table is that, the price of all the different khasas and mulmuls (except khasa Nadona) actually went down in the period 1751-4 from the level between 1732 and 1744. In Table 17.5: Contract Price of Khasas and Mulmuls 1732-54 (Select Years), Dutch Company Textile type

Measure (in covid)

Khasa ordn.

40 x 3

Khasa fine Khasa ordn. Khasa ordn. Khasa ordn. Khasa ordn. Khasa ordn. Khasa ordn. Khasa Nadona Mulmul ordn. Mulmul fine Mulmul ordn. Mulmul ordn. Mulmul fine Mulmul ordn. Mulmul ordn. Muhmd ordn. Muhnul ordn. Mulmul fine Mulmul ordn.

40 x 3 40 x 2⅝ 40 x 2¼ 40 x 2½ 40 x 2 40 x 1¾ 40 x 1½ 25 x 2¼ 40 x 3 40 x 3 40 x 2⅝ 40 x 2¼ 40 x 2¼ 40 x 2 40 x 1¾ 40 x 1¾ 40 x 1½ 40 x 1½ 40 x 4¼

1732 1741 1744 1751 1752 Price Price Price Price Price (Rs. as.) (Rs. as.) (Rs. as.) (Rs. as.) (Rs. as.) 15.00 15.00 15.00 14.11 14.11 18.00 13.00 11.00 X 9.12 8.10 7.8 3.14 15.00 18.00 13.00 11.00 14.00 9.12 8.10 10.8 X X 7

X 13.00 11.00 X 8.00 7.00 X 3.14 15.00 18.00 13.00 11.00 14.00 9.12 8.10 X 7.00 9.00 X

X 13.00 11.00 X 9.12 8.10 7.8 3.14 15.00 X 13.00 11.00 14.00 9.12 8.10 X 7.00 X X

X 12.11 X 10.13 9.8 8.7 7.6 4.6 X 17.10 12.11 10.12 13.11 9.8 8.7 10.4 X 8.13 6.14

X 12.11 10.13 X 9.8 8,7 7.6 4.6 X 17.10 12.11 10.12 13.11 9.8 8.7 10.4 6.14 8.13 X

1754 Price (Rs. as.) 14.11 X 12.11 10.13 X 9.8 8.7 7.6 4.6 14.11 17.10 X 10.12 13.11 9.8’ X 10.5 6.14 8.13 X

Source: Contracts with Merchants, VOC 2241, ff. 649-61; VOC 2537, ff. 1427-8; VOC 2629, f. 218; VOC 2783, ff. 236-7, VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.

Was there a Crisis in Mid-eighteenth Century Bengal? | 415

other words, the prices of khasas and mulmuls in the period from 1732-51 will negate the thesis of a ‘fairly marked and sustained’ increase in the prices of textiles in general during the period. But one might argue that khasas and mulmuls were finer varieties of calicos, and perhaps the price rise was reflected in not-so-fine and medium types of textiles. So let us see how the prices moved in these varieties during the years under consideration. In Table 17.6 we note the contract prices for several types of textiles coarser than muslins and which were prominent in the export list of the Dutch Company. The price trend that emerges from Table 17.6 is undoubtedly different from the one in Table 17.5. Of the six types of coarse textiles, the prices of four rose by 10 to 20 per cent while the price of two others actually show a downward trend. Though it is difficult to explain such mixed trends, one possible explanation could be that most of these piece-goods were produced in the areas around Hugli, which was one of the worst affected by the Maratha raids. Secondly, the competition among the buyers, whether Asians or Europeans, was more severe for the coarser varieties than for finer muslins. But then we cannot explain, at the present state of our knowledge, the slide in the prices of the two types of ginghams. Still what is notable from the prices of Table 17.6: Contract Prices of Coarser Textiles 1732-54 (Select Years), Dutch Company Textile type Sanoes Kharadaries Allabanies Ginghams (plain.) Ginghams (check)

Measure (in covid) 24x2

1732 Price (Rs. as.) 4.8

1741 Price (Rs. as.) 4.8

1744 Price (Rs. as.) 4.8

1751 Price (Rs. as.) 4.15

1752 Price (Rs. as.) 4.15

1754 Price (Rs. as.) 4.15

18 x 2¼ 24 x 3

4.00 4.12

4.00 4.12

4.00 x

4.3 5,7

4.8 5.12

4.8 5.12

13 x 2¼

3.8

3.8

3.8

3.7

3.7

3.7

18 x 2¼

4.12

4.12

4.12

4.7

4.7

4.7

Source: Contracts with Merchants, VOC 2241, ff. 649-61; VOC 2537, ff. 1427-8; VOC 2629, f. 218; VOC 2783, ff. 236-7, VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.

416 | Companies, Commerce and Merchants

the coarser types of textiles is that there is hardly anything which can be termed ‘a marked and sustained increase’ in prices over the period. So far as the price of coarsest textiles is concerned, no clear picture emerges from the Dutch contracts (Table 17.7). Though at the first glance ii seems that the prices went up considerably, it is extremely difficult to measure the rise because the measurement of textiles by the Dutch varied over these years, and there is no precise data how the price of any of the coarsest textiles of exactly the same length and width rose during the period (Table 17.7). Here it is important to note that in Bengal, the price of the same type of textile often jumped when the traditional measurement was even slightly altered – a fact which is borne at by numerous references in the Company records. Yet, it is possible that the price of the coarsest textiles went up to some extent though it is not obvious from Table 17.7. The explanation for this probable rise in the price of coarsest textiles is not obvious from Table 17.7. The explanation for this probable rise in the price of coarsest textiles is not far to seek. Most of these textiles were produced in Birbhum, Burdwan and Kasimbazar areas, which Table 17.7: Contract Prices of Coarsest and Cheapest Textiles 1732-54 (Select Years), Dutch Company Textile type

Measure (in covid)

Garras Garras Garras Garras Guinees Guinees Salampuris Salampuris

36 x 2½ 30 x 2½ 30 x 2½ 24 x 2½ 75 x 2½ 75 x 2¼ 37½ x 2½ 37½ x 2¼

1732 Price (Rs. as.) per corge X X 45 X X 118 X X

1741 Price (Rs. as.) per corge X X 48 X X 121.8 X 60.12

1744 Price (Rs. as.) per corge X X X X X X X X

1751 Price (Rs. as.) per corge 84 70 X 56 175 X 87.8 X

1752 Price (Rs. as.) per corge 84 70 X 56 175 X 87.8 X

1754 Price (Rs. as.) per corge 84 70 X 56 175 X 87.8 X

Source: As in Table 17.5 and VOC 2783, ff. 248-9; 2840, f. 680. Per corge means per 20. Generally the coarsest textiles were contracted per corge.

Was there a Crisis in Mid-eighteenth Century Bengal? | 417

were the most heavily affected areas by the Maratha invasions. Besides, as we have shown elsewhere,43 the keenest competition in the market was for this variety, which was the reason why the merchants were most reluctant to contract for these textiles which, as they alleged, brought them little or no profit while they were extremely eager to contract for finer varieties. Often the Companies had to impose the contract for these ordinary calicos on unwilling merchants. Thus prices of textiles do not show a ‘sharp and marked increase’ from an analysis of the English Company’s contracts from 1730 to 1757.44 Similarly it can be shown that the price of raw silk, though fluctuated a lot during the period, does not show any secular upward trend.45 As pointed out earlier, rice is the most important food item, the price of which should be looked into to determine any precise price movement in Bengal during the period under review. But the main difficulty here is the varieties of rice, and their different prices (Table 17.8). So it is not a simple case of fine or coarse rice only; when the price of coarse rice can vary as widely as between 4 mds. 15 seers and 7 mds. 20 seers per rupee (the difference being about 71 per cent), there is a grave risk in taking the price of rice as an indicator of price movements, until and unless one can be absolutely sure of the exact quality. Otherwise the result could be extremely erratic and gravely misleading. Yet depending on such data and sometimes fragmentary at that, recent Table 17.8: Price of Rice 1729 Variety Fine Rice: Bansephool

Mds. Seers

1st sort 2nd sort 3rd sort Coarse Rice: Desna Coarse Rice: Poorbie Coarse Rice: Munsurah Coarse Rice: Kurkashalle Source: Sixth Report (1782-3), Appendix 15.

1-10 1-23 1-35 4-15 4-25 5-25 7-20

Per Rupee " " " " " " "

418 | Companies, Commerce and Merchants

authorities made such assertions as ‘Rice which was sold at 100 to 120 seers for a rupee in 1738, was being sold only 30 seers for a rupee’ in the mid-1740s as evidence to show that ‘production declined and prices soared’ or that ‘by the 1740s Bengal’s advantages seemed to be disappearing’.46 Basing his evidence on earlier authorities, the most recent authority affirms that ‘between 1738 and 1754 it was thought that the price of rice in Calcutta had risen by three or four times’ and reiterates that ‘local shortages’ led to ‘greatly increased food prices’.47 But a close scrutiny of price of rice in Bengal shows no ‘marked and sustained’ increase during the period.48 Thus, the thesis of the crisis in mid-eighteenth-century Bengal crumbles under close scrutiny. Indeed it was not because of any internal crisis in Bengal that the British had to intervene; it was because of the private trade interests of Company servants. This was the motivating force behind the conquest. The golden days of British private trade began to decline from the late 1730; it was facing a severe crisis in the late 1740s and early 1750s because of a substantial increase in French private trade.49 So the destruction of the French, to prevent any possible FrancoBengali alliance against the British, and the deposition of the nawab who was threatening to stop illegal private trade and misuse of dastaks by the British – both essential for rescuing the battered private trade fortunes of the British – became the main goal of the Company servants’ subimperialism.50 Notes 1. For this broad generalization, see P.J. Marshall, Bengal – The British Bridgehead (Cambridge, 1987), pp. 56, 63; Rajat Kant Ray, ‘Colonial Penetration and Initial Resistance’, Indian Historical Review, vol. XII, nos. 1-2, July 1985-]anuary 1986, pp. 4, 6, 7, 14. It should not be mis-construed that I am against any ‘theorization’ but my point is while doing so, one should not lose sight of the specific issues involved. Also, a recent study has pointed out (M.M. Rahman, JNU, M.Phil., 1988) that the new class alliance or ‘compact’ had more of a personal character to serve vested interests than any institutional basis and hence was bound to be short-lived. For Hill’s views, see S.C. Hill, Bengal in 1756-57 (London, 1905), vol. 1, p. lii.

Was there a Crisis in Mid-eighteenth Century Bengal? | 419 2. P.B. Calkins, ‘The Formation of a Regionally Oriented Ruling Group in Bengal’, Journal of Asian Studies XXIX, 4, 1970, p. 800. 3. M. Mazibor Rahman, ‘Nizamat in Bengal’, unpublished M.Phil, thesis JNU, 1988. 4. Ghulam Husain Salim, Riyaz-us-Salatin (Calcutta, 1904), p. 288. 5. Bengal Public Consultations (henceforth BPC), Range 1, vol. 6, f. 490, 14 August 1727. 6. Riyaz, pp. 294-5. 7. Ibid., p. 320. 8. Ibid., pp. 311, 314-15, 319-20. 9. K.K. Datta, Alivardi and His Times (Calcutta, 1952), p. 81. 10. Only P.J. Marshall spoke about the economic ‘crisis’ in a seminar (1988) in Calcutta. 11. For example, K.N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge, 1978); P.J. Marshall, East Indian Fortunes (Oxford, 1976); Bengal – The British Bridgehead. 12. Richard Becher’s letter to Governor Verelst, 24 May 1769, quoted in W.K. Firminger, Fifth Report, pp. 183-4. 13. Ibid. 14. See S. Chaudhury, ‘Merchants, Companies and Rulers – Bengal in the Eighteenth Century’, Journal of the Economic and Social History of the Orient, February 1988. 15. For details, see S. Chaudhury, From Prosperity to Decline – Eighteenth Century Bengal (Delhi, 1995), Chapter 5. 16. Gangaram, Maharastrapurana, lines 234-42. 17. Riyaz, p. 340. 18. Bharatchandra quoted in K.K. Datta, Studies in the History of Bengal Suba (Calcutta, 1936), p. 466. 19. For the value of Dutch and English exports, see Chapters 3, 7 and 8 and for Asian exports, Chapters 7 and 8 of S. Chaudhury, From Prosperity to Decline. 20. For detailed reasoning for this assumption, see S. Chaudhury, ‘Asian Merchants and Companies in Bengal’s Export Trade, circa 17001757’, paper presented at the International Conference on ‘Merchants, Companies and Trade – the Asian and European Scene, 16th-18th Century’, Paris, 1990; in S. Chaudhury and M. Morineau (eds.), Merchants, Companies and Trade (Cambridge, 2000). 21. Though the markets for the European and Asian exports were different, the demands for the various categories of Bengal textiles in these markets were more or less the same. The detailed analysis of the percentage share of different categories of textiles exported by the Companies (see S. Chaudhury, ‘Continuity or Change in the Eighteenth Century? Price Trends in Bengal, circa 1720-1757’, Calcutta Historical Journal, vol. XV, nos. 1-2, July 1990-June 1991, p. 24, Table 11)

420 | Companies, Commerce and Merchants establishes that the bulk of the exports comprised ordinary, medium and fine cotton piece-goods. The demand in the Middle East and Central Asia which was the main area of Asian exports was also for the same varieties as will be apparent from the analysis of the Dutch textile export to the Persian Gulf region (see, S. Chaudhury, From Prosperity). 22. Leaving aside the amount sent for the emperor at Delhi, the breakdown of the value of the export is as follows: Upper Provinces Rs. 1,00,000, Pathans Rs. 1,50,000, Mughals for foreign consumption Rs. 4,00,000, Armenians to Basra, Mocha and Jeddah Rs. 5,00,000. 23. BPC, vol. 12, f. 263, 26 September 1737; vol. 22, f. 345vo, Annex. to Consult., 26 October 1749. 24. For details, see S. Chaudhury, From Prosperity to Decline, Chapter 5. 25. K.N. Chaudhuri, Trading World, pp. 311-12 26. BPC, Range 1, vol. 26, f. 164, Annex. to Consult, 7 June 1753. 27. For example, see K.K. Datta, Bengal Suba, pp. 463-9; Brijen K. Gupta, Sirajuddaullah and the East India Company (Leiden, 1962), p. 33; K.N. Chaudhuri, Trading World, pp. 99-108; P.J. Marshall, East Indian Fortunes, p. 35; Bengal, pp. 73, 142-3, 163-4, 170. 28. K.N. Chaudhuri, Trading World, pp. 99-108, 159. 29. Om Prakash, Dutch East India Company and the Economy of Bengal (Princeton, 1985), p. 250. 30. Ibid., pp. 251-3. K.N. Chaudhuri, however, shows with histogram a steady increase in the price of rice during the period under review. 31. K.N. Chaudhuri, Trading World, p. 102: following him, P.J. Marshall, Bengal, p. 73. Chaudhuri depends on polynomial and linear trend of textile and silk prices (pp. 103-4, 107-8) which shows a ‘strong and gradual’ rise in prices but as we shall see the method followed is subject to a wide margin of error. 32. K.K. Datta, Bengal Suba, p. 464; Brijen K. Gupta, Sirajuddaullah, p. 73, 33. P.J. Marshall, East Indian Fortunes, p. 35; Bengal, p. 33. 34. BPC, vol. 26, f. 214, Consult., 11 December 1752; Bengal and Madras Papers, vol. II, p. 34; James Long, Selections from Unpublished Records (Calcutta, rpt., 1973), p. 40, doc. no. 103. 35. All emphasis mine. 36. K.N. Chaudhuri, Trading World, pp. 100-8, 533-4, 544-5. 37. See S. Chaudhury, From Prosperity, Chapter 8. 38. K.K. Chaudhuri, Trading World, pp. 506, 546. 39. co. is covid, measuring 18 inches. 40. See S. Chaudhury, From Prosperity, Chapter 7, Table 7.7 and Figure 7.5. 41. Collected and computed from export invoices in VOC records, Verenighdc Oost-Indische Compagnie (henceforth VOC), 2811, ff.

Was there a Crisis in Mid-eighteenth Century Bengal? | 421 6vo-7, 20-20vo, 46-46vo, 99-99vo; 2821. ff. 635-6; 2840. ff. 39, 141-2. 42. For the wide variation in the price of the same type of textiles, e.g. khasa and mulmul, depending on size, quality and aurung, sec Table 17.4. 43. See S. Chaudhury, From Prosperity, Chapter 7. 44. Ibid., Chapter 10. 45. Ibid. 46. Brijen K. Gupta, Sirajuddaullah, p. 33; P.J. Marshall, East Indian Fortunes, p. 35. 47. P.J. Marshall, Bengal, p. 73; East Indian Fortunes, p. 35. 48. See S. Chaudhury, From Prosperity, Chapter 10. 49. The Dutch shipping records in the VOC archives will bear this out. 50. See S. Chaudhury, ‘Trade Bullion and Conquest – Bengal in the Eighteenth Century’, Presidential Address, Medieval India Section, Indian History Congress, Golden Jubilee Session, 1989.

Index

Abyssinians 386 Achee Beagnes 15 Achin 12, 27, 42-3, 131, 134, 136-7 Adams, Abraham 78, 253 Afzal, Mir 302 Agra factors 23, 62, 93, 361 Ahmed, Haji 341, 344, 401-2 Akbar, Ali 123 Aldersey, W. 312, 366, 369 Ali, Karam 277, 342 ‘AlichYarCawn’ 27 Alumchand 341 Amphora 15 Anandchand 238 Arabs 23, 323, 386 Arasaratnam, S. 143 Arcot rupees 178, 249-51, 254, 286, 288, 295, 342 Armenians 7, 23, 27-8, 31, 123, 309, 323, 326, 347, 363, 368; merchants as 27, 129, 135, 140, 345, 348 arrack 135, 138, see also opium artisans 97, 98, 103, 181, 215, 291, 324, 350, 386, 404; Bengali 99 Ashraf, Khwaja 302 Assomies 155, 156 Aurangabad 315, 373 Aurangzeb 1, 52, 56, 58, 263 Azam, Muhammed 55 Azim-us-Shan 26, 155 Babu, Nainsook 233 Balasore 13-15, 18-20, 24, 26, 87-8, 109-13, 115-21, 132, 136-9, 142-3; factors 56, 72, 112, 114-

15, 117-21; merchants 111-13, 115-16, 120, 132, 136-7 banana roots 181, 291, 404, see also famine Bandar-Abbas 1 Bandopadhyay, Sadananda 316 Barbosa, D. 131, 189 Basak, Gangacharan 220 Basak, Paramananda 221 Basak, Sobharam 330 Basaks 216, 328, 330, 334-6, 350, 407 Basra 1, 12, 80, 129, 349 Batavia 16, 42-3, 152, 154, 197, 300, 305 batta 68, 244, 245, 249-50, 339, 341 battle of Plassey 31, 182, 184, 245, 264, 266 292, 300, 349 Bauher, Hakeem Mohamed 27 Bayly, C.A. 360 Beard, John 53, 217 Becher, Richard 180, 264, 290, 403 Beg, Ahmed 25, 136 Beg, Hakim 238-9 Benares merchants 24, 93, 309, 311, 361, 363, see also Bengal, merchants of Bengal Agency 63, 78, 131 Bengal Council 22, 57, 67, 74, 77-8, 122-6, 247 Bengal Nawabs 14, 30 Bengal Suba 85 Bengal: coastal trade of 13-14; commercial exports and imports 269; commodities 27, 70, 351, 394; communication system in

424 | Index 267 (see also under nawabs); domestic trade of 386; export trade of 307, 308, 359-62, 368, 371, 383, 389, 390; factors of 31, 42, 62, 64, 68, 71, 74, 79, 89, 91, 92; handloom industry of 189, 377; import to 10, 15, 25, 337; indigenous merchants trading in 109; investment in 226; merchants of 24, 26, 27, 63, 95, 108-9, 119-21, 129-31, 134-40, 144, 328-9, 332-5, 350, 407; money market in 247, 339; natural products of 1, 41, 264; as Paradise of Nations 1, 263; rice exports of 1, 41, 264; royal port of 2, 13; seaborne trade and 307, 359, 390; silk market of 308, 309, 362, 363 Bengal-Europe trade 385 Bengal-Persia trade 79 Bengal-Surat trade 135 Bengal-Surat-Persia sector 251 Bernier, F. 1, 41, 103, 189 Beschryvinge van de Oost-Indische Compagnie 193 betelnuts 15 Betteeas 265, 317, 374 Bharatchandra 181, 291, 404 Bhattacharyya, Sukumar 359 Bhirguram 232 Bihar trade 302, 343 bilateral trade 384 Bills of Debt 231 Bittaldas 127 Bohra, Virji 352 Bolts, William 265, 317, 374, 392, 393 Bombay 42, 250 Boremull [Puranmall?] 112, 138 borrowing money 25, 71-5, 111, 128, 130, 140, 231, 233-7, 242-3, 253-4, 339-40 Boughton, Gabriel 52-3, 56 Bourchier 219

Bowrey, Ini 24, 26, 53, 131, 137, 139, 196 Bowrey, Thomas 24, 139, 196 Bridgman, James 53 Brimstone 15 Brindabandas 80 brokers 108-9, 111-12, 115, 117, 122, 124, 127, 214-29, 250, 254, 323-4, see also merchantmiddlemen Brookhaven, Captain 53 Bulchand 57, 67 bullion 20, 21, 60-3, 66-70, 162-4, 229, 245-50, 275, 318, 358-60, 386-90, 392, 393; Asian import of 371; influx of 388 Bullubdas 127 Burcoordar, Malik 120, 137 Burdelwalis 309, 363 Burdwan 181, 291, 404 Burma 389, 394 butter 15, 17, 42-4, 135 Bysacks 31 Cabral, Portuguese missionary 12 Caffeelahs 265, 374, 392 Calcutta Council 216-26, 234, 235, 241, 243-4, 246-9, 252, 325, 327-31, 335, 336, 339, 346 calicoes 16, 86-7, 89, 91-2, 95, 169, 202, 280, 415; coarse 172, 192, 197, 202; fine 166-7, 196, 199, 202, 204, 411 Calicut 42, see also Malabar Calwars 309, 310, 363 Cambay 24, 131 Cansius, Henry 361 carpets, of Junapoore 10 Carteret, Edward 220 Cary, J. 89 Cashmeerians 265, 317 ‘Catoene Lijwaten’ 194 Ceylon 1, 9, 16, 24, 41-3, 131, 134, 155, 392 chanck 15

Index | 425 Chandernagore 229, 233 Charan, Hari 138 Charnock, Job 57, 122, 128 Chaudhuri, Indranarain 229 Chaudhuri, K.N. 161, 166-7, 332-4, 347, 350, 360, 412 chief merchants 118-19, 121-2, 124, 130, 214, 217, 254 China 7, 9, 11, 23, 57, 347, 385-6, 389, 394-5; trade missions of 388 Chittagong 7, 266, 268 cinnamon 9, 16, 135 Clive, Col. 184, 233, 335, 337-8 cloth 2, 9, 69, 88, 89, 99, 164-6, 168, 278-80, 331-2, 409-13; quality of 279, see also textiles cloves 9, 15 Cobido 192-6, 200 Cochin 10, 25, 136 Colchester 28, 80 Cole, Humphrys 220 Colombo 25, 136 commodities 2, 8, 9, 20-3, 25-6, 39-44, 61, 62, 110-12, 123, 1557, 161, 162, 273-4, 391-2 Company: debt 71, 72, 231, 234; factors 40, 55, 57, 63, 65, 69, 75, 114, 127; imports into Bengal 114, 136; investments 76, 112, 114-17, 119, 124, 127, 215-16, 219, 228, 233, 328, 329 contract prices 168-9, 174, 280, 293, 413, 415 Copass (kapas, cotton)165, 278, 409 copper 15-16, 21, 67, 110, 135 cordage 15 Coromandel 16, 40, 42, 87, 143, 152-3, 304, 394 Coronne, Sultan 12 Cotma, Sautoo 327 cotton piece-goods 9, 16, 86-8, 90, 110, 216, 370, 384 Council at Kasimbazar 233, 308, 327, 329, 362 Covid 192-4, 196

cowries 119, 121, 135 credit: market 60, 74, 76, 231, 234, 237, 239-41, 251, 254, 335, 407; mechanism 220 customs duties 10, 11, 28, 54, 57, 58, 345 Dacca/Dhaka 63, 64, 71, 93, 94, 122-3, 164-5, 177, 205-6, 223-5, 243-4, 409-10; cloth manufacture of 195; factors of 57, 94, 164-5, 177, 242-3, 278-9, 286, 409-10 dadney system 97, 103, 126, 214-15, 222-5, 230-1, 250-1, 324-35, 342, 391, 407, 408; merchants of 167, 181, 206, 214-16, 291, 325, 330, 331, 333-6, 342-4, 404, 407 Das, Jadu 156 Das, Purusuttom 156 Datta, Burro 226 Datta, K.K. 161, 278, 286 Derrickson 78 Domurmal 129 Dorill, Captain 125-7 Dow, Alexender 270 Durlabh, Rai 184 Dutch East India Company 12, 76, 158, 213, 265, 280, 300; export to Holland 158 Dwarakadas 127 East Indies 9, 14, 42-3, 61, 270, 3845; the Dutch factories in 14 Echenaut, Ramnaut 327 Edwards, Richard 93, 361 elephants 15, 25, 135, 136 elephants’ teeth 15 Ellis, Agent 124 England 19, 21-2, 61-2, 69-0, 75, 77-9, 89-93, 95, 143, 152-4, 253 English East India Company 10-11, 15-17, 20-3, 29, 43-4, 51, 53, 55-7, 60, 111, 360-1; borrowed money 233-4, 253; exports 96, 182, 312, 366, 369, 405; factors

426 | Index 8, 11, 13-15, 17, 39-40, 47, 54, 76, 127-28, 139, 156-57; Interlopers of 117; investment pattern 181, 291, 324, 404; manufactures 61, 69-70; trading in Bengal 13, 20, 60, 108; ships 25, 137 English: merchants 16-17; silk industry 92; silver 246; trade 12, 15, 29, 112, 157, 200; trade in Bengal 17, 51, 109 European: bound ships 62, 153, 229; exports 183, 292, 312-13, 359, 366-7, 390-1; exports of raw silk 205, 312-13, 366-7; imports in Bengal 60; investments 40; markets 61, 85, 86, 98, 308, 368; trade 110, 162-4, 179, 183, 191, 204, 254, 275, 276, 318, 319, 358-60, 376-7; trading in Bengal 14, 16-17, 152, 214, 323-4, 348 exports: Asian 313, 367, 370-1, 391, 405, 407; European 18, 183, 292, 312-13, 359, 366-7, 390-1 external trade of Bengal 4, 14, 26 factories: in East Indies 14; at Hugli 14, 18-19, 22-3, 51, 63, 66, 112; at Malda 18 famine 9, 17, 168, 179, 277, 288, 295, 384, 413 Farrukhsiyar, Emperor 52, 68, 267 Fatechand, Jagath Seth 129, 225-6, 233, 235, 244, 246-7, 249, 250, 338-41 faujdars 28, 30, 115, 123, 136, 138, 302; of Balasore 115, 138; of Hugli 25, 26, 28, 120, 123, 136-7, 140 Fazlullah, Agha 24 Feake, Samuel 253 Federici, Caesar 2, 5, 8, 9, 389 Fenwick, Captain 224, 233, 337 Flynn, D. 385 foreign: merchants 2, 272, 309, 363; trade 2, 26, 132; traders, as ‘milch

cows’ 54; travellers 1, 2, 6, 41, 264, 389, 392 Forster, John 343 Fort St. George 68, 124, 135 Fort William 18, 78, 249 Fort William Consultations 230 Fort William Council 181, 253, 286, 291, 295, 338, 345, 346, 404 Franco-Bengali alliance 418 Frankland, Henry 78, 179, 180, 253, 288, 290 Frankland, William 332, 333, 335 freedom of trade 14, 55 freight voyages 79, 251-2, 254 fruits 6, 26, 138 Fryer 215 Fuggers 347, 348 Futtichund 220, 235, 248, 249, 338, 340; Estate of 341 Gaffur, Abdul 135, 139, 144 Gale 42, 134-7 Gambroon 28, 129, 137-8 Gangaram 181, 291, 404 Ganges 2, 3, 11, 153-4, 268-70 gaunce (ganja) 15 Georgians 386 Ghafur, Mulla Abdul 352 ghee 9, 135, 181, 264, 272, 291, 404 ginghams 9, 15, 22, 87, 112, 116, 170, 415 Giraldez 385 Goa 1, 14, 41-2, 135 Goculchand 66, 126 gold 10, 15, 47, 61-6, 121, 135, 184, 388-9, 394; from Japan 15 gomasta system 179, 181, 225, 290, 324, 332-5, 342, 350, 404, 407-8 Gossairam 127, 327, 329 Govindji 122 Grant, Charles 263 Griffith 27 Gujarat 12, 87, 144, 152, 166, 193, 196, 310, 349, 364, 386-7; merchants 75, 93, 309, 363; ships of 386

Index | 427 gumlac 62 gunpowder 152-3, 155 Gupta, Ashin Das 349 Gupta, Brijen K. 161, 278, 286, 360 Halifax, voyage of 252 Hamilton, Alexander 28, 41 Haridas 66 Harinath 218 Hason, Samuel 20 Hastings 309, 310, 363-4 Hathu (Huttoo) 226 Hedges, Robert 78, 217-18, 253 hemp 15 Hill, S.C. 399 Hindu mercantile-banking class of Bengal 358 Hobson-Jobson 193 Hossein, Gholam 341 Hughes 10 Hugli Council 26, 63, 69, 72, 114-15, 117-20 Hugli: factories 14, 18-19, 22-3, 51, 63, 66, 112; port 3-4, 5, 7, 17, 19, 23, 28-31 Huijghens 303 Hume, Alexander 233, 244 Hunter 8 Hussain, Ghulam 277 Indian cotton goods 61 Indian merchants 13, 23, 27, 41-3, 115, 189, 280, 300-3, 310, 359, 364 indigo 9, 15 Indo-European: oceanic trade 358; trading voyages 137 Indonesian archipelago 85, 300-1, 384 inland trade 4, 8-10, 134, 139, 343 inter-Asiatic: commerce 79; trade 16-17, 23, 78, 79, 110 Interlopers 65, 117, 119-20, 122-5, 140, 156 intra-Asiatic trade 14, 251-2, 254, 305, 392

investments 60-4, 69-71, 110-19, 181, 213-17, 219-27, 229-30, 233-5, 323-5, 328-34 , 350, 407; at Balasore 112, 116-17, 120; in Calcutta 215-16; of Company 21, 110-11, 116; for Europe-trade 110, 125 Israeli, Khaja Sarhaud 80, 129, 138 Italian silks 89, 384 Jackson, John 342-3 Jadu 232 Jafar, Mir 402 Jaffer, governor 25, 136 Jaffnapatnam 42, 134, 136 Jahan, Shah 4-5, 8, 11-14, 53-5; external trade of 12 Janardan 216-17 Japan 11, 15-16 Jafar, Mir 184 Jeddah 131, 252, 386 Jews 386 joint stock 122, 129-30, 143; associations 143; companies 143; of merchants 74, 130-1 Juggutseat 337, 340 Jumla, Mir 26, 55, 155 Kantu 225-6 Karim, Abdul 12 karkhanas 103 Kartick 232 Kashmiri, Khwaja Mohammed Fazel 26 Kasimbazar 65-7, 71-2, 74-5, 128-9, 220-2, 224-6, 233-7, 245-9, 267, 308-11, 326-9; Council 222, 226-27, 235, 239-42, 244, 246, 248-51, 308, 326-7, 338, 340; factors 63, 65, 71, 73-4, 76, 122, 226, 234, 308-9, 340, 341, 362-3; merchants 72, 127, 231, 311, 326-7, 329, 333, 336; price of 248 Katma, Bally [Balai ? Balaram ?] 226-7 Katma, Benode 227

428 | Index Katma, Hathu 226 Katma, Nidhi 226 Katma, Raghunath 94 Katmas 216, 226, 232-3, 329, 336, 350, 407 Kenn, John 65, 309 Kerseboom, Jan 332-3, 346 Khan, Alivardi 180, 241, 264, 274, 277-8, 290, 293, 341, 343, 344, 398, 399, 401-2 Khan, Asad 52 Khan, Buzurg Umeed 26, 136 Khan, Ghaus 402 Khan, Haji Safi 57, 58 Khan, Krishna Chandra 220 Khan, Mir Muhammed Bakir 402 Khan, Murshid Quli 68, 264, 293 Khan, Nasib 137 Khan, Nawab Shaista 136 Khan, Nawajish 136 Khan, Nurullah 26, 136 Khan, Qasim 8, 11, 13 Khan, Ramkrishna 218 Khan, Rashid 117, 139 Khan, Safi 55, 57-8, 112 Khan, Safshi 112, 138 Khan, Sarfaraj 340, 401, 402 Khan, Shaffat Ahmed 91 Khan, Shaista 26, 28, 43, 47, 55, 136, 155, 277 Khan, Shuja 137 Khan, Shujauddin 264, 274, 277, 293, 340-2 Khan, Zulphicar 135 khasas 166-9, 171-2, 197, 200-2, 204, 411-12, 414-15 Khedda 136 Khemchand 47, 111-22, 128, 130, 132, 134-5, 138-9, 141-4 Khwajah Phanoos Kalantar 27 Kissendeb 238, 239 Koning, Martinus 195 Kumarkhali silk 176 Kunja 232 Kuthees 237, 271, 337

Lahori, Abdul Hamid 4, 5, 8, 12 de Laval, Pyrard 1, 9, 24, 41, 131 Law, Monsieur Jean 1 Lethieulier, John 76, 77 Linschoten 9 loan, short-term 254, see also borrowing money Luillier 103 mace 9, 15 machine-made fabrics 189, see also textiles Madras rupees 68, 178, 244, 249-51, 254, 286-7 Mahmudi 27 Malabar 1, 9, 16, 24, 41, 131, 301, 304, 386 Malacca 7, 14, 23, 24, 43, 131, 304 Malda 18, 67, 88, 93, 119, 123, 128, 190, 205, 206, 361-2, 367-70; factories 66, 110 Maldives 1, 24, 25-7, 41-2, 121, 131, 134, 136-7 Malini 291, 404 malmal 194, 197, 200-2, 204 malpractices 165, 217, 223, 273, 279, 342, 410 ‘Mamaruck Ellie’ 27 Manickchand 223, 228-9, 338, 340 Manila 7, 23, 42, 226 Manningham, Charles 179, 180, 288, 290, 332-5 Manrique 6, 8-10, 12 Mansingh, Raja 115 Mansookray, Lahorimall 232 manufacturing centres 266-7, 332 Maratha 30, 162, 163, 168, 170-1, 179-83, 240-1, 274, 275, 290-3, 340, 403-5, 413; invasions of 162, 168, 171, 179-83, 240, 274, 275, 280, 288, 290-2, 403-4, 413 Maricha 268 maritime trade 13, 24, 346 markets 60-1, 69, 70, 85-6, 98-9, 102-3, 156-7, 254, 265, 270-4,

Index | 429 308-10, 367-8; Asian and North African 189; Bengal’s silk and textile 361; of Bhagwangola 272 Marshall, P.J. 161, 271, 286, 360 Marwaris 300, 303 Master, Streynsham 18 Masulipatnam 12, 16-17, 41-3, 154 Mathuradas 63, 80, 94, 121-7, 12930, 135, 140 Mayaram, Dayaram 237 Medici family 348 Meer Ellie Yaree 27 merchant-banking class 401 merchant-middlemen 97-8, 156, 214 merchants: Asian 163, 189-90, 204-5, 308, 312-17, 323-4, 358-64, 3669, 371-4, 376, 377, 389-94; of Bengal 24, 26, 131; in Hugli 24, 63, 123; in Madras 130; princes as 4, 144, 184, 324, 335-8, 342, 343, 346-7, 349-50, 352, 403, 407; behaviour of 310 Middle East 347, 360, 370, 376, 389, 394 mints: Bengal 387; Murshidabad 244, 250 Mirabalans 2 Mirzapore 315, 373; silk from Bengal went to 372 Mocha 42, 75, 386, 394 Mohammed, Haji 25, 26, 137 Mohun, Richard 77 Moluccas 1, 6, 9-11, 16, 41-2 Moor merchants 24, 26-7, 31, 252, 386 Moreland, W.H. 196 Mornett, Captain 27 movement of prices 95, 161-2, 174, 186, 274, 280 Mughal attack on Hugli 24, 131 Mughal mansabdars 400-1 Mughal Suba of Bengal 109; as Zannatabad 263 Mukundaram 2 mulberry plantation 176, 285

mulmul 87-8, 93, 166-9, 171-2, 361, 411, 414-15; price of 415 Multan 309-10, 315-16, 363-64, 373 Multanys 265 Muluckchand 156 Murshidabad 68, 93, 179, 233, 245, 250, 252, 266, 271, 278, 338 Muslim: merchants of Hugli 14, 24, 131; ships 131, 252; vessels to Khedda 136 Muttoh Ellic 27 Muzaffarnama 342 Nabakrishna, Raja 184 Nagar 66, 338 Nalini 181 Nanakji, Sri Govind 345 Nathaniel 20 natural calamities 168, 275, 276, 293, 413 nawabs 56, 57, 122, 123, 138-40, 181, 241, 249, 250, 263, 264, 266, 338-41, 345, 346, 399-402; Bengal under 265; communication system of 266, 271; of Cuttack 138; of Orissa 138; of Patna 136 Nicholson, Captain 121 Norris, William 41, 43 nutmeg 9, 15, 135 oil 15, 42, 44, 135, 181, 272, 291, 404 O’Malley 8 Omichand 335, 336, 342-50, 352 Onupchand 232 opium 15, 16, 135, 300-5, 343-4, 370, 407; of Bengal 301; of Bihar 302 Ossonee 27 overseas trade 4, 12-13, 24-6, 28, 55, 109, 131-2, 134-7, 392 Padroes, Khoja 80 Paggayahs 265, 317, 374

430 | Index Paran 127, 232 Parekhs 352 Parrack family 144 Pathans 265, 392 Patna 9-10, 18, 64-5, 73, 87, 128, 153-7, 266-8, 301-3, 342-4; gunpowder factory 153 Patna Customs House Register 315, 372 Pearson, Michael 349 Pegu 17, 24, 62, 131, 136, 361, 389 Pepper 9, 15-16, 85, 135 Persia 1, 12, 16, 17-19, 23, 25-8, 30, 79-80, 110, 136, 138, 393, 394; trade with 42 Persian Gulf 386, 394; silk textiles for 370 Persians 7, 23, 24, 323, 347, 359, 386, 390 petremen 155-6 Phanous, Khoja 80 Philippines 11, 360, 389, 394 piece-goods 17, 63, 86-7, 89, 91, 93-5, 112-13, 192, 197-98, 200-2, 204; price of 202 Pipli 24, 26, 132, 154 Pires, Tome 189 Pitt, Thomas 26, 27, 42, 124, 135 Plassey 31, 182, 184, 245, 292, 300, 317-18, 347, 349, 398-99, 403, see also battle of Plassey plushes 86, 90 Poddar, Sibram 76 Pollexfen 90 porcelain 9, 135 ports: of Aden 24, 131; of Bengala 24, 131; of Jedda 24, 349 Portuguese: export 9-10; export from Bengal 9; at Hugli 8, 11-13, import to Bengal 10; merchants 99, 102; porto piqueno 2, 3, 5, 7; trade 2, 8, 10-11, 14; trade in Bengal 8, 10-11, 17 Prakash, Om 191-201, 204, 292, 360; classification on Textile 197 Pramanick, Balaram 220

Prananath 126 precious metals 16, 61, 63, 66-7, 69-70, 184-5, 276, 383, 385, 388-9, 393-5 prices 103; Bengal 163, 276, 409; of export commodities 183; of goods 74, 94, 123; of khasa 166-8, 172, 204, 412, 415; movements 94-5, 162, 166-8, 174, 176, 179, 274-5, 280, 285, 288, 412-13, 417; of opium 302, 303; of raw silk 44, 174, 176, 280, 309, 363, 417; of rice 43, 165, 176-9, 277, 278, 285-6, 288, 409, 417, 418; rise in 161-4, 169, 175, 179-80, 184, 275, 276, 278, 280, 288, 290, 408-9; of textiles 94, 164, 166, 169, 174, 278, 409, 412, 415, 417 private trade 17, 181, 223, 291, 300, 334-5, 350, 390, 392, 404, 408 Qassem, Mirza Malik 25-6, 115, 136-8 Quick silver 15, 110 quilts 86, 90-1 Quli, Murshid 28-9, 43-4, 68, 264, 273-4, 277, 293, 338, 340, 398-402 Rafiuzzaman 67 Rai, Jagat Seth Mahtab 239, 240, 247, 248, 337 Rajah, Allie 26 Ram Singh 327 Ramdas 135 Ramnarain Raghunath & Company 94, 143 Ramnath 232 Ramprasad 272 Rangpur silk 310-11 Rannie, Captain 252 raw silk 122-4, 163, 164, 174, 274-6, 278-80, 307-9, 311-14, 316-17, 361-7, 370-3, 407-10 Red Sea 12-13, 17, 24, 131, 386, 394 Rennell, James 266-9

Index | 431 revenue: reforms 400, 401; system 40 Rewadass & Company 117, 118, 143 rice 1-2, 8-9, 15-17, 41-4, 162-5, 176-9, 274-9, 285-6, 288, 408-10, 417-18; coarse 176, 178, 275, 285-6, 417; to St. Helena from Bengal 43 Riyaz-us-Salatin 23, 30, 44, 274, 277, 291 Roe, Sir Thomas 11, 12 Roy, Hari Krishan 229, 335, 407 Roy, Kalyan 115 Ruidas 240 Sabra 228 saffron 135 saltpetre 9, 15, 18, 21-2, 110, 152-9, 268, 302, 343-6, 384; varieties of 153 Samser Gazir Punthi 273 Samsundar 229 sandalwood 9, 16 Sarhad, Khwaja 27 Sarhaud, Khoja 80 Sarkar, J.N. 51, 57 Satgaon 2-8, 11, 28, 31 satins 9, 90 Scrafton, Luke 265, 337, 341, 374, 393 Seir-ul-Mutaqherin 227, 277, 342 Seth, Bishnudas 219, 221, 224, 228-9, 238, 342 Seth, Fatechand 225, 244, 246, 247, 250 Seth, Jagannath 220 Seth, Jagat 184, 232-5, 239, 240, 242, 244-50, 254, 335-42, 34852, 387, 401-2, 407 Seth, Janardan 27, 75, 80, 138, 140, 216 Seth, Kunjabehari 220 Seth, Ramkrishna 218, 224, 238, 330-1 Seth, Rashbehari 238 Seth, Samsundar 220-1, 223-4, 228

Seth, Baranasi 138, 217-21, 226, 228-9 Seths 216-19, 233, 235, 240-1, 245, 247-50, 328-30, 334-5, 337-41, 350-1 Setts 31, 224, 407 Shah, Chintaman 111-22, 130, 132, 134-5, 141-4 Shah, Fatechund 75 Shah, Jairaj 112, 138 Shah, Khemchand 47 Shah, Paramanand 128 Shah, Chaturmal 66, 67, 122, 127-9 Shah, Sukanand 66, 73, 115, 122, 127-8 Sharifuddin, Mir 402 Sheek Sallahy Cungee 27 Sheak Sallee 27 Sheiks 265, 317, 374, 392 shells 9 ship: Arabella 80; Aun 79; Compton 252; Hertford 252; of individual merchants 25, 137; Kempthorne 80; Sallah 27; St. Augustin 10; St. George 252 Shore, John 277, 293 Shroff, Futtichund 244 Shroffs 65, 66, 68, 71, 74, 127, 128, 219, 220, 235-7, 239-43, 246, 247, 338, 340 Shuja, Shah 19, 24-6, 52-5, 136 Siam 16, 42, 117, 136-7 sicca rupees 65-6, 246-8, 250 Sichtermann 301-4 silk 2, 9, 44-6, 86-8, 90-2, 175-6, 308-10, 361, 363, 364, 371-3, 391; from Bengal 86, 89, 155, 265, 307-11, 313, 315-18, 362-4, 366, 372-3; cloth 15; exports 205, 308, 312-15, 361, 366-7, 370-2, 391, 407; manufacture 92, 310, 364; market 300, 308-10, 362-3; piece-goods 86, 91, 93, 167, 1979, 327, 362, 369, 412-13; prices 46, 61, 86, 91, 93, 167, 174, 176,

432 | Index 197-9, 327, 412-13; textiles 194, 198, 369-70; trade 308, 313-14, 362, 366-67, 369, 372; wrought 15 silver 10, 39, 40, 47, 61-8, 75, 128, 184, 246-8, 338, 383-9, 392-5; from Acapulco 394; influx 388; rials 63, 65 Singh, Bijay 402 Singh, Raja Ghandarab 402 Sinha, N.K. 266, 341 Siraj-ud-Daulah 344, 399, 402, 403 Smith, Adam 140 Society 20 Spanish America 394 spelters 135 Stapel, F.W. 193 Stavorinus 269 Steensgaard, Niles 347 subadars of Bengal 24, 26, 28, 52, 68, 136, 338 sugar 2, 8, 9, 15-17, 21-5, 42, 79, 181, 291, 404; investment in 23, 62 Sumatra 1, 9, 24, 41, 131, 394 Sunniasys 265, 317, 374, 392 Surat 10, 11, 30, 56-7, 73-4, 79-80, 110, 138, 139, 144, 251-3, 394; factory at 62; merchants 135 Surhaud, Cojah 28 Swaroopchand, Maharaja 247, 338 taffetas 22, 86, 89, 91 Taillefert, Louis 198, 316; list of 198-9 Tarikh-i-Mansuri 184 Tavernier 10, 154, 189 Taylor 195, 295 Teakchand 232 Tenassary 42 Tenasserim 121, 131, 134, 136-8; nawab’s vessels to 136 textile exports 89, 92, 96, 190, 205-6, 317, 361-2, 368-71, 390, 405; Asian 368, 370, 405; by Asians 190; from Dhaka 362, 370

textile industry 44-5, 85, 98, 190-1, 196, 360, 389; production 85, 98, 265, 361-2, 390; textile market 190, 367; Asian merchants in Bengal 368 textiles 91-6, 163, 164, 166-72, 1923, 195-8, 274-6, 278-80, 367-70, 407-10, 412-17; Bengal 85, 88, 93, 98, 162, 189-92, 194, 198, 205, 376, 385; categories of 197; coarsest 170-1, 293, 416; English export of 201; price of 167; trade 85, 95-8, 368, 390 Thevenot 152 tin 16, 129, 135; from Malaya 15 trade: in Bengal 7, 8, 10-11, 13-17, 20-1, 27, 51-6, 60, 61, 76-7, 85, 109-11, 384-6; of the Hollanders 15; of Hugli 8, 15, 18; marts 14, 266, 270; in textiles 85, 367; with Western India 42, see also Gujarat Trevisa, Jonathan 55 Tripps 347, 348 Tuckee, Mahmood 26 Tumerick 15 Turks 323, 386 Tuttenag 15 Tutucurim 9 Udaychand 129 Udaycharan 126 Umichand 184, 219-21, 224, 302, 324, 407 van Dam, Pieter 193 van Leur, J.C. 347, 348 Varthema 189, 389 Velters, Jan 76 velvets 9, 86, 90 Verelst, Harry 263, 317, 371, 373 vermilion 15, 21, 110 Verona, Cussa Muddo 130 vessels 3, 7, 8, 12, 15, 19, 20, 23, 25, 29, 31, 136, 153, see also ships Vijayaram, Tirthamangal of 272

Index | 433 villain 120, 216, 344, 399, see also malpractices Vincent, Mathias 94, 117 Vohra, Virji 139, 144 wage-goods 163, 276, 388, 408 war (1686-8) in Bengal 137 Wastell 219 wax 8-9, 16 Wazid, Coja 302, 336, 345-6 Wazid, Khwaja 184, 302, 324, 335-6, 343, 345-50, 352, 407

weavers 17, 48, 63, 69, 90, 93-4, 97-9, 103, 119, 215-16, 295; Bengali 99, 216 Willem, Otto 195 Williamson 20 woollen cloth 110, see also velvets wrought silks 92 Yenkatadry, Pedda 130 zamindars 135, 180, 184, 273, 275, 290, 293, 339, 341, 398-403 zijdestoffen 194, 197