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Banias and the British: the Role of Indigenous Credit in the Process of Imperial Expansion in Western India in the Second Half of the Eighteenth Century

  • Lakshmi Subramanian (a1)

Extract

The pressing preoccupation of the British administration in the early decades of the nineteenth century to clip the wings of the malicious Indian shroffs (Bankers) and their manoeuvres and secret dealings was in sharp and in a sense valid contrast to their earlierperceptions of the Indian shroffs and their Hundi empire. By 1807, Mr Rickards, senior member of the Bombay establishment, was urging the Governor-General in Council to establisha General Bank whose operations would extend throughout India, facilitate remittances andcredit transfers from one part of the country to another, and above all ‘free the mercantile body from losses and inconveniences suffered in the exchange and from the artifices of shroffs’. Their ‘undue and pernicious influence over the course of trade and exchange’ could no longer be treated with forbearance, and the urgency of remedy was stressed. It was both strange and ironical that such advice should stem from a quarter where in the crucial years of political change and transition in the second half of the eighteenth century, the cooperation and intervention of the indigenous banking fraternity and their credit support had proved vital to the success of the Imperial strategy. The experience was admittedly not unique to Bombay and the English East India Company (hence-forth E.E.I.C) and in a sense the guarantee of local credit and the support of service groups for a variety of reasons, was clearly envisagedas a basic ingredient to state building in the eighteenth century.

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1 Parliamentary Papers. Evidence before the Lord's Committee. East India Affairs 1813. Extract of a letter from the Governor-General in Council dated 30 06 1809. For the proposals of MrRickards, see pp. 91ff.

3 Quoted in Bayly, C. A., Rulers, Townsmen and Bazaars. North Indian Society in the Age of British Expansion, 1770–1870 (Cambridge University Press, 1983), p. 172.

4 Ovington, John, A Voyage to Surat in the Year 1689, edited by Rawlinson, H. G. (Oxford University Press, 1929), p. 165.

5 Hamilton, Walter, Geographical, Statistical and Historical Description of Hindoostan and the Adjacent Countries in Two Volumes (London, 1920), p. 612.

6 A Memoir of Central India including Malwa and Adjoining Provinces with the History and Copious Illustrations of the Past and Present Condition of the Country. By Major-General Sir John Malcolm in Two Volumes. Vol. 2 (New Delhi: Sagar publications, 1970), pp. 160–2.

7 Enthoven, R. E., The Tribes and Castes of Bombay (Delhi, 1975, first published 1920), vol. 3, pp. 412–22. According to Enthoven the term Bania was a functional term meaning trader and one that applied to other castes who were traders by occupation. He identified forty subcastes within the Gujarati Bania community of whom six had Jain sections, namely Mewada, Narsipura, Nema, Povad, Sarvirya and Shrimali. Among Hindu Banias, subcastes were Agarwals, Agaryas, Deshaval, Kapol, Nagar, Oswal, Palival, Pushkarval, and Sorathia.

8 India, Old and New with a Memorial Address by E. W. Hopkins (New York, 1901), pp. 169ff.

9 Walker of Bowland Papers 1780–1830, National Library of Scotland, Ace. 2228. An Account of Castes and Professions in Gujarat. An unsigned memoir without date.

11 DasGupta, Ashin, Indian Merchants and the Decline of Surat 1700–1750 (Wiesbaden, 1979), for a general description of shroffs and their functions in Mughal India see Habib, Irfan, ‘Banking in Mughal India’ in Raychaudhury, Tapan (ed.), Contributions to Indian Economic History, vol. 1 (Calcutta, 1960), and ‘The System of the Bills of Exchange in the Mughal Empire’ in Proceedings of the Indian History Congress. 33rd Session, Muzaffarpur, 1972 (New Delhi, 1973), pp. 290303.

12 Quoted in Gokhale, B. G., Surat in the Seventeenth Century. A Study in the Urban History of Pre-Modern India (Scandinavian Institute of Asian Studies Monograph Series no. 28. Curzon Press. London, 1979), p. 110.

13 Mayor's Court Register (Bombay) of 1789, pp. 4095–156. Case of Hiranand Tesban vs Haribhai Bhaidas taken up on 3 November 1789.

14 An Account of Castes and Professions in Gujarat (see n. 9).

15 Cooke, C. N., The Rise, Progress and Present Condition of Banking in India (Calcutta, 1863), pp. 82–3.

16 Tavernier, J. B.Travels in India, by Jean Baptiste Tavernier, Bishop of Aubonne. Edited by Cooke, W., translated by Ball, V., in 2 vols (Oxford University Press, 1925), vol. I, pp. 30ff.

17 Bhargava, B. K., Indigenous Banking in Ancient and Medieval India (Bombay, n.d. preface 02 1934, Jaipur, Rajasthan), pp. 140–7.

18 Quoted in Gokhale, , Surat in the Seventeenth Century, pp. 129–30.

19 The agent of the Benares banker Manohardas Dwarkadas in 1795 informed the English Chief at Surat that his cash reserves were made up of deposits of small and middling shroffs of the city. See Surat Factory Diary (henceforth S.F.D.) no. 687 of 1795. p. 311, Representation from agent of Manohardas Dwarkadas dated 13 August 1795.

20 Gupta, Das, Indian Merchants and the Decline of Surat; Marshall, P. J., East Indian Fortunes. The British in Bengal in the Eighteenth Century (Oxford, Clarendon Press, 1976), and Furber, Holden, Bombay Presidency in the Mid-Eighteenth Century (New York, 1975). Furber, however, contends that the expansion of European private enterprise in the Western Indian Ocean in the 1720s and 1730s was not at the expense of Gujarati-owned shipping.

21 DasGupta, Ashin, ‘The Crisis at Surat, 1730–1732’, Bengal Past and Present, LXXXVI, Diamond Jubilee, pt II, no. 162, 1967.

22 The Gujarati merchants were in fact by the 1730s offering the most valuable freights for English shipping, so much so that in 1731 they complained to the Nawab of Bengal that they would be very great sufferers from any interference with British shipping. See Marshall, , East Indian Fortunes, p. 79.

23 Subramanian, L., ‘Bombay and the West Coast in the 1740's’, Indian Economic and Social History Review, vol. VIII, no. II, 1981.

24 L. Subramanian, ‘The Castle Revolution of 1759 and the Bania Community of Surat’ in Papers on Business History of India organised by the Indian Institute of Management, Ahmedabad (forthcoming).

25 Ibid.

26 S.F.D. no. 4 of 1758, p. 25, Letter from Surat dated 22 January 1758 received by the Bombay Council on 27 January. Also see Public Department Diary (P.D.D.) of the Bombay Government no. 32(1) of 1759, pp. 99–102, Letter from John Spencer to Richard Bourchier, Governor of Bombay, dated 11 January 1759 and S.F.D. no. 14(1) of 1759, pp 224–6.

27 P.D.D. No. 33(11) of 1759, p. 252, Letter from Surat dated 11 November and received by the Bombay Council on 18 November 1759.

28 The value of Bombay's overseas trade in the 1740s and the 1750s was unimpressive and the city's imports averaged in value around Rs 1,503,929. We have no figures for Bombay's exports during this period. See Commercial Department Diary (henceforth C.D.D.) of the Bombay Government no. 36 of 1803, pp. 400ff for an extensive statement on the external commerce of Bombay.

29 P.D.D. no. 63 of 1773, p. 395, Consultation Meeting of the Bombay Council of 17 May 1773, and no. 94 A of 1789, pp. 19–20, Letter from Fort William dated 10 December 1788 received by the Bombay Council on 13 January 1789. The Accountant-General emphasized in the Council meeting that the Government would require Rs 56 lakhs to maintain its expenses.

30 Subramanian, L., ‘Capital and Crowd in a Declining Asian Port City. The Anglo-Bania Order and the Surat Riots of 1795’, Modern Asian Studies, vol. 19, pt 2 (04 1985), pp. 213–15.

31 P.D.D. no. 37(II) of 1761, p. 381, Consultation Meeting of the Bombay Council of 1 May 1761. S.F.D. no. 15(ii) of 17591761, p. 323, Letter signed to Bombay on 10 May 1761, and p. 332 for letter signed to Bombay on 12 June 1761 notifying the Council of their transactions with smaller shroffs for sums ranging between Rs 6000 and Rs 9500.

32 P.D.D. no. 38 of 1762, p. 331, Letter from Surat dated 5 June and received by the Bombay Council on 11 June 1762.

33 Ibid., p. 333, Consultation Meeting of the Bombay Council of 15 June 1762.

34 P.D.D. no. 41 (I) of 1763, p. 72, Consultation Meeting of the Bombay Council of 2 08 1763, p. 85, Letter addressed to Surat on 13 08 1763.

35 P.D.D no. 41 (I) of 1763, p. 144, Letter from Fort William dated 17 June 1763 and received by the Bombay Council on 14 September 1763.

36 P.D.D. no. 50(I) of 1768, p. 100, Advices from Bengal dated 30 November 1767 and received by the Bombay Council on 20 January 1768. The Bengal Government announced their intention of remitting Rs 5 lakhs to Bombay. Also see P.D.D. no. 54 of 1769, p. 145, Letter from Surat received by the Bombay Council of 22 August 1769, informing the latter that they had received Rs 7 lakhs from Bengal.

37 P.D.D. no. 55 of 1770, pp. 88–9, Consultation Meeting of the Bombay Council of 2 02 1770; pp. 180–1, Letter from Bengal dated 16 January 1770 and received by the Bombay Council on 10 March 1770; p. 345, Letter from Bengal dated 3 April and received by the Bombay Council on 11 June 1770; p. 347, Letter from Bengal dated 24 April and received by the Bombay Council on 16 June 1770.

38 P.D.D. no. 56 of 1770, p. 53, Consultation Meeting of the Bombay Council of 9 September 1770.

39 Ibid., p. 53, Letter to Bengal signed on 9 September 1770, p. 127, Letter to Surat signed on 11 October 1770.

40 P.D.D no. 62 A of 1772, p. 83, Consultation Meeting of the Bombay Council of 13 October 1772. Also see p. 96, Letter addressed to Surat on 16 October 1772.

41 Ibid., p. 122, Advices from Surat received on 29 October 1772.

42 Ibid., p. 83, Consultation Meeting of the Bombay Council of 13 October 1772 and p. 150, Letter addressed to Surat on 1 November 1772.

43 P.D.D. no. 63 of 1773, p. 395, Consultation Meeting of the Bombay Council of 17 May 1773.

44 P.D.D. no. 64 of 1773, p. 75, Letter addressed to Fort William on 15 August 1773.

45 Ibid., p. 95, Letter from Surat dated 20 August and received by the Bombay Council on 25 August 1773.

46 P.D.D no. 65 A of 1774, p. 17, Consultation Meeting of the Bombay Council of 11 January 1774.

47 Ibid., p. 71, Letter from Fort William dated 9 December 1773 and received by the Bombay Council on 2 February 1774.

48 The Oxford History of India, pt III, by Percival Spear (Oxford, 1958), pp. 510ff.

49 It was customary for Muslim Generals to take with them bankers who undertook all arrangements for ration, pay and other essentials. See Bhargava, , Indigenous Banking, pp. 29–31.

50 P.D.D. no. 73 of 1778, p. 135, Letter from Fort William dated 16 February 1778 and received by the Bombay Council on 20 March 1778; pp. 178ff, Letter from Fort William dated 18 February and received by Bombay on 1 April.

51 S.F.D. no. 672 of 1780, pp. 86, 110, 130–1.

52 S.F.D. no. 673 of 1781, p. 149, Letter from Fort William received by the Surat Council on 10 July 1781.

53 Quoted in Nightingale, Pamela, Trade and Empire in Western India, 1784–1806 (Cambridge University Press, 1970), pp. 46–7.

54 Quoted in Bayly, C. A., ‘Political and Economic Networks in Eighteenth-Century India’, Paper prepared for the panel on ‘250 years of Agragarian Regimes in India’, at the American Association of Asian Studies Meetings, San Francisco, March 1983.

55 Bayly, , Rulers, Townsmen and Bazaars.

56 Sinha, N. K., The Economic History of Bengal, vol. III (Firma K. L. M. Calcutta, 1970).

57 Sinha, N. K., The Economic History of Bengal, vol. I (Firma K. L. M. Calcutta, 1965), pp. 129–56.

58 Calendar of Persian Correspondence. Being letters referring mainly to affairs in Bengal which passed between some of the Company's servants and notables, vol. VII of 1785–87 (Calcutta, 1940), p. 326, Letters nos 1180 and 1192 dated 9 March 1787 from Babu Manohardas.

59 S.F.D. no. 674 of 1782, p. 134, Letter enclosing bills of exchange received by the Surat Council on 24 September 1782.

60 Ibid., p. 162, Letter and enclosures from Fort William received by the Great Council on 25 November 1782.

61 S.F.D. no. 678 of 1786, pp. 103–4, 431–2, 452 for sets of bills received from Fort William on 21 February, 1 September and 5 October respectively.

62 P.D.D. no. 92 A of 1788, p. 101, Letter addressed to Fort William on 8 February 1788 by the Bombay Government.

63 Ibid., p. 105, Letter from Surat dated 4 February and received by the Bombay Council on 9 February 1788.

64 Ibid., p. 146, Letter from Surat dated 14 February 1788 and received by the Bombay Council on 19 February. Also see pp. 155–6, Letter from Surat dated 22 February 1788 and received by the Bombay Council on 26 February 1788. S.F.D. no. 680 of 1788, p. 54, Consultation Meeting of the Surat Council of 21 February 1788.

65 P.D.D. no. 92 A of 1788, p. 264, Letter addressed to Fort William on 17 April 1788 by the Bombay Council.

66 Ibid., p. 266, Letter from Fort William dated 17 March 1788 and received by the Bombay Council on 21 April 1788.

67 S.F.D. no. 680 of 1788, pp. 128–9. Letter from the Benares Resident dated 5 April 1788 and received by the Surat Council on 27 April 1788.

68 Ibid., pp. 170, 196, 241, 252, 260, 292, 340, 467 and 484.

69 S.F.D. no. 681 of 1789, pp. 29ff, Letter from the Resident at Benares dated 4 June 1789 and received by the Surat Council on 22 July.

70 Ibid.

71 Ibid., p. 349, Letter addressed to the Resident at Benares by the Surat Council on 27 July 1789.

72 P.D.D. no. 95 of 1789, p. 64, Letter addressed to Surat by the Bombay Council on 6 August 1789.

73 P.D.D. no. 113 A of 1795, pp. 122–3, Letter from Fort William dated 28 April 1795 and received by the Bombay Council on 26 May 1795. The Bombay Council was directed to find a means to reduce the influence of the shroffs in determining the rate of exchange.

74 P.D.D. no. 94 A of 1789, pp. 8593, Letter from the Cotton Merchants of Bombay read at the Council Meeting of 24 February 1789. The Commutation Bill introduced by Pitt in 1784 reduced the duty on tea to 12 p.c. As a result, the company was able to price its competitors out of the European market and its Chinese Trade leapt in value.

75 P.D.D. no. 96 of 1790, pp. 209ff, Petition of the Bombay Merchants read at the Council Meeting of 23 March 1790. P.D.D. no. 104 of 1793, pp. 152ff, Consultation Meeting of the Bombay Council of 1 March 1793. Exports from Gujarat estimated by John Griffith of the Surat factory in 1785 averaged around 20,000 bales. In the 1790s annual exports of raw cotton from Bombay were reckoned at 21.6 million pounds. See Guha, Amalendu, ‘Raw Cotton of Western India. Output, Transportation and marketing, 1750–1850’. Indian Economic and Social History Review, vol. IX, no. 1 (1972), pp 131.

76 Nightingale, , Trade and Empire in Western India.

77 For a contemporary report on the growth and cultivation of cotton in Gujarat, see P.D.D. no. 4 of 1789, pp. 138ff.

78 Returns and statements, External and Internal Commerce of 1802–03, pp 502–03. This contains an exhaustive report on the want of a sufficient circulating medium to answer the accumulated wants of an extensive commerce. Also see P.D.D. no. 114 A of 1795, pp. 109ff, Petition of the Bania Mahajan to the Surat Council dated 22 August 1795. The petition emphasized the Merchants' reliance on the shroffs' Hundis.

79 Returns and Statements of 1802–03.

81 For a study of the Surat Riots see Subramanian, , ‘Capital and Crowd in a Declining Asian Port City’, pp. 205–37.

82 P.D.D. no. 114 A of 1795 pp. 109ff.

83 Nightingale, , Trade and Empire in Western India.

84 S.F.D. no. 695 of 1795, pp. 102ff, Articles of Agreement between the English East India Company and Nawab Nasiruddin and his heirs for the better administration of Government of the city and its dependencies.

85 P.D.D. no. 119 of 1796, pp. 364–5, Letter from Fort William dated 11 July 1796 and read by the Bombay Council on 11 August 1796.

86 P.D.D. no. 134 of 1798, p. 213, Letter addressed to Fort William on 27 July 1798.

87 P.D.D. no. 172 of 1803, p. 278, Letter from Court of Directors dated 4 February 1803 read in the Council Meeting of 11 June 1803.

88 P.D.D. no. 183 of 1804, pp. 416ff, Letter from Fort William dated 9 February and received by the Bombay Government on 9 March 1804.

89 P.D.D. no. 201 A of 1805, pp. 313–32.

90 Ibid.

91 Board's Collections (IOL) F/4/269, 5907–18, vol. 269 of 1809–10, copy of agreement between the English East India Company and Tarvady Arjunji (extract of a military letter from Bombay dated 22 February 1806).

92 P.D.D. no. 261 A of 1809, pp. 20ff, Letter from Fort William read by the Bombay Council on 19 January 1809. pp. 48ff, Letter from the Accountant-General received by the Bombay Council on 27 January 1809.

93 P.D.D. no. 115 A of 1795, pp. 61ff, Report of the Enquiry Committee and declaration of Tarvady Shankar.

Banias and the British: the Role of Indigenous Credit in the Process of Imperial Expansion in Western India in the Second Half of the Eighteenth Century

  • Lakshmi Subramanian (a1)

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