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Banking Firms in Nineteenth-Century Hyderabad Politics

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Banking Firms in Nineteenth-Century Hyderabad Politics
Author(s): Karen Leonard
Source: Modern Asian Studies, Vol. 15, No. 2 (1981), pp. 177-201
Published by: Cambridge University Press
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Modern Asian Studies, I5, 2 (1981), pp. 177-201. Printed in Great Britain.

Banking Firms in Nineteenth-Century
Hyderabad Politics

University of California, Irving

THE relationship between business and politics in prei
has seldom been clear from historical records. I have

that the major banking firms of Mughal India w

imperial system. These 'great firms' were not parasit
portive of the state because it preserved the law and o
trade; they were not self-contained caste communitie

the government through the leaders of panchayat

functions were as important to the government as th
treasurers, and their desertion of the Mughal Empire
century helped bring about its collapse.1
The case study presented here of banking firms in n

Hyderabad establishes the forms as crucial particip

political system, like their;  earlier counterparts in the

Hyderabad, a Mughal province which became au

eighteenth century, was the largest princely state
continent. The Hyderabad bankers were important

involved with other political figures in a complex of r

went far beyond trade and moneylending. Invest
relationships not only illuminates Hyderabadi histo

tain that it allows inferences about the Mughlai polit

generally. Finally, this investigation gives us a clos

family firms and helps formulate better questions ab
workings and their relationships with each other.

I. The Political System
The first half of the nineteenth century was a time of deepening financial
and political crisis for Hyderabad. Founded in the eighteenth century as
1 See my article, 'The "Great Firm" Theory of Mughal Decline,' Comparative Studies in
Society and History, 2 I, no. 2 ( 1979), 151-67.

0026-749X/8I/0404-030I $02.00 ? I98I Cambridge University Press

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a military aristocracy, Hyderabad's ruling cl
northerners who had come to the Deccan in M
first Nizam (Mughal governor of the Deccan p
the early nineteenth century, the state had b
bureaucracy. Allied with the British East Indi
treaties of 1798 and I8oo), the Hyderabad offi
relationships with the British Resident newly-

From 1812, an important factor in this was the
a body of British-officered troops paid by the N
the Resident. Chandu Lal, defacto Diwan (Prime

I843,2 had come to power as the result of a b

alliance and stayed in power because of his abilit

The political intrigues which followed his re
fiscal crisis in 1853 and forced the state's cession

East India Company. The bankers were heav
The state's sources of income and cash disbursements show how the

bankers and other groups participated in the Mughlai political system.4
Although the rural areas provided the bulk of the state's income through

land revenue, the government exercised direct control only in urban
areas. The land revenue from the state or khalsa lands was collected by

talukdars, or revenue farmers. These men contracted with the state

recordkeepers, the two hereditary daftardars, to collect the land revenue
from specified districts; they turned over to the government the amount
set in their contracts. Other lands were alienated to nobles asjagirs, or
land grants, for their personal income; sometimesjagirs were granted for

the maintenance of troops in the Nizam's army. Some income came
from tributary zamindars, large land-holders whose territories were
exempted from direct state supervision. Some income came from taxes
levied on commercial activities and urban services: a market tax, customs, or the contracting of major consumer industries.
Cash disbursements by the government consisted almost entirely of
salaries and allowances to its employees and dependents. High-ranking
nobles received cash allowances and subsidies to maintain troops, or the
2 The nominal Diwan from I808 to 1832 was a high-ranking Muslim noble, Munirul-Mulk, but by agreement of the Nizam and the Resident, the deputy Diwan or
Peshkar, Raja Chandu Lal, officiated. After Munir-ul-Mulk's death in 1832, Chandu
Lal was officially named Diwan and resigned in I843.
3 Dr Brijen Gupta pointed this out to me long ago in a personal communication; I am
indebted to him for first directing my attention towards the bankers.
4 The following discussion draws on that of Manik Rao Vithal Rao, Bustan-i-Asafiyah

(Hyderabad, 7 vols, 1909-32), I, I49-50.

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land to provide revenue equivalents for those pu
employees who performed clerical and manageri
government units received monthly cash stipen
ones. These might be disbursed through the Diw
state recordkeepers who often assumed responsi
ments. Many other officials were responsible for
ments, to the military men led by their jamada
palace guards and attendants, units of musicia

Begums and other relatives living in the Niz
expense by the i83os was the Hyderabad Con
officered and under the authority of the British

Because the land revenue provided only seasonal income, the government depended on members of the financial community resident in the
city for its ongoing expenses. Sahukars or bankers provided the resources
to pay government employees and dependents. The major bankers, by

granting or withholding loans, could have a powerful effect on the
political standing of an individual or on the viability of a particular
Diwan's administration. Bankers also controlled the minting and

exchange of currency, through their own mints or those they contracted
to administer for the state. A Persian history written in 1842 stressed the
residential, financial, military, and political connections of the financial
communities with other key groups in the city:

Side by side in Begum Bazar are the houses of the Marwaris, Gosains,
Komatis, Afghans, and other financiers and traders . .. and in Karwan Sahu,

the Gujeratis reside.... The bankers are millionaires, lending millions of
rupees to the state and financing the land revenue contractors ... [one of them,

a Gosain] associates with the Afghan military leaders and is fond of fighting . . . The bankers also loan to the nobles and to the Nizam himself; they have
access to the Court.5

II. Bankers in Politics

Maharajah Chandu Lal was successful in obtaining funds from
bad's bankers in the first decades of the nineteenth century. H
with an informal coalition of'State Treasurers' during his long

Diwan. Called the Panch Bhai, or Five Brothers, these local

5 Ghulam Husain Khan, Tarikh-i-Gulzar-i-Asafiyah (Hyderabad, I89oThe manuscript was written in 1258 Hijri (I842-43).

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financed the government activities and personnel.
doubtedly changed, but two banking firms can be

members of the Panch Bhai. Makhdum Seth, A
Bazar, headed one firm;7 the Gujerati firm of
Karwan Sahu was another.8 The Marwari firm of Mahanand Ram
Puran Mal was almost certainly one of the Panch Bhai-Puran Mal had
access to the Nizam's Court and was granted ajagir for Sitaram Bagh
temple by Chandu Lal.9 Palmer and Company, the much-investigated
Eurasian firm, was the major creditor of Chandu Lal's government in
the I82os and may well have been a Panch Bhai firm.10 Other obvious
candidates for the Panch Bhai at various times during Chandu Lal's

tenure would be the Maheshwari Marwari firm of Surat Ram Govind

Ram, various Gosain bankers of Begum Bazar, and the Oswal Jain
Marwari firm of Umarsi Sajan Mal. All of these were associated closely
with Chandu Lal and known to have made extensive loans to the

state.1 Repayment proved more and more difficult-many firms
dealt with Chandu Lal were still calculating the interest due them
end of the century.12
These firms were nearly all Hindu and non-indigenous, from w
and northern India. Family firms in almost all cases, they can b
from generation to generation. For example, in the case of Maha
Ram Puran Mal, Puran Mal was the current head of the firm, so

6 K. Krishnaswamy Mudiraj, Pictorial Hyderabad (Hyderabad, 2 vols, 1929 a

II, 497, and a newspaper article just after Chandu Lal's period also menti
concept of five state treasurers: 'The Englishman,' March 24, 1847, in Mahdi
(ed.), Hyderabad Affairs (Bombay, io vols, I883-89), IV, I8. The latter sou

hereafter be abbreviated HA, and the page numbers are those stamped in the
owned by the University of California, San Diego.
7 Khan, Gulzar-i-Asafiyah, 628-9.
8 Ibid., 630. This firm moved from Karwan to Gulzar Hauz (in the old city

9 He, as well as three Gujerati bankers (Kishen Das, Lachmi Das, andJaganath Das),
sent ceremonial clothes for the 1839 wedding of one of the Nizam's daughters: Government of Hyderabad, Chronology of Modern Hyderabad (Hyderabad, I954), 217. Puran
Mal's father, Mahanand Ram, is also mentioned in this translated Persian Court diary
as giving out alms to stop a beggars' riot in 1811: 146. For thejagir, 'The Evening Mail,'

April I7, I894, in the Clippings Collection, Andhra Pradesh State Archives; also,
Mudiraj, Pictorial Hyderabad, II, 507-8.
10 A good summary of the Palmer affair is given in Henry G. Briggs. The Nizam

(London, 2 vols, I86I), II; and see the manuscripts in the India Office Library by
Edward Palmer, c. I934 (Eur . D. 443).
11 Mudiraj, Pictorial Hyderabad, II, 478-9, 480-I, and Khan, Gulzar-i-Asafiyah, 625-6.

12 Interest comprised 82 to 99% of the debt in 8 of the 9 cases filed against the
Hyderabad government in 1890: India Office Library (hereafter IOL), Crown Representative Records, R/I/I/2o, Document no. 9.

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successor of Mahanand Ram. Double names, then
and/or partnership. The second name was usuall
brother, grandson or adopted successor-always the
the Gosains, a 'sanyasi' merchant order.13
Table I traces the major nineteenth-century H

firms over time. Branches of a parent firm have bee
For example, the two firms Shivdut RamJaisee Ram

Lachmi Ram may have conducted transactions
Jaisee Ram and Lachmi Ram were brothers (sons

the pattern of their business affairs was very simila

These 'great firms' of nineteenth-century Hyd
three major communities: Gujerati, Gosain and

merchants and bankers had settled in Karwan Sahu

century, under the Qutb Shahi dynasty.15 Most

Central India and the Hyderabad districts after the
provincial governor for the Mughal Empire (the ea
tury); they resided in Begum Bazar. Of the Marw
the Maheshwaris came before the Agarwals: the fir

Mal and Surat Ram Govind Ram preceded those
Shivdut Ram Lachmi Ram.16 These Marwaris set

others established themselves in the Residency Baz

derabad Cantonment, under British jurisdiction.
Bazar, there is no evidence for self-contained caste
ties; the residences of bankers and merchants and
mingled throughout that suburb.17

Europeans, Eurasians and Parsis were also invo
Hyderabad. The firm of Palmer and Company h

with the Gujerati bankers. 8 Henry Dighton, a cler

13 Bernard S. Cohn, 'The Role of the Gosains in the Econ

Nineteenth Century Upper India,' The Indian Economic and Soc
(I964), 175-82, is still the best coverage of the Gosains or Gos
14 Mudiraj, Pictorial Hyderabad, II, 465A-B; and see table 5
15 Karwan Sahu means Karwan of the bankers; sahu or sahu
16 See biographies in Khan, Gulzar-i-Asafiyah, 625-31, and M

bad, II. T. Timberg, The Marwaris (Bombay, 1978), I20, relat

migration to the rise of Maratha rulers at the end of the eight

17 Christopher Bayly has found similarly fluid residential
century Benares: 'Indian Merchants in a "Traditional" Sett

A. G. Hopkins, The Imperial Impact: Studies in the Economic Hi

(London, 1978), I88-92.

18 Khan, Gulzar-i-Asafiyah, 629. Bankati Das helped Palmer
a partner in the firm begun in I814: C. Collin Davies (ed.), 'Co
Palmer with Sir Henry Russell, Formerly Resident at Hyd
Archives, Vol. 13 (I959-60), 58 and 6o. In I849, Palmer serv

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Major Hyderabad Banking Firms over Time

Later Names of the F

Early Nineteenth Century Name

(with date of arrival) Community c. 1840-60 c. I890

Hari Das Kishen Das* Gujerati Kishen Das Hari Dast Hari Das Bhagwan Das
(1729) Bhagwan Das Balkishen Da
Lachmi Das Lachman Dast Gujerati Lachmi Das Lachman Dast Chaturbhuj Das, Purs
(?) Lachman Das Purshottam Das* Das; and Benkati Das

Moti Ram Surat Ram* Marwari- Surat Ram Govind Ram* Ghansham DasJaig
( 750) Maheshwari

Umarsi Sajan Mal+ Marwari- Umarsi Sajan Mal Magan Mal Umarsi Sajan M
( 762-1803) Oswal Jain

Shivdut Ram Marwari- Shivdut RamJaisee Ram* Shiv Lal Moti Lal*

(1762-1803) Agarwal Shivdut Ram Lachmi Ram*

Umraogir Gosain Umraogir Gyangir Narsinghgir* R
(180 1)

Mahanand Ram Puran Mal* Marwari- Puran Mal; Seth Ram Lal La
( 801-2) Agarwal Prem Sukh Das

Sources: Ghulam Husain Khan, Tarikh-i-Gulzar-i-Asafiyah (I890-

Krishnaswamy Mudiraj, Pictorial Hyderabad, Vol. II (1934); Rai Lulta Purs
Hyderabad, annual Reports of the Proceedings of the Debt Commission of H

Records, in the India Office Library, R/I/I/20 (concerning the Deb


* Father/son.
t Brothers.
+ Grandfather/grandson.

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was a British subject, later functioned as a leading banker and revenue

contractor in Hyderabad.19 Kishen Das, the Gujerati banker, and
Dighton were partners at one time, but they split; in I84I Kishen Das's
districts were reclaimed and turned over to Dighton, causing a bitter
dispute.20 The Pestonji Viccajee firm, headed by Parsi brothers from
Bombay who were British subjects, was a major creditor of Hyderabad
for a decade following Pestonji Mirji's introduction to Chandu Lal in
I835. The Palmers and Dighton lived near the Residency, and Pestonji
first took over the kothi (office) of the Muslim firm of Makhdum Seth and

then built his own new and impressive kothi in the Residency area.21
The bankers were closely and constantly involved with high-ranking
officials, revenue-farming talukdars and the leaders of military troops.
Evidence for the crucial role of the banking firms in Hyderabadi politics

during the nineteenth century comes not only from contemporary
newspaper accounts and assertions about 'tradition,'22 but from the
Debt Commission proceedings at the end of the century. Many claims

and counterclaims were recorded and investigated by the Commis-

sion.23 These records, combined with British records of the cession of

Berar, give concrete details of the financial and political relationships in
which bankers engaged.
In the first half of the nineteenth century, government officials and
son, Prem Sukh Das, in a dispute with Ramaswamy; the latter had started banking in
the Cantonment with a French partner. 'The Englishman,' November 17, 1849, in HA,

IV, 290-I.

19 For Dighton's beginning as a clerk of the Palmers, see Patrick Cadell (ed.), The
Letters of Philip Meadows Taylor to Henry Reeve (London, 1947), 19.

20 'The Englishman,'January 28, I84I, and 'Bombay Times', April 17, I841, in HA,
IV, 3-7 and 279-83. Here we also learn that Dighton's agent, Azim Ali, was once Kishen
Das's munshi (clerk).
21 Pestonji took on the responsibility of farming the Berar revenues and paying the
Hyderabad Contingent from I836-I841 (after Puran Mal, who took it sometime after

the Palmers). For Pestonji, see IOL, Parliamentary Papers, Vol. LXIX, I852-53, no.
996: 'Copies of all papers relating to the Case of Viccajee Merjee and Pestonjee Merjee,
British subjects and Parsee Inhabitants of Bombay and Hyderabad . .'. Pestonji paid
Makhdum Seth's son Syed Ahmed Ioo rupees a month rent. Khan, Gulzar-i-Asafiyah,

22Most 'tradition' appears to be accurate: the descendants of Shivdut Ram Jaisee
Ram asserted in the 1930s that their firm had been state Treasurer under Siraj-ul-Mulk
(Mudiraj, Pictorial Hyderabad, II, 465), and as tables 3 and 5 show, their firm was his
major creditor.

23 Reports of the Hyderabad Debt Commission, I890-I912, can be found in the
Andhra Pradesh State Archives, Documentation Room, and in the IOL: Crown
Representative Records, R/I/I/20 for documents relating to I890-98, and Crown
Representative Records, Secret Internal, September and November 1898, R/I/I/228,

R/ / I /2 2, and R/ / I/2 I 5 for the cases of Shivdut RamJaisee Ram, Surat Ram Govind

Ram and Umarsi Sajan Mal respectively.

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banking firms did not keep separate, independent
loans to the government; the banking firms kept
might be copied or summarized by government cl
official signed the banking firm's records and the
government when necessary. (The records of Bera
British in 1853 were those kept by Pestonji.25)
The banking firms furnished hundis, credit inst
exchange, payable elsewhere on sight or after a ce
these were destined for the British East India C

dency towns to pay Hyderabad's mounting deb

salaries. The firms furnished cash for disburseme

as the expenses of the Nizam's household or th

troops in the city. They made personal loans to hi
some of which were guaranteed by the governme
made to talukdars, who used the cash for an offeri

contract for revenue collection. The nazrana w

record-keepers; it was they who awarded such con
return, the bankers received official signatures on
guarantees of repayment, diamonds, jewels, or gold
in mortgage, and, increasingly, land from which
collect the revenues to secure repayment of their
revenue, and then to prevent the government fro
assignments, the bankers employed military men,
and Pathan mercenaries, who acted as their agents

acted as personal bodyguards for bankers too; a

standing in the city employed Arab troops to pro
The military men also received land assignments o

24 Report of the Hyderabad Debt Commission, 130 I F. (1
25 India Papers, 'Nazam's Territory, Copy of all Papers rela

His Highness the Nizam, in Liquidation of Debts alleged

Highness to the British Government (1854),' 13.
26 See Kamala Prasad Mishra, Banaras in Transition (New D

a good discussion of the hundi system. When transmitting mo
would give 0ooo rupees cash to a banker, who would give hi
payable after I to 2 months in Madras. The bankers would t

service. The hundi could be used by the drawer almost an

could turn it over to a banker or moneylender at a discount f

sudden need for cash. Here the banker's profit lies in the d
short-term credit, it functioned like a loan. In the case of t
when sahukars gave the Diwan hundis made out to the East In
Madras, Calcutta, or Bombay, we know that the Hyderabad
the sahukars cash; this was a loan transaction, and interest w
27 See the frequent references in the newspaper clipping
IV, for the I84os.

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administration when it became unable to pay th
The complexity of the resulting relationships is
the functions of talukdars, bankers and military
Major overlapping functions were performed by
military men. Since both groups collected land r

of what their contract specified or their own

became moneylenders, major creditors of the st
and talukdars did not deal in long-distance hundi
able to engage in this form of moneylending to


Functions Performed by Key Groups in Hyderabad, i84os


Bankers Talukdars Leaders
Made Loans to State:












for repayment of loans x x
in lieu of salary payments x
as agent for another x x
Provided military protection

of persons and land x

Engaged in entrepreneurial






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ily road and river.29 Here, bankers and talukdars, no
were involved.

While not enough is known about these multiple activities of the
Hyderabad banking firms, it seems clear that in the i84os the entrepreneurial activities took second place to the increasingly desperate
effort to supply funds to the state. Constant and growing pressure came

from the British East India Company and the military commanders.
Newspaper accounts of the day frequently mentioned the kidnapping of
paymasters or the besieging of one or another recordkeeper by military
men; these physical threats sometimes forced officials to pay the troops.
Bankers were also involved in incidents of violence. In I846, the banker

Gomani Ram went with fourteen Pathans to coerce payment from a
Muslim creditor, but he and six of his mercenaries (as well as the
creditor) were killed in the ensuing fight.30 In I847, a group of bankers
invaded the chief state recordkeeper's palace and thereby forced state
repayment of 215,000 rupees.31 Begum Bazar, where many bankers and
jamadars resided, was often the scene of sword and gun fights (as Table 4
The British Resident made threats of another kind. Hyderabad had

fallen behind in payment of the salaries of the Contingent, and the
Resident had begun paying them from his Company treasury in about
1848. Thus the East India Company became a creditor of the state. The

debt mounted, and the Resident began to discuss Governor General
Dalhousie's demand: that territory with revenue sufficient to pay the

salaries of the Hyderabad Contingent be ceded to the East India
Company. 33
Successive Diwans and state officials called on the bankers again and

again for loans, but these were seldom repaid. When the state was
29 The Palmers developed timber contracting (shipping timber on the Godavari to
Masulipatnam) and the Berar to Bombay cotton trade; Pestonji Viccajee did the latter,
as well as farming (contracting for) the land and sea customs and undertaking road work

in the Bombay Konkan; Hari Das Kishen Das did timber contracting in the Central
Provinces and had shipping 'companies at Masulipatnam and Bombay; Surat Ram
Govind Ram had ships plying from Madras to London and Madras to Rangoon.
30 'Spectator,'July 6, 1846, in HA, IV, 13.
31 This was actually a debt owed them by Ismael Khan, Nawab ofEllichpur, but the
recordkeeper, Lala Bahadur, had signed a guarantee (jokum chitty). Siraj-ul-Mulk,
Diwan in I847, paid the bankers, postponing a payment to the Resident to do so. 'The
Englishman,' December 27, 1847, in HA, IV, 26.
32 These jamadars and bankers were close neighbors in Begum Bazar, according to
names on the detailed municipal maps done in 1913. Leonard Munn, Hyderabad
Municipal Survey, old city maps nos I-21.

33 The best account here is that of the Resident, in the book compiled by his son,
Hastings Fraser, Memoir and Correspondence of General James Stuart Fraser (London, 1885).

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unable to give the bankers land assignments

strategies induced them to continue lending. A
given an order on a talukdar for quarterly repa
serve as intermediary, a treasurer was appointed
military family. From a financial caste but not
firm, this man was to channel funds from taluk

bankers, but he soon resigned the position.34 A

solicit loans advanced 'by discount': the entire

period of the loan was deducted at the time of le

was not received on time, the state had to pay

there were 'jokum chittees,' guarantees of payme
on behalf of the government given to a banker, c
third party creditor was not strong enough to

government on his own. The official signing
necessarily the Diwan; it could be any official in
confidence. For some time, this was Lala Bahadu

dar (revenue record-keeper for half the state). O
the bankers tried to get the British Resident's s
By I850, rumor had it that three-fourths of t
one way or another by Arabs and Pathans. A pu

and their revenue incomes was replete with t
name of' and 'protected by' various of these
contemporary press referred to 'the opulent

'capitalists of the powerful clans.' The bankers w
from all dealings,'38 and most had good reason t

The largest banking firms of the i840s had
Pestonji Viccajee's land assignments were recla
levied Rohilla troops and fought the state troop
34 'The Englishman,' November 25, I847, in HA, IV, 25,

(headed by Umarsi Sajan Mal). The Agarwal, Raja Sham

succeeded Dighton's agent, Azim Ali Khan, in this positio
to him of Medak district. 'The Englishman,' February 29
Framurz Jung, The Medak District (Secunderabad, I909
converted to Islam, just before his death in 1857. See Rao

Makhan Lal, Tarikh-i-Yadgar-i-Makhan Lal (Hyderabad,
dari, Agarwal Jati Ka Itihas (Bhanpura, Indore, N.D. [19
35 'The Englishman,' November 9, 1848, in HA, IV, 41.
per month, the same as the rate of interest customary th
36 'The Madras Spectator,' November 28, I853, HA, II,
Lala Bahadur; 'The Spectator,'July I2, 1847, in HA, IVC, 2
the Resident's signature.
37 'The Englishman,' November 2I, 1850, in HA, II, 3
38 'The Englishman,' October 22, I849, in HA, IV, 56,
May 3, I850, in HA, IV, 59.

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British East India Company's help in securing repayment; it declined,
and the firm went bankrupt in I848.39 Puran Mal, 'the Rothschild of
the Deccan,' whose loans had been many times those of the other
bankers combined, went temporarily bankrupt in 1851, as did Shivdut
RamJaisee Ram two months later.40 A coalition of local bankers, under
the leadership of Mr Dighton, twice tried to establish a state bank (in
I847 and 1852) to formalize and safeguard their position and prevent
cession of territory to the British. But the effort was blocked by the
Resident.41 The bankers, like many creditors, were now at a disadvantage with respect to the commanders of Arab and Pathan units: the
military creditors always got paid before others. Table 3 below gives an
Debts Due to Hyderabad Bankers by 1847

Unrepaid Rupee Loans to Successive

Chandu Lal Ram Baksh Sirajul Mulk
Banking Firms 1806-I 843 1843-I846 846-I847 Totals
Umarsi Sajan Mal 600,000 30,000 630,000
Moti Ram Surat Ram 350,000 30,000 I00,000 480,000
Hari Das Lachmi Das 150,000 400,000 75,000 625,000

Lachman Gir 800,000 300,000 I, Io,ooo

Ramaswamy 300,000 oo,ooo 400,000
Shiv Lal Moti Lal 500,000 575,000 1,075,000
Kangir Umraogir 300,000 50,000 450,000
Kripa Ram 300,000 95,000 395,000
Ramdhun 50,000 50,000

Girdhari Lal Fateh Chand I00,000 I00,000

Puran Mal n.a. n.a. n.a. 2,300,000
Totals 1,900,000* 2, 60,ooo* I,200,000* 7,605,000

Source: 'The Englishman,'June 29, 1847, in Seyed Mahdi Ali, Hydera

* Plus debt to Puran Mal (n.a.)

39'The Englishman,' March IO, I848, in HA, IV, 285; Rao, Bustan-i-Asafiyah, II,
733-4. The date of the firm's failure is given as i 85 in Amalendu Guha, 'Parsi Seths as
Entrepreneurs, 1750-1850,' Economic and Political Weekly, Vol. 5 (1970), M-I 13.

40 For Puran Mal, see 'Nizam's Territory' (see note 25), 82, 88; and 'The English-

man,' December 3, I851, in HA, IV, 76, and Rao, Bustan-i-Asafiyah, II, 734; for Shivdut

Ram, 'The Englishman,'January 8, 1852, HA, IV, 80.

41 Objection was to the fact that Mr Dighton was a British subject, legally barred from
lending money to native princes. For the bank efforts, see Fraser, Memoir, 389-91, and

newspaper accounts in HA, IV, 22-6.

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idea of the losses sustained by some of the bankin

Diwans by I847.

In these troubled decades, it is important to n

Hyderabad, despite some efforts such as the
acted jointly as an interest group. There wer

occasion to put together large loans, and two ba
'partners' for a specific transaction.42 But they w
each other, and disputes were frequent. Cases w
courts and in the British Residency courts: Ram

Kishen Das vs. Dighton, Mahadev Gir vs. Sita
between the government and bankers also rea
point of open altercations: Pestonji, Kishen Da
Ramaswamy, and Umraogir all sent troops ag
and/or had troops sent against them at one tim

Resort to physical force became more frequent,
were pawns for more powerful groups in the po

below presents the violent incidents involving
1846 to I857, conveying a graphic sense of their
ability in that decade.

By I85I, the Resident was scrutinizing fina

Nizam's government, and discussing possible ces
Diwan, Siraj-ul-Mulk, responded by undertaki

the East India Company (now some 7,000,000
and December of I85I. He succeeded in raising
July, and he sent hundis for 4,000,000 rupees

months, to the Resident by mid-August. Thereaf

ible to secure a like amount by October, altho

sent.44 This series of hundis delivered to the Resi
July to November, I85I, provides the data below
transactions with the Hyderabad government.
I have grouped the firms by caste or communi

note that a Hyderabad firm dealt elsewhere p

branches or with other firms from its own com

with bankers' books from Benares, found tha
carried on 'largely outside the boundaries of

42 Report of the Hyderabad Debt Commission, 30o F., 4
43 See HA, tables of content, vols III, IV, and V for refe
bitter and long-lasting. A dispute of the i8oos between
Mal was still being pressed by the latter in 1928: IOL, Cr
Foreign and Political Department, R/I/29/503, file no. 47
44 Contemporary newspaper accounts are in HA, IV, 65-7

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Incidents of Violence Involving Leading Hyderab




Oct., I846
Syed Ahmed,
s/o Makhdum Seth

Imprisoned young heirs of: 4 Marwaris, the 2 Daft
Paigah's manager, in his Begum Bazar house to forc

Shivdut Ram

Oct., 1846

Jaisee Ram's grandson Moti Lal imprisoned by Sy

Puran Mal

Jan., 1847

Rohilla troops waylaid him at Diwan's residence;

Baldevgir &
Bijigir, Gosains

Oct. 849-

Battle over disputed inheritance; Bijigir employed R

Jaisee Ram

troops secured release
men, including Arabs, of Gosains

June, 1850

May, 1853
Govind Ram
Surat Ram

June, 1850

but lost; unpaid Rohillas kidnapped disciple of Ba
their employer for ransom; government troops fi
Begum Bazar
Bijigir attacked Baldevgir's house again with 00 Sikhs; 300 A
Bijigir was wounded, captured

Govind Ram's son, Jai Gopal, kidnapped by Rohillas to forc

pay them for employment by Bijigir (above); plan worke


Hari Das Jan., I849

Hired Arabs to fight for jagir mortgaged to him

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Fateh Chand


Jan., 1849
May, 1851

March, i853
Jan., I850
Sept., 1852

Hired Arabs and Rathores to fight for jagir mortgaged to h
Attacked in his house by Arabs; his guards were killed, h
Two of his sons-in-law were kidnapped by Arabs

Kidnapped by Rohillas to force repayment of debts to
bankers 'sat in' at Diwan's until government paid for rele
Employed 500-700 Arabs, led by Bafana; used them to c
talukdars who fronted for him, farming district revenues

March, 1853
Feb., 1855

Aug. 1855

Lachman Das,
Lachmi Das

Oct., 1852

Seized and imprisoned by former ally, the Arab Bafana
Arabs broke into his house claiming debt but he escaped
Imprisoned by Diwan Salar Jung, charged with conspir
besieged Diwan's residence; Diwan put him in fetters; his
his Begum Bazar house as additional outpost vs. governme
Murdered in SalarJung's house; other bankers to blame?

Brothers kidnapped by Sikhs, demanding payment of their sa
after 30 days by government with money borrowed from bank

* All save two references are from the volumes of collected newspaper clippings edited by Mahdi Syed Ali: Hyderabad Affairs.
t Colin MacKenzie, Storms and Sunshine of a Soldier's Life (Edinburgh: 2 vols, I884), II, I 12-I 13, noted his imprisonment and Arab besiegers while at
wedding party at SalarJung's. He has dated it in I854-either he is a year off or Umraogir was imprisoned then as well.
+ K. K. Mudiraj, Pictorial Hyderabad, II, gives this story; there are few i857 references in the Hyderabad Affairs volumes.

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Networks of Banking Firms and Hundi Transactions, 1851

Number of Firms on which hundis were drawn (inc
Hundis Rupee

Hyderabad Firms Drawn Amount* Bombay Ca

Shivdut Ram Lachmi Ram
Shivdut RamJaisee Ram

Nathmal Govardhan Dast




Sultan Chand Bahadur Chand



Girdhari Lal Fateh Chand


Hanumant Ram Sri Ram



Moti Ram Ramdhun

b) Mahanand Ram Puran Malt
c) Surat Ram Govind Ram
d) Padamsi Nyansi
e) Gomani Ram Ram Lal
f) Anand Ram Sadasukh





Jaisee Ram Shiv Lal
Bag MalJit Mal

Shiv Lal Kishen

Pural Mal Hardat Rae

Puran Mal Srik

Kesri Chand Pul Chand

Surat Ram Rae
185,715 Jaigopal Das Purshotam




Manik Chand K

Tajsi Nyansi


2 83,000 Ram Lal
2 14,000 Bansi Lal Abir Chand

Lachman Das Purshottam Das

7 97,000 Sri Govardhan Maharaj

Lachmi Das Lachman Das

7 89,I43 Brij Lal Dalab Das
2 34,483 Jawahar Chand Atma

Kishen Das Purshottam Das

Sadul Singh


Jamna Das Balkishen Das
Narayan Das Tirmuk Das

q 26,893 Narotam Das Haribai
3 '9,579


a) Dighton
b) MacPherson

5 260,000

Northwest Bank

Source: Papers Relative to Territory Ceded by the Nizam in Liquidation of Debts, 66-9, 87-8.

* East India Company rupees, rounded off.
t also transactions with Girdhar Das Manikji Govardhan Das in Masulipatnam.
+ also transactions with Mahanand Ram Puran Mal in Masulipatnam and Govind Das Radha Kishen in Mirzapur.

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Hyderabad in I85 , that was apparently not s
dealt with European companies or banks in C

respect to geographic networks, Marwari firms

three Presidency capitals: Bombay, Calcutta,

ati firms in Hyderabad dealt with Madras but a
in the mid-nineteenth century.46

In earlier times, Gujerati and Gosain bankers
linked to the government; in 1851, the major s
Hyderabad government were Marwaris.47 Only
tors (Puran Mal and Shivdut Ram) loaned to the

out the year, and even they decreased their

November; both firms were said to be temporar
ended and 1852 began. The most serious consequ
was that:

The foreign correspondents of the Hyderabad houses decline giving them
credit-that is, have stopped dealings with them-I believe, with all, without
an exception ... to protect themselves from the pressures of their creditors the
tottering houses have procured and posted Arab guards at their gates.48

The Diwan, Siraj-ul-Mulk, now found it nearly impossible to secure
loans; I852 was the bankers' second attempt to form a bank, and again
they failed.
The Diwan, with the advice of the British Resident, sought to reform
the Mughlai administration to avert financial disaster, but the reforms
proposed all reduced the power and income of the Mughlai officials. At
this juncture, Lala Bahadur, the major recordkeeper, led the Mughlai
officials in opposition to the Diwan's cooperation with the Resident. The
talukdars did not want their customary share ( ) of the revenue collection

reduced. The paymasters of household and military units opposed
reduction of their share (16 to ) of the salaries they distributed, and they

opposed cuts in the numbers of their employees. The military commanders resisted similar proposals of salary and manpower cuts. Those
45 Bayly, 'Indian Merchants,' in Dewey and Hopkins, The Imperial Impact, I79.

46 Gujerati bankers were in Madras by I8o0: Parliamentary Papers, Vol. 6 (I812),
242-3, lists settlements of the Nawab of Arcot's debts, with the names of Gujerati
bankers. The Marwaris arrived there later: Timberg, The Marwaris, 225. Although
Gosains were not lenders in these records of the I851 crisis, we have a reference to
Umraogir's providing hundis drawn on Calcutta in June and July 85 I: Report of the
Hyderabad Debt Commission, 130I F. 1-3.
47 The Gujerati bankers and Palmer seem to have distrusted Siraj-ul-Mulk profoundly: Palmer to Russell, I843, in Davies, 'Correspondence' (see note I8), 34.
48 'The Englishman,'January 8, r852, in HA, IV, 80.

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who held land, and they were many, resisted the Diwan's attempts to
regain it for the state.

The Nizam, suspicious of the East India Company, sided with the
Mughlai officials led by Lala Bahadur.49 Given the political situation,
few bankers loaned and only then on the guarantee of Lala Bahadur, not
that of the Diwan. Fiscal reforms were resisted, and the financial situa-

tion worsened. Governor-General Dalhousie lost patience and sent an
ultimatum: Hyderabad was forced to cede Berar, rich in cotton and land
revenue, to the British in payment of its debt and to provide regular
salaries for the Contingent. The cession occurred on May 2 , 1853, and
the humiliated Diwan, Siraj-ul-Mulk, died a few days later.50

Siraj-ul-Mulk's twenty-four-year-old nephew, Salar Jung, was
chosen to succeed him. Not considered the strongest candidate for
Diwan, Salar Jung was selected precisely because it was thought he
would make an ideal puppet, easily manipulated by his backers, princi-

pally Lala Bahadur.51 But Salar Jung declined the role of puppet.
Appointed Diwan inJune, 1853, within two weeks he had refused to sign
papers presented by Lala Bahadur, saying that 'he could not sign papers

till he had satisfied himself by a knowledge of their contents of the
propriety of doing so.'52 By early August the relations between the two
showed serious strain, and they challenged one another directly at the
end of August.
The crucial turning point in SalarJung's contest for power with Lala

Bahadur involved securing advances from bankers. The I85i arrangements to secure hundis from bankers had involved consideration of past
debts and future revenues, but the Hyderabad government had proved

no more able to repay the bankers than the East India Company.
Further loans could not be obtained. Lala Bahadur presented Salar
Jung with a financial statement of the state's predicament and
'requested his direction as to the way and means for the supply of
money.' Salar Jung responded by submitting a petition for specific
administrative reforms to the Nizam and threatening to resign if it was
not endorsed.53 The Nizam endorsed the petition, awarding victory to

the Diwan, who then proceeded to eliminate the daftardars as inter49 'The Englishman,' May I8, 1853, in HA, V, 189; Shiv Narayan Saksenah, Kayasth
Sajjan Caritra (Jaipur, 3 vols, 1912-13) II, 8-9.
50 The text of the treaty is in Briggs, The Jizam, I, 312-I6.

51 'The Englishman' and 'The Madras Spectator,' June 8, I853, 'United Service
Gazette,'June 10, I853, and 'Madras Spectator,'June 8, I853, in HA, III, 2-4.
52 'The Englishman,'June 20, I853, in HA, III, 7.
53 'The Englishman,' August 29, 1853, in HA, III, 7-8.

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mediaries between himself and the moneylender
tors.SalarJung wrote:

[After the failure of the daftardars to improve their a

evident] I gradually . . . made arrangements with

unconnected with the Duftardars to make advances t
the Government, and in consequence of the period o

being yet eight months distant, I deprived the Du
appoint Talooqdars, a privilege which they had hit
selves ... I obtained His Highness the Nizam's guarant
from the sahookars ... he ... accepted and signed at
sahookar's papers of requisitions, and the two Wajib


Even more specific is the account given by a later Resident, Richard
Temple. A banker, unnamed by Temple, was introduced to him in 1867
by SalarJung as the first man to come forward and assist SalarJung on
his accession to the Diwanship.55
The banking firm which extended credit to SalarJung had to be that

of Lachmi Das Lachman Das. A contemporary Court diary entry for
August 27, I853, noted that Salar Jung had presented the sahukar
Lachmi Das and his brother to the Nizam, who accepted their nazr and
then initialled the government papers submitted to him.56 Since the
final battle between Lala Bahadur and SalarJung occurred at the end of

August, this court presentation was the event to which Salar Jung
referred in his written account quoted above. (It was this same banking
firm which assisted SalarJung I in 'falsifying' the state accounts later on,

from I871 to I877. A false set of account books for these years was
prepared to conceal from the Resident payments being made for political activities counter to British interests. In the false accounts, these sums
were labelled 'loans to Luchmi Dass Sahoo.'57

After Salar Jung's assumption of power, he initiated a gradual
changeover from the Mughlai bureaucracy to a modern, Anglo-Indian

administration.58 The bankers' roles in Hyderabad politics were ultimately much reduced. The new Diwan, in office from 1853 until his
54 Salar Jung, Hyderabad State, Miscellaneous Notes on Administration (Hyderabad,
[1856]), 7 (in the SalarJung Library, Hyderabad).
55 Richard Temple, Journals Kept in Hyderabad, Kashmir, Sikkim, and Nepal (London, 2

vols, 1887), I, I20-I.

56 Chronology of Modern Hyderabad, 271.

57 IOL, Crown Representative Records, Foreign Department, Confidential-A,
Internal Branch, Section B, nos 23-9 of I89I (R/I/24/5), 7; and see 1892 Proceedings
58 See my article, 'Mulki-non-Mulki Conflict in Hyderabad State,' in Robin Jeffrey
(ed.), People, Princes and Paramount Power (Delhi, 1978).

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death in 1883, established district and central
the currency, and took control of the mints
these changes took many years to effect, a
some bankers and battled others during the f

Those bankers allied with the ousted Berar talukdars and military men,

notably the Gosain Umraogir, strongly opposed the new Diwan.
Actually, the cession of Berar to the East India Company helped Salar
Jung by dislodging many powerful military men from their land assignments there. He was able to negotiate reduction of troops, and in some
cases dismissal of entire units of Arab and Pathan mercenaries, in return

for some compensation.59 The East India Company, given a pretext in
854 when Arabs in Yeshwuntpura fired on an Englishman, also assisted

Salar Jung by offering to help him against the Arabs.60 This alignment-the Diwan with the East India Company against the talukdars,
military men, and bankers who had profited under the old systemmarked the events of I857 in Hyderabad.
The rebellions of that year against the British in India reflected local
circumstances wherever they occurred,61 and in Hyderabad the most

common interpretation of the disturbances has been to blame a disgruntled Rohilla Afghan (Toora Baz Khan) whose forces attacked the
Residency, allegedly seeking payment of back salaries. But a glance at
the incidents on Table 4 involving the Gosain, Umraogir, gives another
hypothesis for further research.
Umraogir had been closely allied with Lala Bahadur and some of the
Arab and Pathan leaders. His relationship with SalarJung's late uncle,
the previous Diwan, had once been close, but Siraj-ul-Mulk had persuaded Umraogir's own Arabs to turn against him. Siraj-ul-Mulk imprisoned him and then he cancelled or collected for himself most of the

debts due to Umraogir.62 Once released, Umraogir began raising troops
and allied himself with several of those ousted from their Berar holdings.

SalarJung imprisoned him for conspiracy in I855. Then in 1857 Salar
Jung and others charged the Rohilla rebel, Toora Baz Khan, with
instigation by his employer, whom 'everybody knows,' in Begum
Bazar.63 (It is also noteworthy that the tributary state of Shorapore,
whose Raja rebelled in 1857, was captured and committed suicide, had


See the articles in HA, II, 35-43.
'The Englishman,' April 6, 1854, in HA, II, 40-I.
Eric Stokes, The Peasant and the Raj (Cambridge, 1978), Chs 5-8.
'Madras Spectator,' February I6, 1855, in HA, V, 767-8.
Sources for i855 in table 4; and for I857, 'The Englishman,' August I, HA, III,

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had as its bankers Gosains from Begum Bazar
of 1857 did not refer to the murder of Um

occurred in the Diwan's own residence. But he did accuse Gosains and

other Begum Bazar residents of participating in another conspiracy
against him in I862.65
Clearly, bankers continued to participate in politics in Hyderabad.
Their changing role in the late nineteenth century needs careful investigation.

III. The Family Firms
The historical material on the 'great firms' of nineteenth-century
Hyderabad has illuminated the political events of that time and place.
Now let us see how the details about those political actors and events can

be related to questions about the way the family firms functioned
internally; the role of religion in the business life of these banking
communities; and the way the firms functioned with respect to each


Family firms, it is argued, have many economic advantages. They can
invest in the training of personnel, draw upon relatives for capital, and
provide continuity and social security in ways unmatched by competing
non-family firms. A name and a sense of tradition were valuable assets in
the field of merchant banking.66 The institution of the joint family has
been viewed as contributing to the success of family firms in India.67

The stereotypical model of the Hindu patrilineal joint family is
employed; discussion points to the functional role of Mitakshara law
(followed by the Marwaris and Gujeratis), which provides for the
co-parcenary (impartible) estate, managed for the patrilineage by successive eldest males. The Parsis, whose customary law enjoins the practice of partible inheritance, are alleged to have followed English law and
64 Lachman Gir was the major banker there in the I840s: Meadows Taylor, Story of
My Life, Chs 9 and I I, reprinted in HA, V, 409 and 430.
65 Salar Jung, 'Administration Report of the Dominions of His Highness the Nizam'

[1863], reprinted in HA, III, 151 on, and see 247-51 of same volume. Some banking

firms assisted SalarJung in I857. Shiv Lal Moti Lal received a reward from the British
(Mudiraj, Pictorial Hyderabad, II, 465), probably for supplying the Resident with money,
the new coinage Salarjung was introducing then.
66 Burton Benedict, 'Family Firms and Economic Development,' Southwestern Journal
of Anthropology, 24, no. I (1968), 2; David Landes, 'Bleichroders and Rothschilds,' in
Charles E. Rosenberg (ed.), The Family in History (Philadelphia, 1975), 11I -3.
67 Timberg, The Marwaris, 127-9.

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made wills to avoid the division of f

Gosains, the chelas or disciples of a Gos
sons and carried on the business. Gosain

typically as members of a communit

monasteries and the constant movemen

gave them an institutional framework

family and kin,69 and whose austere wa

We have many examples of long-lived family firms in Hyderabad. Six
of the seven firms in Table 1 have existed for over one hundred years.

The material available suggests that these have not operated on a
strictly patrilineal model. There are references to sons-in-law and
nephews as heirs or partners,71 and at least one instance of a son-in-law
displacing a son as successor to the retiring head of a family firm.72 The

more appropriate model here would be that of a composite descent
group,73 utilizing bilateral kinship ties and adoption to carry out the
firm's economic activities. This has been recognized by Indian writers

on the business communities: one proposes the kindred as the more
appropriate unit of analysis for Marwari business activities.74 Another
defines joint family as including relatives by marriage, not necessarily

co-resident, who share economic activities.75 'Inbreeding,' or the
arrangement of marriages within a close circle of relatives, has been
correlated with the continuity of family firms in some cases.76 Given the

high mortality rates characteristic of societies prior to the demographic

transition, the bilateral kindred or composite descent group is more
likely than a strictly patrilineal group to explain the continuity of these
Hyderabad nineteenth-century family firms. But the marriage patterns
of these families and kindreds have not yet been studied historically, and
68 Amalendu Guha, 'The Comprador Role of Parsi Seths, 1 750-1850,' in Economic and
Political Weekly, Vol. 5 (November 28, I970), 1936.
69 Mishra, Banaras, 98.
70 Ibid., 97; Cohn, 'The Role of Gosains,' I80-I.
71 'Madras Spectator,' February 22, I850, and 'The Englishman,' March 15, I853, in
HA, V, 574 and 742 respectively.
72 Khan, Gulzar-i-Asafiyah, 630, for Radhakishen's son-in-law, Jagannath Seth.
73 E. Leyton, 'Composite Descent Groups in Canada,' in C. C. Harris, Readings in
Kinship in Urban Society (N.Y., 1970), I8o.

74 B. R. Agarwala, 'Caste in a Mobile Commercial Community,' Sociological Bulletin,
Vol. 4 (1955), 141.
75 Arabinda Ghosh, 'Japanese "Zaibatsus" and Indian Industrial Houses: an International Comparison,' American Journal of Economics and Sociology, Vol. 33 (I974), 318.

76 Guha, 'The Comprador Role of Parsi Seths,' mentions inbreeding for Parsis;

Joseph Wechsberg, The Merchant Bankers (Boston, 1966), tells us that of the Rothschild's
59 weddings in the nineteenth century, half were between Rothschilds (35 I).

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it may be that certain types of preferred marriag
the Hyderabad firms.77
The religious element in these Indian family firm
of the Gosains, is still often over-emphasized. A

have remarked, the sectarian differences amon
Marwaris have had no apparent impact on their
Certainly some of Hyderabad's leading banker

devout men, performing daily pujas, giving out ch

temples; such qualities and acts were also attrib

political figures of the time. But they are also des
fond of cock-fights and engaging in the occasiona

selves. 79

It is particularly difficult to view Hyderabad's Gosains as austere
monks. Their establishments were like those of other wealthy men; their

locality was repeatedly termed 'most opulent' in the city. The contemporary description of Umraogir below has nothing of a religious flavor:
Umraogeer has been repeatedly before the public. He has been a great actor on
this stage of ours ... He is a Gosaeen, a class of men notorious for their opulence
and their usurious dealings, amongst whom he is noted both as a large capitalist

and for undertaking adventures of the utmost hazard, upon the chance of
obtaining exorbitant gains . . . Umraogeer . . . is particularly noted for a
haughty and fiery temper, for a sort of courage which seems to hazard much by

defiance but which never yet has been seen to come into the contact which
produces the final catastrophe.80

Yet Gosain establishments, and those of some Gujeratis, were termed
maths (monasteries) in Hyderabad, and some commercial establishments

may have been linked to 'Bairagis' (Hindu Vaishnava ascetics?).81
The way these maths functioned and what the term really meant in
nineteenth-century Hyderabad remain to be investigated.
Social interaction among bankers in the city is difficult to discern from
the available historical sources. Within the localities where most bankers

lived, the heads of the big firms played leading roles. The Holi celebrations, very popular in the Gujerati and Marwari communities, were
77 Peter Dobkin Hall, 'Marital Selection and Business in Massachusetts Merchant
Families, 1700-1900', In Michael Gordon (ed.), The American Family in Social-Historical
Perspective (N.Y.: 2nd edn, 1978), 101-I4.
78 Timberg, The Marwaris, 35-7.
79 Khan, Gulzar-i-Asafiyah, 625-31.

80 'Madras Spectator,' February I6, I855, in HA, V, 767-8.
81 See the names on the Municipal Survey Maps: Munn, 1913. G. S. Ghurye, Indian

Sadhus (Bombay, 2nd edn, I964) gives religious information about these and other


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marked by riotous and sometimes violent behavior

and Puran Mal's son in Begum Bazar are both

feuds which marred the festivities in their localitie

information, some data relating bankers to partic
the striking contiguity of the bankers' residences
nobles and military men, little is known about
city. But the 'nautch party' hosted by the Musl
Ahmed (Table 4), suggests that the scions of we

munities enjoyed private entertainments togeth
Ahmed imprisoned the young Hindu heirs of le
wari bankers at the end of five days of drinks an
the party was over and his troops detained th

dancing girls imprisoned along with the young me
their) reputations as young men-about-town.83
The ways in which the banking firms functioned
other have been illustrated in the course of the narrative. Bankers

competed with each other in Hyderabad when contracting for
revenue assignments or 'mortgaged' jagirs and when making loa
nobles. They competed with each other when hiring bodyguard

military forces, and they sometimes fought each other. Banking f
invested separately in specific enterprises, like cotton or opium. Th
seem to have taken European partners early in the century in all o
above from time to time, but these partnerships were not lasting.

bankers formed political alliances with revenue officials, noble

military men, and conflict and lawsuits were not infrequent amon
those engaged in banking activities in the city.
The Hyderabad firms cooperated to varying extents when it cam

making loans, particularly via hundis. When actually drawing h
upon firms elsewhere, the Hyderabad firms dealt only with their

branches or with other members of their caste, as we have seen

vis-d-vis the Hyderabad government, the local firms on occasion f
tioned collectively. The banking firms sometimes formed local coalit
to raise a particular sum needed by the government. These efforts
evidently carefully negotiated, however, and disagreements and dis

characterized them.84 But when two of the leading local firms

82 Khan, Gulzar-i-Asafiyah, 630 (Hari Das), and 'Madras Spectator,' Novemb
i848, in HA, V, 549 (Puran Mal's son, Prem Sukh Das).
83 'Madras Spectator,' October 3, i846, in HA, V, 602.

84 When a 'coalition' was being formed in I847, one firm objected to the inclus
Puran Mal (because the government's huge debt to him would reduce their divi
'The Englishman,' October 23, in HA, IV, 22. And in I852, when the Nizam fo
necessary to mortgage a fabulous diamond to the bankers, it was kept in a che

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temporarily bankrupt, others covered for the

bankers made efforts to act collectively only to fen

ment demands or to protect local firms crucial
banking activities.

The attempts by Hyderabad bankers to establi

1852) would have institutionalized the informal an
ships among leading creditors of the State. Blocke
perhaps by distrust among the bankers themselves,

succeed. When such a 'State Bank' was finally r
however, it was a branch of the Bank of Benga

India,87 the history of'organized banking' in Hyde
linked to the inauguration of European-style bank
must redefine banking and its importance in India
cover the indigenous bankers and their political an

Kishen Lal (Shiv Lal Moti Lal), but the key was with Hari Da
Arabs: 'Madras Spectator,' June 7, in HA, V, 715.
85 These were Puran Mal and Shivdut Ram Jaisee Ram, i
86 Manik Rao Vithal Rao, Khayaban-i-Asafi (Hyderabad,
87 The best summary remains that of B. Ramachandra Ra
the Days ofJohn Company,' Bengal: Past and Present, Vols 3


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