While a number of in-depth studies have been carried out on the role of the formal financial market (Gurley and Shaw, 1955; Patrick, 1966; Porter, 1966; Goldsmith, 1969; McKinnon, 1973; Shaw, 1973, to mention a few), the informal or unorganized financial sector has largely been neglected. While discussions about the operations of the informal market were popular about 20 years ago (Geertz, 1962; Ardener, 1964; Anderson, 1966; Kurtz, 1973) they have gradually been relegated to the side-lines and this is despite the fact that the said market is neverthel ess of significant size and importance (as will be illustrated elsewhere in the paper).

The necessary vocabulary has not yet been created to encompass both the ‘informing spirit’ and ‘whole social order’ of British India. In part, at least, this is because research has generally concentrated on either British or Indian realms of action, rather than the interaction between them. But British colonial rule shaped a distinctive social system in India, one that drew on both British and indigenous values as well as notions of authority. This essay analyzes aspects of this colonial social order by focusing on its legal system, particularly that portion designed to deal with what the British identified as ‘extraordinary’ crime. Indeed, criminal law may be among the most revealing aspects of a social order. For, as Douglas Hay has observed for a similar elaboration of the English legal structure, ‘criminal law is as much concerned with authority as it is with property … the connections between property, power and authority are close and crucial.’

The assumption of the passive peasant in Indian history has been existent at least since the time of Max Weber, and continues to return, phoenix-like in its appearance, every few decades. Its importance, however, lies in the responses the generality spawns. Morris D. Morris refuted Max Weber's thesis, detailed in The Religions of India, in 1967, while Barrington Moore, Jr.'s Social Origins of Dictatorship and Democracy was aptly rebutted by Kathleen Gough in 1974. Since then, the concept of the rational peasant, particularly during colonial times, has undergone a metamorphosis. Various modes of peasant dynamics have been amply demonstrated in recent works, stepping into the realms of peasant rebellion, desertion, banditry, and the like. Of particular import, in terms of peasant consciousness, has been the rise of the ‘Subaltern School’ of study. Beginning with Ranajit Guha's seminal work, Elementary Aspects of Peasant Insurgency in Colonial India, and continuing with volumes of articles by a variety of authors, the Subaltern Studies group has attempted, in their own words, to offer an alternative to historical writing ‘that fails to acknowledge, far less interpret, the contributions made by the people on their own, that is independently of the elite.…’ These scholars thus use the term subaltern for those social groups which they believe have been ignored through the course of history.

Meenakshipuram is a small, dusty village in Tamilnadu's Tinnevelly (Tirunelveli) district, very close to the south Kerala border. In 1981 this inconspicuous place, and several other villages in its immediate vicinity, made big headlines in the Indian daily papers when thousands of harijans or ex-untouchables decided to leave Hinduism and to embrace Islam. This spectacular case of mass conversion created a terrible shock among caste Hindus and threatened to upset the always precarious communal balance. Rumours circulated about Arabian sheikhs who had come to give tangible expression to the immense richness of Islamic belief by handsome distributions of oildollars. More serious investigation, however, showed that the harijans in this region had been suffering from oppression by aggressive landlords, harassment by police authorities and acute prejudices by caste Hindus for a very long time. A growing awareness of this social degradation has led many of these harijans to convert to Islam.

India's Parsis as a group have long been noted for their entrepreneurial talent. Parsis have played an important role in the growth of Indian industry in the nineteenth century, pioneering cotton textile industries in western India. Parsis were first described by early European visitors like J. Ovington as the principal weavers of Gujarat who worked primarily in ‘silks and stuffs’. In the late seventeenth century, Parsis began to participate in trade as ‘a large number of Parsi merchants began to operate in Swally and some of them like Asa Vora bought pinnaces (small coastal ships) to transport their goods to Basra and other ports in the area.’

The Banias of eighteenth-century Surat, whom Michelguglielmo Torri earlier treated with indifference if not innocence, have invited his wrath since they were brought into focus by the publication of my essay on the Banias and the Surat riot of 1795. In his ‘rejoinder’ to my article, he seeks to wish away their existence altogether (to him there was no specific Bania community, the term merely signifying traders of all communities engaged in the profession of brokerage), and seeks to provide what he regards as an ‘alternative’ explanation of the Muslim–Bania riot of 1795. the Muslim-Bania riot of 1795. It shall be my purpose in this reply to show that his alternative explanation is neither an alternative nor even an explanation, and is based on a basic confusion in his mind about the Banias as well as the principal sources of tension in the social structure of Surat. I shall treat two main subjects in this reply to his misdirected criticisms. First, I shall present some original indigenous material as well as European documentation to further clarify the identity, position and role of the Banias, whom Irfan Habib in a recent article has identified as the most important trading group in the trading world of seventeenth and eighteenth-century India. It is also my purpose to show how the social order of Surat operated under stress by presenting some archival material, the existence of which Torri seems to be completely unaware of, on the Parsi-Muslim riot of 1788.

During the second half of the eighteenth century, Surat was still a large city and an important centre of trade. One of the most successful sectors of its merchant class was made up by shroffs, namely businessmen specializing in money-exchanging, money-lending and the giving and discounting of bills of exchange. By the late 1770s, the fortunes of the shroffs, who were mainly Hindu, were on the rise. According to knowledgeable observers, the Hindu businessmen, but most particularly the shroffs, had become the wealthiest sector of the Surat merchant class.