britain's east india company and the jagat seth -- 7/7/20
Today's selection -- from The Anarchy by William Dalrymple. In a devastating irony, India's bankers provided much of the funding for the takeover of India by Britain's East India Company:
"As [India] grew increasingly anarchic [with the decline of Mughal power], [Bengali Governor] Murshid Quli Khan found innovative ways to get the annual tribute to Delhi. No longer did he send caravans of bullion guarded by battalions of armed men: the roads were now too disordered for that. Instead he used the credit networks of a family of Marwari Oswal Jain financiers, originally from Nagar in Jodhpur state, to whom in 1722 the Emperor had awarded the title the Jagat Seths, the Bankers of the World, as a hereditary distinction. Controlling the minting, collection and transfer of the revenues of the empire's richest province, from their magnificent Murshidabad palace the Jagat Seths exercised influence and power that were second only to the Governor himself, and they soon came to achieve a reputation akin to that of the Rothschilds in nineteenth-century Europe. The historian Ghulam Hussain Khan believed that 'their wealth was such that there is no mentioning it without seeming to exaggerate and to deal in extravagant fables'. A Bengali poet wrote: 'As the Ganges pours its water into the sea by a hundred mouths, so wealth flowed into the treasury of the Seths.' Company commentators were equally dazzled: the historian Robert Orme, who knew Bengal intimately, described the then Jagat Seth as 'the greatest shroff and banker in the known world' . Captain Fenwick, writing on the 'affairs of Bengal in 1747-48', referred to Mahtab Rai Jagat Seth as a 'favourite of the Nabob and a greater Banker than all in Lombard Street [the banking district of the City of London] joined together'.
"From an early period, East India Company officials realised that the Jagat Seths were their natural allies in the disordered Indian political scene, and that their interests in most matters coincided. They also took regular and liberal advantage of the Jagat Seths' credit facilities: between 1718 and 1730, the East India Company borrowed on average Rs400,000 annually from the firm. In time, the alliance, 'based on reciprocity and mutual advantage' of these two financial giants, and the access these Marwari bankers gave the EIC to streams of Indian finance, would radically change the course of Indian history.
"In the absence of firm Mughal control, the East India Company also realised it could now enforce its will in a way that would have been impossible a generation earlier."