The Wealth Creators of Bengal
From the earliest days of Egyptian and Roman empires, India continued playing a pivotal role in the world economy. The opening of the silk and spice routes, saw India strengthening her position in the emerging global power system. By the 17th century, India was a force to be reckoned with having earned the reputation of being a land of immense wealth and the manufacturing workshop of the world. The West was lured by the riches of her lands the spices, silks, the finest yarn and calicoes and in 1750, India accounted for a whopping 25% of the global GDP as compared to Britain's 1.9%. Bengal itself was single-handedly responsible for 20% of the Indian GDP and a staggering 5% of the world market. Silk, spices, cotton textiles and calicoes, indigo and jute all found their way throughout India, Europe and even North & South America. The Kashmiris, Multanis, Afghans, Shaikhs and Bhutias all carried out trade in Bengal. All the while, the traders of Bengal began to expand their operations throughout the country from Nepal, Kashmir and Uttar Pradesh to Maharashtra, Karnataka and Sri Lanka. Bengal's industrial growth was also booming. Shipbuilding was a thriving craft and proving to be a significant industry.
Iron was also a flourishing industry. Local artisans made iron cannons at Calcutta and Kasimbazar. Bengal also traded heavily in gold, silver and other precious jewels.
The fine craftsmanship, ingenuity and quality of Bengal's textiles and calicoes brought it widespread acclaim in global markets. When the Mughals conquered Bengal in 1576, it is no surprise that they regarded mulmul, or muslin, as their most precious conquest.
The Mughal court established Royal Workshops or Karkhanas in Dhaka, Sonargaon, Jangalbari and Bazetpur to ensure that they received a regular supply of
mulmul khas of the finest quality.
By 1776, Bengal silk drove all competitors, except Italian and China silks out of the English markets. And Murshidabad was at the forefront of the silk industry. The Portuguese were the first to procure Murshidabad silk through their Bengali agents. They had virtual monopoly over Bengal's overseas export trade by the second half of the 16th century. The Dutch entered the fray around the beginning of the seventeenth century, and quickly realized that trading Bengal silk was very lucrative.
All these attracted the most famous and richest merchants India had ever seen from Nagor Rajasthan to Patna & subsequently to Dacca. He was none other than the founder of the house of the Jagat Seths - one Hiranand Galeda. The twin towns of Azimganj and Jiaganj also flourished as hubs of both wholesale and retail trade, mainly because of the investments made by
Marwari merchants and entrepreneurs from Rajasthan who entered the banking and trading businesses. The prosperity and wealth of these merchants was legendary. They acted as middlemen to the European merchants and, at the same time, enjoyed a monopoly in internal trade on items such as rice, oil, pulses, oilseeds and molasses. They also took over Jamindari from the local nawabs in exchange of guaranteed annual revenue. Bengal was thus riding the textile wave that was sweeping European markets. Her share of European imports leaped from 42% in 1689 to 66% by 1738. Despite this fact, the trade of all European countries put together constituted only one third of all Bengal's total exports, the bulk still conducted by Asian merchants.
In 1686, Job Charnock, an ambitious British official became Governor of Bengal. Unlike all other European trade centres that were situated on the western bank of the Hooghly, Charnock settled on the eastern bank, defending it well in case of an attack by the Nawab's army. Thus it was in 1690, that Job Charnock set foot on what is today Neemtolla Ghat in North Calcutta.
It was during this period that the East India Company became a colossus, and the wealth of the East poured into England, accounting for almost 13-15% of all Britain's import between 1699 and 1774. The Company's investors enjoyed generous dividends and capital growth, and the Company's share price more than quadrupled in 2 decades growing from 70 pounds in 1664 to 300 pounds in 1680.
However, the Company had long been the target of protests from protectionist interests, critical of its growing imports of Indian calicoes. Three years later, the British Parliament passed the first of its series of acts forbidding the use and wearing of all wrought silks, Bengalls and calicoes.
Back in India, many English employees doing trade in India were greatly dependent on local merchants for cash and connections. The Company simply did not have the skills or the capacity to buy goods directly from producers, due to lack of funds and the obvious language problem. They, therefore, had to commission local brokers to purchase textiles and other products on their behalf. Indeed Asian trading houses such as those headed by Jagat Seth and Amir Chand (Umichand) were far richer and better connected than the Company.
Edmund Burke, a renowned political thinker, once spoke of the transactions of the House of Jagat Seth as being similar to those of the Bank of England. It is said that Jagat Seth transferred the entire revenue of the eastern provinces through a single Hundi drawn on their Delhi agents, equivalent to almost one and a half crore silver coins, as annual revenue payable to the Mughal Emperor.
It is interesting to note how the Mughal Emperor Farruksiyar conferred the title Banker to the World (Jagat Seth) on Manickchand, the founder of the House. It is recorded by the court chronologist that at the time of the Delhi famine of 1700, the Mughal emperor summoned all his advisors to find a solution. It was Manikchand who rose to the occasion, by lifting the Paan Bira. He recommended that everyone within the Mughal Empire be allowed to issue personal hundis - payable on a future date which also would be transferable. The House of Manikchand acted as a central bank which bought all hundis at a discounted value from the grain merchants as well as other traders. The famine almost immediately vanished as the farmers rich in assets but poor in cash were able to raise money to purchase not only food from neighbouring states, but also seeds and pay for labour in preparation for the next harvest. Thus the House of Manickchand not only protected the farmers from hunger but also created wealth for their firm. So impressed was the Mughal Emperor with the economic foresight of Manickchand that he conferred on him the title of Jagat Seth or 'Banker to the World' for his extraordinary service.
At the beginning of Ali Vardi's reign, the Seth's possessed a capital of 10 crores of rupees. It is no wonder then that Fatehchand was the first banker to be permitted by Murshid Quli Khan, to coin money out of Jagat Seth's own bullion on payment of the usual customs. By 1721, Fatehchand had managed to acquire the sole privilige of coining money, making the House of Jagat Seth, the premier banking institution, and more importantly, acquiring the sole rights to control the price of bullion imported by the European countries. The imported bullion was mostly converted into mughal coins at various mints throughout India.The House of Jagat Seth became conspicuous for its wealth, prosperity and integrity.The opulence and success of the House of Jagat Seth also attracted many more Jain businessman from Rajasthan to settle in the most prosperous part of Bengal Murshidabad district in the cities of Azimganj and Jiaganj. Their prosperity and wealth were legendry. All of them made fortune by money lending, banking and trading business. They also took Zamindari from the local Nawabs in exchange of guaranteed annual revenue.
Some such prominent families were Singhis, Dugars, Nowlakhas, Dudhorias etc. who thereafter had family and matrimonial alliance with the house of Jagat Seth. For instance a daughter from the house of Singhis was married to Jagat Seth, Mehtab Chand.
The contemporary historian wrote that this part of the world enjoyed highest concentration of wealth. Within one mile radius were residing over 10 billionaire families whose combined wealth was much more than wealth of the entire British Aristocracy. They had palaces designed by French and British Architects as replica of European palaces including Buckingham Palace and owned jewellery better than European Royalties of that time.
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