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Indigenous Banking Firms in Mughal India: A Reply

Published online by Cambridge University Press:  03 June 2009

Karen Leonard
Karen Leonard
Affiliation:
University of California, Irvine
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Extract

In the April 1979 issue of CSSH I proposed a theory: The financial services of leading indigenous banking firms were indispensable to the Mughal state, and the diversion by these firms of resources, both credit and trade, from the Mughals to other political powers in the Indian subcontinent contributed to the downfall of the Mughal empire (p. 152). John F. Richards's article in the present issue takes exception to that theory, challenging the evidentiary basis for my assertions. While stating that further research was admittedly necessary to test and fully substantiate the theory, I certainly offered evidence that these banking firms supplied working capital to the empire and its officials for military campaigns, trade, construction, karkhanah (workshop) production, and personal loans. I also discussed the bankers' regulation of the valuation, exchange, and circulation of currency, and particularly the hundi system of bills of exchange. The political potential of these financial services – of their performance or nonperformance, and on what terms – is obvious. Indeed, I cited instances of political interactions between bankers and officials.

Type
Debate: Mughal State Finance
Information
Comparative Studies in Society and History , Volume 23 , Issue 2 , April 1981 , pp. 309 - 313
Copyright
Copyright © Society for the Comparative Study of Society and History 1981

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References

1 Gokhale, B.G., “Ahmadabad in the XVIIth Century,” Journal of Economic and Social History of the Orient XII, no. 2 (04 1969): 187–97CrossRefGoogle Scholar; Arasaratnam, S., “Aspects of the Role and Activities of South Indian Merchants c [sic] 1650–1750,” Proceedings of the 1st International Conference Seminar of Tamil Studies (University of Malaya, 1968), pp. 582–96Google Scholar; Chaudhuri, K.N., The Trading World of Asia and the English East India Company 1660–1760 (New York, 1978)CrossRefGoogle Scholar, particularly chapters 7 and 8; Habib, Irfan, The Agrarian System of Mughal India(Aligarh, 1963), pp. 69–70.Google Scholar

2 Chaudhuri, K.N., “Markets and Traders in India during the Seventeenth and Eighteenth Centuries,” in Economy and Society, Chaudhuri, K.N. and Dewey, Clive J., eds. (Delhi, 1979), p. 144.Google Scholar

3 I cited some of this evidence in my 1979 CSSH article.

4 Habib, Irfan, “Banking in Mughal India,” Contributions to Indian Economic History (Calcutta) I(1960): 10–11.Google Scholar

5 Ibid., p. 11.

6 Habib, Irfan, “Usury in Medieval India,” Comparative Studies in Society and History 6, no. 4 (07 1964): 407–11.CrossRefGoogle Scholar

7 Habib, , “Banking,” p. 6Google Scholar; idem, “Usury,” p. 409.Google Scholar

8 Habib, , “Usury,” pp. 413, 399.Google Scholar

9 Vilar, Pierre, A History of Gold and Money 1450–1920 (London, 1976), p. 96Google Scholar; Neale, Walter C., “The Market in Theory and History,” in Trade and Market in the Early Empires, Polanyi, Karl, Arensberg, Conrad M., and Pearson, Harry W., eds. (Glencoe, III., 1957), p. 362.Google Scholar

10 Habib, Irfan, “The Currency System of the Mughal Empire (1556–1707),” Medieval India Quarterly IV (1961): 1–22Google Scholar; Nicholson, J. Shield, “The Indian Currency Experiment,” Contemporary Review 64 (1893): 342–43.Google Scholar

11 Ahmad, Qeyamuddin, “An Historical Account of the Banaras Mint in the Later Mughal Period, 1732–1776,” Numismatic Society of India 23 (1961): 198–215Google Scholar, says that “in spite of the great importance of the subject [of currency and mints] there are very few references to it in the contemporary Persian chronicles … ” The chronicles are “characterised by a dearth of information on non-political subjects, [and] are even more reticent on the subject of Currency and Mint” (p. 198). In Ahmad's eighteenth-century data on management of the Banaras mint, officials alternated with the “farmers” (contractors and bankers, judging by their names) of the mint, and the farmers always carried away their papers (p. 213). Furthermore, farmers sometimes operated the mint during periods when the records showed that an official appointee was in charge, “probably… with the permission and on behalf of” the official apointee (p. 203, n. 2).

12 Habib, , “Currency System,” p. 3, n. 5.Google Scholar

13 Ibid., p. 5, n. 1.

14 Ibid., n. 3.

15 Ibid., p. 6, nn. 1, 5; p. 7, nn. 3, 4; p. 9, n. 3; p. 11, n. 10; p. 13, n. 8; p. 19, n. 10; also Chaudhuri, , Trading World, pp. 183–84Google Scholar, and Gokhale, , “Ahmadabad in the XVIIth Century,” p. 193Google Scholar. See also Habib, , “Banking,” pp. 7, and 4Google Scholar, where Habib quotes Abu'l Fazl as saying that “the success of the minting department of the government depended” on the moneychangers, or shroffs (citing Fazl, Abul, Ain-i Akbari, Jarrett, H.S. and Blockmann, H.F., trans., 3 vols. (Calcutta, 1927), I: 16).Google Scholar

16 Chandra, Satish, “Commercial Activities of the Mughal Emperors During the Seventeenth Century,” Bengal Past and Present 78, no. 146 (07–12 1959):92–97.Google Scholar

17 Sharma, R.C., “The Ardha-Kathanak: A Neglected Source of Mughal History,” Indica 7 (1970), pt. 1: 49–73, and pt. 2: 106–20Google Scholar. This charming autobiography emphasizes a personal quest for salvation and gives financial details only incidentally; it has startling similarities to the merchant-based Tales of Ancient India edited by Buitenen, J.A.B.Van and also to Gandhi's Autobiography.Google Scholar

18 I agree that G. T. Kulkarni's study of an eighteenth-century banking firm in Poona is the most detailed and authoritative one available, but Kulkarni obviously assumes that such firms existed before that century. Kulkami, G.T., “Banking in the 18th Century: A Case Study of a Poona Banker,” Artha Vijnana XV (1973): 187ffGoogle Scholar. Two promising efforts are Joshi, C.B.'s work with seventeenth-century village-level papers: “Indapur Village, A Study in Economic History,” Indian Historical Records Commission Proceeding 15 (1938): 175–81Google Scholar; and P. K. Gode's success in finding Baroda State archival papers which corroborate eighteenth-century family papers: “Keshavbhat Karve, a Poona Banker of the Peshwa Period and His Relations with the Peshwa and Damaji Gaikwad,” Journal of the University of Bombay 6 (07 1937): 87–91.Google Scholar

19 I have worked on the more plentiful materials for Hyderabad State in the nineteenth century: “Banking Firms in Nineteenth-Century Hyderabad Politics,” Modern Asian Studies, forthcoming.