Companies, Commerce and Merchants

Sushil Chaudhury
Companies, Commerce and Merchants

Companies, Commerce
and Merchants
Bengal in the Pre-Colonial Era
Sushil Chaudhury
an informa business
ISBN 978-1-138-23479-6
www.routledge.com
,!7IB1D8-cdehjg!
COMPANIES, COMMERCE AND MERCHANTS
COMPANIES, COMMERCE AND MERCHANTS
Bengal in the Pre-Colonial Era
SUSHIL CHAUDHURY
First published 2017
by Routledge
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informa business
© 2017 Sushil Chaudhury and Manohar Publishers &
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The right of Sushil Chaudhury to be identiﬁed as author of this
work has been asserted by him in accordance with sections 77 and
78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
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Typeset in Sabon
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For hundreds of my students
who were my main source of inspiration
for more than four decades
Contents
Preface ix
Acknowledgements xi
1. The Rise and Decline of Hugli:
A Port in Medieval Bengal 1
2. Prices of Provisions in Bengal in the Second Half
of the Seventeenth Century: Moreland Refuted 39
3. The Myth of the English East India Company’s
Trading Privileges in Bengal, 1651-1686 51
4. The Problem of Financing East India Company’s
Investments in Bengal, 1650-1720 60
5. Textile Trade and Industry in Bengal Suba,
1650-1720 85
6. Bengal Merchants and Commercial Organisations
in the Second Half of the Seventeenth Century 108
7. Saltpetre Trade and Industry in Bengal Suba,
1650-1720 152
8. Continuity or Change in the Eighteenth Century?
Price Trends in Bengal, c. 1720-1757 161
9. European Companies and the Bengal Textile Industry
in the Eighteenth Century: The Pitfalls of
Applying Quantitative Techniques 189
viii | Contents
10. European Companies and Pre-Modern South

Asian Commercial System: A Study of Bengal
in the Eighteenth Century 213
11. General Economic Conditions under the Nawabs 263
12. The Traffic in ‘Drug’ in Bengal Suba: A Study
of Opium Trade and Production, 1700-1757 300
13. International Trade in Bengal Silk and the
Comparative Role of Asians and Europeans,
c. 1700-1757 307
14. Merchants, Companies and Rulers:
Bengal in the Eighteenth Century 323
15. The Asian Merchants and Companies in Bengal’s
Export Trade, c. Mid-eighteenth Century 358
16. The Inflow of Silver to Bengal in Global
Perspective, c. 1650-1757 383
17. Was there a Crisis in Mid-eighteenth Century Bengal? 398
Index 423
Preface
I had been contemplating for some time to bring out a collection

of my articles written over the last four and a half decades but
it did not materialize because of my busy schedule. However
Subrata Roy, a former student and now a college teacher, was
insistent that I should go ahead with the plan. Fortunately, Mr.
Ramesh Jain of Manohar came forward with great enthusiasm
to publish the collection of my essays. This is how the present
volume came about. It was really a difficult task to select the
essays from numerous pieces that were published in different
books, journals and those that were presented in various inter-
national and national conferences or seminars over the years.
No less tough job was to pick and choose essays, which were
relevant more or less, to a particular theme. However, in this
volume I have included the articles which pertain to Bengal’s
economic history in general, its commercial economy in particu-
lar, with special emphasis on the role of the European Companies
in Bengal in the seventeenth and the eighteenth centuries. Some
of the other pieces were put together in another volume entitled
Trade, Politics and Society: The Indian Milieu in the Early Mod-
ern Era. There is no chronological arrangement to the essays as
I felt it was not at all necessary. Since the essays were written
at different times and in different perspective, there are bound
to be some repetitions and this could hardly be avoided. But I
can assure the readers that the repetitions, wherever they occur,
are very relevant for the clarity of that particular chapter. There
was a temptation to revise such repetitions as far as possible,
correct the essays and make them up to date, bring uniformity
in spellings, update the bibliographies wherever needed. But I
x | Preface
have resisted this except reluctantly in correcting some factual

mistakes and in intervening despairingly to bring about some
uniformity of spelling. But these, I am glad to say, have been
done very sparingly. I am extremely thankful to Mr. Ramesh Jain
of Manohar Publishers & Distributors for taking great care and
interest in publishing the book. My wife Mahasweta, as always,
has been very helpful in reading the manuscript, correcting the
proofs and the errors which escaped my eyes. Perhaps it will
be superfluous to thank her after more than half a century of
married life.
Sushil Chaudhury
Acknowledgements
Profuse thanks from the author and the publisher to the following
Publishers/Editors/Authors for granting permission to reproduce
the articles published in this volume:
Ashgate (Chapter 16); Asiatic Society of Bangladesh, Dhaka, His-
tory of Bangladesh, vol. 2 (Chapter 11); Bengal Past and Present
(Chapter 1, 3, 6); Cambridge University Press (Chapters 9, 13,
15); Indian Economic and Social History Review (Chapter 4);
Indian Historical Review (Chapter 5); Indian History Congress
(Chapters 2, 7, 12); Journal of the Economic and Social History
of the Orient (Chapter 14); Manohar Publishers & Distributors
(Chapter 17); Modern Asian Studies (Chapters 9, 13); The Cal-
cutta Historical Journal (Chapter 8, 10)
chapter 1
The Rise and Decline of Hugli

A Port in Medieval Bengal*
‘The Paradise of Nations’ – thus Aurangzeb is said to have styled

Bengal.1 No official firman, parwana or other official papers of
the Mughal Empire ever mentioned Bengal without adding ‘the
Paradise of India’, an epithet – as Monsieur Jean Law, the chief
of the French factory at Cassimbazar opines – given to it par
excellence.2 Bengal’s richness in medieval period was legendary
and the cheapness of wares there were attested by most of the
foreign travellers.3 The natural products of Bengal were profusely
abundant. In the beginning of the seventeenth century Pyrard de
Laval found that Bengal exported rice ‘not only to other parts
of India as well to Goa and Malabar’, but even to ‘Sumatra, the
Moluccas and all the islands of Sunda to all of which Bengal
is a very nursing mother who supplieth them with their entire
subsistence and food.’4 Bernier was inclined to believe that the
‘pre-eminence ascribed to Egypt (which had been represented
throughout the middle Ages as the finest and most fruitful
country in the world) was rather due to Bengale.’5 Rice from
Bengal, as the French traveller tells us, was supplied to Patna,
Masulipatam, and many other parts on the Coromandel coast,
as also to Ceylon and the Maldives. Bengal sugar was not only
sent to Golconda and the Carnatic, but to Arabia and Mesopo-
tamia through the towns of Moka and Basra, and to Persia by
way of Bandar-Abbas.6 Bernier is also eloquent in describing the
*Bengal Past and Present, vol. LXXXVI, part 1, sr. no. 161, January-June
1967, pp. 33-67.
2 | Companies, Commerce and Merchants
industries of Bengal. ‘In regard to valuable commodities of a

nature to attract foreign merchants, I am acquainted with no
country where so great a variety is found . . . there is in Bengale
such a quantity of cotton and silks, that the kingdom may be
called the common storehouse for those two kinds of merchan-
dise, not of Hindoustan or of the Empire of the Great Mogul
only, but of all the neighbouring kingdoms, and even Europe.’7
In craftsmanship also Bengal enjoyed an enviable position. ‘The
inhabitants (of Bengal), both men and women, are wonderously
adroit in all such manufactures such as of cotton, cloth and silks
and in needlework such as embroideries which are worked so
skilfully down to the smallest stitches that nothing prettier is to
be seen anywhere.’8
Therefore it was quite natural that trade and commercial
activities were brisk in medieval Bengal and hence her ports
played an important role in the economy of the then Bengal. Till
the middle of the sixteenth century Satgaon was the most import-
ant port which from ancient times was the chief emporium of
trade in the western part of Bengal. It was the advantageous
position of Satgaon – on the river Saraswati in the loop formed
by it before it falls into the Ganges – that made it ‘the great port
of Bengal for ocean-going ships in the middle Ages’. Its wealth
was the theme of medieval Bengali poetry and foreign travellers’
tale. According to the poet Mukundaram, it used to attract so
much foreign trade that the merchants of Satgaon never left their
home town.9 It was the royal port of Bengal till the emergence of
Hugli in the last quarter of the sixteenth century and the latter
prospered so rapidly that made the former ‘hide its diminished
head’ in the beginning of the seventeenth century.10 As the chief
mart of Bengal, it attracted merchants from different parts of
India and diverse other countries.11 It was the chief emporium
of Portuguese trade since 1537 and popularly known to them as
‘porto piqueno’.12 Even in 1567 Caesar Federici found Satgaon
‘a remarkable faire cite’ where ‘every year they lade thirtie or five
and thirtie ships, great and small, with rice, cloth of Bombast of
divers sorts, Lacca, great abundance of Sugar, Mirabalans dried
The Rise and Decline of Hugli | 3
and preserved, long Pepper, Oyle of Lerzeline and many other

sorts of merchandise.’13
But the historic port of Satgaon began to decline from the
middle of the sixteenth century mainly due to freak of nature.
The river Saraswati on which it was situated and through which
flowed the main current of the Hugli began silting up and was
navigable only by smaller vessels. The mouths of the feeders
of the Ganges became choked with sand and the water supply
diminished till at last only the tidal Ganges remained navigable,
and the Saraswati dried up into narrow channels, thereby
rendering navigation by merchantmen and large vessels very
difficult; even the smallest craft could not ply except for a few
weeks in the monsoon. This sounded the death-knell of Satgaon
as an important port.14 The Saraswati actually had been silting
up from the beginning of the sixteenth century. De Barros found
Satgaon in 1532 ‘not . . . so convenient for the entrance and
departure of ships.’15 Even in 1540 the harbour of Satgaon was
becoming difficult to the access of big ships. Though in 1567
Satgaon was still described as ‘a reasonable faire eitie’ abound-
ing in all things, its importance as a port was visibly declining.16
Apart from the natural cause, the activities of traders, espe-
cially the Portuguese, also helped the decline of Satgaon and
the rise of Hugli as the principal port of Bengal. The Portuguese
were the dominant seapower in the Indian Ocean in the sixteenth
century and the greater part of the seaborne trade of Bengal was
concentrated in their hands. They began to frequent Bengal from
the fifteen thirties and had important settlement at Satgaon. In
the sixties of the century they felt it necessary to build temporary
quarters at a place downstream during the trading seasons as
their big ships could not reach Satgaon and burnt those villages
when they left Bengal every year after brisk trade activities.17
But they found making and unmaking of villages did not lead
to either comfort or economy and so were naturally anxious to
shift their 'porto piqueno' to a convenient place 'on a navigable
river with sufficient anchorage.' Thus their choice fell on Hugli,
which soon supplanted Satgaon as the principal port of Bengal.
Not only the Portuguese, even the merchant princes of Satgaon,

who once boasted that they sat at home and grew rich while all
the world came to them to trade, were forced, one after another,
by the declining importance of Satgaon to leave the place and
seek livelihood elsewhere. The great majority of them moved
only a short distance and settled down at Hugli, which rose to
the position of the chief port of Bengal and remained so through-
out the seventeenth and early part of the eighteenth century.18
The external trade of Bengal and through Bengal of upper
India thus deserted Satgaon and was diverted to Hugli where
the Portuguese mastered the major portion of the overseas trade,
albeit the limited activities of a few Malaya, Arab and Indian trad-
ers. Even the inland trade was mostly diverted to Hugli, though
Satgaon remained the royal port and the seat of the governor
and the Imperial Customs house till 1632 when Hugli took its
place officially as the royal port.19 This natural change of fortune
aroused the jealousy of the Mughal officers at Satgaon and was
misunderstood by the court historians, who called it ‘stealing
away of business and wealth of the royal port by the treachery of
the Feringis’. Abdul Hamid Lahori, the official historian of Shah
Jahan, states: “During the rule of the Bengalees a party of Feringi
merchants, inhabitants of Sandip, used to frequent Satgaon and
populated [i.e. colonised] a place on the estuary one Kos beyond
Satgaon. In course of time, owing to the stupidity and careless-
ness of the rulers [governors?], many Feringis assembled here. In
due course, a large town grew up here and it came to be known
as Hugli Bandar. It became the practice for ships from Farang
to call at this port and carry on their trade; so the market of
Satgaon declined and lost its splendour and use.”20
It has been established beyond any shade of doubt that
the Portuguese were the founders of Hugli port.21 The precise
date of the foundation of Hugli, however, is not very easy to
determine. The question has taxed the ingenuity of various
scholars.22 It can however be determined within close approxi-
mation from a critical analysis of contemporary writings and
events. Scholars who fix the date of the foundation of Hugli in
the 1530s probably confuse Hugli with Satgaon, which was the
first Portuguese settlement in Western Bengal. Hugli could not

have been founded in the thirties of the sixteenth century. The
most authoritative proof of this assertion can be found in the
fact that Caesar Federici spoke only about Satgaon in 1567 and
did not mention Hugli. In Portuguese history ‘DA ASIA’, there
is no reference to Hugli. Again in 1554 Antonio Nanez referred
to Satgaon as ‘porto piqueno’. O’Malley’s contention that Hugli
was founded between 1568 and 1573 [seems to be 1572 and not
1573, as Sulaiman Karnani died in 1572] is solely based on the
absolute reliance he had placed on Abdul Hamid Lahori. This
court historian of Shah Jahan died in 1654 and wrote a passage
on the origin of Hugli, which we have already quoted. A care-
ful study of the passage does not easily lead to the contention
that the Portuguese founded Hugli before Akbar’s conquest of
Bengal in 1576. They might have visited the Hugli region before
1576, as is obvious from the statement of Lahori – ‘Under the
rule of the Bengalees a party of Feringi merchants, inhabitants of
Sandip, used to frequent Satgaon and populated [i.e. colonised] a
place on the estuary one Kos beyond Satgaon’. But the next line
of Lahori [‘in course of time due to the stupidity and careless-
ness of the rulers (governors?) many Feringis assembled here’]
does not specifically refer to the pre-Mughal period; it can as
well refer to the early and weak administration of the Mughal
governors of Bengal under Akbar. It is in the latter sense that the
whole thing becomes more intelligible, especially when we find
that Turbati, Akbar’s governor in Bengal, was weak and this led
to serious consequences in Bengal. Besides, the next sentence of
Lahori [‘in due course, a large town grew up here and it came
to be known as Hugli Bandar’] is a definite hint that Hugli Port
did not emerge suddenly and that it took considerable time for
its growth and development. So it is perhaps not a wholly unten-
able proposition, that though the Portuguese had come to the
neighbourhood of Hugli before Akbar’s conquest of Bengal in
1576, it was only after Akbar’s conquest that they established
themselves on a firm footing in Hugli. If Lahori’s statement is
accepted at its face value and thus the date of foundation of
Hugli is fixed before Akbar’s conquest of Bengal, it hardly stands
some acid tests. It is very strange that the Kavikankan Chandi of

Mukundaram, written in 1577, had no reference at all to Hugli,
while it mentions in several passages ‘Satgaon’ and the ‘Feringis’.
Again neither any Persian chronicle nor any foreign traveller
ever corroborates the contention that Hugli was founded before
Akbar’s conquest of Bengal. On the contrary, we find sufficient
evidence, both among the indigenous and foreign writers (who
were earlier authorities than Lahori) that the foundation of
Hugli can be fixed somewhere after 1576 i.e. after Akbar’s con-
quest of Bengal. Manrique who was in Bengal from 1628-9, does
not unfortunately specify the date of the foundation of Hugli,
but gives a detailed account of the circumstances leading to the
Portuguese foundation of Hugli.
He tells us that Akbar, having heard about the Portuguese and
seen the valuable goods which they exported from the Eastern
ports of Borneo, Moluccas etc., gave orders to the Nawab of
Dacca to send two principal Portuguese from Satgaon to his
court at Agra.23 The Nawab’s messengers, however, found on
reaching Satgaon that the Portuguese had already left Bengal in
that year. Next year, one Pedro Tavares, was sent to Fathepur,24
and the fruit of the mission was the foundation of Hugli by the
Portuguese.25 The Akbarnama records the visit of Tavares as
occurring in the beginning of the 23rd year of Akbar’s reign i.e. in
1578.26 If Du Jarric was correct in dating Father Juliano Pereira’s
arrival at Fathepur in 1578,27 then Tavares must have gone to
Akbar’s court in 1577 or 1578 at the latest since it was through
his request that Pereira was invited by Akbar to his court. To rec-
oncile this with the account of Akbarnama, it can be presumed
that Tavares went to Akbar’s court in the beginning of 1578.28
Tavares must have been still in Fathepur in 1579, because, as
Father F. deSouza says that the former obtained a decree from
the emperor exempting the Portuguese of Bengal from all their
dues upto 1578.29 Again, we have evidence that Tavares had
already left Fathepur for Bengal by 1580. Father A. Monseratte
relates that when the first Jesuit mission arrived at Fathepur on
8 February 1580, they found there some Portuguese of Tavares’
suite, while no mention is made of Tavares.30 This is again con-
firmed by ‘Akbarnama’ which records that in 1580 Mirza Najat

Khan, Akbar’s Faujdar at Satgaon, being defeated by Qutlu fled
to ‘Partale Bal Feringi’ (Pedro Tavares), the Portuguese governor
of Hugli.31 So all the evidence, noted above, perhaps reconcile
very well with each other if the date of foundation of Hugli by
Tavares is set down towards the close of 1579.
The Portuguese had most sanguine expectations of a lucrative
trade in Bengal which was not only realised but sometimes even
seems to have surpassed their imagination. Vasco da Gama and
Albuquerque, long before the foundation of Hugli, reported to
Lisbon on the vast possibilities of trade and commerce in Bengal.
After the foundation of Hugli, and thus when they monopolised
the major portion of Bengal trade, the Portuguese realised to
their great satisfaction what a mine of wealth they had found
at last.
The Hugli port flourished with amazing rapidity under the
Portuguese. It soon rose to the position of ‘the richest, the most
flourishing, and the most populous’ of the various ‘bandels’ or
trading ports in Bengal. It became the common emporium of
trade, where, as Fr. John Cabral writes on 12 November 1633, the
vessels of India (Portuguese India), China, Malacca and Manila
repaired in great numbers. The Portuguese missionary further
says, ‘Not only the natives of the country, but also Hindusthanis,
the Mogols, the Persians and the Armenians came there to fetch
goods.’32 Van Linschoten, who visited India between 1583 and
1589 writes, ‘there is great trafficke used in those partes by div-
ers ships (and merchants) which all the year divers times both go
to and from all the Orientall Ports.’33 Ralph Fitch, the English
traveller who visited Hugli in 1588, says that Hugli was the
‘chief keep’ of the Portuguese.34 The Ain-i-Akbari, completed in
1596-97, states that Hugli was a more important port than Sat-
gaon.35 After the rise of Hugli, Chittagong which so far enjoyed a
pre-eminent position, began to lose its commercial importance.36
Thus it appears that at the end of the 16th century Hugli became
the first port in Bengal and fully deserved to be called, not ‘Porto
piqueno’, but ‘Porto Grande’ (the Great Haven), the name by
which Chittagong was known to the Portuguese.
In the absence of sufficient materials, it is not possible to give

an idea of the volume of Portuguese trade at Hugli. We only get
some rough idea of the extent of the trading activities of the
Portuguese at Hugli from the number of ships that plied to and
from that port. Of course, here also materials are too meagre to
arrive at an accurate and final estimate. Caesar de Federici found
that thirty or thirty-five ships were laden every year at Satgaon
by the Portuguese and from this it could perhaps be surmised
that a greater number of ships were engaged in trading activities
at Hugli, when the Portuguese firmly established themselves and
where they carried on trade much more vigorously than they did
at Satgaon. Manrique states that over one hundred ships were
yearly laden in the ports of Bengal with rice, sugar, ‘fat oil’, wax
and other similar articles,37 and most of them, it may be pre-
sumed, were laden at Hugli since it was then the principal port
in Bengal. Besides, numerous smaller crafts and barges, engaged
in coastal and inland trade in which the Portuguese were no
less active than in the external trade, plied to Hugli. Perhaps
Laval referred to this when he wrote in the beginning of the 17th
century that ‘an infinite number of vessels arrive in the ports of
Bengal to lade them with provisions’.38
In an account on the trade of Hugli, Clavell, the English fac-
tor, stated on the 16 December 1676, ‘when in the possession of
the Portuguese, who in their prosperity sailed to it yearly from
India, and Malaya with 60: 80: to 100 vessells.’39 According to
Abdul Hamid Lahori, when Hugli was sacked in 1632 by Qasim
Khan, the governor of Shah Jahan, there were 64 large ‘dingis’,
57 ‘ghrabs’, and 200 ‘jaliyas’ at Hugli, out of which only one
‘gharb’ and two ‘jaliyas’ escaped.40 Both Hunter and O’Malley,
relying on Lahori, it seems, put the number of vessels as above.41
It can well be assumed that most of these vessels were engaged
for trading purposes by the Portuguese and the local merchants.
A good idea of the extent, composition and direction of the
Portuguese trade in Bengal can be gathered from Manrique, who
was in Bengal during the palmy days of the Portuguese. The
Portuguese imported to Bengal various commodities from differ-
ent places. The articles imported by them from ‘Southern India’
(i.e. Borneo, Moluccas, Sumatra etc.) were a large amount of

‘worked silks, such as brocades, Brocateles, cloth, velvets, Dam-
asks, Satins, Tafettas, Taffissirias and Escomillas or Muslins, all
from China.’ They also brought cloves, nutmegs and mace from
Mulaccas and Benda, and highly precious camphor from the Isles
of Borneo. From the Maldive islands they imported sea-shells
(cauris) which were then current in Bengal as coins, ‘chanquo’ or
bigger shells from ‘Tutucurim’ and ‘Pescaria’ coast [the coast of
Tinnevelley], pepper from Malabar and cinnamon from Ceylon.
They also brought from China great quantities of ‘porcelain’,
valuable pearls and jewels and many kinds of gift articles such
as bedsteads, tables, boxes, chests, writing desks etc. From the
kingdom of ‘Salor’ and ‘Timor’ they imported great quantities of
sandalwood, both red and white varieties, which in Bengal was
a rich commodity.42
The Portuguese exported from Bengal a wide variety of mer-
chandise such as cotton goods, ginghams made of grass, and silks
of various shades, as well as sugar, ghee, rice, indigo, long pepper,
saltpetre, wax, lac and other articles which were abundant in the
Gangetic provinces.43 Caesar de Federici’s list of commodities
which the Portuguese exported from Bengal in about 1567 differs
little from that of Manrique. Rice in particular was exceptionally
cheap in Bengal and hence it formed one of the chief articles of
Portuguese export to other parts of India and the East Indies.
Pyrard de Laval states ‘. . . when the Bengal ships are behind
their time or are lost, rice is fabulously dear and there is cry of
famine [in Sumatra, Moluccas etc.]’.44 Besides rice, ‘cotton linen’
was another commodity which was carried by the Portuguese,
as Linschoten observes, not only ‘into India and all the Eastern
parts, but also into Portugal and other places’.45
The Portuguese collected commodities for shipment at Hugli
not only from Bengal, but also from the neighbouring territories
and they took part in the inland trade of the country as well. They
sold the cargoes which they imported to Bengal from different
places in the internal markets. In Patna, the Portuguese had brisk
trading activities, not only buying commodities for export from
Hugli, but selling their imports there to different merchants. We
learn a good deal about the Portuguese trade from the records
of the English East India Company. Hughes and Parker wrote
from Patna (where they went to explore the possibility of found-
ing a factory) on 30 November 1620 to the Court of Directors
that ‘the Portingalls of late years, have had a trade in Puttana,
cominge up with their friggitts from the bottom of Bengala,
where they have two porttes, th’ one called Gollye [Hugli] and
th’ other Pieppullye. . . . Gollye is theire cheefest porte where
they have yearlye shipping both from Mallacka and Cochine.
The commodities theye usiallye bringe up hither is for most part
tyne, spices and China wares, in lewe where of theye transporte
ambertye, callicoes, carpets and all sorts of thin cloth, . . . for saile
to the Southwards’.46 Another letter dates 20 July 1620, written
by Hughes at Patna to the President and Council at Surat also
refers to the Portuguese trade. ‘There are some Portingalls,’ he
wrote, ‘at present in towne and more are latllye gone for theire
portes in Bengala, into whose trafique I have made enquirye
and gather that they usailye bringe vendable here all sortes of
spices and silk stufes of Chyna, tyne, and some jewelleres ware;
in lewe where of theye transporte coarse carpets of Junapoore,
ambertyes, cussaes, and some alike.’47 Hughes even reported that
the Portuguese ‘merchants buy up all theye can laye hand of’.48
A rough idea of the value of the Portuguese trade in Bengal
could be formed from the fact that they paid over 100,000
rupees as customs duties to the Mughals at the rate of 2½ per
cent on the value of goods exported and imported.49 The ship St.
Augustin, bound for Hugli and on which Manrique boarded for
Hugli from Cochin, alone carried merchandise to the value of
eight lakhs of rupees.50 But in the absence of sufficient evidence
at present, it is not possible to give an exact idea of the value of
the Portuguese export from and import to Bengal. The Portu-
guese, however, carried on a very lucrative trade of Bengal, while
in inland trade they were formidable competitors of the country
merchants and other foreigners. They earned such a huge profit
in Bengal trade that, as Tavernier asserts, if the Dutch had not
come to India, there would be no piece of iron in the Portuguese
factories but all would be gold and silver, for the Portuguese with
two or three voyages to China, Japan, Philippines and Moluccas

would earn as much as a thousand per cent on their goods.51
Though an obvious exaggeration, this description of Portuguese
trade perhaps was not very far from the truth. The Bengal trade
was so profitable and its memory so imposing to the Portuguese
that in the later half of the 18th century there was an attempt in
Lisbon to form a company exclusively to trade in Bengal.52
Though the Mughals were the rulers of the country, the Por-
tuguese supremacy at Hugli was so strong that it rendered the
Mughal authority content with merely collecting customs duties
and market dues. The Portuguese enjoyed almost absolute inde-
pendence; even the Mughal governor of Bengal could enter the
Portuguese town of Hugli only with their consent and the Mughal
ships had to submit to various regulations enforced in the port.
Even as early as 1535, Rebello had forbidden any alien ship from
touching Satgaon without permission. In fact, the superiority of
the Portuguese vessels over those of the Indians and other for-
eigners rendered the enforcement of the principle – that any ship
without a Portuguese pass would be treated as enemy ship and
hence liable to capture and confiscation – practicable. In order
to destroy the moorish trade, they applied the rule to Bengal.53
While entering Hugli, even the fleets of the viceroy of Bengal,
as Cabral states, had to submit to certain formalities.54 This
very supremacy of the Portuguese at Hugli rendered the task of
opening trade with Bengal extremely difficult for the Dutch and
the English East India Company. The English factors at Surat
wrote in a letter of 26 February 1616 that ‘hitherto they had not
found it practicable to open a trade in the countries bordering
on the Ganges, the Portuguese being in exclusive possession of
the commerce in this part of the Peninsula.’55 Sir Thomas Roe
wrote from Ahmedabad to the Company on 14 February 1618,
‘Bengala hath noe ports but such as the Portuguese possesse for
small shipping.’56 The Dutch also found that any substantial
trade with Bengal was impossible so long as the Portuguese were
firmly entrenched there.57
The palmy days of the Portuguese in Hugli came to an end in
1632 when Shah Jahan’s governor Qasim Khan captured Hugli
after inflicting a crushing defeat on them. Many reasons have

been ascribed by various authors (including contemporaries like
Manrique, the Portuguese missionary Cabral and the historians
like Abdul Hamid Lahori and Shihabuddin Ahmed Talish, besides
later authorities) as to the sack of Hugli by Shah Jahan. We need
not discuss those in the present article, except mentioning that
none of the writers gave any direct hint that Shah Jahan’s desire
to command overseas trade through Hugli was a weighty reason
for crushing the Portuguese. Dr. Abdul Karim makes a casual
suggestion that ‘the need for controlling the external commerce
through Hugli might have been one of the reasons why Shah
Jahan had expelled the Portuguese’,58 but he did not put forward
any evidence to corroborate the point. If we closely study the
commercial activities of Shah Jahan both before and after his
accession, we stand on a much surer ground and it seems prob-
able that Shah Jahan’s interest in external trade and his desire to
seize the supremacy from the Portuguese in the East, was one of
the main reasons for his onslaught on the Portuguese. Even when
he was the viceroy of Gujarat his ships carried an extensive trade
with Molla. Sir Thomas Roe suspected that Khurram’s opposi-
tion to the English trade with the Red Sea ports was due to the
fact that ‘Sultan Coronne himself . . . had a ship to set out for
the Red Sea’. His ships also traded between Masulipatnam and
the Persian ports.59 Two of his ships, The Fethe and Shahe were
engaged in trading with the Red Sea ports and at least one of
his ships went to Achin in 1636.60 That Shah Jahan had actively
taken part in overseas trade and thus tried to augment his rev-
enue is also evident from the Dutch sources. In an answer to a
petition by the Dutch Company that they seek permission to
take Moorish persons and goods to Basra, Persia and other ports
without interference from subordinate governors, Shah Jahan
regretted that he could not grant the request because he ‘himself
has had several vessels constructed and intended for the carry-
ing trade and to increase his revenue’.61 Again in a letter, dated
24 December 1652, from the Governor-General and Council for
India to the Directors of the Dutch East India Company, they
complained that the governor of Surat forbade them to accept
any merchandise for shipping ‘before the King’s ships, six large
vessels, should have their full loading’.62 So these evidences
would lead us to the conclusion that Shah Jahan was interested
in overseas trade and hence he wanted to drive away the Portu-
guese who by their monopoly and various regulations hampered
the trade of the Indian merchants. So he made the onslaught on
Portuguese Hugli. The country merchants, nobles and governors
might have also instigated (which is evident from Qasim Khan’s
complaints to the Emperor against the Portuguese) Shah Jahan
because they were also actively interested in overseas trade and
had their own ships making voyages to different ports in the Red
Sea and in the East. Indeed, the Portuguese, by their monopoly of
the overseas trade of Bengal and their supremacy in the Eastern
Seas, became the eyesore of the nobility and the ruling class.
After the capture of Hugli in 1632, it was made the royal
port of Bengal and all the offices and records were removed
to Hugli where the Mughal authority was firmly established.63
Though the Portuguese were allowed to return to Hugli in
1633, the blow was too severe for them to revive. Thomas Col-
ley, the English factor at ‘Harrapore’, writing to Cartwright at
Balasore on 17 July 1633, on the chances of the English estab-
lishing trade in Bengal, says that the ‘Portuguese who had been
expelled from Hugli had found great favour with Shah Jahan
and reentered that place. . . . So that our expectation [of] Hugly
is frustrayt’.64 But his apprehension was not realised – the
Portuguese lost their pre-eminent position in Bengal trade for
good. Hugli now became the seat of local faujdar and the impe-
rial customs house was located there. Notwithstanding the
decline of the Portuguese, trade flourished unabated at Hugli. It
became now the chief seat of considerable maritime trade on the
part of the country merchants.65 Soon after, the Dutch and the
English settled down at Hugli.
With the decline of the Portuguese supremacy ends the first
phase of Hugli as the most important port of medieval Bengal.
For more than half a century the Portuguese dominated the
overseas and coastal trade of Bengal from Hugli. The fall of the
Portuguese at Hugli caused a great concern even to the authori-
ties of Goa. The Portuguese viceroy of India expressed his anxiety

over the loss of Hugli in a letter of 3 February1633 to the king,
and hoped to reopen the port ‘so that Malacca should not be
wanting what used to come to it from Bengala which is what had
been to me the greatest source of anxiety.’66 But the Portuguese
in Bengal were doomed and could never recover from the shock.
During the later part of the 17th century the Portuguese trade
was negligible. Clavell reported on 15 December 1676 that ‘their
trade was not worth mentioning’.67
So long as the Portuguese were entrenched firmly in Hugli,
it was not possible for the Dutch to explore the possibilities of
trade in Bengal. The Bengal trade attracted the Dutch because of
two-fold reasons – first, through it they hoped to solve partially
‘the problem of inadequate cash-capital’ and secondly, the water-
ways connecting Bengal with the trade marts of Northern India,
offered them a cheaper means of transport.68 After the expulsion
of the Portuguese, the Dutch first sent a yacht to Hugli and in
1635 got a firman from the Bengal Nawab granting freedom of
trade and the right to establish a factory at Hugli. In the same
year they secured a firman from Shah Jahan. But the Muslim
traders of Hugli who resented foreign competition stood in the
way of successful and profitable trade of the Dutch and even a
new firman from Shah Jahan could not improve their position.69
Writing to the governor of Pulicat on 31 July 1637, the Gover-
nor General and Council of the Dutch factories in the East Indies
stated, ‘We have learned with great regret how slowly the trade
in Bengal progresses and the bad treatment experienced by our
people at Ougley’.70 It was not until the middle of the century
that the Dutch permanently settled in Bengal and in 1655 the
Hugli factory was made an independent Directorete.71
During the third quarter of the 17th century the Dutch pre-
dominated in the overseas and coastal trade of Bengal. They
operated their trade mainly from Hugli, their chief factory in
Bengal. They were not only engaged in Europe trade but in
intra-Asian trade, specially trade with the East Indies. The
supremacy of the Dutch in the external trade of Bengal during
this period is evident from the reports of the English factors.
Paul Waldegrave and Thomas Stevenson at Balasore, wrote on

28 December 1654 to the Company that their business ‘may be
thought in the least proportionable to the great and vast trade
of the Hollanders here’.72 In the same letter the English factors
reported that the Dutch invested at least 200,000 sterling yearly
in Bengal.73 Clavell’s report in 1676 on the trade of Hugli gives
a detailed picture of Dutch trade.74 He states that the Dutch
had a great stock and assumes the amount as 24 tons of gold
in circa 1674. He suggested to the English East India Company
to follow the Dutch method who brought their ships, even of
six or seven hundred tons, up the river to Hugli, thus saving the
trouble and the extra-expenses of taking the merchandise from
Hugli to Balasore and lading the ships at the latter place. He also
gave a list of the items of export from and import to Bengal by
the Dutch. They imported to Bengal ‘gold from Japan, copper of
Japan, tuttenag, tinn from Malaya, pepper, chanck [conch shell],
betelnuts, elephants and elephants’ teeth, cloves, mace, nuttmegs
and gaunce [ganja]’. They also imported brimstone, quicksilver,
vermilion, and some cloth, which did not sell well in Bengal.
Their export consisted of ‘rice, oil, butter, hemp, cordage, silk
cloth, raw silk, silk wrought, saltpetre, opium, Tumerick, Neelas
[Nila], Ginghams, Tapits [hanging carpet], brawles [blue and
white striped cloth], Achee Beagnes [used in dying red cloth],
sugar, long pepper and bees-wax as much as they can gett’.
Throughout the third quarter of the 17th century the Dutch
trade in Bengal, centering round Hugli, far outshadowed the
English trade. Even in the fifties and sixties of the century the
Dutch found ‘lading for seven or eight ships of burthen’ and
some of them were 600 tons.75 The profit of the year 1660 was
stated to have been 155,744 gulden and that for the next twelve
months was given as nearly 204,00.76 Saltpetre and ‘Amphora’
[bastard Indigo] were the most profitable articles of their trade
and they used every effort to keep out the English and the French
from these two articles. In 1693 the Heeren XVII (the Board of
Directors) gave instructions that the 160,000 tons of saltpetre
which they had ordered from Bengal might be increased to any
amount as far as space in the vessels allowed.77 Saltpetre was
obtained generally from Patna where the Dutch refined it and

sent it by river to Hugli, where the seabound ships were loaded.
Even in the nineties of the 17th century the Dutch trade in Hugli
was considerable and competed well with the English. In a letter
of 8 July 1693, the Heeren XVII advised the Dutch factors to
make as many purchases of silk, silken goods and cotton goods
as could be obtained in Bengal.78
In the field of inter-Asiatic maritime trade (where also as in
Europe trade, Bengal had an excess of exports over imports),
besides the import of precious metals and copper and export
of fabrics and raw silk (which again played an important role),
the Dutch dealt in other commodities. They carried Indonesian
pepper and spices to Bengal, as also cinnamon, areca-nuts and
chanks from Ceylon, tin from Moluccas and Siam, Persian
tobacco, sandalwood from Coromandel coast. They exported
various grains, specially wheat, that among other places was
carried to Ceylon and Batavia, rice, Bengal butter and cheese,
sugar and wax. They also sent opium and jute to other Asiatic
places. Around the turn of the century, the exports of the Dutch
from Bengal were carried to the following regions and countries
in Asia – Moluccas, Batavia, Siam, Japan, Ceylon, Coromandel,
Malabar and Persia.79
Besides the Dutch, the English Company had also brisk trad-
ing activities at Hugli. As early as 1616, the English East India
Company tried to explore the possibilities of opening trade with
Bengal.80 But it was only in 1633 that the Company sent the
‘Siwan’ to Bengal in an attempt to open trade with Bengal. This
delay on the part of the English can be explained by several fac-
tors – first, the goods sought by the English merchants on the
coast at that period were mainly calicoes of Golconda and the
countries southward and hence they were not too interested in
Bengal trade; secondly, the products of Bengal were readily avail-
able at Masulipatnam and ‘there was no temptation to venture
further afield in quest of them, at the risk of being snapped up by
the Portuguese war-vessels.’ Moreover the trouble at Masulipat-
nam, culminating in the withdrawal of the English in 1628, put
a stop for the time being to the schemes they might have enter-
tained for the enlargement of their trade. The change of policy

following their return in 1630 was partly due to the famine, the
soaring price of food stuffs which rendered coasting trade in
sugar, rice and butter highly profitable, and the general dearth
of piece-goods due to the heavy mortality among the weavers,
which rendered coarse silks and cottons of Bengal more valuable
in the eyes of the English merchants. Another factor, though less
obvious, but equally effective was the prospect it offered of lucra-
tive private trade for the factors who found little opportunity in
Masulipatnam and its neighbourhood to invest their own capi-
tal. Furthermore another great inducement was the capture of
the Portuguese Hugli by the Mughals and the supposed intention
of the Emperor to stamp out the Portuguese trade in Bengal, and
it led the Masulipatnam factors to conclude that a favourable
opportunity had offered itself for planting English trade in
Bengal.81 But though the English trade in Bengal through Bala-
sore began in 1633,82 they did not establish a factory at Hugli
before 1651. It was in January 1651 that the English East India
Company first established a factory at Hugli and commenced
trading on a large scale in Bengal.83
On the possibilities of a lucrative trade in Bengal, the English
factors reported on 28 December 1654 that inspite of the great
Dutch investment, there was enough room for the employment
of ‘a very great stock’. They wrote to the Company, ‘Your Wor-
ships supplying this place with stock sufficient and honest men
to manage it, will soon find as great business and as much profit
when besides for the shipping Your Worships shall designe to
returne to Europe, there may be sufficient to employ to Persia,
the Red Sea, Acheen, Pegu, Tanassara and Zealon, places which
all of them returne good profit from.’84 This hope and calcula-
tion of the factors were more than realised as we find that the
English East India Company really had a great trade in Bengal;
they were engaged not only in Europe trade, but in Inter-Asiatic
trade. Thus Hugli port played a vital role in the trade complex
of the Company.
The advantageous situation of Hugli made it the most import-
ant factory and port of the Company in Bengal. Mr. Clavell, in
his account of the trade of Hugli, writes in 1676: ‘Hugli having

the advantage of situation upon the banks of the river Ganges,
whose branches come far from the country above, and spread
wide thereabouts . . . hath continued to be a scale [emporium]
of great trade’.85 Streynsham Master who came to reorganise the
Bengal settlements decided (in a Consultation at Cassimbazar
on 1st November 1676) that Hugli should be the chief factory
in Bengal. This reason was that Hugli was the most fitting place
‘notwithstanding the Europe ships doe unloade and take in their
ladeing in Ballasore roade, Hugly being the key or scale of Ben-
gala, where all goods pass in and out, to and from all ports.’86
Until the foundation of Fort William (Calcutta) in 1690,
Hugli was the headquarters of the English in Bengal and as such
had a lucrative and an extensive trade. The trade, of course,
was not confined to the local varieties of goods produced or
manufactured in or near Hugli itself, but the Hugli factory was
the general clearing-house for the products of Bengal, brought
for export to Europe and the Asian marts, and for the imports
from those marts for distribution throughout Bengal. While
some of the articles so exported were produced locally, such as
silk and silk fabrics, many of the exports from Hugli were not
local products, as for instance, saltpetre which all the European
Companies obtained chiefly from Bihar through Patna.
Unlike the Dutch, the English did not take their ships upto
Hugli and lade their sea-bound ships there. The English procured
all the items of export from their various factories at Malda, Cas-
simbazar, Patna and Dacca and brought all those mostly through
waterways to Hugli. From Hugli these merchandise were taken
in sloops to Ballasore where the sea-bound ships were laden.
Similarly the imported commodities were transhipped at Bala-
sore and were taken in small boats to Hugli from whence they
were distributed to the inland factories. Thus upto the seven-
ties of the 17th century Hugli was mainly an entrepot in the
trade complex of the Company. This caused unnecessary delay
in the departure of ships and incurred extra expenditure in the
transport of cargoes at Balasore. The boats, both private and
belonging to the Company, again were sometimes ‘comman-
deered’ by the local governors or nawabs for their own purposes,

thus making speedy loading and unloading as also the departure
of ships impossible. In a letter to the Madras Council in 1665,
the Hugli factors reported, ‘one hindrance to the speedy loading
of the ships was the fact that the boats built the previous year
at Hugli had been commandered by the governor to fetch the
Nawab’s salt. . . . Formerly boats might have been procured here
freight, now few or none, arising from the ill government of this
place.’87 They suggested if the ships from England would come
into the Hugli River, these difficulties would largely disappear.
The English, however, were not permitted to take their ships
upto Hugli, when they first settled down there. Only in 1669,
through a petition to Shah Shuja to the effect, they received as
a concession the privilege of bringing their ships up the river to
the Hugli port.88
The first English ship intended for Hugli was the ‘Lyoness’
despatched in 1650 but fearing the passage to be full of danger,
the Agents at Madras did not permit her to attempt the navi-
gation of the river upto Hugli, and accordingly she only went
upto the Balasore Road. But the Court of Directors did not
desist from urging on their factors that their ships, instead of
being discharged and reladen for England at Balasore, should
go upto Hugli and then their business in the Bay ‘brought into
some decorum’. In 1662 they agreed to pay 10s. per ton extra
to the chartered ships for all goods that they should take to
Hugli.89 Seeing that the Dutch ships of 600 tons performed the
feat of sailing up and down the river, one Captain Elliot ventured
to essay the task but he was prevented by Agent Trevisa who
considered the risk too great, to the chagrin of the Court. The
Captain, however, left a written memorandum at Hugli stating
that the passage up the river Hugli was hazardless and it was
proposed that the vessels should in future go direct to Hugli and
that Balasore should be abandoned. The proposal was accepted
by the Court which made fresh offers but without any success.
The suggestion was condemned by the local agents; though
aware of the advantages to be gained, they sent no ships up the
river, as they had no pilots. The local pilots were too expensive
and the owners refused to risk their ships without proper pilots
and charts to indicate the depths and sounding. Accordingly, in
1667 the Court built a small vessel, the Diligence for the purpose
of survey.90
The renewed offers of the Directors gave an increased impetus
to the attempts at the navigation of the Hugli river and in 1672,
in accordance with the order of the Company that ships should
try to go up the river, the Rebecca, a vessel of 200 tons, assisted
by the sloop Diligence and chief pilot Samuel Hason, made the
journey up and down the river in safety.91 But it took a few more
years for the English ships to come straight to Hugli for loading
and unloading of cargoes. In 1676 Clavell, in his report of the
trade at Hugli, was very insistent on the advantage possessed by
Hugli in its navigable river and urged the importance of having
trained pilots to bring the Company’s ships upto the town, thus
avoiding the transhipment of cargoes at Balasore.92 In 1678 the
ship Falcon piloted by the sloop ‘Arrival’ got safely to Hugli,
with a cargo of bullion and goods valued at over £40,000. But
still, three other ships, Williamson, Nathaniel and Society which
came in the same year to Balasore, did not adventure up the
river for want of the necessary orders from their owners, though
they were requested to do so by the Council in accordance with
the wishes of the Company. The commanders of these ships,
however, came to Hugli on sloops and were satisfied by the navi-
gability of the river.93 It seems that from the 1680s, it became a
general practice for the Company’s ships to load and unload at
Hugli instead of at Balasore, and thence onward Balasore was
abandoned in favour of Hugli. The coming of the ships upto
Hugli was considered very beneficial to the Company and as it
was put ‘having excellent conveniences for carrying their Euro-
pean commodities up into the inland town and cities and the like
for bringing down the commodities purchased in this or some
other kingdoms.’94
The trade of the English East India Company in Bengal
expanded in rapid strides. The factors of the Company were
very hopeful of an extensive trade in Bengal. They wrote home,
‘Bengal is a rich province. Raw silk is abundant. The taffaties are
various and fine. The saltpetre is cheap and of the best quality.
The bullion and pagodas you have sent have had an immediate
and most favourable effect on the trade; the goods have been
sold at great advantage. Our operations are going so extensive
that we shall be obliged to build new and large warehouses.’95
The investment of the Company in Bengal in 1668 was £34,000,
in 1674 it rose upto £85,000; in 1680 it was £150,000 and in
1682 it went as high up as £230,000. These figures show how
rapidly the trade of the Company increased in Bengal.96 Gener-
ally in the 1670s and 1680s on an average four ships of the
Company came to Bengal every year and were despatched back
to England with merchandise.97
The English East India Company imported different types
of woollen cloth such as broadcloth and woollen fabrics called
perpetuanoes and in addition lead, copper, iron, ironwares,
‘tutenague’, vermilion, firearms, looking glasses and a variety of
finer articles generally called ‘rarities’. The sale proceeds of the
imported articles however could not provide for the increasing
volume of goods exported from Bengal. So the European Compa-
nies had to pay for their export commodities in hard cash either
brought from Europe or earned through trading with other parts
of Asia. That Bengal had a very favourable balance of trade is
apparent from the fact that the English East India Company had
to export to Bengal a large amount of bullion which was far
greater than the value of the commodities imported by them. In
1677, in the total amount of £72,000 sent to Bengal for invest-
ment, £55,000 was in bullion and the rest £17,000 in goods.98
Besides this, the factors at Hugli were authorised to draw on the
Company for that year to the value of 20,000 pound sterling if
they could take up the exchange at 2s 6d per rupee.99
In the early period of Company’s trade in Bengal, saltpetre
formed the most important of the commodities exported from
Hugli. In the early fifties the factors at Hugli were instructed
to invest half of their capital in saltpetre, and the remaining
half in equal proportion in silk, sugar, cloth.100 Throughout the
century, in the list of commodities to be provided in Bengal, the
place of honour was accorded to saltpetre. In 1659 the Court
directed the Hugli factors to remit Rs. 50,001 annually to Patna

for the purchase of saltpetre while Rs. 40,001 was to be sent
each year to Kasimbazar for investment in raw silk, taffetas and
cotton yarn.101 In the 1670s and 1680s of the century generally
the volume of saltpetre exported by the Company to England
amounted from 600 to 800 tons.102 Besides saltpetre, the Com-
pany exported from Bengal raw silk, sannaes, ginghams, cassaes,
mulmulls, humhums, taffetas, ‘nillaes’, tincall, cotton yarn, stick-
lac, turmerick, etc. It is not possible at the moment to give an
idea of the volume of commodities exported by the English East
India Company from Bengal in the 17th century.103 A rough idea
of that could be found from the list of items to be provided for
export every year from Hugli. In a general letter to the chief and
factors at Hugli, on 24 December 1675, the Court asked Bengal
Council to provide following goods for the year ensuing 1677:
‘10000 Sannaes from 12 to 16 yds. long . . .
10000 Collor’d Ginghams, the finest and best procurable
10000 Cossoes made at Dacka, very fine, cleare and thinn,
1 yd. broad
5000 Cossoes from 4 to 7 rupees, 20 yds. long or more,
1 yd. broad, the thinner the better
5000 fine mulmulls, the finest and the clearest and 1 yd.
broad
1000 fine humhums, of 5 rupees
1000 finer ditto, from 7 to 8 rupees
10000 Nillaes, all of the best sorts, of the pleasantest and
liveliest coullers.
6000 Taffetyes, raw made thicker and closer struck (woven)
than the last sent, though the cost a little more
4000 white, to be packt by themselves, about 4 or 5 rupees
1000 full yellowes and 1000 full redds, to be packt by
themselves, about 4 or 5 rupees
2000 Mixt Taffetyes for lynings of hatts, about 7 rupees . . .
3000 light coullers vizt. sky, sky and white mixt, Izabella
Ash couller, straw couller, coronation and white,
greyes, each in proportion in a chest
8000 cloth coullers without mixture, according to sample

formerly sent
7000 Mixt cloth coullers, according to samples formerly
sent . . .
15000 Silke Romalls, head and belly
500 bales raw silke, halfe heade, ½ belly, cleane and good,
more head, if not too deare
100 bales of white silke
140 Duppers of Tincall
50 or 60 bales cotton yarne, 3 mds. each, as formerly directed
600 tonnes saltpetre
50 or 100 bales (if procurable) of Florett yarne, each 90 seere,
100 tonnes of the Best Pegu Black Sticklack’104
The English East India Company also traded with differ-

ent parts of Asia and India from Hugli port. Perhaps the most
important branch of Inter-Asian trade of the Company from
Hugli was the sugar trade with Persia. As early as 1651, the
Hugli factors were asked to provide 160 or 180 tons of sugar
for Persia for which they were authorised to borrow or draw on
the Agra factors to the extent of Rs. 15,000.105 Again in 1652 the
Agra factors were asked to send Rs. 10,000 for the sugar invest-
ment for Persia.106 Throughout the period this branch of trade
was extremely profitable to the Company and they regularly
sent ships to Persia from Hugli with cargoes of sugar, and other
articles like fine rumalls, mulmulls, cassaes etc.107
Besides the European Companies,108 Indian and Asian mer-
chants also played a great role in the history of the Hugli Port. It
was a port where merchants from many parts of Asia gathered
for trading in different commodities. In his account of the fall
of the Portuguese Hugli, John Cabral states that Hugli was a
common emporium to which vessels from India (Portuguese
India), China, Malacca and Manila repaired in great numbers.
He found in Hugli not only country merchants but also Hindu-
sthanis, the Mogols, Persians and the Armenians’.109 The author
of Riyaz-us-Salatin tells us that even the ‘merchants of Arabia
and Ajam’ (i.e. Arab and non-Arabian merchants), China, Persia
and Turan, besides Europeans and ‘wealthy Moguls’ traded at

Hugli.110 In fact Hugli became a Shia colony and as such many
Persians came there and tried their luck through trade.111 Thus
even in the beginning of the 18th century, persons like Agha
Fazlullah from Persia and Agha Motaber from Ispahan, settled
at Hugli and amassed vast fortunes through trade.112
The merchants of Bengal had a long established tradition in
overseas trade and kept it alive throughout the 17th century.
The Portuguese traveller Barbossa found many merchants in the
‘ports of Bengala’ who owned large ships and traded to Malabar,
Cambay, Pegu, Tenassarim, Sumatra, Ceylon and Malacca.113
At the end of the 15th century, every year four or five ships
sailed from Bengal to Malacca or Sumatra with provisions and
textiles.114 Bengal ships also went to the Red Sea ports of Aden
and Jedda.115 In the beginning of the 17th century, Pyrard de
Laval found Bengal merchants in the Maldives and named one
‘Mouhamede Coca’ as ‘an honourable, rich, discreet merchant’
of Bengal.116 The first attempt of the Dutch Company to open
trade with Bengal after the fall of the Portuguese was frustrated
by the opposition of the Muslim merchants of Hugli.117 At the
time of the Mughal attack on Hugli, there were at least 12 or
13 local merchants who operated with a large capital.118 After
1632 Hugli became the chief seat of a considerable maritime
trade carried on by local traders. In 1645 the Danes seized sev-
eral ships of the Bengal merchants by way of reprisal for injuries
suffered at the hands of the local authorities. In 1665 out of 12
Muslim ships to Acheen, 4 belonged to the merchants of Ben-
gal.119 Thomas Bowrey saw some of the richest merchants of the
Kingdom in Hugli, while Schouten stated that there were many
Moor merchants who carried on a great trade. Ini Bowrey’s time
the Nawab and the merchants in Hugli, Balasore and Pipli had
about ‘20 saile of ships of considerable burthen that annually
traded to sea.’120
An interesting feature in the composition of Bengal merchants
engaged in overseas trade in the 17th century was the presence of
nobles, governors and subadars of Bengal. As early as the 1640s
of the century we find the subadar of Bengal, Shah Shuja, had his
own ships engaged in overseas trade. He took active part in trade

and tried to monopolise some sectors of the province’s external
trade, and made himself the sole purchaser of the elephants, one
of the chief items of the Dutch Company’s import to Bengal.121 In
1651 a junk came to Gombroon with merchandise from Hugli,
belonging to the governor of the latter port, to carry some horses
as a return cargo.122 In 1654 the Dutch Company refused many
applications made by the ‘governor Jaffer’ at Hugli for passes
for the Moorish vessels to Queda, Colombo and Cochin. But the
Company was obliged to grant two passes for two of the Nawab’s
vessels to Tenassarim and Acheen, and one for the governor’s
ship to the Maldives. They also gave three more passes to the
vessels of the Nawab Nawazish Khan, the faujdar of Rajmahal
and Ahmed Beg, the ex-faujdar of Hugli.123 Again in 1656 the
faujdar of Hugli appealed for a pass for his vessel to Colombo
and Shah Shuja had asked for three passes on Colombo, Cochin
and Jafferapatnam. But all these requests were politely refused
because of Shah Shuja’s attempt to monopolise some sectors of
the province’s overseas trade. The Company similarly refused a
request for the services of one of their mates for a ship sailing
for Persia.124
The nobles and the members of the ruling family also freighted
their goods in the ships of individual merchants or the Compa-
nies. Thus as early as 1653 we find the faujdar of Hugli sent 11
bales of goods to Gombroon in one of the English Company’s
ships.125 Malik Qassem, a later faujdar of Hugli, also transported
his goods in 1672 on the Company’s ships.126 The nobles some-
times acted through their own agents or merchants. Thus one
Haji Mohammed, an agent of Mirza Malik Qassem, governor
of Hugli, made a trip to Gombroon with some sugar and other
commodities vendible there, in one of the English Company’s
ships, for purchasing several things Malik Qassem wanted from
Persia. The sale proceeds of the merchandise brought from
Hugli could not provide for the commodities he wanted to buy
at Gombroon and so borrowed Rs. 1904½ from Mr. Alley, the
commander of the ship. The Madras Council gave the amount to
Mr. Alley when the ship arrived there and Haji Mohammed gave
an undertaking that his master would pay the Hugli Council

the sum of Rs. 2589, of which Rs. 684½ was the freight charge
for 4 horses he had brought from Persia. It is interesting to note
the commodities which Haji Mohammed brought for Malik
Qassem besides the horses. These were – Hing 7 bales, Tobacco
7 bales, Rose water 1 chest, ‘Athar’ 10 chests, Fruits 29 ‘Jurrs’,
Almonds 150 maunds, ‘Arraks’ 2 chests, and 8 sheep. The Com-
pany brought these commodities freight-free and assisted Malik
Qassem’s agent as it expected to gain ‘a profitable influence in
Hugli out of it’.127
It seems that until the end of the century, the nobles and mem-
bers of the ruling family participated considerably in the external
trade of Bengal. Bowrey who visited Bengal in the seventies of
the century states that the ‘trade of the Moors of Bengala very
much increased.’128 Important state officials like the subadars of
Bengal, Shah Shuja, Mir Jumla, Shaista Khan, Azim-us-Shan, the
Nawab of Patna – Buzurg Umeed Khan, and the governors of
Hugli, Pipli and Balasore carried on an extensive overseas trade.
The drastic reduction of the nobility’s participation in foreign
trade from about the close of the 17th century was perhaps due
to the general impoverishment of the nobility followed by the
disintegration of the Mughal Empire. An important merchant at
the close of the 17th century was Nurullah Khan, the faujdar of
Hugli, Jessore, Burdwan, Midnapore and Hijli.129 The Bay Coun-
cil of the English Company suspected Thomas Pitt of taking
service on the ships of Nurullah Khan.130 One of the principal
merchants of Hugli in the beginning of the 18th century was
Khwaja Mohammed Fazel Kashmiri.131
The records of the English Company show that the merchants
of Bengal were active even in overseas and coastal trade at the
beginning of the 18th century. In the Fort William Diary of 12
April 1704, we find reference to several Indian ships with their
owners e.g. ‘the ship St. Martin, burthen one hundred tons,
belonging to Cojah Matroos, bound for Acheen’, ‘ship Romenee,
burthen two hundred and seventy tons, belonging to Mahmood
Tuckee, bound for Gombroon’, ‘ship Tawockall, burthen one hun-
dred and fifty tons belonging to Allie Rajah, bound for Persia’.132
During the season 1705-06 (September 1705-February 1706), as

many as 24 ships of different tonnage traded on the account of
Bengal merchants to different parts of Asia and India from Hugli
and Calcutta. Out of these ships, fourteen received passes from
the English Council at Calcutta, and except one (which belonged
to the English Company and freighted by Janardan Seth, a Hindu
merchant) all belonged to the ‘Moors’ (it seems probable that the
‘Moors’ here meant Muslims as well as Armenians who were
very active in Bengal during this period).133 The destination of
these ships were mainly Persia, Achin, the Maldives, Coroman-
del coast and Batavia. It is interesting to find the names of some
of these ships with their owners in the records of the English
Company. The ship Sallah belonging to ‘Sheek Sallahy Cungee’,
burthen 300 tons and Nemede owned by ‘Sheak Sallahy Cun-
gee’, burthen 300 tons and Nemede owned by ‘Sheak Sallee’,
were both bound for Gambroom; the ship Mamaruck Ellie; 200
tons, bound for Persia belonged to ‘Hakeem Mohamed Bauher’;
Mahmudi, 80 tons, owned by ‘Meer Ellie Yaree’; Ossonee 100
tons, belonging to ‘Haujee Maumed Jumah’ and Muttoh Ellic,
300 tons owned by ‘Alich Yar Cawn’ – were all destined for the
Maldives.134
The Armenian merchants carried on an extensive trade in
Bengal both overseas and inland. They were the chief foreign
competitors of the European Companies in procuring Bengal
commodities. As early as 1688 relations were established between
the English Company and the Armenians, through Khwajah Pha-
noos Kalantar who acted on behalf of the Armenians in Bengal
and elsewhere. The Armenians had their own ships by which they
traded to various Asiatic countries from Hugli and Calcutta, and
often sent their goods in the Company’s ships. Sometimes the
Company and the private English merchants had to depend on
the Armenian merchants for freights in their ships. In 1700 Pitt
wrote to Khwaja Sarhad, ‘Merchant in Bengal’, requesting ‘your
favour and assistance to Mr. Griffith and Captain Mornett in the
Sadgevick, in which I am concerned, we designing her for Persia
and hope by your means to get a good freight’.135 Sometimes
the ring of Indian merchants, especially the Armenians, gave
troubles to the Company in the matter of freight. The Company

had to yield often to the pressure of these merchants and this is
evident from the Consultation of 29 December 1702. ‘The time
of the year being far spent and the Armenians holding together
to beate down the freight for goods to be loaden for Gambroon
and Bussera on ship Colchester, and Cojah Surhaud having
offer’d thirty eight thousand rupees to have the whole ship for
the voyage to Bussera and Persia . . . agreed that we contract
with him.’136
During the 17th century Hugli was the principal port of
Bengal. A rough idea of the volume of trade at Hugli could
be formed by the fact that at the close of the 16th century the
‘bandarban’ (port dues) and mandavi (market dues) in Sarkar
Satgaon amounted to 1,200,000 dams or Rs. 30,000 and most
of this amount was realised at Hugli since by that time the
decline of Satgaon was almost complete.137 After the fall of the
Portuguese in 1632, Hugli became the royal port and the seat of
the local faujdar and the imperial customs house. The Mughal
rulers, who as we have seen earlier, were themselves actively
interested in overseas trade, fully realised the importance of the
‘Hugli Port’ as an emporium of great external trade and hence
directly appointed the faujdar of Hugli. The faujdar had little
concern with and was independent of the Subadar of Bengal.138
Only during Shaista Khan’s viceroyalty was it given to him as his
jagir.139 In the early part of the 18th century Murshid Quli Khan
succeeded in reducing the faujdar of Hugli to the position of his
own immediate subordinate and at Hugli ‘he placed the centre of
the financial resources of the Country of Bengal upon the Cus-
toms duties levied from traders’.140 Even in the beginning of the
18th century Hugli was the principal port, the trade emporium
through which passed the great bulk of commodities imported
to and exported from Bengal. Alexander Hamilton, who visited
Bengal in the first decade of the century, gives Hugli the attribute
of the ‘the Sole centre for Bengal’s overseas trade’ because ‘all
foreign goods are brought thither for import and goods of the
product of Bengal are brought hither for exportation’. He fur-
ther states, ‘It affords rich cargoes for fifty or sixty ships, besides
what is carried to neighbouring countries in small vessels’.141

Bolts repeats the same thing when he says ‘Hoogly . . . was at
this time a port of considerable trade, to which all foreigners in
general resorted as the general emporium for the purchase and
sale of all commodities in Bengal’.142 Even in the Fifth Report
of the Select Committee of the House of Commons, Hugli was
referred to as a ‘grand emporium of foreign commerce’.143 To the
Mughals, Hugli was the ‘Bakshbandar’ i.e. divisional port. The
value of the trade which passed through Hugli may be guessed
from the fact that in 1728 ‘Syer Bakshbandar’ i.e. export and
import duties on foreign merchandise, yielded Rs. 221,975 at the
rate of 2½ per cent on the value of goods, and with the tolls on 9
gaunges or subordinate stations, it amounted to Rs. 2,42,014.144
But the Hugli port began to decline from about the middle
of the 18th century. That the decline precipitated in the third
quarter of the century is evident from the fact that the gross col-
lection of port-dues and customs dues (Saiyar) realised in Hugli
amounted only to Rs. 91,196 in 1768 while in Calcutta it rose
as high up as Rs. 890,604.145 The process of the decline of Hugli
Port was indeed very rapid, as we find, only five years later the
‘Saiyar’ realised at Hugli was only Rs. 62,644.146
Perhaps the seed of the decay and decline of the Hugli port
can be traced back to the withdrawal of the English East India
Company from Hugli and the establishment of their settle-
ment at Calcutta in 1690 following a war with the Mughals
in Bengal. During Murshid Quli’s time, the pre-eminence of
Hugli was threatened by the establishment of the factories of
some foreign Companies at other points on the banks of the
river, which developed into busy centres of trade. Inspite of his
efforts, Murshid Quli could not prevent the overshadowing of
Hugli.147 Geographical as well as strategic considerations led
the English Company to settle down at Calcutta. As a centre
of English trade, Hugli had several limitations. It was separated
from the sea by a long and dangerous river journey; secondly, as
it stood on the west bank, it was open to attack from the land.
Calcutta, on the other hand, was much nearer to the estuary and
free from the operations of the European rivals, as well as, of
the Marathas and the Nawabs of Bengal. Moreover, the position

of Calcutta at the lower reaches of the river made deep water
channels and anchorages available which were lacking at Hugli.
On the question of building a warehouse in Calcutta in 1713,
the Court of Directors enquired from the Council at Calcutta
whether the latter was not more advantageous to the country
merchants than Hugli. The Court wrote, ‘Whether the country
merchants do not trade to Surat, Persia and other places yearly
from Bengal, whether they do not send their goods on Europe or
European’s shipping, whether such goods are not providing by
them all the year long to be ready against the time of shipping,
whether if such goods are lodg’d at Calcutta and they could be
sure they were safe there and to be come there wherever they
would, the warehouse Rent at Calcutta being at as cheap a rate
as it costs them Hugley would not in a few years and in how
many pay for the charge of building substantial and fit ware-
house for that use [?] whether such goods so housed at Calcutta
could not with more ease and expedition to shift off thence on
freight than from Hughley. . . .’148 These points raised by the
Court demonstrate that they realised the potential advantages of
Calcutta more correctly than their subordinates in Bengal. The
advantages thus offered by Calcutta attracted more and more
traders to it and thus it ultimately overshadowed Hugli as the
principal port of Bengal.
The ‘mild and equitable conduct’ of the English at Calcutta,
in contrast to the oppression of the local faujdars of Hugli, also
accelerated the process of the decline of Hugli. As Riyaz-us-
Salatin puts it, ‘When the oppression and extortion of the fauj-
dars increased, the port of Hugli declined, and Calcutta, owing
to the liberality and protection offered by the English and the
lightness of duties levied there, became popular.’149 Salimullah
also confirms this – ‘The mild and equitable conduct of the
English in their new settlement gained them the confidence and
esteem of the natives, which joined to the consideration and
privileges and immunities which the Company enjoyed, induced
numbers to remove thither with their families so that in a short
time Calcutta became an extensive and populous city.’150 The
Court of Directors was particular about the point and insisted

and instructed their servants to administer ‘exact Justice’ as they
were sure that the inhabitants ‘will resort where they may best
be secured from oppression or secret of open squeezings and
treated with humanity.’151
After the foundation of Calcutta, a large number of local mer-
chants – Armenians, Hindus and Muslims – flocked to Calcutta
to carry on trade under the protection of the Company.152 Some
important merchant families, in particular the four families of
the Bysacks and one of the Setts, who left the rapidly declining
city of Satgaon and founded the settlement of Govindapur153 at
about the close of the 16th century, had already been settled in
Calcutta.154 By 1710 a number of principal merchants had moved
over to Calcutta.155 Even in the first decade of the 18th century
it was said that ‘the trade at Calcutta causes murmurings already
among Moors’ officers’.156 In 1719 the Bengal factors reported
that ‘Calcutta trade is brisker’.157 The firman from the Mughals
in 1717 again gave an impetus to the growth of Calcutta and
thus the shipping belonging to the port amounted to ten thou-
sand tons in the course of ten years after 1717.158 In 1759 thirty
vessels sailed from Calcutta aggregating ‘3964 tons burthen’.159
The decline of the Hugli port was precipitated after the battle
of Plassey which gave the English political suzerainty in Bengal
through which they had at their disposal the entire resources of
Bengal for the establishment of commercial hegemony. From this
time onward, the decline of Hugli ran parallel to the rapid rise of
Calcutta as the premier port of Bengal.
Notes
1. The author of Riyaz-us-Salatin calls Bengal ‘Jinnat-ul-bilad’ or
‘Paradise of Provinces’ (Ghulam Husain Salim, Riyazu-s-Salatin, text
ed. Moulavi Abdul Hak Abid, Calcutta, 1890, p. 4; Tr. Maulavi Abdus
Salam, Calcutta, 1904, p. 3). Humayun bestowed on Gour in Bengal
the epithet ‘Jinnat-Abad’ or ‘the realm of Paradise’ (Abul Fazl, Ain-
i-Akbari, Text, vol. 1, ed. Blochmann, Calcutta, 1872, p. 390. Trans,
Jarrett, vol. II, Calcutta, 1891, pp. 122-3; Al-Badaoni, Muntakhab-al-
Tawarikh, Text ed. Maulavi Ahmed Ali, vol. I, Calcutta, 1868, p. 349;
Trans, Ranking, vol. I, Calcutta, 1898, p. 458.)
2. S.C. Hill, Bengal in 1756-57, vol. III, London, 1905, p. 160.

3. Bowrey, A geographical account of countries round the Bay of Bengal,
1664-79, ed. R.C. Temple, Cambridge, 1905, pp. 193-4; Sebastian
Manrique, Travels in Mogul Empire, 1656-68, tr. Constable, 2nd ed.,
revised by V.A. Smith, OUP, 1914, pp. 438-9; Linschoten, The Voyages
of . . . , ed. A.C. Burnell, London, 1885, p. 93.
4. Pyrard de Laval, The Voyages of . . ., Tr. Grey and Ball, vol. I, London.
1888, p. 327; M.A.P. Meilink Roelofz, Asian Trade and European
Influence, The Hague, 1962, p. 68.
5. Bernier, op. cit., p. 437.
6. Ibid., p. 437.
7. Ibid., p. 439.
8. Pyrard de Laval, op. cit., vol. 1, p. 329.
9. R.K. Mukherjee, Economic History of India, p. 114.
10. Riyaz-us-Salatin, text, op. cit., p. 33; tr., op. cit., p. 29; Crawford, A
Brief History of Hugli District, Calcutta, 1902, p. 2; Hunter, Statistical
Account of Bengal, vol. 3, London, 1876, p. 299; G. Toynbee, A Sketch
of the Administration of the Hooghly District, Calcutta, 1888, p. 2.
11. Campos, History of the Portuguese in Bengal, Calcutta, 1919, p. 113;
S. Dey, Hoogly Past and Present, Calcutta, 1906, p. 150.
12. Linschoten, op. cit., vol. 1, p. 93; Campos, op. cit., p. 113; R.K.
Mukherjee, op. cit., p. 114; Crawford, op. cit., p. 2; A.K. Ray, A Short
History of Calcutta, Census of India, 1901, vol. VII, pt. 1, p. 113;
O’Malley and M.M. Chakraborty, Hugli District Gazetteer, p. 47.
13. Caesar de Federici, ‘Extracts of . . . his eighteen year Indian observation’
1563-81, Glasgow, 1905, p. 114.
14. Salimullah, Tarikh-i-Bangla, tr., Gladwin, Calcutta, 1788, p. 87;
Campos, op. cit., pp. 22, 57; S. Dey, op. cit., pp. 9, 150; Hunter, op. cit.,
p. 299; S.K. Mitra, Hugli Zelar Itihas-o-Banga Samaj, pt. II, enlarged
2nd Mitrani edn, Calcutta, 1962, p. 639; A. Karim, Murslid Quli Khan
and his times, Dacca, 1963, p. 214; R.K. Mukherjee, op. cit., p. 114;
J.N. Sarkar, History of Bengal, vol. 2, Dacca, 1948, pp. 318, 364; A.K.
Roy, op. cit., p. 113.
15. Quoted in S. Dey, op. cit., p. 150.
16. Federici, op. cit., p. 115; C.R. Wilson, Early Annals of English in

Bengal, vol. I, London, 1895, pp. 134-6; Crawford, op. cit., p. 2.
17. Federici, op. cit., pp. 113-14.
18. Wilson, Early Annals etc., vol. 1, op. cit., p. 135; Sarkar, op. cit., vol. 2,
pp. 364-5.
19. Crawford, op. cit., pp. 188-9; Sarkar, vol. 2, op. cit., p. 318; Hunter,
vol. 3, op. cit., pp. 299-300; G. Toynbee, op. cit., p. 2; S. Dey, op. cit.,
p. 18.
20. Abdul Hamid Lahori, Badshahnama, Text, vol. 1, Calcutta, 1867,

p. 434; Elliot and Dawson, History of India as told by its own
Historians, vol. VII, London, 1877, p. 31; Sarkar, op. cit., vol. 2,

pp. 318-19.
21. Campos, op. cit., p. 44; S. Dey, op. cit., pp. 1-2; S. Mitra, op. cit.,
p. 639; Manrique, op. cit., vol. 2, p. 288; Hosten, ‘A Week at Bandel
Convent, Hugli’, Bengal Past and Present, vol. 10, 1915, p. 42.
22. Hunter gives the date as 1537 (Hunter, op. cit., vol. 3, p. 299); O’Malley
between 1567-73 (O’Malley, op. cit., p. 48); Long, 1538 (Calcutta
Review, vol. V, 1846, p. 258; Hosten between 1578-80 (Bengal Past
& Present, January-March 1915, p. 42; Mukherjee, 1538 (Mukherjee,
op. cit., p. 114); Crawford about 1578 (Crawford, op. cit., p. 4);
Campos, 1579-80 (Compos, op. cit., p. 54).
23. From Satgaon and not from Hugli, which further strengthens our
point that it was after Akbar’s conquest of Bengal that the Portuguese
founded Hugli Port.
24. Pedro Tavares is variously described as respectable man, well versed
in politics and affairs of state (Manrique, op. cit., vol. 1, p. 34); one
of the officials of the merchants of Bengal (Abul Fazl, Akbarnama, tr.
Benveridge, vol. 3, Calcutta, 1939, p. 349); chief of the port at Bengal,
(Sarkar, op. cit., vol. 2, p. 319); Captain of Porto Piqueno (Hosten,
Bengal Past and Present, vol. 12, 1916, p. 313).
25. Manrique, op. cit., vol. 1, pp. 32-7; Campos, op. cit., pp. 51-2.
26. Akbarnama, op. cit., vol. 3, pp. 349-50; Elliot and Dowson, op. cit.,
vol. VI, p. 59, Sarkar, op. cit., vol. 2, p. 319; Partab Bar Feringi of
‘Akbarnama’ is identified with Pedro Tavares by Beveridge (Journal of
Asiatic Society of Bengal, 1888, p. 34 and 1904, p. 52) and Blochmann
(Ain, op. cit., vol. 1, p. 440). Campos perhaps wrongly fixed Tavares’
travel to Fathepur in 1579 (Campos, op. cit., pp. 52, 54).
27. Du Jarric, Akbar and the Jesuits, trans and notes by Payne, London,
1926, p. 15.
28. There is hardly any authoritative evidence to prove Hosten’s contention
(Bengal Past and Present, 1916, notes to Chapter V, p. 314) that Tavares
had come to Fathepur in 1577 at the latest.
29. Campos, op. cit., p. 54; Hosten, Bengal Past and Present, 1916, p. 314.
30. Ibid., p. 313, Campos, op. cit., p. 54.
31. Akbarnama, vol. 3, p. 469; Ain, Blochmann, vol. 1, p. 440; Campos,
op. cit., pp. 53-3.
32. John Cabral’s Account of the fall of Hugli, Appendix in Maurique,
op. cit., vol. 2, p. 392.
33. Linschoten, op. cit., vol. 1, p. 95.
34. Quoted in Campos, op. cit., p. 55.
35. Ain-i-Akbari, tr. vol. 11 (Jarret and Sarkar), Calcutta, 1949, p. 137.
36. Campos, op. cit., p. 113.
37. Manrique, op. cit., vol. 1, p. 56.
39. Factory Records, Misc, vol. XIV, f. 317 (India Office Library); The
Diary of Streynsham Master, ed. R.C. Temple, vol. 2, London, 1911,
p. 79.
40. Elliot and Dowson, op. cit., vol. VII, p. 34; Badshahnama, text, op. cit.,
vol. 1, p. 438.
41. O’Malley, op. cit., p. 51; Hunter, op. cit., vol. 3, p. 299.
42. Manrique, op. cit., vol. 1, pp. 29-31.
43. Ibid., vol. 1, p. 33.
45. Linschoten, op. cit., vol. 1, p. 95.
46. English Factories in India, ed., Foster, 1618-21, Oxford, 1906,
pp. 213-14.
47. Ibid., p. 195.
48. Ibid., p. 197.
50. Manrique, op. cit., vol. 1, pp. 6, 23.
51. Tavernier, quoted in Campos, op. cit., p. 115.
53. Ibid., pp. 62, 112.
55. Letters Received from the Servants of the East India Company, ed.,
Foster, vol. V (1617), London, 1901, pp. 119-20.
56. Original Correspondence 610, vol. 5 (India Office Library); English
Factories, etc., op. cit., 1618-21, p. 14.
57. T. Raychaudhuri, Jan Company in Coromandel, 1605-1690, The
Hague, 1962, pp. 75-6.
58. Karim, op. cit., p. 213.
59. Letters Received etc., op. cit., vol. III (1615), p. 270; vol. IV, pp. 13-
14; English Factories etc., op. cit., 1618-21, pp. 92, 106, 113, 177,
240, 328; S. Chandra, ‘Commercial activities of the Mughal Emperors
during the 17th century,’ Bengal Past and Present, January-June 1959,
p. 93.
60. English Factories, op. cit., 1634-36, p. 255; Factory Records, Surat,
vol. 1, pp. 134, 526, quoted in S. Chandra’s article, op. cit., p. 94.
61. Translation of Dutch Records, vol. 18T, no. DXLVIIA (India Office
Library).
62. Ibid., vol. 18T, no. DXXXVIII.
63. Dey, op. cit., p. 18; Hunter, op. cit., vol. 3, p. 300; G. Toynbee, op. cit.,
p. 2; O’Malley, op. cit., p. 31.
64. Original Correspondence, 1510, vol. 14; English Factories, op. cit.,
1630-3, p. 308.
65. C. J. Hamilton, The Trade relations between England and India, 1600-
1896, Calcutta, 1916, p. 31; O’Malley, op. cit., pp. 53, 189.
66. Translations of Portuguese Records, Book of the Monsoons, Book 30

[India Office Library].
67. Factory Records, Misc, vol. XIV, f. 322; Master’s Diary, op. cit., vol. 2,
p. 84.
68. This has been discussed in details by T. Ray Chaudhuri, op. cit., p. 76.
69. Ibid., p. 76.
70. Translation of Dutch Records, op. cit., vol. 64T.
71. Campos, op. cit., p. 120; T. Raychaudhuri, op. cit., p. 78; Om Prakash,
‘The European Companies and the merchants of Bengal’, Indian
Economic and Social History Review, vol. 1, no. 3, 1964, p. 38.
72. Original Correspondence, 2435, vol. 24; English Factories etc., op. cit.,
1651-4, p. 304.
73. Ibid.
74. Factory Records, Misc., op. cit., vol. XIV f. 317-22; Master’s Diary,
op. cit., vol. 2, pp. 79-84.
75. Original Correspondence, 2435, vol. 24; English Factories etc., op. cit.,
1651-4, p. 303; 1661-4, p. 66.
76. English Factories etc., op. cit., 1661-4, p. 71.
77. Translation of Dutch Records, op. cit., vol. 61T, no. 216.
78. Ibid.
79. Kristof Glamann, ‘Bengal and World Trade about 1700’, Bengal Past
and Present, vol. LXXVI, 1957, p. 36.
80. Letters Received etc., op. cit., vol. V (1617), pp. 119-20.
81. English Factories etc., op. cit., 1630-3, p. xxx.
82. Sir Charles Cecil Stevens, ‘The Port of Calcutta’, Journal of Society of
Arts, vol. XLVII, p. 635.
83. Original Correspondence, op. cit., no. 2200, vol. 22; English Factories
etc., op. cit., 1651-4, pp. xxvi, 16-17; Yule, The Diary of William
Hedges, vol. 3, London, 1889, pp. 194-95.
etc., op. cit., 1651-4, p. 303.
85. Factory Records, Misc., op. cit., vol. XIV, f. 317; Master’s Diary,

op. cit., vol. 2, p. 79.
86. Factory Records, Misc., op. cit., vol. XIV, f. 288; Master’s Diary,

op. cit., vol. 1, p. 53.
87. English Factories etc., op. cit., 1665-7, pp. 138-9.
88. Dey, op. cit., pp. 22-3; Hunter, op. cit., vol. 3, p. 300; G. Toynbee,
op. cit., p. 1.
89. C.C. Stevens, op. cit., p. 635; Wilson, Early Annals etc., op. cit., vol. 1,
p. 47; A.K. Roy, op. cit., p. 113.
90. Wilson, Early Annals etc., op. cit., vol. 1, p. 47; Hedges Diary, op. cit.,
vol. 3, p. 198; Crawford, op. cit., p. 15; C.C. Stevens, op. cit., p. 635;
A.K. Roy, op. cit., p. 113.
91. English Factories in India, New Series, ed. Sir C. Fawcett, vol. II,
Oxford, 1952, pp. 342-3.
92. Factory Records, Misc., op. cit., vol. XIV, ff. 320-1.
93. English Factories etc., New Series, op. cit., vol. IV, pp. 166-7; Stevens,
op. cit., p. 635; A.K. Roy, op. cit., p. 113.
94. Bowrey, op. cit., pp. 166-7.
95. Wilson, Early Annals etc., op. cit., vol. 1, p. 34.
96. Letter Book, vol. 4, f. 201 (India Office Library); Letter Book, vol. 5,
f. 155; John Bruce, Annals of the Honorable East India Company,
London, 1810, vol. 2 pp. 228, 360, 451, 482; Stevens, op. cit., p. 631;
Hamilton, op. cit., p. 52.
97. English Factories etc., New Series, op. cit., vol. II, p. 329; vol. IV,
p. 161. In 1672 six ships were sent to the Bay, which was rather
unusual; English Factories etc., New Series, op. cit., vol. II, pp. 341-3.
98. Letter Book, op. cit., vol. V, f. 390.
99. Ibid., f 391.
100. Original Correspondence, op. cit., 2208, vol. 22; English Factories,
etc., op. cit., 1651-54, p. 45.
101. Letter Book, op. cit., vol. 1, f 411; English Factories, etc., op. cit.,
1655-60, p. 275.
102. Ibid., p. 276; Letter Book, op. cit., vol. V, f 237-8, 239, 390; Sometimes
the volume of saltpetre rose upto 1000 tons as in the year 1681, cf.,
Home Misc., vol. 1, series 1, f 3; Letter Book, op. cit., vol. 4, f 401.
103. At present I am collecting material on this aspect.
104. Letter Book, op. cit., vol. V, f. 239.
105. Original Correspondence, op. cit., no. 2242, vol. 22; English
Factories, etc., op. cit., 1651-4, p. 110.
106. Original Correspondence, op. cit., no. 2297, vol. 23.
107. English Factories, etc., op. cit., New Series, vol. IV, pp. 321, 329.
108. Besides the English and the Dutch, other Europeans like the Danes,
the French etc., came to Bengal for trade during this period and
established factories in the neighbourhood of Hugli; but it seems that
their trade was negligible compared to that of the English and the
Dutch.
109. Manrique, op. cit., vol. 2, Appendix, p. 392.
110. Riyaz-us-Salatin, op. cit., text, p. 33; tr. p. 30.
111. Sarkar, op. cit., vol. 2, p. 419.
112. Syed Hussain, ‘Haji Mohammed Mohsin and Hugli Imambara’,
Bengal Past and Present, vol. 2, p. 62.
113. Barbossa, Quoted in R.K. Mukherjee, op. cit., p. 120.
114. Meilink Roelofz, op. cit., p. 3.
115. Chablani, The Economic Condition of India during the Sixteenth
Century, Delhi, 1929, p. 60.
116. Pyrard de Laval, op. cit., vol. 1, pp. 236, 259, 332, 333.
117. Raychaudhuri, op. cit., p. 76.

119. Dagh Register, 9th and 10th March 1665, quoted in Mukherjee,
op. cit., p. 120.
120. Bowrey, op. cit., pp. 168, 179-80; Schouten, vol. Ii, p. 158 Quoted by
R.C. Temple in Bowrey, op. cit., p. 168.
121. T. Raychaudhuri, op. cit., p. 76.
etc., op. cit., 1651-4, p. 63.
123. Translation of Dutch Records, op. cit., vol. 18T, no. DL; The
possession of a pass from a Company rendered the ship of an
individual merchant immune from attack on the high seas by the
ships of that particular Company.
124. Translation of Dutch Records, op. cit., vol. 20T, no. DLXXXV; The
pass system, its import on the composition, extent and direction of
the foreign trade of the merchants of Bengal and the various objects
for which the Companies enforced the system, has been discussed
by Om Prakash in his article in Indian Economic and Social History
Review, op. cit., vol. 1, no. 3, pp. 37-63.
125. English Factories etc., op. cit., 1651-4, p. 188.
126. Ibid, new series, op. cit., vol. II, p. 345.
127. Diary and Consultation Book, 1672-78, Records of Fort St. George,
Madras, 1910, pp. 43-4.
128. Bowrey, op. cit., p. 182.
129. Salimullah, op. cit., p. 6.
130. English Factories etc., New Series, op. cit., vol. IV, p. 183.
131. Salimullah, op. cit., pp. 104-5.
132. Wilson, Early Annals etc., op. cit., vol. I, p. 346.
133. Bengal Public Consultations, Range 1, vol. I, Diary & Consultations,
from September 1705-February 1706. Dr. A. Karim has given a
list of the ships carrying goods of individual merchants during the
season 1705-6. According to him, out of 33 ships, 19 belonged to
the Moors, one was freighted by ‘Branasi Seth’ (in consultation of
the 25 November 1705, the name, however, was Janardan Seth) and
the rest belonged to European private merchants (vide A. Karim,
op. cit., pp. 230-1); But taking into consideration the consultations
of 18 September 1705 and 17 December 1705 (which Dr. Karim
perhaps overlooked) we find the number of ships sailing on the
account of the ‘Moors’ during this season was 23. Again not all these
ships (as Dr. Karim contends, ibid., p. 230), but only 14 out of them
received passes from the Calcutta Council.
134. Diary and Consultations of 18 September, 1 December 1705; 7 January
1706, vide Bengal Public Consultations, Range 1, vol. I; Dr. Karim
names a ship ‘Sarah’ belonging to Sabh-al-Din but the consultation

of 19 February 1706 states that the ship ‘Sarah’ belonging to John
Salladine; it is perhaps too much to identify John Salladine with
Sabh-al-Din’, specially when the first name ‘John’ is there. Moreover,
the name of the master of the ship (Sampson Osborn) is another
indication that it belonged to a European merchant, and not to a
Muslim, since hardly any Muslim ship had European master; only in
some cases the Muslim ships had local Portuguese as their masters.
136. Factory Records, Calcutta, vol. 4, f. 18.
137. O’Malley, op. cit., p. 188; Ain-i-Akbari, vol. II, tr. (Jarret), p. 140.
138. Riyaz-us-Salatin, op. cit., tr. pp. 29-30; text, op. cit., p. 33.
139. Factory Records, Misc, op. cit., vol. XIV, f. 317; Master’s Diary,
op. cit., vol. I, p. 79; vol. II, p. 92.
140. Riyaz-us-Salatin, op. cit., text, p. 33; tr, p. 30.
141. Alexander Hamilton, A New Account of the East Indies, ed. Foster,
London, 1930, p. 12.
142. William Bolts, Consideration on Indian Affairs etc., 2nd edn, London,
p. 58.
143. Fifth Report etc., ed. Firminger, vol. 2, Calcutta, 1917, p. 199.
144. O’Malley, op. cit., p. 190; J.C. Sinha, Economic Annals of Bengal,
London, 1927, p. 7; However the ‘Syer Bakshbandar’ in the Fifth
Report is given as Rs. 2,97,941 (Fifth Report etc., ed. Firminger,
Calcutta, 1917, vol. 2, p. 199) and in the Sixth Report (Appendix 14)
it is Rs. 29,289-8-3.
145. Dey, op. cit., p. 154.
146. O’Malley, op. cit., p. 190.
147. Karim, op. cit., p. 215.
148. Wilson, Old Fort William in Bengal, London, 1906, vol. I, p. 96.
149. Riyaz-us-Salatin, op. cit., text, p. 33; tr. p. 30.
150. Salimullah, op. cit., pp. 88-9.
151. Wilson, Old Fort William etc., op. cit., vol. I, p. 62.
152. Wilson, Early Annals etc., op. cit., vol. I, p. 125; Sinha, op. cit.,
p. 6.
153. One of the three villages, comprising the city of Calcutta, in the
beginning of the 18th century.
155. Wilson, Old Fort William etc., op. cit., vol. I, p. 79.
156. Ibid., p. 68.
157. Ibid., p. 107.
158. Stewart, History of Bengal, London, 1813, p. 403.
159. Roy, op. cit., p. 119.

chapter 2
Prices of Provisions in Bengal

in the Second Half of the
Seventeenth Century
Moreland Refuted*
Moreland’s thesis1 that ‘prices on the Hooghly’ in the second half

of the seventeenth century ‘were brought into line with those
which prevailed elsewhere on the Indian sea board’ can now
be exploded with the discovery of new evidence in the archives
of the Dutch and English East India Companies. This mass of
material – so far unexplored – leads to the irresistible conclusion
that prices of provisions in Bengal were cheaper – much cheaper
indeed – than those in any other part of the Indian coast.
Moreland’s contention was that upto 1650 ‘prices in Bengal
were abnormally low compared with those’ in other regions on
the coast of India. The reason for this unusual phenomenon, as
he explains, was that – as the supply of silver had ‘previously
been inadequate compared with what was available on other
portions of the sea-board’ so that silver price was depressed and
commodities were cheap. But the extension of trade in Bengal
in the second half of the 17th century – in the wake of the brisk
trading activities of the European Companies – ‘resulted in that
market being brought more nearly on a level with the conditions
prevailing elsewhere on the coast’.
The basis of his inference was that the English factors who
wrote in about 1650 that provisions in Bengal could be procured
*Proceedings of the Indian History Congress, Jabalpur, 1970, pp. 387-97.

all at half price or little more than that they are in other parts’,
complained in 1658 that provisions had trebled in value. He
holds that this sudden rise in price, as alleged by the factors, was
due to the large inflow of bullion as a result of the European
trading activities. He tried to explain the shortage of silver in
Bengal – in the preceding period – in the working of the revenue
system in which land revenue was paid in silver and much of it
remitted to the Mughal Court in the same form’. As a result, the
amount of imported silver retained in Bengal was inadequate to
satisfy local demand so that silver was normally expensive, or in
other words, commodities were cheap. And the sudden influx of
silver in the wake of European trading activities was ‘sufficiently
large to effect a material alteration in the monetary position in
Bengal’. He maintained that this increase in imported supplies
of silver occuring from 1650 onwards sufficed to remove the
special cause of the low prices of provisions, namely shortage
of silver, and bring Bengal in line with the rest of the coast. This
inference, as he wrote, was in accordance with the fact that for a
long time previously (i.e. before 1650) Bengal had exported rice
to countries which would more naturally have obtained their
supplies their Coromandel.
But we have now enough evidence to show that Bengal was
never brought into the same level with other parts of the coast so
far as the prices of provisions were concerned. While Moreland’s
thesis was solely based on a report from the English Company’s
factors, we have got quite a few reports from different parts of
the country pointing unmistakably to the low prices of provi-
sions in Bengal compared with those in other parts of the Indian
sea-board. The Bombay factors wrote in 1698 that ‘the work-
manship in Bengal is (sic) cheaper than here by reason of the
great difference in the prices of provisions’.2 In 1702 the Court
of Directors reported that ‘the cheapness of provisions is one
reason for the difference of price of Europe investments in Ben-
gal and Madras’.3 Again as late as 1711, the Directors wrote that
‘all things are cheaper in the Bay than at the Fort (i.e., Madras)
. . . a rupee in the Bay will go as far as a pagoda at the Fort’ (1
pagoda – 3.5 rupees approximately).4
Prices of Provisions in Bengal | 41
Bengal’s richness was legendary, and the cheapness of provi-

sions there was attested to by most of the foreign travellers in the
17th and early part of the 18th century. The natural products of
Bengal were profusely abundant. In the beginning of the 17th
century Pyrard de Laval found that Bengal exported rice ‘not
only to other parts of India as well as to Goa and Malabar’,
but even to ‘Sumatra, the Moluccas, and all the islands of Sunda
to all of which Bengal is a very nursing mother who supplieth
them with their entire subsistence and food’.5 Bernier tells us
that rice from Bengal was supplied to Patna. Masulipatnam and
other parts on the Coromandel coast as also to Ceylon and the
Maldives.6
This traditional export of provisions from Bengal was kept
alive throughout the second half of the 17th and at least early
years of the 18th century. The cheapness of provisions in Bengal
and their export to other parts attracted the attention of all the
foreign travellers who visited Bengal during the period. Barlow
wrote in 1692 – ‘The place had plenty of good provisions . . .
all provisions very cheap’.7 The English ambassador Sir William
Norris observed in 1699 that Masulipatnam was supplied with
rice from Bengal and that the people of the locality would starve
if rice were not supplied from the said place.8 Even as late as
1706-7, Alexander Hamilton wrote – ’The plenty and cheapness
of provisions are incredible’.9 So in the face of these statements
it is difficult to subscribe to Moreland’s thesis that in the sec-
ond half of the 17th century prices of provisions in Bengal rose
sharply so that it was brought into the same level with the rest
of coastal India.
Besides the travellers’ accounts, we have statistical evidence
in the Dutch records on the export of provisions from Bengal
to other parts of the Indian sea-board as well as to the eastern
islands throughout the second half of the 17th century. These
records provide us with good and concrete ideas regarding the
export of food grains by Indian merchants to various regions.
The merchants definitely traded on profit-motive and naturally
would not have dealt in provisions as one of the main commodi-
ties of their trade if these did not fetch a substantial margin for
them. The main provisions in the export list of the merchants

comprised rice, wheat, butter and oil, besides sugar which
was a regular commodity in the trade with Western India and
Persia. Rice, wheat, butter etc., were exported by Indian mer-
chants regularly throughout the period to different parts of the
Coromandel coast – Masulipatnam, Jaffnapatnam, etc., though
also occasionally to Surat, Bombay, Goa, Calicut etc.10 Again,
provisions in considerable quantities were regularly exported to
Ceylon (Gale), the Maldives, and occasionally, though not very
rarely, to Achin, Queda, Moluccas, Siam, Manila and Tenassary
in the East Indies and Mocha in the west.11 In a memorandum
‘of what voyages most profitable with commodities from the
Bay’, Mr. Pitt wrote in the third quarter of the 17th century that
rice, wheat, butter, etc., were regularly exported to Batavia, the
Maldives, Achin, and the coast of Coromandel.12 One can rea-
sonably ask why rice or provisions be carried to Ceylon or the
islands in the East Indies from Bengal when it could be obtained
from Coromandel Coast by a shorter and much less dangerous
voyage. The only reasonable answer seems to be that the prime
cost of provisions in Bengal must have been so much lower as to
cover the increased charge for transit as also a substantial profit.
Quantitatively, the amount of rice exported by Indian mer-
chants was not significant. Fortunately enough we can compute
the quantity of rice exported annually from the Dutch list of the
cargoes of indigenous ships that left Bengal ports. According to
the Dutch account, in 1682, 19,170 mds. of rice were exported
from Bengal by indigenous merchants, while it went up to 62,500
mds. next year, rising to 92,000 mds. in 1684.13 The export fig-
ure was not unimpressive even at the end of the century. In 1698
the total amount of rice exported was 65,500 mds. while in the
next year it stood at 31,852 mds.14 If we add to this the amount
exported by the European Companies to their different facto-
ries in India and other parts of Asia, the total amount would
be quite considerable. When the Dutch became the sovereign of
part of Ceylon in late 1650s, it became their responsibility to
provide rice for the local population as well as for their own
establishment. As such, the Bengal factors were asked to send as
much rice as possible and also to persuade Indian merchants to

send large amount of rice to this island. At the moment I have
only computed the amount exported by the Dutch from Bengal
to Ceylon, Batavia, and Malacca in 1674-5 and this stood at
1,747,991 lbs. or 27,101 mds.15 Though the major part of this
quantity was exported to Ceylon, the amount sent to Batavia
and Malacca was not negligible. The amount of wheat and but-
ter exported to these places during the year was 587,294 lbs.
and 59,620 lbs. respectively.16 The English East India Company
also regularly sent rice to Madras. In 1685 the Company sent
rice and other provisions proper for Achin.17 Even in the second
decade of the 18th century we find the English Company send-
ing rice to St. Helena from Bengal.18 Obviously, this considerable
export of provisions from Bengal would only mean that they
were much cheaper there than in other parts. Interestingly, this
substantial export of rice and other provisions from Bengal to
other parts of India and to neighbouring countries would seem
to suggest that the value of trade in these commodities repre-
sented a significant proportion of the total output – a possibility
which clearly contradicts the thesis of absolute self sufficiency in
the contemporary Indian economy.
The normal price of rice throughout the period was around
3 to 4 mds. to a rupee while it fluctuated widely in times of
scarcity or abundance mainly depending on the nature of har-
vest. The legendary price of rice at 8 mds. per rupee19 during the
subedarship of Shaista Khan was nothing absolutely abnormal.
Even in the time of Murshid Quli ‘the ruling price of rice was 5
or 6 mds. per rupee.’20 But for wide variety of rice, a price series
could be built up. The great divergence of quality and price of
rice is amply clear from the price table for 1729 where the price
for the finest quality of rice was 1 md. 10 srs. per rupee while
the coarsest kind was as cheap as 7 mds. 20 srs. to a rupee.21
But whatever might be the price, we know for certain that the
traders had substantial profit by exporting provisions to other
parts of India and the East Indies. Even as late as the close of the
century, William Norris remarked on the export of provisions
from Bengal to Masulipatnam . . .’ corn from Bengal . . . bearing
so much a higher rate here than there, 40:50 hardly ever less,
sometimes cent per cent gained’.22
It is interesting to note that probably the Bengal rulers encour-
aged export of provisions from Bengal – a fact that indicates
the abundance of food grains in the country. This is evident
from a Dutch report of 1686 which states that rice, wheat,
butter, oil etc., were amongst the untaxed (geen thol schuldigh
zijn) goods in Bengal.23 The assertions in Tarikh-i-Bangala and
Riyaz-us-Salatin that Murshid Quli totally prohibited export of
rice24 cannot be taken too seriously on their face value because
of contradictory evidence in the Dutch and English records. The
prohibition, if any, might have been imposed temporarily or for
a very short time, not definitely for a very long period. In the
Dutch records, we notice at least up to 1708-9 quite a consider-
able amount of rice was regularly exported from Bengal. Even in
the second decade of the 18th century Bengal rice was carried to
Madras by the English East India Company.25 However, it seems,
while in periods of acute scarcity the state had to step in and
prohibit the movement of rice outside the province with a view
to checking the upward trend in price,26 a considerable amount
was exported in normal years.
A glance at the export lists of the European Companies indi-
cates that there was definitely an expansion of the export trade
from Bengal and as such, a corresponding increase in produc-
tion, specially in the silk and textile industry. But the increased
demand for commodities and consequent rise in production do
not seem to have affected the price level to any significant extent.
The price of raw silk, no doubt, showed violent and inconsis-
tent fluctuations over the period due to various factors.27 But
at any rate it did not exhibit any secular upward trend. Though
a precise price series of textiles could not be drawn up due to
the multiplicity of the types of textiles – prices of the same type
widely varying according to the size, quality, place of produc-
tion etc., a glance at the prices for four years taken at random
between 1710 and 1720 would show no significant rise at all
over these years.28 It is significant that the increase in production
could be made without any fundamental change in the system of
Table 2.1: Prices of Raw Silk in Bengal
Years Price (in Rs.) Years Price (in Rs.)

1663/4 155 p.md. 1711/12 187 p.md.
1664/5 N.E. 1712/13 171 p.md.
1668/9 N.E. 1713/14 171 p.md.
1669/70 196 p.md. 1714/15 172 p.md.
1670/1 177 p.md. 1715/16 162 p.md.
1671/2 152 p.md. 1716/17 169 p.md.
1675/6 191 p.md. 1717/18 169 p.md.
1676/7 217 p.md. 1718/19 171 p.md.
1678/9 165 p.md. 1719/20 155 p.md.
1681/2 268 p.md.
1682/3 298 p.md.
1583/4 167 p.md.
1684/5 168 p.md.
1685/6 222 p.md.
1690/1 182 p.md.
1693/4 187 p.md.
1694/5 182 p.md.
1695/6 160 p.md.
1696/7 115 p.md.
1697/8 144 p.md.
1698/9 164 p.md.
1699/1700 182 p.md.
1700/1 201 p.md.
1701/2 236 p.md.
1702/3 203 p.md.
1704/5 154 p.md.
1705/6 174 p.md.
Source: A.G.D. Range 11, vols. 28, 30, 32, 37, 41, 46, 49, 52, 55, 58. The figures
for 1678/9 are to be found in B.M. Addl. MSS. 34, 123, All fractions have been
left out.
production. This obviously points to the existence of a possible

overcapacity in the silk and textile industry over a short period
of the creation of new supplies of skilled labour which was the
most important factor in the production system. However, it is
evident that there was no appreciable change or rise in the price
level in general, or prices of provisions in particular, over the
Table 2.2: Contracts with Calcutta merchants showing the different

varieties of three principal muslins and their prices for four years
(vide, Beng. Pub. Consult, Range 1, vols. 2-4)
1710 1713 1716 1719

Cossaes Co x Co. Rs. as. Rs. as. Rs. as. Rs. as.
Maldah 40 x 2¼ 9-12 9-12 9-12 9-12
Orrua 40 x 2¼ 6-10 7-0 7-0 7-0
Cogmary 40 x 2 9-8 9-8 9-8 9-8
Cogmary 40 x 3 13-0 13-0 13-9 13-0
Cogmary 40 x 2½ - - 10-8 10-8
Colligaum 40 x 2½ 10-8 10-8 - -
Mulmuls
Malda 40 x 2 13-12 - - -
Savagepore 40 x 2¼ 8-12 - 8-12 -
Santapore 40 x 2¼ 13-8 14-12 14-12 14-12
16-0 11-12 11-12 11-12
22-0 13-4
Santapore 40 x 3 -- 20-0 -- 16-0
Dacca 40 x 2 16-0 13-0 - 8-0
Dumree 40 x 2¼ 12-0 - - -
Cossajura 40 x 2 13-6 12-0 12-0 12-0
Coincola 40 x 2 -- 11-12 -- --
Flowered with silk 40 x 1 -- 22-0 -- --
Flowered with silk thread 40 x 1 16-0 15-0 15-0 15-0
Tanjeebs
Santose 40 x 2¼ 7-12 7-12 -- 6-14
Dacca 40 x 2¼ 8-8 -- -- --
Dacca 40 x 2 7-0 7-0 -- 7-0
Flowered with silk -- -- 20-0 -- 20-0
Flowered with silk thread 40 x 1 13-0 13-0 -- 13-0
period under review. It might well be assumed that if the prices of

provisions had gone up significantly, there would certainly have
been a corresponding increase in the prices of silk and textiles,
the two principal commodities in the export trade or vice versa.
Naturally the question crops up – what happened to the large
amount of bullion and specie that poured into Bengal and how
was it that this great amount of treasure had no significant
impact on the economy as a whole? Besides the European ‘free’

traders and indigenous merchants, the English and the Dutch
Companies carried on trade to the value of Rs. 40 or 50 lakhs
a year, mostly financed by importing bullion into Bengal.29 This
sum is significant percentage of the revenue from Bengal which
was about 130 lakhs during the period.30 That the influx of silver
had no appreciable impact on the prices of provisions can only
be explained by the fact that most part of it was drained out
of the country towards northern and western India, and a part
went into hoarding. It can hardly be denied that the drain from
Bengal to upcountry during this period reached a new and great
dimension. The revenue, however, did not seem to have increased
to any great extent. But the numerous grantees and even big
merchants, who were mostly from northern and Western India,
remitted huge sums to Agra and Delhi in the form of cash. The
Company’s records provide a rough idea of the vast sum amassed
and remitted by numerous officials and revenue formers. The
fortunes made by Shaista Khan who was governor in Bengal for
more than 20 years would give an indication of the extent of loot
from Bengal. It was reported by the English factors in June 1673
that Shaista Khan presented the king with 2 crores of rupees
and was thus again confirmed in his governorship.31 In 1678
the factors reported that besides gold and jewels, Shaista Khan’s
treasure amounted to Rs. 40 crores.32 In November 1676 he was
reported to have regained his governorship by giving 3 crores of
rupees to the king.33 When he died at Agra in December 1693,
the English factors reported that he was worth ‘40 million of
pound sterling’, most of which, it could be assumed, he amassed
during his viceroyalty in Bengal.34 All the viceroys during the
period indulged in extracting wealth from Bengal. Shaista Khan
took with him 9 crores in 10 years, Khan Jahan Bahadur Khan
2 crores in one year, Azim-us-Shan 8 crores in 9 years.35 The
merchants too did not lag behind. Khemchand Shah, a promi-
nent Gujarati merchant in Bengal in 1680’s was reported to have
been robbed of Rs. 15 lakhs while going to his native land on the
occasion of his daughter’s marriage.36 At his death in 1689, when
his trade declined considerably, he was said to have left ‘90 odd
thousand rupees’ which, it can well be assumed, were transferred

to his ‘country’ as there was no indication that his successors
carried on trade in Bengal.37 Thus there was a continuous drain
of specie from Bengal to other parts of India. As a result, despite
a great expansion of trade and a consequent influx of bullion,
there was no material alteration in the price level in general,
and food prices in particular did not show any appreciable rise
throughout the period and remained much cheaper than those in
other parts of coastal India.
Finally it is to be noted that the fertility of land and good
yields may explain to some extent this cheapness of provisions in
Bengal. But despite the low prices of provisions on the one hand,
and the increase in production and competition amongst buy-
ers, the conditions of the actual producers, weavers in particular,
remained unchanged and poor. The plight of the weavers is amply
illustrated by the factors’ correspondence which often described
it in such phrases as – ’weavers cannot subsist or lie long idle’, or
‘weavers live from hand to mouth’, or ‘such needy a generation
as the weavers are’.38 Even making allowance for the inevitable
exaggeration in the observation of the factors, the poverty of
the weavers can hardly be refuted. It seems reasonable to argue
that the broker system was responsible for the extreme poverty
of the weavers. Otherwise it is difficult to reconcile the weavers’
poverty with the fact so often apparent that the Companies were
buying in a seller’s market. The European Companies imported
silver which hardly filtered down to the producers to any sub-
stantial extent, the surplus being mostly expropriated by only
a small section – the merchants middlemen and ruling nobility.
Manuscript Sources and Abbreviations
AGD Accountant General’s Department, Range 11, India

Office (Commonwealth Relations) Library, London
BPC Bengal Public Consultations, India Office Library
BGL and J Bengal General Ledger and Journal, India Office
Library
BM Addl Mss British Museum Additional Manuscript
DB Despatch Book, India Office Library

Home Misc Home Miscellaneous Series, India Office Library
KA Koloniaal Archief, Algemeen Rijksarchief, The Hague
OC Original Correspondence, India Office Library.
Factory Records (India Office Library): Hugli, Malda, Misc.
Notes
1. W.H. Moreland, From Akbar to Aurangzeb, London, 1923, pp. 178-

82.
2. O.C. 22 May 1698, no. 6566, vol. 54.
3. D.B., 4 February 1709, vol. 96, f. 434.
4. D.B. 28 December 1711, vol. 97, f. 461.
5. Pyrard de Laval, The Voyages of . . . tr. Grey and Ball, vol. 1, London,
1888, p. 327; M.A.P. Meilink Roelofz, Asian Trade and European
Influence, The Hague, 1962, p. 68.
6. F. Bernier, Travels in the Mughal Empire, tr. A. Constable, 2nd edn.,
revised by V.A. Smith, London, 1916, p. 437.
7. Edward Barlow, Barlow’s Journal, 1670-97, vol. 2, London, 1934,
p. 437.
8. H. Das, The Norris Embassy to Aurangzeb, ed., S.C. Sarkar, Calcutta,
1959, p. 120.
9. A. Hamilton, A New Account of the East Indies, ed., W. Foster, London,
1930, vol. 2, p. 13.
10. See relevant volumes in Koloniaal Archief (K.A.) series, Algemeen

Rijksarchief, The Hague.
11. Ibid.
12. B.M. Addl. Mss., 34, 123, f. 34.
13. K.A. 1267, f, 1342 recto; K.A. 1276 f, 1179 verso; R.A. 1292, f. 535
verso.
14. K.A. 1500, ff. 71-4, 140-2; K.A. 1516, pp. 122-7.
15. K.A. 1196, ff. 59 recto-603 verso.
16. Ibid.
17. D.B. 15 Oct. 1685, vol. 91, f. 19.
18. B.G.L. and J., vol. 92, f. 83.
19. Ghulam Husain Salim, Riyaz-us-Salatin, tr. Abdus Salam, Calcutta,
1904.
20. Ibid., pp. 280-1.
21. S. Bhattacharya, The East India Company and the Economy of Bengal,
London, 1954, p. 213.
22. Das, op. cit., pp. 120-1.
23. K.A. 1311, f. 1202.
24. Salimullah, Tarikh-i-Bangala, tr., Gladwin, Calcutta, 1788, p. 112;

Ghulam Husain Salim, op. cit., p. 280-1.
25. For export in 1713, see. B.G.L. and J., vol. 90, f. 81; for 1720, see,
B.P.C., vol. 4, f. 294 recto.
26. K.A., 1158, f. 907 vol; K.A. 1205, ff. 548-9.
27. See Table 1 for price of raw silk. The fluctuations, often wide, were
mainly due to bad or good harvest as also to the competition amongst
the three main buyers – the English, Dutch, and indigenous merchants.
28. See Table 2.
29. S. Chaudhuri, ‘Trade and Commercial Organisation in Bengal, 1650-
1720’, unpublished Ph.D. thesis, University of London, 1969.
30. Irfan Habib, The Agrarian System of Mughal India, Asia Pub. 1963,
pp. 400-2; Salimullah, op. cit., pp. 63-4.
31. Factory Records, Hugli, vol. 4, pt. 1, f. 54.
32. O.C., 20 January 1678, no. 4134, vol. 38.
33. Home Misc., vol. 803, f. 154.
34. Factory Records, Misc., vol. 3 A, f. 260.
35. J.N. Sarkar, ed., History of Bengal, vol. 2, Dacca, 1948, p. 413.
36. Bowrey, Countries Round the Bay of Bengal, ed., R.C. Temple,
Cambridge, 1905, pp. 152-6.
37. Factory Records, Hugli, vol. 11, f. 187.
38. Factory Records, Malda, vol. 1, Diary, 25 October 1680, Home Misc.,
vol. 803, ff. 84-5; D.B. 28 January 1661, vol. 85, ff. 367-8.
chapter 3
The Myth of the English East India

Company’s Trading Privileges in Bengal,
1651-1686*
Most writers on the early annals of the English trade in Bengal

maintain that the Company enjoyed the privilege of duty-free
trade on the payment of Rs. 3,000 only per annum. But this
theory of customs-free trading privileges of the Company can
now be exploded on the discovery of new evidence in the Com-
pany’s archives. In fact, the Company had never enjoyed – by
virtue of any imperial farman – such privileges in Bengal during
the period under study. The English claim of duty-free trade was
only a myth, hardly based on any legal or valid imperial sanction
behind it.
Though the English trade in Bengal – through Balasore –
began as early as 1633, it was only after the foundation of the
Hugli factory in 1651 that the Company started trading there
on a large scale. Quantitatively, however, the Company’s trade
in Bengal was not yet very significant, though by the close of the
century it became the important branch of trade derived by the
English Company in India. The main significance of the Bengal
trade in the commercial complex of the Company was that it
was an expanding trade – ‘the rising’st trade in India’, to quote
the Company factors in Bengal.1
*Bengal Past and Present; Sir J.N. Sarkar Centenary Volume, 1971,
pp. 287-92.
The problem of securing trading privileges, as the Company

thought, was a formidable hindrance to the growth and develop-
ment of its trade in Bengal. Hence from the beginning it tried
to secure an invidious trading privilege giving it an obvious
advantage in competition with other traders including the local
merchants. It claimed that it obtained these differential privileges
through various farmans, nishans or letters patent, and tried to
maintain these privileges throughout the period. This, however,
led often to disputes with local authorities who frequently
challenged the authority and bonafide of those claiming such
concessions – a common phenomenon which, in its turn, was
in essence exploitative rather than an effort on the part of these
officials to enrich the royal treasury. The English, on their part,
tried to resist such bureaucratic exploitation when they felt it
went beyond a certain limit, by open recourse to arms. Thus at
one stage war broke out between the Company and the Mughals
in 1686 in the trail of which the English withdrew from Bengal
and returned to Madras in 1689. They came back in 1690 fol-
lowing a peace settlement when Aurangzeb, ‘on the most humble
and submissive petition’ of the English, allowed them to trade
freely in Bengal paying Rs. 3,000 only in lieu of customs. The
hasb-ul-hukm or imperial order in this respect was issued in
1691 under the seal of the imperial diwan Asad Khan.2 However,
it was only in 1717 that the English succeeded in procuring an
imperial farman from Emperor Farrukhsiyar for free trade in
Bengal in return for the payment of only Rs. 3,000 yearly as
peshcash.
Historians have repeated, with varying degrees of reserva-
tions, the picturesque story according to which the concessions
that enabled the Company’s servants to establish factories and to
trade duty-free in Bengal were obtained through the magnanim-
ity of a surgeon named Gabriel Boughton. He was high in the
favour of Prince Shah Shuja for curing, first an imperial princess
and then one of the consorts of the Prince who was then the
subadar of Bengal. When offered a reward, Boughton declined to
receive any personal remuneration but asked that in lieu thereof
his countrymen might be granted the commercial privileges
The Myth of the English East India Company | 53
which they had long desired.3 There are various versions of the
story which differ from one another in details.4 A careful and
critical analysis of the different narratives makes it clear that
Gabriel Boughton got the concession of free trade for himself
only, and not for the English in general. Bowrey’s account rep-
resents that the concessions of free trade were general to the
English, while other imply that they were special concessions to
Boughton himself, though they were made to cover the transac-
tion of Brookhaven in his first voyage. The latter version appears
to be more accurate, and this is corroborated by the instructions
to James Bridgman and other merchants whom Brookhaven was
sending up from Balasore in December 1650 to establish a factory
in Hugli. In these instructions, stress was laid upon the necessity
of a farman from Shah Shuja for free trade in Bengal – a clear
proof that no general concession had yet been obtained from
the Prince – and reference was made to certain promises secured
from Boughton of assistance therein.5 That the privileges granted
by Shah Shuja were personal to Boughton and not general to
the English, we know for certain from the traditional account of
English privileges in Bengal, written in February 1685 allegedly
by John Beard,6 the Company’s Agent from October 1684 to
August 1685. It was stated there – ‘He (Prince Shuja) offers Mr.
Boughton that if he would trade, he should be free from pay-
ing of custom and all other duties, and gave Mr. Boughton two
nishans to that end’.7 It is true, however, that the account goes on
to say that in 1650 Captain Brookhaven’s ship ‘upon the account
of Mr. Boughton’s nishans was free of all duties’; but this, if true,
might have been due to the factors’ making out that their goods
belonged to Boughton.
It is clear that the first nishan for the Company’s trade in Ben-
gal was obtained by James Bridgman from Shah Shuja in August
1651 and it was founded upon a farman procured by Davidge
from Shah Jahan a year earlier. The obvious meaning of the latter
document8 was merely to free the Company from the payment of
rahdaries or road-dues on their goods collected in Oudh, Agra,
etc. and sent down to the western coast for shipment; it could
never have been intended at Delhi, even by the wildest extension
of the meaning of the farman, to exempt the English from paying

the usual customs duties on their goods exported from Bengal.
Nevertheless, Bridgman succeeded, by giving a present of Rs.
3,000 in obtaining a nishan from Shah Shuja which adopted the
English contention that imperial farman had freed them from all
duties in Bengal.9 The English factors reported – ‘. . . . if it (the
privilege) can be maintained in its full vigour will in short time
quite (quit) the charges’.10 In 1656 the English obtained another
nishan from Shah Shuja which confirmed the privileges enjoined
in the previous one.11
The Company’s chief concern was to establish exclusive and
preferential privileges in the face of multiform bureaucratic
exploitation. Hence much of its efforts were directed towards
acquisition and extension of such privileges in order to secure
an exclusive control of the local market. But the local potentates
often without any long-term interest in the region which they
governed temporarily, and always desirous to maximise their
immediate income, offered various hindrances to the exclusive
enjoyment of those privileges by the Company. The general
suggestion12 that these officials were eager to treat the foreign
traders as ‘milch cows’ could hardly be accepted in its entirety,
though this does not necessarily negate the exploitative nature
of the former. There were several aspects which complicated
the question of the privileges of the Company. So long as the
Company’s trade in Bengal was small, the Mughal officials were
not greatly concerned at its exemption from customs duties.
And if any difficulties were raised, they were removed by pres-
ents or bribes. The situation, however, changed when the trade
increased considerably and private English ships appeared in
Bengal in great numbers. The issue was further complicated by
the indigenous merchants’ attempts to cover their own goods
with the Company’s dastak, thus illegally securing exemption
of duties for those goods. Moreover, one of the main causes of
the conflict between the local officials and the Company was
essentially one of trade rivalry where the former was backed by
political power which they exercised indiscriminately. Most of
these local potentates in the second half of the 17th century took
active part in both inland and overseas trade, and often tried to
monopolise some sectors of trade which the foreign Companies,
themselves strongly monopolistic, tried to foil. Again, the trouble
arose quite frequently due to the ambiguity of the concessions
which the rival parties interpreted in different ways to suit their
respective interests.
The Company’s usual practice was to procure a parwana
for customs-free trade from the reigning subadars in Bengal on
the pretext that Shah Jahan’s farman – which, as the Company
alleged was lost and hence could never be produced – enjoined
such a concession. Mir Jumla, on the representation of Jona-
than Trevisa that the English goods were free from all duties
by imperial farman, gave the Company a parwana in 1660 for
duty-free trade.13 Similarly in 1672 Shaista Khan confirmed the
nishan of Shah Shuja enjoining the English freedom of trade.14
But when he left Bengal in 1677 – only to come back again in
1679 – the new nawab Fedai Khan and diwan Safi Khan alto-
gether disregarded it. However, in 1678 the English procured
fresh nishan from Prince Muhammed Azam who succeeded
Fedai Khan as governor of Bengal. But the Company was not
content with this practice, and considered it very expensive and
troublesome that it would have to procure a fresh order for free-
dom of trade from every succeeding governor. It was apparently
such considerations which caused the Company to ask for an
imperial grant giving it the freedom of trade. But it seems very
doubtful whether the English Company had at any time during
the period obtained such a farman. As noted earlier, Shah Jahan’s
farman – on the basis of which the English contended that they
were exempted from paying customs – could never have been
intended to give the Company the entire freedom of trade in
Bengal. It was specifically clear in its terms, and only exempted
English goods collected in Oudh, Agra, etc. from road duties.
Moreover, there was hardly any reason why the English should
be exempted from customs while all the merchants, indigenous
or foreigners, were bound to pay it.
Even some of the Company’s factors doubted the alleged
privilege of customs-free trade. In 1669 Joseph Hall, the Chief
of the Balasore factory, wrote – ‘It’s wonder that after so many

years’ trade the Hon’ble Company should write out to know the
privileges they enjoy, which as yet I never could see any more
than which their peshcashes yearly hindered the Nawab and
Governor to demand sight of their pretend (ed) farman, but their
eyes being yearly thus blinded, they were willing to believe what
the English affirm.’15 Again a passage in the Court Minutes of
the English East India Company raises further doubts as to the
bonafide of the concessions claimed by the English. According to
this – submitted to the Court on 4 September, 1674 in the form
of a report by a Committee specially appointed to investigate the
question of trade in Bengal – the privilege was first procured by
Gabriel Boughton and ‘gave the English only a liberty to trade,
paying Custom according to the King’s farman but was altered
and made to pay no Custom according to the King’s farman’.16
The position of the English regarding trade-privileges was per-
haps best expressed by the author of the traditional account of
their trade in Bengal who stated – ‘. . . we have had privileges
continued from time to time . . . with much struggling and great
bribes.’17
However, the English succeeded in obtaining an imperial
farman from Aurangzeb in 1680. But it was interpreted differ-
ently by the factors of the Company and the local officials. It
is significant that the farman was particularly addressed ‘to all
present and future’ governors of Surat. The Company’s version
of the relevant clause is as follows – ‘. . . it is agreed of the English
nation besides their usual Custom of two per cent for their goods,
more one and a half per cent jizyah or poll money, shall be taken.
Wherefore it is commanded that in the said place, from the first
day of Shawwal, in the twenty-third of our reign of said people,
three and a half per cent of all their goods, on account of Custom
or poll money, be taken for the future. And at all other places,
upon this account, let no one molest them for Customs, rahdari,
peshcash, farmaish18 and other matters by the Emperor’s Court
forbidden, nor make any demand in these particulars.’19 But this
rendering into English made all the difference in the meaning of
the farman. Read as above with a full stop after ‘for the future’, it
would appear that the farman was intended to exempt all English
goods from Customs duties at Surat and in all other place. But if
the full stop is placed after ‘and at all other places’, the meaning
is completely reversed. The Company’s factors tried to interpret
the farman in the former sense as it was to their own advantage,
which in the proper context, seems to be wholly incorrect. As
Sir J.N. Sarkar observed – ‘Payment of duty on the goods landed
at Surat could by no exercise of ingenuity exempt from duty a
different cargo that had come from Home or China not through
Surat but directly to Bengal and which therefore could not have
paid duty at Surat. The English traders in Bengal had no reason
to claim exemption from a law of the land, which the merchants
of all other nations had to obey’.20
Some factors of the Company were well aware of the real
intention and meaning of the farman. Job Charnock wrote
from Patna that the diwan alleged that the farman ‘was for all
goods carried to Surat and not to Bengal ports’.21 The traditional
account of English privileges, written in 1685, states – ‘When the
farman came, though there was a dispute upon it, yet, Haji Safi
Khan, being our friend, a parwana was obtained of the Nawab
and said Haji Safi Khan for free passing our goods upon the
farman, interpreting the said farman in our favour’. It further
goes on to add that the next diwan Bulchand pointed out that the
farman did not at all concern Bengal, it being directly addressed
to the governors of Surat and ‘the meaning was that those that
paid Custom at Surat should not be molested in any other place’.
The diwan also asserted that if the English could have a rewana
or receipt in a merchant’s name that they had paid customs at
Surat, he would not demand it from them.22 Again shortly after
the receipt of the farman, the Dacca factors reported that it was
‘not speaking very clearly as to that point (customs-free trade)
without some adequate bribe given’.23 In 1700 Edward Littleton,
a member of the Bengal Council and later on the President of
the New Company in Bengal, wrote about the farman that it
was ‘so ill penned in favour of the English that some if not most
were then of opinion it had been better stifled than produced
and made use of . . .’.24 That the farman was never meant to
exempt the English in Bengal from customs duties was confirmed

by the emperor in 1682. In April that year the English came to
know that Haji Safi Khan, the diwan, had received orders from
Aurangzeb requiring the English to pay 3½ per cent customs on
all goods exported from or imported to Bengal.25 The contro-
versy and conflict regarding the privileges, however, dragged on
until the outbreak of war in 1686.
Abbreviations and Manuscript Sources
BM Addl Mss British Museum Additional Manuscript.

EFI English Factories in India, ed., W. Foster.
Home Misc Home Miscellaneous Series, India Office (Common-
wealth Relations Office) Library, London.
Orme Mss Orme Manuscript, India Office Library.
Rawl Rawlinson Manuscript, Bodleian Library.
Factory Records (India Office Library): Calcutta, Dacca, Fort St.
George, Hugli, Misc.
Court Books India Office Library.
Notes
1. O.C. 2830, vol. 26, 23 November 1659; E.F.I., 1655-60, p. 296.

2. O.C. 5702, 5704, vol. 48; Factory Records, Calcutta, vol. I, pt. II, ff.
93-4, Factory Records, Dacca, vol. 1, pt. II, ff. 17-22.
3. Charles Stewart, History of Bengal, London, 1813, pp. 251-2; Robert
Orme, History of the Military Transactions of the British Nation
in Indostan, vol. 1, London, 1803, p. 8; H. Yule, ed., The Diary of
William Hedges, vol. III, London, 1889, p. 167. For Boughton and
Privileges of the Company, see, William Foster, ‘Gabriel Boughton
and the Grant of Trading Privileges to the English in Bengal’, Indian
Antiquary, September 1911, pp. 247-57.
4. Thomas Bowrey, A Geographical Account of Countries Round the
Bay of Bengal, 1669-1679, ed., R.C. Temple, Cambridge, 1905,
pp. 233-4; Orme Mss., O.V. 12, ff. 3-10; Factory Records, Fort St. George,
vol. XXX, ff. 35-40; Home Misc., vol. 68, ff. 27-34.
5. O.C. 2186, vol. 22, 14 December 1650; E.F.I., 1640-50, p. 333.
6. William Foster, Indian Antiquary, op. cit., p. 253.
7. Factory Records, Fort St. George, vol. XXX, f. 35; Orme Mss., O.V. 12,
ff. 3-10.
8. B.M. Addl. Mss. 24, 039, f. 5; E.F.I., 1655-60, pp. 414-15.
9. B.M. Addl. Mss. 24, 039, f. 6; E.F.I., 1655-60, p. 111.
10. O.C. 2246, vol. 22, 14 January 1652; E.F.I., 1651-4, p. 97.
11. B.M. Addl. Mss. 24,039, f. 7; Home Misc., vol. 629, ff. 5-8; E.F.I.,
1650-60, p. 111; Fact. Records, Misc., vol. XIV, f. 346; Hedges’ Diary,
op. cit., vol. III, p. 189; R.C. Temple, ed., The Diaries of Streynsham
Master, vol. II, London, 1911, p. 21.
Hague, 1962, p. 16.
13. B.M. Addl. Mss. 24,039, f. 8; E.F.I., 1655-60, p. 416.
14. Factory Records, Misc., vol. 3, f. 159; Home Misc., vol. 629, ff. 43-6;
O.C. 3029, vol. 28, 21 June 1664.
15. O.C. 3275, vol. 30, 2 May 1669.
16. Court Book, vol. 29, 4 September 1674, f. 72; E.B. Sainsbury, ed.,
Court Minutes of the East India Company, 1674-76, p. 81.
17. Factory Records, Fort St. George, vol. XXX, f. 40, Orme Mss., O.V. 12,
ff. 3-10.
18. Rahdari – road dues; peshcash – tributes; farmaish – commission for
goods.
19. The English version of the farman is to be found in Factory Records,
Fort St. George, vol. XXX, f. 38 and C.R. Wilson, Early Annals of the
English in Bengal, vol. I, Calcutta, 1895, pp. 78-9. I have been fortunate
to discover a true copy of the farman, attested by Qazi Abdul Rahim,
in the India Office Library, O.C., 4702, vol. 40. There is another copy
of the farman which varies in minute details from the attested one in
the British Museum, c.f., B.M. Addl. Mss., 24,039, f. 28 recto.
20. J.N. Sarkar, History of Aurangzeb, vol. V, Calcutta, 1924, p. 322.
21. Factory Records, Hugli, vol. 7, pt. III, f. 113.
22. Factory Records, Fort St. George, vol. XXX, f. 38.
23. Factory Records, Hugli, vol. 2, pt. II, f. 99.
24. Rawl. A 302, f. 207.
25. Factory Records, Fort St. George, vol. XXX, ff. 38-9; Factory Records,
Dacca, vol. I, pt. II, f. 32.
chapter 4
The Problem of Financing East India

Company’s Investments in Bengal,
1650-1720*
The success of the English East India Company’s trade in Bengal

depended on several factors other than the purely economic ones
of supply and demand. Of these, an important factor was the
Company’s organisation of its commerce, specially the financing
of investments in Bengal.1 Throughout the period under review,
the Company in Bengal, as in other parts of India, suffered from
a chronic shortage of funds for investment. The problem of inad-
equate working capital was accentuated by the poor demand
for the Company’s European imports in Bengal. Though the
quantity of merchandise imported by the Company was not gen-
erally large, the market for even this small amount was strictly
limited. The only item for which there was a steady demand in
Bengal was bullion and specie. But as their supply was seasonal
and often limited, the Company had to explore additional
means for financing its investments. The extensive credit market
in Bengal, short-term direct borrowings from the servants of
the European Companies and free traders, and the Company’s
coastal and freight trade to various Asian ports ultimately played
a significant role in reducing the shortage of liquid capital for the
Company.
The story of the English East India Company in Bengal was
essentially one of expanding capital investments for procuring
*Indian Economic and Social History Review, vol. VIII, no. 2, 1971,
109-33.
Problem of Financing EIC’s Investments in Bengal | 61
commodities for the English and other European markets. The

actual financing of the trade was always a complicated and dif-
ficult matter for the Company. During the early voyages in the
beginning of the 17th century, the Company’s practice was to
buy eastern commodities, mainly spices, with gold and silver. But
the mercantilist theory and a limited supply of precious metals
inhibited large exports of bullion and species which could be
shipped to the East Indies. As a result, the Company was obliged,
specially in the later period, to send out along with bullion Eng-
lish manufactures and goods which were in little demand in the
Asian markets. There was, however, one commodity, namely
Indian cloth, which was readily acceptable to the producers of
spices and hence, if procured in adequate quantities, could make
up for the shortage of bullion and specie. This urged the Com-
pany to exchange cheap Indian cotton goods with spices of the
East Indies. Thus trade ceased to be bilateral – between England
and the East Indies – and became multilateral or triangular. This
was the familiar pattern of the Eastern trade during the first
half of the 17th century. But after that as the spice trade was
monopolised by the Dutch, there was no need for the English
Company to exchange Indian cotton goods for the spices of the
East Indies. Now Indian cotton and silk piece goods had become
the principal attraction of the English Company’s Eastern Trade.
These commodities had gained a substantial market in England
and on the Continent. And despite the agitation waged against it,
the export of bullion increased gradually along with the export
of English manufactures. But at the same time the agitation
against the export of bullion and the difficulty of procuring it
induced the Company to explore additional or alternative means
of financing the Indian investments.
There were several methods adopted by the Company to
finance its expanding investments in Bengal during 1650-1720.
Throughout this period, the export of bullion and specie was the
normal means of financing the Bengal trade. The capital avail-
able for the purpose of investment was, however, limited in the
early years of the Company’s trade in Bengal. But this did not
pose a serious problem as the volume of export from Bengal
was small during those early years. The main difficulty faced by
the Company was in providing funds for the investment in the
proper season which generally started after the shipping season
was over.2 As the price of most of the commodities went up con-
siderably (sometimes by 40 to 50 per cent)3 during the time of
shipping, the Company had to start investment for goods just
after the departure of Europe-bound ships i.e. generally from
February or March, and hence it always needed a stock to be
left for such investments in India after paying for the previous
year’s goods. As early as 1651 the Company resolved to keep
the factories supplied with ‘a competent stock beforehand’ and
the factors wrote that ‘this was the only way to make the trade
flourish’.4 But generally throughout the period the factories were
hardly left with adequate stock after the ships had left. To obvi-
ate the difficulty the Company sent in the early years stock to
Bengal by bills of exchange from other factories. Thus as early
as 1651 the Bay factory received nearly Rs. 6,000 from Pegu in
bills of exchange.5 Again in 1652 the Bengal factors were asked
by the Surat factory to provide sugar and gumlac, and they were
asked to draw bills of exchange for the purpose on the Agra fac-
tors to the extent of Rs. 15,000 or else borrow to that amount.6
In December 1652 the Agra factory was again asked to send
Rs. 10,000 to begin sugar investment in Bengal as there was
about 40 per cent difference between prices in February and
those at the time of shipping.7
The supply of capital, however, was gradually on the increase
and as the export from Bengal grew steadily in volume, so did
the import of bullion and specie. Throughout the period under
review, the investment in Bengal was dependent to a large extent
on the Company’s export of bullion from England and was sel-
dom independent of such financial assistance. But, besides the
problem of inadequate supply of bullion, the Company had to
fact some peculiar problems in Bengal in converting the bullion
into local currency required for investments. Generally during
this period, the Company converted precious metals, whether
silver or gold, either by selling them to local shroffs or money-
changers, or by coining them in the mint at Rajmahal. Sometimes
when conversion was not possible by either of these two ways

due to the shortage of time required for sending and coining
the bullion in the mint or absence of substantial merchants to
take off the bullion, the Company had to pay for its investments
partly in foreign silver or gold. Thus in 1678 the Hugli Council
persuaded the merchants to take silver rials as part payment
against investments.8 Next year the weavers in Kasimbazar were
paid in silver and the silk merchants in gold.9 Even the most
prominent merchants were often thus paid by the Company. In
1679 Mathuradas received 1,500 tolas of gold as barter for his
goods supplied to the Company.10 But the merchants generally
preferred payment in cash thus making the problem of invest-
ment more complicated for the Company. In 1678, both in Hugli
and Dacca, the merchants could be persuaded to take only half
of the value of the contracts for piece-goods in rials and the rest
had to be paid in cash within 8 to 10 days.11
Of the precious metals sent to Bengal, the Company’s factors
preferred silver to gold since the former had a better market in
Bengal. Silver rials, popularised by the Portuguese throughout
Asia, were in great demand. It was easier to convert the rials into
local currency than any other specie and hence they wee more
easily accepted by the merchants against contracts for goods. In
1677 the merchants in Hugli complained that they could not sell
cruzadoes timely enough to start investment and asked for rials
instead.12 The attitude of the Bengal merchants in this respect
was quite rigid. The Kasimbazar factors reported in 1679 that
‘merchants will give much more for coin both of gold and silver
known to them than for ingots which are or at least specified of
the same finish.’13 As the gold market in Bengal was not profi-
table and as the Company had to suffer losses in converting
gold whether by selling or minting, the Bengal Agency always
discouraged the export of gold from Europe for the purpose
of investment in Bengal. In 1678 when the Company ordered
£10,000 as ‘quickstock’ for Bengal – the greater part of it in gold
and only a small quantity in silver – the factors wrote that it
would certainly occasion a great loss for the Company.14 Again
the Hugli factors wrote in 1680 – ‘We always looked upon gold
as merchandise it being so even when in mohars but silver is

cash or sooner converted thereunto.’15 During this period, Dacca
was the chief market for gold where it was reported to have
produced 10 per cent more than anywhere else.16 Minting the
gold entailed a loss of 20 per cent for the Company. The Court
of Directors reported that even in Dacca one ‘great ingot’ was
disposed of in 1685 at a loss of about 30 per cent and in another
similar transaction at Patna the loss ranged between 12 to 14 per
cent.17 As usual, they attributed this loss – with little justification
it seems – to the dishonesty of their servants in Bengal. As to the
low price of gold and mohars, the factors wrote in 1679 that it
was due to the little demand, ‘the government being as yet poor
and not arrived to the hoarding age’.18 The market price of gold
mohars appears to have been subjected to sharp fluctuations
from time to time as it is evident from the following table19 –
Date Place Price of gold mohar

Early 1670 Hugli Rs. 15-2 an. to Rs. 15-4 an.
February 1677 Kasimbazar Rs. 13-14 an.
April 1677 Kasimbazar Rs. 13-14 an.
July 1677 Kasimbazar Rs. 13-10 an.
August 1678 Dacca Rs. 13
December 1678 Kasimbazar Rs. 12-13 an.
September 1684 Malda Rs. 12-6 an. to Rs. 12-8 an.
September 1711 Hugli Rs. 15 to Rs. 15-8 an.
September 1711 Calcutta Rs. 14-8 an. to Rs. 15-8 an.
In 1679 the Bengal factors reported that the Company would

lose 22 per cent on the sale of gold, and in order to reduce the
loss, they asked for larger supplies of silver.20 The low price of
gold and gold mohars which characterised the late ‘seventies
continued to embarass the Company, and the Directors resolved
in 1686 to send henceforth only rials to Bengal which might be
‘exchanged into Rupees wihtout the trouble, charges or prejudice
of the mint and become much sooner useful for investments’.21
The exact mechanism of price fluctuations of gold is not clear.
However, the reasons for such fluctuations can be traced to the
larger supplies of gold by the Company, the imposition of a

5 per cent duty for coinage in the mint, the payment of soldiers
in mohars sometimes during this period and the frequent change
of subadar in Bengal during the late ‘seventies’.22
Though silver was in greater demand in Bengal, the Company
quite often encountered difficulties and losses in disposing of or
converting it. Coining in the mint yielded more but in the early
years the Company preferred selling silver to the shroffs because
of the hazards involved and time required in the former process.
Generally 100 pieces of silver rials fetched about 206 to 209
sicca rupees, sometimes as low as 205 and at the most 210 rupees
throughout our period, though in the mint they produced 219
to 221 sicca rupees excluding the charges and customs. The net
yield from 100 rials was about Rs. 213-14 an.23 The fluctuation
of silver price depended mostly on the rates of exchange to Agra.
Any decline in this rate of exchange had its immediate effect on
the price of silver in Bengal and resulted in a consequent fall in the
latter and a contraction in the silver market. John Kenn gave an
interesting report on the mechanism of the exchange operation
in 1661. He wrote – ‘To pay money in Kasimbazar and receive it
in Patna, upon Bill of Exchange a month after date, always yields
profit. I have known it from 1 to 6 per cent, when the silk sells
well at Agra, the produce is usually sent to Kasimbazar in money
overland, which is the reason that when great sums of money
come from thence the exchange of money to Patna in one day
data sometimes fall 2½ to 3 per cent,’24 In 1678 the Kasimbazar
factors reported ‘that exchange to Agra is much fallen from 99
to 96 rupees the 100 and leave come to the Gujarat merchants to
draw thither which makes us fear our silver will not sell so soon
as otherwise it might have done’.25 Next year they wrote that
‘rise in the exchange caused abatement’ in the price of silver.26
Besides the rates of exchange to Agra, other contributory factors
for the fluctuation of silver price were the supply brought by the
Interlopers and other merchants, and the imposition of a 5 per
cent customs on all treasure coined in the mint. The Company’s
factors in Kasimbazar wrote in 1682 that the low price of silver
was ‘occasioned by the Interlopers’ treasure being sole here at
underrates besides 5 per cent custom upon all treasure at the

mint imposed lately’ by the king.27 The problem of selling silver
was accentuated by the fact that substantial merchants were not
often available in most of the factors to take off silver with ready
money even at the price which entailed a loss for the Company.
This was specially the case in Hugli and Malda factories. In
1678 as also in 1684 and 1685 the Hugli factors reported that
they could not sell either silver or gold at all.28 The report of the
Malda factors in 1682 similarly conveyed their inability to sell
any treasure.29
As a result, the general pattern for the disposal of the Com-
pany’s treasures was to send them to Kasimbazar which was
the only substantial market for precious metal throughout our
period.30 The obvious advantage at Kasimbazar was that it
was the main trading centre and the resort of great indigenous
merchants, and the mint was nearby. If the treasure could not
be sold, it could conveniently be sent to Rajmahal to be coined
there. But even in Kasimbazar, as the factors reported in 1682, it
was sometimes difficult to find any merchant to buy the treasure
for ready money.31 Again, most often the shroffs who bought
the treasure paid only half in ready money and the other half in
a month’s time. This is evident from the transactions between
the Company and its important shroffs and merchants like
Sukanand, Chaturmal, Haridas, Nagar, Goculchand etc. during
this period.32 To obviate all these difficulties, connected with the
sale of silver, Master entered into a ‘firm and lasting contract’
in 1679 with the great shroff and merchant, Chaturmal Shah,
who agreed to take all the bullion imported by the Company at
a fixed rate.33 According to this contract, Chaturmal would pay
210 sicca rupees for 100 rials, and 13 rupees sicca for each gold
mohar besides various rates for other kinds of bullion and spe-
cie. The bullion was to be weighed and delivered and ‘the risk of
the same to Rajmahal and of money from thence to Kasimbazar
to be upon the Company’s account at Chaturmal’s charge and
at his risk while at Rajmahal’. This was a satisfactory arrange-
ment and relieved the Company of the uncertainty in obtaining
cash for investments as also reduced the chance of loss through
violent fluctuations in the prices of bullion. But unfortunately

for the Company, the contract did not last long as Chaturmal
failed to comply with the agreement due to the loss he suffered
through it.34
The coining of precious metals in the mint at Rajmahal,
though yielded more than their sale value in the open market,
was no smooth affair. Still the Company had to take recourse
to coining its treasure after being disappointed with the bullion
market in Bengal. In 1685 the Hugli General Letter to Madras
stated that the Bengal Council had stopped the sale of silver
there. But the coining of the Company’s treasure in the Mughal
mint involved many problems and hindrances. The road and the
distance from Hugli to Rajmahal via Kasimbazar were hazard-
ous with the attendant risk of losing the whole boat-load of
treasure or money on its way to or from Rajmahal due either to
bad weather or robbery.35 Again coining in the mint took con-
siderable time, often more than a month, and sometimes two or
three months.36 Another inhibiting factor against coining in the
mint was the imposition of a 5 per cent customs on all treasure
in 1677.37 Other hindrances too were there. In 1683 Bulchand, a
local faujdar, sent a great quantity of copper to be coined which
took up so much time at the mint that it was said the English
could have coined 4 lakhs of rupees during this time.38 Next
year the English were threatened by Rafiuzzaman, the faujdar of
Rajmahal and Malda, that the Company would be forced to sell
all its gold mohars in the mint to him at his own price.39
In order to obviate the difficulties connected with coining
of bullion in Bengal, the Company finally resolved in the early
years of the 18th century to coin all imported treasures in the
mint at Madras, and then despatch them to Bengal. In 1705 the
Court of Directors wrote to Bengal that they had sent silver to
Madras from where it was directed to be sent to Bengal after
being coined in the Company’s mint there, thus saving the time
and hazard of sending the bullion to Rajmahal.40 It seems that
from then onward it became the general practice to coin all the
bullion in Madras from where it was despatched to Bengal. In
1707 the Directors wrote they were glad that the Bengal fac-
tors did not send any silver to Rajmahal and asked them not
to alter the practice except in case of urgent necessity.41 The
Madras rupees, though claimed by the Company to be of equal
‘weight and matt’ as the slccas or current rupees of Bengal, were
deemed two per cent worse than the siccas by the shroffs. This,
as the Company thought, was due to the intrigues of the shroffs
who wanted to make a profit. In 1708 the Madras rupees in the
Bay were current at 9 per cent discount and the siccas at 9½
per cent The Directors expected that the difference between the
siccas and Madras rupees would be less when the latter were
once ‘very current’ in Bengal. Even if it did not, they thought
coining at Madras was much more advantageous considering
the cheapness, speed and safety of coining at the Fort as against
the hazards and risks involved in sending bullion to Rajmahal.42
But in 1709 when the government refused to accept Madras
rupees into the king’s treasury, their batta sharply fell from 9 to
7 per cent.43 Alarmed at the loss the Company would thus incur,
the Calcutta Council wrote to Madras to send them henceforth
all the uncoined silver which they now designed to coin at Mur-
shidabad for which, as they claimed, they had already obtained
a parwana from Murshi Quli Khan.44 But the Directors did not
accede to this proposal considering the advantages of coining at
Fort St. George – namely, saving the duties of the mint as also the
hazards of having the bullion seized, lost or stopped by the trou-
bles in the country. The Company knew that the best solution, so
far as the coining of bullion was concerned, was to have a mint
of its own in Bengal – like the one it had in Madras, or at least
to have the liberty of free use of the mints in Bengal. As early as
1687 the Company had asked for permission to establish a mint
in Hugli in one of the clauses of the proposed treaty between
the English and the Bengal subadar.45 Then onward it urged the
Bengal factors frequently to try to get the liberty of a mint in
Calcutta. Though in 1717 Emperor Farrukhsiyar’s farman gave
the English the liberty of a mint, the concession proved to be
nominal. Murshid Quli in collusion with the great indigenous
banker Jagat Seth prevented the Company from enjoying the
liberty of free coinage in the mint at Murshidabad.46
Besides bullion and specie, the exportation of which seemed

always to fall short of the Company’s actual requirements
throughout the period, the Company had to import differ-
ent English manufactures and goods to pay for the increasing
exports from Bengal. But this did not help the Company very
much in solving the problem of financing the investments since
there was very little demand for these commodities in Bengal.
Nevertheless the Company had to import these wares into Bengal
due to the unabated agitation against exportation of bullion or
precious metals from England.47 But the Company’s factors who
were fully aware of the little demand for the European wares
requested the Directors as early as 1669 not to send more than ¼
of the total investment in English manufactures and goods.48 But
even this comparatively small amount of European commodity
could hardly find a favourable market in Bengal. The factors
wrote in great disappointment – ‘it is of little or no demand in
the country and therefore of low price; the truth is we have no
people for trade, they knowing little or nothing but the taking
of the Honourable Company’s money and therewith picking up
cloth among the weavers’.49
In an attempt to solve the problem of inadequate funds for
investment, the Company in the early years bartered English
wares for its investments in Bengal. Most of the merchants
were obliged to take half the value of ‘Europe-invest’ in English
manufactures and goods. But this practice often led to frequent
disputes and ill-will on the part of the indigenous merchants who
were sometimes saddled with unsaleable goods. The Company,
too, on its part suffered loss through such barter, sometimes
the loss running as high as 20 per cent.50 Moreover the goods
which the Company received against bartering European com-
modities were often of inferior quality. Hence at one time the
Court disapproved of the barter system. In 1674 the Directors,
‘desiring to keep the reputation of the Indian commodities for
their goodness’, asked the Hugli Council not to barter but to sell
and buy goods for money unless they could barter for as good
as those bought for money.51 Similar was the vein of their letter
in 1677 – ‘We observe the reason you give for dearness of cloth
we complained of and do wholly dislike that way of barter and

therefore we recommend you to sell our goods for money’.52 But
as the bullion fell far short of the amount and also as the market
for English wares was very limited, the Company could hardly
do without bartering imported goods for Bengal commodities. It
obliged the reluctant merchants to take off a quantity of Europe-
goods along with cash against their investments for the Company.
The problem of disposing of English manufactures and goods
was aggravated in 1702 when the Company was required to
send one tenth of its total export in the product and manufacture
of England.53 The Court directed the factors to increase ‘the vent
thereof for we continue in the same mind rather to have it dis-
posed of in greater quantities than for great profit’.54 But all the
same the demand for European wares remained highly inelastic
and the market hardly expanded.
As a result financing the investment remained a great problem
for the servants of the Company and hence the factors in Ben-
gal turned to other sources for supply of capital for financing
the investments in the most appropriate season of the year. In
the absence of sufficient quantitative data, it is not possible to
compute the precise amount by which the Company’s capital
supply fell short of the actual requirements in a particular year. It
does not seem that the value of bullion and merchandise sent to
Bengal in a particular year (except in those years when it was not
quite possible to send ships directly to Bengal because of wars)
fell much short of the amount required for investment. But, as
we have seen earlier, the conversion of precious metals by selling
them to merchants or coining in the mint took considerable time.
Again most of the imported merchandise lay unsold for a long
time, thus aggravating the problem of providing working capital
for the different factories. But perhaps the most important factor
which induced the Company’s servants to turn to other sources
for supply of money was the fact that the proper time for giving
out advances for investment lay between February and June or
July. But by then, after paying for the previous year’s investment,
the Company was hardly left with any substantial amount to
start investment for the ensuing year. Moreover, the Company
often remained indebted to the merchants for past investments

even after the departure of the ‘Europe-ships’. The Kasimbazar
factors reported in November 1700 that they were indebted by
about a lakh of rupees for the previous year’s investments.55
The Bengal factors frequently wrote to the Court of Directors
insisting on the advantages of a double stock which should be
kept in Bengal after the departure of the ‘Europe-ships.’56 The
Directors seem to have appreciated the benefits following from
such a ‘stock left beforehand’ but did never actually put it into
practice.57 Hence throughout the period the factors had to seek
alternative sources of supply for making investment in the proper
season.
Of the various additional or alternative sources of supply,
the most useful and easily available was the local capital mar-
ket which the Company found to be efficient and adequate for
its purposes. Throughout the period the Company borrowed
money from local merchants and thus provided investment in the
proper season. It is however not possible, in the absence of any
systematic account in the Company’s records, to compute the
amount borrowed annually by the Company for such purposes.
Still some idea could be formed from scattered information in
the records. Table 1 indicates the amount of the Company’s
debts to the indigenous merchants in different factories under
certain specific dates.58
Generally the Company used to borrow money mainly
from Kasimbazar and from there send out money to different
factories, specially to Patna and Dacca by bills of exchange or
letters of credit on the issuing merchants’ agents. The Company
also borrowed money in Hugli, Balasore and Dacca. In other
words, wherever the factors needed money and found it avail-
able in the local market, they resorted to borrowing. But it seems
that by borrowing at Kasimbazar the Company gained certain
advantages. Besides being the resort of numerous shroffs and
merchants, Kasimbazar’s proximity to Rajmahal enabled the
Company to pay off the debt after coining its treasure, thus sav-
ing interest charges which were always very high. As a result
the Company sent out a higher proportion of its treasure and
Table 4.1
Date Place Company's debts to

local merchants (in Rs.)
18 May 1683 Kasimbazar 250,000
29 October 1683 Kasimbazar 350,000
11 June 1684 Kasimbazar 100,000
15 September 1685 Dacca 80,000
27 April 1685 Kasimbazar 270,000
6 October 1685 Kasimbazar 250,000
21 December 1695 Calcutta 147,000
29 February 1696 Calcutta 300,000
15 February 1700 Calcutta 300,000
26 May 1701 Kasimbazar 250,000
4 February 1702 Kasimbazar 200,000
15 August 1702 Calcutta 700,000
merchandise to Kasimbazar for sale there. But later on, specially

during the first two decades of the 18th century when Calcutta
rose to prominence and became the resort of important indig-
enous merchants, the Company, it seems, borrowed mainly in
Calcutta. It would have been of great interest if it were possible
to compute the amount of money supplied yearly by the Kasim-
bazar merchants to the Company. But here again the paucity of
detailed information stands in our way. However, we can compile
the full amount of the Company’s debt for one year from March
1683 to February 1684. In these twelve months the Kasimba-
zar merchants provided the Company with about Rs. 200,000.
Between February 1683 and January 1684 Rs. 168,000 were
paid by the Company to the Kasimbazar merchants as payment
of debts while another Rs. 76,000 remained unpaid. During
these twelve months the Company paid out about Rs. 20,000
to the Kasimbazar merchants as interest for debts.59 Some idea
regarding the amount of money borrowed at other factories can
be formed from the information scattered here and there in the
records. In 1684 the Hugli Council asked the Balasore factory
to take up Rs. 100,000 at interest not exceeding 1 per cent per
month.60 In 1699 the Company’s treasurer received Rs. 40,000
at interest from Metersen (Mitra Sen or Mathura Singh?). In the

same year the Calcutta Council agreed to borrow another Rs.
60,000 from him.61 As early as 1682 the Company borrowed
Rs. 50,000 in Dacca from the same merchant.62 Only at Patna,
it seems the Company did not borrow much locally though it is
not possible to ascertain any reason for it. The Patna factory was
generally provided with money from other factories. In 1679
the Kasimbazar factors took up Rs. 30,000 at 1¼ per cent per
month from Sukanand Shah and sent the amount to Patna.63
Though the local capital market in India helped the Company
to overcome the difficulties resulting from a shortage of fund
for investment in the proper season, there were certain factors
which inhibited it from borrowing freely in Bengal. The chief
deterrent in this respect was the high rate of interest prevailing
in Bengal during this period and which ranged between 12 to
18 per cent per annum.64 This rate was rightly considered very
high by the Company as money was available at 8 per cent per
annum in Madras or 9 per cent at Surat.65 Consequently the
Directors urged their factors in Bengal not to borrow money
locally unless it was absolutely necessary. As early as 1677 they
wrote to Bengal ‘. . . we desire what may be (necessary) to avoid
paying interest which is so high in the country but when you see
there is absolute necessity for it for a little time till our own stock
can be coined, we leave it unto you to do what may be requisite
therein’.66 The exorbitant rate of interest in Bengal was regarded
by the Court as the ‘rank poison’ to their commerce and hence
they asked the factors to prevent running into debt ‘the inter-
est of which eats deep and insensibly’.67 But as Company could
hardly avoid borrowing money altogether, it accepted it as a
necessary evil and tried to beat down the rate of interest by vari-
ous means. In the early ‘eighties the Court of Directors claimed
to have reduced the rate of interest at Surat to 6 per cent by
sending ‘great stocks of money’ there. They reported ‘. . . money
was grown so plentiful there that any man in full credit might
take up what he would at 4 per cent’. Such a rate of interest was
of considerable advantage to the Company which asked Surat
to go on buying goods throughout the year by which it would
save about 20 per cent in the price of goods while the interest
for such a period (six months at the most) would be only 3 per
cent. With the expectation of such advantages, the Bengal factors
were asked to reduce the interest of money to that prevailing
at Surat or to 7, 8 or 9 per cent at most ‘by any contrivance or
diligence or by any contract with the great moneyed men of the
Bay’. The Court further wrote, presuming such rates would be
available in Bengal, that it would ‘probably be our advantage
to be always in debt there £ 100,000 or thereabout’.68 In 1682
the Directors asked the Bengal Council to begin an indigenous
bank with a capital of £ 200,000 from the indigenous merchants
there.69 But it seems the Company did neither send a sufficiently
large stock to Bengal in an attempt to reduce the rate of interest
as it did in Surat nor could it form an indigenous bank to relieve
it from borrowing money at exorbitant interest. It also tried,
though in vain, to form a joint stock of merchants who would
provide investments with their own money.
The problem of financing the investment was made more
difficult for the Company because of the fact that the rate of
interest as also the availability of money depended to a large
extent on the rate of exchange to Agra. If the latter rate was
high, money would become scarce in Bengal and consequently
the rate of interest would also be high. Sometimes even at this
high rate of interest it was difficult for the Company to pro-
cure any money. In 1682 the Kasimbazar factors wrote that the
place was ‘unprovided of cash by reason the exchange to Agra
is so exceeding high’.70 This was the pattern of the credit mar-
ket throughout the period. Even as late as 1700 the factors in
Kasimbazar reported – ‘We cannot get money at interest here
being very little ready money in the country and the exchange
current from hence to Delhi and Agra is but 6 per cent and the
shroffs make use of what ready money they have that way’.71
Again the merchants or shroffs who lent money to the Company
would often demand it back when the exchange to Agra took a
sudden rise so that they could employ it more profitably. In 1684
the Kasimbazar factors reported that the merchants demanded
their principal and had become ‘very importunate with us for
it’. They further wrote – ‘We cannot well avoid paying now, the
exchange running high aloft which is the reason they want it to
employ that way to their better advantages’.72 Any rise in the
rate of exchange to Agra also impeded the sale of treasure by the
Company. In 1678 the factors in Kasimbazar reported that they
failed to come into contract with Gujarati merchants for sale of
their treasure as the latter employed all their money in exchange
to Agra, following a sudden rise therein.73 The mechanism of
this operation can be understood as follows. A favourable rate
of exchange on Agra causes the Indian merchants in Bengal to
engage in arbitrage transactions thus causing a temporary tight-
ness in the local money market. Since the sale of the Company’s
silver required liquid funds, the merchants were obviously not in
a position to offer attractive prices in view of their operations in
bills of exchange.
There were other factors which hindered the Company
from borrowing money locally for financing the investment.
Sometimes the official exploitation of the Company in other
parts of India led to its loss of credit in Bengal. Thus in 1702
Janardan Seth, the Company’s broker, failed to borrow money
on behalf of the Company in Hugli where a report was cur-
rent that the Dutch and the English factories in Surat had been
plundered by the government to the extent of above six lakhs
of rupees to make satisfaction for the piracies committed on the
‘mocco’ (Mocha) and Malacca shipping in the previous year.74
The late arrival of Europe ships also sometimes led to the loss
of credit for the Company. The Calcutta factors wrote in 1702
that Fatechund Shah refused to accept their letter of credit to
pay the English ten thousand rupees at Patna as ‘no ship was
yet arriving from England.’75 Again most often the merchants
clamoured for their money as soon as the ships arrived from
England, thus aggravating the Company’s problem of finance.
In a general report in 1669 the Company’s factors wrote – ‘If we
chance to get into merchants’ debts, they call for their money
as soon as our ships arrive and nothing will serve their turns
but silver, they will not stay coining it because they will have
the advantage themselves.’76 Sometimes the merchants who lent
money were factors or agents of other merchants and demanded

payment of their money when their masters asked for it, thus
putting the Company in an awkward position. The Kasimbazar
factors reported in 1685 that three of their merchants to whom
they owed Rs. 50,000 at interest had been ‘very importunate’
with them for their money as the latter’s masters ‘called upon
them for it’.77 In the same year Sibram Poddar and others who
were poddars to the Dutch, and to whom the English Company
was indebted for Rs. 60,000, demanded their money back, part
of which, as the factors believed, belonged to the Dutch.78 But
despite all these limitations, the credit market in Bengal was the
most important as an additional source of supply for financing
the Company’s investments.
Apart from indigenous credit market, the Company often
turned to other sources to replenish its finance in Bengal. Of
these the Dutch were the most important source of supply for
the English Company, especially in the early years of its trade in
Bengal. The servants of the Dutch East India Company generally
remitted money to Europe through the English Company. The
general practice was that these factors deposited their money
with the Company in Bengal and received a bill of exchange
which their agents or correspondents cashed in Europe. In 1664
the Court of Directors made an agreement with John Lethieulier,
a London merchant, to receive Rs. 20,000 to 25,000 from Jan
Velters who was a factor of the Dutch East India Company in
Bengal. Accordingly in 1665 Jan Velters paid Rs. 25,000 to the
English factory in Hugli and received a bill on the Company at
2s. 6d. per rupee.79 This was obviously a contrivance on his part
for getting money remitted to Europe without the knowledge
of his employers. Similarly other Dutch factors remitted money
through the English Company. The practice became so common
that the Company authorised its factors in Bengal in 1669 to
take up from the Dutch up to £ 10,000 regularly at exchange.80
It was not only the ordinary factors but even the Chiefs or Direc-
tors of the Dutch factories in Bengal seem to have indulged in the
same practice.81 The English factors in Hugli reported in 1681
that the Dutch Director there offered to pay Rs. 10,681 into the
Company’s treasury and to take bill as usual for it on the Com-

pany in England and that they had agreed to the transaction.82
For obvious reasons the Company preferred taking up money
by this sort of exchange than borrowing locally, and in 1674 the
Court of Directors gave liberty to the Bengal Council to take up
of the Dutch and draw upon them to the value of £ 20,000 annu-
ally.83 However it is not possible to calculate precisely the exact
amount of money which was actually received from the Dutch
factors in Bengal for lack of quantitative data, except perhaps
for one or two particular years. In 1669 the English Company
received Rs. 65,000 (£ 8,125) from the Dutch against bills
of exchange.84 Again in 1673 the amount was Rs. 110,000
(£ 13,750) and next year it decreased to Rs. 60,000 (£ 7,511,5s).85
But sometimes, especially during the Anglo-Dutch wars, the
Dutch source of supply was not available, thus aggravating the
Company’s already acute problem of financing the Bengal trade.
In 1669 the factors wrote that the Dutch had stopped further
business with them in bills of exchange.86 Again in 1674 it was
reported that no money was to be had by exchange from the
Dutch due to the war between the English and the Dutch, despite
all assurance from the Company to honour and pay the bills as
in peace time.87 However, it seems, up to the ‘eighties of the 17th
century, the Dutch factors provided a substantial part of the
Company’s finance in Bengal. Even in 1681 the Court directed
the factors in Bengal to take about 40,000 or 50,000 rupees at
the rate not exceeding 2s. 6d. per rupee from John Lethieulier’s
correspondents who were mostly Dutch factors in Bengal.88 But
the Dutch sources seem to have dried up towards the close of the
century when their trade was much reduced compared to that of
the English.
Besides, the Dutch, the English Company’s servants, free
merchants and other Europeans also supplied the Company
with money for the necessary investments in Bengal. In the
early years, the Company’s servants generally paid money into
the Compnay’s treasury not in their own name but in the name
of indigenous merchants thus concealing their private fortune
from the Company. In 1679 Richard Mohun, a factor in Bengal,
deposited money in a country merchant’s name and received

a bill in return.89 Sometimes, however, these factors preferred
to lend money to the Dutch Company as they deemed it more
profitable. In 1674 the Bengal Agency reported taht some fac-
tors found it to their greater advantage to lend what money
they could spare to the Dutch Company at 1¼ per cent inter-
est per month.90 Generally the factors deposited money with
the Company against bills of exchange which they sent to their
correspondents in England. A few illustrations of such transac-
tions can be noted here. Abraham Adams, who was accountant
at Fort William, on his departure for England in 1716 deposited
Rs. 27,728.6.3 and received a bill of exchange for £ 3,812.13.1
(at 2s. 9d. per rupee) on the Court of Directors.91 Even the
President of the Company’s affairs in Bengal remitted money to
England by bills of exchange on the Court. In December 1717
the principal and interest of money deposited by Robert Hedges,
the President in Bengal, amounted to Rs. 40,045 for which he
received a bill of exchange on the Court at 2s. 9d. per rupee.92
The succeeding President, Samuel Frake, paid Rs. 10,000 into
the Company’s treasury in 1718 against a bill of exchange on the
Directors for £ 1,375 (at 2s. 9d. per rupee).93 In the same year
Henry Frankland, storekeeper at Fort William and a member of
the Bengal Council, deposited Rs. 80,000 for which he received
a bill of exchange on the Court for £ 11,000 (at 2s. 6d. per
rupee).94 Besides the Company’s servants, other Europeans too
lent money to the Company at interest. In 1699 Noel Argons,
a Frenchman, offered to lend Rs. 15,000 to the Company at
1 per cent interest per month.95 Derrickson, a free merchant it
seems, received a bill of debt from the Company in 1715 for his
principal and interest amounting to Rs. 30,731.0.6.96
Apart from short-term direct borrowings which were really
bridging finance, the Company also tried to explore other
available sources in an attempt to create funds required for its
investment in Bengal and thus engaged itself in several branches
of inter-Asiatic trade. Similarly in order to tap yet another source
of income, it encouraged the freighting of its ships by indigenous
merchants and carried goods of these traders to different Asian
ports on freight. The inter-Asiatic trade and freight voyages not

only provided additional sources of funds for investment but
they also saved the Company the demurrage of its ships while in
Asia. These ships which failed to sail for England in the proper
season were obliged to stay on, thus incurring heavy demurrage.
Under the circumstances the Company asked its servants to use
their best efforts to employ those ships in inter-Asiatic commerce
and freight voyages. These commercial ventures eased, with little
doubt, the problem of financing the investment for the Company
though in the absence of adequate data, any accurate estimate
of the proceeds from such ventures is not possible. Throughout
the period, the branch of the inter-Asiatic trade in which the
Company was mostly engaged was the Bengal-Persia trade. As
early as 1652 the Company decided to lade a ship in Bengal for a
voyage to Persia.97 In 1657 the Court directed the Bengal factors
to send one ship annually with suitable cargoes to Persia.98 The
ship Aun arrived at Gombroon in 1659 from Bengal with com-
modities on the Company’s account as well as a considerable
quantity of freight goods.99 But it appears that the Company
never sent ships regularly on trading voyages to Persia. In 1682
the factors in Gombroon urged the Company to send one or
two ships there regularly from Bengal. They pointed out that
the Dutch sent that year two ships from Bengal laden with cloth
and sugar by which they ‘seldon got less than 50 or 60 per cent’
so that one of the ships of 400 tons gained by one voyage at
least fifty five or sixty thousand rupees, besides the freight they
got from Gombroon to Surat.100 In 1683, however, the English
Company sent two ships to Persia from Bengal – one of them,
the Hare, carrying 2,171 bags of sugar valued at Rs. 21.733.4,
the other, Henry and William, laden with 2,821 bags of sugar
and various other goods amounting to Rs. 56,760.101 A large
part of the profit thus earned in Persia went to Bengal in the
form of silver abbasis and gold ducats.
The freight voyages were generally undertaken to and from
Surat and Persia. Whenever the Company failed to procure
sufficient tonnage for freight to Surat or Persia, it filled up the
ships with cargoes on its own account. Thus in 1690, besides the
freight goods, about 200 tons were required to make up the full
tonnage of the ship Kempthorne and the Company ordered to
provide 5,000 or 6,000 mds. of rice and 1,000 mds. of wheat to
make up her tonnage in a voyage to Surat.102 Individual Indian
merchants also quite frequently freighted Company’s ships for
particular voyages to Surat or Persia either jointly or on their
separate account. A few illustrations of such freighting of ships
by indigenous merchants would not be inappropriate here. In
1701 several Hugli merchants – Mathuradas, Brindabandas,
Khoja Padroes and Khoja Phanous – freighted one of the Com-
pany’s ships for a voyage to Surat for Rs. 20,000.103 Again in
1702 Khoja Sarhaud Israeli, the famous Armenian merchants in
Bengal, chartered the Company’s ship Colchester for a trading
voyage to Gombroon and Basra for Rs. 38,000.104 Janardan Seth,
the Company’s broker in Calcutta, chartered the Hester in 1707
for Persia at Rs. 30,000.105 Khoja Sarhaud freighted the How-
land in the same year for Persia at Rs. 34,000.106 The earnings
from such voyages either on freight or on the Company’s own
account were not negligible. In 1714 the ship Hanovers’ voyage
to Surat produced about Rs. 59,548.107 The estimated profit of
the Cardigan’s voyage to and from Persia in the same year was
about Rs. 40,000.108 In 1717 the small ship Arabella’s earnings
in her Surat voyage amounted to well over Rs. 17,000.109
Notes
1. The term ‘investment’ is used here in the same sense as the Company
did to denote its purchases in India.
2. The shipping season in Bengal was generally from September to
January.
3. D.B., January 1659, vol. 84, f. 411.
4. O.C., 18 January 1651, no. 2200, vol. 22; E.F.I., 1651-4, pp. 13-14.
5. O.C., 18 January 1651, no. 2200, vol. 22.
6. O.C., 27 Jan. 1652, no. 2242, vol. 22.
7. O.C., 10 December 1652, no. 2297, vol. 22.
8. Factory Records, Hugli, vol. 1, Diary, 26 September 1678.
9. Ibid., vol. 1, Diary, 15 February 1679; vol. 2, f. 17.
10. Ibid., vol. 2, ff. 95-6; Master’s Diary, vol. II, pp. 258-9.
11. Factory Records, Hugli, vol. 1, Diary, 25 September (1678); vol. 7,

pt. II, f. 115.
12. Ibid., vol. 1, Diary, 18 September 1677.
13. Ibid., vol. 7, pt. II, f. 33.
14. Ibid., vol. 1, Diary, 1 August 1678.
15. Ibid., vol. 5, pt. II, f. 112.
16. D.B., 12 December 1677, vol. 88, f. 522; Factory Records, Hugli,
vol. 1, Diary, 1 August 1678.
17. D.B., 14 January 1686, vol. 91, f. 48.
18. Perhaps referring to the temporary governorship of Prince Azam.

Generally after stabilizing their position, these governors started
amassing vast fortunes.
19. Factory Records, Hugli, vol. 2, f. 14; Factory Records, Kasimbazar,
vol. 1, Diary, 15 February, 24 April, 25 June, 27 July 1677; Factory
Records, Hugli, vol. 10, f. 185; B.M. Addl. Mss., 34,123, ff. 2a, 3a.
For the price of gold and gold mohar, see, Irfan Habib, The Agrarian
System of Mughal India, pp. 384-7, K.N. Chaudhuri, ‘Treasure and
Trade Balances, the East India Company’s Export Trade, 1660-1720’,
Economic History Review, vol. XXI, 1968, pp. 486-90.
20. Factory Records, Hugli, vol. 2, pt. 1, ff. 14, 17.
21. D.B., 14 January 1686, vol. 91, f. 48.
22. D.B., 12 December 1677, vol. 88, f. 522 (In this letter the Company
wrote to Bengal that it sent a greater quantity of gold than formerly);
Factory Records, Hugli, vol. 1, Diary, 1 August 1678; Shaista Khan left
Bengal in 1677 only to come back in 1680 while in the interim period
two subadars Fidai Khan and Prince Azam ruled Bengal. The factors
reported in 1677 that ‘the Prince at Patna lately had paid his soldiers
in gold mohars which is reason they are so much fallen that uncoined
gold is dearer than coined gold’. Vide, Factory Records, Kasimbazar,
vol. 1, Diary, 27 July 1677.
23. Factory Records, Hugli, vol. 1, Diary, 16 November 1677; Factory
Records, Kasimbazar, vol. 1, Diary, 18 and 30 August 1677, 16 and
29 September, and 20 October 1679; D.B., 14 January 1686, vol. 91,
ff. 48-9; D.B., 8 January 1718, vol. 99, f. 372.
24. B.M. Addl. Mss., 34, 123, f. 42a.
25. Factory Records, Kasimbazar, vol. 1, Diary, 17 August 1678.
26. Ibid., Kasimbazar, vol. 1, Diary, 29 September 1679.
27. Ibid., vol. 1, Diary, 7 September 1682.
28. Factory Records, Hugli, vol. 1, Diary, 25 September, 13 October 1678,
vol. 6, part II, f. 165; Home Misc., vol. 803, f. 458.
29. Factory Records, Malda, vol. 1, Diary, 17 October 1680.
30. Ibid., Hugli, vol. 1, Diary, 25 September, 13 October 1678.
31. Ibid., Kasimbazar, vol. 2, Consult., 7 September 1682.
32. Ibid., vol. 1, Diary, 28 August 30 August, 16 September 2 October

1679.
33. Master’s Diary, vol. II, pp. 306-8.
34. Factory Records, Kasimbazar, vol. 1, Diary, 24 December 1679,

21 February 1680; 2 March, 8 March, 1680; 27 August 1680.
35. Ibid., Calcutta, vol. 7, pt. 1, f. 11, D.B., 14 January 1686, vol. 91, f. 48;
D.B., 12 January 1705, vol. 95, f. 389.
36. Home Misc., vol. 803, f. 458; D.B., 7 April 1708, vol. 96, ff. 262-3.
37. Factory Records, Kasimbazar, vol. 1, Diary, 24 February 1677. Factory
Records, Hugli, vol. 1, Diary, 1 August 1678; Factory Records,
Kasimbazar, vol. 2, Diary, 7 September 1682. In 1683 the Kasimbazar
factors reported that they were advised from Rajmahal that a general
parwana came from Dacca fixing the customs as follows (vide, Factory
Records, Kasimbazar, vol. 3, Diary, 31 January 1683).
Of the English – 3½ per cent Of the Hindus – 5 per cent
Of the Dutch – 4 per cent Of the Armenians – 7½ per cent
Of the Muslims – 2½ per cent
3
39. Ibid., vol. 10. f. 185.
40. D.B., 12 January 1705, vol. 95, f. 389.
41. Ibid., 7 February 1707, vol. 96, f. 98a.
42. D.B., 7 April 1708, vol. 96, ff. 222-3, 260.
43. B.P.C., Range, 1, vol. 1, f. 528; D.B., 5 January 1711, vol. 97, f. 125.
44. Ibid.,. It seems by 1708 Murshid Quli had established another mint at
Murshidabad, vide, D.B., 7 April 1708, vol. 96, ff. 262-3.
45. O.C., 18 June 1687, no. 5618, vol. 47; Home Misc., vol. 68, f. 35.
46. S. Bhattacharya, The East India Company and the Economy of Bengal,
London, 1954, pp. 31-3.
47. By an act of 1694 the Company was ordered to export goods valued at
least £ 100,000 a year to the East.
48. Factory Records, Misc., vol. 3, f. 100; E.F.L. 1668-69, p. 311.
49. Home Misc., vol. 803, f. 456.
50. In 1672 the Company bartered broodcloth, lead etc. for goods provided
by Khemchand and other Balasore merchants but at 20 per cent loss,
vide, Factory Records, Hugli, vol. 4, pt. 1, f. 4.
51. D.B., 23 August, 1674, vol. 88, f. 153.
52. D.B., 12 December 1677, vol. 88, f. 520.
53. D.B., 26 February 1703, vol. 95, f. 49.
54. D.B., 12 January 1705, vol. 95, f. 389.
55. Factory Records, Calcutta, vol. 10, pt. III, f. 2.
56. O.C., 18 January 1651, no. 2200, vol. 22; E.F.I., 1651-54, pp. 13-14;
O.C., 8 January 1702, no. 7820, para II, vol. 63; O.C., 24 December
1702, no. 8097, para 15, vol. 65.
57. D.B. 28 January 1659, vol. 84, f. 411; D.B., 18 January 1706, vol. 95,
f. 518; Rawl. A. 302, f. 250.
58. Factory Records, Hugli, vol. 9, ff. 63, 155; vol. 10, ff. 109, 164; Factory
Records, Kasimbazar, vol. 4, pt. 1, ff. 71, 145; Factory Records, Misc.,
vol. 3A, f. 392; Factory Records, Calcutta, vol. 6, pt. 1, ff. 6-7, 26;
vol. 10, pt. III, f. 43; O.C., 4 February 1702, no. 7852, para 3, vol. 63;
O.C., 15 August 1702, no. 7996, vol. 64.
59. Compiled from Cash Account of Factory Records, Kasimbazar, vol. 3.
60. Factory Records, Hugli, vol. 10. f. 86; Factory Records, Balasore,

vol. 1, Diary, 22 April 1684.
61. Factory Records, Calcutta, vol. 3, pt. II, ff. 51-52, 61.
62. Ibid., Dacca, vol. 1, pt. II, f. 57.
63. Ibid., Kasimbazar, vol. 1, Diary, 25 March, 1679.
64. Ibid., Kasimbazar, vol. 1, Consult. 15 October 1679, vol. 3, Consult.
8 February 1683; vol. 4, pt. 1, f. 154; Factory Records, Hugli, vol. 6,
f. 164; vol. 10, ff. 86, 99-100, 108, 248; Factory Records, Balasore,
vol. 1, Diary, 22 April 1684; Factory Records, Calcutta, vol. 2, pt. 1,
ff. 16-41; vol. 3, pt. II, f. 48; vol. 6, pt. III, f. 14; vol. 8, pt. II, ff. 71-72;
Factory Records, Dacca, vol. 1, pt. II, f. 57; Rawl. A. 302, f. 250; O.C.,
November 1684, no. 5264, vol. 44; D.B., 13 February 185, vol. 90,
f. 436.
65. D.B., 5 July 1682, vol. 90, f. 8; 12 January 1705, vol. 95, f. 381.
66. D.B., 12 December 1677, vol. 88, f. 520.
67. D.B., 5 July 1682, vol. 90, f. 8; 18 January 1705, vol. 95, f. 519.
68. D.B., 5 July 1682, vol. 90. f. 8. There is little doubt that the large stock
sent by the Company to Surat greatly reduced the rate of interest there.
The Surat General Letter stated in 1683 – ‘It is very true that the large
stocks Your Honours sent out lately annually was the real cause that
the rate of interest fell and not unlikely but at sometimes when Your
Honours or the Dutch’s occasions require no money, men of good
reputations might for small sums procure after the rate of 4 p.c. per
annum.’ Vide, O.C., 30 November 1683, no. 5651, vol. 43.
69. D.B., 28 August 1682, vol. 90, f. 22.
70. Factory Records, Kasimbazar, vol. 2, Consult, 7 September 1682.
71. Ibid., Calcutta, vol. 10, pt. II, f. 92.
72. Ibid., Kasimbazar, vol. 4, pt. I, f. 1.
73. Ibid., vol. 1, Diary, 17 August 1678.
74. Factory Records, Calcutta, vol. 8, pt. II, f. 54.
75. O.C., 15 August 1702, no. 7996, vol. 64.
76. Rawl. A. 302, f. 250.
77. Factory Records, Kasimbazar, vol. 4, pt. 1, f. 108.
78. Ibid., vol. 4, pt. 1, ff. 111-12.
79. D.B. 21 December 1664, vol. 86, f. 460; O.C., 1 September 1665,
no. 3069, vol. 29.
80. O.C., 11 September 1669, no. 3344, vol. 30.

81. Velters himself was the chief of the Dutch factory at Piply.
83. D.B., 17 August 1674, vol. 88, f. 131.
84. O.C., 30 November 1669, no. 3377, vol. 30.
85. D.B., 23 December 1674, vol. 88, f. 153; Factory Records, Hugli,
vol. 4, pt. 1, £ 114.
86. O.C., 30 June 1669, no. 3303, vol. 30.
87. D.B., 7 July 1673, vol. 88, f. 48; 31 October 1673, vol. 88, f. 75, 23
December 1674, vol. 88, f. 153.
88. D.B., 5 January 1681, vol. 89, f. 276.
89. O.C., 1 October 1679, no. 4660, vol. 40.
90. Factory Records, Hugli, vol. 4, pt. II, f. 20.
91. B.P.C., Range 1, vol. 3, f. 117.
92. Ibid., Range 1, vol. 3, f. 460.
93. Ibid., Range 1, vol. 4, f. 1a.
94. Ibid., Range 1, vol. 4, f. 3.
96. B.P.C., Range 1, vol. 3, f. 108a.
97. O.C., 12 February 1652, no. 2257, vol. 22; E.F.I., 1651-54, p. 111.
98. D.B., 31 December 1657, vol. 85, ff. 15-16.
99. O.C., 2 April 1659, no. 2730, vol. 26.
100. O.C., 16 May 1682, no. 4820, vol. 42.
101. Factory Records, Hugli, vol. 6, pt. II, ff. 4-5.
102. Ibid., Calcutta, vol. 1, pt. 1, f. 36.
104. Factory Records, Calcutta, vol. 4, pt. 1, ff. 18, 20-2.
105. D.B., 7 April 1708, vol. 96, ff. 255-6.
106. B.P.C., Range 1, vol. 1, f. 411.
107. C. & B., Abstr., vol. 1, ff. 508, 524.
108. B.P.C., Range 1, vol. 2, f. 399a.
109. Factory Records, Misc., vol. 7, f. 37.

chapter 5
Textile Trade and Industry in

Bengal Suba, 1650-1720*
An attempt is made in this paper to analyse the nature, pattern

and organization of textile trade and industry in Bengal Suba in
the second half of the 17th century and first two decades of the
18th century. It is indicated here that the export trade in Bengal
textiles had a phenomenal growth resulting from a great demand
for these commodities in the European markets and there was
a corresponding increase in textile production in Bengal during
this period. So far as the European trade in Bengal textiles is
concerned, we have ample quantitative data, but our informa-
tion about the textile trade carried on by the Asian merchants is
very scanty. Moreover, we are handicapped in our analysis by the
paucity of material on the organization of the textile industry.
But despite these limitations, it is possible to indicate the broad
pattern and organization of textile trade and industry in Bengal
during the period under review.
In the overall picture of the English Company’s export trade
textiles were most important both in volume and value. It is
common knowledge that the European Companies began to
display interest in the Indian textile trade in the early 17th cen-
tury for the purpose of bartering cotton piece-goods for pepper
and spices in the Indonesian archipelago. And the direct trade
in textiles between Europe and India developed as an essential
by-product of this ‘earlier and more urgent necessity’. The most
striking feature of the English East India Company’s textile trade
* Indian Historical Review, New Delhi, vol. I, no. 2, September 1974,

pp. 262-78.
from Bengal was a boom in export in the early 1680s under

the stimulus of a rapid expansion in demand for calicoes in the
European markets which continued vigorously, with the excep-
tion of a brief interruption following the Bengal war in 1686,
into the following decades.
The multiplicity of the types of textiles exported from Bengal

renders their identification and proper division into different
categories an exceedingly difficult task. One finds at least 75,
if not more, different names of piece-goods in contemporary
records. It is not easy to identify some of them – such as umbers,
mahmudiaties, atchabannies, abrowahs, bulchols, coopes, doo-
damies, etc. However, this limitation notwithstanding, the piece-
goods exported by the Company can be divided into three main
types – first, silk piece-goods; secondly, mixed piece-goods, that
is, piece-goods of mixed silk and cotton; and thirdly, cotton
piece-goods, plain or painted. In addition, there was a category
of miscellaneous goods consisting of quilts, tablecloths, plushes,
velvets, etc.
Bengal silk piece-goods were known to the English as the
taffatie or taffeta and the Dutch termed it armosijnen.1 The word
taffeta was current in medieval Europe in a rather vague sense
to imply fine cloth, usually of a silky and glossy quality. When
the Europeans introduced the term into India, it became mixed
with Persian tafta, ‘a glossy twist’, already in use as a term for
silk. Most of the Bengal taffetas were produced in areas around
Kasimbazar. Some of the different types of taffaties were known
by such names as restaes (striped taffaties) or gold pumbers (a
sort of taffaties of deep gold colours and made of thicker than
ordinary silk).2 Among other silk piece-goods exported by the
English Company were sarcenetts, jamwars and silk lungees
produced mainly in Kasimbazar area, silk handkercheifs, neck
cloths and atlasses woven mostly in Hugli and the Balasore area.
Silk handkerchiefs were also procured in Dacca. Taffetas, though
the most important single item in the list of the Company’s
Textile Trade and Industry in Bengal Suba | 87
export from Bengal in the second half of the 17th century, lost
their predominance in the first two decades of the 18th century.
It seems that throughout the period under review mixed fabrics
and cotton goods comprised the largest bulk export. The mixed
piece-goods exported by the Company were mainly allabanees,
cuttanees, carridaries (or choradarries), chucklaes, cherconnaes,
cushtaes, doreas, elatches, ginghams, jamdanees, nehallewars,
nillaes, peniascoes, sooses, seersuckers and mandilla. Of these,
ginghams and nillaes, woven in the neighbourhood of Hugli and
Balasore, enjoyed a predominance in the Company’s export list
during the second half of the 17th century while doreas, woven
in Hugli and the Malda region, ruled the roost in the first two
decades of the 18th century.
But it was cotton piece-goods which numerically far sur-
passed other piece-goods, whether of silk or mixed varieties in
the Company’s export list. Of the calicoes again, plain cotton or
plain muslin goods comprised the bulk of the Company’s export.
The painted cotton goods generally known as chintz began to
be exported only in the last decade of the 17th century and the
European demand for Indian chintz of all kinds was soon at its
peak.3 The chintz came mainly from Patna and were of a cheaper
and comparatively inferior grade to those from Coromandel
and Gujarat. Patna also provided such cotton piece-goods as
emerties and luckowries. Among other cotton piece-goods
exported by the Company were chillaes, baftas, dungarees (the
Dutch dongerijs), dimities, photaes, orungshies, chandanees and
putlas. But it was the better known muslin that enjoyed suprem-
acy in the Company’s export list. The Company, however, did
not export much of the very finest and most expensive Bengal
muslin, famous from Roman times, perhaps partly because the
limited supply was monopolised by local merchants for exclu-
sive sale to the nobility and partly because of the unsuitability of
this material for the climate in Europe. The muslin exported by
the Company comprised such different varieties as allaballees,
addaties, chowtars, cossaes, serhaudconnaes, gurralis, humhums,
mahmudbannies, mulmuls, nainsook, sannoes, tanjeebs, ter-
rendums, seerbands and rehings. Most of these were woven in
areas around Dacca and Malda, though some like mulmuls and
mahmudbannies were also produced in the neighbouring regions
of Hugli and others like sannoes around Balasore. The embroi-
dered piece-goods were mostly on the finer varieties of muslin
such as mulmuls, tanjeebs, cossaes or humhums. The quality
of the different types of muslin woven in different areas varied
widely, as did their prices. We refrain from an attempt at their
classification according to fineness and price as such an attempt
is fraught with the danger of producing misleading results.4
II
An analysis of the Company’s orders for Bengal piece-goods

reveals that in the early years the demand for silk and cotton
piece-goods was insignificant in the overall structure of the
Company’s export trade from Bengal. In February 1651 the
factors in Bengal were asked to invest only one-sixth of their
small capital in cloth, mainly sannoes and atlasses.5 An indica-
tion of the first boom in the demand for Bengal textiles is to be
found in the order sent out in 1675-6 for 98,000 pieces while in
1669-70 the order was only for 26,850 pieces. In other words,
within the span of six years the order for textiles had increased
by four times. But it was from about the beginning of the 1680s
that there was a remarkable rise in the demand for textiles from
Bengal. In the year 1680-1 the Company ordered for 206,400
pieces which went up to 229,200 pieces next year, eventually ris-
ing to 662,800 pieces in 1682-3 and 682,300 pieces in 1683-4.
This, however, was followed by a slump in the demand. But from
about the middle of the 1690s there was again a sharp rise. In
1695-6 the Company ordered 417,500 pieces and up to 1716-17
the order ranged between 250,000 and 300,000 pieces. Again,
a boom began in 1717-18 when 415,000 pieces were ordered,
which rose to 480,000 pieces in 1719-20. The Dutch order too
was considerable and seems to have ranged between 250,000
and 300,000 pieces per year in the first two decades of the 18th
century.
An obvious question that arises is: what were the precise

underlying factors for the unprecedented growth of textile
exports from Bengal at the beginning of the 1680s? The plau-
sible answer is that it was due partly to the greater competitive
power of the Indian piece-goods in prices in comparison with
the traditional fabrics manufactured in Europe and partly to
a revolutionary change in the consumer taste in England and
the Continent. A contributory factor was, however, the Act of
1678 which forbade the importation of French silks and cloths
together with French wine, salt and paper.6 Though Bengal silks
and piece-goods did not compare favourably in quality with
French and Italian fabrics, the former had the advantage of being
very much cheaper and hence available to a larger section of the
people. Moreover, there was a deliberate attempt on the part of
the Company to make Bengal piece-goods, especially taffetas,
look like Italian silks or fabrics. As early as 1659 the Directors
wrote to the Bengal factors that taffetas would be gummed in
England which ‘would then be as glossy as Italian silks’.7 Again,
in 1663 they asked the factors to ‘cause all taffaties to be made
as near to the Italian fabrics as you can’.8 So far as the change in
consumer taste was concerned, the ‘Indian craze’ set in about the
1680s and was a marked feature of the last decade of the 17th
century.9 It is unnecessary to describe this trend in fashion,10 but
it obviously operated as an active economic factor. The nature
and extent of this fashion is revealed by J. Cary’s pamphlet of
1695 which states:
It was scarce thought about twenty years since that we should ever
see Calicoes, the Ornaments of our greatest Gallants (for such they
are, whether we call them Muslins, shades or anything else) when they
were then rarely used, save in Shrouds for the Dead, and chiefly among
the Poor who could not go to the Price of finer Linnen, and yet were
unwilling to imitate the Rich; but now few think themselves well dresst
till they are made up in Calicoes, both Men and Women, Calico Skirts,
Neckcloths, Cuffs, Pocket-Handkerchiefs for the former, Headdresses,
Nightroyls, Hoods, Sleeves, Aprons, Gowns, Petticoats and what not
for the latter besides India-Stockings for both Sexes’.11
No less revealing than this was the speech by Pollexfen before

the Board of Trade in 1696 describing the state of Indian com-
modities in 1681. He said:
As ill weeds grow apace, so these manufactured goods from India
met with such a kind reception that from the greatest gallants to the
meanest Cook Maids, nothing was thought so fit to adorn their Persons
as the Fabrick from India.12
The European Companies were well aware of this great change

in consumer taste and there began a race for procuring novelties.
The Directors of the English Company wrote in 1681:
Note this for a constant and general Rule that in all flowered Silks
you change the fashion and flower every year as much as you can, for
English Ladies, and they say the French and other Europeans will give
twice as much for a new thing not seen in Europe before though worse,
than they will give for a better silk of the same fashion worn the former
year.13
In July 1682 the Directors perhaps made the most pointed

remark about the change in fashion: ‘. . . nothing pleases so much
as variety everyone desiring something that their neighbours
have not like it’.14
The English Company traded not only in silk and mixed and
cotton piece-goods from the 1680s but also in such miscella-
neous commodities as plushes, velvets, satins and quilts. In April
1681 the Directors wrote to Hugli Agency:
Set your weavers’ inventions on work to make Plushes, Velvets, and
Satins as fine, rich and as strong as the best usually worn and of the
same breadths; this is nothing so difficult but may be effected where the
material silk and midwife labour are so cheap as with you.15
In December that year the factors were asked to send Flanders

and French diaper – commonly used in England – which ‘may be
made and brought from India upon much easier term than from
any place of the world and that would be a national advantage,
also as a profit to us and an increase of the English navigation
if we could introduce into common use the Indian Diapers for
Napkins and Tablecloths’.16 Next year the Company asked the
Bengal factors to send 500 silk quilts yearly as ‘the use of Rugs
and Blankets grows out of request’ ‘by reason of moths and
the increase of the riches of our nation’.17 In the same letter
the Directors asked the factors ‘for the setting afoot of a linen
manufacture in the Bay for sailcloth and such kind of cloth as
Lockerams, Dowlas, Holland and other foreign kinds which this
nation is yearly supplied with, from France, Germany, Flanders
and Holland to the great diminution of our wealth and the
increase of theirs, without any kind of benefit to the English
navigation’.18 All these only indicate that the Company was
eager to expand its trade from Bengal in as many varieties of
textiles as possible.
As noted earlier, silk piece-goods, mainly taffetas, held an
undisputed supremacy in the Company’s export list from Ben-
gal throughout the second half of the 17th century. In 1684 the
Court of Directors wrote to the Agent and Council in Hugli:
‘Plain taffaties of all sorts are certainly the most staple commod-
ity India affords and it is impossible for you ever to send us too
many of them’.19 They wrote in the same vein four years later:
‘Your taffaties are a noble commodity of which you can never
send enough being well made and well bought’.20 It was only
from the beginning of the 18th century that silk piece-goods as
well as mixed ones lost their predominance in the Company’s
export following the Act of 1700 prohibiting such goods in Eng-
land.21 The national concern, however, over the large imports of
silks and piece-goods and its impact on English domestic indus-
tries was gaining ground from about the beginning of the 1680s.
We shall not enter into the details of the increasing opposition
to import of silks and manufactured goods or the impact of such
imports on English silk and weaving industry which has already
been discussed by Shaffat Ahmed Khan.22 We note a few things
only to indicate the nature and extent of the opposition to import
of Indian manufactured silks and how the Company met this.
As early as 1677 concern was voiced over the rapid increase
in Indian imports in these words: ‘One commodity more ruins
us and that is Calico which destroys more the use of Wool than
all things besides’.23 Similarly in 1680 a pamphleteer tried to
pinpoint the grave danger to the English silk industry resulting

from the steep rise in the import of Indian textiles. He wrote:
The result is that masters break; Journeymen run away, having no
Trade. Some fly to the Mint and Privileged places. Some to Holland;
some to Ireland. Some starve to death at home with their Wives and
Children. Multitudes turn upon the parishes. Houses empty. Prisons
full.24
The Company, however, tried to justify the import of wrought
silks by pointing out that a great part of these were again
shipped out to France, Holland and other foreign countries.
Wrought silks, the Company argued, were, moreover, the ‘stron-
gest, cheapest and the most durable that come from any part of
the world’. Nor did their wearing hinder, it was argued, the silk
manufacture in England; ‘they do only hinder the importation of
the like quantity from France and Italy’. Still the Company was
forced to confess that ‘wrought silks, flowered or striped, do a
little impede the growth of silk manufactures in England’.25
The Company justified the import of calicoes on the ground
that it ‘is a most useful and necessary commodity and serves
instead of the like quantities of French, Dutch and Flanders Lin-
ens’. It argued that the nation thus saved not only ‘two to three
100 thousand pounds in its expense; but also as it hinders so
far the enriching those Neighbour-Nations, from whose great-
ness this Kingdom might fear most prejudice’.26 However, the
result of the Act of 1700 prohibiting the import into England ‘of
wrought silks, Bengals and Stuffs mixed with silk or herba’ was
an increase in the import of white calicoes and muslins which
were then printed in England. The Act no doubt caused concern
among Bengal factors who wrote in 1702:
All white goods are so very cheap in England and goods worked with
silk and cotton being forbid to be worn, sells for loss so that we know
not what to order about Cloth Investments until we received our
Masters’ advices.27
But the Act does not seem to have vitally affected the export
of textiles from Bengal, except for a few years immediately fol-
lowing its enactment. Therefore, in 1720 another Act was passed
prohibiting the use or wearing of printed calicoes in England.

But as these articles were allowed to come to England on con-
dition of their being reshipped, the export of cotton and silk
piece-goods from Bengal continued to increase steadily even
after 1720.28
III
On the supply side the competition was a triangular one among

the English, Dutch and indigenous merchants. The main centres
of supply of Bengal textiles were Kasimbazar, Dacca, Malda,
Hugli, Balasore and Patna,29 where indigenous traders were
already engaged in an extensive trade in piece-goods long
before the advent of the European Companies. Even in Malda
– as Richard Edwards reported in 1676, a few years before the
establishment of the English factory there – the chief traders
were the ‘Factors of Agra, Gujarat and Benaras Merchants who
yearly send them fifteen to twenty five Patelas30 whose lading
consists of cossaes, mulmuls and mundeels and elatches of all
sorts, valued at about one Lack each Patela and about the half of
that amount by landing said goods and raw silk’. Besides, about
three lakhs of rupees went yearly to Dacca in elatches and coarse
cloth and about the same value to petty merchants of Rajmahal
and Murshidabad and other places.31 It was quite natural that
indigenoub merchants, besides the Dutch, should have offered
keen competition to the English in all the centres of supply. It is
difficult to ascertain the impact of this triangular competition on
the market prices of textiles. However, from incidental references
it can be said in general that the presence of too many buyers
enhanced the prices. It was reported in 1676 that the Dutch who
were in Malda before the English were able to buy muslins at a
much cheaper rate than when English demand afterwards had
increased the competition. Thus pieces measuring 10 yards by
1¼ yards cost at first Rs. 6 to 10 per piece against Rs. 9 to 15
in Master’s time (about 1676). That means the rise in price was
about 50 per cent.32
But sometimes concentration of too many weavers at one
place resulted in lowering the prices of their products, the heavy

demand notwithstanding.. Mathias Vincent reported in 1676
that the English factory set up at Kasimbazar induced a large
number of weavers to gather there which resulted in the lowering
of prices of taffaties. A piece of taffatie, as Vincent stated, which
used to cost Rs. 15 about 12 or 13 years ago, was then ‘made and
sent home’ at about six or seven rupees, that is, the price fell by
well over 50 per cent.33 The English factors, however, often com-
plained of dearer prices of textiles resulting from competition
from other merchants. It is very much evident from the Com-
pany’s records that it was apprehensive about its weavers being
lured away by the Dutch. In 1684 the Dacca factors reported
that Mathuradas, Raghunath and Ramnarain – all Company’s
merchants – sent many agents to Dacca and the neighbourhood
and they feared that the weavers would raise the price of goods
‘to see so many buyers’.34 The rivalry and competition between
the Old and New Company also led to a sharp rise in the prices
of textiles in the early years of the 18th century. The factors of
the New Company reported in 1700 that ‘goods became exceed-
ing dear at the aurungs even beyond what was usual for tho’
they did use to be dear at the ports in time of shipping yet now
many goods were dear or dearer at the marts for investments,
the demand was so great’.35 There is little doubt that the Indian
merchant-middlemen found the trade in piece-goods quite prof-
itable and were sure of a market for what they could provide and
that was the reason why at the end of our period even the shroffs
‘fell into the dealing so largely in piece goods’.36
IV
As indicated earlier, it is not possible to build up a coherent his-

tory of the price movements of textiles and their fluctuations
throughout the period under review. Textiles were manufactured
in Bengal at this time at the level of cottage industry and the
technique of weaving varied from one place to another. The Com-
pany’s exports were composed of a wide range of varieties which
differed from one another in size, quality, texture and colours.
This multiplicity of types was naturally reflected in an equally

wide range of prices. Consequently it is not very easy to estimate
what effect the movement of prices had on the purchases by
the Company since the same type of cloth could display a wide
variation in price even in one particular year depending on size,
quality and the place of production.37 However, it seems from
the contracts between the Company and Calcutta merchants in
the second decade of the 18th century that the price of calicoes
(the size and the place of production remaining constant) did
not show much fluctuation.38 Of course, it is certain that the
Company derived sufficient profit from the textile trade39 and
was not concerned much even if the cost prices went up. As early
as 1670 the Directors wrote to Bengal: ‘We find the Calicoes in
your parts to be dearer than in other places, yet we are unwilling
wholly to leave of the trade thereof in the Bay’.40
Turning to the actual exports, we find that the textiles exported
by the Company up to the 1670s were significant neither quanti-
tatively nor financially. In the two years 1663-4 and 1664-5, the
Company exported only about 24,000 pieces on an average at
the invoice price of £14,681. The quantity was reduced to 8,085
pieces costing £5,549 in 1668-9, rising eventually to 20,336
pieces next year and valued at £10,253. A remarkable increase
in the export of piece-goods is to be found in the export list of
1670-1 when 37,739 pieces were despatched to England at the
cost price of £23,577. The next year both the quantity and value
were almost doubled, the number of piece-goods exported being
75,975 costing £41,739. It seems that from then onward the
quantities and total value of textiles exported by the Company
remained almost steady till the beginning of the 1680s. In the two
years 1675-6 and 1676-7 81,779 pieces were annually exported
on an average at the value of £40,698. In 1678-9 the Company
exported 75,408 pieces valued at £50,363. But the tremendous
growth in the total quantity of piece-goods as well as their value
began in the 1680s which continued, though with interruption
caused by various factors, throughout the period under review.
The following table illustrates the continuous growth of textile
trade from Bengal.
Table 5.1: Quinquennial Total of Textile Export from Bengal41
Years Total no. of Total Value Average no. Average

pieces of pieces Total value
1681/2-1685/6 1,040,491* £561,988 208,098 £112,397
1694/5-1698/9 – £333,035 – £ 66,607
1699/1700-1704/5 £569,435 – £113,887
–
(Excluding 1703-4)
1705/6-1709/10 – £450,043 – £ 90,005
1710/11-1714/15 1,246,907 £914,446 249,381 £182,889
1715/16-1719/20 1,538,972 £970,759 307,794 £194,152
Note: *Excluding the number of pieces exported by Persian Merchant in 1685-6

which is not mentioned in the invoice. In this year two ships were despatched to
England. The other ship, Eagle, carried 203,372 pieces of piece-goods.
It is clear from the above table that the general tendency in

textile export, despite the two periods of slump during 1694-5 to
1698-9 and 1705-6 to 1709-10, was one of steady growth both
in volume and value. We cannot yet compute the total value of
the Dutch export of textiles from Bengal during this period. But
from the number of pieces exported by the two Companies, it is
apparent that from about the beginning of the second decade of
the 18th century the English surpassed the Dutch at least in tex-
tile trade from Bengal. The Dutch during this decade exported
on an average about 203,853 pieces annually while the English
export stood at 278,588 pieces.42
Finally, it is interesting to see what percentage the total value
of annual textile export constituted of the total value of the Eng-
lish Company’s annual export from Bengal. With the exception
of a few years (for example, in 1668-9 and 1704-5 when the
percentage slid to 38.5) the total value of annual textile export
formed roughly about 70 to 90 per cent of the total value of the
Company’s exports.43 So it can rightly be asserted that through-
out the second half of the 17th century and the first two decades
of the 18th century textiles constituted the most important
article in the structure of the English Company’s export trade
from Bengal.
Fig. 5.1: Percentage of Export Commodities from Bengal in

Total Export Value of the English Company
Percentage in Total Export
Note: Dotted lines represent parts of the curve in which data are not available.
V
The European Companies procured textiles for export mainly
through merchant-middlemen as they could not deal directly with
the producers in most cases. They had to give dadni or advance
to middlemen who in their turn paid advances to weavers and
artisans in the proper time of the year. Thus one finds that the
dadni system was widely in use and that both cash advances and
giving out of raw materials were established practices. Textile
production in Bengal, as in other parts of India, was organized
as a cottage industry by the weavers and artisans in their own
homes. These people with little capital in their hands generally
had to depend largely on the advance either in cash or in kind
from the merchant-middlemen for whom they produced the com-
modities. Thus the merchant-middlemen had some control over
the quality, size and quantity of production. But as yet there was
no full-fledged putting-out system involving deep penetration

of capital into production. The merchant giving out advances
was only interested in the finished products and thus remained
largely outside the production organization. And despite the
increased demand for textiles and competition among buyers,
both European and Asian, it seems that the weavers and artisans
had hardly any bargaining power which remained mostly in the
hands of these merchant-middlemen.
The activities of the European companies undoubtedly gave
an impetus to textile production in Bengal. The European
demand for Bengal textiles was a new phenomenon in the his-
tory of the country’s export trade and assuming, in the absence
of any evidence to the contrary, that the supply for European
markets did not seriously affect Bengal’s traditional exports
to other regions, it can rightly be said that the production of
textiles had definitely gone up during this period, though it is
not possible to measure this in any quantitative terms. A cursory
glance, however, at the export list of the European Companies
will give a rough idea of the extent of expansion of textile trade.
Towards the close of the period under study the English and the
Dutch Companies exported annually from Bengal on an average
about 525,000 pieces of different textiles. Only an expansion in
production could meet such a huge demand for Bengal textiles.
The significant point is that the increase in production could be
made without any fundamental change in the technique or in
the organizational aspect of the production system. The question
naturally crops up – how then was this expansion in production
possible? In the absence of any direct evidence only a tentative
hypothesis can be put forward. So far as the textile industry was
concerned, the expansion in production was achieved by pick-
ing up the slack in the economy. The fact that a considerable
increase in the total output could be brought about without any
significant innovation in the technique of production obviously
points to the existence of a possible over-capacity in the textile
industry over short period or the creation of new supplies of
skilled labour which was the most important factor in the pro-
duction system. This is further confirmed by the fact that when
the English settled down in Kasimbazar, there was such a huge

congregation of weavers there that it resulted in the lowering
of prices of cloth.44 It is probable that these weavers were not
fully employed earlier and also that quite a few of them were
previously agricultural producers, taking to weaving only as a
subsidiary employment and now becoming exclusively weavers
giving up agriculture as their primary occupation.
It appears that despite the promise of ‘great wages’ and all
material inducement the weavers in Bengal were somewhat
reluctant to leave their traditional abodes and settle down in
some other places and the English Company failed to persuade
Bengali weavers to go and settle down in Madras. This is rather
interesting in view of the fact that the Coromandel weavers were
‘surprisingly mobile’. ‘Such was their caste and lineage’ that
Bengali weavers feared to lose these by crossing salt water. The
Company even failed to persuade the taffeta-weavers to move
from Kasimbazar and settle in Hugli. But Bengali weavers and
artisans never lacked enterprise. The English factors reported
that the weavers were willing to engage in any new work though
they demanded higher price for any cloth other than those made
traditionally. On various occasions they demanded payment of
the cost of alteration in their looms for meeting the specified
requirements of piece-goods by the Company.
The activities of the European Companies were responsible
for introducing certain new elements in the organization of com-
merce and production, though not on any extensive scale. But
they might hardly be called innovations, as their overall impact
was not particularly significant. Before the arrival of the Euro-
pean Companies the Asian as well as the Portuguese merchants
used to buy from the markets or manufacturers as best articles
as they could get at any given time. But the European Compa-
nies of monopolistic merchant capital, catering to the European
craze for ‘Indienness’ and trading for a higher margin of profit,
insisted on supplies conforming to samples with rigid and spe-
cific demands as to size, colour and quality and thus introduced
the idea of specific standardization which was something new in
the region. But the point may not be stretched too far because
Table 5.2: English Company’s Textile Exports (in pieces)
Years Quantity (pieces) Value in £

1663-4 26,383 16,951
1664-5 21,133 12,412
1668-9 8,085 5,549
1669-70 20,336 10,254
1670-1 37,739 23,578
1671-2 75,957 41,739
1675-6 84,402 38,204
1676-7 79,157 43,193
1678-9 75,408 50,363
1681-2 164,479 80,640
1682-3 168,789 78,641
1683-4 187,004 96,416
1684-5 316,829 148,813
1685-6 – 157,480
1690-1 71,130 34,538
1692-3 17,987 9,339
1693-4 89,052 36,858
1694-5 71,539 26,308
1695-6 – 70,490
1696-7 125,747 56,617
1697-8 – 60,258
1698-9 – 119,364
1699-1700 – 144,441
1700-1 – 196,950
1701-2 – 165,522
1702-3 – 37,314
1704-5 38,250 25,211
1705-6 81,224 54,640
1706-7 – 49,876
1707-8 – 103,256
1708-9 – 75,848
1709-10 272,222 166,423
1710-11 284,907 203,196
1711-12 298,624 210,824
1712-13 275,553 219,093
1713-14 197,503 149,048
1714-15 190,320 132,287
1715-16 271,126 178,015
1716-17 179,097 115,366
1717-18 275,375 174,606
1718-19 337,642 205,275
1719-20 475,750 297,500
Source: Computed from A.G.D., Range II, 28, 30, 32, 37, 41, 43, 46, 49, 52, 55, 58.
Table 5.3: Percentage of Textiles in Total Export Value from
Bengal English Company
Years Textiles
1663-4 71
1664-5 67
1668-9 38
1669-70 62
1670-1 83
1671-2 77
1675-6 71
1676-7 71
1678-9 52
1681-2 55
1682-3 50
1683-4 67
1684-5 71
1685-6 83
1690-1 83
1692-3 83
1693-4 62
1694-5 83
1695-6 77
1696-7 77
1697-8 91
1698-9 77
1699-1700 77
1700-1 71
1701-2 71
1702-3 71
1704-5 38
1705-6 77
1706-7 59
1709-10 83
1710-11 91
1711-12 91
1712-13 83
1713-14 83
1714-15 83
1715-16 83
1716-17 66
1717-18 71
1718-19 83
1719-20 91
Source: See note on Table 5.2.

while on the one hand the local artisans’ production system was
rather indifferent to any rigid standardization, the severe compe-
tition amongst too many buyers in the market on the other was
likely to make the merchants and producers somewhat reluctant
to specific standardization as they were sure of being able to sell
off their wares to one buyer or the other. Before the arrival of the
European Companies the Asian and the Portuguese merchants
Table 5.4: Contracts with Calcutta merchants showing the different

varieties of three principal muslins and their prices for four years
(cide, Beng. Pub. Consult, Range 1, vols. 2-4).
1710 1713 1716 1719

Cossaes Co x Co. Rs. as. Rs. as. Rs. as. Rs. as.
Malda 40 x 2¼ 9-12 9-12 9-12 9-12
Orrua 40 x 2¼ 6-10 7-0 7-0 7-0
Cogmary 40 x 2 9-8 9-8 9-8 9-8
Cogmary 40 x 3 13-0 13-0 13-0 13-0
Cogmary 40 x 2½ – – 10-8 10-8
Colligaum 40 x 2½ 10-8 10-8 – –
Mulmuls
Malda 40 x 2 13-12 – – –
Savagepore 40 x 2¼ 8-12 – 8-12 –
Santapore 40 x 2¼ 13-8 14-12 14-12 14-12
16-0 11-12 11-12 11-12
22-0 13-4
Santapore 40 x 3 – 20-0 – 16-0
Dacca 40 x 2 16-0 13-0 – 8-0
Dumree 40 x 2¼ 12-0 – – –
Cossajura 40 x 2 13-6 12-0 12-0 12-0
Coincola 40 x 2 – 11-12 – –
Flowered with silk 40 x 1 – 22-0 – –
Flowered with silk thread 40 x 1 16-0 15-0 15-0 15-0
Tanjeebs
Santose 40 x 2¼ 7-12 7-12 – 6-14
Dacca 40 x 2¼ 8-8 – – –
Dacca 40 x 2 7-0 7-0 – 7-0
Flowered with silk – – 20-0 – 20-0
Flowered with silk thread 40 x 1 13-0 13-0 – 13-0
never fixed a definite price of the commodities they ordered at

the time of giving out advances and did so only when the prod-
ucts were delivered to them. The European Companies, however,
fixed the price according to samples at the time of giving out the
dadni and this was a novelty in the organization of commerce
in the region. They also sometimes set up establishments for the
processing of cloth – especially bleaching and dyeing as also
for winding or reeling of silk – employed weavers and artisans
purely as wage-workers and even brought throwsters, weavers
and painters from Europe who instructed local artisans and
weavers in those arts and tried to improve the quality and colour
of the piece-goods or raw silk. These establishments no doubt
enlarged the range of the manufacturing system in the region,
though they were not entirely new institutions in the country.
The royal karkhanas were there and though they produced for
use rather than for market, they must have served as models for
the merchants to engage in such enterprises. There is evidence
that such establishments under Indian auspices were operating
in the 17th century, though perhaps on a small scale. As early
as 1620 the visiting English factors at Patna intended to start a
‘Corconna’ with about a hundred workmen to wind silk,45 obvi-
ously following the practice of the local merchants. It is very
probable that Bernier referred to such private ‘manufactories’
when he observed that ‘rich merchants and tradesmen . . . pay
the workmen rather higher wages’.46 Luillier who visited Bengal
in 1702-3 remarked that the big native merchants ‘apart from
their large numbers of agents . . . maintain a great number of
workers whom they make to work for very little’.47 So it seems
that small private manufactories under Indian auspices were
already there and perhaps the European activities only extended
the range of such establishments.
AGD Accountant General’s Department, Range II, India

Office (Commonwealth Relations) Library, London.
BPC Bengal Public Consultations, India Office Library.
DB Despatch Books, India Office-Library.

EFI English Factories in India, ed. W. Foster.
KA Koloniaal Archief, Algemeen Rijksarchief, The Hague.
Factory Records (India Office Library): Calcutta, Hughli, Miscel-
laneous
Notes
1. ‘een Indische sijden stof; taf’.

2. D.B., 89, f. 266; 93, ff. 32-6.
3. Irwin’s contention (John Irwin and P. R Schwartz, Studies in Indo-
European Textile History, p. 45) that ‘Chintz goods were of in-
significant importance in Bengal trade’ does not seem to be tenable as
in the second decade of the 18th century the English Company
exported quite large number of chintz, numerically surpassed only
by such cotton piece-goods as baftas, cossaes, emerties, gurrahis,
mulmuls, romalls and tanjeebs. In 1711-12 the Company exported
21,397 pieces of chintz at the invoice price of Rs. 85,050. The Dutch
Company ordered during the first two decades of the 18th century on
an average about 10.000 pieces a year. It is true, however, that Bengal
chintz could never compete in importance with those of western India
and the Coromandel.
4. Irwin classified the varieties of muslin ‘according to the maximum
prices paid’ in the following order of fineness: tanjeebs, mulmuls,
nainsooks, terrendums, aliballies, seerhaudconnaes, etc. (op. cit., pp. 49-50).
But this classification seems to be completely erroneous if we look
at the contracts made by the Company with Calcutta merchants in
the first two decades of the 18th century (cf. B.P.C., Range I, 1-4).
Seerhaudconnaes which finds sixth place in Irwin’s classification was
actually the most expensive and hence, deserves the first place, if, as
Irwin claims, maximum prices paid is to be the criterion of fineness of
cloth. Both in 1710 and 1711 the Company paid Rs. 26 per piece of
seerhaudconnaes (42 co. × 2 co.) while for tanjeebs (Santose, 42 co. ×
2¼ co.) the maximum price paid during these years was only Rs. 7¼
per piece (B.P.C. Range I. .2, ff. 11-7, 81a-85a). The price of ordinary
tanjeebs whether from Dacca or Santose (sizes varying between
40 co. × 2 co. and 40 co. × 2¼ co.) throughout the second decade of the
18th century ranged between Rs. 6.14 ans and Rs. 8.8 ans while the
maximum price paid for flowered tanjeebs woven with silk was only
Rs. 20 per piece (40 co. × 2 co.). Even for the mulmuls the Company
had to pay more than it did for tanjeebs. The maximum price for
mulmuls Sevagepore (40 co. × 2¼ co.) was Rs. 8.12 ans and Rs. 16
for mulmuls Dacca (40 co. × 2 co.) and mulmuls Santapore (40 co.
× 2¼ co.). And for flowered mulmuls woven with silk the Company
paid Rs. 22 per piece (40 co. × 2 co.). So it is clear that mulmuls were
more expensive than tanjeebs and as such should precede tanjeebs in
order of fineness. Again, in Irwin’s classification even nainsooks and
terrendums preceded seerhaudconnaes while actually they should
come only after the latter, if maximum price paid is the criterion of
fineness. While a piece of seerhaudconnaes (42 co. × 2 co.) cost Rs. 26
in 1710, a piece of tansook or nainsook (42 co. × 2 co.) and terrendum
(40 × 2¼ co.) cost only Rs. 18 and Rs. 12.8 ans respectively.
5. O.C:, 19 Feb. 1651, no. 2208, 22; EFI, 1651-4, p. 45; O.C., 25 February
1651, no. 2210, 22; EFI, 1651-4, p. 47.
6. E. Lipson., An Introduction to the Economic History of England, III
(Revised Edition, London, 1956), 104.
7. D.B., 28 January 1659, 85, f. 199; EFI, 1655-60, pp. 275-6.
8. D.B., 2 January 1663, 86, f. 202.
9. K. Glamann, Dutch Asiatic Trade, 1620-1740 (The Hague, 1958),
p. 142.
10. For description of fashion see Slomann, Bizarre Designs in Silks.
11. J. Cary, A Discourse concerning the East India Trade (London, 1696),
p. 4.
12. India Office Tracts, 83, Tract no. 7, p. 50.
13. D.B., 20 May 1681, 89, f. 352.
14. D.B., 5 July 1682, 90, f. 7.
15. D.B., 22 April 1681, 89, f. 331.
16. D.B., 30 December 1681, 89, f. 437.
17. D.B., 5 July 1682, 90, f. 7.
18. Ibid.
19. D.B., 30 October 1684, 90, f. 382.
20. D.B., 27 August 1688, 91, f. 575.
21. The Act of 1700 laid down that ‘from September 29, 1701 all

manufactured silks, Bengals and stuffs mixed with silk or herba, of the
manufacture of Persia, China or East Indies and all calicoes painted,
dyed, printed or stained there which are or shall be imported into this
kingdom of England, dominion of Wales and Town of Berwick on
Tweed, shall not be worn or otherwise used within this Kingdom and
also of £200 penalty on the persons having or selling any of them’,
D.B., 93, f. 271.
22. S.A. Khan, East India Trade in the Seventeenth Century (London,
1923).
23. Col. Birch quoted in ibid., p. 163.
24. Quoted ibid., p. 159.
25. Childe, ‘The East India Trade in the most National of all Foreign
Trades, 1681’, India Office Tracts, 83, Tract no. l, pp. 18-19; Reply
to the Allegations of the Turkey Co., quoted in S.A. Khan, op. cit.,
pp. 158-9.
26. Papillon, The East India Trade a most Profitable Trade to the Kingdom
(London, 1677), p. 10.
27. Factory Records, Calcutta, 8, pt. II, f. 149.
28. S. Bhattacharya, The East India Company and the Economy of Bengal
(London, 1954), pp. 158-9.
29. Geographical analysis of piece-goods in the Company’s orders for
Bengal
Areas Orders sent out Orders sent out Orders sent out
November 1681 August 1682 December 1683
Kasimbazar 84,100 pieces 222,600 pieces+ 208,00 pieces+
20 bales 20 bales
Hugli 23,500 pieces 110,200 pieces 158,300 pieces
Balasore 72,500 pieces 162,000 pieces+ 158,000 pieces+
16 bales 16 bales
Dacca 21,300 pieces 81,500 pieces+ 71,500 pieces+
12 bales 12 bales
Malda 27,800 pieces 86,500 pieces+ 86,500 pieces+
20 bales 20 bales
229,200 pieces 662,800 pieces+ 682,300 pieces+
68 bales 20 bales
Source: Compiled from D.B., 89 and 90.

0. A large flat-bottomed boat.
3
31. R.C. Temple, ed, The Diaries of Streynsham Master, I (London, 1911),
399-400; Factory Records, Misc., xiv, ff. 334-6.
32. Temple, op. cit., i, 139, 399; Factory Records, Misc., xiv, ff. 335-6.
33. Temple, op. cit., i, 139; ii, 11; Factory Records, Misc., xiv, ff. 327-8.
34. Factory Records, Hugli, x, f. 207.
35. O.C., no. 7211, 58.
36. D.B., 3 Feb. 1720, 100, f. 222.
37. See Table 3.
38. Ibid.
39. The Company realized a profit of about 450 per cent from the sale
of the piece-goods brought by the ship Tavistock in 1704.5, A.G.D.,
Range II, 49, ff. 23,55.
40. D.B., 29 November 1670, 87, f. 404.
41. Computed from relevant volumes in A.G.D., Range II.
42. Speaking generally of the textile trade about the close of the 17th
century, K. Glamann observes: ‘The Dutch Company still maintained
its leading position but it was a near thing. The competition was
severe’. For Dutch export see relevant volumes in K.A.
43. See Table 5.2.

44. Irwin, op. cit., pp. 31-2.
45.
EFI, 1618-21, pp. 197-8.
46.
F. Bernier, Travels in the Mughal Empire, 1656-68, tr., A. Constable,
2nd edn, revised by V.A. Smith (London, 1916), pp. 228-9.
47. Quoted in Indrani Ray, ‘The French Company and the Merchants of
Bengal (1680-1730)’, The Indian Economic and Social History Review,
VIII, no. l (March 1971), 50.
chapter 6
Bengal Merchants and Commercial

Organisation in the Second Half
of the Seventeenth Century*
An attempt is made in this paper to analyse the trading activities

of the Bengal merchants and examine the nature and character
of their commercial organisation vis-à-vis the English East India
Company trading in Bengal. The appearance of the European
Companies gave rise to a new situation in the commercial life of
Bengal in the second half of the seventeenth century. These Com-
panies entered the market as buyers and sellers of goods, and
created problems in their supply and delivery. There is evidence
to show that the quantities of goods entering trade flows were
now greater than before, and the increased demand put great
pressure on supplies. Again, the Bengal merchants, who had a
long experience of dealing with individual traders from various
parts of Asia, had to deal for the first time with foreign Compa-
nies of monopolistic merchant capital during this period. It will
be our aim to study the response of the traditional merchants in
their methods and organisation of trade to this new situation.
The activities of the Bengal merchants had certain distinct fea-
tures. They acted as brokers to the European Companies which
could not deal directly with the producers for provision of goods
for Europe. But they were not merely brokers but also traders
operating, exclusively with their own capital. All of them were
primarily merchants – buyers and sellers of different commodi-
*Bengal Past and Present, vol. XC, part II, sr. no. 170, July-December 1971,
pp. 184-216.
Bengal Merchants and Commercial Organisation | 109
ties, and their business extended to any class of goods which

was expected to yield a profit. They also acted simultaneously
as shroffs or money-changers and bankers, received deposits and
arranged remittances by means of bills of exchange or letters
of credit on their various agents in the different trade marts of
Bengal. Occasionally they served as middlemen, specially in the
transactions between the European Companies and the ruling
class. These Companies, on their part, on various occasions
made use of the merchants’ influence with the ruling nobility
to win favour or privileges for them. But despite that, the Euro-
pean Companies most often mistook the Bengal merchants as
mere brokers and tried, though unsuccessfully, to coerce them
into submission following trade disputes. Time and again they
tried to break the rings and the bargaining position of the Bengal
merchants, specially their monopolistic designs but only in vain.
Throughout the period the Bengal merchants maintained their
credit and influence quite independent of the European Com-
panies.
The term ‘Bengal merchants’ is used here in a wide sense
and includes all the indigenous merchants trading in Bengal as
opposed to the Europeans, and geographically Bengal means
the Mughal Suba of Bengal comprising the present provinces of
Bengal (East and West), Bihar and Orissa. We shall discuss the
subject under the following heads – (i) position of English, trade
in Bengal; (ii) Bengal merchants and the English East India Com-
pany; (iii) Bengal merchants’ overseas trade; (iv) some estimate
of their wealth; and (v) finally, our conclusions.
Position of English Trade in Bengal
It will be helpful to begin with a brief description of the founda-

tion and early development of English trade in Bengal, and take
a quick glance at its main features. During the second half of the
17th century the European Companies, mainly the Dutch and
the English, built up an extensive commercial complex in Ben-
gal. Though the English trade in Bengal began as early as 1633
through Balasore, it was only after the foundation of the Hugli
factory that the English started trading there on a large scale.

By the ‘sixties of the 17th century they had already; established
inland factories at Kasimbazar, Patna and Dacca, besides those
at Balasore and Hugli, and in 1676 they had founded the Malda
factory.1 From the very beginning, the factors of the Company
were hopeful of a lucrative trade in Bengal. They wrote home in
the late ‘fifties – ‘Bengal is a rich province. Raw silk is abundant.
The taffaties are various and fine. The saltpetre is cheap and of
the best quality. . . . Our operations are going so extensive that
we shall be obliged to build new and large warehouses.’2 Indeed
the trade of the Company in Bengal expanded in rapid strides.
The investment of the Company in Bengal in 1669 was £34,000
rising to £85,000 in 1675 while in 1681 it went up to £150,000
and reached a peak of £250,000 in 1682.3 These figures indicate
how rapidly the trade of the Company increased in Bengal. In
fact, in the last quarter of the century, its Bengal trade assumed an
increasing importance in the total trade complex of the English
Company. Political instability, Maratha threat and the oppres-
sions of local governors in Surat, and local feuds and internecine
wars in Caromandel injected an element of uncertainty into the
trade of these two centres and were partly responsible for a cor-
responding stimulus to trade in Bengal which enjoyed relative
political stability. Indeed the importance of Bengal trade in the
second half of the 17th century lay in the fact that it was a ‘rising
trade’.
The chief preoccupation of the English Company in Bengal
was to provide investment for Europe-trade, though it derived
a lucrative profit from inter-Asiatic trade directed from Bengal.
Thus both for European trade and inter-Asiatic trade the Com-
pany had to make a large annual investment. The commodities
mostly in demand throughout the period comprised silk and
cotton piece-goods, raw silk, cotton and floretta yarn, saltpetre,
sticklac, tincall and sugar (mainly for Surat and Persia). To pay
for these goods the Company imported different types of wool-
len cloth – such as broadcloth, cloth rashes, perpetuanoes – lead,
copper, vermilion, quicksilver and iron. But these imports from
Europe had only a limited market in Bengal – a feature shared
by the rest of India – and hence in order to finance the increas-

ing volume of exports from Bengal, the Company had to import
bullion which it sold in the local market or, as in a later period,
had them coined in local mints. Sometimes when the shipment of
goods and bullion was late – which happened most frequently –
the Company borrowed money from the indigenous merchants.
Throughout the period, a chronic shortage of fund for making
investments in the proper time of the year forced the Company’s
servants to borrow money locally. The general pattern of the
Company’s organisation of trade in Bengal was that in every fac-
tory it had several merchants or brokers of whom one acted as
the chief and through whom the Company transacted its entire
business in the country. It is against this background – the gen-
eral trade complex of the English East India Company – that we
shall analyse the position and activities of the Bengal merchants.
Bengal Merchants and the English East India Company
In this section we shall discuss the activities of several important

merchants in the different trade marts of Bengal, especially with
reference to their relation and transactions with the English East
India Company. Every important merchant, it appears, had one
main centre of his activities though he managed his commercial
organisation through a network of gomastas or agents in almost
all the trade centres of Bengal.
The two Balasore merchants, Khemchand and Chintaman
Shah, played a significant role in the commercial life of Bengal in
the second half of the 17th century. These two merchants were
generally referred to in the records of the English Company as
‘Chimcham’ and ‘Chintamund Saw’. They were the most influ-
ential merchants at Balasore on their own account, taking a
prominent part both in the internal and external trade of the
country, sometimes trading jointly and at other times on sepa-
rate accounts. For many years they were the principal brokers
to the English Company at Balasore for providing commodities
for the investment of the Company. But their role as indepen-
dent traders and merchants was no less important than that as
brokers to the Company. Perhaps that was the reason why they
could bargain effectively with the Company, even in the face of
the threat of being deprived of their position as chief brokers.
Of the two merchants, Khemchand seems to have enjoyed
greater repute and better position than his partner and colleague
Chintaman. As early as 1669 Khemchand entered into an engage-
ment to supply goods for the Company’s investment.4 Generally
this investment at Balasore at this period consisted mainly of
such piece-goods as sannoes, nillaes and ginghams, and occa-
sionally, if cheap and of good quality, doreas and cossaes also.5
Khemchand was mentioned in the records of June that year as
the ‘chief merchant of Balasore’. But soon the Company became
concerned at the high rates charged by him and the Hugli fac-
tors wrote in October 1670 that they endeavoured ‘to redress
by drawing the provision out of Khemchand’s hands whom we
find not fitting to be much longer employed in your business’.6
However he still enjoyed in 1672 the title of chief broker and
merchant to the Company. In that year when Safsi Khan suc-
ceeded Safi Khan as the governor of Orissa, Khemchand and
two other merchants, Haricharan and Jairaj Shah, accompanied
Boremull [Puranmall?] to Cuttack to obtain a parwana for the
English trade in that province.7
The Balasore merchants generally provided the commodi-
ties for the Company’s investment accepting payment half in
Europe-goods and half in ready money.8 But sometimes influen-
tial merchants would not provide goods for investment without
an advance in cash. Such a situation arose in 1673 when the
financial position of the Company at Balasore was precarious
throughout the year. On the one hand, the provision of cargo
for an unusually large number of ships which had arrived at
the end of the previous year9 had depleted the sources of the
Balasore factory, on the other, due to the Dutch war, no money
was available on bills of exchange from the Dutch who usually
provided funds to the English Company in this way. Khemchand
was fully aware of the financial difficulties of the English and
was unwilling to provide any investment for the Company
without an advance in cash. The disappointed factors reported
– ‘Khemchand keeps aloof off and seeing we have no money

to advance here is unwilling to take off our goods.’10 However,
the Company was finally able to barter some of the lead and
broadcloth for piece-goods but this resulted in a financial loss of
about 20 per cent for the Company.’11
Khemchand was seldom subservient to the Company and
owned his position as a merchant and banker quite independent
of the English. Streynsham Master, who was in Bengal during
1676-80 to reorganise the Company’s trade, reported that Khem-
chand and Chintaman were the only ‘money’d men amongst the
merchants’ at Balasore and that there were ‘no other merchants so
able and capable to procure the said goods or that can undertake
them cheaper’.12 He stated on 30 August 1676 that Khemchand
was ‘very high and indifferent whether he dealt with the Com-
pany or not.’13 However, in order to prevent bad debts by which
the Company suffered considerably at Balasore, Master entered
into a contract with the Balasore merchants in which he insisted
that for all money ‘advanced on account’, the leading merchants,
Khemchand and Chintaman Shah, should be mutual securities,
both for their own transactions as well as those of their less
wealthy colleagues. According to this agreement, the investment
was to be divided into ten parts, viz. four parts to be assigned to
Khemchand, two to Chintaman and the remaining four among
the smaller merchants at the joint discretion of the chief of the
factory, Khemchand and Chintaman. These merchants obliged
themselves, in return for a full advance on the whole investment,
to repay any arrear within a month after the departure of the
ships for Europe, and in default, to pay 1½ per cent interest until
the arrears were settled. Failure to supply goods contracted for
entailed forfeiture of the merchant’s share or shares, as the case
might be, in the investment. The contract was to remain in force
during the Company’s pleasure ‘unless the merchants through
their defaults shall cause a breach thereof.’14
A careful analysis of this contract between the Company and
the Balasore merchants brings to light certain interesting points.
Khemchand was, with little doubt, the most influential mer-
chant and the chief broker to the Company at Balasore and was
responsible for providing 40 per cent of the Company’s invest-

ment. Chintaman was only next to Khemchand in influence and
credit providing 20 per cent of the investment. In the selection
of other merchants for providing investment, both Khemchand
and Chintaman, besides the chief of the factory, had an effective
voice. But they had no right to terminate the contract, even if
they desired to do so, and were thus tied to the Company. Thus
Master sought to protect the Company by this contract from
loss through ‘persons of small or no estates employed in the
investments’ by taking security of Khemchand and Chintaman
on behalf of other merchants.
Despite the contract, Khemchand and Chintaman could exert
their independence, as we find, they refused, to the surprise of the
Company’s factors, to stand security for three merchants ‘since
their affairs were esteemed desperate’.15 Again they declined to
give security for some merchants fearing the latter would sup-
ply inferior goods. The Hugli Council appreciated this stand of
Khemchand and Chintaman which is evident from their letter:
‘We admire Khemchand and Chintaman should refuse to be
security for those persons who provide any goods of the invest-
ment enordered with you. . . . The security deseired, you may tell,
was for persons, which, when they have considered, we suppose,
they will not be so scrupulous as you may now represent.’16
The Hugli Council gave permission to Khemchand and his
fellow merchants to build a warehouse in the Balasore factory ‘at
their own charge’ for various goods for investment to be stored
in ‘until they were priced’. The main condition attached by the
Council for building this warehouse was that the merchants had
to do it in the Company’s name, and that they could bring or put
no other goods therein except in case of ‘very great exigency and
then to advise and have licence from Hugli for their so doing.’17
Khemchand not only provided investment for the English
but sometimes used to purchase Europe-goods from the Com-
pany for trading in those articles in the country. At one time
he proposed that he might be allowed to buy entire supply of
broadcloth – which formed quite a substantial part of the Com-
pany’s imports into Bengal – imported yearly by the English. He
made this proposal to the Company as early as 1675 but nothing

seems to have come out of it, and in 1677 the Company rejected
his offer and entered into a contract with Sukanand Shah, an
eminent merchant and shroff at Kasimbazar, who agreed to buy
all the broadcloth imported into Bengal.18 Khemchand, however,
had to accept Europe-goods in part payment for the Company’s
investment and he used to sell these commodities in the inland
markets,19 though sometimes the ‘clogging of them’ in the hands
of the Indian merchants (as these articles had little sale in Bengal)
was a positive deterrent for their continued sale to the traders by
the Company.
That these two Balasore merchants were very influential is
evident from the fact that they acted as brokers between the
Company and the prospective buyers, specially when the latter
were high officials of the State. In 1673, in order to avoid diffi-
culties in financial transaction, the Hugli Council instructed Hall
at Balasore that if Malik Qasem, the then faujdar of Balasore,
wanted to buy guns from the Company, he must pay cash, or
Khemchand should buy them for him. The Company decided
that Khemchand could buy as many guns as he wanted at eight
rupees per maund but Raja Mansingh, another prospective cus-
tomer for whom Khemchand was acting as a broker, would have
to pay nine rupees per maund.20 In 1679 Chintaman approached
the Balasore factors with a letter from Malik Qasem desiring to
provide the latter with a quantity of iron ordnance. The factors
declined to deal with the governor except through the brokers
and finally transacted the business through Khemchand and
Chintaman.21 In the same year in regard to a dispute with the
Dutch concerning a house and a piece of ground at Balasore, the
factors were directed to get the ‘quanungo’s chaup’, if necessary,
by means of Khemchand or Kalyan Roy.22
Khemchand and his fellow merchants often formed rings and
bargained effectively with the Company which had to yield,
though very reluctantly, to their terms. In 1680, despite all per-
suasion and threats by the Company, the merchants ‘obstinately
refused to give any more than 208 (rupees) for 100 p. Rials . . .
unanimously joining together and with one consent declaring
as much . . .’.23 The Balasore merchants were shrewd enough to

realise that time was on their side and that the Company would
have to yield if it did not want to lose the full investment for the
year. The Company ultimately surrendered with the following
remark – ‘. . . delay in a business of such import being of conse-
quence, we having well weighted the thing . . . (as) the investment
of this year enordered on Balasore may be much retrenched, if
not wholly lost, those people appearing resolute at this pinch
of time as well knowing our necessity of taking their goods, we
judged best to give order. . . .’24
The Company’s investment at Balasore for 1681, mainly in
nillaes, ginghams and sannoes, amounted to Rs, 138,000,25 An
advance of Rs. 25,000 was paid to the merchants and distributed
among them according to their respective shares in the following
manner:26
Khemchand Rs. 12,000
Nimdas Rs. 1,255
Hira Shah Rs. 828
Goculchand Rs. 1,875
Syed Nyamatullah Rs. 875
Enayat Khan Rs. 875
Gangaram Rs. 1,656
Sibram Rs. 575
Bihary Rs. 575
Nilu Shah Rs. 575
Bhikary Shah Rs. 1,011
Rs. 25,000
It is clear from the above list that Khemchand was still by

far the most influential merchant at Balasore providing 48 per
cent of the total investment of the Company there. However,
when the Company decided to enlarge the investment for that
year by an additional amount of Rs. 35,000, Chintaman Shah
(who was excluded earlier) was allowed to have a share in the
investment, but it was small, and though greater than that of
other merchants, not comparable at all to that of Khemchand.27
Chintaman Shah, who was even in 1679 referred to as ‘one of
the Company’s chief merchants’,28 received a severe reprimand
in July 1680 from the Hugli Council for ‘boggling’ about a debt
he owed to the Company.29 He was excluded from any share in
the investment for 1681 for three reasons – his dealing with the
Interlopers, his being in ‘serious debt’ (as Sir James Fawcett says),
and his engagement with nawab Rashid Khan.30 The Balasore
Consultation of 21 June 1681 states that the Hugli Council gave
‘express order’ not to employ Chintaman Shah anymore as he
was acting for the nawab. This seems a curious and small reason
for his exclusion, the Company generally considering trade with
rival English Interlopers or bad debts as the principal reason for
discontinuing the services of a particular broker. The actual debt
owed by Chintaman to the Company could hardly be considered
serious, since it stood in the Company’s book at Rs. 5,729 : 3 :
4 only.31 Khemchand, however, came forward and put pressure
on the Company by saying that without Chintaman’s help he
would not be able to go through with the investment, and he
also offered to stand security for his colleague.32 Chintaman,
too, as security for his debt gave an obligation for Rs. 5,000
owing to him by the factor of the King of Siam,33 the interest
of which stood at about 600 rupees. The Hugli Council left the
whole matter to the Balasore factors ‘who seemed willing to give
another imprest to Chintaman’.34
It is interesting to note that the Company at this time began to
realise the disadvantages of depending too much on the syndicate
formed by Khemchand, Chintaman and their fellow merchants
for providing Company’s investment at Balasore. Early in 1679
Mathias Vincent, the Agent in Hugli, wrote that the Balasore
goods would not come down to their usual prices until Khem-
chand and ‘those that hang on him or side with him would be
thrown off’.35 In 1681 the Hugli Council resolved that the best
way of providing the investment at Balasore was not by ‘these
great merchants.’36 As a result and in accordance with the Court’s
order to encourage and employ new merchants ‘who depend not
on any of the knott of Khemchand etc.’,37 the Balasore factors
entered into a contract on 27 September 1681 with ‘Rewadass &
Company’ for providing such goods as were wanting to complete
the full investment for the year and distributed an advance of

Rs. 20,000 amongst these merchants in the following manner38 –
Rewadass Rs. 5,500
Bulchund Rs. 3,500
Shyamdas Rs. 5,750
Abhiram Rs. 5,250
Rs. 20,000
The Hugli Council was glad that ‘Rewadass & Company’

agreed to supply goods at a more reasonable rate than that of
Khemchand and his fellow merchants. This belied the apprehen-
sion of the Balasore factors that the merchants there were too
afraid of Khemchand to enter into a separate contract with the
Company.39 However, it did not diminish in any way the influ-
ence and position of Khemchand and Chintaman as principal
merchants of Balasore. Even in 1682 Khemchand was still in a
position to dictate his terms to the Company, though by then, it
appears, he had lost the title of chief merchant. The investment
for that year amounting to Rs. 198,700 was proportioned by
the Hugli Council in the following manner – Khemchand and
Chintaman Rs. 55,000 (Chintaman’s share being Rs. 20,000),
Rewadass Mahta and Mahmud Hussain Rs. 37,500, Rajaram-
das Rs. 21,000, Hira Shah Rs. 20,000 and the rest among 13
other merchants.40 Khemchand immediately declared that he
would not accept any share in the investment unless he might
be allowed such a part of it as in ‘proportion to his late title of
chief merchant’ and that he would receive no ‘imprest’ money
nor make any provision of goods for the Company.41 The Hugli
Council directed the Balasore factors to distribute Khemchand’s
share, in case of his refusal to accept it, amongst others or new
merchants, and they resolved not to have a chief merchant in
any factory ‘on whom the rest shall have dependence’.42 The
factors at Balasore were not happy with the decision of the
Hugli Council. They wrote back that the resolution would be
of ‘ill consequence and much to the prejudice of the Company’s
affairs’. They reported that a ship on private account had already
arrived at Balasore while several others were expected and that
Khemchand still persisted in his refusal knowing well he would

find other customers (e.g. the Interlopers) for his goods. Actually,
as the factors stated, he had made an investment for rupees one
lakh and sent gomastas to different inland marts to secure as
many weavers as they could and purchase all the goods ‘they
meet with’. The Balasore factors concluded – ‘it will be very
material and requisite he be continued in this year’s business, if
not, we doubt the moity of the goods enordered here will be not
got in’.43
By 1684, however, Khemchand’s position was definitely on
the wane, at least, in the eyes of the Company’s chief factor at
Balasore, who stigmatised him as ‘an encourager of Interlopers’,
‘a base unworthy person’, ‘not worth a cowry of our Company’s
investment’, and that he ‘fell short in the investment which is
considerable’.44 As such, it appears, he was replaced by Chinta-
man Shah as the Company’s chief merchant.45 Chintaman began
to gain confidence of the Company from, 1682. In that year his
gomasta lent Rs. 10,000 to the Company at Malda at 1 per cent
interest – per mensem (general rate being 1¼ to 1½ per cent
p.m.). In March 1684 the Company procured bills of exchange
from both Khemchand and Chintaman, in each case amounting
to Rs. 8,500.46
Both Khemchand and Chintaman Shah had regular trans-
actions with the Interlopers who visited Balasore during this
period, albeit the Company’s warning ‘not to have any dealings’
with them, directly or indirectly, under ‘pain of incurring the
Honourable Company’s displeasure and forfeiting their employ-
ments’.47 We have already noticed that Khemchand was branded
as an ‘encourager of Interlopers’, and perhaps that was the rea-
son for his losing the title of chief merchant of the Company at
Balasore. Time and again the Company tried to dissociate the
Bengal merchants from the Interlopers but with little success. In
1683 the Hugli Council directed the Balasore factors not to fail
in reasoning and confirming their promises to Khemchand and
the rest of the merchants that they would have ‘considerable and
sufficient’ investment for that year from the Company, and to
impress upon them that it would be an ‘everlasting discredit to
leave their old masters, by whose employments they have most

of them got their estates’.48 In another instruction of the same
year, the Balasore factors were asked to be ‘frequent in minding’
Khemchand and Chintaman of their promise and obligations
not to trade with the Interlopers ‘in hopes that shame may work
upon them, esteeming them persons that make so great scruple
to break through all obligations when they stand in competition
with their interest’.49 But all these efforts were to prove ineffec-
tive. The Balasore merchants never refrained from their dealings
with the Interlopers. Even in 1684 Chintaman’s gomasta was
found buying a considerable quantity of piece-goods in Dacca,
presumably for supplying the Interloping ships and to the great
prejudice of the Company’s affairs. Though the Hugli Council
declared that they would not encourage ‘such villains in making
preparations for Interlopers’, they could hardly prevent these
transactions between the Bengal merchants and the Interlopers.50
Despite the pronounced displeasure of the Company with the
activities of Khemchand and Chintaman, it could hardly dis-
pense with the services of these merchants. Their assistance was
essential not only for providing the full investment at Balasore,
but for keeping up good relations with the ruling class, as these
merchants had great influence on the latter. In April 1685, the
Hugli Council directed the chief of the Balasore factory to employ
Chintaman Shah to negotiate with Mahmud Khan and thus to
please Malik Burcoordar, the faujdar of Hugli, who seemed to
have become incensed with the Company at the time. Again in
that very year Khemchand and Chintaman were employed ‘as
Company’s merchants’ to clear up an affair with the government
‘for peace sake’.51
By the close of the ‘eighties of the century, both these mer-
chants had lost their influence and power to a great extent.
Khemchand died in November 168752 and the Company took
summary proceedings against his partner and colleague Chin-
taman Shah following doubts about his solvency. Chintaman
was alleged to be considerably indebted to the Company and
there being little likelihood of recovering his debt, the Company
decided to recover it by seizing his ships. Accordingly, when a
ship arrived in November 1686, of which Chintaman was a part

owner, the other being Khemchand, Captain Nicholson captured
it.53 The Balasore factors wrote in 1687 that Chintaman was not
‘worth anything’.54 But it appears from later records that until
his death, Chintaman traded considerably on his own account.
In 1691 he offered to buy the English ship Bengal Merchant for
Rs. 17,000.55 In the same year, at least, two of his ships sailed
on trading voyages to Tenasserim and the Maldives.56 Even in
1695 his ship Fatechund ‘burthen 10,000 mds.’ sailed for the
Maldives.57 After his death in 1695, the Company put a peon
(on the pretext of a debt amounting to Rs. 10,138 which Chinta-
man owed to the Company) on his ship which came from the
Maldives with Rs. 16,000 worth of cowries, and several other
commodities, thus preventing its sale or letting on freight. His
son-in-law, Ram Roy, pleaded on the basis of his papers that
Chintaman’s loss through the seizure of his ships and their car-
goes by the Company during the war in 1686 was much more
than the debt he owed. However, the Company found other
creditors of Chintaman clamouring for satisfaction out of the
ship and finally made a settlement with Ram Roy who agreed to
pay Rs. 700 yearly until the debt was cleared.58
Turning to Hugli, we find Mathuradas was the chief merchant
of the Company there at least from the ‘seventies of the century
though his name as chief merchant can only be traced from 1680
onwards. It is apparent from his own statement that he rose into
prominence as a merchant through his dealings with the Com-
pany.59 Like Khemchand and Chintaman at Balasore, he played
a significant role in the commercial life of Bengal not only as the
chief merchant of the Company but as the most influential mer-
chant on his own account in Hugli. Like other Bengal merchants
of the time, he handled a wide variety of commodities, buying
Europe-goods from the Company and also providing investment
for Europe. In 1679 the Company made a contract with him for
6,000 pieces of romalls, valued at Rs. 30,000 payable to him
half in money and half in goods. In the same year he bought
1,500 tolas of gold from the company for about Rs. 20,000.60
Next year the Company agreed to sell him 13 chests of treasure
(11 chests of fine bar silver and 2 of rials valued at about 1 lakh
of rupees) on the same terms and rates as in the contract with
Sukanand Shah of Kasimbazar.61
Like Khemchand and Chintaman Shah, Mathuradas was
not simply a broker to the English Company but a merchant
of considerable credit and influence, quite independent of the
Company. He traded on his own account as also with other
Europeans, notably the French and the Interlopers. He operated
his business, much to the annoyance of the English Company,
with monopolistic designs. The Kasimbazar factors complained
in 1682 that Mathuradas stayed there for about a month giving
considerable sum of money for raw silk and even endeavoured
to entice away some of the Company’s picars.62 In the same year
they reported that the picars demanded unreasonable prices and
two of their ringleaders, Chaturmal and Govindji in collusion
with Mathuradas, succeeded in luring away a great number of
picars who promised not to deal with the Company and pay a
penalty of Rs. 1,000 in case of any breach therein. Mathuradas
offered these picars, as the factors reported, ‘a great price’.63
The Court directed the Bengal Council to free itself from the
monopolising clutches of Mathuradas and others by forming a
joint stock of a hundred merchants but the Company failed to
organise such a joint stock in Bengal.64 In 1684 Mathuradas,
still the chief merchant of the Company, was found buying up
cloth around Dacca, much to the displeasure and hindrance of
the Company.65 The Company was further displeased with him
when he was found very ‘importunate’ to get back his principal
of Rs. 14,000 with interest from the Company.
As a result perhaps, when the Company resettled in Bengal
after a brief withdrawal following the war of 1686-88, it tried to
get rid of Mathuradas. Job Charnock, the agent in Bengal, wrote
to Stanley in Hugli to contract with Sudanand, Chaturmal and
other merchants and not ‘to have anything to do with Mathura,
that notorious villain’, and to ‘utterly reject him’.66 He advised
Charles Eyre at Dacca to procure from the nawab ‘as much as
possible that he (Mathuradas) may be discountenanced in such a
manner as to leave Bengal’.67 It appears that the English received
a parwana from the nawab on Ali Akbar, the faujdar of Hugli,

warning Mathuradas that if he indulged in future in his ‘ill
behaviour’ to the English, it would result in his total expulsion
from the country. But it was hardly put into effect, the obvious
reason being the credit and influence enjoyed by Mathuradas.68
The faujdar, as the factors reported, was severely displeased with
the parwana and wrote to the diwan that a person who brought
Rs. 18,000 to the King’s treasury could hardly be turned out of
the country.69 The Company also soon realised that it was not
possible to procure full investment in Bengal without the cooper-
ation of Mathuradas who by 1691 had become one of the most
influential merchants in Hugli. The Court directed the Bengal
agency to adjust all differences with Mathuradas and to hold a
‘fair correspondence’ with him. They further wrote that they had
reports not only from Englishmen but from Indians and Arme-
nians that he was ‘completely rich’ and ‘his masters in Dacca
are men of very great estates, money’d men and who can upon
occasion take up what money they please at small rates under
6 per cent per annum and make very great investments beforehand
in whatever goods you shall order either at Malda, Dacca, Patna
or Benaras’. The Company knew it could not buy commodities
from Mathuradas or cause him to provide goods altogether so
cheap as it could by giving out money in advance to picars. But
now as the Bengal goods were ‘fetching’ a very good price in Eng-
land and the Continent, the Company’s main concern was for a
greater investment, and therefore it asked the Bengal Council to
enlarge investment even by allowing Mathuradas 10 to 12 per
cent commission if he would provide sufficient commodities for
the Company.70 In August 1693, Mathuradas visited Sutanuti
factory and undertook to provide commodities worth more than
rupees one lakh with his own money.71 Later in that year the
Court directed the Bengal Council to ask Mathuradas to provide
as much raw silk as he could, allowing him ‘competent profit to
his content’, it (silk) being ‘the very best commodity that could
be sent from India’.72
Apart from Mathuradas’ monopolistic designs, the great con-
cern of the Company was his dealings with the Interlopers and
the French who frequented Bengal during this period. Occasion-

ally, he acted as broker to the French Company also.73 It can
be assumed that his attempt to buy raw silk or piece-goods in
the inland marts was motivated mainly by the desire to supply
the Interlopers and the French. In fact, he was the mainstay of
the Interlopers in Bengal as is evident from the Court’s letter in
1693 – ‘. . . no Interloper, if they could (meaning, if the Bengal
Council could reconcile Mathuradas), would adventure to Ben-
gal, their hopes and confidence of making a voyage being singly
in that man’. In order to frustrate the activities of the Interlopers
in Bengal, the Court gave instruction to settle all quarrels with
Mathuradas and reconcile him by allowing a substantial profit
in his investment for the Company.74 Mathuradas was a typically
shrewd merchant, always aiming at maximum bargains, even
ready to go back on his words when there was a chance of a
greater profit. The Bengal Council reported in 1693 that though
he had entered into an agreement with Agent Ellis to provide
an investment for Rs. 70,000, with the arrival of the French as
prospective buyers, Mathuradas informed the Council that he
was not going to comply with the contract. Thomas Pitt, the
great Interloper (who later on became the governor of Fort St.
George) was a friend of Mathuradas.75
Though Mathuradas was the chief merchant of the English
Company in Hugli and provided a large part of the Company’s
investment, he was not in the least subservient to it. When
implored by the Company not to deal with the Interlopers, he
shrewdly replied that being a merchant in the ‘King’s country’,
he was free to correspond and deal with anyone he liked.76 The
Company, however, tried repeatedly to dissociate him from the
Interlopers but with little success. A very interesting report in
this respect was sent by the Bengal Council in 1694 which is
worth quoting here at length:
. . . We sent for Mathuradas from Hugli and made him many fair
promises by way [of] encouragement in order to the withdrawing him
from the Interlopers, telling him how that he had no occasion to creep
to such a sort of people whose residence and trade was but for a year,
that our house was the most safe and securest hold and more for his
reputation and credit to be concerned with so ancient a people as the

Rt. Hon’ble Company who were able to protect him from any affront
or injury he might at one time or other receive from the government,77
that we would always keep his hands employed and be concerned with
him so far as he could . . . manage . . . provided he would not deal with
the Interlopers, Your Honours’ enemies and many more expressions to
this effect, upon which he made many solemn declarations that he knew
no better house than ours and that his first rise was from us whom he
would serve to the utmost of his power, that he had no occasion to
serve a new people’s interest when the old was so potent and fresh in
his memory, that he would endeavour to disengage himself from the
Interlopers as soon as possible, and much more to this effect was his
disclosure but notwithstanding all his promises, we cannot but acquaint
Your Honours he was proved false to your interest by continually
corresponding with and assisting the Interlopers in all their designs
. . . he is a person whose covetousness blinds all other considerations
whatever which makes him rich at all. . . .78
As the Company could not dispense with the services of Mathura-
das, the Bengal Council continued to carry on as friendly a cor-
respondence with him as possible, and at the beginning of 1694
gaye him an advance for goods amounting to Rs. 170,000.79 The
Court of Directors advised the Bengal Council in 1696 that in
spite of all the allegations against Mathuradas being true, they
should keep him in employment as ‘he has a great stock and
potent friends’ and asked them to send his goods with a dis-
tinctive mark so that the Company could know for itself the
quality of goods supplied by him. In the same letter, however,
they pointed out that the last consignment of goods delivered by
him to Captain Dorill was ‘very good and some of such sort of
which our factors could never send’.80
The question might well be asked here why Mathuradas was
suddenly considered so indispensable to the Company after all
the disparaging remarks about him earlier. The obvious answer
is that the Company knew he was a merchant of very large
credit and influence who could assist it not only for providing
investment for Europe but also supplying money at low rates of
interest. In 1696 the Directors wrote to Bengal – ‘If your stock
should fall short, we may reasonably expect that Mathuradas
. . . should be willing to assist you at moderate interest, we being

well assured he can have credit of the great men in Dacca at
4 per cent per annum.’81 Perhaps this was why the Company
could not get rid of him. He even attempted to monopolise the
sale of some of the Europe-commodities imported into Bengal.
Quite a few times he offered to buy all the broadcloth imported
annually by the Company. In 1698 he was about to enter into a
contract with the Company to buy silver worth rupees two lakhs
but ultimately abandoned it fearing exaction from the nawab.82
But the Company was gradually becoming more concerned
at his ‘monopolising temper’ and the hindrance created by his
formation of ‘rings’ with other merchants. It seems that the Ben-
gal Council was really exasperated when in 1699 Mathuradas,
in collusion with two other eminent merchants, Udaycharan
and Goculchand, refused to accept the Company’s dadney or
advance, unless his two compatriots Nainsook and Prana-
nath (who were debtors to the Company) were reinstated as
merchants to the Company, and Golabray (whose father was
alleged to be his enemy) was turned out of the Company’s
service. ‘This insolence in Mathuradas,’ the Calcutta factors
reported, ‘is owing greatly to the countenance he hath from this
Agency, for upon Captain Dorill’s arrival he was at the brink
of destruction, his credit ruined, and could not have subsisted
above a year longer, but the erroneous account that was given
of him to the Rt. Hon’ble Company gained their esteem and got
him credit again after he received their imprest money.’83 The
Company, however, did not comply with his demands and when
the Council found that he had made no application for dadney,
divided the ‘imprest’ money designed for him to the amount of
Rs. 250,000 amongst other merchants.84 But soon Mathuradas
reconciled himself with the Company and received dadney for
investment amounting to Rs. 100,000.85 In 1700 Mathuradas
seemed to have been assisting the New Company more actively
and stood security for it for the payment of customs if it failed to
procure the Emperor’s farman for a free trade in Bengal.86 Early
in that year, following his failure to obtain a nishan from the
Prince, the Old Company’s factors reported that he had become

‘the ridicule of the province’, ‘his reputation sunk’ and that he
became entirely the New Company’s ‘creature’.87 But by 1702, as
the Fort William General Letter reports, Mathuradas was ‘grown
very old and going off the stage who hath been a bird raised
up to pick at your own eyes’. It adds further – ‘Although he is
grown very rich since the New Company’s settling in Hugli, yet
without the interest of the English within five years would be
brought to as low an ebb as he was on Captain Dorill’s arrival.’88
In that very year in which this letter was written, he was turned
out of the New Company’s services and his brother Bullubdas
was replaced by Jaykrishna as broker.89 But this apparently did
no harm to the trading activities of Mathuradas’ firm. With his
brother, two sons – Bittaldas and Dwarakadas – and two other
friends, Paran and Gossairam, he traded considerably maintain-
ing gomastas in all the trading centres of Bengal. Even in 1703,
after the union of the two Companies, the Court of Directors
were still so apprehensive of his credit and influence that they
wrote . . . ‘his monopolising temper hath been such as to make
us look upon him [as] dangerous.’90
Mathuradas’ real crisis and actual ruin came not from the
withdrawal of the patronage of the English Company, but from
his speculation in revenue farming. The English factors reported
in 1705 – ‘. . . that family has suffered much by Mathuradas,
his engagement with government and farming revenues which
involved them in many troubles from which he has not been able
to free himself perfectly though his endeavours have cost him a
great expense of time and money’. He died in 1706, ‘worth but
little money’ and it was said that his family ‘was near ruined
before he died by his engagement to the government.’91
Among the Kasimbazar merchants, the two most influential
ones were Sukanand and Chaturmal Shah. Both of them, it
appears, were mainly shroffs or bankers, though more frequently
than not, they traded in other commodities as well and provided
part of the Company’s investment in Bengal. The names of both
these merchants were mentioned frequently in the records of the
Company as eminent merchants of Kasimbazar. Before his death

in 1680, Sukanand Shah was definitely a merchant of greater
influence and credit than Chaturmal. He used to buy quite a sub-
stantial part of the treasure imported by the Company and most
often lent money to the Company for its investment in different
factories. He performed the function of a banker too, issuing
bills of exchange or letters of credit in favour of the Company
whenever it needed them. A few examples of his transactions of
this nature with the Company can be cited here. In May 1677,
the Company procured from him letters of credit on his gomasta
at Patna to pay Job Charnock what money he required at the
usual rate of interest. In March 1679, the English factors bor-
rowed Rs. 30,000 from him for sending to Patna. In October
that year he issued bills of exchange for Rs. 20,000 each to Patna
and Dacca in favour of the Company. Next year his gomasta
Paramanand Shah gave Rs. 20,000 to the factory at Malda and
the Company further requested Sukanand to supply it with more
money.92 That he was a great shroff on whom the Company
relied greatly is evident from a Kasimbazar letter – ‘We finding
no market for our treasure unless dispose of it underrate much
to the disadvantage of the Honourable Company, our chief and
ablest shroff [Sukanand] being dead.’93 Though mainly a shroff,
Sukanand traded in other commodities as well, sometimes mak-
ing attempts at monopoly, especially of Europe-goods imported
into Bengal. In 1677 he proposed to buy all the broadcloth
and silver brought by the Company yearly to Bengal. Though
Khemchand had made the same proposal to buy broadcloth two
years earlier, the Company ultimately negotiated with Sukanand
and agreed to sell all its broadcloth to him. But he did not get
the exclusive monopoly to buy all the silver imported by the
Company. As late as 1680, a few days before his death, he again
made an offer for the same but only in vian.94
Chaturmal was another eminent shroff at Kasimbazar who
had substantial transactions with the Company. From time to
time he used to buy treasure from the Company and sometimes
managed the affairs of the Company at the mint at Rajmahal. He
had an efficient gomasta there whose help was frequently sought

by the Company.95 His son Domurmal and several gomastas
like Udaychand and Fatehchand helped him in his multifarious
trading operations. Occasionally he used to buy lead, tin, copper
plates etc. from the Company whenever he found the transac-
tion profitable.96 He had close correspondence with Mathuradas
and seems to have assisted the latter in his various investments.
We have noticed earlier that the Company had complained
once that Chaturmal and Mathuradas were the ringleaders who
incited the silk picars at Kasimbazar to refuse to deliver silk at
the Company’s price and offered them lucrative prices if sold to
Mathuradas.
Throughout the period the rings formed by the merchants and
their bargaining position were great concern for the Company.
Despite the fact that they also acted as brokers to the Company,
the Bengal merchants could effectively bargain with the Com-
pany which in most cases – as we have seen earlier – had to
submit to their terms. These were definitely not isolated instances.
Even as late as 1702 the Company had to yield to the pressure
of the Armenian merchants. The Council in Calcutta reported
that since the Armenian merchants were ‘holding together to
beat down’ the freight of goods for Gambroon and Basra, they
contracted with Khoja Surhaud Israeli who offered thirty eight
thousand rupees ‘to have the whole ship for the voyage’.97 The
Company, however, tried to break such rings and the bargaining
position of the Bengal merchants, especially their monopolistic
designs, by fostering the formation of a joint stock in every fac-
tory in Bengal. The advantages of such a joint stock were well
summed up by the Court of Directors in 1684. First, it would
save the Company from making any bad debt; secondly, it would
make it easier to dispose of Europe-commodities by distributing
those annually among the joint stock merchants at the time of
the contract, and thirdly, in case of the late arrival of ships from
Europe and the consequent shortage of funds (which occurred
quite frequently), the joint stock merchants would provide goods
with their own funds.98 From the early ‘eighties of the century
directions were sent to different inland factories to form a joint

stock of merchants, with about 100 shares, each amounting to a
value of Rs. 500 or Rs. 1,000. These merchants, it was proposed,
should choose from among themselves a chief merchant who
was to be the president and seven or eight to be his council.
This body was to handle the whole business of the joint stock.’99
The model was obviously borrowed from Madras where the
Company had already fostered such a joint stock of merchants
in 1680, though such a system was actually first organised in
Pulicat sometime earlier.100 In Bengal, however, the Company
failed to organise a joint stock.101
It may well be asked why the Company failed in Bengal while
it could organise such a joint stock in Madras. In the absence of
any direct evidence, it may be argued that the influence, power
and credit of the Bengal merchants – who perhaps apprehended
that a joint stock, with its various obligations to the Company,
would reduce their independence and curtail their bargaining
position and monopolistic designs – frustrated the attempts of
the Company. It is interesting to note that in Madras, too, there
was considerable apathy among the great merchants to form a
joint stock and only by offering Pedda Yenkatadry the post of
first and chief merchant and giving 25 out of 100 shares to the
‘company’ of Yenkatadry and Cussa Muddo Verona, while 7
other chief merchants had only 2¾ shares each, that the Com-
pany had succeeded.102 Of course, it should be noted that the
social and political factors in Madras were quite different from
those in Bengal. The strong caste affiliations of the merchants in
Madras and the fact that they lived there under the Company’s
rule made it easier for the Company to organise them into a joint
stock. But the position in Bengal was quite different. There were
too many great merchants like Khemchand, Chintaman and
Mathuradas who could easily defy the Company and carry on
their own business which Yenkatadry and his fellow merchants
in Madras perhaps could not. The fact that during the ‘eight-
ies of the century, the English Company’s trade in Bengal was
greater than that in Madras precludes any suggestion that a joint
stock was essential in Madras for a greater investment there than

anywhere else. In Surat, too, though the investment was not as
big as it was in Bengal, the Company did not or perhaps could
not organise a joint stock of merchants. In the beginning of the
18th century, however, the Bengal Agency wrote to the Court
that a joint stock of merchants would not work to the benefit of
the Company in Bengal.103 The reasons for such assertion could
not be traced in the records of the Company.
Bengal Merchants’ Overseas Trade
It has already been suggested that the Bengal merchants were

active both in the inland and overseas trade on their own
account irrespective of their business with the Company. In
fact, the merchants of Bengal had a long established tradition
in overseas trade and kept it alive throughout the 17th century.
The Portuguese traveller Barbosa found in the beginning of the
16th century many merchants in the ‘ports of Bengala’ who
owned ships and traded to Malabar, Cambay, Pegu, Tenasserim,
Sumatra, Ceylon and Malacca.104 At the end of the 15 th century
every year four or five ships sailed from Bengal to Malacca or
Sumatra with provisions and textiles.105 Bengal ships also traded
with the Red Sea ports of Aden and Jeddah.106 At the beginning
of the 17th century, Pyrard de Laval found Bengal merchants
in the islands of Maldive and named one ‘Mohammed Coca’
as an honourable, rich and discreet merchant of Bengal.107 At
the time of the Mughal attack on Hugli in 1632, there were at
least 12 or 13 local merchants there who operated with large
capital.108 The first attempt of the Dutch Company to open up
trade with Bengal after the fall of the Portuguese was frustrated
by the opposition of the muslim merchants of Hugli.109 In 1645
the Danes seized several ships of the Bengal merchants by way of
reprisal for injuries suffered at the hands of the local authorities
in Bengal. In 1665 out of 12 muslim ships to Achin, 4 belonged
to the merchants of Bengal.110 When Bowrey visited Bengal in the
’seventies of the century, the nawab and the merchants of Hugli,
Balasore and Pipli had about ‘20 saile of ships of considerable

burthen that annually traded to sea’.111
As regards the activities of the several merchants – discussed
in the previous section – in the external trade of the country,
we can have some idea of the ventures of the two Balasore
merchants. Both Khemchand and Chintaman took active part
in overseas trade during this period. They owned ships which
sailed on trading voyages to different countries and sometimes
these ships were owned jointly by them. It is a great pity that the
Balasore factory records, which could have given us a graphic
picture of the foreign trade of these two merchants, are extant
only for the years 1679 to 1687, and that too with many gaps
in between. The records of the Dutch Company which are more
detailed in their information fail to give us an unbroken series of
lists of ships with their cargoes that either left or arrived at Hugli
and Balasore. The Dutch factors claimed that they collected
these lists yearly from the custom house in the ports of Bengal.
Since it will give an unreliable picture if only one consolidated
list is drawn up chronologically of the trading vessels of the two
Balasore merchants by combining the two series, it would be
better to consider the two tables derived separately from the two
different sources.
Table 6.1: (on the basis of Balasore Factory Records)112
Owner Arriving from Commodities Date of entry in

brought Bal. Fact. Records
Khemchand Tenasserim 21 elephants 20 March 1680
Khemchand Tenasserim elephants 29 Jan. 1684
Khemchand – – 29 Jan. 1684
Chintaman Tenasserim elephants 5 Feb. 1684
Khemchand Achin – 21 Mar. 1684
Khemchand & Chintaman Cochin China elephants, 1 April 1684
chanks, cloves
Khemchand & Chintaman Tenasserim elephants 5 May 1684
Chintaman ‘Coringo’ (?) elephants 6 May 1684
Khemchand & Chintaman – – 15 Nov. 1686
Table 6.2: (on the basis of the records of the
Dutch East India Company)113
A. Outbound ships
Owner Destination Commodities Date of entry Name of ships

Khemchand Tenasserim 200 mds. ghee, 7 Jan. 1682 Guruprosad
100 mds. oil, piece-
goods.
Khemchand Gale (Ceylon) 500 mds. rice, 28 Jan. 1682 Bhagabat-
piece-goods. prosad
Khemchand Gale 1,000 mds. rice, 4 Feb. 1682 ‘Mosiaheddy’
piece-goods.
Chintaman Jaffnapatnam 700 mds. rice, 10 25 Feb. 1682 Krishnaprosad
mds. cummin, 100
mds. long pepper, 4
mds. opium, 50 mds.
peas, piece-goods.
Khemchand Gale 1,400 mds. rice, 21 Feb. 1683 Bhagabat-
piece-goods. prosad
Chintaman Maldives 600 mds. rice, 50 25 Feb. 1683 Keshari
mds. butter, 325
piece-goods.
Khemchand Gale 7,000 mds. rice, 5 3 Mar. 1683 ‘Moemeddy’
mds. candy sugar,
piece-goods.
Chintaman Maldives 5,500 mds. rice, 50 18 Feb. 1684 –
mds. oil, 50 mds.
butter, 800 piece-
goods.
Chintaman Gale 600 mds. rice, piece- 21 Feb. 1684 –
goods.
Khemchand Gale 13,000 mds. rice, 400 9 Mar. 1684 –
mds. sugar, 20 mds.
candy sugar, 2,200
piece-goods.
Khemchand Achin 9,000 mds. rice, 800 9 Mar. 1684 –
mds. sugar, 30 mds.
silk, 10 mds. opium,
250 mds. oil, 150
mds saffron, 300
mds. butter, 120
mds. cummin, 100
mds. peas.
B. Inbound Ships
Owner Destination Commodities Date of entry Name of ships
Khemchand Tenasserim 22 elephants, 50 6 May 1682 Guru-prosad
mds. staff copper,
40 mds. spelter, 90
mds. tin, 2 casks of
porcelain
Khemchand Gale 7 elephants, 40 10 Aug. Bhagabat-
mds. arrack, 12 lbs. 1682 prosad
nutmeg
Khemchand Gale 11 elephants, 225 12 Sept. ‘Mosiaheddy’
mds. arrack, 2,000 1682
coconuts, 800 ‘ca-
han’ cowries
Chintaman Jaffnapatnam 5 elephants, 4000 21 Sept. Prosad
cowries, 1 md. nut- 1682
meg, ½ md. mace,
1½ md. cinnamon
Khemchand Tenasserim 19 elephants, 50 11 May 1683 –
mds. tin.
Chintaman Maldives 1,800 ‘cahan’ cow- 1 Sept. 1683 –
ries, 500 coconuts
Khemchand Gale 14 elephants, 1000 Oct. 1683 –
‘cahan’ cowries, 200
mds. arrack, 10 mds.
cinnamon, 8 mds.
nutmeg
Chintaman Gale 9 elephants, 750 March 1685 –
mds. arrack, 36,000
cowries
Khemchand Achin 22 elephants, 18 May 1685 –
seers gold
The two tables, especially the second one, help us to form a

fairly good idea of the direction and composition of the exter-
nal trade of the two Bengal merchants. It is apparent that in
overseas trade, as in inland trade, Khemchand was more active
than his partner and colleague Chintaman. Khemchand’s trade
was mainly with Gale in Ceylon though he traded at the same
time with Tenasserim and Achin also. Chintaman was more con-
cerned with the Islands of Maldive though his trading vessels
went to Jaffnapatnam and Gale also. The commodities exported
by these merchants to the Eastern Islands comprised mainly rice,

butter, oil, sugar, ghee and piece-goods. Besides these, they also
exported long pepper, opium, silk, saffron, little peas etc. The
most import item of import was elephant. No ship of these mer-
chants came home without elephants. Obviously elephants were
quite a profitable commodity to sell to the nawabs, zamindars
and other high officials of the state. Other items of import con-
sisted of tin, cowries, cinnamon, copper, nutmeg, spelters, arrack,
porcelain and even gold. The two merchants, it appears, con-
fined their overseas trade to the islands in the Eastern Seas and
had no trade with the western, coast of India. This was perhaps
due to the fact that they could hardly withstand the competition
of the Surat merchants who were the principal participants in
this branch of trade. It seems that the Bengal-Surat trade was a
monopoly of the Surat merchants. Out of ten indigenous ships
that left Bengal for Surat between December 1681 and January
1684, all except one (which belonged to Zulphicar Khan, the
Siamese King’s gomasta in Bengal) belonged to Surat merchants
and not a single one to Bengal merchants.114 Even the ships of
the great Surat merchant Abdul Gaffur traded with Bengal, and
as this branch of trade was quite profitable, the Surat merchants
tried to exclude other competitors from it.115
Except for Mathuradas, we do not have any evidence of other
Bengal merchants’ (discussed in the previous section) overseas
trading activities which probably implies that they did not take
part in it. But Mathuradas was definitely engaged in the exter-
nal trade of the country, though it seems, on a limited scale. As
early as 1683 his gomasta at Patna, Ramdas, was reported to
be procuring goods for a ship intended to sail for Surat.116 In
1700 a ship belonging to him was captured by the Portuguese
for want of a pass and taken to Goa.117 It seems Thomas Pitt,
who was then governor of Fort St. George, assisted him in his
overseas trading ventures. Sometimes he freighted English ships,
as in 1702, together with Armenian merchants for commercial
voyages to Surat.118 But it is quite certain that his activities in the
external trade of the country were not as extensive as those of
his fellow merchants, Khemchand and Chintaman.
An interesting feature in the composition of Bengal merchants

engaged in overseas trade in the 17th century was the presence
of subadars, faujdars and other members of the ruling class in
Bengal. As early as the ‘forties of the century we find the subadar
of Bengal Shah Shuja had his own ships engaged in overseas
trade. He even tried to monopolise some sectors of the province’s
external trade and made himself the sole purchaser of elephants,
one of the chief items of the Dutch Company’s imports into
Bengal.119 In 1651 a ‘junk’ belonging to the faujdar of Hugli
went to Gombroon with different menchandise and to bring
back horses as a return cargo.120 The Dutch Company refused
many applications made by ‘governor Jaffer’ in 1654 for mus-
lim vessels to Khedda, Colombo and Cochin. However, it was
ultimately obliged to grant two passes for two of the nawab’s
vessels to Tenasserim and Achin, and one for the faujdar’s to the
Islands of Maldive. The Dutch also issued three more passes for
the vessels of nawab Nawajish Khan, the faujdar of Rajmahal
and Ahmed Beg, ex-faujdar of Hugli.121 Again in 1656 the fau-
jdar of Hugli applied for a pass for his vessel to Colombo and
Shah Shuja had asked for three passes for Colombo, Cochin and
Jaffnapatam. But all these requests were politely refused because
of Shah Shuja’s attempt to monopolise some sectors of the prov-
ince’s external trade. The Dutch Company similarly refused a
request for the services of one of their mates for a ship sailing for
Persia.122
A cursory glance at the list of the Bengal ships that were
engaged in overseas trade between 1682 and 1684 reveals that
except for the ships of the two Balasore merchants, all the oth-
ers belonged to the members of the ruling class. Buzurg Umeed
Khan, the nawab of Patna, sent between December 1681 and
December 1682 four ships to Tenasserim, Gale and Siam with
different merchandise. Malik Qasem, the faujdar of Hugli (for
sometime also of Balasore), despatched four ships between Janu-
ary 1682 and January 1683 to Tenasserim, Gale and the Islands
of Maldive (2). Between January 1682 and March 1684, four
ships of nawab Nurullah Khan of Orissa traded to Pegu and the
Maldives. Even Nawab Shaista Khan, the subadar of Bengal, had
a share in this branch of trade. In January 1682, one of his ships

sailed for the Islands of Maldive and another for Tenasserim.
Nasib Khan, the shahbandar of Balasore, who was referred to
by Bowrey as an eminent merchant,123 sent between January
1682 and January 1683 three ships to the Islands of Maldive (2)
and Tenasserim. The next shahbandar, Shuja Khan, was equally
interested in overseas trade and sent four ships between January
1683 and February 1684 to the Islands of Maldive (2), Achin
and Gale.124 Though the evidence cited above is fragmentary,
nevertheless it helps us to form some idea of the extent, direction
and composition of the external trade of the nobility in Bengal.
It appears that most of the trading voyages of the ruling class
were confined to the eastern seaports. The main items of export
and import varied little from those handled by the two Balasore
merchants. A good idea of the size of the various ships of the
Bengal merchants can be formed from the details of several ships
seized by the Company during the war (1686-88) in Bengal.
The English Company captured a ship named Balasore, 55 tons,
belonging to Malik Burcoordar, the faujdar of Hugli. The Eng-
lish further seized and appropriated as prize several other ships
of the Bengal merchants – Hugli 600 tons, Achin Merchant 300
tons. Dacca Merchant 400 tons, and Katherina, 270 tons, besides
Doorea Daulat 400 tons, belonging to the King of Siam.125 Bow-
rey stated that he saw a ship of Nasib Khan, the shahbandar of
Balasore, which was about 500 or 600 tons.126 So it can safely be
asserted that at least some of the ships of the Bengal merchants
were of the same size as the big ships of the European Compa-
nies engaged in Indo-European trading voyages.
The nobles and the members of the ruling family also freighted
their goods in the ships of individual merchants or the European
Companies. Thus as early as 1653 we find the faujdar of Hugli
sent 11 bales of goods in one of the English Company’s ships.127
Malik Qasem, a faujdar of Hugli, also transported his goods in
1672 on a Company’s ship.128 The nobles often acted through
their agents or gomastas. Haji Mohammed, an agent of Malik
Qasem, made a trip to Gambroon with sugar and other com-
modities vendible there in one of the English ships. As return
cargo he brought, besides 4 horses, – hing 7 bales, rose water

1 chest, attar 10 chests, fruits 29 jars, almonds 150 mds., arrack
2 chests and 8 sheep. The Company brought all these commodi-
ties freight free, except the horses, and assisted Malik Qasem’s
agent with money in Gambroon as it expected to gain a ‘profit-
able influence in Hugli out of it’.129 In 1687 the English captured
a Spanish ship carrying considerable quantity of goods belong-
ing to the nawab of Cuttack from Tenasserim.130 It seems that
from the ’nineties of the 17th century freighting of European
ships by Bengal merchants for trading voyages to Surat and
Persia became a general practice. Important Bengal merchants
like Benarasi Seth, Janardan Seth and Khaja Sarhaud Israeli used
to freight Company’s ships for such ventures.
Wealth of the Bengal Merchants
It is not possible to give a precise idea of the wealth or working

capital of the Bengal merchants due to complete absence of any
material of that kind in contemporary records, except for some
fragmentary evidence here and there regarding the total value of
the contracts made by the English Company with these merchants
or the total value of the cargoes of a particular ship belonging
to a particular merchant. To rely on this kind of evidence for
making even a conjecture about the wealth of the merchants
would not only be unscientific but also ridiculous. But it may be
possible to have some very rough idea of the wealth of at least
one of the merchants, namely Khemchand. There is little doubt
that he was a rich merchant and perhaps the richest at Balasore
during the ’seventies and ’eighties of the century. That explains
why he was quite often mulcted of quite substantial sums by
the greedy and apprehensive faujdars of Balasore or nawabs of
Orissa. As early as 1672 Safshi Khan, the governor of Orissa,
arrested Khemchand who accompanied Boremull (Puranmall?)
with two other merchants, Hari Charan and Jairaj Shah, to the
nawab to obtain a parwana for the English. The nawab impris-
oned Khemchand without any charge against him and it seems
only to extract some money from him. Khemchand had to buy
his release by complying and giving security to pay Rs. 10,000

in 17 days and Rs. 20,000 in three months.131 But this did not
appear to have affected in any way the financial position of the
wealthy merchant. The English factors wrote – ‘Khemchand . . .
notwithstanding his present troubles . . . hath estate sufficient
to indemnify our masters which is sufficient for our proceeding
in delivering him this day his share of the 25,000 rupees being
7,500.’132 Thomas Bowrey gives a vivid description how nawab
Rashid Khan extracted a large sum of money from Khemchand
in 1674. The ‘hungry’ nawab, as Bowrey relates, fell on Khem-
chand, ‘a great Banjan merchant’ and ‘great broker to the English
East India Company’ and demanded rupees one lakh from him.
Before he appeared in front of the nawab, Khemchand took off
his gold turban, jewels and rings, put on ‘mean clothes’, ‘thereby
to plead poverty’. Then be began to ‘bemoan’ his sad accident
and the loss he had lately received (referring to the robbery of
Rs. 1,500,000 while going to the country for his daughter’s
marriage – the truth of which was attested to by Bowrey). But
the nawab was little moved by the story and declared that he
was well satisfied now that the report of Khemchand’s wealth
was not untrue. After many apologies and feeding the nawab’s
courtier, he got off by paying Rs. 50,000 to the nawab.133 If we
believe Bowrey, it is anyone’s guess how wealthy Khemchand
was – who could part with fifty thousand rupees in cash to satisfy
the nawab and spend fifteen lakhs of rupees in one daughter’s
marriage only while he had several other children – especially
bearing in mind that none of these transactions hampered his
normal activities either in inland trade or overseas ventures. But
as we have noticed earlier, Khemchand’s fortunes declined con-
siderably at the close of the ’eighties of the century. Still at the
time of his death, as the English factors at Balasore reported, he
‘left clear in money and goods ninety odd thousand rupees’.134
There is no doubt that the Bengal merchants carried on their
trading transactions with large capital though their fortunes
never gave rise to such fabulous tales as did the wealth of Virji
Vora or Abdul Gaffur of Surat. We have some evidence as to the
size of particular transactions of the Bengal merchants. Golabray
(Golap Ray ?), who was mainly a shroff in Dacca and once stood
security for the customs to be paid by the English Company, was
accepted by the nawab as security for Rs. 350,000 for the Raja
of Coochbehar.135 In 1699 the share of the investment designed
for Mathuradas by the Company amounted to Rs. 250,000.136
Bearing in mind that he used to provide investment not only for
the Old and the New English East India Companies but for the
French and the Interlopers, it might well be said he was worth
several lakhs of rupees. Khaja Sarhaud, the Armenian merchant,
had once contracted with the Company to supply goods worth
Rs. 250,000,137 though his main trade was independent of his
contracts with the Company. Jarrardan Seth, who was the
Company’s broker at Calcutta, was reported to be worth several
lakhs of rupees.138
Conclusions
It may rightly be concluded on the basis of evidence and dis-

cussion made earlier that the Bengal merchants throughout the
period held fast to their traditional organisation though they had
to extend the methods generally practised but there was hardly
any innovation to encompass the new situation arising with
the appearance of the Europeans. At the same time it can be
asserted that the commercial aptitudes of the Bengal merchants
were certainly not inferior to those of the Europeans. The former
could perhaps claim to be what Adam Smith called a speculative
merchant who ‘enters into every trade when he foresees that it
is likely to be more than commonly profitable and quits it when
he foresees that its profits are likely to return to the level of
other trades’.139 It is very difficult to make an estimate of the rate
of profit in order to measure the incentive to trade during this
period. Still it may be said that the merchant traded on profit-
motive and hence the rate could not be less than the current rate
of interest which was roughly 15 to 20 per cent during the period
under study. So it may be conjectured that the rate of net profit
was at least 25 to 30 per cent if not more. We find the faujdar of
Hugli once borrowed three lakhs of rupees at 25 per cent from
Bill for 6,000 rupees, executed by Khemchand and Chintaman, payable to
Bros. Douglas (?) with interest, dated ah 1096 (ad 1683). The manuscript
has impressions of sales of the executants, each bearing the date ah 1093
(ad 1682). The signature of the executants are torn.
Khemchand and Chintaman’s signature in the contract with the Company
at Balasore in 1679; O.C. 4648, vol. 40.
the nawab140 and surely the former expected substantial profit

after paying so high a rate of interest.
An analysis of the trading activities and methods of these mer-
chants reveals keenest competition among buyers and sellers, an
eager search for exclusive information, the organisation of rings
and commercial monopoly which the European Companies tried
to foil by fostering the formation of joint stock associations of
local merchants but only in vain. S. Arasaratnam’s contention141
that such joint stocks flourished and were established in almost
every important factory of the Dutch and the English Compa-
nies and that supply through these joint stock partnerships had
become the norm by 1700 does not seem tenable at all so far as
Bengal is concerned, though it may be valid for Coromandel. In
Bengal trade or business was the concern of individuals rather
than of groups acting in common interest though we hear about
such joint ventures as Khemchand Chintaman & Company,
or lower down the scale, Rewadas & Company at Balasore
or Ramnarain Raghunath & Company in Hugli – which were
exceptions rather than rules. The merchants in Bengal, as in
other parts of India, operated with their own capital and there
was hardly any close financial link between the merchant and
the public – a feature which was fast developing in England in
the 17th century through the joint stock companies. In fact it can
be asserted that as a result of the growth of the joint stock com-
panies, the ownership of capital was divorced from management
in England and these companies could undertake commercial
ventures with limited liability to individual merchants. These
joint stock associations may rightly be called the precursors of
modern industrial type of organisations. In India, however, com-
mercial venture was mainly the risk of individual merchant. It is
true that sometimes the merchants acted as depositors of funds
or even traded with capital supplied by the nobility for invest-
ment in the trade but the risk of any disaster or loss was his own.
The remarkable growth of a financial machinery for credit
and exchange,142 and the specialised activities of a large class
of merchants, especially the shroffs, undoubtedly point towards
the fact that merchant capital and commercial organisations
were highly developed in Bengal. No doubt the European Com-

panies from time to time dominated the markets for particular
commodities but they hardly ever dominated the ‘commercial
outlook’ – that position was held by individual Bengal merchants
who, it appears, through their wealth and abilities controlled the
entire wholesale trade within the area of their operations. Of
course it is true that none of the Bengal merchants ever held the
position comparable in credit and influence to that enjoyed by
Virji Vohra, the great merchant prince of Surat, Molla Abdul
Gaffur, or the Parrack family of Surat or even the Malaya family
of Coromandel but, nevertheless they played a significant role
in the commercial life of Bengal. Finally it is of great interest
to note that most of the prominent Bengal merchants during
this period were not local people but outsiders mainly from
Gujarat or Rajasthan as their names, and in case of Khemchand
and Chintaman their signatures suggest.143 Of the 18 prominent
merchants who supplied raw silk and piece-goods to the Dutch
Company in Kasimbazar, as many as nine were Gujaratis.144
This is rather peculiar since both in Surat and Madras all the
prominent merchants were local people, and this only histori-
cally traces the fact that Bengalis had never been and are still not
business-minded.

AGD Accountant General’s Department, Range 11, India
Office (Commonwealth Relations) Library, London.
BM Addl Mss British Museum Additional Manuscripts.
DB Despatch Book, India Office Library.
EFI English Factories in India, ed., W. Foster.
EFI, ns English Factories in India, new series, ed., C. Fawcett.
Factory Records (India Office Library): Balasore, Calcutta, Hugli,
Kasimbazar, Miscellaneous.
KA Koloniaal Archief, Algemeen Rijksarchief, The Hague.
Master’s Diary The Diaries of Streynsham Master, ed., R.C. Temple.
Notes
1. H. Yule (ed.), The Diary of William Hedges, vol. III, London, 1889,
pp. 194-5.
2. C.R. Wilson, Early Annals of the English in Bengal, vol. I, London,
1895, p. 34.
3. D.B., 20 November 1668, vol 87, f. 201; 23 December 1674, vol. 88,
f. 155; 5 January 1681, vol. 89, f. 277; 18 November 1681, vol. 89,
f. 404.
4. O.C., 28 May 1669, no. 3282, vol. 30; 12 October 1669, no. 3352,
vol. 30.
5. On 2 October 1680 the Company made an agreement with the
Balasore merchants for the provision of 10,000 ginghams, 14,000
nillaes and 15,000 Sannoes vide, Consultation of 2 October 1680,
Factory Records, Balasore, vol. 1. It is interesting to note that in
1663 when the Company’s trade at Balasore was still in its infancy,
the Company ordered the following commodities from Balasore, cf.,
Factory Records, Hugli. vol. 1, Consult. 20 June 1663:
Ginghams ... 6000 pcs. ... Rs. 24,000
Cotton yarn ... 500 mds. ... Rs. 8,000
Sticklac ... 500 mds. ... Rs. 2,000
Sannoes ... 6444 pcs. ... Rs. 24,000
Cowries ... 900 mds. ... Rs. 9,000
6. Factory Records, Misc., vol. 3, f. 140. Here and in all other extracts from
the records of the Company quoted hereafter, I have modernised the
spelling.
7. Factory Records, Hugli, vol. 7, pt. 1, ff. 34-40; E.F.I., n.s., vol. II,
p. 339.
8. Factory Records, Msic, vol. XIV, f. 324; Master’s Diary, vol. II, p. 86.
9. Six ships came to Bengal in 1672 and left with a cargo valued at about
Rs. 547,718, vide, E.F.I., n.s, vol. II, p. 343.
11. Ibid., pt. 1, f. 4.
12. O.C., 1 September 1679, no. 4647, vol. 40; Master’s Diary, vol. 1, p. 101;
vol. II, pp. 217, 219.
13. Factory Records, Misc., vol. XIV, f 48; Master’s Diary, vol. 1, p. 303.
14. B. M. Addl. Mss., 34, 123, ff. 43a-44a; O.C., 3 September 1679, no. 4648,
vol. 40; Master’s Diary, vol. II, pp. 222-4.
15. O.C., 1 Sept. 1679, no. 4647, vol. 40; Master’s Diary, vol. 1, p. 101;
vol. II, p. 219.
16. O.C., 1 October 1679, no. 4659, vol. 40.
17. O.C., 15 November 1678, no. 4522, vol. 39; Factory Records, Hugli,
vol. 1, Consult. 14 November 1678.
18. Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May, 16 June,
9 and 13 August 1677; Factory Records, Balasore, vol. 1, Consult.
28 July 1677.
19. In 1677 the Kasimbazar Diary mentioned that Khemchand used to supply
Europe-goods there for sale through his gomasta, vide, Factory Records,
Kasimbazar, vol. 1, Diary, 18 September 1677.
20. Factory Records, Hugli, vol. 4, pt. 1, f. 98; E.F.I., n.s., vol. II, p. 365.
21. Factory Records, Hugli, vol. 7, pt. III, f. 43.
22. Ibid., vol. 5, pt. 1, ff. 41-2.
23. Ibid., vol. 2, pt. II, f. 95.
24. Ibid., vol. 2, pt. II, ff. 95-6.
25. In 1677 the Company’s investment at Balasore amounted to Rs. 187,000
while in 1682 it was for Rs. 198,700, vide, Factory Records, Hugli,
vol. 7, pt. II, f. 21; O.C., 17 June 1682, no. 4823, vol. 42.
26. Factory Recods, Balasore, vol. 1, Diary & Consult., 21 June 1681.
27. Ibid., Diary & Consult., 22 August 1681.
28. Master’s Diary, vol. II, p. 236.
29. Factory Records, Hugli, vol. 6, pt. 1, ff. 21-22.
30. E.F.I., n.s., vol. 4, p. 272; Sir James Fawcett completely ignores
Chintaman’s engagement with the nawab as a reason for discontinu-
ing his services as a broker by the Company, ibid., vol. 4, p. 272.
Chintaman occasionally acted as agent or gomasta of nawab Rashid
Khan of Orissa, vide, O.C., 25 March 1681, no. 4726, vol. 41; Factory
Records, Hugli, vol. 3, pt. 1, ff. 20-1.
31. Factory Records, Balasore, vol. 1, Diary & Consult., 21 June 1681.
32. Ibid., Hugli, vol. 3, pt. 1, f. 44; O.C., 8 July 1681, no. 4742, vol. 41;
Factory Records, Balasore, vol. 1, Diary & Consult., 21 June 1681.
33. The King of Siam had regular trade with Bengal during this period.
In 1682 four of his ships came to Bengal with different commodities,
of which, elephants comprised the main bulk, vide, K.A., vol. 1267,
f. 1398.
34. O.C., 8 July 1681, no. 4742, vol. 41; Factory Recods, Hugli, vol. 6,
pt. 1, f. 29; Factory Records, Balasore, vol. 1, Diary & Consult.,
21 June 1681.
35. O.C., 9 February 1679, no. 4576, vol. 39.
37. D.B., 5 January 1681, vol. 89, ff. 256-7; Factory Records, Hugli, vol. 6,
pt. 1, f. 29.
38. Ibid., Balasore, vol. 1, Diary & Consult., 29 August, 17 October

1681.
39. Ibid., Hugli, vol. 6, pt. 1, ff. 41-2.
40. O.C., 17 June 1682, no. 4823, vol. 42; Factory Records, Hugli, vol. 6,
pt. 1, f. 57.
41. Ibid., 27 June 1682, no. 4824, vol. 42; Factory Recards, Hugli, vol. 6,
pt. 1, f. 58.
42. O.C., 17 June 1682, no. 4823, vol. 42; Factory Records, Hugli, vol. 6,
pt. 1, f. 58.
43. O.C., 14 July 1682, no. 4829, vol. 42.
44. Factory Recorus, Hugli, vol. 10, ff. 11-12.
45. E.F.I., n.s., vol. 4, p. 344; Factory Records, Balasore, vol. 1, Diary,
13 March 1684; Factory Records, Hugli, vol. 6, pt. II, f. 9.
46. Factory Records, Hugli, vol. 10, f. 47; Factory Records, vol. 1, Cash
Account of March 1684.
47. Ibid., Balasore, Diary & Consult., 2 October 1680.
48. O.C., 2 May 1683, no. 4941, vol. 43.
49. O.C., 30 May 1683, no. 4947, vol. 43.
50. O.C., undated, no. 5264, vol. 44; Factory Records, Hugli, vol. 6, pt. I,
f. 195.
51. O.C., 2 April 1685, no. 5355, vol. 45; 9 May 1685. no. 5378, vol. 45.
53. Ibid., Balasore, vol. 1, Consult., 16 November 1686.
54. Ibid., Hugli, vol. II, f. 189.
55. Ibid., Calcutta, vol. 1, pt. II, ff. 95, 127; vol. 5, pt. II, ff. 132,

142.
56. Ibid., Calcutta, vol. 1, pt. II, ff. 31, 36; one of these ships was named
Jagganatprosad.
57. Ibid., Calcutta, vol. 9, pt. II, ff. 19, 45.
58. Ibid., Calcutta, vol. 2, pt. I, ff. 162, 195; vol. 9, pt. II, ff. 89-90, 105,
124, vol. 10, pt. 1, f. 3.
59. O.C. 14 December 1694, no. 5949, vol. 50.
60. Factory Records, Hugli, vol. 2, pt. 1, ff. 68, 95-6.
61. Ibid., vol. 2, pt. II, f. 98; The value of 13 chests of treasure is calculated
on the basis of the data found in Factory Records, Hugli, vol. 2, pt. II,
f. 101 and A.G.D., Range 11, vol. 41, ff. 21, 26.
62. Factory Records, Kashimbazar, vol. 2, Diary, 2 June 1682.
63. Ibid., vol. 2, Diary, 17 June 1682; vol. 4, pt. 1, f. 29.
64. D.B., 5 September 1683, vol. 90, f 219.
65. Factory Records, Hugli, vol. 6, pt. II, f. 152; vol. 10, f. 207.
66. Factory Records, Calcutta, vol. 5, pt. 1, f. 7.
67. Ibid., vol. 5, pt. 1, f. 15. Similar instructions were issued time and
again by Job Charnock to different factories, vide, Factory Records,
Calcutta, vol. 1, pt. 1, ff. 21, 30, 41; vol. 9, pt. 1, f. 40.
68. Ibid., vol. 9, pt. 1, f. 76.
69. Ibid., vol. 9, pt. 1, f. 150. As the Hindus generally paid 5 per cent
as customs during the period, the value of Mathuradas’ annual trade
[exclusive of the investment provided for the Company, since these
commodities for the Company’s investment were exempted from

customs duty and carried by the Company’s dastak] could not be less
than about 4 lakhs of rupees.
70. D.B., 22 January 1692, vol. 92, f. 179.
71. O.C., 19 August 1692, no. 5886, Letter no. 22, vol. 50.
72. D.B., 27 October 1693, vol. 92, ff. 297-8.
74. D.B., 10 April 1693, vol. 92, f. 256.
75. B.M. Addl. Mss., 22,842, vol. 1, f. 74; O.C., 14 October 1693,

no. 5886, Letter no. 34, vol. 50.
77. The Company claimed in 1677 of ‘giving him all assistance in our
power which was not a little serviceable to him with late troubles by
securing him from the claws of the government when a more eminent
merchant than himself felt the smart’. Vide, Factory Records, Calcutta,
vol. 6, pt. II, f. 51. The trouble referred to here was probably caused by
Mathuradas’ transactions with Sobha Singh who rebelled against the
Mughals in 1696.
79. Factory Records, Misc., vol. 3A, f. 268; O.C., 14 December 1694,
no. 5949, vol. 50.
80. D.B., 14 May 1696, vol. 92, f. 494.
81. Ibid., f. 495.
82. Factory Records, Calcutta, vol. 3, pt. 1, f. 121.
83. Ibid., vol. 3, pt. II, ff. 128-9.
84. Ibid., vol. 3, pt. II, ff. 140-1.
85. Ibid., vol. 3, pt. II, f. 155.
86. Records of Fort St. George, Letters to Fort St. George, 1699-1700,
Madras, 1921, p. 42.
87. Ibid., p. 41; Factory Records, Calcutta, vol. 7, pt. III, f. 14.
89. O.C., 28 August, 22 September, 29 September 1702, no. 7913, vol. 64;
O.C., 24 December 1702, no. 8097, vol. 65.
90. D.B., 26 February 1703, vol. 95, f. 58.
91. O.C., 28 December 1705, no. 8416, vol. 68; 29 Dec. 1706, no. 8408,
ff. 27, 56-7, vol. 68.
92. Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May 1677;
Diary, 13 May 1680.
93. Ibid., Kasimbazar, vol. 2, Diary & Consult., 24 September 1680.
94. Ibid., Hugli, vol. 1, Diary & Consult., 28 July 1677; 9 August 1677;
Factory Records, Kasimbazar, vol. 1, Diary & Consult., 28 May,
16 June, 9 and 13 August 1677.
95. Ibid., vol. 6, pt. II, f. 154; Factory Records, Kashimbazar, vol. 4, pt. 1,
f. 30.
96. Ibid., Kasimbazar, vol. 1, Diary & Consult., 13 August 1677; 5 Jan-
uary, 18 January 1678.
97. Ibid., Calcutta, vol. 4, f. 18. Khaja Sarhaud Israel was one of the most
influential Armenian merchants in Bengal during the nineties of the
17th and early part of the 18th centuries, trading extensively on his
own account, as also providing, investment for the Company. In 1697
the Company contracted with him for the provision of commodities
worth Rs. 250,000, vide, Factory Records, Calcutta, vol. 3, pt. II,
ff. 228-9.
98. D.B., 5 March 1684, vol. 90, ff. 260-1.
99. Ibid., 21 December 1683, vol. 90, f. 245; O.C., 4 September 1684,
no. 5190, vol. 44.
100. Records of Fort St. George, Diary if Consultation Book, 1680-81,
Madras, 1912, p. 43.
101. It is interesting to note the different observations on the question
of forming a joint stock from different factories in Bengal. From
Dacca – ‘. . . this can never be done here, the people . . . are as wicked
and envious sort of people as the world affords and they are for
destroying (not assisting) one another, they will be and are sometimes
2 or 3 most (and will be not more) in partnership all equal.’ From
Malda – ‘we do not apprehend which way it will make for Hon’ble
Company’s interests to have the country merchants jointly . . . they
yearly joining hand in hand for their own interest, will leave no stone
unturned whereby they may raise the prices of what goods are to
be provided and lower what goods are to be sold . . . it is observed
the best policy in this country is to deal distinct not having one
merchant present at contracting with another by which means may
bring them to comply at cheaper and more reasonable terms.’ From
Patna – ‘We much doubt of bringing our old or any new petremen to
it, we knowing by experience, they are unwilling to trust their own
brothers, much less to be securities for one another which makes us
fear, the abler sort will not be brought to it.’ Vide, Factory Records,
Hugli, vol. 10, ff. 165, 182-3, 195.
102. Records of Fort St. George, Diary & Consultation Book, 1680-81,
op. cit., pp. 44-5, 48.
103. D.B., 5 March 1702, vol. 93, f. 542.
104. D. Barbosa, The Book of, ed. M.L. Dames, vol. 2, London 1921,
p. 145.
105. M.A.P. Meilink Roelofz, Asian Traue and European Influence, The
Hague, 1962, p. 3.
106. H.L. Chablani, The Economic Condition of India during the
Sixteenth Century, Delhi, 1929, p. 60.
107. Pyrard de Laval, The Voyages of, tr. Grey & Ball, vol. I, London,
1888, pp. 236, 259, 332-3.
108. Sebatian Maurique, Travels of . . . , ed. Luard and Hosten, vol. 2,

Oxford, 1927, p. 397.
Hague, 1962, p. 76.
110. Dagh Register, 9 and 10 March 1665, quoted in R.K. Mukherjee,
Economic History of India, p. 120.
111. Bowrey, A Geographical Account of Countries Round the Bay of
Bengal, 1669-79, ed. R.C. Temple, Cambridge, 1905, pp. 168, 179-
80.
112. The list is prepared from the diaries of various dates in the Factory
Records, Balasore, vol. 1.
113. The list is prepared from K.A, vol. 1267, ff. 1338-41, 1339-1402;
vol. 1276, ff. 1178vo, 1264vo, 1266; vol. 1292, ff. 498vo, 535;
vol. 1303, ff. 309vo-310.
114. K.A., vol. 1267, ff. 1337vo-40; vol. 1276, ff. 1176vo; vol. 1292,
ff 498vo, 499, 533-534vo.
115. K.A., vol. 1276, f. 1264vo; vol. 1292, f. 498vo.
116. Factory Records, Hugli, vol. 9, f. 151. But no mention of this ship is
to be found in the Dutch records.
117. B.M. Addl. Mss. 22,842, vol. 1, f 74.
118. O.C., 23 December 1701, no. 7807, vol. 63; 27 January 1702,
no. 7837, vol. 63.
119. Raychaudhuri, op. cit., p. 76.
120. O.C., 8 May 1651, no, 2219, vol. 22; E.F.I., 1651-4, p. 63.
121. Translation of Dutch Records, India Office Library, vol. 18T,
no. D.L. The possession of a pass from a Company rendered the ship
of an individual merchant immune from seizure and confiscation by
the ships of that particular Company.
122. Ibid., vol. 18T, no. DL. The pass system, its impact on the composition,
extent and direction of the foreign trade of the merchants of Bengal
and the various objects for which the European Companies enforced
it, has been discussed by Om Prakash, ‘The European Trading
Companies and the Merchants of Bengal, 1650-1725’, Indian
Economic and Social History Review, New Delhi, vol. 1, no. 3, 1964.
124. K.A., vol. 1267, ff. 1336 8vo; 1341; vol. 1276, ff. 1176vo-1179;
vol. 1292, ff. 498vo, 533vo-535.
125. O.C., 18 April, 24 May, 1 November, 6 December, 12 December
1687, no. 5576, vol. 47.
127. E.F.I., 1651-4, p. 188.
128. E.F.I., n.s., vol. II, p. 345.
129. Records of Fort St. George, Diary & Consultation Book, 1672-78,
Madras, 1910, pp. 43-4.

131. Factory Records, Hugli, vol. 7, pt. 1, ff. 39, 43a; E.F.I., n.s., vol. 4,
p. 339.
132. Factory Records, Hugli, vol. 7, pt. 1, f. 45a.
133. Bowrey, op. cit., pp. 152-6.
134. Factory Rerords, Hugli, vol. 11, f. 187.
135. Ibid., Hugli, vol. 10, f. 119.
136. Ibid., Calcutta, vol. 3, pt. II, ff. 140-1.
137. Ibid., ff. 228-9.
138. D.B., 13 January 1714, vol. 98, f. 196.
139. Quoted by Lucy S. Sutherland, A London Merchant, 1695-1774,
Oxford, 1962, p. 19.
140. O.C., 28 May 1669, no. 3282, vol. 30.
141. S. Arasaratnam, ‘Indian Merchants and Their Trading Methods
(Circa 1700)’, Indian Economic and Social History Review, March
1966, vol. III, no. 1, p. 86.
142. Tavernier’s general statement (vide, Tavernier, Travels in India, ed.
Ball, vol. 1, London, 1889, pp. 28-9) that in India a village must
be very small if it had not a money changer or shroff who acts as a
banker to make .remittances of money and issue letters of exchange
seems to hold good for Bengal in the 17th century.
143. O.C., 3 September 1679, no. 4648, vol. 40; 13 March 1684,
no. 5110, vol. 43; 2 February 1686, no. 5471, vol. 45.
144. K.A., vol. 1311, f. 1132.
chapter 7
Saltpetre Trade and Industry in

Bengal Suba, 1650-1720*
In the second half of the 17th century, saltpetre was an import-

ant item in the export list of the European Companies trading in
Bengal. As an essential ingredient of gunpowder it was in great
demand in the West. Besides as it could be used as saleable bal-
last, its export was of additional advantage to the Companies
which otherwise hid to take the uneconomic method of using
iron as ballast to make the deep sea ships sailworthy, It was only
in the early ’twenties of the seventeenth century that the shortage
of saltpetre in England and the increasing difficulty in obtaining
supplies of gunpowder had turned the attention of the English
Company to the possibility of importing this chemical from
India. The first supply however reached England only in 1626.1
And once established the saltpetre trade displayed a consistent
growth, though the real expansion did not take place till after
the Civil War commenced.
The chief sources of saltpetre supply till the beginning of the
’forties were mainly Coromandel and Gujarat. Thevenot, the
French merchant, recorded in 1666 the process of its manu-
facture in Ajmer from whence it was carried to the seaports of
Western India and purchased by the Europeans ‘to ballast their
ships and to sell elsewhere’.2 But Coromandel seems to have sup-
plied the main bulk of this commodity to the Europeans before
1640s. In 1624 and 1625, 270,000 lbs. (Dutch) and 286,431
lbs. (Dutch) respectively of saltpetre were exported to Batavia
*Proceedings of the Indian History Congress, Chandigarh, 1973, pp. 263-

70.
Saltpetre Trade and Industry in Bengal Suba | 153
from Coromandel in the late ’thirties however Bengal saltpetre

supplemented those from the Coast.3 From the ’fifties Bengal
definitely replaced Coromandel as the chief source of supply.
Saltpetre was produced in Bihar mainly in the neighbourhood
of Patna where it was available in abundance. The discovery of
this source revolutionized the Company’s saltpetre trade and led
to its tremendous expansion in the second half of the 17th and
first half of the 18th centuries. A Dutch report of 1688 gives
interesting details regarding the annual output, the names of the
parganas producing saltpetre, and the officials who owned or
administered these tracts. According to this, the total output a
year amounted to 226,200 mds. (raw) and when refined (dobara-
cabessa) the figure stood at 127,238 mds. Of this amount, as the
report runs, 1,200 mds. were sent to Hugli, 3,000 mds. to Dacca,
and 7,000 mds. were retained for Patna gunpowder factory. The
rest amounting to 105,238 mds. were left for export.4
The saltpetre procured at Patna was considered the best in
quality for the manufacture of gunpowder. Moreover the price
of Bengal saltpetre was cheaper than that of other places.5 It
was reported in 1650 that saltpetre cost only Re. 1 per maund
at Patna, though the customs and freight for bringing it to Hugli
would raise the price to Re. 1.12 annas per maund.6 Again from
the point of transportation, Bengal saltpetre enjoyed another
advantage. The cheaper and more convenient transport down
the Ganges enabled the Company to despatch cargoes of salt-
petre from Patna to Hugli for lading Europe-bound ships and
also for supplying Madras with ballast for its vessels. All these
considerations coupled with the enhanced demand from Eng-
land and Europe encouraged the Company to drive an extensive
trade in Bengal saltpetre.
There were generally three varieties of saltpetre – the refined
one called dobara-cabessa or culmy, the twice boiled or dobara
and the crude variety termed katcha or raw.7 The European
Companies generally exported refined saltpetre as otherwise it
could not be used for making gunpowder. Moreover the export
of raw or crude variety was uneconomic as it increased freight
charges while custom duties remained the same on both refined
and crude varieties.8 The Companies often undertook the refin-

ing in their own factories. The Dutch Company procured large
quantities of saltpetre from Patna and shipped it direct to Bata-
via after refining it, at Hugli or Pipli. As a matter of fact, as early
as 1640-1, the Dutch set up a refinery at Pipli with copper kettles
imported from Holland.9 Tavernier stated in the ’sixties of the
17th century that the Dutch refined saltpetre at a ‘large village
called Chapra, situated on the right bank of the Ganges’, about
twenty miles above Patna.10
The English Company too, it seems, refined its saltpetre at
Singhee or Patna.11 The refining, in order to remove impurities,
was usually done by the Indian methods of evaporation in which
earthen vessels were used. In 1652 the English factors reported
that the great difficulty in refining was for want of convenient
copper pans. Refining in great earthen pots was tedious and
troublesome because those pots very often broke in the middle
of processing. As suitable copper pans were not locally available,
the Company decided to divert to this purpose appliances which
had been sent out for making sugar at Assada in Madagascar.12
The cost of refining, however, was very small being only 1/4 of
an anna per maund,13 The English Company once attempted to
refine saltpetre at Calcutta but abandoned the experiment as it
was found to be too expensive.14
An examination of the orders for saltpetre sent from England
reveals that the quantities ordered depended on two main fac-
tors. First, in times of war the quantities required to be sent from
Bengal naturally went up while in peace time they were greatly
reduced. Secondly, the quantities ordered depended on the
requirement of the ships for their ballast or ‘kinteledge’. Saltperte
was used as ballast not only for Bengal ships but also for ships
sailing from Madras, Masulipatnam, Bantam or Bencoolen. The
order for Bengal saltpetre increased steadily from the foundation
of the English factory in Hugli in 1651 till 1681 when for the
first time there was a sudden decline in the quantities ordered.
There were two obvious reasons for this reduction in the order.
There was then little demand for saltpetre in Europe which by
then was temporarily relieved of war. Secondly, it was from 1681
that there was a sudden boom in the demand for Bengal silk and
piece-goods which shifted the emphasis in the Company’s export
trade in favour of the latter commodities.
In the early years of the Company’s trade in Bengal, saltpe-
tre definitely ranked as the primary object of commerce, and
not merely a make-weight. In 1651, the factors in Bengal were
instructed to invest half of their capital in saltpetre alone and in
case the factors ran up debts the Court gave special instruction
that ‘let it be for this commodity’.15 In the early years of its trade,
the order was generally for 200 to 600 tons, while in the ’eighties
it went upto 800 to 1,000 tons a year, the highest order being
for 1500 tons in 1682. The Dutch East India Company’s order
for saltpetre from Bengal for Holland itself far surpassed that
of the English Company throughout the period, and the former
also supplied its other Asiatic factories, specially Bantam and
Ceylon from Bengal. In the first two decades of the eighteenth
century the demand for Bengal saltpetre for Holland only stood
consistently between 3,000,000 to 3,500,000 Dutch lbs.16
The supply condition in saltpetre trade was more or less
smooth enough for securing an extensive trade in that commod-
ity. The only inhibiting factor was the occasional attempts by
local officials to monopolize the trade. Mir Jumla made such
an attempt but with little success.17 The next subadar Shaista
Khan tried to monopolize the trade and sent his gents to Patna
who ‘obstructed and hindered’ the procurement of saltpetre by
the Europeans. When the English appealed to him, he demanded
20,000 mds. of saltpetre from them on the pretext of his Arakan
war.18 Prince Azim-us-Shan made a similar attempt in 1699. He
sent an agent to Patna to buy between 40,000 and 50,000 mds.
of saltpetre on the plea of making gunpowder for his intended
attack on Arakan. But ultimately his initial plan of making cent
per cent profit on an investment of rupees one lakh failed miser-
ably.19
The saltpetre was generally procured through assomies or
petremen to whom money was advanced in the right season.20
Often murchant-middlemen were also employed for procuring
saltpetre. In May 1683, the Company contracted for 4,120 mds.
of saltpetre (at Re. 1¼ p.md.) with three able ‘petremen’; ‘Buck-

tmall,’ ‘Muluckchand’ and ‘Siabray’ who had provided all the
Company’s saltpetre in the previous year, and now gave good
security against fulfilment of the contract.21 But official rapacity
occassional ly made the petremen hide out in which case the Com-
pany had to deal with the merchant-middlemen who demanded
a greater price than the ordinary petremen or assomies. Thus in
1684, the Patna factors reported that they dealt with one mer-
chant, namely Probhat (‘Perevott’) who would not deal at the
same price as the assomies on the ground of the trouble given
by the nawab and his officers.22 In general, the competition in
the saltpetre market was confined mostly among the European
Companies specially the English and the Dutch. Both these Com-
panies were apprehensive, not without much reason – that the
others try to engross the trade, As a consequence the English
Company asked their factors to carry on with the investment in
saltpetre even in the time of war when they could hardly send the
commodity for want of shipping.23
This competition amongst the Europeans had often its impact
on the prices. The English factors once claimed that the price of
saltpetre was much reduced when the Dutch had left Patna.24
The interlopers too were competitors in the market specially in
the ’eighties of the seventeenth century. In 1684 the Patna fac-
tors reported that Purusuttom Das and Jadu Das – who were
formerly Dutch gomasta, and provided the interlopers with
saltpetre in the various years – again procured for the interlop-
ers great quantities of refined saltpetre which made the coarse
variety scarce and raised their price. But when the interlopers
failed to come, the two merchants, hard pressed by the creditors
for money, tried to sell the commodity for whatever prices they
could get. But the English and the Dutch Companies ‘plagued
them sufficiently’ and agreed not to buy an ounce of them so
that ‘they might be sufficient losers and be made examples to
prevent others’ from following their steps in future.25
An analysis of the price of saltpetre shows a general upward
trend throughout the period, though with exceptions during cer-
tain years.26 Of course, it is difficult to find out precisely the cost
price of saltpetre as it depended on certain factors, e.g., the place

and time of purchase as also on the variety bought. As noted
earlier, the price of saltpetre at Patna in December 1650 was
Re. 1 per md. while with charges for freight, it amounted to
Re. 1¼ at Hugli. But the English bought the same variety for the
ships despatched that year at Re. 15/8 per md.27 In other words,
the English had to pay 5 per cent more for the commodity during
the shipping season. The price at Patna was about 40 to 50 per
cent cheaper than that in Hugli.28 In 1659-60 the English factors
procured saltpetre at Re. 11/8 per md. at Patna which indicates
a 12½ per cent rise in price than that in 1650-1.29 At the end
of our period, i.e. in 1719-20 the average price of saltpetre was
about Rs. 5 per md. This was generally the price in Hugli and
definitely it shows a rise of about 300 per cent from that in the
beginning of our period. This tremendous rise in the price over
the period can only be explained by the competition among the
European Companies and their heavy demand on the supply.
When the English first began their trade in saltpetre in 1650-1,
there was only the Dutch Company who used to export the com-
modity from Patna. So the former found saltpetre very cheap.
But with the growth of the English trade and the heavy demand
by the Europeans on the market, the price soared accordingly.
The other contributory factors for fluctuations in prices appear
to be the occasional attempts at monopoly by local rulers as
also the uncertain weather conditions. It was reported that more
saltpetre was procurable in dry seasons than during the rains.30
During 1663-4 and 1664-5 the price of saltpetre was Rs. 3
per md. while the treble refined variety cost Rs. 3¾. It ranged
between Rs. 2 to Rs. 3.2 from 1668-9 to 1675-6 with a sudden
rise to over Rs. 4 during the years 1676-7 and 1678-9. In the
’eighties however the average price was about Rs. 2 with the
lowest figure of Rs. 1.6 in 1682-3. But in the ’nineties the aver-
age price was over Rs. 3 per md. During the first decade of the
18th century it went up high and stood at Rs. 4 per md. which
was the trend in the second decade too, only with the exception
of 1712-13 when the price went up to Rs. 6 per md. However it
must be pointed out that fluctuations in cost price of saltpetre
did not have any determining influence or the amount procured

by the European Companies. The main considerations were the
ballast requirements for the returning ships and the market con-
ditions in Europe.
The quantities of saltpetre actually exported by the English
Company from Bengal over the period under review show
fluctuations though the general trend was one of expansion,
reaching the peak in the ’eighties and then sloping downwards
in the ’nineties, only to rise gradually again in the subsequent
years. These fluctuations depended on various factors which can
be generalised as the demand from England, the available supply
and the requirement for the Company’s shipping from Bengal. In
1663-4 the Company exported 943,650 lbs. of saltpetre which
rose to 990,450 lbs. in 1664-5. There was a phenomenal rise in
1668-9 when 1,977,300 lbs. were exported from Bengal, though
the figure fell later to as low a level as 712,950 lbs. The boom
in the export of saltpetre began in 1681-2 and continued upto
1685-6. The following table will indicate the fluctuations in the
export of saltpetre from the ’eighties till the end of the period
under review.31
Saltpetre Export: Quinquennial Total English Exports
Years Quantities Average

1681/2-1685/6 6,298.208 lbs. 1,259,641 lbs.
1690/1-1695/6* 2,652,964 lbs. 530,592 lbs.
1696/7-1700/1 2,226,132 lbs. 445,226 lbs.
1701/2-1706/7** 3,785,486 lbs. 757,097 lbs.
1710/11-1714/15 4,202,514 lbs. 840,502 lbs.
1715/16-1719/20 5,352,689 lbs. 1,070,537 lbs.
Notes: * Excluding 1691/2; **Excluding 1703/4.
The Dutch East India Company exported a far greater quantity

of saltpetre from Bengal than its English counterpart. In 1669-70
the Dutch export to Holland and the Asiatic factories amounted
to 3,343,440 Dutch lbs.32 Even in the first two decades of the
18th century the Dutch export to Holland far surpassed that of
the English. During the three years 1701-2, 1702-3, 1704-5 the
Dutch exported to Holland 8,494,754 lbs. (Dutch) at an average

of 2,381,918 lbs. yearly. The average annual export to Holland
during the quinquennial periods 1705-6 and 1710-11 and 1711-
12 to 1715-16 was 2,999,789 lbs. (Dutch) and 3,884,405 lbs.
(Dutch) respectively which indicates that the Dutch trade in
Bengal saltpetre was far greater than that of the English.33
Though the quantities of saltpetre exported annually by the
English Company seem to be impressive, the total value of this
annual saltpetre trade in proportion to the value of total exports
of the Company was not so. In the ’sixties the total value of
saltpetre exported annually from Bengal constituted about 20 to
25 per cent of the total value of export, rising to 50 per cent in
1668-9. But its share during the slump which began in 1681-2
was only 4 per cent of the total value of the Company’s exports
from Bengal, though that year witnessed a boom in the absolute
quantities of saltpetre exported by the Company. This decline in
value continued till 1685-6 when it formed only 1.5 per cent of
the total value of the exports. There was a sudden rise in 1704-5
when it stood at 22.7 per cent but gradually went down again
Then onward it varied between 3 to 4 per cent of the total value
of the Company’s exports.
AGD Accountant General’s Department, India Office

Library, London
Beng. Public Consult. Bengal Public Consultations, India Office,
London.
DB Despatch Book, India Office Library, London.
KA Koloniaal Archief, Rijksarchief, The Hague.
EFI English Factories in India, ed. W. Foster.
Fact. Records Factory Records, Hugli, Calcutta, Patna, Misc,
I.O.L., London.
Notes
1. Court Book, IX, p. 320, 5 January 1627.

2. S.N. Sen (ed.), Indian Travels of Thevenot and Careri, New Delhi,
1949, p. 74.
3. T. Raychaudhuri, Jan Company in Coromandel, The Hauge, 1962,

pp. 168-9.
4. K.A. 1343, ff. 748vo-749vo.
5. Price of Patna Saltpetre was just half of that of Ahmedabad saltpetre,
c.f. Moreland, From Akbar to Aurangzeb, London, 1923, p. 121; Price
of saltpetre at Hugli was £6 per ton while at the Coast it was £8 to £9
in 1659-60, D.B., vol. 84, ff. 411-12; vol. 85, ff. 334.
6. O.C., 15 Dec. 1651, no. 2188, vol. 22.
7. Fact. Records; Hugli, vol. 10, f. 235.
8. D.B., vol. 95, f. 232.
9. T. Raychaudhuri, op. cit., pp. 169-70.
10. Tavernier, Travels in India, trans V. Ball, London, 1889, vol. 1, p. 122.
11. Fact. Records, Misc., vol. 3, f. 63; vol. XIV, ff. 331-2.
12. O.C., 14 January 1652, no. 2246, vol. 22. E.F.I., 1651-4, p. 95.
13. Bengal Public Consultations, Range 1, vol. 6, f. 488a.
14. D.B., 3 February 1720, vol. 100, f. 224.
15. O.C., 10 February 1651, no. 2208, vol. 22; ibid., 25 February 1651,
no. 2210, vol. 22. EFI, 1651-4, pp. 45, 47.
16. For the list of Dutch Company’s orders for Bengal goods, see K.A.
vols. 1556, 1581, 1584, 1622, 1636, 1653, 1669, 1688, 1720, 1734,
1746, 1776, 1804.
17. E.F.I., 1661-1704, pp. 69-71.
18. Fact. Records, Hugli, Consult. 11 July 1674; E.F.I., 1661-4, pp. 395-6.
19. Fact. Records, Calcutta, vol. 3, pt. II, f. 87.
20. Fact. Records, Hugli, vol. 10, f. 194.
21. Fact. Records, Patna, vol. 1, pt. IV, f. 18.
23. D.B., vol. 86, ff. 504-5; vol. 86, ff. 522-3, vol. 87, f. 39.
24. Fact. Records, Calcutta, vol. 11, pt. II, ff. 2-3.
26. See Table 11.
27. O.C., 15 December 1650, no. 2188, vol. 22; E.F.I., 1651-4, pp. 337-8.
28. D.B., 28 January 1659, vol. 84, f. 414.
29. O.C., 15 December 1659, no. 2833, vol. 26; E.F.I., 1655-60, p. 29.
30. O.C., 1 September 1665, no. 3069, vol. 29.
31. See, relevant volumes of A.G.D.
32. K.A., 1164, ff. 380-2vo., The Dutch lb. is equivalent to 1.09 English lb.
approx. cf. T. Ray Chaudhuri, op. cit., p. 223.
33. For the list of Dutch export from Bengal, see K.A. vols. 1556, 1581,
1584, 1622, 1653, 1669, 1688, 1720, 1734, 1746, 1776, 1804.
chapter 8
Continuity or Change in the

Eighteenth Century?
Price Trends in Bengal, c. 1720-1757*
Interestingly enough, there has been a surprising concensus

among historians (e.g. K.K. Datta, Brijen K. Gupta, K.N.
Chaudhuri and even P.J. Marshall in his latest book in the
New Cambridge History of India Series) that there was a sharp
and steady rise in the prices of commodities in Bengal during
the period from around the 1720s to the 1750s. This has an
important bearing on the ‘Change or Continuity’ thesis in the
context of the eighteenth century. If the price rise was a continu-
ous process from the nawabi regime, then it is implied that the
steep rise in prices in the 1760s, which is amply documented in
the Company records and acknowledged as such even by P.J.
Marshall, was nothing but a continuity of the trends prevalent
in the pre-Plassey period. At the same time, this assumption
minimizes the role of the Company and its servants in destroy-
ing Bengal’s economy by various monopolies, oppressions and
ruthless exploitation in the post-Plassey period. In the backdrop
of all this, it would be interesting to re-examine the price trends
in Bengal in the pre-colonial period, and see how far the general
thesis of the upward movement of prices in the first half of the
eighteenth century, held so far by most of the authorities on the
subject, can stand a close scrutiny in the light of the new evidence
found in the European archives.
* The Calcutta Historical Journal, vol. XV, nos. 1-2, July 1990-June 1991,
pp. 1-25.
As we have just noted, there is a complete unanimity among

historians that prices of commodities in Bengal from 1720 to
1760, especially from the early 1740s, show ‘a fairly sustained
and marked increase’ which was ‘particularly strong for raw
siIk and Bengal textiles’ as also for rice.1 With the help of such
sophisticated devices as ‘weighted moving-average’ of price
series, histogram and, polynomial and linear trend of prices of
several commodities, these authorities conclude that ‘the gen-
eral synchronic trends are clearly visible’ and that there was a
gradual rise in prices over the period as a whole.2 But the general
emphasis so far has been on the ‘sharp increase’ in prices from
around the early 1740s. The significant point to note is that the
‘secular upward’ trend in the movement of prices is linked to
the ‘phenomenal increase’ in the European export trade from
Bengal and the consequent influx of bullion into the country.
Along with this, as the authorities hold, the contributory fac-
tors for the rise in prices during the period were the Maratha
invasions which seriously disrupted the economy, and the keen
competition among the European Companies for the export
commodities.
‘Marked and Sustained’ Increase?
It is clear from the above that for the supposed rise in price
movement, a lot of emphasis has been put on the European
trade which brought in its train bullion into the province. It has
been stated clearly that the ‘foreign demand for export goods,
which were all paid in cash, stimulated domestic demand for
food grain and other consumer products’ which ‘in its turn could
have exerted some pressure on prices’.3 There is no denying the
fact that there was a significant increase in European trade and
a consequent inflow of bullion in the first half of the eighteenth
century. It is also probable that as a result of this, there was an
expansion in the economic activity of Bengal and an increase in
money supply. But the extent of the impact of these on the overall
economy and the price movements over the period are yet to be
determined precisely. Moreover, as we have argued elsewhere,4
Continuity or Change in the Eighteenth Century? | 163
even in the mid-eighteenth century, the European trade was not

the most important factor in the commercial life of Bengal; the
volume of the export trade carried on by the Asian merchants
from Bengal was much larger than that of the Europeans. The
Europeans were not the only importers of bullion and for that
matter, not even the largest at that. The Maratha incursions, no
doubt, resulted in dislocation in the economy but it was not so
serious as it was mainly local in character and only a temporary
phase. The competition among the European traders as also
among the European and Asian merchants was certainly there
but this need not be overemphasized.
Even taking for granted for the sake of argument that the
price of export goods such as textiles and raw silk registered a
rise over the period under review, it may be argued, as has been
done by a recent authority, that ‘such a sectoral rise might only
reflect a failure of the supply of these goods to increase as fast as
the demand for them, and may not necessarily indicate a general
price rise in the economy’.5 In order to prove the latter, we have
to look for movements in the price of the so-called wage-goods.
The most important among these are staple food items like rice
and wheat. But at the present state of our knowledge, such an
exercise is fraught with the danger of a wide margin of error
because of the lack of precise information in the face of numer-
ous varieties of staple food items, especially rice. One suspects
that such an attempt might only lead to extremely erratic behav-
iour of the prices of provisions, as has been demonstrated in
a recent study of Bengal prices on similar lines for the period
1650-1720.6 Further, the explanation based on the quantity the-
ory of money that the increasing European demands for export
commodities which were paid in cash enhanced the demand for
staple food like rice and other consumer goods has recently been
subjected to doubt. A recent authority explains the phenomenon
in a different way.7 Though the extent of increase in the velocity
of money circulation as a result of European trade cannot be
precisely determined, the increasing European trade implied that
the ‘monetized transactions as a proportion of total transactions
in the economy would have gone up’. Besides, over the period
of more than 35 years from 1720 to 1757, ‘natural increase in

population would have necessitated a secular rise in output and
transaction if the per capita output and availability were not to
go down’. All these factors, it has been pointed out, would gravi-
tate towards checking a general rise in prices which could have
been the result of an increase in the supply of money following
the influx of bullion connected with the European trade.8
Price of Textiles
Be that as it may, as has been pointed out earlier, we should

look into the prices of major food grains, especially rice, the
staple food of Bengal, to determine whether there was any sharp
rise in prices in general over the period, and not in the prices of
major export commodities like textiles and raw silk where the
great demand for such goods on the part of Asian merchants
and Europeans might have resulted in such a rise. But as even
the latest studies emphasize this aspect to prove a general rise
in prices and as ‘evidence of a sustained and marked increase in
prices’,9 let us examine how far and if at all, the prices of these
commodities show a secular upward trend during the period
under review. One has to take into account here that even earlier
authorities pointed out a ‘sharp increase’ in the prices of textiles
and raw silk, and asserted that between 1738 and 1754, prices
of these goods increased by no less than 30 per cent.10 The latest
study on the period, quoting earlier authorities, also came to the
same conclusion.11
The main and the only basis of the above conclusion by earlier
authorities regarding the steep rise in the price of textiles is a
complete misreading (and out of context too) of an entry in the
Bengal Public Consultations under December 1752.12 The par-
ticular Consultation refers to a letter from Dacca of 4 December
1752 wherein the Dacca factors were trying to answer the allega-
tions from Calcutta regarding the bad quality of textiles sent by
them, pointing out that the sample of 1738 was not ‘fit standard
for judging’ the quality of cloth sent from Dacca in the former
year. The reasons for the badness of the quality of cloth, as the
Dacca factors wrote, were:13
. . . as the Copass [kapas – cotton] or country cotton has not been for
the two years past under 9 or 10 rupees and the price of rice at the same
time very dear, whereas in 1738 the Coppas did not exceed Rs. 2 or Rs.
2-8 and the rice very cheap, mostly 2 maunds 20 seers to 3 maunds for a
rupee to which may be added which is well known to all the purchasers
of cloth that the prices of all sorts of cloths have risen near 30 per cent,
some more, since the year 1738, and that they now labour there and has
done so for these two years past under the inconvenience of a French
factory continually emulating the Hon’ble Company’s trade and have
advanced the price of all cloth both coarse and fine and obliged them to
be less severe with their dellols in prizing their cloth. . . .
It is amply clear from the above that this is a desperate bid on
the part of the Dacca factors – scrupulousness not being their
strong point which was true also of other Company servants
working in India at that time – to justify the badness of cloth
and hence the emphasis on 30 per cent increase in the price of
cloth between 1738 and 1752. As the ‘muster’ (sample) of 1738
had been the standard, so 1738 becomes the target date and for
no other reason. Moreover, if one carefully examines the above
passage, one could seldom miss the stress on ‘these two years
past’ which signifies that the quality of cloth sent by them dete-
riorated mostly in those two years and not really for the whole
of the period from 1738 to 1752. There is the specific reference
to ‘near 30 per cent’ increase in the price of cloth during the
period but, if at all true, that applied to Dacca only, and could
hardly be taken as an evidence of a general phenomenon of price
increase throughout Bengal. Besides, one can rightly suspect the
validity of the evidence which was produced in self-defence in
the face of the allegation of malpractice. One who has gone care-
fully through the Company records can hardly fail to observe
that throughout the period, whenever an allegation was made
regarding badness of investments, the factors always answered
in the same vein – that it was because of the high price of staples
like rice and cotton, competition from other Asian and/or Euro-
pean merchants, and the general increase in the price of export

commodities. One should accept such ‘evidence’ or ‘excuses’
with due caution.
Still the fact remains that a distinguished authority has
demonstrated with diagrams, polynomial and linear trends as
also time series that ‘a fairly sustained and marked increase [in
prices] is particularly strong for raw silk and textiles’ during the
period under review.14 How can one reconcile this with the fact,
as we shall see shortly, that the increase in prices of these two
main export commodities was hardly so spectacular as has been
presumed to be? The answer is not far to seek. The weighted
average, diagrams, polynomial and linear trend etc., so well illus-
trated by K.N. Chaudhuri, do not however take into account
the most crucial factors which determined the price of either
textiles or raw silk. There were numerous varieties of textiles
and even within the same category (e.g. muslins or fine calicoes),
there were different types (e.g. in muslin, there were khasas,
mulmuls etc.) and the price of each type (e.g. khasa) depended
on several factors such as the size, quality, the aurung in which
it was produced, etc.15 The same was the case with raw silk, the
price of which depended on the particular variety (e.g. ‘Gujarat’,
‘Kumarkhali’ etc.), fineness and racolta (band – Indian term for
the harvest).16 If all these factors are not taken into consideration
in minute details while working out the cost price, the results
are bound to be misleading. Just by deflating the total cost price
by the total amount exported to find out per unit cost price
does not reveal the real picture as has happened in this case.17
Hence even with such scientific tools of analysis used by K.N.
Chaudhuri, the results – showing a secular upward trend – can
hardly be taken for granted.
For any precise study of the movement of textile prices, one
has to take into account very meticulously how many pieces of
a particular type of cloth, of what length and width, of which
aurung and of what quality were exported at what total price
from which only one can get the exact picture of the price move-
ment. To give an illustration, if we are looking into the price
of khasa, just taking into account the total pieces of khasas
exported and their total price to find out the unit price of khasa
could be quite erroneous. We have to know whether the khasa
was ordinary, fine or superfine (i.e. the quality), whether its
measurement was 40 co. × 3 co.18 or 40 co. × 2¾ co. or 40 co.
× 2½ co. etc. (i.e. its actual size), whether it was produced in
Jagannathpur or Cogmaria or Orrua (i.e. the aurung in which
it was produced) etc. Because, the price of khasa will depend on
all these factors and hence we have to take all these variables
into consideration. This is almost an impossible task as in all the
export invoices, whether of the Dutch or the English Company,
what we get is the total number of khasas exported with their
total cost price without any indication whatsoever about their
size, quality or aurung.
Again, if the unit price of the textiles in a particular year is
arrived at just by dividing the total cost price by the total num-
ber of pieces exported by the Companies, without taking into
account the composition of different categories such as muslins,
fine calicoes, ordinary calicoes etc. which varied over the period in
the total textile export, then the picture of price movement could
be very much distorted. Thus the steady upward trend in K.N.
Chaudhuri’s time series can be explained by the fact that while
the share of the more expensive category of textiles, muslins, (as
also silk piece-goods) steadily increased in the first quinquennial
period of 1740s and 1750s, that of the cheapest variety, ordi-
nary calicoes, remained the same during this period,19 and not
because of any real increase in the price of textiles. That the unit
price of textiles could vary widely depending on the category of
textiles and place of procurement is amply clear from the unit
price of the textiles exported by the Dutch Company in 1753/4
for which such breakdowns are available. Thus, the unit price of
textiles sent from Patna, mostly ordinary calicoes, worked out
to be f. 6.13 and from Dacca, mostly muslins and fine calicoes,
f. 20.04, from Hughli, mostly medium quality, f. 9.56 and from
Kasimbazar, silk piece-goods and ordinary calicoes, f. 7.85.20
The only evidence from which we can get an exact picture
of the price movement in textiles is the contract the Companies
entered into with the dadni merchants for supply of goods every
year. In these contracts we find the particular details of the size,

quality and the aurung of each type of cloth which are abso-
lutely essential for a proper scrutiny of the movement of price of
textiles. Until and unless we know these details of the variables,
nothing definitive can be said about price movement. As is well
known, the prices were arrived at after days’ of bargaining and
wrangling between the Company and the merchants. Though
the Companies sometimes tried to pay lower prices for cloth
delivered by the merchants, it was mainly on the ground of infe-
rior quality supplied than agreed for in the contract, and the
original contract price was never altered. So let us see what are
the general trends as revealed in these contracts over the period
for which we select six years namely, 1732, 1741, 1744, 1751,
1752 and 1754.
These particular years are chosen for such an analysis because
1732 was a normal year without any political disturbance or
natural calamity, 1741 was the year just prior to the Maratha
invasions, 1744 was the year when the impact of these incur-
sions which began in 1742 could naturally be expected to be
reflected in the price movement. The Maratha invasions stopped
in 1751 and 1752 was the year immediately after the peace with
the Marathas while 1754 was the normal year after the famine of
1752. As such these years would give us a broad spectrum of the
period with its ups and downs, whether political or economic.
For our present analyses, we first take up the Dutch contracts
for these six years and see how the prices moved in the two main
types of muslins, khasas and mulmuls, which were the staples in
the export list of the Europeans (Table 8.1).21
It is quite evident from the above Table 8.1 that between 1734
and 1754, there was absolutely no increase in the price of the 20
different types of khasas and mulmuls that were noted in the list
of contract, except khasa Nadona which seems to be, from its
price, a medium or low quality khasa. What is extremely signifi-
cant, as is apparent from this Table 8.1, is that the price of all the
different khasas and mulmuls, except khasa Nadona, actually
went down in the period 1751-4 from the level between 1732
and 1744. In other words, the prices of khasas and mulmuls in
Table 8.1: Contract Price of Khasas and Mulmuls, 1732-1754

(Select Years), Dutch Company
Textile Type Measure 1732 1741 1744 1751 1752 1754

(covid) Price Price Price Price Price Price
Rs. As Rs. As Rs. As Rs. As Rs. As Rs. As
Cossa Ordn. 40 x 3 15.00 15.00 15.00 14.11 14.11 14.11
Cossa fine 40 x 3 18.00 x x x x x
Cossa ordn. 40 x 2⅝ 13.00 13.00 13.00 12.11 12.11 12.11
Cossa ordn. 40 x 2¼ 11.00 11.00 11.00 x 10.13 10.13
Cossa ordn. 40 x 2½ x x x 10.13 x x
Cossa ordn. 40 x 2 9.12 8.00 9.12 9.8 9.8 9.8
Cossa ordn. 40 x 1¾ 8.10 7.00 8.10 8.7 8.7 8.7
Cossa ordn. 40 x 1½ 7.8 x 7.8 7.6 7.6 7.6
Cossa Nadona 25 x 2¼ 3.14 3.14 3.14 4.6 4.6 4.6
Mulmul ordn. 40 x 3 15.00 15.00 15.00 x x 14.11
Mulmul fine 40 x 3 18.00 18.00 x 17.10 17.10 17.10
Mulmul ordn. 40 x 2⅝ 13.00 13.00 13.00 12.11 12.11 x
Mulmul ordn. 40 x 2¼ 11.00 11.00 11.00 10.12 10.12 10.12
Mulmul fine 40 x 2¼ 14.00 14.00 14.00 13.11 13.11 13.11
Mulmul ordn. 40 x 2 9.12 9.12 9.12 9.8 9.8 9.8
Mulmul ordn. 40 x 1¾ 8.10 8.10 8.10 8.7 8.7 x
Mulmul ordn. 40 x 1¾ 10.8 x x 10.4 10.4 10.5
Mulmul ordn. 40 x 1½ x 7.00 7.00 x 6.14 6.14
Mulmul fine 40 x 1½ x 9.00 x 8.13 8.13 8.13
Mulmul ordn. 40 x 1¼ 7 x x 6.14 x x
Source: Contracts with Merchants, VOC 2241, ff. 649-661; VOC 2537, ff. 1427-8;
VOC 2629, f. 218; VOC 2783, ff. 236-7; VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.
the period from 1732-54 will negate the thesis of a ‘fairly marked
and sustained’ increase in the prices of textiles in general during
the period. But one might argue that khasas and mulmuls were
finer varieties of calicoes, and perhaps the price rise was reflected
in not-so-fine and medium types of textiles. So let us see how
the prices moved in these varieties of textiles during the years
under consideration. In Table 8.2 we note the contract prices
for several types of textiles coarser than muslins and which were
prominent in the export list of the Dutch Company.
The price trend that emerges from Table 8.2 is undoubtedly
different from the one in Table 8.1. Out of the 6 types of coarser
Table 8.2: Contract Prices of Coarser Textiles,1732-54


(in covid) Price Price Price Price Price Price
Rs. As. Rs. As. Rs. As. Rs. As. Rs. As. Rs. As.
Sanoes 24 x 2 4.8 4.8 4.8 4.15 4.15 4.15
Kharadaries 18 x 2¼ 4.00 4.00 4.00 4.3 4.8 4.8
Aliabanies 24 x 3 4.12 4.12 x 5.7 5.12 5.12
Ginghams 18 x 2¼ 3.8 3.8 3.8 3.7 3.7 3.7
(plain)
Ginghams 18 x 2¼ 4.12 4.12 4.12 4.7 4.7 4.7
(check)
Humhums 14 x 3 5.00 5.4 5.4 5.11 5.11 5.11
(Ordn.)
Source: same as in Table 8.1.
textiles, the price of 4 went up by about 10 to 20 per cent while

the price of two others actually show a downward trend from
the period 1732-44 to 1751-4. Though it is difficult to explain
such mixed trends in prices of these textiles, one possible expla-
nation could be that most of these piece-goods were produced in
the areas around Hugli, which was one of the worst affected by
the Maratha raids. Secondly, the competition among the buyers,
whether Asians or Europeans, was more severe for these coarser
varieties than in finer muslins. But then we cannot explain, at the
present state of our knowledge, the slide in the prices of the two
types of ginghams in the period 1751-4 from the level in 1732-
44. Still what is apparent from the prices of the coarser types of
textiles is that there is hardly anything which can be termed ‘a
marked and sustained increase’ in prices over the period.
However, so far as the price of coarsest textiles is concerned,
there seems to have been a perceptible rise in the 1750s from
the level of the 1730s (Table 8.3). But it is extremely difficult to
measure the increase in prices over the period because the mea-
surement of the textiles procured by the Dutch varied, and there
is no precise data how the price of any of the coarsest textiles of
the same length and width rose during the period (Table 8.3). In
Bengal, the price of the same type of textile often jumped when
Table 8.3: Contract Price of Coarsest and Cheapest Textiles, 1732-54


per per per per per per
corge* corge corge corge corge corge
Garras 36 x 2½ x x x 84 84 84
Garras 30 x 2½ x x x 70 70 70
Garras 30 x 2¼ 45 48 x x x x
Garras 24 x 2½ x x x 56 56 56
Guinees 75 x 2½ x x x 175 175 175
Guiness 75 x 2¼ 118 121.8 x x x x
Salampuris 37½ x 2½ x x x 87.8 87.8 87.8
Salampuris 37½ x 2¼ x 60.12 x x x x
Source and note: Same as in Table 8.1 and VOC 2783, ff. 248-9; 2840, f. 680. Per corge
means per 20. Generally the coarset textiles were contracted per corge.
the traditional measurement was even slightly altered – a fact

which is borne by numerous references in the Company records.
Yet, in all probability, the price of the coarsest textiles went up
considerably as will be apparent from Table 8.3. The explanation
for this is not far to seek. Most of these textiles were produced in
Birbhum, Burdwan and Kasimbazar areas which were the most
affected by the Maratha invasions. Besides, the keenest competi-
tion in the market was for this variety which was the reason why
the merchants were most reluctant to contract for these textiles
which, as they alleged, brought them little or no profit while
they were extremely eager to contract for finer varieties. Often
the Companies had to impose the contract for these ordinary
calicoes on the unwilling merchants.22
Taking up the contracts of the English Company, it can be
asserted that though no uniform and precise trend is to be found
in the prices of muslins like khasa and mulmul, yet an upward
trend is discernible on the whole. In case of more expensive kha-
sas like khasa Cogmaria (40 × 3), while the price was Rs. 11.8
in 1732, it came down to Rs. 9.8 in 1741 and 1742 but rose
again to Rs. 10.8 in 1744 and remained at the same level up to
1751. Similarly in case of khasa Cogmaria fine (40 × 2½), the

price came down from Rs. 8.00 in 1740 to Rs. 7.6 in 1741 and
remained at Rs. 7.12 from 1744 to 1751 (Table 8.4). Similarly,
in case of mulmul Santipur fine (40 × 3) while the price was Rs.
17.8 in 1740, it came down to Rs. 16.8 in 1741 and 1751. Again
mulmul Balasore (20 yd × 1 yd) was priced at Rs. 11.00 in 1744
and 1750 while in 1751 it was Rs. 10.8 (Table 8.4). What is
clear from Table 8.4 is that there was sharp increase in the price
mainly of the cheaper varieties of khasas and mulmuls. Thus
while the price of khasa Burron (40 × 2) was between Rs. 4.12
and Rs. 5 in 1732 and 1741, it went up to Rs. 5.12 in the period
from 1744 to 1751. The same upward trend is visible in case
of khasa Kumarkhali (40 × 2) (Table 8.4). More or less the
same picture is to be found in the price of cheaper mulmuls.
For example, while mulmul Santipur (40 × 2¼) cost Rs. 7.12
in 1741, the price was Rs. 9.12. In 1750 and 1751. The increase
in price is more marked in the case of mulmul Santipur (40 × 2)
over the period (Table 8.4). In other words, though there was a
sharp increase in the price of cheaper types of muslins, the price
of more expensive types actually went down. So it is difficult to
maintain that there was a marked and sustained increase in the
price of textiles as a whole over the period.
There was, however, a marked and, to some extent, sharp
rise in the price of coarse calicoes in the contract of the Eng-
lish Company. It will be apparent from Table 8.5 that the price
of photaes fine (20 × 2¼) went up from Rs. 3.12 in 1740 and
1742 to Rs. 4.8 in the period from 1744 to 1751. More marked
was the rise in the price of garras. While the price of garras fine
(72 × 2¼) was Rs. 106 per 20 pieces in 1740, it rose to Rs. 112
in 1742 and to Rs. 160 in 1750 and 1751. Similarly, garras fine
(36 × 2½) cost Rs. 53 to Rs. 56 per 20 pieces in 1740 and 1742
respectively but the price moved up to Rs. 80 in 1750 and 1751.
This only indicates clearly that there was a sharp increase in the
price of coarse textiles in the contracts of the English Company
– a trend which was not so very clear in the Dutch contracts.
But as we have explained earlier, the coarse categories of textiles
were produced mostly in the areas which were badly affected by
Table 8.4: Contract Price of Khasas and Mulmuls, 1732-51
(Select Years), English Company

(in covid)
Price Price Price Price Price Price
Cossa Orrua 40 x 2¼ 8.00 8.00 7.12 8.14 8.14 8.14
Cossa Orrua 40 x 2 x 7.2 6,12 7.14 7.14 7.14
Cossa Cogmaria 40 x 3 11.8 9.8 9.8 10.8 10.8 10.8
Cossa Cogmaria
fine 40 x 3 15.8 x x x x x
-do- 40 x 2½ x 7.10 7.10 8.2 8.2 8.8
-do- 40 x 2¼ x 8.00 7.6 7.12 7.12 7.12
Cossa Burron 40 x 2 5 4.12 4.12 5.12 5.12 5.12
Cossa Kumar-
khali 40 x 2 x 4.12 4.12 5.12 5.12 5.12
Cossa Malda F.
Golden 40 x 2½ x 19.00 19.00 x x x
-do- 40 x 3 x x x 17.8 17.8 17.8
Cossa Serry 32 x 1¾ x 57 p.c. 64 p.c. x x x
Mulmul Santipur 40 x 3 14 x 10.00 x 11.00 x
-do- 40 x 2¼ x x 7.12 x 9.12 9.12
Mulmul Santipur
fine 40 x 3 x 17.8 16.8 x x 16.8
-do- 40 x 2¼ x x 9.8 9.12 x x
-do- 40 x 2 x x 8.4 8.4 x x
-do- 40 x 2 x x 6.12 x 8.4 8.4
Mulmul 20yd x
Balasore 1yd x x x 11.00 11.00 10.8
Mulmul
Cossajura 40 x 2 x 11.0 x x x x
Mulmul
Cossajura fine 40 x 2 x 19.0 x x x x
-do- 40 × 2¼ x 21.0 22.8 x x x
-do- 40 x 3 x 30.0 30.0 x x x
Mulmul Serry 36 x 1¾ x 55 p.c. 55 p.c. x x x
Mulmul Serry 82.8 92.8
fine 36 x 1¾ x p.c. p.c. x x x
Source and note: BPC, vol. 9, f. 61; vol. 14, ff. 91-2; vol. 15, ff. 89, 233-4; vol. 17, f. 70;
vol. 23, ff. 186-7; vol. 24, ff. 238-9. From 1744 onward, the ‘medium price’ is noted
here. For 1752 no such price is available while the contract system was abolished in
1753; p.c. means per corge or per 20.
Table 8.5: Contract Price of Coarse Calicoes, 1732-51 (Select Years),

English Company

Photaes fine 28 x 2¾ 4 x x x x x
-do- 28 x 2¼ x 3.12 3.12 4.8 4.8 4.8
-do- 28 x 2½ x 2.12 2.12 x x x
Garras 72 x 2¼ x 93 p.c. 99 p.c. x x x
Garras fine 72 x 2¼ x 106 p.c. 112 p.c. x 160 p.c. 160 p.c.
Garras 36 x 2¼ x 46.8 p.c. 49.8 p.c. x x x
Garras fine 36 x 2¼ x 53 p.c. 56 p.c. x 80 p.c. 80 p.c.
Source and note: Same as in Table 8.4.
the Maratha inroads. Moreover, there was always the keenest

competition among various groups of merchants for the coarser
textiles for which the demand was great and which often pushed
up the prices. Still, what is obvious from the contract prices in
the Dutch and English records is that though prices of certain
types of textiles went up, especially in the late 1740s and early
1750s from the level of the 1730s, there is nothing to establish
that the prices of textiles in general went up sharply during the
period under review.
Silk Price
Turning to raw silk, we find a slightly different picture from that

in the case of textiles. In the Table below (Table 8.6) we note the
price of raw silk for several years from 1733 to 1753 to see the
movement of prices in this important export commodity.
The trend of raw silk prices that emerges from Table 8.6 is
somewhat erratic and shows wide fluctuations over the period;
But what is clear is that the rise in the price of raw silk between
1733 and 1745 is almost negligible and does not support the
thesis of a general increase in prices in Bengal from the early
1740s. What is significant is that there was a marked increase in
the price of raw silk in 1747 and 1748 from the level of 1733 or
1745. But this seems to have been a temporary phenomenon as
from June 1748 the prices began to fall and remained more or
less at the same level except in February 1751 when there was
again a slight increase from the level of June 1748. In short, it
can be stated that the price rise in silk was not so precipitate as
most historians would have us believe. That the price trend is to
some extent erratic is because of the fact, which we analysed in
detail elsewhere,23 that silk was one of the most sensitive articles
Table 8.6: Price of Raw Silk Procured by the English, 1733-53
Date Variety of Silk Price per seer (Rs. As.)

March 1733 November bund 5 : 12
Gujarat 6:6
Kumarkhali 5 : 12
January 1745 November bund 5 : 14
Gujarat 6:7
Kumarkhali 5 : 11
April 1747 November bund 9:4
Gujarat 9 : 13
Kumarkhali 9:1
January 1748 November bund 9:4
Gujarat 9 : 13
Kumarkhali 9:1
June 1748 November bund 7:8
Gujarat 8:1
Kumarkhali 7:5
October 1749 November bund 7:-
Gujarat 7:9
Kumarkhali 6 : 13
February 1751 November bund 8:-
Gujarat 8:9
Kumarkhali 7 : 13
March 1752 November bund 7 : 14
Gujarat 8:7
Kumarkhali x
April 1753 November bund 7 : 12
Gujarat 8:5
Kumarkhali x
Source: Fact. Records, Kasimbazar, vol. 5, 7 March 1733, vol. 6, 19 January 1745;
vol. 7, 2 June 1748, vol. 10, 22 February 1751; BPC, vol. 19, 22 April 1747; vol. 22,
31 October 1749; vol. 25, 16 March 1752, vol. 26, 18 April 1753; C & B Abstr.,
vol. 5, 10 January 1748.
the production of which, right from the mulberry plantation,

depended so much on the whims of nature. Moreover, as we
have argued elsewhere, the demand of the Asian merchants was
one of the major factors which determined the price of silk in
the market. An important point that is reflected in the above
Table 8.6 is that the English Company was not exporting the
cheaper Kumarkhali silk from around 1752 and was concentrat-
ing more on the comparatively expensive varieties like Gujarat
and November bund. As such, the unit price of silk is bound to
go up from that of the earlier period and so the rise in the unit
price after 1752 would not necessarily mean any intrinsic rise
in the price of the commodity. From the analysis made here, it
can be said that the dominant trend in silk price over the period
can hardly be described as a ‘marked and sustained’ increase in
prices.
Price of Food Grains
As pointed out earlier, rice is the most important food item the
price of which should be looked into to determine any precise
price movement in Bengal during the period under review. But
the main difficulty here is the wide variety of rice and its equally
wide price variation depending on quality. This is well illustrated
in Table 8.7 which indicates the different varieties of rice and
their prices.
So it is not a simple case of fine or coarse rice only; when
the price of coarse rice can vary so very widely from 4 mds.
15 seers to 7 mds. 20 seers per rupee (the difference being about
71 per cent), there is a grave risk in taking the price of rice as an
indicator of price movement until and unless one can be abso-
lutely sure of the exact quality of rice when its price is taken
into account. Otherwise the result could be extremely erratic and
gravely misleading. Yet depending on such data and sometimes
even fragmentary at that, recent authorities including the latest
on the subject have made such assertions as ‘Rice which was
sold at 100 to 120 seers for a rupee in 1738, was being sold only
thirty seers for a rupee’ in the mid-1740s as evidence to show
Table 8.7: Price of Rice, 1729
Variety Mds. seer per Rupee

Fine Rice
Bansephool
1st sort 1–10 –
2nd sort 1–23 –
3rd sort 1–35 –
Coarse Rice – Desna 4–15 –
Coarse Rice – Poorbie 4–25 –
Coarse Rice – Munsurah 5–25 –
Coarse Rice – Kurkashallee 7–20 –
Source: Sixth Report (1782-3), Appendix 15.
that ‘production declined and prices soared’ or that by the 1740s

‘Bengal’s advantages seemed to be disappearing’.24 Basing his
evidence on earlier authorities, the most recent authority affirms
that ‘between 1738 and 1754 it was thought that the price of rice
in Calcutta had risen by three or four times’ and reiterates that
‘local shortages’ led to ‘greatly increased food prices’.25
Now let us see how far such assertions are borne by hard
evidence. Regarding the price of rice in 1738, earlier authorities26
solely depended on the letter written by the Dacca factors to
Calcutta in 1752 in answer to the allegation of inferior quality
of cloth supplied by the former which we have quoted earlier.
Not only that, the letter was written in self defence but one has
to take into account the fact that the Dacca factors were writing
in 1752 about the prevailing price of rice in 1738 for which they
probably depended mostly on their own imagination which again
might have been coloured by their desperate attempt to cover up
their shortcomings. Moreover, the significant fact that it referred
to price of rice only in Dacca is ignored by our authorities. It is
too much to expect that the price of rice would be the same in
Calcutta and Dacca so that the price of rice in the latter place in
1738 could be compared with that in the former place in 1752
or 1754. Again, numerous references in the Company records
clearly indicate that the price of rice in Calcutta mostly depended
on the supply of the commodity from Bakherganj and Douleah
in south-eartern Bengal, without which the city was ‘reduced to

the greatest necessity and misery’ and that the price of rice in
Calcutta was often manipulated by the city’s rice merchants who
took advantage of the fluid situation in the growing city.27
As a matter of fact, as is indicated in Table 8.8, the price of
rice in Calcutta in 1738 was 30 seers per ‘Madras’ rupee at which
rate the Fort Wiiliam Council decided to buy rice for the garri-
son (coarse, of course, but yet which quality even in the coarse
variety ?) while in 1744 the rate was 30 seers for ‘common sort’.
The Council blamed the importers of rice for raising the price to
such an ‘exorbitant’ rate and asked the Calcutta zamindar not to
permit the coarse rice to be sold under 1 md. per ‘Arcot’ rupee.28
It will also be clear from Table 8.8 that in 1754 fine rice was sold
at 32½ seers per rupee while the coarse variety was sold at 1 md.
per ‘Arcot’ rupee. Hence the assertion of our authorities that the
Table 8.8: Price of Rice in Bengal, 1738-54
Date Place Mds. Seer per Rupee Quality

12 June 1738 Calcutta 0-30 ‘Madras’ Rup. Coarse (?) (for garrison)
2 April 1739 Calcutta 1-30 ‘Madras’ Rup. ‘very good sort’
31 May 1743 Dacca 0-35 Dasmasha ” ‘fine’
31 May 1743 Dacca 1-10 Dasmasha ” ‘ordinary’
7 January 1744 Calcutta 0-30 Arcot Rup. ‘common sort’
7 January 1744 Calcutta 1-00 Arcot Rup. ‘coarse’
20 September 1751 Calcutta 0-35 Arcot Rup. ‘good Nov. sort’
20 September 1751 Calcutta 1-10 Arcot Rup. ‘ordinary’
October 1751 Calcutta 1-32 Arcot Rup. ?
2 January 1752 Calcutta 0-35 Arcot Rup. ‘good Nov. sort’
2 January 1752 Calcutta 1-10 Arcot Rup. ‘ordinary’
October 1752 Calcutta 1-16 Arcot Rup. ?
19 February 1753 Calcutta 0-25 Arcot Rup. ?
10 June 1754 Calcutta 0-32½ Arcot Rup. ‘fine’
10 June 1754 Calcutta 0-35 Arcot Rup. ‘middling’
10 June 1754 Calcutta 1-00 Arcot Rup. ‘coarse’
Source and note: BPC, vol. 13, f. 262vo, f. 527; vol. 16, f. 401vo; vol. 24, f. 323;
vol. 25, f. 297vo; vol. 26, ff. 56vo-57; vol. 27, ff. 224vo-25; Fact. Records, Dacca, vol. 2,
31 May 1743. Arcot or Madras rupees were coined by the English in Arcot/Madras
and ‘Dasmasha’ rupees were used in Dacca.
price of rice had gone up ‘three to four times’ between 1738 and
1754 is hardly tenable.
While it is obvious from the above Table 8.8 that no clear
trend of the price of rice emerges, one has to take into consid-
eration in analyzing the Table that some of the prices shown
were during the times of scarcity and famine, and not under
normal conditions. In 1738, for example the price was affected
by the severe storm and flood that swept Bengal in September
and October 1737.29 Again, after the Maratha invasions were
over and when monsoon failed, there was famine in 1752 which
is said to have resulted in ‘worst shortages in 60 years’ and
the price of rice had reportedly gone up sharply to 25 seers a
rupee. At the same time one should note here that the price was
reported by Holwell who was prone to exaggeration and also
that he emphasized the sharp rise because of the large export of
rice from Calcutta on the one hand and the delay in the import
from Douleah on the other.30 But Orme’s assertion that the price
of rice in Murshidabad rose by 6 times its previous level seems to
be an obvious exaggeration and can hardly be corroborated by
contemporary evidence.31 That the abnormal price rise in early
1753 was only a temporary phenomenon and that prices came
down to their normal level in 1754 become quite evident from
Table 8.8. As such, the price of rice can hardly be taken as an
index of price movement because of the lack of precise data as
also the anomaly of the data available to us at this stage.
Maratha Invasions, European Trade and Prices
Historians including the latest authorities have unduly empha-

sized the effects of the Maratha invasions and the impact of
the European trade while dealing with the price movement
in Bengal.32 The report of the two English warehousekeepers,
Manningham and Frankland, came in handy to substantiate
the thesis of price rise in Bengal from the 1740s.33 As we have
argued elsewhere,34 the report was self-contradictory, motivated
and written with the ulterior objective of changing over from
the dadni to the gomasta system. Hence it should be handled
with more caution. Moreover, the very fact that these two Com-
pany servants wrote that the ‘necessaries of life had been greatly
enhanced over the previous ten or twenty years’ only betrays
the casual nature of their assertion. As they wrote in 1753, it
could have meant price rise either from about 1733 or 1743
which is a very curious position as our authorities assert that the
marked and sustained increase in prices took place only in early
1740s and by implication that the price situation was completely
different in the early 1730s and early 1740s. Hence one part
of the assertion of the two Englishmen (‘since the last 20 yrs’)
becomes superfluous. If the increase of prices is to be dated from
early 1740s, the report then, no doubt, tallies with the thesis of
our authorities but as we have seen in our analysis earlier, that
was not the case at all. So there is hardly any justification for
relying so much on the report of Manningham and Frankland as
evidence of price rise.
Like most of the historians, these two Englishmen, too, have
attributed the alleged price increase in Bengal to a condition
of real scarcity following the Maratha invasions. There is no
denying the fact that the Maratha incursions resulted in seri-
ous dislocation in the economy of some areas of Bengal. But
the impact of the invasions has been greatly exaggerated. The
Marathas caused destruction generally along the lines of their
march, leaving the remaining part of the country more or less
unaffected. Even in the affected areas, as Richard Becher, a Com-
pany official present in Bengal during the period, pointed out,
the Marathas were obliged to return at the approach of the rainy
season, and the inhabitants were again safe till next January. So
they immediately began to work and arranged to raise and sell
their crops before next year’s impending invasion.35 That the
country was not so much impoverished is proved by the fact
that the zamindars paid Alivardi Rs. 10 million at one time and
Rs. 5 million at another besides their annual revenue to enable
him to meet the increased military expenditure.36 The argument
that many merchants in Bengal ‘were crippled by losses and
exactions’ following the Maratha invasions and that as a result
of this both the English and the Dutch Companies increasingly

turned to direct dealings with the artisans is hardly tenable. As
we have shown elsewhere,37 the Dutch Company made such an
experiment for a few years only from 1747 to 1749 in view of
the ‘bankcruptcy’ of several merchants in a particular aurung
but reverted to contracts with dadni merchants from 1750.
The change over in the English Company’s investment pattern
from dadni to gomasta system in 1753 was not because of any
decline of Bengal merchants but was actually the result of the
Fort William Council’s attempt to resolve its commercial crisis
concerning private trade by cutting out the dadni merchants.38
Again, historians rely too much on contemporary vernacular
literature and Persian chronicles to corroborate the disastrous
effects of the Maratha invasions. That these are mostly exag-
gerated accounts is clear from the very nature of the evidence.
For example, the poet Gangaram wrote ‘rice, pulses, dal of all
sorts, oil, ghee, flour, sugar, salt began to be sold at one rupee
per seer. . . . All of them from the lowest to the highest, includ-
ing the nawab himself, had to subsist on boiled roots of banana
trees’.39 It is simply absurd that rice, oil, ghee (butter oil), sugar,
salt were all sold at one rupee per seer. Equally, unbelievable is
the assertion that even the nawab subsisted on roots of banana
trees. Even making allowance for the poetic effusion, the above
can hardly be taken as evidence of the impact of the Maratha
invasions. The author of Riyaz refers to human beings living
on banana roots to avert death by starvation. But if even true,
this was a description mostly of Burdwan city when its grana-
ries were burnt down and the supply of imported grains was
completely cut off by the Marathas for a short while.40 Another
Bengali poet, Bharatchandra, gives an account of Nalini’s shop-
ping in Burdwan but the prices she paid for different articles
though regarded as ‘abnormal’ cannot be compared with earlier
prices (for lack of precise data) to see if they were really so.41 The
simple fact that the total value of the investments of the major
European Companies, especially the English and the Dutch, as
also the export by Asian merchants was hardly affected during
or after the Maratha incursions is sufficient proof that the inva-

sions had really no long-term disastrous effects on the overall
economy of Bengal.42
The assertion of a recent authority that ‘prices were rising with
a high level of European purchases financed by imports of silver
in the decade or so before the battle of Plassey’ (in 1757), though
in line with the general assumption that there was an upward
movement in prices from the early 1740s (the period referred
to coinciding with the commencement of the Maratha invasion)
can hardly be tanable.43 Of the two major European exporters
of Bengal goods, the Dutch fell far behind the English from the
1720s. As far as the English were concerned, and they were the
most dominant of the European Companies in Bengal during
this period, there was hardly any remarkable increase in their
total exports from Bengal in the 1740s and 1750s as compared
with the level in the 1730s which will be evident from Table 8.9.
It is well beyond doubt from Table 8.9 that the value of the
English exports, though fluctuated a little from 1726-7 to 1754-
5, the increase or decrease in the average annual value was only
marginal. Though there was a trend of decline from the mid-
1740s, this was more than compensated by the increase in Dutch
exports during this period which will be evident from Table
8.10.44 In other words, the total European export from Bengal
Table 8.9: Quinquennial Total of English Export from Bengal, 1727-55
Years Total value (£s.) Average annual value (£s.)

1726/7-1730/1 2,289,323 457,865
1731/2-1735/6 2,046,150 4,09,230
1740/1-1744/5 2,401,785 480,357
1745/6-1749/50 2,173,524 434,705
1750/1-1754/5 2,033,235 406,648
Source and note: Computed from K.N. Chaudhuri, Trading World, pp. 509-10 with
one year lag. As the real boom in English exports began in 1726/27 when the value
of the export amounted to over 0.5 million pounds, the second highest in the first
half of the eighteenth century, our computation here began with that year. Again as
the increasing purchases of the Europeans and consequent price rise are linked up,
presumably from the 1740s, we concentrated here mainly on the period 1740-55.
Table 8.10: Quinquennil Total and Average Annual Value of

English and Dutch Exports, 1730-55
(in Florins)
Years English Dutch

Average Annual Average Annual Average Annual
Value of Exports Value of Exports Value of Total
to Europe to Europe Exports (Europe
and Asia)
1730/1-1734/5 5,082,453 2,020,460 3,489,567
1740/1-1744/5 5,764,284 2,390,558 3,475,770
1750/1-1754/5 4,879,785 3,417,306 4,480,104
Source and note: Dutch exports compiled and computed from export invoices in
VOC records. The figures for English exports calculated with one-year lag from K.N.
Chaudhuri, Trading World, pp. 510-11. The rate of conversion used is £1 = f. 12
remained more or less stable from the early 1730s to the mid-
1750s which would substantiate our two important assertions
that neither the Maratha invasions had a disastrous effect on
the economy nor that the increasing purchases of the European
Companies pushed up the prices.
Moreover, it can be pointed out, for the sake of argument, that
had there been even an increase in the European exports from
Bengal, it would not have necessarily resulted in a spurt in prices.
As an authority has argued recently, the overall increase in the
prices of the export commodities ‘wold have constituted a clear
signal for reallocating resources to increase the output of these
goods’.45 It is beyond any doubt that Bengal was one of the most
fertile provinces of Mughal India, supplied food grains and other
provisions to not only several other parts of the country but quite
a few neighbouring countries also. As such it can be argued, as
has been done by the said authority, that ‘the availability of a
food surplus created a margin within which a relative shift from
food to commercial crops in response to challenging demand
could be affected without generating unduly severe strains’.46
Regarding the impact of the influx of bullion as a result of
the European trade, as we cannot estimate the total supply
of money in the economy, it is not possible to have any idea
of the relative significance of the addition to the money sup-
ply as a consequence of the import of precious metals by the

Europeans. In all probability, not all the silver brought by the
Companies was converted into Mughal coins, and as such did
not mean an automatic and corresponding increase in money
supply. Most often that not, the Companies had to sell their
silver to the banking house of Jagat Seth which because of its
many sources of income did not always have to coin the silver
in the mint.47 Moreover, leaving aside the ‘Oriental penchant for
hoarding’ which is explained as one of the major factors why
the import of precious metals had had no pressure on prices,48
there is little doubt that the nawabs of Bengal and the merchant
princes amassed a huge fortune during this period. Even after
paying the revenue to Delhi to the tune Rs. 13 million a year
from the early eighteenth century to at least the early 1740s, the
nawabs of Bengal could enrich their treasury to such an extent
that after the battle of Plassey, the British were astounded to find
‘20 million of rupees in gold and silver’ in the royal treasury. If
we are to believe the author of Tarikh-i-Mansuri, besides the
above amount, there was a hidden treasure in the harem which
contained ‘no less than 80 million rupees’ in gold, silver and jew-
els, and which was appropriated by Mir Jarfar, Rai Durlabh and
Raja Nabakrishna, Clive’s munshi.49
At the same time, we have indicated elsewhere the amount
of the enormous wealth accumulated by the merchant princes
namely, the Jagat Seths, Umichand and Khwaja Wazid.50 Then
there were the fabulously rich zamindars and mansabdars who
attained their prosperity in the first half of the eighteenth cen-
tury. All this will only indicate that quite a substantial part of the
precious metals brought in by the trade did not possibly filter
down to the primary producers and that a large chunk of it was
appropriated by the upper section of the society. The main fac-
tor, however, for the absence of any marked price rise in Bengal
was the basic question of demand and supply. Whatever the
level of demand was, the fact that Bengal could easily provide it
without requiring any change in the basic technology mitigates
against any marked rise in prices. If the supply side could meet
the demand easily without having any significant pressure on
Table 8.11: Percentage Share of Different Categories of Textiles Exported

by the Companies, 1730-55 (First Five Years of Each Decade)
Textile Categories Dutch Exports English Exports

1730s 1740s 1750s 1730s 1740s 1750s
Ordn. Calicoes 46.39 39.84 55.68 46.01 30.59 30.80
Fine Calicoes 14.99 19.89 12.66 20.29 22.48 19.16
Muslins 20.22 26.21 17.78 24.44 34.08 39.26
Silk Piece-Goods 10.43 10.08 11.18 3.18 4.55 6.36
Mixd. Piece-Goods 7.97 3.98 2.70 5.97 7.88 3.72
Miscellaneous – – – 0.11 0.42 0.70
Total 100 100 100 100 100 100
Source: Dutch exports collected and computed from export invoices in VOC records,
English exports computed from detailed data supplied by K.N. Chaudhuri.
Figure 8.1: Share of Different Categories of Textiles in Dutch

and English Exports (1730-55)
Source: As in Table 8.11.
the structure and organization of the industries (as is evident

especially in the textile and silk sectors), the demand which
brought in precious metals in consequence need not necessarily
have much effect on the price level. All the evidence analyzed so
far will confirm this.
Thus it can be reasonably concluded that there was hardly

any sustained and marked increase in the prices of commodities
in Bengal in the pre-Plassey period. The sharp rise of prices in
the 1760s was not a continuum of the earlier trends – it was
only a post-Plassey phenomenon for which the Company and
its servants with their new onslaughts on various sectors of the
province’s economy were primarily responsible. And so far as
the sharp and upward movement of prices in the post-Plassey
period is concerned, it was a complete break from the trends in
the nawabi regime in which, as we have tried to establish here,
there was nothing definitive in the price movement which can be
described as either ‘sustained’ or ‘marked’ increase.
Notes
† This paper is a part of the manuscript of the book ‘Pre-Modern

Industries and Maritime Trade in South Asia – Bengal in the First Half
of the Eighteenth Century’, which I completed as a Fellow-in-Residence
at the Netherlands Institute of Advanced Study during the academic
year 1990-1. But when published the title of the book was changed to
From Prosperity to Decline: Bengal in the Eighteenth Century, New
Delhi, 1995.
1. For example, see K.K. Datta, Bengal Suba, 463-9; Brijen K. Gupta,
Sirajuddaullah, p. 33; K.N. Chaudhuri, Trading World, pp. 99-108;
P.J. Marshall, East Indian Fortunes, p. 35; Bengal, pp. 73, 142-3, 163-
4, 170.
2. K.N. Chaudhuri, Trading World, pp. 99-108, 159.
3. Ibid., p. 108.
4. See my Presidential Address, Medieval India Section, Indian History
Congress, Golden Jubilee Session, Gorakhpur, 1989, ‘Trade, Bullion
and Conquest – Bengal in the Eighteenth Century’.
5. Om Prakash, Dutch Company, p. 250.
6. Ibid., pp. 251-3. K.N. Chaudhuri, however, shows with histogram etc.
a steady increase in the price of rice during the period under review.
7. Ibid., p. 253.
8. The whole question is discussed in details by Om Prakash, pp. 253-6.
9. K.N. Chaudhuri, Trading World, p. 102; following him; P.J. Marshall,
Bengal, p. 73. Chaudhuri depends on polynomial and linear trend of
textile and silk prices (pp. 103-4, 107-8) which shows a ‘strong and
gradual’ rise in prices but as we shall see the method followed is
suspect to wide margin of error.
10. K.K. Datta, Bengal Suba, p. 464; Brijen K. Gupta, Sirajuddaullah,

p. 33.
11. P.J. Marshall, East Indian Fortunes, p. 35; Bengal, p. 73.
12. BPC, vol. 26, f. 214, Consult. 11 December 1752; Bengal and Madras
Papers, vol. II, p. 34; James Long, Unpublished Records, p. 40, doc.
no. 103
13. All emphasis mine.
14. K.N. Chaudhuri, Trading World, pp. 100-8, 533-4, 544-5.
15. See my forthcoming paper ‘European Companies and Bengal Textile
Industry – The Pitfalls of Applying Quantitative Techniques’, in
Modern Asian Studies.
16. See my forthcoming paper ‘Silk Trade and Industry in Pre-Colonial
Bengal, circa, 1700-1757’, in the Journal of the Economic and Social
History of the Orient.
17. K.N. Chaudhuri, Trading World, pp. 506, 546.
18. co. is covido, measuring 18 inches.
19. See Table 8.11 and Figure 8.1.
20. Collected and computed from export invoices in VOC records, VOC,
2811, ff 6vo-7, 20-20vo, 46-46vo, 99-99vo; 2821, ff. 635-6; 2840,
ff. 39, 441-2.
21. For the wide variation in the price of the same type of textiles, e.g.,
khasa and mulmul, depending on size, quality and aurung, see my
forthcoming paper in Modern Asian Studies.
22. See my article ‘Merchants, Companies and Rulers’ in the Journal of the
Economic and Social History of the Orient, February 1988.
23. See my forthcoming paper in JESHO.
24. Brijen K. Gupta, Sirajuddaullah, p. 33; P.J. Marshall, East Indian
Fortunes, p. 35.
25. P.J. Marshall, Bengal, p. 73; East India Fortunes, p. 35.
26. K.K. Datta, Bengal Suba, pp. 463-4; Brijen K. Gupta, Sirajuddaullah,
p. 33.
27. BPC, vol. 26, ff. 56vo-57, 19 Feb. 1753; ff. 152-4, 24 May 1753;
ff. 336-36vo, 19 November 1753; vol. 27, f. 181, 10 June 1754;
ff. 244vo-5, 12 August 1754; ff. 378-78vo, 5 December 1754.
28. BPC, vol. 16, f. 401vo, 7 January 1744.
29. S. Bhattacharyya, East India Company, pp. 214-15.
30. BPC, vol. 26, ff. 56vo-57, 19 February 1753.
31. Orme, Historical Fragments, p. 405. P.J. Marshall, however, depended
on Orme and Holwell’s description of the effects of the famine in
Caicutta (Holwell, India Tracts, p. 165) as evidence of the marked rise
in food prices, P.J. Marshall, Bengal, pp. 18, 73.
32. K.K. Datta, Bengal Suba, pp. 465-8; K.N. Chaudhuri, Trading World,
pp. 99-108; P.J. Marshall, Bengal, pp. 73, 142-4.
33. Manningham & Frankland’s report, BPC, vol. 26, Annex to Consult.
7 June 1753. Both K.N. Chaudhuri (pp. 99, 102) and P.J. Marshall
(East Indian Fortunes, p. 35), depended a lot on this report.
34. See my article ‘Merchants, Companies and Rulers’, in JESHO, February
1988.
35. Richard Becher’s letter to Governor Verlest, 24 May 1769, quoted in
W.K. Firminger, Fifth Report, pp. 183-4.
36. Ibid.
37. See my article, ‘Merchants, Companies and Rulers’, in JESHO,
February 1988.
38. For details, see ibid.
39. Gangaram, Maharastrapurana, lines 234-42.
40. Rivaz, p. 340.
41. Bharatchandra quoted in K.K. Datta, Bengal Suba, p. 466.
42. For the value of Dutch and English exports, see my paper ‘The Asian
Merchants and Companies in Bengal’s export trade, circa, mid-
Eighteenth Century’, presented at the International Conference on
‘Merchants, Companies and Trade’, held at Maison Des Sciences de
l'Homme, Paris, May 1990.
43. P. J. Marshall, Bengal, pp. 163-4.
44. As a matter of fact, the average total export of the English and Dutch
Companies was the highest in the first quinquennial period of the
1750s.
45. Om Prakash, Dutch Company, p. 238.
46. Ibid.
47. See my article, ‘Merchants, Companies and Rulers’, in JESHO,
February 1988.
48. For example, Earl J. Hamilton, ‘American Treasure and the Rise of
Capitalism, 1500-1700’, Economica, 27, November 1929, 338-57;
Rudolph C. Blitz, ‘Mercantilist Policies and the Pattern of World
Trade’, 1500-1750, Journal of Economic History, 27, March 1967,
pp. 39-55, quoted in Om Prakash, Dutch Company, p. 250.
49. Tarikh-i-Mansuri, tr. H. Blochmann, Journal of the Asiatic Society,
no. 2, 1867, pp. 95-6.
50. See my article ‘Merchants, Companies and Rulers’, in JESHO, February
1988.
chapter 9
European Companies and the

Bengal Textile Industry in
the Eighteenth Century
The Pitfalls of Applying Quantitative
Techniques*
Bengal textiles enjoyed a unique place and an indisputable supre-

macy in the world market for centuries before the invasion of
the machine-made fabrics in the early nineteenth century follow-
ing the industrial revolution of the West and political control
of the Indian subcontinent by the English East India Company.
It need not be emphasized that the products of the Bengal han-
dloom industry reigned supreme all over the accessible Asian
and North African markets in the middle ages, and later became
one of the major staples of the export trade of the European
Companies. Most travellers from Europe starting with Tome
Pires, Varthema and Barbosa in the sixteenth century to Bernier,
Tavernier and others in the seventeenth singled out especially
textiles of Bengal for comments on their extraordinary quality
and exquisite beauty. But it was not only in the field of high qual-
ity cloth that Bengal had a predominant position; it was also the
main production centre of ordinary and medium quality textiles.
Long before the advent of the Europeans, the Asian merchants
from different parts of the continent and Indian merchants from
various regions of the country derived a lucrative trade in Bengal
textiles. Though any quantitative data on the volume or value of
* Modern Asian Studies, 27, 2 (May 1993), pp. 321-40.

textile exports by Asians from Bengal in the seventeenth or early

eighteenth century is hard to come by, it can be established from
the Dutch and English sources that the total value of the textile
export by Asian merchants from Malda, one of the main centres
of textile production in Bengal (besides several others equally,
probably more, important areas like Hughli, Kasimbazar, Dacca,
etc.) in the 1670s (i.e. prior to the significant penetration of the
textile market by the Europeans) was between Rs. 2 and 3 mil-
lion a year.2 It was only from around the third quarter of the
seventeenth century that there was a sudden boom in the textile
exports of the Companies from Bengal which revolutionized the
pattern of the Asiatic trade of the Companies. From then onward
till the mid-eighteenth century, Bengal became the chief partner
of the Companies’ export trade to Europe.
There should be little doubt, thanks to the researches of sev-
eral scholars in the past few decades, that the large exports of
Bengal textiles by the North European Companies in the first
half of the eighteenth century – not only because of ‘price advan-
tage’ of these textiles but also as a result of the ‘Indian Craze’
in contemporary Europe – certainly gave a boost to the Bengal
textile industry. But the impact of the European trade on Bengal
in general, and on this traditional and highly developed Bengal
industry in particular, seems to have been overestimated – much
beyond the proportion it really deserves – by historians.3 What
is more, a recent study went to the extent of estimating the new
jobs created by the increased purchases of the Europeans in the
early eighteenth century, by applying quantitative techniques and
came up with a very impressive figure.4 An extremely novel and
welcome experiment by itself, no doubt, but the point to argue is
whether its results could be accepted as reasonable. The classical
debate5 between Fogel and Elton as protagonists of ‘cliometric’
and ‘traditional’ history respectively notwithstanding, historians
today are in general more receptive to ‘scientific’ history, ‘born
of the marriage contracted between historical problems and
advanced statistical analysis’. But as both the reputed scholars
agreed that ‘neither traditional nor cliometric methods are free
of pitfalls’,6 one should perhaps be very cautious while applying
European Companies and the Bengal Textile Industry | 191
quantitative technique. Of course, the pitfalls are not inherent to

the method itself as much as they arise from ‘inept applications
of the method’.
The quantification made in Om Prakash’s study has become
all the more significant because on the one hand it has become
the model of another recent article which tries to quantify the full
time job equivalents of the nineteenth century textile industry7
while on the other all the latest studies on eighteenth-century
Bengal or trade in general cite Prakash to show in concrete terms
how important the impact of the European trade was on the
Bengal economy.8 As such, the aim of this paper is to re-examine
the nature of the data on which the quantification was based
and see how far the conclusion arrived at in that study could be
taken for granted, even giving due allowance for the margin of
error involved in such a process.
The significant conclusion of Prakash is that ‘the Dutch (and
English) trade in Bengal was a net contribution to the growth
of the trade from the region’, that it generated ‘a significant
increase of income, output and employment’ and that it cre-
ated the equivalent of around 100,000 new jobs in the textile
industry.9 Though one may raise the question how significant
the ‘net contribution’ in the context of the Bengal economy as a
whole really is, here we shall take up only the question of the full
time job equivalent for our consideration. It should, however,
be noted, in all fairness, that Prakash made it clear that ‘these
figures are extremely crude and subject to a significant margin
of error’.10 But still, as it often happens, later authorities found
the conclusion too tempting to take note of this caution and
hence took the figure of 100,000 full time job equivalents cre-
ated by the Dutch and English exports of Bengal textiles almost
for granted.11 That is why it becomes imperative to re-examine
the issue and see if Prakash’s acknowledgement of ‘significant
margin of error’ is in fact far more significant than he expected
it to be and whether the figures of employment attributed by him
to have been generated by the Dutch and English exports could
at all be accepted even after allowing reasonable margin of error
involved in such quantitative analysis.
Crucial Factors in the Estimation of

Full Time Job Equivalents
The procedure followed by Prakash was to find out the total

square yardage per piece of textiles by multiplying the length by
width, both measures given in cobidos which was taken as 27
inches, and then multiplying the square yardage per piece by the
total number of pieces exported. Then he calculated how many
looms would have been needed to produce the total square yard-
age of textiles exported and finally how many weavers, spinners,
bleachers, etc. would have been employed in the total number of
looms required to produce the total square yardage of textiles
exported by the Dutch and English Companies. He also classi-
fied the piece-goods into various categories such as muslin, fine
and coarse calicoes, silk, etc. and made assumptions, based on
later sources, about how many pieces in each of these categories
could be produced in a loom per year.
There are three crucial factors, besides several other minor
ones, on which the whole estimate of the full time job equivalent
is based. These are: (a) the actual measure of cobido/covid, the
unit in which the dimension of all the textiles was expressed in
the records; (b) the classification of the textiles into various cat-
egories like muslin, fine and coarse calicoes, and silk and mixed
piece-goods;12 (c) the actual size of the piece-goods procured in
Bengal by the Dutch and English Companies.
(a) Cobido/covid
It is common knowledge that all Bengal textiles were measured

in cobido/covid; both length and width were indicated in this
unit. The cobido (in Dutch records) or covid (in English Records)
was, however, a measure (Portuguese for cubit) with large local
variations in different parts of India. But Prakash takes cobido as
27 inches and makes his significant calculations with the cobido
measuring precisely 27 inches. As this is the most significant
part of his calculations, since he multiplies the length (given
in cobido) and width (again in cobido) by the total number of
average annual exports of textiles by the Dutch Company (as

also the English) to find out the total square yardage exported,
let us see whether cobido could at all be taken as measuring
27 inches. Prakash cites only two grounds for taking the cobido
as 27 inches: first, Pieter van Dam’s Beschryvinge van de Oost-
Indische Compagnie and secondly, the assertion that the Heeren
XVII (the Dutch Directors) used the two units, cobido and ell
‘interchangeably’ and as the ell was 27 inches, so the cobido was
‘the equivalent of 27 inches’.13
His first evidence is not so much a reference to Pieter van
Dam’s Beschryvinge as to the editor’s glossary. It seems that F. W.
Stapel who edited van Dam’s works took the liberty of simply
establishing an arbitrary average on the basis of some random
quotations from Hobson-Jobson, most of which actually pertain
to Gujarat14 and hence can hardly be taken for granted. Stapel
makes the following entry:15 ‘cobido: de Indische ellemaat, niet
overal even lang, maar gemiddeld ongeveer 70 cm. zie Hobson-
Jobson invoce covid.’ But if one consults Hobson-Jobson, as
suggested by Stapel, one finds a significant hint there that ‘the
measure [covid] has been forgotten under this name in Bengal
though used under the native name hath’. Here is a definite
indication that the covid and the Bengali ‘hath’ were equivalent
measures or units, a point to which we shall return in due course.
The main point to stress at this juncture is that when the whole
estimate of full time job equivalent hinges so critically on the
actual measure of cobido, we should be much more cautious
than just depending on a secondary source like Stapel who in
his turn depends on another secondary source, Hobson-Jobson.
The second argument that the Heeren XVII used cobido and
ell ‘interchangeably’, meaning thereby that they were the same
unit of measurement, and that as the ell was 27 inches, the
cobido, too, was 27 inches, seems to be more serious than the
first one. But the big question is: was it really so? Great pity it
is that Prakash gives no reference whatsoever either in his ear-
lier article (1976) or in his book (1985) for so vital a statement
made by him. As a result, we had to take the trouble of verifying
his statement in the vast mass of Dutch records. Luckily for us,
however, he gave us a clue as to where to look for them, indicat-

ing that the Dutch Directors used the units ‘interchangeably’ in
their orders for goods to be sent from Bengal. So we turned to
the volumes containing the Resolutions of Heeren XVII in the
V.O.C. archives. But in the 15 odd volumes that I looked into
for a corroboration of the statement, for the period from about
1680 to 1750, unfortunately I came across not a single instance
where the Heeren XVII used both the units as the same or ‘inter-
changeable’ ones.
What we found, instead, is in absolute contradiction of
Prakash’s claim, and a definite indication of what the actual
measurement of cobido was. No doubt the Dutch Directors
used both units when sending out annual orders for Bengal but
what he missed is not ‘interchangeably’, which makes all the big
difference.16 As a matter of fact, it is the very evidence in the
Resolutions of Heeren XVII which conclusively establishes that
the cobido was 2/3 of ell and hence only 18 inches, and under no
circumstances 27 inches. In the ‘Eijsch [order] van Bengale’ (dt.
26 November 1688), the Heeren XVII asked for 6000 malmals
of which 1000 were to be ‘van 3 cubido off twee ellen’ (of 3
cobido or 2 ell), making it absolutely clear that ‘3 cobido’ was
equal to ‘2 ell’ or in other words, cobido was only 2/3 of ell
and hence only 18 inches as the ell was 27 inches.17 In another
instance, in the orders sent out for ships returning in 1757, the
Heeren XVII asked for fine romals ‘van 1 el of 1½ cobido’ which
establishes beyond any doubt that covid was only 18 inches.18
As the unit cobido is so very vital in the estimate of the extra
employment generated by the Dutch and English export of Ben-
gal textiles, we should not depend on only a single source of
evidence, however significant it may have been. We shall try to
produce more evidence to establish that the cobido measured
only 18 inches and not 27 inches as claimed by Prakash. In a
handbook prepared for training the Dutch East India merchants
in the early eighteenth century the following note is to be found,
significantly after the glossary of ‘Zijde Stoffen’ (Silk textiles)
and ‘Catoene Lijwaten’, all exported from Bengal:19 ‘De goederen
in Indien worden gemeten met Cubidos. Een Cubido of cavido is
2/3 El Amsterdamsch, en een El Amsterdamsch is 1½ Cubidos.’

So it is more than conclusive from the above that the cobido was
only 2/3 of ell and as the ell was 27 inches, the cobido was only
18 inches.
However, it may be noted that even in Bengal, there were per-
haps slight differences in the measure of cobidos as prevalent in
different parts of the province. In a comprehensive survey drawn
up by Martinus Koning and Otto Willem (dt. Hughli 23 August
1762), three different cobidos are mentioned – one for Hugli,
two others for Kasimbazar.20 In Hugli it was equivalent of ‘een
voet en 5 duijm Rijnlands ruijm’. Taking ‘Rijnlandse voet’ at
31.39 cm. and the ‘duijm’ at 2.616 cm., the Company’s cobido in
Hugli would amount to somewhat over 44.47 cm. and therefore
come close to the hath-value i.e. 18 inches. The two cobidos cur-
rent in Kasimbazar are referred to by the compilers as ‘Comp.’s
cobido’ and ‘Bazaars cobido’, the former being equal to 2/3 ‘Elle
Hollands’ or approximately 45.86 cm. and the latter 4/7 ‘elle’
or approx. 39.31 cm. But as we are concerned with the Comp.’s
textiles and the Comp. cobido being 45.86 cm., we should have
little doubt that the cobido was 18 inches only. This is more
or less confirmed by the Dutch traveller Stavorinus who wrote
about Bengal in early 1770s:21
The measures of length are cobidos and gass or goss. At Chinsurah a
cobido is one foot five inches Rhineland measure. The general length
of cobido is taken to be from the elbow of a full grown man, to the tip
of the middle finger, in the same manner as the cubit of the ancients. A
gass or goss is two cobidos, being at Chinsurah, two feet and ten inches
Rhineland measure.
Turning to English sources, one finds unmistakable references
in Taylor’s famous description of Dacca Cloth Manufacture in
the eighteenth century that in Bengal both textiles and thread
were measured in the traditional Begali hath (haut – from elbow
to the tip of the middle finger – a tradition that still lingers on),
each hath measuring, according to him, ‘nineteen and a half
inches’ in Dacca,22 i.e. slightly more than our 18 inches cobido
(perhaps a local variation) but certainly much closer to our
findings than Prakash’s assumption. Again, the English traveller
Thomas Bowrey who was in Bengal in the 1670s states categori-

cally that the ‘covet . . . contains 18 inches, and is called hawt’.23
It is long ago (1923) that Moreland came to the conclusion that
‘covads’ in the East Coast was used as a synonym for hasta [or
hath] and ‘not as denoting a different unit’. He also cited an
instance where 100 cobidos were equivalent to 70 Dutch ells and
asserted that on the East Coast the cobido was ‘about 18 inches’
while in Gujarat it was nearly 27 inches.24
Prakash however mentions Moreland and Bowrey in his article
(1976) but thinks that ‘the figure of 18 inches to a covid sug-
gested by Moreland [here a ‘suggestion’ of course] and Bowrey
[it is contemporary and categorical statement and hence could
hardly be a ‘suggestion’] appears to be too low’.25 Unfortunately
he gives no explanation whatsoever as to why he considers it so.
Be that as it may, after a close scrutiny of Prakash’s evidence
for taking cobido as 27 inches and our counter evidence that it
was only 18 inches, one should have little doubt that the estimate
of 100,000 jobs created in the textile industry by the export of
the two Companies should be reduced by at least 1/3 at this
stage of our analysis. In other words, the margin of error in the
said estimate turns out to be at least 33 per cent which is rather
too high to be accepted as ‘scientific’ even by the most optimist
among historians.
(b) Classification of Textiles
This is again very crucial for the estimate of full time job
equivalents generated by exports of the two Companies because
according to Prakash while only 15 pieces of muslins could be
produced in a loom per year, the number is 36 in case of fine
calicoes, 80 for ordinary calicoes and 45 for silk and mixed piece-
goods.26 Even taking for granted that this is a valid assumption,
the fact remains that until and unless one could be absolutely
sure about the classification of textiles into various categories,
the result could be highly misleading. I have sounded this cau-
tion quite sometime back when in a long note in my book I
pointed out it is not only difficult but risky, too, to make such a
classification, giving specific examples how Irwin’s classification

according to maximum price paid, as he claimed, could often be
quite misleading.27
In this particular case, one needed all the more caution because
if a ‘muslin’ turned out to be actually fine calico, the margin of
error for that particular variety could be around 250 per cent
(as the rate of production per loom is assumed to be 15 and 36
respectively) and if the muslin was really silk piece-goods, the
margin of error would be 300 per cent (the rate being 15 and
45 per loom per year) while it could be even over 500 per cent
if the muslin turned out to be coarse calico (the rate of produc-
tion being 15 and 80 respectively). Here again, unfortunately
for us, Prakash does not give any specific reference which was
the basis of his classification of the various piece-goods except
one vague statement that for 18 years a ‘detailed breakdown by
category of textiles exported was available’28 (presumably in the
export invoices in the Dutch records). Admittedly limited as my
knowledge of Dutch records is compared to that of Prakash, I
did not find any export invoice in the eighteenth century where
breakdown by category of textiles is given. What we find instead
is the total number of a particular type of textiles. The only
instance where I came across such breakdown was for a lone
year (1753-4) and that, too, just only stating ‘fijne’ or ‘grove’
(coarse) ‘lijwaten’ and ‘zijde stoffen’ – no mention of muslin or
mixed piece-goods – sent out from different factories. This was
found not in the export invoices but in a General Letter from
Hughli to Batavia.29 Even in the auction lists of various Kamers
(Chambers of Commerce), the textiles were divided only into
two categories – ‘Coetene Lijwaten’ and ‘Zijde Stoffen’.30
According to Prakash’s classification, there were about 25
particular types which come under the category of finest textiles,
muslin, of which the principal types exported were (in his words
‘in descending order of fineness, workmanship and cost’)31 tan-
zeb, terrindam, khasa, malmal, resta and rehing. Among these,
the staple varieties were khasa and malmal. Of these 25 items,
at the most 10 could undoubtedly be said to be muslin, 6 are
quite doubtful32 and more importantly as many as 9 were defi-
nitely not muslin. We can make such a definitive statement on

the basis of several important pieces of evidence. First, Louis
Taillefert, who was in Bengal for many years and became the
Director of the Dutch factories in Bengal twice (in 1755 and then
from 1760 to 1763), left a ‘memorie’ for his successor George
Louis Vernet giving detailed information about various types of
Bengal textiles, including the aurungs in which some of them
were produced.33 Secondly, occasional description of a particular
piece-good in the list of orders sent out by the Heeren XVII.
Thirdly, the description of a piece of textiles in the export invoice
of a particular ship and last, the geographical distribution of the
piece-goods exported as is categorically mentioned in the export
invoices from 1752-3 onwards. Depending on these sources,
we can exclude 9 items, namely chanderbani, cottabani, dotani,
kamkhani, maypoost, mohanbani, ragibegi, rudrabani and resta
from the author’s list of muslin, as except kamkhani which was
at best fine or medium calico,34 all others were actually silk
piece-goods. Though we have evidence for all these items to
show that they were silk textiles, for lack of space and the risk of
repetition, we give one particular instance of our evidence which
conclusively proves our point.
We enlist our evidence for dotani, because of all these varieties,
this was perhaps exported in larger quantities than the others.
(1) Silk piece-good in Taillefert’s list. He also categorically men-
tioned that it was mainly produced in Baluchar, a well-known
aurung for producing silk textiles. He writes: ‘Dotanijs of
Armosijnen bloemen: en beijde zijden even schoon in Bal-
loetsjer gemaakt wordende’ (HR 246, 7 November 1763).
Armosijnen were undoubtedly silk piece-goods, and are even
acknowledged as such by Prakash.
(2) In the list of orders sent out by Heeren XVII (V.O.C. 122,
KA 271, 7 April 1740), the entry is: ‘Armosijnen met bloe-
men een bijde zijden even schoon genaamt Dotanijs’.)
(3) In the export invoice of the ship Coxhorn (V.O.C. 8774, HB,
24 November 1733, ft. 253-5) the entry for 100 pcs. of Dot-
anijs is as follows: ‘Dotanijs of Armosijnen met bloemen’.
(4) The price of Dotanijs in the invoice of the ship Haaften

(V.O.C. 2304, HB, 3 November 1734, f. 208) works out to
be only f. 5 which could hardly be the price of any muslin in
the first half of the eighteenth century.
So if more than one third of the muslins in the list of Prakash
(which could be produced only 15 pcs. per loom per year) turned
out to be silk piece-goods (45 pcs. per loom per year) or ordi-
nary calico (80 pcs. per loom per year), then the gross margin
of error in the estimate of the full time job equivalents could be
anybody’s guess.
Coming to the list of fine calicoes, out of 19 varieties as
many as 8 were certainly not fine calicoes. Golmandal (or Pan-
sjes Nakjes both in Taillefert’s ‘memorie’ and Heeren XVII’s
Resolutions, V.O.C. 117, orders sent out 26 February 1720 and
identified as silk piece-goods by Taillefert), sjoukoria, taffach-
ela (both silk piece-goods, according to Taillefert, produced in
Kagera, the famous aurung for silk piece-goods near Company’s
village Kalkapur in Kasimbazar), lungi (silk piece-goods pro-
duced in Raendhe in Taillefert’s list and in the invoice of the
ship Coxhorn, V.O.C. 8774, HB 24 November 1733, ff. 253-5
described as ‘enkelde geruite Armosijnen’) were obviously silk
piece-goods,35 while bafta, chila, fota and chintz were ordinary
calicoes. The price of these last four varieties would conclusively
show that they were certainly not fine calicoes. While the aver-
age price of bafta, fota, and chintz was f. 7, 6 and 4 respectively,
which more or less correspond to the prices of ordinary calicoes
from Bihar like amriti (f. 7), dariabadi (f. 6), dongrijs (f. 6) etc.,
fine calicoes like bethilas (f. 12-13), chowtars (f. 12) etc. would
have been much more expensive.36 If this was so, the margin of
error in the estimate of new jobs created becomes too unwieldy
to be accepted by historians. This is also confirmed by the English
records. While the price of bafta, chila, fota, and chintz varied
between Rs. 3 and 3.5, the price of fine calicoes like chowtars
and dysooksies ranged from Rs. 5.5 to 7 in the early 1750s
which only indicates that the former were ordinary calicoes.37
(c) Actual Size of Piece-goods Procured
In the calculation made by Prakash, the size of the piece-goods

procured in Bengal plays a major role because to find out the
total square yardage exported by the two Companies, the total
number of pieces was multiplied by the square yardage per
piece.38 The total square yardage, as he claims, has been ‘arrived
at on the basis of extensive information available in the Dutch
and English Company records’. He holds that the muslins in
Dutch records measured 27 to 37 yds for length and 3/4 to 2¼
yds for width and hence takes per piece to be 30 sq. yds.39 Let us
see how far justified his claim is. It is true that the average size
of the staple muslins like khasa and malmal was 40 co. × 2 co.40
But Prakash takes the cobido as 27 inches which should actually
be 18 inches and hence the average size of a muslin would have
been only 20 sq. yds and not 30 sq. yds. More serious is his claim
(and which again plays a major role in his calculations) that the
‘dimensions found in the English records broadly correspond
with these figures’, i.e. 30 sq. yds for muslins. He states that ‘for
example, the sizes of tanzebs, khasas and malmals (all muslins)
mentioned in these records [English] were 30 yards for length
and between ¾ and 2¼ yds for width’.41
But a distinguished authority on the English trade made it
absolutely clear quite sometime back that the khasas and mal-
mals exported by the English measured on an average 24 yds
in length and 1-1.5 yds in width.42 Even earlier than this, I
have given a full table of different types and sizes of khasas and
malmals exported by the English (of course in cobidos as that
was the common measure of cloth in Bengal).43 Perhaps Prakash
was so much engrossed in his idea of cobido being 27 inches,
he ignored all such evidence. Fortunately we could find some
evidence in the English Company records about the size of these
piece-goods in yards which will put to rest all doubts about their
dimension in yards as also the actual measure of the cobido. In
their orders sent out to Bengal, the Directors used both the units,
cobido and yards but certainly not interchangeably. For almost
all the types of khasa they wanted, they mentioned the width
varying between 1 and 13/8 yds (in Dutch records the width being
between 1½ co. and 3 co.) taking it for granted that the length
would be 20 yds (which in Dutch records was 40 co.). Yet
in one case they mentioned particularly the size of khasas as
20 yds × 1 yd. In the case of malmal again on two occasions
in the same year they mentioned the size as 20 yds × 1 yd and
20 yds × 1½ yd. The same is the case with tanzebs or several
other piece-goods like kharidaries (20 yds × 1 yd), soosies
(20 yds × 1 yd) etc.44 So there should be little doubt that the aver-
age dimension of the muslins exported by the English (as also
the Dutch) was 20 yds ×1 yd, and not 30 yds × 1 yd as claimed
by Prakash and on the basis of which he made his estimate of
full time job equivalent.
After taking all the above factors into consideration, the
magical figure of 100,000 new jobs created by the Dutch and
English export of textiles from Bengal should be reduced, even
at the conservative estimate, by more than half. In other words,
the margin of error in the estimate of full-time job equivalents
would amount to more than 50 per cent at the minimum which
by any account is too high to be accepted.
(d) Other Methodological Problems
There are other methodological problems with such calcula-

tions made to find out the additional employment generated in
Bengal’s textile industry. Two illustrations here will suffice to
substantiate our point. First, the piece-goods in most of the types
that were exported from Bengal varied in size, especially so far
as the width is concerned, and on occasion, even in length too.
Hence for any reasonable estimate which would be within the
acceptable margin of error, one has to take into account how
many pieces, of what length and width of a particular type (e.g.
khasa or malmal) was exported from Bengal. This is almost
impossible because in the Dutch export invoices one just finds
the total number of a particular type of piece-goods (say, khasa),
without any indication of how many pieces of what length and
width were actually exported. That can only be found in the
annual contracts made by the Company with the merchants. But

that is no indication of how many pieces, and of what length and
width, were finally delivered by the merchants, and secondly,
how many of those delivered were finally exported to Europe.
Our point will be clear if we give an illustration (see Table 9.1)
of the varieties in the size and number of two staple muslins,
khasas and malmals, from the Dutch Company’s contract with
merchants for 1752.45
It is clear from Table 9.1 that there are many variables as
to the number of pieces exported and their actual size which
should be taken into account in any quantitative estimate which
is admittedly quite a complicated process. Secondly, even within
the same type of piece-goods, the price variation could be quite
large not only depending on the actual size but also on the aurung
where it was produced, both of which are reflected in Table 9.1.
For example, while the same khasa Jagannatpur (24 × 2¼) costs
Rs. 10:13, that of Nadona (24 × 2¼) only Rs. 7:2. Again while
the price of malmal fine is Rs. 17:10, the same malmal (ordinary)
costs only Rs. 7:6 and so on, indicating thereby that the price of
piece-good should be taken into account while determining how
many pieces, whether muslins or calicoes, could be produced in
a loom per year. Moreover one should also take into account the
fact that sometime even the so-called fine calicoes or even coarse
calicoes could be more expensive than the so-called muslins
implying thereby that price is also a factor to indicate the num-
ber of pieces that could be woven in a loom per year.46 Hence the
assumption that so many pieces of muslins or fine calicoes etc.
could be produced in a loom per year, giving weightage only to
the criterion whether it is muslin or fine calico etc. could be quite
erroneous. The sort of evidence that we have at the moment does
not categorically identify for certain the numerous piece-goods
on the basis of fineness and workmanship. What we can do at
best with available information is to classify them according to
their prices.47
So the price of piece-goods should be considered a major fac-
tor in all quantitative estimates we are talking about inasmuch
as it reflects, besides the cost of raw material and workmanship,
Table 9.1: Dutch Company’s Contract with Merchants

for Textiles, 24 June 1751
Name of Piece-goods No. of Pieces Length (co.) x Price per Piece

breadth (co.)
Cossas 3000 40 x 2 14:11
Cossas 840 40 x 2⅜ 12:11
Cossas Jagannatpur 6000 40 x 2¼ 10:13
Cossas Hendial with gold border 2000 40 x 2¼ 11:6
Cossas Jagannatpur 2000 40 x 2 9:8
Cossas Hendial 2000 40 x 2 9:8
Cossas Jagannatpur 2960 40 x 21/5 8:7
Cossas Jagannatpur 1200 40 x 1½ 7:6
Cossas fine Hendial with gold
border 500 40 x 3 18:15
Cossas fine Hendial with gold
border 1500 40 x 2¼ 14:3
Cossas Nadona 1000 40 x 2¼ 7:2
Cossas Nadona 2000 25 x 2¼ 4:6
Cossas Bourang 4000 38 x 1⅞ 6:10
Malmal fine 200 40 x 3 17:10
Malmal fine 300 40 x 2¼ 13:11
Malmal fine Haripal 100 40 x 2¼ 12:4
Malmal fine Haripal 350 40 x r¾ 10:4
Malmal fine Haripal 50 40 x 2¼ 8:13
Malmal (assorted) 1000 40 x 3 14:11
Malmal 400 40 x 2⅝ 12:11
Malmal 4500 40 x 2¼ 10:12
Malmal 500 40 x r¾ 8:7
Malmal 1200 40 x 2 9:8
Malmal 400 40 x 1½ 6:12
Malmal ordinary 4000 38 x 2¼ 7:6
Malmal ordinary 1200 40 x 2 6:12
Source: V.O.C. 2821, HB, 20 February 1753, ff. 91-5, Contract. dt. 24 June 1752.
the cost of labour involved [and hence the number of pieces that
could be produced in a year in the loom] in the production of
a particular piece-good. As such, any estimate of the number of
pieces that could be produced in a loom per year needs to be
related to their respective prices also. For example, let us con-
sider the prices of a few piece-goods that were exported during

1753-4 and 1754-5 for which years we have the export invoices
with area-wise breakdown of textiles exported by the Dutch (see
Table 9.2). Table 9.2 makes it clear that the price of khasa or
malmal (except the finest one from Junglebary), the so-called
muslins, could be much less than that of doreas (so-called fine
calicoes). If that is so, how can one expect that only 15 of these
khasas or malmals could be produced in a loom per year while
two or three times more expensive doreas could be produced at
the rate of 36 pcs. per loom per year? This only corroborates our
point that only dividing the textiles into different categories for
any computation of the full time job equivalents would be futile
unless we also take into account other important variables like
price, number and size of the piece-goods exported.
But all this does not in any way detract from the merits of the
study which is undoubtedly a welcome addition to our knowl-
edge of the trading world of Asia and Europe in the pre-modern
period, and even the ‘rough’ estimate attempted by Prakash is a
novel exercise. The main point to emphasize is that most of the
historians working in this field so far (not excluding myself, as
would be apparent from my earlier study of 1975) were perhaps
overestimating the impact of the European trade. In the process
the export trade, especially the overland trade, by Asian mer-
chants from Bengal has been overlooked for long. The obvious
reason for this was the abundance of quantitative data in the
Table 9.2: Prices of Piece-goods Exported by the Dutch

during 1753-4 and 1754-5
Piece-goods Supposed category Area Price per Piece

(florin)
Coassas (assorted) muslin Hugli f.13-15
Cossas Junglebarry muslin Dacca f.72-73
Doreas fine calico Hugli f.25-29
Doreas fine calico Dacca f.46-51
Malmal (assorted) muslin Hugli f.11-13
Source: Computed from the export invoices of the Dutch Ships, 1753-4 and 1754-5,
V.O.C., 2811, HA, 10 Nov. 1753, 5 January 754, ff. 20-20vo., 46-46vo. V.O.C., 2829,
HA 10 November 1754, 19 January 1755, ff. 134vo.-135vo., 185-85vo. I Re:=1.5 fl.
European archives while evidence, especially of a quantitative

nature, of the Asians’ trade is so hard to come by. But a care-
ful search in the indigenous sources as well as in the European
archives would possibly yield interesting information which
might reveal an altogether different picture than is generally
believed now. From my own humble efforts, I am in a position
now to suggest with quite some quantitative evidence that even
in the mid-18th century, the export trade of Asian merchants
from Bengal, especially in the two key export commodities, tex-
tiles and raw silk, was much larger than that of the European
Companies.48 The total value of Bengal textiles exported by
Asian merchants was worth at least about Rs. 4.5 to Rs. 5 mil-
lion in the mid-18th century.49 However, it is in the silk export
that the Asians had a decidedly far superior position inasmuch
as while the value of their export (exclusively by Asians as our
sources state) was estimated at around Rs. 5.5 million on an
average in a year in the early 1750s,50 the total European export
of raw silk could be valued at Rs. 1 million at the most.51 The
average annual volume of raw silk exported by Asians in the first
five years of the 1750s works out to be 1.45 million lb. while the
English and Dutch export for this period was only 0.086 million
lb. and 0.073 million lb. respectively.52 At the same time it is
significant to note that like the Europeans, the Asians too had to
bring in mostly silver/cash to Bengal for their purchases53 and as
such it can be reasonably argued that it was the Asians and not
the Europeans who were the major importers of bullion/silver
into Bengal even in the pre-Plassey period, i.e. prior to 1757.54
So far as Bengal’s textile industry was concerned, one has to
consider carefully the fact that while the total textile exports
of the two major European Companies, the English and Dutch,
could hardly be worth more than Rs. 4.5 million around mid-
18th century,55 the total value of cloth production for exports
from Dacca only was estimated at Rs. 2.85 million.56 It need not
be emphasized that areas like Hughli, Kasimbazar, Malda and
Patna actually produced more medium and ordinary piece-goods
than Dacca for export to different parts of Asia and Europe. As
a matter of fact the Dutch Company (probably the same would
have been the case, more or less, with the English too)’ exported
more than 50 per cent of the total value of its textiles from the
Hughli area (possibly including Malda where piece-goods were
procured through dadni merchants of Hugli), 25 to 38 per cent
from Kasimbazar and 8 to 12 per cent from the Patna area while
the share of Dacca varied from around 5 to 10 per cent in the
mid-18th century. This will be apparent from the table of Dutch
textile exports for 1753-4 and 1754-5 for which we can find
area-wise breakdown (see Table 9.3).
If, along with the above facts, we take into consideration
the fact that an estimate of the late 18th century puts the value
of cloth production of Bengal (for local consumption only) at
Table 9.3: Geographical Distribution, Unit Price and Share of Different

Areas in the Total Value of Dutch Textile Export from Bengal
to Holland, 1753-4 and 1754-5
a. 1753-4
Place No. of Pieces Total Value Unit Price Share (percent-
[florins] [florins] age) in
Total Value
Hugli 141,105 1,348,532 9.56 53.82
Kasimbazar 77,565 608,709 7.85 24.30
Dacca 12,600 251,494 20.04 10.04
Patna 48,420 296,815 6.13 11.84
Total 279,800 2,505,550 100.00
Average unit price of textiles = f. 8.9
b. 1754-5
Place No. of Pieces Total Value Unit Price Share (percent-
[florins] [florins] age)
in Total Value
Hugli 104,534 997,865 9.55 50.07
Kasimbazar 93,609 763,663 8.16 38.33
Dacca 5,000 85,630 17.13 4.30
Patna 23,289 145,125 6.23 7.30
Total 226,432 1,992,283 100.00
Average unit price of textiles = f. 8
Source: Collected and Computed from the Bengal Export Invoices in Dutch Records.
Rs. 60 million58 which could well have been the case for mid-
18th century, then the European export of Bengal textiles was
in all probability a small fraction of the total output and hence
should be placed in its proper perspective.
Notes
1. This paper was written while I was a fellow-in-residence at the

Netherlands Institute of Advanced Study, Wassenaar, The Netherlands,
in 1990-1.
2. The report of the Dutch factor, Henry Cansius, in 1670 put the value
of textile exports by the Asians at Rs. 0.8 to 1 million while Richard
Edwards of the English Company estimated it between Rs. 2.25 and
3.75 million in 1676. For Cansius’ report, see Verenigde Oost-Indische
Compagnie, 1278 (henceforth V.O.C., earlier Koloniaal Archief,
1168, henceforth K.A.) 7 September 1670, ff. 2173-4, Algemeen Rijk-
sarchief, The Hague. The first reference to this report I saw in Om
Prakash, The Dutch East India Company and the Economy of Bengal
(Princeton, 1985), pp. 99-100, where it is mentioned under K.A. 1168.
The series has since been changed to V.O.C. For Edwards’ report,
see Factory Records, Miscellaneous, vol. 14, ff. 334-6, India Office
Records, London (henceforth IOR).
3. K.K. Datta, Studies in the History of Bengal Suba (Calcutta, 1936),
pp. 463-6; S. Bhattacharya, The East India Company and the Economy
of Bengal (London, 1954), p. 17; K.N. Chaudhuri, The Trading World
of Asia and the English East India Company (Cambridge, 1978),
pp. 239, 247, 261, 272-5; P.J. Marshall, ‘Bengal – the British
Bridgehead’, in New Cambridge History of India (Cambridge, 1987),
pp. 65-7.
4. Prakash, The Dutch East India Company, pp. 242-4.
5. William Fogel and G.R. Elton, Which Road to the Past? Two Views of
History (New Haven and London, 1983).
6. Ibid., p. 124.
7. Michael J. Towney, ‘Employment in the Nineteenth Century Indian
Textiles’, Explorations in Economic History 20 (1983), pp. 37-57, esp.
pp. 48-9.
8. Marshall, ‘Bengal’, p. 66; Niels Steensgaard, ‘Asian Trade and World
Economy from the 15th to the 18th centuries’, in T.R. de Souza (ed.),
Indo-Portuguese History: Old Issues, New Questions (New Delhi,
1985), p. 232; J.F. Richards, ‘The Seventeenth-Century Crisis in
South Asia’, Modern Asian Studies 24, 4 (1990), pp. 634-5. Richards,
however, referred to the general conclusion without quoting the figure.
9. Om Prakash, ‘Bullion for Goods: International Trade and the Economy

of Early Eighteenth Century Bengal’, Indian Economic and Social
History Review, (henceforth IESHR) XIII, 2 (April-June 1976), pp. 159-
87; The Dutch East India Company, pp. 242-8, 256. The exact esti-
mate is 87 to 111 thousand.
10. Prakash, The Dutch East India Company, pp. 242, 246; ‘Bullion for
Goods’, p. 172.
11. Marshall, ‘Bengal’, p. 6; Steensgaard, ‘Asian Trade and World
Economy’, p. 232.
l2. Prakash, The Dutch East India Company, p. 243, Table 8.1; pp. 61-5.
13. Ibid., pp. 65, 244; ‘Bullion for Goods’, p. 182.
14. H. Yule and A.C. Burnell, Hobson-Jobson, a glossary of Anglo-Indian
Words and Phrases, etc. (new edn., W. Crooke, London 1903; facsimile
reprint, 1968), p. 268.
15. F.W. Stapel (ed.), Pieter van Dam’s Beschryvinge van de Oost-Indische
Compagnie (The Hague, 1932), vol. II, pt II, p. 451.
16. As for example, in the order sent out on 14 November 1701, the
Heeren XVII asked for 4000 pcs. of malmal ‘van 36 cobidos lang en 2
co. breet’, and 1300 milmil ‘van ell breet’, V.O.C, 113 (K.A. 262). For
the order sent out in 1733, they asked for 15,000 pcs. of Cossas ‘van
3 cobido – 1½ cobido’ while asked for 800 sanoes of 16 ‘ellen lang’
(V.O.C. 120, K.A. 269). Again in 1740, they asked for 60,000 pcs. of
garras of ‘30 a 31 cobido lang’ while the order sent out in 1733 was for
60,000 pcs. of garras ‘van 21 ellen lang’ (V.O.C. 122, KA. 271).
17. V.O.C. 110 (K.A. 259), order sent out in November 1688.
18. V.O.C. 7381, ‘Eijsch’ for ships returning in 1757.
19. De Koophandel van Amsterdam, by Le Moine De L’Espine, ed. by Issac
Le Long, Tweede Deel, Negende Druk (6th edn., Rotterdam, 1780),
p. 91. While discussing the problem of cobido with Dr B.J. Slot, Keeper
of the 1st Section, Algemeen Rijksarchief, he thought there might be
a book like this, and we found out this edition and the subsequent
information in the book. I am thankful to Dr Slot for his help and
cooperation.
20. Collectie Hope, No. 73(13), Algemeen Rijksarchief. I owe this infor-
mation to Huub Meens of Maastricht, Netherlands, for which I am
grateful to him.
21. J.S. Stavorinus, Voyages to the East Indies, 1768-71, trans. S.H.
Wilcocke, vol. I (London, 1798), p. 463.
22. Home Misc. 456F, ff. 135-6, 173, 175, IOR.
23. Thomas Bowrey, A Geographical Account of Countries Round the Bay
of Bengal, 1669-79, ed. R.C. Temple (Cambridge, 1905), p. 218.
24. W.H. Moreland, From Akbar to Aurangzeb (London, 1923), pp. 318,
338.
25. Prakash, ‘Bullion for Goods’, p. 182. But I could not find the reference
in his book.
26. Prakash, The Dutch East India Company, p. 243, Table 8.1.
27. S. Chaudhuri, Trade and Commercial Organization in Bengal, 1650-
1720 (Calcutta, 1975), pp. 194-5, fn. 141.
28. Prakash, The Dutch East India Company, p. 243, sources for Table
8.1.
29. V.O.C. 2862 (K.A. 2754); HB, 14 March 1755, ff. 898-9.
30. Auction Notice, Dt. 16 September 1755, Resolutions of Heeren XVII,
V.O.C. 7380.
31. Prakash, The Dutch East India Company, pp. 61-5, with footnotes,
especially 18, 23, 29, 30.
32. The doubtful varieties are: achiabani (coarse calico according to K.
N. Chaudhuri, p. 503), asisbegi (like rajibegi?), ektani (like dotani?),
kabulkhani (like kamkhani?), mobessabani (like mohanbani?), and
gerberry (produced in Malda, according to Taillefert).
33. Hoge Regering van Batavia (henceforth HR), 246, 7 November 1763,
Algemeen Rijksarchief. Taillefert actually wrote two ‘memories’, the
first one dt. 27 October 1755, V.O.C. 2829 (K.A. 2741).
34. Prakash might raise the question that kamkhani was identified as fine
muslin by Irwin also. The latter states that it was produced near Patna
which is confirmed by our sources (V.O.C. 2594, HB, 4 January 1744,
ff. 286vo., 288). But Bihar was certainly not an area producing fine
muslin. Secondly, if price is any indication which both our author and
Irwin claim it is, kamkhani is at best a medium or coarse calico because
the price of kamkhani in the export invoices works out to be around
f. 4.5 (V.O.C. 2617, HB, 24 January 1745, ff. 157vo-58, Invoice of
Hofwegen) while the price of muslin during the period would have
been at least f. 15 to 20 (V.O.C. 2629, HB, 4 January 1744, ff. 199-
218, Contracts with Merchants).
35. Prakash can argue again that he mentioned silk lungi, silk taffachela,
silk sjoukoria, etc., as a separate category from lungi, taffachela, etc.
But the problem is that nowhere in the records of the early 18th
century do we find these distinctions, and Taillefert never mentions
such different categories of the same brand of piece-goods. Nor do we
find such distinction in Irwin, K.N. Chaudhuri or Hameeda Hossain.
36. The unit price of these piece-goods computed from the total cost price
and the number of pieces exported by the ships Bevalligheid (V.O.C
2794, HB, 20 Dec. 1752, ff. 7vo.-8; 2829, HA, 10 November 1754,
ff. 134vo-35vo.) and Ruijskenstein (V.O.C. 2829, HZ, 19 January
1755, ff. 185-85vo.). There is also great doubt whether sanu could
be considered fine calico as is done by Prakash. Even Irwin contends
that sanu was a ‘plain cotton cloth of ordinary quality’, and baftas and
chintz as ‘white’ or ‘calico’ (John Irwin and P.R. Schwartz, Studies in

Indo-European Textile History (Ahmedabad, 1966), pp. 59, 62, 70)
while K. N. Chaudhuri, The Trading World of Asia, pp. 503-5, classifies
baftas as ‘plain white . . . medium to superior’, chintz ‘printed . . .
medium to superior’ and sanu as ‘plain white’. Still now salu (a corrupt
form of sanu?) is considered a cheap coarse cloth in Bengal. It is strange
that Prakash places nainsook which means ‘pleasure of eye’ under fine
calicoes. It was actually one of the finest and most expensive muslins
(Taylor – 'a thick muslin’), the price being f. 73 per piece in 1754-5
(V.O.C. 2811, HA, 5 January 1754, ff. 46-46 vo.), V.O.C. 2829, HA,
19 January 1755, ff. 185-85vo.). Similarly dorea and humhum were
not, in all probability, fine calicoes but muslins. According to K.N.
Chaudhuri, humhum was muslin while Irwin thinks that it was ‘plain
cotton cloth of varying quality’. Both of them however hold that dorea
was mixed piece-goods, which is rather doubtful. If these two types
were muslins, that will certainly strengthen Prakash’s position.
37. Collected and computed from Bengal General Journals and Ledgers,
vol. 54, IOR.
38. Prakash, The Dutch East India Company, p. 243, Table 8.1.
39. Ibid., p. 244, note for Table 8.1.
40 . V.O.C. 2821, HB, 20 February 1753, ff. 91-95, Contract with Mer-
chants, 24 June 1752.
41 . Prakash, The Dutch East India Company, p. 244, note for Table 8.1.
42 . K.N. Chaudhuri, The Trading World of Asia, p. 504.
43. S. Chaudhuri, Trade and Commercial Organization, p. 267, Appendix
E.
44. Despatch Book (henceforth D.B.), vol.107, 13 December 1738, ff. 536-
47; DB. 108, 3 February 1740, ff. 364-76, IOR.
45. V.O.C. 2821, HB, 20 February 1753, ff. 91-5, Contract dt. 24 June
1752.
46. For example, the price of guineas, a well-known coarse calico, was
f. 13-14 (because of its size? 75 co. × 2¼ co.) in the period 1752-3 to
1754-5 while the price of ordinary malmal (a muslin) of Hugli was
f. 11-13, ordinary khasa, (again a muslin) of Hugli from f. 13-15 and
bethila (a fine calico) from f. 11-12 in the same period. Collected and
computed from Dutch export invoices, V.O.C. 2794, 2811, 2829.
47. Prakash classifies the various piece-goods even in the same category in
‘descending order’ on the basis of ‘fineness, workmanship and cost’.
Om Prakash, The Dutch East India Company, pp. 61, 62, 64. This
is an extremely doubtful hypothesis. See for example, the prices of
tanzebs, terendams, khasas, malmals (in ‘descending order’ of Prakash)
for 1753-4 and 1754-5.
Tanjeb Dhaka -f. 42-63
Tanjeb Daudpur (Hughli) -f. 10-11.
Terendam Santipur (Hugli) -f. 19

Khasa (Hugli) -f. 13-15
Malmal Santipur (Hugli) -f. 38
It is clear from this that Tanjeb Dhaka is the most expensive and hence
finest quality but not Tanjeb Daudpur which is less expensive than
Terendam Santipur while Malmal Santipur should precede in order of
fineness both Tanjeb Daudpur and Terendam Santipur as also Khasa
Hugli.
48. See for example, Trade, Bullion and Conquest: Bengal in the Eighteenth
Century, Presidential Address, Medieval India Section, Golden Jubilee
Session, Indian History Congress, Gorakhpur, December 1990.
I have discussed the whole issue in greater detail in my paper ‘The
Asian Merchants and Companies in Bengal’s Export Trade, circa
mid-Eighteenth Century’, presented at the International Conference
on ‘Merchants, Companies and Trade’ held at Maison des Sciences
de l’Homme, Paris, 31 May-1 June 1990. It has since been published
as Merchants, Companies and Trade: Europe and Asia in the Early
Modern Era, Cambridge, 1999.
49 . Dutch Director Louis Taillefert’s ‘memorie’, V.O.C. 2849 (K A. 2741),
27 October 1755, ff. 188 vo.-189.
50 . Bengal Public Consultations (henceforth B.P.C.), Range 1, vol. 44,
Annex to Consult. 19 June 1769, IOR; Eur. Mss. D. 283, f. 21; H.
Verelst’s letter to the Court of Directors, 5 April 1769, Fort William
– India House Correspondence (henceforth FWIHC), vol. V., ed. N.K.
Sinha (New Delhi, 1960), pp. 18-19.
51. The Dutch export is computed from export invoices in Dutch records
and the English export is taken from K.N. Chaudhuri, The Trading
World of Asia, p. 534. The value of both the Dutch and English export
was calculated at the rate of Rs. 7 per seer, the rate at which the Asian
export was estimated in the sources. That the average price of tanna
silk was about this is corroborated by other sources also, e.g. Factory
Records, Kasimbazar, vol. 12, Consult. 6 January 1756, IOR; B.P.C.,
Range 1, vol. 26, f. 114, Consult. 18 April 1753, vol. 25, f. 86vo.,
Consult. 16 March 1752.
52 . All the English and Dutch silk converted into small English lb
53 . Taillefert’s ‘memorie’, V.O.C. 2849, 27 October 1755, f. 245vo. Luke
Scrafton, Reflections on the Government of Indostan (London, 1760),
p. 20; B.P.C., Range I, vol. 11, ff. 288 vo.-289, 28 August 1736;
FWIHC, vol. V, pp. 18-19.
54 . The Asian merchants imported into Bengal a few commodities like
cotton etc.but their total value compared to the value of exports from
Bengal was quite negligible.
55 . The Dutch trade to Europe valued at around Rs. 1.5 million (computed
from export invoices in Dutch records) and the English trade around
Rs. 2.5 to Rs. 3 million (K.N. Chaudhuri, The Trading World of Asia,
p. 545) in the mid-18th century.
56. Taylor’s Report, Home Misc. 456F, f. 93.
57. See, for instance, the Geographical Analysis of Orders for Piece-goods
from London in early 1680s, S. Chaudhuri, Trade and Commercial
Organisation, p. 201, fn. 166.
58. H.T. Colebrooke, Remarks on the Husbandry and Internal Commerce
of Bengal (Calcutta, 1804), p. 170.
chapter 10
European Companies and Pre-Modern

South Asian Commercial System
A Study of Bengal in the Eighteenth Century*
It is almost common knowledge by now, thanks to the researches

of several trade historians in the last few decades, that the Euro-
pean Companies trading in South Asia in the seventeenth and
eighteenth centuries had to adjust themselves to the prevalent
commercial system and tradition in the given areas of their trade.
Seldom were the cases when the Companies could affect notable
changes in the traditional system of commerce in the South Asian
countries they traded with. Of course it should be admitted in all
fairness that the activities of these Companies resulted in certain
innovations as also modifications in the existing system which
were in a way novel in the commercial order of the time, though
these were probably not very significant in the overall structure
of pre-modern South Asian commercial system.
In this essay† I shall examine the Investment Pattern of the
European Companies, mainly the English and Dutch East India
Companies, which were the major foreign trading concerns in
*Calcutta Historical Journal, vol. XI, nos. 1-2, July 1986-June 1987,
pp. 138-65.
†
The award of fellowship/travel grant/contingency from various institu-
tions like the Commonwealth Commission in the U.K., British Council,
Indian Council of Historical Research, Indian Council of Social Science
Research and Maison des Sciences de l’Homme (Paris) enabled me to do
most of the research for this paper in the U.K., the Netherlands and India,
and finalise the draft of this paper.
Bengal in the first half of the eighteenth century, and see how
the Companies tried to achieve the twin goals of Investment
and Procurement within the broad framework of the traditional
commercial system. A few questions crop up in this connection.
Did the Companies have to change the small details within the
broad structure of traditional system? What were the problems
they had to face in their investments? How did they try to solve
them and with what success? In the course of the discussion I
shall try to answer these questions as far as possible, given the
limitations of the source material. Though the illustrations will
be taken mainly from the English East India Company, supple-
mented by those of the Dutch Company, the broad conclusions
will be applicable to all the European Companies trading in
Bengal, and for that matter, with minor changes in detail and
allowance for local variations, will be valid in general for all the
European Companies trading in different parts of South Asia
during the period under review.
Investment Pattern
The succesful investments1 of the European Companies in

Bengal depended not primarily on the economic laws of sup-
ply and demand. The Companies had to face many a problem
in securing their investments which were peculiar to the Indian
situation. Their servants in India were not familiar with the
market mechanism of the country and most often ignorant of
the local language. Under the circumstances they had to depend
for investments on a group of merchant-middlemen, generally
under a Chief merchant often called broker by the Companies,
in every major trading centre. Thus the Companies appointed
local brokers in most of their factories and depended solely on
them for the provision of their investments. The brokers helped
the Companies in making contracts with local merchants – most
often recommended by the brokers themselves – for provision
of goods for the return voyage of the ships. These merchants,
however, were required to be paid advance or dadni by the Com-
panies on the amount contracted for. The dadni merchants in
European Companies and Pre-Modern Commercial System | 215
their turn gave advances to weavers, artisans and other primary

producers through their gomastas or agents scattered through
various production centres or aurangs to ensure the supply of
goods at proper time and according to specified standards. The
Companies, however, also purchased goods with ‘ready money’
at the shipping season but this invariably entailed paying a much
higher price than at the normal time. Naturally they preferred,
in order to minimise the cost price of commodities bought for
export, the investment by dadni or advance payment system.
The Institution of Broker
As the European Companies had to resort to the dadni system

or advance payment to merchants for their investments, they had
to depend largely on the brokers who were responsible for the
money advanced to the merchants. The merchants who worked
on behalf of the Company for procuring the investments with
such advances were called dadni merchants. Thus the practice of
employing a broker became an integral part of the Companies’
machinery for providing investments in Bengal. The custom of
engaging a broker who was intimately connected with the invest-
ments of the Europeans in India was reported as being common
by travellers like Fryer and Ovington during the last quarter of
the seventeenth century.2
In Calcutta, Kasimbazar, Dacca and other factories in Bengal,
the English Company contracted for the investments with the
dadni merchants through the brokers who also helped in pricing
and sorting of commodities brought in by those merchants. As
the Company’s investment in Calcutta was quite considerable, the
office of the broker there became quite important and influential
one. The office of the broker was equally important in Surat
where one had to buy the office by offering a substantial sum
but it was not the case in Calcutta.3 It is important to note that
these brokers, though employees of the European Companies
were themselves merchants of repute and substantial credit, and
quite often conducted their own business quite independent of
the Companies through their host of relatives and gomastas. As
such, whenever these brokers were dismissed from the Compa-

nies’ service, it did not absolutely ruin them as would be evident
from the various evidence to be found in the Company records.
Calcutta Brokers
The two main families which provided most of the brokers to

the English Company in Calcutta and Kasimbazar were the
Seths and Katmas respectively. As the investments in Calcutta
largely consisted of silk and cotton piece-goods produced by
Bengali weavers, none could better play the role of a broker
than the Seths who were themselves of the weaving caste. They
together with the Basaks of the same caste were then perhaps the
most powerful groups, both economically and socially, in their
community. Being firmly established in the site of Calcutta for
generations before the arrival of the English and already acquir-
ing great fortune by trade with the Europeans, not only did the
Seths and Basaks command respect of the weavers’ community,
but also as their virtual leaders they could alone persuade them
to work for the Company under their guidance. As the dadni
merchants of Calcutta mostly belonged to their community,
they could also exercise direct control over them as they wished.
It was therefore not for nothing that the Seths filled the most
important post of the Company’s broker in the first half of the
eighteenth century almost by hereditary succession.4
Towards the close of the seventeenth century Jayakrishna was
the broker to the Company in Calcutta on a salary of Rs. 1,000
per annum but was dismissed from service in 1699 for accepting
dosturee or brokerage from the dadni merchants.5 Janardan Seth
who was described by the Calcutta Council ‘as the person best
qualified for a broker’ was appointed to the post on condition
that he would be allowed 3/4 per cent brokerage on the value of
total investment in Calcutta, in lieu of a regular salary.6 Though a
broker to the Company, Janardan was also an eminent merchant
who supplied part of the Company’s investment throughout the
tenure of his office till he died in February 1712.7 The Court of
Directors in London looked down upon Janardan as a villain
who, it alleged, through his malpractices cheated the Company,

monopolised all the trade and thus amassed vast fortune for
himself.8 In January 1714 it wrote to the Calcutta Council: ‘No
wonder that the late broker Janardan declared himself several
lack of Rupees who but a few years ago was Mr. Beard’s servant
and not worth one hundred rupees’.9
After Janardan’s death, his brother Baranasi Seth was ap-
pointed the Company’s broker. But the Directors regarded him
too as the chief source of all the mischief leading to bad quality
and high price of the English investments in Bengal. By now, it
seems, the broker’s power was immense and the Court was not
prepared to tolerate such a position. The Directors ordered in
1716 that the broker’s power and the ‘Confederacy of the pres-
ent merchants’ set up by him with his ‘Relatives and Creatures’
must be broken.10 They wrote indignantly to Calcutta: ‘The
exorbitant power of your broker is what we will never again
bear with nor with those who are his advocates and support
nor will we suffer any broker to rival much less to overstep our
President’.11 Again they complained, not without reason, that
Baranasi was not only a broker but ‘by himself and creatures’
sold most of the goods provided for the Company.12 When
Robert Hedges succeeded Russell, he wrote frequently to the
Court of Directors about the misdeeds of the broker and tried to
curtail his power. He reported to the Directors that the President
had set a bad example of depending wholly on Baranasi Seth and
that he was so indifferent to investment that Baranasi and his
family provided two-third of the investments, and influenced the
sorting and pricing also. Till this was ‘cured’, held Hedges, there
was no possibility of getting goods at cheaper rates. ‘Benarse Seat
ruled as much abroad as in the Warehouse, Revenues rose or fell
as he pleased, the Collectors being his Creatures.’13 Such was
the power of the Seths as broker. But Hedges was not entirely in
favour of removing Baranasi Seth but wanted only ‘to hinder his
power which prejudices the Company’s Affairs’, because ‘it can-
not be the Company’s interest that the Chief Merchant should
be Broker for if so Goods will come dear’.14 The Court of Direc-
tors however was adamant and following its order, Baranasi
was replaced in April 1715 by Ramkrishna Khan, a merchant of

repute and influence in Calcutta.15
Both the Court of Directors and the Calcutta Council seemed
gratified with Ramkrishna’s appointment which resulted in bet-
ter and cheaper investments for the Company. But the Directors
at the same time cautioned the Calcutta Council in the following
words: ‘It will be incumbent on all of you to prevent this Broker
getting the ascendant the last had. Encourage and support him
in his place while he diligently performs his Duty but don’t let
him overstep you or be in effect Your Master.’16 But Ramkrishna
could not enjoy the coveted post for long and died in November
1716 when Harinath was made broker on the rcommendation
of Robert Hedges.17 In the beginning this Harinath appeared
to be ‘able, diligent and faithful’ from the goods he provided.
But despite this, the Council observed that ‘if he should prove
unfaithful will turn him out with disgrace and suffer no broker
to have too great authority.’18 But Harinath was primarily a ser-
vant of Hedges and the Council soon found him to be ‘unskilled
in goodness or value of muslins and of mean capacity and no
repute.’19 The Council wrote home that ‘we wonder Mr. Hedges
should put him in when he would not trust him in his own Affairs
but Barnarse Seat.’20 In April 1719 the Calcutta Council declared
in a long minute that Harinath was altogether unsuitable for
his job, and as it was looking for ‘an honest experienc’t man to
direct the merchants in making the species of cloth’, it thought
the only competent person then in Calcutta for the office of the
broker was the much maligned Baranasi Seth.21 Thus Baranasi
was reappointed broker in 1719.
The reasons for reinstating Baranasi in the broker’s office,
as the Council put it, were that he ‘is perfectly capacitated for
business and as honest as of his cast[e].’22 The Council wrote
home: ‘The large and early investment will show his capacity, the
goods are generally better made and cheaper than for sometime
past.’23 That Baranasi Seth was a capable man and that he was
quite successful as a broker is evident from the Council’s letter of
31 January 1722: ‘. . . none but he could have influenced the mer-
chants and secured the last and this years Investment on credit,
he being bound with each merchant for what they borrowed of

the shroffs, this shows his zeal for the Company’s Interest.’24 The
Court of Directors too wrote to Calcutta Council appreciating
the services rendered by Baranasi.25
It is evident from the records of the Company that the Seths
were the only persons in Calcutta in the 1st half of the 18th
century, who as the social and economic leaders of the weaving
community, could serve best the interest of the Company. The
case of Baranasi Seth proves beyond doubt there was none else
in Calcutta in his time who could secure the Company’s invest-
ments on better terms. Despite many a pious resolution by the
Company, the power of the Seths could hardly be curbed, and
as brokers they continued to exercise absolute control over the
Company’s investments.
Baranasi died in October 1724 and was succeeded by his
brother Bishnudas Seth.26 Justifying his appointment the Council
wrote to the Directors that he appeared ‘the properest Person
on many Accounts, and principally in regard to his Credit in the
Country which is apparent from the recommendation of all the
Government of Hugly in his favour and his being a very Substan-
tial Man, which will enable him upon an emergency to assist our
Hon’ble Masters Affairs as Barnassoeseat did three years agoe.’
As to his capacity for the post, it pointed out that ‘we think him
equal to any of the rest and the trust Barnassoeseat reposed on
him by leaving him the sole Direction of his Affairs, show the
good an opinion he had both of his Integrity and Capacity.’27
Notwithstanding this confidence on the new broker and his
being presented with a ‘seerpaw’ and a horse as ordered by the
Court, his conduct was called into question as early as January
1728.28 It was alleged that he together with Umichand, a dadni
merchant, has engrossed most of the investments, especially of
the finer sorts, to the exclusion of most other merchants. On 21
July 1731 the Calcutta Council noted that the broker in collusion
with Umichand has monopolised under fictitous names ‘much
the largest part of the Company’s investment’ and corrupted
‘most if not all black servants in the cottah.’29 Two members of
the Council, Wastell and Bourchier, wanted immediate dismissal
of Bishnudas. But the Council led by President Deane gave the

following reasons for not turning out the broker ‘at this season
of the year’: ‘It is incontestable that the Merchants, who contract
for investment, borrow large sums of money to carry it on before
money is advanced, that many goods are purchased and that the
Broker must be engaged on that account for relations and friends
in a large sum of money and security for all the Merchants in
general, wherefore his being displaced will immediately bring his
creditors upon him and make advantages to themselves (at the
several aurungs) by his disgrace. . . .’30 It was further argued by
the Council that only recently the discredit of the Company’s
broker at Kasimbazar resulted in ‘our credit almost gone with
the shroffs and entirely ruined with Futtichund who was the
only person that could assist us in any pressing occasion.’31 This
throws some very interesting light on the ramifications of the
dadni system as also the delicately balanced credit mechanism
on which the system was primarily based.
It is interesting to note that two members of the Calcutta
Council, Humphrys Cole and Edward Carteret, submitted the
results of their ‘enquiry into the state of the Broker’s affairs’,32
wherein they came to the conclusion that ‘the charges laid against
him [broker] are unfairly represented and insufficiently proved’.
They have shown in their report that the names of the merchants
in the dadni list were not fictitious, only sometimes the contract
in the name of one particular merchant was fulfilled by another,
sometime a part of it and at other times the whole amount. Thus
the contract in the name of Kunjabehari Seth ‘who broke two
years ago’ was performed by Jagannath Seth and Gangacharan
Basak. Similarly the contract in the name of Santosh Ghose who
became insolvent was carried out by Krishna Chandra Khan
and Balaram Pramanick. There was practically nothing unusual
in this sort of commercial practice which seems to be quite in
vogue during the period under review. We learn from the same
report that Gangacharan Basak provided all the ‘soosies’ con-
tracted by Umichand while the latter supplied ‘Booran Cossaes’
contracted by the former. As to the main leaders of the move
to remove the broker, namely Samsundar Seth, Jagannath Seth
and Paramananda Basak who complained that ‘they have not

the sums sett down to them’, the report retorts: ‘If they have it
not, its given at their desire to severall of their dependents, which
the Broker is ready to prove, and this has been so many years’.
Regarding the fact that the entire investment of Malda was given
to Umichand and his brother Kissenchand, the report affirms
that ‘they were the fittest men he [broker] knows to procure
those goods’ and it was given to them as others were reluctant to
contract for Malda goods.
However in deference to the wishes of the Court of Directors,
the Calcutta Council ultimately decided to remove Bishnudas
Seth from the office of broker in March 1732, and Samsundar
Seth, the son of the former broker Baranasi Seth was appointed
broker in preference to Jadu Seth because the latter’s ‘great age
and Infirmity of body will oblige him to leave a great share of the
management to his son, who none of us think fit in anything of
that consequence’.33 It is interesting to note that the office of the
broker passed on from one member of the Seth family to another
without hindrance. This only means that there was no way out
of the Seth family for the Company in procuring its investments
in Bengal. Meanwhile the Court of Directors remonstrated to
the Calcutta Council: ‘. . . it appears that the greatest part of
our Investment was provided by the relations and Friends of the
late Broker, you must be guarded against this practice, which is
naturally attended with bad consequences on a supposition that
you are guided by his Judgment in the sorting or prizing our
goods, and otherwise we dont see any use he is of, indeed it is
alleged he is security for the money advanced to the merchants,
but that amounts to a very great sum . . . it would be much bet-
ter to pay every individual merchant yourselves than to entrust
a middle person.’34 The Directors were apprehensive that the
broker and the servants of the Company bought goods on their
own accounts and sold them to the Company at an advanced
price which, if it had been the case, ‘easily accounts for the high
prices given for silk, gurrahs and other goods’ provided both
at Calcutta and Kasimbazar. So they laid down a standing rule
that ‘none of our Covenant Servants or Brokers be directly or
indirectly concerned in the goods prized’ on the point of being

dismissed from Service and suggested the abolition of the post of
Broker.35 The Calcutta Council stressed in its reply that it would
guard against all the evils connected with investment as pointed
out by the Court but ‘as to having no broker cannot think it
for the Company’s Interest, it being certainly necessary to have
somebody of Wealth and Reputation in that Capacity’.36
But the Court of Directors was hardly convinced and was
now determined to abolish the post of broker. It is worth quoting
at length from the letter it wrote to Calcutta touching upon the
evils which grew out of the office of broker and the reasons for
abolishing it: ‘And whereas by means of our Brokers, several of
our servants have been enabled to get credit amongst the shroffs
and merchants to our great prejudice and loss, and we have
good reason to believe that in all our factorys many other evils
have been brought upon us in the course of Investments by their
Influence, Therefore we do absolutely abolish the Said office of
Broker, not only at Calcutta but also in our subordinate factorys,
requiring you and all our Servants, to make our future contracts
without the intervention of such a person, who by his influence
and interest may not only abuse us in our Dadney, as has been
formerly done, but also greatly prejudice us, by admitting or
debarring merchants to or from transacting with us, who are not
suited to his interest.’37 This raised considerable alarm both in
Calcutta and Kasimbazar.
The Kasimbazar Council became very much concerned and
wrote to Calcutta about the serious consequences the aboli-
tion of the broker’s office would have in the procurement of
investment as also the void it would create in the Company’s
relations with the government at a time when it was expecting
a ‘revolution’ in the government. It pointed out further that ‘the
continuation of a broker there is absolutely necessary for the
safety of the Hon’ble Company’s estate . . . the security of their
money and effects there’.38 The Calcutta Council deliberated on
the issue and came to the conclusion that ‘we cannot abolish that
office here no more than at Kasimbazar without running a great
risk of the Company’s estate’ and in view of the ill consequences
that may attend our contracting with private merchants with-

out some such person being security for the Dadney advanced
them’.39 So Samsundar Seth was continued in the office of broker
for the time being and was confirmed in his office on 15 Feb-
ruary 1739.40 The Dacca letter to Calcutta pointing out the
consequences of abolishing the broker’s post is revealing. The
factors at Dacca wrote that it ‘will be Irritating the great men at
Dacca by whose intercession this post [of broker] was given him
[Manickchand] by which their business may be prejudiced if not
entirely stopped’.41
Meanwhile the question whether the broker should be retained
or not was debated by the Calcutta Council and in January 1739
it wrote to the Court listing up the reasons in favour of retain-
ing the broker’s office.42 These reasons were: First, the principal
‘end’ in employing a broker was to secure the dadni advanced
to the merchants and if the post is abolished, there would be no
security for the money advanced as the broker only was respon-
sible for the amount advanced. Secondly, the broker only knew
the ‘real circumstances’ of the merchants and thus could advise
the Council who are the merchants to be trusted with money.
Thirdly, if the post was abolished, ‘many parties will arise among
tbe merchants’ who could be suppressed ‘by a Man of Fortune
and Figure being at the Head’. Fourthly, ‘though some few mer-
chants have indisputable fortunes yet giving the investment to so
few will be very prejudicial by their advancing the prices more
than a greater number can, who are a check upon one another’
and hence the necessity for a large number of dadni merchants
over whom the broker should rule.
The Court of Directors, however, was insistent on abolishing
the office of the broker. In its general letter of 21 March 1740 it
wrote that the dadni charged to the Company’s accounts as paid
to the merchants was not duly received by them and ‘the Broker
was doubtless Privy thereto’. It further alleged that the money
was diverted to provide goods for the ‘enormous’ Private trade
of the Company’s servants. ‘And a Broker’, the letter pointed
out, ‘is the Middle Person who cloaks all such collusions and
malpractices, beside the Dustore of One Rupee nine annas per
cent, or whatever is allowed to the Broker by the Merchants is

a tax upon us, and our Investment comes out so much dearer
to us.’43 Hence it enjoined upon the Calcutta Council that its
earlier order directing to abolish the broker’s post be absolutely
complied with at Calcutta, Kasimbazar and other subordinate
factories. It further directed the Council to procure the goods
on the best and cheapest terms by contracting with the most
reputable merchants.44 The Calcutta Council at last decided on
3 January 1741 that the office of the broker would be abolished
after that year’s investment was completed and that it would
henceforth contract for goods with the ‘most substantial mer-
chants’.45 In July that year it informed the Court that ‘they laid
aside the office of the Broker’ at Calcutta and other subordinate
factories, and that the merchants entered into ‘Joint Security
Bonds’ with Samsundar Seth, Bishnudas Seth and Umichand in
three ‘setts’.46 In December the Council called the merchants and
informed them that the office of the broker was abolished, and
to secure the Company from bad debts proposed they should
become ‘jointly and separately bound one for the other for all
sums advanced on Dadney’ which the merchants refused. They
presented three lists of merchants who proposed to be bound
‘one for the other’ with Samsundar Seth for the first list, Bishnu-
das Seth and Umichand the second, and Ramkrishna Seth for the
third ‘who are esteemed men of fortune and credit which was
agreed to’.47
Captain Fenwick who claimed to have been in the East India
Company’s service for thirty years emphasized in 1747-8 the
necessity of employing a broker as ‘the best times [regarding
investments] have been under the management of the broker’.
In advocating the re-appointment of the broker, he stated the
important functions of the broker as follows: ‘I shall state the
duty of a broker against the maxim of having none; as he ought
to be an excellent merchant himself so he ought to know every
merchant’s Capacity, Integrity and Circumstances he introduces
to the Council to be employed; for it is not sufficient that he is
answerable for the contracts, as to the sums, but that such people
do conduct their affairs, that the Company be not disappointed
of any part of their Investments. He ought to be so good a judge

of cloth, even to know at first sight in what part of the country
every sortment is fabricated.’48
Interestingly enough a few years later the Court of Directors
changed its mind and asked Calcutta Council to revive the office
of broker. It wrote to Calcutta in January 1753: ‘We have taken
great pains to enquire into the utility of the office of a Broker
at Calcutta and . . . it appears to us that the reviving that office
upon the old footing will be of great service to the Company,
as it will be the best means of carrying on our investment with
regard to the quantity, quality and price.’ And it empowered Cal-
cutta Council to appoint such a person as broker who ‘from his
circumstances, capacity and reputation may be the best able to
serve us’.49 But by the time the suggestion reached Calcutta, the
Company’s pattern of investment has been changed from dadni
to gomasta system.50 The Calcutta Council wrote back that ‘such
an office can be of no manner of use in the present model of
conducting the business’.51 Even as late as 1755 the Directors
asked the Calcutta Council to revive the office of broker52 but
the gomasta system for the procurement of investments had by
then been firmly established, and there was absolutely no scope
for a broker in the new system of investment. .
Kasimbazar Brokers
The Company’s broker in Kasimbazar from about the second

decade of the eighteenth century was a merchant named Kantu.
He claimed to have served seven Chiefs at Kasimbazar but was
brought to discredit in 1730 following his insolvency which
resulted, as he alleged, from the extortions and undue privileges
wrested from him by Stackhouse, the then Chief of the Com-
pany. He was indebted to Fatechand Seth, the famous banker,
to the tune of Rs. 2,15,000 which he borrowed for the transac-
tions of the Company’s business. The Company seized Kantu’s
effects but Fatechand insisted that Kantu be reinstated in the
office of broker and that he be paid the sum owed to him by
Kantu. The affair dragged on for sometime and ultimately the
Company paid Fatechand a part of his due but dismissed Kantu

as broker.53 Fatechand knew well the importance of the position
of a broker of the Company and objected to Kantu’s being called
a ‘Dellol.54 It appears from the proceedings of the Kasimbazar
factory that Kantu was not only a broker to the Company but a
substantial merchant on his own account, often freighting goods
on European ships. In 1730 the proceeds of his dosutties55 sent
to Manila amounted to Rs. 4,053 which was appropriated by
the Company following his dismissal. He had connections with
Calcutta investment too as we find that Baranasi Seth was his
‘bondsman’.56 As Company’s broker the dasturi or commission
on investment that he earned amounted to Rs. 1,20,000 (at the
rate of Re. 1- 9 ans. per cent) but tbe Calcutta Council observed
that ‘as he is to be esteem’d at the Durbar and the Country round
as our Broker, he is obliged to live up to that character and the
numerous family depend upon will make that amount barely
sufficient to defray his expenses.’57
The Kasimbazar Council dismissed Kantu in June 1730 and
tried to appoint either Burro Datta or Hathu (Huttoo) Katma,
the two substantial merchants of Kasimbazar but both refused
on the plea that the season had far advanced for investment and
that it would be impossible to make the investment unless the
Company’s dispute with Fatechand was resolved.58 In October
the Council sent for Burro Datta and acquainted him of his being
appointed broker but was surprised to find he declined accepting
the post directly, desiring time to consult his brother who was at
Hugli.59 However it ultimately appointed Hathu Katma, ‘a man
of unquestionable credit and the properest person for that post’
as broker. He was also reported to be ‘a man of considerable
estate’ and his father Nidhi Katma offered to be his security.60
He enjoyed the position for sometime but was dismissed in early
1737 following a complaint from Calcutta that he took four
annas per seer for Mr. Barker, the chief at Kasimbazar, on the silk
provided by the merchants, and the Calcutta Council ordered
his immediate removal, and the appointment of a new broker.
Accordingly Bally [Balai ? Balaram ?] Katma was appointed
broker because of his ‘great experience’ in the Company’s affairs
and the ‘great wealth that is in his family’. His security bond was
signed by Benode Katma.61 Balai Katma continued in the post till
1741 when the office was altogether abolished in all the factories
in Bengal.
The Kasimbazar Council was very much concerned at the
abolition of the broker’s office and wrote to Calcutta: ‘. . . con-
sider how impracticable it is for us to come at the knowledge of
the worth of any of the merchants here when there is no broker
whose interest it is to tell us the truth and such an one has many
ways to learn more exactly who are fit to be trusted than we can
possibly do. . . .’62 Even some time after the abolition of the bro-
ker’s post, the Kasimbazar Council wrote to the Court in 1748
underlining the bad effects of it: ‘. . . the abolishing of the office
of broker has been by experience found highly detrimental to
your Honours’ affairs, especially in contracts for the investment,
the merchants being come to such a pitch as to fix what prices
they pleased on their goods, which evil they conceived could be
cured by no other method than by a ruler over them, of Wealth
and Credit of their own cast[e].’63
There can be hardly any doubt that the Indian broker of the
European Companies played a crucial role in securing their
investments and as such a significant function in the commercial
life of Bengal in the first half of the eighteenth century. He was the
essential link between the indigenous commercial agencies and
the centralised investment organization of the European Compa-
nies. Hume, the agent of the Ostend Company in Bengal, wrote
in 1730: ‘The English and Dutch, who are the greatest Traders in
this Country, do their business wholly by their Brokers who are
their principal merchants. Notwithstanding they have numbers
of Rich men Established in their bounds, who need no Security
but they find their business the best regulated by having their
Merchants act in Concert, by means of their Broker, everyone
taking upon him according to his force, they know one another
better than they can be known by Europeans.’64 But the broker
notwithstanding, as Hume pointed out, the dadni merchants had
to make the contracts in their own names, and the Company
was at liberty to reject or receive the merchants known to be of
credit and substance though not recommended by the broker.

Hume elaborates further the advantages of the system: ‘By which
you secure yourselves from having a Cabal being formed among
your Merchants to prejudice you in the price of your goods.’65
The brokers also played a vital role in the relation between
the European Companies and the local administration. They
often acted as mediators between the two parties and often
helped diffuse a crisis. The post of the broker was so important
and significant that even the ruling elite took active interest in
the appointment of a broker. The Companies too on their part
always tried to appoint someone who had influence with the
local administration or at the durbar. The point is clearly borne
out by the fact that when ‘Sabra’, the Company’s broker at
Dacca, died, the Council there reported that ‘great solicitations
have been made to us by the Dellols and Persons of the Greatest
Importance’ to appoint his nephew Manickchand as the broker.
The Dacca Council ‘not being able to find out a more proper
person having great Interest at the Durbar, worth some money
and much esteem’d in the place’ agreed on 27 January 1738 to
appoint Manickchand the broker at Dacca.66
The above analysis of the activities of the brokers and their
relation with the English Company brings to relief certain inter-
esting aspects of the role played by the brokers in the commercial
sector of Bengal’s economy. They were essentially middlemen
who organized the procurment of the Company’s investments,
and though they were the Company’s employees and as such
subordinate to it, yet they were in no way subservient to it.
They were not only mere brokers of the Company – that was
only one facet of their activities – but merchants of repute and
substantial credit, carrying on their own trade independent of
the Company. This is very well illustrated by the career of Bara-
nasi Seth, Bishnudas Seth, Samsundar Seth etc. The dismissal of
Baranasi from the office of broker hardly affected his position
as an independent merchant, and he carried on his trade quite
independent of the Company which was ultimately forced to
re-employ him in the exalted office. Bishnudas’ dismissal too
had little effect on his own independent business, and later the
Company accepted him as a ‘substantial merchant’ to be security

for a group of merchants after the abolition of the broker’s post.
Samsundar too was regarded as a ‘man of fortune and credit’ by
the Company even after he ceased to be a broker and accepted
him as security for another group of merchants. More often than
not these brokers had a strong link with the ruling elite which
sometime even intervened in or tried to influence the appoint-
ment of a broker, as we have seen in the case of Bishnudas Seth
in Calcutta and Manickchand in Dacca. There can be hardly any
doubt that men like Baranasi Seth, English Company’s broker at
Calcutta, Indranarain Chaudhuri, French Company’s broker at
Chandernagore and Harekrishna Roy, Dutch Company’s broker
at Chinsurah were men of considerable wealth and social emi-
nence in Bengal in the first half of the eighteenth century.
Problems in Investments and Measures Adopted
The European Companies had to face many a problem in secur-

ing their investments in Bengal. One of the major problems
throughout the period under review was a chronic shortage of
working capital. The problem of inadequate funds for invest-
ments was accentuated by the poor demand for the European
Companies’ imports to Bengal. Though the quantity of merchan-
dise imported by the Companies was not generally large, the
market for even this small amount was strictly limited. The only
items for which there was a steady demand in Bengal were bul-
lion and specie. But as their supply was seasonal and limited, the
Companies had to explore additional means for financing their
investments in Bengal. Moreover the Companies had to confront
some peculiar problems in Bengal in converting the bullion and
specie into local currency. Another difficulty that the Companies
had to face was to provide funds for investment in the proper
season which generally started after the shipping season was
over. As the price of most of the commodities went up consider-
ably (sometimes even by 40 to 50 per cent)67 during the time
of shipping, the Companies had to start contracting for goods
just after the departure of Europe-bound ships, that is, gener-
ally from February or March, and hence they always needed a

stock to be left for such investments in India after paying for the
previous year’s supplies. Here we shall try to examine the vari-
ous problems the Companies had to encounter in securing their
investments and the measures adopted to solve them.
Chronic Shortage of Capital
The main problem which plagued the English Company as well

as the Dutch and French was the chronic shortage of liquid capi-
tal to secure the investments almost throughout the period under
review. After the Europe ships had left by February or March
at the latest, and when it was the best time for giving out dadni
or advance for next year’s investment, the Companies were left
with little money. The problem was aggravated by the fact that
often the Companies failed to pay the arrears due to merchants
for the previous year’s investment. Almost every year at this time,
with the departure of Europe ships and the time for investment
approaching, the merchants would clamour on the one hand for
payment of their arrears for the previous year and an advance
for the next year’s investments on the other. The Council of the
different European factories was often in a helpless position.
The Calcutta Council of the English Company noted in 1720
that their merchants were ‘very uneasy and daily complaining
for want of usual advancement on Dadney besides their last
years arrears due to them’.68 The situation was sometimes exas-
perating as is apparent from the Fort William Consultations of
29 May 1721: ‘There being due . . . [a large amount] to our
merchants on balance of the past year’s account and we having
no money to clear off those balances or advance them on this
years contract . . . they are very clamorous for either money or
bills at Interest to be given them alleging they cannot perform
the new contract without being forced to borrow all the money
they can gett at Interest to send to the aurungs’.69 The problem
continued to plague the Company. Even as late as 8th August
the same year (1721) the Council noted in desperation: ‘We as
yet having no news of any ship from England, Our merchants
are very clamorous for the Dadney to be advanced them on the

goods contracted for this year, and insist upon giving them Bills
of Debt for that and the Balance of their last years account.’70
Local Credit Market
Naturally the Companies had no other way of solving the

problem of shortage of working capital but by borrowing from
the local credit market. Luckily for the Companies, the credit
market in Bengal was highly organized and efficiently man-
aged. There was indeed a remarkable growth of the financial
machinery for credit and exchange, and the specialized activities
of a large class of merchants, especially the shroffs, undoubtedly
point towards the fact that merchant capital and commercial
organization were highly developed in early eighteenth century
Bengal. So the European Companies tried to solve the problem
of acute shortage of working capital by borrowing heavily from
the local money market. Though there is no systematic account
of the amount borrowed yearly in different factories, quite a few
references here and there in the records give an indication of the
sum borrowed at different times in different factories.
Towards the beginning of the eighteenth century, the English
Company’s debts to merchants in Calcutta and Kasimbazar
at certain specific dates amounted to around Rs. 7 lakhs and
Rs. 2½ lakhs respectively.71 In 1720-1 the Company’s debt in
Bengal amounted to Rs. 24 lakhs while the amount of debt
turned out to be Rs. 55½ lakhs in 1747-8 (this too exclusive of
interest).72 The Dutch Company also borrowed from the local
capital market. Its debt to the Kasimbazar merchants (with inter-
est) in September 1724 amounted to Rs. 14,72,418.73 Even at the
risk of a little digression, it is worthwhile to have a close look at
the name of the merchants to whom the Company was indebted.
It is a pity that the list which could have thrown significant light
on the social composition of the merchants and the regions they
came from gives only the first name of most of the merchants,
leaving us in darkness about their last names. Yet the list pro-
vides with certain interesting clues. Though the names are often
mentioned as Ramnath, Jadu, Kunja, Kartick, Paran etc. (typical

Bengali names!), luckily enough the Katmas are mentioned with
their full names.74 The list mentions name like Lahorimal, Onup-
chand, Teakchand, Bhirguram etc. who probably came from
other parts of India (West or North?). But the most interesting
part is that we find the Panjabi merchants with the surname of
Kapur (Caporeij in Dutch, Coppree in English) whom we meet
for the first time in the records.
Among the main creditors of the Company, the house of
Jagat Seth is unfailingly there even in that early period. In two
separate entries the credit of the house to the Company totalled
Rs. 2,55,986.75 The Katmas were not lagging much behind.
According to the list, wherein there are as many as 8 Katmas,
the Company owed them Rs. 2,06,794 of which the breakdown
is as follows:
Balai76 [Bolley] Katma – Rs. 16,294

Loknath Katma – Rs. 13,036
Panchu [Poutsjou] Katma – Rs. 16,796
Raghu [Raggo] Katma – Rs. 49,259
Ramchand [Ramsjent] Katma – Rs. 26,735
Satu77 [Satoe] Katma – Rs. 34,608
Bhuban [Bouwaan] Katma – Rs. 18,919
Jagu [Jegu] Katma – Rs. 31,147
Rs. 2,06,794
Of the 79 merchants in the iist, the Company owed more than

Rs. 20,000 to only 20 merchants, and besides the House of Jagat
Seth and the Katmas, the prominent creditors of the Company
were the following:78
Onupchand – Rs. 43,064

Gopinath – Rs. 36,321
Kunja – Rs. 34,310
Nimoe – Rs. 44,010
Ramballabh – Rs. 33,281
Kommelain(?) – Rs. 31,839
Lahorimal – Rs. 62,948
Golabray (Golap Ray ?) – Rs. 52,608
Coming back to the story of the borrowings by the European

Companies, we find that the Ostend and the French Company
also borrowed freely from the local capital market. The Ostend
Company was lent money by the local shroffs and merchants.
Alexander Hume, the Chief of the Company in Bengal, reported
in 1730 that among other merchants, Nainsook Babu, a near
relation of Jagath Seth Fatechand, had lent large sums of money
to the Company.79 Similarly the French too relied heavily on the
local money market for securing its investment. Fatechand was
indispensable to them as their most important money lender.
Though Dupleix described Fatechand as the ‘greatest of Jews’
and ‘our chopping-block’, he often had to seek loan of one to
three lakhs from him.80 He had to borrow money also from
the rich and powerful family of merchants and money-lender
of Kasimbazar – the Katmas.81 Of course the most substantial
lender to the European Companies was the house of Jagat Seths
in the period under review. Even in the early years between 1718
and 1730, the English Company borrowed from the Jagat Seth
at Murshidabad on an average more than 4 lakhs of rupees a
year.82 In the three years between 1755 and 1757 the Dutch debt
to the house of Jagat Seths amounted to Rs. 23,85,803.83 In 1757
alone the Dutch borrowed 4 lakhs from the Seths and the French
debt at the time of the fall of Chandernagore amounted to one
and a half million of rupees.84 Captain Fenwick estimated the
French debt in 1747-8 to be ‘upward of 17 lakhs’ while Watts
wrote to Clive on 18 February 1757 that the French owed some
13 lakhs to the Seths.85
Though the English Company borrowed money locally in all
the factories in Bengal, Kasimbazar was one of the main centres
where it procured money freely for investments. The reason was
two-fold: first, a lot of the Company’s investment was made
here; secondly, because of the presence of a large number of big
merchants and shroffs from various parts of India in Kasimbazar
which was the most important trade mart of Bengal in the first
half of the eighteenth cntury, money was freely available. The
Council at Kasimbazar often borrowed quite a large amount of
money for securing the investments at the right season. Thus we
find in March 1728 it borrowed Rs. 4 lakhs for giving advances

for investments.86 But the Court was not very happy with this
large amount of borrowings at high interest. It wrote to Calcutta
with great concern that ‘upwards of 4000 £ sterling was paid for
interest’ at Kasimbazar during the year May 1730 to April 1731,
besides Rs. 6,43,832 ‘running at the extravagant rate of twelve
percent per annum from that time’ and that the Kasimbazar fac-
tors had borrowed another Rs. 2,57,180 afterwards. It asked the
Calcutta Council that high rate of interest (at 12 per cent) which
was ‘canker to the Company’s estate’ should be rooted out.87
But despite all the reprimands from the Directors, the differ-
ent factories in Bengal borrowed heavily from the local credit
market almost throughout the period under study. Even as late
as 1745 the Company’s debt at Calcutta amounted to Rs. 9
lakhs whereas in Kasimbazar and Dacca it was computed at
Rs. 10 lakhs.88 The English debt at Dacca in 1749 amounted
to Rs. 7,55,400. Of this amount as big a sum as Rs. 5,84,000
was due to the house of Jagat Seth and the rest to ‘several other
shroffs’.89 In Calcutta in the course of a single day only in 1743
the English Company borrowed a sum of Rs. 8,25,000 from the
following merchants:90
Bishnudas Seth Rs. 1,10,000
Chaitanya Charan Seth Rs. 50,000
Anunchand Rs. 1,00,000
Hazarimal Rs. 80,000
Gangabishnu [Mendrew ?] Rs. 40,000
Rashbehari Seth Rs. 50,000
Rashbehari Seth Rs. 50,000
Ramkrishna Seth Rs. 75,000
Krishna Chandra Datta Rs. 50,000
Kunja Katma Rs. 51,000
Sabram[?] Rs. 1,00,000
Dulichand Rs. 69,000
Rs. 8,25,000
And just a week later, the Company borrowed of the Jagat

Seths a sum of Rs. 3,26,750 for paying advances for its invest-
ments.91
In this connection it should be emphasized that the mainstay

of the capital market in Bengal in the first half of the eighteenth
century was the famous banking house of the Jagat Seths. The
house had grown itself gradually into a great financial institu-
tion during the period under review.92 It came to the rescue of
the European Companies, which as we have seen earlier, suffered
from a chronic shortage of working capital. So they borrowed
heavily and freely from the house throughout the period of our
study. The extent of the reliance on this banking house by the
English Company will be evident from the fact that even in the
subordinate factory at Dacca where the investment was quite
small compared to that in Calcutta or Kasimbazar, it borrowed a
sum of Rs. 4,70,000 in the period between 3 December 1744 and
20 October 1745.93 In Kasimbazar the Company owed the Seths
an amount of Rs. 8,36,037 in 1746 and Rs. 6,30,213 including
interest in 1748.94 Even in 1751 the English debt to the banking
house in Kasimbazar amounted to Rs. 5,62,820.95 In Calcutta on
one single occasion in 1742 the Calcutta Council borrowed Rs. 2
lakhs from the Jagat Seths.96 The Company preferred to borrow
from Jagat Seth Fatechand ‘as he might prove serviceable at the
Durbar’.97
The Jagat Seths lent money to the Europeans at the rate of
12 per cent per annum which was the prevalent rate at the
time. But consequent to a request from the English Company
to reduce the rate of interest to 9 per cent the banking house
lowered the rate accordingly in 1740.98 Following this the inter-
est rate charged by other shroffs or bankers was also reduced to
9 per cent.99 But still the Company preferred borrowing from
the Seths. The Kasimbazar Council noted in 1741: ‘Futtychund
having favoured us in lowering the Interest and as we are appre-
hensive he may be displeased, should we take up money of other
people and so raise the interest again on us, agreed that we give
him preference.’100 It borrowed Rs. 2,01,000 from the house on
8 March 1741 but on 27 March when informed by Fatechand
that he could not lend more than Rs. 50,000, it decided to bor-
row from the following merchants:101
Dayaram Mayaram Rs. 20,000

Prankissen Rs. 20,000
Harryballav Das Rs. 10,000
Jagat Seth Rs. 50,000
Lahorimal Harkissen Rs. 50,000
Rs. 1,50,000
In Kasimbazar, however, the Katma family dominated the list

of merchants from whom the Company borrowed in the ’thir-
ties as will be apparent from the following list dated 26 March
1733:102
Golab Katma Rs. 40,000
Indranarayan Katma Rs. 60,000
Chuckoo [Chaku] Katma Rs. 50,000
Raghunath Katma Rs. 25,000
Priti [Preet] Katma Rs. 25,000
Lahorimall Mansookray Rs. 30,000
Manikchand Ananchand Rs. 40,000
Lalaram Singh Rs. 30,000
In June 1733 the Company owed Rs. 72,800 to Sachi Katma

alone.103
In Calcutta too the Company borrowed from other merchants
and shroffs, the Seths of Calcutta predominating the list of such
merchants as would be evident from the following list.104
Anandchand105 Rs. 1,00,000 Rashbehari Seth Rs. 50,000

Bishnudas Seth Rs. 60,000 Anandchand Rs. 49,000
Sebaram [Katma] Rs. 50,000 Anandchand Rs. 45,000
Ramkrishna Seth Rs. 50,000 Laksmichand Seth Rs. 45,000
Baburam Katma Rs. 50,000 Nidhiram Das Rs. 40,000
Shyamal Das Rs. 50,000 Anandaram Seth Rs. 38,859
Sahibram(?) Rs. 50,000
Total Rs. 6,77,859
Not that the Company always borrowed from big shroffs or

merchants; it borrowed even from small merchants too and also
in small amount as was available. This is apparent from the list
of borrowings in Kasimbazar on 24 April 1743:106
Thakurjee Acherjee Rs. 20,000 Dayaram Thakur Rs. 50,000

Nainsook Nath Rs. 5,000 Buckorsingh [?] Rs. 8,000
Satu Katma Rs. 10,000 Jamuna Das Rs. 3,000
Anandaram Coppree [Kapur] Rs. 10,000 Kissenchunder Rs. 3.000
Gobindram Karfarma Rs. 35,000 Kirtichand Katma Rs. 3,300
Dayaram Mayaram Rs. 15,000
Total Rs. 1,62,300
Similarly in Dacca too the Company procured money from

the local credit market even in small amount for securing its
investments. Thus we find that as late as April 1750 it borrowed
an amount of Rs. 77,000 at 9 per cent from the following mer-
chants:107
Kinkar Das Rs. 8,000
Santiram Rs. 7,000
Sobharam Poddar Rs. 7,000
Harri Krishna Das Rs. 12,000
Motiram Shaw Rs. 15,000
Soberam[?] Rs. 4,500
Onupchand Kissenchand Rs. 4,000
Balaram Roy Rs. 4,500
Koosalchand Motichand Rs. 15.000
Rs. 77,000
Generally the practice was to borrow money from merchants

and shroffs in large amount either at Calcutta or Kasimbazar,
and then to send the money to the subordinate factories in cash
or by bills of exchange. As the biggest creditor of the Company
was the house of Jagat Seth which had its kuthees108 or agencies
in all the trade marts of Bengal (and also in most trade centres
all over India), the Company borrowed from the house in all
the subordinate factories. But as mentioced earlier, the Company
also freely borrowed from other shroffs and merchants. It is
interesting to note that in Calcutta many of the merchants from
whom the Company quiet often borrowed money were them-
selves dadni merchants of the Company. The point is well borne
out by the fact that on 15 May 1746 the Company borrowed
Rs. 8,96,731 at 9 per cent interest from the following merchants
of whom many were Company’s dadni merchants.109
Bishnudas Seth Rs. 50,000 Brindaban Seth Rs. 40,000

Sebakchand Seth Rs. 43,000 Brigolldut [?] Seth Rs. 30,000
Gokulchand Seth Rs. 30,000 Raghunath Seth Rs. 32,000
Raghumitra [and? ] Krishna Chandra Seth Rs. 33,000
Samjee Rs. 21,000
Brajamohan Basak Rs. 30,000 Madhu Seth Rs. 22,731
Anandchand Rs. 100,000 Harimohan Basak Rs. 29,000
Kebalkissen Mendrew [?] Rs. 24,000 Gopimohan Basak Rs. 26,000
Radhakissen Gindary Jagganath Khan Rs. 32,000
[Girdhary?] Rs. 21,000
Rashbehari Seth Rs. 1,31,500 Krishna Gobinda
Chaudhuri Rs. 31,000
Chaitan Basak Rs. 25,500 Harrynarayan Khan Rs. 25,000
Ramkrishna Seth Rs. 41,000 Jayakrishna Katma Rs. 32,000
Govinda Chandra Seth Rs. 24,000 Nantu Katma Rs. 25,000
Total Rs. 8,96,731
It is significant to note that not only the merchants, bank-

ers and shroffs lent money to the European Companies, often
members of the ruling elite too invested their money with these
Companies. The most conspicuous case of such money lend-
ing by the ruling class, as to be found in the records, is that of
Kissendeb [Krishnadeb] Poddar who was the diwan of Hakim
Beg, the pachotra daroga,110 and an important member of the
administration.111 This Kissendeb was reported to have great
influence with the nawab and Hakim Beg, and a ‘person of very
great interest and authority in the government’.112 He lent the
English Company in Kasimbazar the following sums on different
dates.113
2 January 1750 – Rs. 25,000
1 March 1751 – Rs. 50,000
25 March 1751 – Rs. 50,000
17 May 1751 – Rs. 25,000
11 November 1751 – Rs. 25,000
6 April 1753 – Rs. 50,000
4 May 1753 – Rs. 100,000
16 August 1753 – Rs. 10,000
It appears that most of the money that Kissendeb lent the

Company belonged to his master Hakim Beg. Perhaps that is
why after Kissendeb’s death, Hakim Beg demanded from the
Company in Kasimbazar the repayment of an interest note due
to Kissendeb for Rs. 100,000 [principal] and the Kasimbazar
Council paid the amount with interest to Hakim Beg on 31 May
1754.114
Problems in Borrowing ‘
There is little doubt that the capital market in Bengal eased to a

great extent the European Companies’ problem of chronic short-
age of working capital for investments. But it was not all smooth
sailing for the Companies as they had to face various problems
in borrowing in the local money market.
(a) Short term Loans
One of the main difficulties in borrowing from Bengal’s credit

market was that as a general rule money was lent only on a short
term basis throughout the period under review and there was
no tradition of long term loan. As a result, the shroffs and mer-
chants, including the banking house of Jagat Seths, demanded
money as soon as the Europe ships arrived with their supply
of treasure. It was as impossible for the Companies to repay so
many creditors as it was to pay the merchants’ arrears. Even the
Jagat Seths often threatened the Companies with stoppage of
their business if their money was not repaid at the usual time.
The English factory at Dacca reported in November 1749 that
Jagat Seth Mahtab Rai’s gomasta ‘absolutely insisted on the pay-
ment of the sum due to his master threatening in rough terms
that in case of non-payment he would immediately put a stop
to our Business’.115 In Kasimbazar in 1749 it was with great
difficulty that the Company could borrow from the Seths Rs.
1,20,000 which it agreed to pay the nawab in connection with
the dispute of the Armenian ships.116 The Kasimbazar Council
wrote to Calcutta that the Seth’s gomasta Ruidas ‘complained
heavily of our not having paid them anything this season of the
large debt the Company owed them at that factory notwithstand-
ing so much treasure had been imported by several ships lately
arrived’.117 The Seths were often importunate in recovering their
money and insisted on being repaid the loan with the arrival of
the ships which put the Company into great inconvenience. The
Kasimbazar letter of 25 August 1750 illustrates the point clearly:
‘. . . the Seats on the arrival of the treasure sent to demand it and
gave them to understand that they expected the whole of their
debt at that factory should be paid off out of the money which
might arrive by this year’s shipping and instead of being able to
raise a further credit with them it was with the utmost difficulty
they could obtain their consent to apply any part of what was
lately sent them to the use of the investment. . . .’118 The desper-
ate situation that sometimes the factors were confronted with is
amply clear from the Dacca letter wherein the factors reported
in 1751 that the gomasta of the Seths insisted that the ‘whole
of the Debt to be immediately paid him’ and they requested the
Kasimbazar Council to prevail on Seth Mahtab Rai not to insist
on the payment of any of the money that it might send them
‘as it would stop their business and render it unpracticable for
them to purchase any Ready money goods’.119 A close study of
the Company records reveals that in Bengal during this period
money was lent for short term, generally for a few months and
the interest was calculated at a monthly rate, and the loan not
carried beyond a year.
(b) Occasional Scarcity
The Companies’ problem was aggravated by the fact that there

was occasional scarcity in tbe credit market resulting from vari-
ous factors, the most important of which was the reluctance of
the money-merchants and shroffs to show up money for fear of
exactions from the government. Though this was true in general
for the whole period under review, it became more acute in the
wake of the Maratha invasions in Bengal in the ’forties and the
early ’fifties. Even the great banking house of the Jagat Seths was
not free from the fear psychosis. Of course one should remember
that the nawab, Alivardi Khan, harassed by the Maratha incur-
sions was badly in need of money to raise and maintain a large
army, and hence spared almost none who possessed any money.
So though very good friends of the nawab they were, the Seths
were extremely scared of Alivardi’s extortions. This is evident
from Kasimbazar letter of 1746: ‘. . . they have not a prospect of
borrowing more . . . for the scarcity of money is so great that it
has been with some difficulty Futtichand’s house has been able
to pay for the bullion sold them. . . .’120 The Kasimbazar Coun-
cil further added that ‘at last it appears to us that if they [the
Seths] have money, they don’t care to produce it for fear of the
Government’. If this was the position of the Seths who were the
closest ally of the nawab and who wielded so much power in the
political and economic life of Bengal during this period, one can
well imagine the attitude of other shroffs and money merchants.
Similar was the occasional scarcity of money in the credit
market in Calcutta. Sometime the Calcutta Council would take
up money at interest in Calcutta and send it to Kasimbazar and
other subordinate factories. In 1746 the Calcutta Council wrote
to the Kasimbazar Council that it tried hard to procure money at
interest in order to supply Kasimbazar but ‘the scarcity of rupees
being so great that nobody can lend us that’. It recommended to
Kasimbazar to borrow ‘sufficient money’ to secure the invest-
ments. But Kasimbazar Council also found it extremely difficult
to borrow from the capital market.121 The situation was no bet-
ter at Patna, ‘they [Patna factors] being out of cash and none of
the shroffs in town caring to lend any money at interest’.122 The
impression one gets from the records of the Companies is that
sometime this scarcity of money in the credit market was quite
an inconvenience for the Companies, especially in the ’forties of
the eighteenth century.
A significant as also an important factor for the occasional
scarcity of money in Bengal’s capital market was the fact that
the availability of money depended to a large extent on the rate
of exchange to Agra. If the latter rate was high, money would
become scarce in Bengal, the reason being the shroffs and money
merchants would then employ their money in the exchange to

Agra, which was more profitable than lending even at 12 per
cent. This was the general pattern of money market in Bengal
throughout the second half of the seventeenth century and early
decades of the eighteenth. Our point is well borne out by the let-
ter of the Kasimbazar Council which noted in 1700: ‘We cannot
get any money at interest here being very little ready money in
the country and the exchange current from hence to Delhi and
Agra is but 6 per cent and the shroffs make use of what ready
money they have that way’.123 From about the third decade,
however, one does not find reference in the records to money
being employed in exchange to Agra. Probably by this time the
banking house of the Jagat Seth had already extended its sway in
the money and exchange marts of Northern India which perhaps
resulted in a stability in the market, and the wide fluctuation in
the exchange rate eliminated.
(c) High Rate of Interest
The high rate of interest, which was the prevalent rate in Bengal
till 1740, was quite a deterrent for the Companies’ borrowing
in the local money market. The Home authorities always dis-
couraged taking up money at 12 per cent which they considered
‘exorbitant’ and hence ‘rank poison’ to their commerce. They
often advised the different factories to ‘desist’ from running into
debt, ‘the interest of which eats deep and insensibly’.124 But as
we have noted, the servants of the Companies in Bengal could
hardly avoid borrowing money and accepted the high interest
rate as a necessary evil.
Though the house of Jagat Seth and consequently other shroffs
reduced the rate of interest to 9 per cent in 1740, it was often
difficult for the English Company to borrow money at that rate,
especially in the subordinate factories. As if taking advantage
of the helpless condition of the Company, the merchants and
shroffs occasionally tried to impose a higher rate of interest. The
Dacca factors wrote in August 1746 that ‘as we find it will be
impossible for us to raise any more money here under the rate of
12 per cent per annum Interest’, they desired the Calcutta Coun-
cil’s permission to borrow money at that rate of interest.125 The
latter wrote back immediately that it ‘positively ordered that on
no account they give more than 9 per cent for money at interest
for it would be of utmost ill consequence to our Honble Masters
should they give a higher premium to any one person and we
doubt not that who have money to spare will let them have it at
the same rate as we get everywhere else’.126 But the Dacca fac-
tors replied on 16 September 1746 that they saw no possibility
of borrowing money at 9 per cent ‘having already tried all the
shroffs in the place who insist on 12 per cent’.127 Even as late as
12 October they wrote to Calcutta that ‘they are sorry to inform
us that all their endeavours to obtain money from the shroffs of
that place at the rate of 9 per cent per annum have been fruit-
less’.128
The Calcutta Council believed that the situation in Dacca
would improve with the coming of Europe ships with treasure.
So when three ships from Europe arrived in October, it wrote
to Dacca that ‘we hope the arrival of these ships will give them
credit to Borrow money at the usual rate’.129 But the Dacca fac-
tors reported in November that they ‘can get no credit there’.130
There was no improvement in the situation even in 1747 when
the factors from Dacca reported that they could take up no money
there under 12 per cent interest.131 On the contrary the situation
deteriorated as no Europe ships arrived even by November. The
Dacca factory wrote that ‘no one being willing to lend them a
single rupee their credit being quite gone, none of the Company’s
ships arriving with any treasure’.132 However, with the arrival
of five ships from Europe with treasure, the Calcutta Council
hoped ‘it will raise their credit to enable them to go on with
the Investment’.133 But that was not to be. The Dacca factory
reported in January 1748 that without a supply of money either
from Calcutta or Kasimbazar ‘it will be impossible to send down
any Goods this season as they could get no money there’.134
Minting
The problem would have been much less for the Companies if
they could coin freely the treasure which was imported to Bengal
to pay for the export commodities. But despite their best efforts
almost throughout the period, the Companies failed to obtain
free minting privilege in Bengal. The main obstacle to such a
privilege to the Companies was the house of Jagat Seth who,
it seems, from the early third decade of the eighteenth century
monopolised the business of the mint. The English factors at
Dacca reported as early as January 1722 that they tried to obtain
the use of the mint but ‘Futtichund Shroff who it is said Trades
for the Nabob hindered, fear it will never be granted, the Nabob
gets so much by it’.135 Nonetheless the Court of Directors urged
upon the Calcutta Council to try to get the privilege of minting
coins and wrote in one of its letters: ‘We hope our now consti-
tuted President and Council will give us a convincing specimen
of their ability and zeal for our Service among other things in
obtaining the grant of Coynage. We have so often and with such
earnestness prest you to endeavour and shew’d you the loss we
suffered and wherein in the sale of Silver and by the batta on
our Madras rupees we can’t add thereto.’136 But all the efforts on
the part of the Company came to nothing. Alexander Hume, the
chief of the Ostend Company in Bengal, wrote in 1730 that he
did not earnestly try for the minting privilege ‘lest the Company
lost a good friend in Fatechand who has the Tansal [tancsal-
mint] almost wholly in his hands’.137
The Company’s servants in Bengal, however, did not desist
from trying to secure coining privileges in the Murshidabad
mint. But they were at the same time conscious of the reality of
the situation. Thus the Calcutta Council ‘forbid’ Patna in 1741
applying to the Court [Durbar at Delhi] for the ‘liberty of the
mint’ as this would be of no use so long as Fatechand Seth was
alive and ‘in these unsettled times’.138 Next year the Kasimbazar
Council suggested that in view of the government’s great need
for money to ward off the Marathas, ‘possibly a sum properly
applied might even procure the liberty of the mint’.139 But after
serious consideration it gave up the idea because such a step

might ‘exasperate Futtichund so far as to make him impede the
Company’s business’.140 Even as late as 1753 William Watts
wrote from Kasimbazar that the establishment of a mint at
Calcutta ‘could not be effected with the Nabob as it would be
overset by Jagatseat . . . as he is a great gainer by being the
sole purchaser of all Bullion imported’.141 Though the Company
secured the privilege of establishing a mint in Calcutta by the
Treaty of Alinagar (February 1756), and established its protec-
torate over Bengal following the battle of Plassey (June 1757),
the Seths still remained the main obstacle to Company’s mint-
ing coins. The Bengal General Letter to the Court of Directors
pointed out in December 1759 that as the coining of siccas in
Calcutta interfered so much with the interest of the Seths that
‘they will not fail of throwing every obstacle in our way to dep-
recate the value of our money in the country, notwithstanding
its weight and standard is in every respect as good as the siccas
of Murshidabad so that a loss of Batta will always arise on our
money, let our influence at the Durbar be ever so great’.142 Of
course soon the story was very different, the Seths approaching
their doom fast and the English having the stranglehold over the
political and economic life of Bengal.143
Selling Bullion
The European Companies would have been in a much better

position than they actually were, had it been possible for them
to sell the imported treasure in the open market or pay for their
investments in bullion. But as a result of the monopoly of the
mint business by the house of Jagat Seth, they were forced to
sell their treasure imported to Bengal, both bullion and specie,
to the banking house. The dadni merchants too were in general
reluctant to accept bullion for their supplies, and only occasion-
ally and very rarely agreed to be paid in bullion.143 In 1746 the
English Company offered bullion to the merchants in payment
of what was ‘due to them on account the investment’ but they
refused it alleging that nothing but ‘Rupees would pass at the
aurungs [and] that they could no ways turn the Bullion into
Rupees but by selling it to Juggutseat’s House who they were
well assured would not buy it of them’.144 Obviously the Compa-
nies had little choice but to sell the bullion to the Jagat Seths and
they had to accept whatever price the house offered.
Though according to an estimate of Hedges (the then Presi-
dent in Bengal) and Feake in 1718, 240 sicca weight of English
standard silver produced nearest to 218¾ sicca rupees, and the
shroffs and merchants received sicca Rs. 210: 7: 9 for 240 sicca
weight of silver after paying 5 per cent custom duties, the house
of Jagat Seth generally paid Rs. 203 for 240 sicca weight.145 On
a visit to the Kasimbazar factory in September 1743 Fatechand
Seth informed the English that the nawab had tried the French
silver in his own presence and adjusted the value at 205 siccas
for 240 sicca weight and that if he found the English silver of
the same fineness, he would allow the same rate to them. The
Calcutta Council advised Kasimbazar to agree to the rate and
to dispose of the bullion ‘lying dead’ (125 chests) there which
would help them to pay the debts and lessen the ‘heavy load of
interest’.146
Fatechand made a trial of the English silver at the mint in
November 1743 and submitted the valuation made at the mint
as also the rates at which he would take it:147
Estimates Value in the Mint Fatechand’s rate

Pillar Dollars @ 206 siccas per @ 204 siccas per
240 sicca wt. 240 sicca wt
Mexico @ 205 siccas per @ 203 siccas per
French Crowns @ 207 siccas per @ 205 siccas per
Duccatoons 2:7:3 siccas each 2:6:9 siccas each
As the English silver consisted mainly of Mexico dollars,

this rate was lower than what Fatechand said he would take at.
While the Kasimbazar Council made representation to him, he
shrewdly replied that he had not then tried the silver and that
he would expect some profit over the value in the mint for his
troubles which he thought ‘little enough in the price he proposed

to give’.148 The Calcutta Council advised Kasimbazar that if
representation to Fatechand proved ‘ineffectual’, then to let him
have the silver but at the same time ‘to acquaint him that we
cannot think of Importing any more silver if this is to be made
a precedent of’.149 Fatechand knew well that the Company was
bound to import treasure in order to pay for its investments in
Bengal and hence was least concerned with the English represen-
tation. The French and the Dutch too were in the same difficulty.
The Kasimbazar Consultation of 18 November 1743 noted: ‘The
French are in the same dilemma as us having their bullion in the
factory without being able to come to terms with him [Jagat Seth
Fatechand] nor have the Dutch coined a Rupee having had a
dispute with the Government which is not yet adjusted.’150
The Court of Directors, knowing little as it did about Bengal’s
money market, thought of some alternative measures of freeing
from the clutches of Fatechand Seth. It instructed the Calcutta
Council in 1745 in the following manner: ‘By delivering our sil-
ver to the merchants at the current value as part of their dadney,
it may prevent Fatehchund’s lowering it according to his will and
pleasure, on his shuffling in such an unheard of manner. Some
of the other great shroffs should have been tryed, whereas offers
being made to him only, flung the Power wholly into his hands
off getting it at his own price’.151 But as we have seen earlier the
dadni merchants were almost ‘averse’ to take bullion in lieu of
their supplies and no other shroff would even dare buy bullion
from the Company.
The death of Fatechand in 1744, the Court earnestly hoped,
would change the situation for better and it expected that the
Company’s bullion would now yield a higher price by Bengal
Council’s ‘prudent management of his young successors in
the Business’.152 Bat unfortunately for the Directors, that was
not to be as will be seen shortly. Fatechand’s successors, Jagat
Seth Mahtab Rai and Maharaja Swaroopchand actually tried
to reduce the rate that was allowed by their grandfather. In
June 1745 the Company requested the Seths to buy the bullion
imported recently which they ‘agreed to take at the prices paid
for the last provided we will send it up there [Kasimbazar] for

they will receive it nowhere else’. When the Kasimbazar Council
proposed to them. ‘to raise the price to what Futtichund for-
merly paid’ for the Company’s silver, they absolutely refused
to advance anything on the last price alleging that it was not
owing to them but the government that the price was lowered.153
Again in June 1746 the English wanted to sell their silver but
Swaroopchand offered no more than the ‘last price given namely
203 sicca rupees for 240 sicca weight’.154 In October of the same
year again the Seths agreed to take English bullion but refused to
give ‘more than last year’.155 The Calcutta Council assessed the
situation well and wrote to Kasimbazar: ‘We cannot pretend to
dispute the price of bullion with Futtichund’s house at this time
and that we agree to let them have it at the price of last year’.153
Soon the Jagat Seths raised another difficulty for the Company
in the sale of its imported treasure. The Kasimbazar Council
reported to Calcutta in November 1746 that Seth Mahtab Rai
had started an objection in Kasimbazar price of silver at the rate
of 203 siccas for 240 sicca weight stating that as he received the
bullion in Calcutta he was expected to pay no more for it than it
was sold there. If the Company wanted the Kasimbazar price, he
was to be allowed the charges of sending the silver from Calcutta
to Kasimbazar.157 The Calcutta Council advised Kasimbazar to
acquaint him that his gomasta demanded earlier the charges of
carrying the silver to Kasimbazar but later on relinquished the
demand. At the same time it urged Kasimbazar Council ‘in case
be persists in requiring it of them, they must agree to it rather
than alter the price of the bullion’.158 Next year the Seths refused
to pay more than Rs. 201 siccas for 240 sicca weight ‘alleging
by way of excuse to the imposition that the profit thereon is not
near so great as formerly occasioned by Rupees being made of
finer silver than usual’.159 The Calcutta Council wrote in utter
desperation that ‘we must submit thereto as we had it not in our
power to resist their imposition, there being no other purchas-
ers’.160 The Seths demanded a deduction of one per cent in the
price of silver that they bought from the English in view of the
charges and risk involved in bringing the silver from Calcutta to
Kasimbazar. The Calcutta Council strongly objected to this and

asked Kasimbazar Council not to give in to the Seths’ demand.161
But the Company could not hold against the Seths for long and
agreed in October 1750 to allow the Ssths ‘to deduct half per
cent in consideration of the risque and charges up’.162
Madras and Arcot Rupees
The Company’s problem was accentuated by the fact that the

Madras and Arcot rupees which it imported to Bengal were cur-
rent only at a batta or discount which again was manipulated
by the house of Jagat Seth to its advantage. One of the reasons
why the Company wanted the minting privilege for coining
sicca rupees was that ‘at most aurungs Madras rupees go for
no more than Current whereas siccas at 3, 4 or 5 per cent more,
the merchants at Fort William take them at 10 per cent’.163 The
Kasimbazar Council reported in 1731 that at the ‘instigation’
of Fatechand, a representation was made to the nawab (though
not true at all) that the English brought only Madras and Arcot
rupees and no bullion that season whereupon the nawab had
forbidden the currency of those rupees, and ordered that they
should be received only as bullion. Fatechand was the first to
pay obediance to the order by putting fifty thousand rupees into
the mint to be melted down. But the other shroffs were ‘very
clamorous upon the occasion, as they are likely to be great suf-
ferers by it’.164
The batta or discount on Madras and Arcot rupees rose or
fell according to the manipulation of the Jagat Seths. The house
could influence the nawab to issue orders relating to the batta
on Madras and Arcot rupees in its favour. This is quite clear
from the Bengal General Letter of 24 January 1737: ‘Futtichund
has this year again influenced the Nabob to lessen the value of
Madras and Arcot Rupees and procured orders that 107¾ of
either should pass for no more than 100 siccas . . . they used to
pass 103½ Madras for 100 siccas’.165 Again in 1738 the nawab
issued an order ‘forbidding Arcot rupees to go current’ and ask-
ing all persons that had any in their possession to bring them to
Fatechand’s house to be changed into siccas ‘which he had settled

at twelve and half per cent Batta on Arcot Rupees’.166 Similarly in
1750 the Seths obtained an order from the nawab which ‘forbids
all persons besides themselves from purchasing any silver or tak-
ing any Arcot rupees’.167 The Company was helpless in the face
of these impositions and could hardly do anything but to submit
with a grudge. Even as late as 1752 the diwan Roy Kiritchand
ordered that all money whether bullion or rupees must be sent to
the mint at Murshidabad to be coined into siccas or disposed off
to the house of Jagat Seth, and that the Company should not pay
any money to its merchants except in new siccas as ‘no others
are to pass current in the country’. The Company found that
on disposing of the Arcot rupees to Jagat Seth’s house ‘they will
allow us only 87: 11: 3 sicca rupees for 100 Arcot rupees and
ninety two siccas for one hundred Bombay Rupees, by which a
difference arises on the Arcot Rupees of about 14 per cent and
on Bombay 9 per cent which is 7½ per cent more than the Batta
was on Arcot Rupees in the year 1750’.168
The dadni merchants too were often reluctant to take Madras
or Arcot rupees in payment for their supplies because of the fact
they suffered loss in exchanging those rupees for siccas, thus
adding to the Company’s difficulties. In 1738 the Kasimbazar
Council acquainted the merchants that it expected they would
take Madras rupees in part of dadni at the usual batta but
they represented that they would be great sufferers by it as the
government would oblige them to pay a duty of 2½ per cent
and that they would be at further loss in ‘putting them off’. The
Council knew well that the only remedy was to seek the help of
the Jagat Seths in the matter. So it asked the broker to ‘solicit his
[Fatechand’s] interest for the currency of them [Madras rupees]
again’. Fatechand Seth was shrewd enough to tell the English bro-
ker that ‘the French had been the sole occasion of our complaint
by agreeing to pay a custom on Madras and Arcot rupees and
that it was not in his power to be of any service to us he himself
not being exempted from this custom’. But it was ultimately he
who came to the rescue of the Company and told the broker that
he was willing to take 106¼ Madras rupees for 100 siccas which
was half per cent more than ‘we could Put them off for anywhere
else’.169 Throughout the period, however, the Company tried to
coerce the merchants to take part of their dadni in Madras and
Arcot rupees. The Kasimbazar Council reported in 1752 that it
had paid their merchants with Madras rupees at 106 rupees per
100 siccas which was ‘the lowest batta they could take them at,
and at which rate there is a less loss arising to the Company than
on any other sort’.170
Intra-Asiatic and Freight Trade
Though the local credit market eased to a great extent the Com-
pany’s problem of shortage of working capital, it often tried to
augment its resources by engaging in Intra-Asiatic and freight
trade as also borrowing from the servants of the European Com-
panies including its own. The Intra-Asiatic trade and freight
voyages not only provided additional sources of funds for inves-
ment but also saved the Company the demurrage for its ships
lying idle in Bengal. The Dutch and the French too did the same.
The ships which failed to sail for Europe in the proper season
were obliged to stay on, thus incurring heavy demurrage. Under
the circumstances the Companies asked their servants to use
their best efforts to employ these ships in Intra-Asiatic commerce
and freight trade. These commercial ventures certainly helped
the Companies to some extent to solve the problem of shortage
of liquid capital, though in the absence of adequate data it is not
possible to make any accurate estimate of the proceeds from such
ventures. Only occasional references to the earnings of some of
the ships are to be found in the records. In the first two decades
of the eighteenth century the Intra-Asiatic trade was mostly in
the Bengal-Surat-Persia sector. This trend was continued in the
rest of our period though the trade to Surat declined a bit from
about the early ’thirties. The Indian and Armenian merchants at
Hugli and Calcutta often freighted European ships for particu-
lar voyage to Surat or Persia either jointly or on their separate
account, especially in the first two decades of the 18th century.171
A few illustrations of the Intra-Asiatic and freight voyages will
give an indication of the earnings from such endeavours. It was

reported in January 1728 that the ship Hertford ‘being ordered a
country voyage’ sailed for Surat ‘with a tolerable good freight’.172
In the preceding year ship Sarum’s earnings on a voyage to Surat
produced only Rs. 18,550, ‘Surat almost being ruined by country
Government’.173 Consequent to the prospects of a poor freight,
the ship Compton was let out in October 1728 for a freight
voyage to Jeddah for a sum of Rs. 20,000 which was propor-
tionate to the sum for which Walpole was let out the previous
year.174 The Calcutta Council reported in 1737 that the earning
of Halifax’s voyage to Surat was Rs. 48,304.175 In November
1754 the Company let out ship St. George to Captain Rannie
for Rs. 40,000.176
But even in Intra-Asiatic trade and freight voyages the Com-
pany had to face various difficulties. The English Company had
to compete with other European Companies and Muslim ship-
owners. As other European Companies, mainly the Dutch and
the French, were also engaged in Intra-Asiatic trade, the English
Company had to face their rivalry. In freight trade, the main
competitors were the French and Muslims. The Calcutta Coun-
cil reported in 1727 that two Muslim ships arrived from Surat
and the super cargoes told the merchants at Murshidabad that
their ships were safer than those of the English who were then
at war with Angria. They further informed the merchants that
they would carry goods ‘at half freight and no expence in boat
hire’. And they secured most of the freight goods.177 Next year
the Council wrote that the Muslim ships ‘have run away with
the major parts of the freights at Rs. 4 and 4½ per maund’. It
further added that ‘were the English to lower theirs to 4 Rupees
per maund the Moors would still sink under even to 1 Rupee
per maund because [they] can afford to take less’.178 In July that
year the Council noted that the ship Compton could be set up
for a freight voyage to Surat but ‘cannot expect many freight
Bales because the French and Moors take in Bales at freight’.178
In 1729 a French Captain came to Bengal in a large Muslim ship
with a French pass and ‘has got the major part of the freight by
agreeing for it at Surat at an under rate’.180 The Court of Direc-

tors too pointed out the lowering of earnings from freight trade,
especially to Surat, because of the ‘badness of Trade, and the low
freights which the Moors ships carrying goods for who sailing at
much less charge than our shipping can afford to do’.181
Borrowing from Europeans
The English Company also borrowed from local Europeans

including servants of various European Companies, free mer-
chants and ships’ Captains. These short-term borrowings which
were really bridging finance did to some extent ease the Com-
pany’s problem of cash shortage for investments in the proper
season. In the early decades of the eighteenth century the Com-
pany’s servants deposited money with the Company against bills
of exchange on the Court of Directors to be paid in England
As for example, Abraham Adams, the accountant at Calcutta,
deposited Rs. 27,728 at Calcutta against a bill of exchange on
the Court prior to his departure for England in 1716.182 Even
the Presidents of the Fort William Council remitted money to
England by this method. Thus we find Robert Hedges, the Presi-
dent in Bengal, transferred Rs. 40,045 by means of a bill on the
Court in 1717.183 Samuel Feake, the next President, received a
bill on the Court for his deposits amounting to Rs. 10,000 in
1718,184 In the same year Henry Frankland who was the export
warehouse keeper paid a sum of Rs. 80,000 into the Company’s
treasury in Calcutta for which he received a bill of exchange
on the Court for £ 11,000.185 As a matter of fact the Company
borrowed money locally from the Europeans in Bengal almost
throughout the period under review, though it is difficult to com-
pute the amount borrowed yearly by the Company. However, an
idea of the amount borrowed from the Europeans could be given
for some particular years. In the period of one year from June
1746 to May 1747 the English Company borrowed from the
Europeans Rs. 475,640 while next year, from June 1747 to May
1748, the amount borrowed was Rs. 510,967.186
Summing up
To sum up, it can be said with little doubt that the European
Companies were able to solve, though with some difficulty, the
problems facing them in securing their investments in Bengal.
This will be evident from the increasing volume of the European
trade during the period under review. The Companies tried to
solve their main problem in procuring investments – the acute
shortage of working capital – by recourse to borrowing from
local credit market which was highly efficient and well orga-
nized, and this local money market was the main source of
borrowings of the Companies. They also borrowed from local
Europeans including their servants and free merchants, and tried
to augment their finances by earnings from Intra-Asiatic trade
and freight voyages. The main obstacles in borrowing from local
capital market were the tradition of short-term loan extending
not beyond a few months generally, the occasional scarcity of
money in the market and the high rate of interest. The Com-
panies could hardly modify this traditional system. The interest
rate was, however, lowered but that was surely granted as a grace
rather than anything else by the house of Jagat Seths. They faced
various problems in converting the bullion and failed to procure
any minting privilege. Neither could they sell the imported bul-
lion and specie in the open market nor could they freely impose
the Madras and Arcot rupees on the merchants and markets.
In all these they were hindered and harassed by the Jagat Seths
who were the most powerful economic force in Bengal under the
patronage of the nawabs. Thus the Companies could do little
to change even the small detail in the traditional commercial
organization. The only new element, if any, that they could intro-
duce in the traditional system was perhaps the office of broker
or Chief merchant. Though the brokers were not unknown in
the traditional organization of commerce, the role played by
the brokers of the European Companies in the commercial and
social life was something new in the traditional system. The
brokers of these Companies were altogether a new institution
in the commercial life of the country, quite different from the
traditional Indian broker in their functions and importance. The

other new elements introduced by the Europeans were mainly in
the field of organization of trade and procurement system which
will be discussed in a later paper. It is also interesting to note that
a study of the European investments gives us an insight, however
inadequate, into the working of the complex structure of tra-
ditional commercial organization, credit machinery and capital
market, and the mercantile class in the pre-Colonial period.
BPC Bengal Public Consultations, India Office Library

and Records (IOLR)
OC Original Correspondence, IOLR
VOC Verenigde Oost-Indische Compagnie (earlier K.A.
– Koliaal Archief), Algemeen Rijksarchief, The
Hague
DB Despatch Book, IOLR
C & B Abstr. Coust and Bay Abstracts, IOLR
Hume’s Memorie The Memorie of Alexander Hume, 1730, Stadsar-
cbief Antwerpen, General Indische Compagnie,
5769
Orme Mss Orme Manuscripts, IOLR
Fact Records Factory Records, Calcutta, Dacca, Kasimbazar,
IOLR
NAI National Archives of India
Beng. Letters Recd Bengal Letters Received, IOLR
Notes
1. The term ‘investment’ is used here in the same sense as that in which
the Companies used to denote their purchases in India.
2. S. Chaudhuri, Trade and Commercial Organization in Bengal,
Calcutta, 1975, p. 144; John Fryer, A New Account of East India and
Persia, 1672-81, vol. 1, London, 1909, p. 217; J. Ovington, A Voyage
to Surat in the Year 1689, London, 1929, p. 401.
3. It was reported that Vithaldas Parekh paid Rs. 100,000 to become
the broker of the Company at Surat. Another broker, Rustomjee
Maneckjee, paid Rs. 20,000 as customary present to the English
Company, vide, O. C. 7222, para 48, vol. 58, 14 September 1700. The
Bengal factors reported in 1703 that ‘it was never the custom here
in Bengal for brokers to buy their places’, vide, O. C. 8110, vol. 65,
25 January 1703.
4. For a detailed study of the Seths of Calcutta. See, Benoy Ghose, ‘Some
Old Family Founders in the 18th Century Calcutta’, Bengal Past and
Present, vol. 79, pp. 42-55.
5. Factory Records, Calcutta, vol. 2, pt. I, f. 133.
6. Ibid., vol. 3, pt. II, f. 90.
7. B.P.C., Range 1, vol. 2, f. 189a.
8. For details of the Court’s allegations against Janardan Seth, see,
S. Chaudhuri, op. cit., p. 145
9. D.B., vol. 98, f. 106, 13 January 1714.
10. B.P.C., Range 1, vol. 2, f. 189a, C & B Abst., vol. 1, f. 342.
11. D.B., vol. 99, f. 189, 15 February 1716.
12. Ibid., vol. 98, f. 462, 12 January 1715.
13. Quoted in Benoy Ghose, op. cit., p. 47.
14. C. & B. Abst., vol. 1, f. 472.
15. B.P.C., Range 1, vol. 30, ff. 26a, 31a; C. & B. Abstr., vol. 2, f. 28.
16. D.B., vol. 99, ff. 76-7, 18 January 1717.
17. C & B. Abstr., vol. 2, f. 175, para 57, 6 December 1718.
18. Ibid., vol. 2, f. 79, para 42, 27 November 1716.
19. Ibid., vol. 2, f. 175, para 58, 6 December 1718.
20. Ibid., vol. 2, f. 276, para 72, 28 December 1720.
21. B.P.C., Range 1, vol. 4, ff. 46-46a; C. & B. Abstr., vol. 2, f. 175, para
59, 6 December 1718.
22. C & B. Abstr., vol. 2, ff. 236-7, para 82, 29 November 1719; f. 320,
para 60, 31 January 1722.
23. Ibid., vol. 2, f. 237, para 83, 29 November 1719.
24. Ibid., vol. 2, f. 320, para 60, 31 January 1722.
25. D.B., vol. 101, f. 463, para 36, 14 February 1723.
26. C. & B. Abstr., vol. 2, f. 437, para 53, 9 January 1725. On 6 December
1718 the Bengal Council referred to Bishnudas as a weak brother of
the family, the most unqualified, vide, C. & B. Abstr., vol. 2, f. 172,
para 35. But Benoy Ghose holds that Bishnudas was son of Janardan
and nephew of Baranashi Seth, vide, Benoy Ghose, op. cit., p. 49.
27. B.P.C., Range 1, vol. 5, f. 568, 9 November 1724.
28. C & B. Abstr., vol. 2, f. 586, para 54, 28 January 1728.
29. B.P.C., Range 1, vol. 8, f. 419, 21 July 1731.
30. Ibid., ff. 434, 434a, Annex to Consult., 9 August 1731.
31. Ibid., f. 434a, Annex to Consult., 9 August 1731.
32. Ibid., ff. 435-36, Annex to Consult., 9 August 1731.
It is surprising that K.N. Chaudhuri completely ignored this report
which throws interesting sidelight on the working of the dadni system.
33. B.P.C., Range 1, vol. 9, f. 9-9a, 13 March 1732; C & B. Abstr., vol. 3,
f. 233, para 4, 26 June 1732. Benoy Ghose (op. cit., p. 49) holds that
Samsundar was Bishnudas’ eldest son but a Fort William General (C &
B Abstr., vol. 2, para, 82, 29 November 1719) mentions categorically
that Samsundar was Baranasi’s son.
34. D.B., vol. 106, f. 182, para 38, 29 January 1734.
35. Ibid., f. 183, para 41, 29 January 1734.
36. C & B., Abstr., vol. 4, ff. 66-7, para 52, 24 January 1735.
37. D.B., vol. 107, ff. 414-15, para 17, 19, 21, 2 February 1738.
38. B.P.C., Range 1, vol. 13, f. 429a, 20 December 1738, f. 456a,
17 January 1739.
39. Ibid., f. 434, 23 December 1738.
40. For the Council’s reasons for confirming Samsundar Seth, see, C & B.
Abstr., vol. 4, f. 308, para 99, 24 December 1739.
41. B.P.C., Range 1, vol. 13, f. 324a, 14 August 1738.
42. C & B., Abstr., vol. 4, ff. 285-6, paras 108-9, 29 January 1739.
43. D.B., vol. 108, f. 155, para 95, 21 March 1740.
44. Ibid., para 96-7, 21 March 1740.
45. C & B. Abstr., vol. 4, f. 348, para 160, 3 January 1741.
46. Ibid., f. 372, para 4, 26 July 1741.
47. Ibid., f. 379, para 98, 11 December 1741.
48. Orme Mss., India VI, f. 1513, Letter of Captain Fenwick on Company’s
affairs in Bengal.
49. D.B., vol. III, f. 537, para 38, 24 January 1753.
50. For this change over and motives behind it, see my forthcoming article
in the Journal of the Economic and Social History of the Orient, February
1988.
51. C & B. Abstr., vol. 5, f. 428, para 62, 3 September 1753; Beng. Letters
Recd., vol. 22, ff. 428-9; FWIHC, vol. l, p. 692.
52. D.B., vol. 112, f. 214, para 48, 23 January 1755.
53. For Kantu’s affair, see, B.P.C., Range 1, vol. 8, ff 203-3a, 219, 226a,
234-34a, 236a, 237, 248-48a, 249-49a, 256, 257-60.
55. Cotton piece-good.
56. Ibid., f. 203, 28 April 1730.
57. Ibid., f. 249-49a, 22 June 1730.
58. Ibid., f. 248a, 22 June 1730.
59. Ibid., f. 298, 5 October 1730.
60. Ibid., f. 321, 7 December 1730.
61. Fact. Records, Kasimbazar, vol. 5, Consult. 5 February, 21 February
and 19 March 1737; C & B. Abstr., vol. 4, f. 210, para 4, 15 February
1737; B.P.C., Range 1, vol. 12, f. 162, 16 April 1737.
62. Ibid., vol. 6, Consult. 16 September 1742.
63. Beng. Letters Recd., vol. 21, ff. 283-4, 10 January 1748; B.P.C., Range
1, vol. 19, f. 239, 15 May 1747, FWIHC, vol. 1, p. 232.
64. Hume’s Memoirs. I am gratefully indebted to Prof. K.N. Chaudhuri

for allowing me to make a photocopy of this document from his own
copy of the same.
65. Ibid.
66. Fact. Records, Dacca, vol. 2, Consult. 27 Janury 1738.
67. D.B., 28 January 1659, vol. 84, f. 411. The shipping season in Bengal
was generally from September to January.
68. B.P.C., Range 1, vol. 4, f. 274a, 18 August 1720.
69. Ibid., ff. 404a-405, 29 May 1721.
70. Ibid., f. 432, 8 August 1721.
71. S. Chaudhuri, op. cit., p. 114. For the Company’s borrowings and
debts in Calcutta and Kasimbazar in the first two decades of the 18th
century, see, Ibid, pp. 114-16. One lakh is one hundred thousand.
72. D.B., vol. 101, f. 372, para 32, 21 December 1722; C & B., Abstr.,
vol. 5, f. 117, para 261, 10 January 1748.
73. V.O.C, 2030, ff. 156-8, 16 March 1725; all fractions rounded to
nearest figure.
74. One wonders why – was it because the Katmas were the most influential
merchant and trader family (specialised in money lending and trade in
silk, silk piece goods?)
75. The house used to lend money in the name of Jagath Seth but sometimes
also in the name of and referred to as Manickchand and Anandchand,
or simply Anandchand.
76. The same Balai Katma – the Company’s broker, see Section on
Kasimbazar broker.
77. Satu might have been the same as Hatu, in Kasimbazar broker section.
78. Taking only amount exceeding Rs. 30,000.
79. Hume’s ‘Memorie’.
80. Indrani Ray, ‘Some Aspects of French Presence in Bengal, 1731-40’,
Calcutta Historical Journal, vol. 1, no. 1, July 1976, p. 99.
81. Ibid, pp. 100-1.
82. J.H. Little, The House of Jagat Seth, Calcutta, 1967, p. X (Introduction
by N.K. Sinha); see also Kantu Papers. B.P.C., Range], f. 256, Annexure
to Consult, 29 June 1730.
83. Computed from V.O.C. 2874.
84. J. H. Little, op. cit., p. xi, Introduction by N.K. Sinha.
85. Orme Mss., India VI, f. 1525; Watts’ letter to Clive, 18 February 1757,
quoted in S.C. Hill, Bengal in 1756-57, vol. II, London, 1905, p. 229.
86. B.P.C., vol. 6, f.564a, 12 March 1728.
87. D.B., vol. 105, ff. 688-9, para 100, 6 February 1733; C & B. Abstr.,
vol. 3, para 86, f. 345, 2 December 1733. At the rate of 2s. 6d per
rupee, the Company paid an interest of Rs. 32,000 at the rate of 12 per
cent interest at Kasimbazar in the year 1731-2.
88. C & B. Abstr., vol. 5, f. 59, para 18, 11 August 1745.

89. Fact. Records, Dacca: Consult. 8 September 1749.
90. B.P.C., Range 1, vol. 16, f. 177, 6 June 1743.
91. Ibid., vol. 16, ff. 184a, 203a, 13 June 1743.
92. For a detailed study of the rise and growth of the banking house
of the Jagat Seths and the role of these Seths in the economic and
political life of Bengal, see my forthcoming article in the Journal of
the Economic and Social History of the Orient, February 1988. This
house was not related to the Seths of Calcutta.
93. Fact. Records, Dacca, vol. 2, Consult. 30 July 1746.
94. Ibid., Kasimbazar, vol. 7, 15 April 1746; 22 August 1748.
95. Ibid., vol. 10, Consult. 11 November 1751.
96. B.P.C., Range 1, vol. 15, f 84a, 29 March 1742.
97. C & B. Abstr., vol. 3, f. 345, para 86, 26 December 1733.
98. B.P.C., Range 1, vol.14, ff 317, 317a, 11 December 1740, f. 337,
26 December 1740.
99. Ibid., vol. 14, f. 338, 26 December 1740.
100. Fact. Records, Kasimbazar, vol. 6, Consult. 5 February 1741.
101. Ibid., vol. 6, Consult. 24 April 1743.
102. Ibid., vol. 5, Consult. 26 March 1733.
103. Ibid., vol. 5, Consult. 14 June 1733.
104. B.P.C., Range 1, vol. 17, ff. 106-6a, 17 May 1744.
105. This Anandchand, and Manickchand Anandchand definitely refer to
the house of Jagat Seths, c.f., V.O.C. 2849 (K.A. 2741), f. 128.
106. Factory Records, Kasimbazar, vol. 6, Consult. 24 April 1743.
107. Ibid., Dacca, vol. 3, Consult. 19 April 1750.
108. Agency house, subordinate office.
109. B.P.C., Range 1, vol. 18, f. 236, 15 May 1746.
110. Daroga of the customs houses. Jan Karseboom, the chief of the Dutch
Company in Bengal, describes Hakim Beg in 1755 as ‘Daroga van de
Pansjoutra of thol platsen’ (Daroga of Pachotra or Tollplaces [custom
houses]), and ‘een grote favoriet van den Nawab’ (a great favourite of
the Nawab), V.O.C. 2862 (K.A.) 2754, ff. 125vo, 127vo.
111. He emerged as the key figure in the Nawab’s relations with the
English Company when Alivardi gave him the charge of the nawab’s
relations with the Europeans in Bengal in 1750, B.P.C. Range 1,
vol. 23, f. 306a, 25 August 1750.
112. Fact. Records, Kasimbazar, vol. 10, 10 October 1751; vol. 11, 2 Dec-
ember 1751.
113. Computed from Fact. Records, Kasimbazar, vols. 9, 10, 12.
114. Fact. Records, Kasimbazar, vol. 12, Consult. 4 May 1753; 31 May
1754.
115. Fact. Records, Dacca, vol. 3, 9 November 1749; B.P.C., Range 1,
vol. 22, f. 420a, 15 November 1749.
116. For this, see my forthcoming article in JESHO.

117. B.P.C., Range 1, vol. 22, f. 338-338a, 20 October 1749.
118. Ibid, vol. 23, f. 303a, 25 August 1750.
119. Beng. Letters Recd., vol. 22, f. 117; Home Misc. (NAI), vol. 16,
p. 189, para 83, Letters to Court, February 1751; C & B. Abstr.,
vol. 5, f. 275.
120. Fact. Records, Kasimbazar, vol. 7, Consult. 22 June 1746; B.P.C.,
Range 1, vol. 18, f. 265a, 30 June 1746.
122. Ibid., vol. 18, f. 302a, 29 July 1746.
123. Fact. Records, Calcutta, vol. 10, pt. II, f. 92.
124. D.B., vol. 95, f. 519, 18 January 1705.
125. Ibid.,, Dacca, vol. 2, Consult. 19 August 1746.
126. B.P.C., Range 1, vol. 18, f. 354a, 5 September 1746.
127. Fact. Records, Dacca, vol. 2, Consult. 16 September 1746.
128. B.P.C. Range 1, vol. 18, f. 391a, 12 October 1746.
129. Ibid., f. 408, 16 October 1746.
130. Ibid., f. 434, 11 November 1746.
131. Ibid., f. 76a, 31 July 1747.
132. Ibid., f. 235a, 24 November 1747.
133. Ibid., f. 283a, 28 December 1747.
134. Home Misc. (NAI), vol. 13, f. 85, para 70, Letter to Court, 10 January
1748; Beng. Letters Recd., vol. 21, f. 237; FWIHC, vol. 1, pp. 203-4
135. C. & B. Abstr., vol. 2, f. 321, para 77, 31 January 1722.
136. D.B., vol. 101, f. 162, para 56, 16 February 1722.
137. Hume’s Memoire.
138. C. & B. Abstr., vol. 4, f. 336, para 124, 3 June 1741.
139. B.P.C., Range 1, vol. 15, f. 334a, 19 October 1742.
140. C & B. Abstr., vol. 4, f. 430, para 8, 30 January 1743; B.P.C., Range
1, vol. 16, f. 92, 29 March 1743.
141. Ibid., vol. 5, f. 399, 12 February 1753; Beng. Letters Recd., vol. 22,
ff. 384-5, 8 Feb. 1753.
142. Public Letter to Court (NAI), sr. no. 6, f. 25, para 60, Bengal General
Letter to the Court of Directors. 29 December 1759.
143. C. & B. Abstr., vol. 5, f. 69, para 14, 4 February 1746; f. 80, para
66, 30 November 1746; B.P.C., vol. 24, f. 49, 31 January 1751.
Occasionally however Umichand and some of the substantial dadni
merchants were paid in bullion as is evident from the records of the
Company.
144. Beng. Letters Recd., vol. 21, ff. 49-50, para 66, 30 November 1746.
145. C. & B. Abstr., vol. 2, f. 175, para 62, 6 December 1718; vol. 4,
f. 454, para 46, February 1744.
146. B.P.C., Range 1, vol. 16, ff. 272a-273a, 19 September 1743.
147. Ibid., f. 332a, 9 November 1743.

148. Ibid., ff. 332a-333, 9 November 1743.
149. Ibid., f. 333, 9 November 1743.
150. Fact. Records. Kasimbazar, vol. 6, Consult. 18 November 1743.
151 D.B., vol. 108, f. 288, para 15, 7 February 1745.
152. D.B., vol. 109, f. 463, pata 19, 7 May, 6 & 12 June 1746.
153. B.P.C., Range 1, vol. 17, f. 604, 13 June 1745.
154. Ibid., vol. 18, ff. 265a-266, 30 June 1746.
155 Ibid., f. 394, 14 October 1976.
156. B.P.C., Range I, vol. 18, f. 398, 15 October 1746.
157. Ibid., f. 431, 8 November 1746.
158. Ibid., f. 431a, 8 November 1746.
156. Ibid., vol. 19, f. 292a,. 23 June 1747; Beng. Letters Recd.; vol. 21,
f. 2S5, 10 January 1748; FWIHC, p. 233.
160. Beng. Letters Recd., vol. 21, ff. 289-90, para 195. 10 January 1748;
B.P.C., Range 1, vol. 20, f. 187a, 9 October 1747; FWIHC, vol. 1,
p. 236.
161. Ibid., vol. 21, ff. 198a-200a, 22 September 1748.
162. Ibid., vol. 23, f. 356a, 20 October 1750; C. & B. Abstr., vol. 5, f. 278,
paras 126, 127, 4 February 1751; FWIHC, vol. 1, pp. 482-3.
163. C & B. Abstr., vol. 2, f. 175 para 61, 6 December 1718.
164. B.P.C., Range 1, vol. 8, ff, 451a-452, 13 September 1731; C & B.
Abstr., vol. 3, f. 172, para 2, 5 January 1732.
166. Fact. Records, Kasimbazar, vol. 2, Consult. 20 March 1738; B.P.C.,
Range 1, vol. 13, f. 216, 3 April 1738.
166. B.P.C., Range 1, vol. 23, f. 28, 11 January 1750.
168. Fact. Records, Kasimbazar, vol. 11, 31 January 1752; C. & B. Abstr.,
vol. 5, f. 357, para 79, 18 September 1752.
169. B.P.C., Range 1, vol. 13, ff. 183-83a, 2 March 1738.
170. C. & B. Abstr., vol. 5 f. 356; B.P.C., Range 1, vol. 25, f, 162, 8 June
1752; FWIHC, vol., f. 6.
171. For English Company’s Intra-Asiatic trade, and Freight voyages
by Indian and Armenian merchants in early 18th century, see, S.
Chaudhuri, op. cit., pp. 124-5.
173. D.B., vol. 104, ff. 420-1, para 6, 21 February 1729; C & B. Abstr.,
vol. 2, f. 583, para 19, 28 January 1728.
174. B.P.C., Range 1, vol. 6, f. 656, 7 October 1728.
175. C. & B. Abstr., vol. 4, f. 233, 30 November 1737.
176. B.P.C., Range 1, vol. 27, f. 334, 7 November 1754.
177. C & B. Abstr., vol. 2, ff. 524-5, para 15, 28 January 1727.
178. Ibid., ff. 583, para 18, 28 January 1728.
179. Ibid., vol. 3, f. 26, para 18, 31 July 1723.

180. Ibid., vol. 3, f. 30, para 16, 2 February 1729.
181. D.B., vol. 104, ff. 420-1, para 6, 21 February 1729.
182. B.P.C., Range 1, vol. 3, f. 117.
183. Ibid., vol. 3, f. 460.
184. Ibid., vol. 4, f. 1a.
185. Ibid., vol. 4, f. 3.
186. Computed from relevant volumes of B.P.C., Range 1.
chapter 11
General Economic Conditions

under the Nawabs*
Throughout the seventeenth century, the Mughal Suba of Ben-

gal was regarded as Zannat-abad or ‘the realm of Paradise’ an
epithet ascribed to it by the second Mughal emperor Huma-
yun.1 Aurangzeb is said to have styled Bengal as the ‘Paradise
of Nations’. Indeed no Mughal farman, nishan or other official
papers ever mentioned Bengal without adding ‘the Paradise of
India’ – an appellation given to it par excellence as pointed out
by Jean Law, the chief of the French factory at Kasimbazar.2
That Bengal under the nawabs in first half of the eighteenth
century was equally prosperous and flourishing as Europe in the
seventeenth century is evident from the fact that the near-con-
temporaneous author of the Persian chronicle Riaz-us-Salatin
describes Bengal as zannat-al-bilad or ‘Paradise of Nations’.3
The myth of wealth of Bengal as also the cheapness of its wares
during the period under review is enthusiastically-pointed out
by most of the contemporaneous European accounts of Bengal.
Charles Grant described Bengal of the pre-British period as ‘easy
in its finances, moderate in its expenditure, free from charges
and cares of independent dominion, its inhabitants enjoying in
the occupation of agriculture and commerce, public peace and
abundance’.4 Harry Verelst ascribed the prosperity of nawabi
Bengal to the cheapness and quality and the prodigious traffic of
her manufactures. ‘Besides the large investments of the European
nations’, according to him, ‘the Bengal raw silk, cloths etc. to a
* History of Bangladesh, vol. II, Dhaka, 1992, pp. 30-66.

vast amount were dispersed to the West and North inland as far
as Guzrat, Lahore and even Ispahan.’5
Bengal had, in fact, all the prerequisites for a prosperous
economic life. The rich fertility of its soil was conducive to its
flourishing agriculture. The natural products of Bengal were
hence various and abundant which enabled it to export its
surplus agricultural products to various parts of India as also
to several neighbouring countries – a tradition which was so
markedly pointed out by most of the foreign travellers in the
seventeenth century and which was continued even during the
nawabi regime.6 The shipping lists in the Dutch archives of Asian
vessels which left Bengal ports in the first half of the eighteenth
century bear ample testimony to the fact that during the pre-
Palashi period Bengal exported rice, wheat, sugar, ghee and other
provisions to various ports of India and the eastern Islands.7 The
handicrafts manufacturing industry of Bengal, especially in the
field of textile and silk production, was at its peak during the
rule of the Bengal nawabs supplying the enormous demands of
both Asia and Europe, and bringing in its trail the huge amount
of silver from those parts to Bengal. All these economic activi-
ties flourished inasmuch as Bengal under the nawabs enjoyed
enviable political stability which was rare in many other parts of
contemporary India. The nawabi regime established by Murshid
Quli Khan had a succession of capable rulers in Shujauddin Khan
and Alivardi who provided the Suba with almost half a century
of stable political condition, the Maratha and Magh incursions
notwithstanding, which was not only so very essential for peace
and prosperity but also for vigorous pursuits in the field of agri-
culture, commerce, industry and other economic activities. Hence
it is no wonder that the general economic condition of Bengal
under the nawabs was much more prosperous than it was in the
subsequent period of the Company rule. This is corroborated in
no uncertain terms by Richard Becher, a Company official, who
had been in Bengal for many years both before and after the
battle of Palashi. He wrote: ‘It must give pain to an Englishman
to have reason to think that since the accession to the Dewanee
General Economic Conditions under the Nawabs | 265
the condition of the people of this country has been worse than
it was before, and yet I am afraid the fact is undoubted.’8
The stable political condition and efficient administration not
only fostered a flourishing agriculture but stimulated manufac-
turing and export trade. There is no denying the fact that the
traditional manufactures of Bengal enjoyed a supremacy both
in Asia and in Europe even during the seventeenth century but it
was in the first half of the eighteenth century that the production
of these manufactures reached a new height under the compul-
sion of supplying the unprecedented demand from both Asian
and European markets. It was during the nawabi regime that
the exports of the European Companies, especially the English
and Dutch East India Companies, from Bengal shot up phe-
nomenally. There was abundant production of textiles and raw
silk – the two major products of Bengal’s famous manufacturing
industries – to meet the demands of the Asian and European
markets. It is now known that the Asian merchants, exclusive of
the European investments, exported raw silk from Bengal to the
tune of Rs. 48 lakhs per annum on an average in late ’40s and
early ’50s of the eighteenth century. This is not surprising if we
take into account what William Bolts wrote about Bengal under
the nawabs:
A variety of merchants of different nations and religions, such as Cash-
meerians, Multanys, Pathans, Sheiks, Sunniasys, Paggayahs, Betteeas
and many others used to resort to Bengal in Caffeelahs or large parties
of many thousands together with troops of oxen for the transport of
goods from different parts of Hindostan.9
Luke Scrafton corroborates this when he writes:

Till of late years inconceivable numbers of merchants from all parts
of Asia in general, as well as from the rest of Hindostan in particular,
sometimes in bodies of many thousands at a time, were used annually
to resort to Bengal with little else than ready money or bills to purchase
the produce of these provinces.10
So it is conceivable that Bengal’s commerce, both inland and

foreign, exclusive even of the Europeans, was in a flourishing
state under the nawabs. This meant that the despotism of the
nawabs never degenerated into absolute oppression. Commerce
and manufactures were encouraged by the nawabs. As a result
up to the battle of Palashi, Bengal had a favourable balance of
trade with all other countries including Europe. The flourishing
condition of Bengal in the first half of the eighteenth century, as
N.K. Sinha pointed out rightly, became a ‘subject of celebrity’ in
the second half of the century.11
Communication System
As the economic condition of a country is largely dependent

on its communication system, it is imperative that a detailed
analysis of Bengal’s roads and communication network during
the nawabi regime is made here. Almost all contemporaneous
accounts of Bengal affirm that in the first half of the eighteenth
century, the whole province of Bengal was covered with a net-
work of good roads which connected every part of the province
with one another and this created a congenial atmosphere for
vigorous economic activity. In his Description of the Roads in
Bengal and Bihar (1788), James Rennell gave a long list of the
main roads of the province in the eighteenth century. The major
cities of Bengal – Murshidabad, Hugli, Dhaka, Patna and Cal-
cutta – were connected by roads with Nepal and Bhutan in the
east; Ganjam district of Orissa in the south; Singbhum, Palamau
and Chotanagpur in the south-west; Benares and Ghazipur in
the west; Batia of Bihar in the north-west; Sylhet, Jayantia and
Khaspur in the north-east, and Chittagong and Rajghat in the
south-east.12 It is significant to note in this connection that not
only the prominent cities but even smaller places like Burdwan
or Nagore had important roads running from and to the dif-
ferent parts of the country. There were two main roads from
Burdwan to Calcutta running through Chandannagore. Besides,
many other roads from Burdwan connected other manufactur-
ing centres and trade marts like Dhaniakhali, Tamluk, Budgebuz,
Nadia, Jalangi, Rajmahal, Radhanagore, Chandrakona and
Farukabad.13 Similarly Kasimbazar was connected by fine roads

with various other parts of the country. A vital road was 281
miles long from Kasimbazar to Patna via Rajmahal. Other roads
from Kasimbazar connected it with Burdwan, Jalangi, Dhaka,
Rampur Boalia, Meenkhat, Dinajpur, Birbhum, Malda, Ranga-
mati, Goalpara, Kandi and Surul (in Birbhum).14 Such instances
can be easily multiplied.
There is ample evidence that major Bengal towns and produc-
tion centres were well connected by roads with important places
in northern Indian plains. A major connecting route was the 522
miles long road from Calcutta through Kasimbazar and Rajma-
hal to Patna from where Delhi and Agra could be reached via
Allahabad and Mathura. The Surman embassy to the Mughal
emperor Farrukhsiyar took this road to Delhi.15 The roads in
Bengal not only connected one important centre with other
similar centres in different parts of the province but also a single
district was intersected by many roads, running from one part of
it to another. Rennell, for example, mentioned many roads run-
ning across the Birbhum district. Of these, the main ones were
from Nagore to Deoghar, Kumirabad, Maluti and Maragram.
Three other roads starting from Nagore ended at Suri. Besides,
there were roads from Nagore to Krishnanagore, Ilambazar,
Ukhara, Pachet (Ranigunge) and Supur. A striking feature of
Bengal’s communication system during the nawabi regime was
that even most interior parts of the country were also connected
by roads with the distant towns. These roads were constantly
in use and have been carefully noted by Rennell. For example,
roads from Calcutta ran to places like Patchwary (in Santhal
Parganas) and Pakur. However, it is to be noted that all roads
were not in good shape. The road from Barasat to Jessore was
particularly bad. As Rennell observed:
After leaving Barasat, we seldom found the roads good, they being
excessive narrow, rough and crooked and very frequently running
across paddy fields so that when the ground is ploughed there are no
traces of road to be found.16
Still, from all contemporary accounts it can be asserted that

Bengal under the nawabs had a system of communication of
‘reasonable quality by any pre Industrial standard.’17
The interior part of eastern and northern Bengal, especially
the tract lying east of Dhaka, was not provided with so many
good roads as the western part owing chiefly to the presence of
numerous rivers and creeks in the area. The important places in
these parts however were connected by roads with cities of note
in almost every direction. For instance, there were two roads
from Calcutta to Dhaka and two others went up to Bakarganj.
Calcutta was again connected with Chittagong by two roads and
another went up to Sylhet to Dhaka. For obvious reasons, as
Rennell pointed out, most of the roads in eastern part of Bengal
were not in very good condition during the rainy season as they
were mostly mud roads. On the land route between Bengal and
Bihar, Maricha (Mircha of the English Company records) was
an important centre of communication and for transportation
of goods. Here at Maricha which stood at the head of a creek
joining the Ganges with the Jalangi and Bhagirathi, goods were
transhipped from larger to smaller boats on their way from
Patna to Calcutta. The boats laden with saltpetre and silk goods
at Patna and Futwa travelled via Bhagalpur and Colgong to
Maricha where in the drier season the boats had to be changed
because of the shallowness of water. If the level of water was
sufficiently high, the boats came down to Calcutta via Nadia.18
Boats carrying broadcloth and treasure from Calcutta to Patna
followed the same route. In fact, Maricha occupied a strategic
position for the business of the European Companies between
Bengal and the upper regions. Whenever the Bengal nawab con-
sidered that he had a grievance against the Company and wanted
them to comply with his demands, the usual method adopted
was to station soldiers at this place and prevent the transport of
goods either way.19
In Bengal under the nawabs, as it was in earlier times, the
most important means of communication was the river highway.
The Ganges and the Brahmaputra with their numerous tributar-
ies and channels afforded facilities for reaching the most interior
areas of Bengal. It is worth quoting Rennell’s observation at

length here:
The Ganges and the Burramooter Rivers, together with their numerous
branches and adjuncts intersect the country of Bengal . . . in such a
variety of directions, as to form the most complete and easy inland
navigation that can be conceived. So equally and admirably diffused
are those natural canals . . . that, after excepting the lands contiguous to
Burdwan, Birboom, etc. . . . we may safely pronounce that every other
parts of the country has, even in the dry season, some navigable stream
within 25 miles at farthest, and more commonly within a third part of
that distance.20
He further states that 30,000 boatmen were constantly
employed in Bengal’s inland navigation which carried ‘all the
salt and a large proportion of the food consumed by ten millions
of people’ in the Kingdom of Bengal. The inland waterway was
the main route through which Bengal’s commercial exports and
imports to the tune of about two million sterling per annum
(around Rs. 160 lakhs) were transported.21
The large number of tributary rivers, nulluhs and creeks,
running almost through every part of the province, especially
eastern Bengal, provided excellent means of communication
through which even remote villages in the interior were within
easy reach of merchants and travellers. Rennell wrote:
The Kingdom of Bengal, particularly the Eastern Front, is naturally the
most convenient for trade within itself of any country of the world; for
the rivers divide into just a number of branches that the people have
the convenience of water carriage to and from every principal places.22
The Dutch traveller Stavorinus who visited Bengal in the late
eighteenth century made a similar remark:
The country is everywhere intersected, with large and broad channels.
. . . All merchandise is conveyed, by means of these passages, with great
facility, from one place to other, throughout the land, and the chief
branches of the river communicate hereby with each other. . . . They are
agreeably bordered on either side, with many towns and villages, and
with pleasant fields, of arable and pasture land; which renders the face
of the country very beautiful.23
Of the two chief navigational routes from Calcutta to north

India in the eighteenth century the first, passing through the
Jalangi and Nadia led towards Kashi and the second through
Bhagirathi and Suti went up to Munger and Patna in Bihar. The
latter was most commonly used. The riverine route from Cal-
cutta to Dhaka passed through the Jalangi to Padma from where
through Padma and the Ichamati to Jaffarganj and through
Dhaleswari to Dhaka. The whole of eastern Bengal was so well
connected with rivers and their tributaries that transportation
of goods posed little difficulty. Alexender Dow rightly observed:
The easy communication by water from place to place, facilitated a
mercantile intercourse among the inhabitants. Every village had its
canal, every Pergunna its river, and the whole Kingdom the Ganges,
which falling, by various mouths, into the Bay of Bengal, lays open the
ocean for the export of commodities and manufactures.24
In view of the analysis which undoubtedly testifies to a rea-

sonably good system of communication in pre-colonial Bengal,
the popular concept that Bengali villages remained economically
independent and self-sufficient unit during nawabi regime is not
true. As a matter of fact the well-organized communication sys-
tem helped Bengal’s continuous contact with the outside world
on the one hand and the various important production centres
and trade marts within the province itself on the other. So the
suggestion of largely self-sufficient Bengali villages living in
isolation from one another in nawabi Bengal is totally inappro-
priate. In this connection it is relevant to note that many Bengali
artisans during this period produced for distant markets. Peas-
ants in Bengal were also engaged in the cultivation of cash crops
like cotton, sugarcane, mulberry, oil seeds, etc. Even rice, espe-
cially the among winter crop, was produced as cash crop since
quite a large amount was meant for export to different parts of
India, Asia and the East Indies. A significant aspect of Bengal
economy of this period was the extent of monetization so much
so that revenue payments were generally made in cash which
circulated very wide, though cauris were mostly used in small
and daily transactions. Credit was freely available to all sections
of the society though the terms for ordinary people might have
been stringent. Moreover credits were transferred and bills of
exchange were widely issued and discounted. Indigenous bank-
ing and credit system were highly organised and efficient during
this period.25
It has been argued by Marshall that by mid-eighteenth cen-
tury Bengal had ‘to a degree developed an integrated economy
with marked regional specialization’.26 Some areas specialized
in producing grain surpluses, some concentrated on cash crops
and yet others on particular lines of textiles and silk produc-
tion. A widely spread network of markets facilitated exchange.
Besides, big wholesale markets had developed at strategic points
such as the one at Bhagawangola near Murshidabad which was
the greatest grain market in nizamat Bengal. Narayanganj near
Dhaka was another such whole sale market. Large local markets,
called ganj, abounded in many parts of Bengal while small scale
transactions took place in the village hats which met generally
twice a week. It is significant that one documented village mar-
ket of 1770s in Murshidabad had three stalls dealing in cauris
and two money changer’s stalls in a total of its thirteen shops.27
This economic integration was no doubt aided by the satisfac-
tory system of communication through land and river routes.
A clear indication of economic integration was the rough unifor-
mity of prices in major centres throughout Bengal about mid-
eighteenth century. But this was mainly confined to big towns
and places in the vicinity of navigable rivers. Wide fluctuations in
grain prices were frequently noticed in remote countryside, even
over short distances from year to year and from month to month
in a given year. The economic integration was also indicated by
the extent of commercialization of agriculture and handicrafts
in the mid-eighteenth century. The process was further helped
by the presence of merchants from all over India with extensive
network and their involvement in a wide range of enterprise. The
richest among these merchants were at the same time bankers,
shipowners and dealers in different commodities, and operated
through their gomastas or agents in various kuthees or business
branches in different parts of the country.
Market Price and Wages
Market
Market places abounded in nizamat Bengal. Every important city

or village had its own market while bazars and nearby hats were
conspicuous in places which were not centres of trade. Markets
in the city comprised shops which stocked not only articles of
necessity but luxury as well. Ramprasad, the contemporary
poet, gave a description of the market in the city of Burdwan
which was then, according to the author of Sier-ul-Mutakherin,
‘famous for populousness and plenty of provisions superior to
most cities in Bengal.’28 He writes:
Beyond these the poet [Sundara] saw the King’s market with thousands
of foreign merchants sitting there. There were hundreds of shopkeepers
and countless gems, pearls and rubies.
There were various kinds of fine and beautiful cloths. . . . There
were many bilati (foreign) articles of fancy price and fashionable
designs which were however heaped together for want of customers.
Everything was cheap and easily available.29
Though the above is an account of the jewelry and cloth

departments of the market in Burdwan, a city market in gen-
eral contained various other shops dealing in different articles.
Vijayaram’s Tirthamangal gives several descriptions of various
specialised shops in a city market.30 The poet thus described the
market of Bhagwangola:
The boat soon reached the market place at Bhagwangola and all
shouted out ‘Hari’, ‘Hari’. They were highly pleased to see the market
and walked through the whole city on foot. The market, beautiful to
look at, extended 4 kos (8 miles) and was full of numerous soukaris
(shell workmen), Kausaris (brass smith) and weavers. The streets were
full of grocers’ shops and they all spoke highly of the market. There
were also numerous grain golas (barns) there.31
Holwell testifies that Bhagwangola was the ‘greatest market’

for grain, oil and ghee ‘in Indostan or possibly in the known
world’. The volume of trade at this important mart can be gauged
from the fact that here the customs on grain only amounted to
Rs. 3 lakhs per annum.32 Holwell also refers to several markets

in Rani Bhawani’s zamindari of Natore – Bhawaniganj, Shib-
ganj, Swarupganj and Jamalganj – the very names implying that
they were mainly markets for grains.33 In Calcutta in mid-18th
century there were about 10 or 11 bazars – Shobha Bazar, Shyam
Bazar, Bagh Bazar, Hatkhola Bazar, Charles Bazar, Begum Bazar,
John Nagar, Mandi Bazar, New Bazar etc.34
A host of officials appointed by the nawab or the zamindar
looked into the affairs of markets throughout Bengal – the prices
and quality of commodities, weights and measures. These offi-
cials maintained strict order in all the city markets and bazars or
hats in the villages. An important function of the kotwal was to
look after the markets and to prevent any malpractice or abuse
in the markets. The officials checked regularly weights and mea-
sures, the quality of the commodities sold and regulated prices of
articles. Anyone violating the regulations was subjected to severe
punishment. This is well illustrated by contemporary vernacular
literature:
Neither could anybody sell in less than the proper weight nor could
anybody cheat others by increasing price. The Gazi punished him who
violated the regulations; the customers as well as the shopkeepers were
all under his orders.35
So it is evident that the markets were organised and controlled

by the zamindars through their officials in their respective locali-
ties, much to the convenience of the people in general. From this
it can be presumed as well that not only the big city market were
regulated by the nawab’s or zamindar’s officials but the regu-
lations were also enforced in rural areas. Otherwise the above
reference in Samser Gazir Punthi, which presumably refers to
rural areas, would have been less categorical. In Calcutta the
English Company maintained strict vigilance over prices, weights
and measures. Any one acting contrary to the rules was severely
punished.36
The Bengal nawabs in general and Murshid Quli in particular
kept strict surveillance over the markets and prices in the country.
The author of Riyaz-us-Salatin makes the following observation

on Murshid Quli’s reign in this regard:
He exerted himself to render the prices of food-grains cheap, and did
not allow rich people to hoard up stocks of grains. Every week, he
had the price-current reports of food-grains prepared, and compared
them with prices actually paid by the poor people. If these latter were
charged one dam over the prices stated in the price-current report, he
had the dealers, mahaldars and weighmen punished in various forms,
and had them patrolled through the city, placed upon asses.37
The general statement by near-contemporaneous Persian
chroniclers that Shujauddin’s reign was ‘marked by peace and
prosperity’, and that ‘he uprooted from his realm the foundation
of oppression and tyranny’ or that after the Maratha invasions
were over, Alivardi ‘applied himself with judgement and alacrity
to the repose and security of his subjects and never afterwards
deviated in the smallest degree from those principles’38 could
well be taken as indications that both Shujauddin and Alivardi
took great care in regulating markets and prices throughout the
province of Bengal.39
Prices
At the present state of our knowledge it is extremely difficult

to say anything definitive about movement of prices in the first
half of the eighteenth century. Though there was possibly a slight
increase, which in all probability was only marginal, in prices of
commodities, especially of provisions from about early 1740s,
one fails to observe a ‘fairly sustained and marked increase’ in
prices in the period between 1720 and 1760. In recent years there
has been attempts to study the price movements with particular
reference to several commodities, such as textiles, raw silk, rice
etc.40 The method used for the purpose seems to have been to
apply the simple rule of dividing the total price paid for the total
quantity of the commodity for finding out the unit price. But this
does not take into account many variables and hence might lead
to misleading results. In case of textiles there were hundreds of
varieties which differed widely in prices. Again the price of the
same category of textiles varied greatly depending on the quality,

size and the aurung in which it was produced. As to the raw
silk, there were several varieties – in each variety again the price
varied depending on the season in which it was produced. An
important factor which should be taken into consideration is the
quantity of each variety exported for both raw silk and textiles.
For rice too the price depended on the quality – even ‘coarse’ rice
varied in price depending on degree of ‘coarseness’ and the place
where it was bought.41
While analysing the price movement in Bengal and trying to
explain the sharp price rise in Bengal from about early 1740s
(which as we shall see later was not really the fact), historians
have in general put too much emphasis on several factors.42
These are: (a) The ‘phenomenal increase in the European trade
and bullion imported by the European Companies’ during the
period between 1720 and 1760; (b) the Maratha invasions and
consequent dislocation in the economy; (c) the competition
among European Companies; (d) imposition of heavy duties; (e)
natural calamities. There is no denying the fact that there was
a significant increase in European trade in the first half of the
eighteenth century and a consequent influx of bullion. It is also
probable that as a result of this there was an expansion in the
economic activity of Bengal and an increase in money supply.
But the extent of the impact of these on the overall economy
and the price movement over the period are yet to be determined
precisely. Moreover, as we have argued elsewhere,43 even in the
mid-eighteenth century, the European trade was not the most
important factor in Bengal’s commercial economy, the volume
of the export trade carried on by the Asian merchants from
Bengal was much larger than that of the Europeans, and the
Europeans were not the only importers of bullion and for that
matter not even the largest at that. The Maratha invasions no
doubt resulted in dislocation in the economy but it was mainly
regional in character and only a temporary phase. The competi-
tion among European traders was certainly there but this would
have hardly affected the general price level. The Bengal nawabs
and zamindars took resort to abwabs (additional imposts) and
levied other tolls but their effects need not be overemphasized.

Natural calamities were there affecting prices but their impact
was only temporary and often local in nature.
Even taking for granted for the sake of argument that the
price of export goods such as textiles and raw silk registered
a rise over the period under review, it may be argued, as has
been done by a recent authority, that such a sectorial rise might
only reflect a failure of the supply of these goods to increase as
fast as the demand for them, and may not necessarily indicate a
general price rise in the economy. As solid evidence of the latter,
one would have to look for movements in the prices of so-called
wage-goods, the most important among which would be staple
food items like rice and wheat.44 But at the present state of our
knowledge this exercise is fraught with the danger of a wide
margin of error because of the lack of precise information in the
face of immense staple food varieties, especially rice. One sus-
pects such an attempt at this stage might only lead to extremely
erratic behaviour of the prices of provisions, as has been the case
of a recent study on Bengal prices on similar lines for 1650-
1727.45 Further, the explanation based on the quantity theory of
money that foreign demands for export goods which were paid
in cash stimulated domestic demand for food grains and other
consumer products which in turn exerted pressure on prices has
recently been challenged. One writer explains the phenomenon
in a different way. Though the extent of increase in the velocity
of money circulation as a result of European trade could not
be precisely determined, the increasing European trade implied
that the monetized transactions as a proportion of total transac-
tions in the economy would have gone up. Moreover over the
fairly long period that we are concerned with, natural increase
in population would have necessitated a secular rise in output
and transaction if the per capita output and availability were not
to go down. All these factors would tend to check a general rise
in prices consequent upon an increase in the supply of money
caused by an increased inflow of precious metals.46
There is hardly any doubt that in Bengal people in general
‘had far more to eat and his condition was far better in the early
eighteenth century than in the nineteenth’.47 For the common

man the most important factor was the price of rice which was
his staple food, and during Murshid Quli’s administration the
ruling price of rice was 5 to 6 maunds per rupee. As the author of
Riyaz-us-Salatin points out, other provisions too were similarly
cheap so much so that by spending one rupee in a month ‘people
ate polao and qaliah daily’. Even discounting the obvious exag-
geration in the statement, his observation that ‘owing to this
cheapness, the poor people lived in ease and comfort’ is quite
significant.48 As a matter of fact near-contemporaneous Persian
chronicles and European records point out that Murshid Quli
exerted him to render the prices of food grains cheap, often pro-
hibiting any hoarding and even sometime their export in times
of scarcity and famine.49
During Nawab Shujauddin Khan’s time, the low prices of pro-
visions became legendary. According to most Persian chronicles
including the Sier-ul-Mutakherin Shujauddin’s reign was marked
by peace and prosperity. John Shore went to such an extent as to
say in 1789 that it was ‘moderate, firm and vigilant, and seems
the only part of the whole period (from Murshid Quli to Mir
Qasim), with an exception perhaps of the last years of Alivardi
Khan, in which the conduct of the government was in any respect
calculated for the improvement of the country.’50 It was during
Shuja’s viceroyalty that the western gates of the city of Dhaka,
which were not to be opened since the departure of Shaista Khan
unless the price of rice came down to the level of 8 maunds per
rupee, were reopened.51 He too prohibited the export of grains
from Bengal at times of scarcity.52 Both Ghulam Hussain and
Karam Ali state that Alivardi’s administration was marked by an
all-round lenity and that the nawab was very careful to promote
the comfort and welfare of his subjects. Despite the imposition
of abwabs, the latter period of Alivardi’s reign was on the whole
one of unbroken prosperity for Bengal. Alivardi’s government
did not hesitate to impose embargo on rice export during the
years of scarcity from Bakarganj to Calcutta where an estimated
400,000 mds. of rice were imported annually for its own con-
sumption and re-export.53 The Calcutta Council at the instance
of Holwell (the zamindar of Calcutta) and the rice merchants of

Calcutta tried to lift the embargo but to no avail.54 Whenever
there was any scarcity of food grains, Alivardi waived the duties
on grains to be imported to Murshidabad and prohibited the
chaukis from collecting any tolls from boats laden with food-
stuff for the capital.55
As argued earlier, the movement of price should be looked into
in the prices of major food grains, especially rice, the staple food
of Bengal and not in the prices of major export commodities like
textiles and raw silk where the heavy demand for such goods on
the part of the Asians and Europeans might have resulted in such
a rise in prices when the supply failed to meet such a demand.
But as even recent authorities emphasize this aspect to prove a
general rise in prices and as ‘evidence of a sustained and marked
increase in prices,56 let us examine how far and if at all the prices
of these commodities show a secular upward trend in the first
half of the eighteenth century. One has to take into account here
that even earlier authorities like K.K. Datta and Brijen K. Gupta57
emphasized the ‘sharp increase’ in prices of textiles and raw silk
during the period under review and even asserted that between
1738 and 1754 prices of these commodities increased by no less
than 30 per cent. The latest work on this period by P. J. Marshall,
quoting the earlier authorities, arrived at the same conclusion.58
The main and the only basis of the above conclusion regard-
ing the sharp increase in the price of textiles, as referred to both
by K.K. Datta and Brijen K. Gupta, is a complete misreading
(and out of context too) of an entry in the Bengal Public Consul-
tations under 11 December 1752.59 The particular Consultation
refers to a letter from Dhaka of 4 December 1752 wherein the
Dhaka factors were trying to answer the allegation from Cal-
cutta regarding the bad quality of textiles sent by them pointing
out that the sample of 1738 was not the ‘fit standard for judging’
the quality of cloth sent from Dhaka in 1752. The reason for the
badness of the quality of cloth, as the Dhaka factors wrote, was:
as the copass [kapas-cotton] or country cotton has not been for these
two years past under 9 or 10 rupees, and the price of rice at the same
time very deer, whereas in 1738 the Copass did not exceed Rs. 2 or
Rs. 2-8 and the rice very cheap, mostly 2 maunds 20 seers to 3 maunds
for a rupee to which may be added which is well known to all the
purchasers of cloth that the prices of all sorts of cloths have risen near
30 per cent, some more, since the year 1738, and that they now labour
there and has done so for these two years past under the inconveniency
of a French factory continually emulating the Hon’ble Company’s trade
and have advanced the price of all cloths both coarse and fine and ob-
liged them to be less severe with their dellols in prizing their cloth. . . .
It is amply clear from the above that this is a desperate bid on

the part of the Dhaka factors – scrupulousness not being their
strong point which was true also of other Company servants
working in India at that time – to justify the badness of cloth
and hence the emphasis on 30 per cent increase of cloth price
between 1738 and 1752. As the ‘master’ of 1738 was to be the
standard, so 1738 becomes the target date and for no other
reason. Moreover if one carefully examines the above passage,
one could hardly miss the stress on ‘these two years’ which signi-
fies that the quality of cloth sent by them deteriorated mostly
in those two years and not really for the whole of the period
from 1738 to 1752. There is the specific reference to ‘near 30 per
cent’ increase in the price of cloth during this period but, if at all
true, that applies only to Dhaka and could hardly be taken as an
evidence of a general phenomenon of price increase throughout
Bengal. Besides one can rightly suspect the validity of the evidence
which was produced in self defence in the face of allegation of
malpractice. One who has gone carefully through the Company
records can fail to see that throughout the period whenever the
allegation was made regarding the badness of investments the
factors always answered in the same vein that it was because of
the high price of staples like rice and cotton, competition from
other Asians and/or European Companies, and general increase
in the price of the export commodities. One should accept such
‘evidence’ with due caution.
Let us now examine the procurement prices of textiles and
raw silk in Bengal during this period to find out the price trend.
As recent historians emphasize that the prices in Bengal showed
a definite upward movement from early 1740s (conveniently to
coincide with the Maratha invasions!), we should make a com-

parative study of the prices of a few staple export goods in the
export list of the European Companies in early 1730s and early
1740s. These are contract price with Indian merchants who pro-
vided the export commodities and the prices were arrived at after
hard bargaining on both sides and hence quite reliable. Though
the Companies sometime paid lower prices to the merchants for
cloths delivered, it was mainly on the ground of inferior qual-
ity than contracted for and the contract price was generally not
altered.
It is more than evident from the Table 11.1 that there was
absolutely no increase in the prices of the two principal piece
goods contracted for export by the Dutch East India Company
between 1732 and 1754. One might argue that these were finer
varieties of calicoes, and perhaps the price rise was reflected not
in the finer textiles but in coarse categories. So let us see how the
prices moved in the latter during the years under consideration.
In Table 11.2 we find the contract prices of some of the coarser
textiles which were prominent in the export list of the Company.
The data from Table 11.2 shows that even in the case of coarser
calicoes, except a slight rise in the price of photaes, there is hardly
any change in the price between 1732 and 1744.
Turning to raw silk, we find a slightly different picture. In the
Table 11.3, we note the prices of raw silk for several years from
1733 to 1753 to see the movement of prices in this important
export commodity.
The trend of price that emerges from Table 11.3 does not
show a secular upward movement of prices during the period
under review. The rise in the price of raw silk between 1733 and
1745 is almost negligible which disproves the thesis of a rise in
prices in Bengal from early 1740s. There was marked increase in
the price of raw silk in 1747 and 1748 as is evident from Table
11.3. But this was a temporary phenomenon as from June 1748
the prices began to fall and remained more or less at the same
level except in February 1751 when there was again a slight
increase from the price level of June 1748. In short, the price rise
Table 11.1 : Textile Prices, 1732 and 1744: Dutch Company
Contract Price with Merchants 1732 Contract Price with Merchants 1744
No. of Pcs. Piece-good Length & Price Per Pc. No. of Pcs. Piece-good Length & Price Per Pc.
breadth breadth Rs.
600 Cossa 40 co. × 3 co. Rs. 15–0–0 1500 Cossa 40 co. × 3⅞ co. 15
200 Cossa fine 40" x 3 " 18 – – – –
450 Cossa 40" x 2⅝" 13 1000 Cossa 40" x 2⅝" 13
150 Cossa fine 40" x 2⅝" 16 – – – –
7000 Cossa 40" x 2¼" 11 5000 Cossa 40" x 2¼" 11
500 Cossa fine 40" x 2¼" 14 – – – –
4000 Cossa 40" x 2" 9–12 3000 Cossa 40" x 2" 9–12
600 Cossa 40" x 1¾" 8–18 800 Cossa 40" x 1¾" 8–10
500 Cossa 40" x 1½" 7–8 700 Cossa 40" x 1½" 7–8
800 Cossa Nadona 25" x 2¼" 3–14 2000 Cossa Nadona 25" x 2¼" 3–14
400 Malmal 40" x 3" 15 600 Malmal 40" x 3" 15
100 Malmal fine 40" x 3" 18 100 Malmal fine 40" x 3" 18
300 Malmal 40" x 2⅝" 13 200 Malmal 40" x 2⅝" 13
100 Malmal fine 40" x 2⅝" 16 – – – –
Table 11.1 (contd.)
breadth breadth Rs.
3800 Malmal 40" × 2¼" Rs. 11 3000 Malmal 40" × 2¼" 11
400 Malmal fine 40" × 2¼" 14 150 Malmal fine 40" × 2¼" 14
1600 Malmal 40" × 2" 9–12 1200 Malmal 40" × 2" 9–12
500 Malmal 40" × 1¾" 8–10 1000 Malmal 40" × 1¾" 8–10
– – – – 200 Malmal fine 40" × 1¾" 10–8
800 Malmal 40" × 1½" 7 1000 Malmal 40" × 1½" 7
Source: For 1732, V.O.C. 2241 (K.A. 2133), ff. 649-61, Hughli to Batavia, 3 March 1732. For 1744, V.O.C. 2629 (K.A. 2521), ff. 199-218, Hughli
to Batavia, 4 January 1744.
Table 11.2: Price of Coarser Textiles, 1739 and 1744: Dutch Company
breadth (Rs.) breadth Rs.
800 Sannoes 24 co. × 2 co. 4 : 8 per pc. 1,000 Sannoes 24 co. × 2 co. 4 : 8 per pc.
6,000 Choraderries 18 co. x 2¼ " 4 : per pc. 2,000 Choraderries 18 co. x 2¼ " 4 : - per pc.
Kharraderies Kharraderies
5,000 Photaes 24 x 2¼" 50 per corge* 6,000 Photaes 24 x 2¼" 57 per corge
20,000 Cotton Rumals 15" x 1" 50 per corge 50,000 Cotton Rumals 15" x 1" 50 per corge
4,000 Desi 4" x 1½" 13 per corge 1,000 Desi 4" x 1" 13 per corge
Source: Same as in Table 11.1. Corge (*) is twenty.

Table 11.3: Price of Raw Silk 1733-53: English Company
Date Category Price Per Seer Source

March 1733 Novemberbund Rs. 5 : 12 K.F.R. vol. 5, Consult, 7 March
1733
–do– Guzarat Rs. 6:6 –do–
–do– Kumarkhali Rs. 5 : 12 –do–
January 1745 Novemberbund Rs. 5 : 14 K.F.R. vol. 6, Consult, 19 Janu-
ary 1745
April 1747 Novemberbund Rs. 9:4 B.P.C. Range 1, vol. 19, f. 2090,
Consult. 22 April 1747
–do– Guzarat Rs. 9 : 13 –do–
–do– Kumarkhali Rs. 9:1 –do–
January 1748 Novemberbund Rs. 9:4 C&B Abstr. vol. 5, f. 114, 10
January 1748
–do– Guzarat Rs. 9 : 13 –do–
June 1748 Novemberbund Rs. 7:8 K.F.R. vol. 7, Consult, 2 June
1748
October 1749 Novemberbund Rs. 7:– B.P.C. Range 1, vol. 22, ff.
350-50vo, Consult. 31 October
1749
February 1751 Novemberbund Rs. 8:– K.F.R. vol. 10, Consult. 22 Feb-
ruary 1751
March 1752 Novemberbund Rs. 7 : 14 B.P.C., Range 1, vol. 25, f. 8600,
Consult, 16 March 1752
–do– Kumarkhali Rs. – –do–
April 1753 Novemberbund Rs. 7 : 12 B.P.C. Range 1, vol. 26, f. 114,
Consult. 18 April 1753
–do– Kumarkhali Rs. – –
Sources & Abbrev: K.F.R. – Kasimbazar Factory Records; B.P.C. Bengal Public Consul-
tations, C & B Abstr. – Coast & Bay Abstracts
in silk was not so precipitate as most historians would have us

believe. That the price trend is to some extent erratic is because
of the fact that silk was one of the most sensitive articles the pro-
duction of which right from the mulberry plantation depended
much on natural factors. Still then the dominant trend in silk
price is certainly not one of sustained and marked increase.
As pointed out earlier, rice is the most important item the
price of which should be looked into for determining any price
movement. But the main difficulty here is the wide variety of
rice and its equally wide price variation depending on its quality.
This is well illustrated in Table 11.4 which indicates the variety
and price of rice in 1729.
Table 11.4: Price of Rice, 1729
Variety mds. seer per rupee

Fine rice, Bausephool
1st sort 1-10 " "
2nd sort 1-23 " "
3rd sort 1-35 " "
Coarse Rice called Desna 4-15 " "
Coarse Rice called Poorbie 4-25 " "
Coarse Rice called Munsurah 5-25 " "
Coarse Rice called Kurkashallee 7-20 " "
So it is not a simple case of fine or coarse rice only; when

the price of coarse rice can vary so very widely from 4 mds. 15
seers to 7 mds. 20 seers per rupee (the difference being about
71 per cent),60 there is grave risk in taking the price of rice as
an indication of price movement until and unless one can be
absolutely sure of the exact quality of rice when its price is taken
into account. Otherwise the result could be extremely erratic and
gravely misleading. Yet depending on such data and sometime
even fragmentary at that, recent authorities including the latest
on the subject have made such assertions as ‘Rice which was
sold at 100 to 120 seers for a rupee in 1738 was being sold
only 30 seers in mid 1740s’ as evidence to show that ‘produc-
tion declined and prices soared’61 or ‘By the 1740s . . . Bengal’s

advantages seemed to be disappearing’.62 Basing his evidence on
earlier authority, Marshall affirms that ‘between 1738 and 1754
it was thought that the price of rice in Calcutta has risen by
three or four times’63 and the same authority reiterates that ‘local
shortages’ led to ‘greatly increased food prices’.64
Now let us see how far these statements are borne by solid
evidence. Regarding the price of rice in 1738, both our earlier
authority (K.K. Datta) and a recent one (Brijen K. Gupta)65
depended solely on the letter written by the Dhaka factors to
Calcutta in 1752 in reply to the allegation of inferior quality of
cloth supplied by the former which we have referred to earlier.
Not only the letter was written in self defence but one has to
take into account the fact that the Dhaka factors were writing
in 1752 about the prevailing price of rice in 1738 for which
they probably depended on mostly their own imagination which
again might have been coloured by their desperate attempt to
cover up their shortcomings. Moreover the significant fact that
it refers to rice price only in Dhaka is ignored by our authori-
ties. It is not to be expected that the price of rice would be the
same in Calcutta and Dhaka. Again numerous references in the
Company records clearly indicate that rice price in Calcutta
often depended on the supply of the commodity from Bakarganj
and Doulea without which the city was ‘reduced to the greatest
necessity and misery and that the price of rice in Calcutta was
often manipulated by the city’s rice merchants who took advan-
tage of the fluid situation in the growing city’.66 As a matter of
fact, as is indicated in the following Table 11.5, the price of rice
in Calcutta in 1738 was 38 seers per Madras rupee at which rate
the Fort William Council decided to buy rice for the garrison
(coarse rice of course but yet which quality even in the coarse
variety ?) while in 1744 the rate was 30 seers for ‘common sort’.
The Council blamed the importers of rice for raising the price
to such ‘exorbitant’ rate and asked the Calcutta zamindar not
to permit the coarse rice to be sold under one maund per Arcot
rupee.67 It will also be clear from Table 11.5 that in 1754 fine
rice only was sold at 33 seers per rupee while the coarse variety
Table 11.5: Price of Rice in Bengal, 1738-54
Date Place Mds. Seer Per Rupee Quality Source

12 June 1738 Calcutta – 30 per Madras rup. Coarse (for garrison) B.P.C., vol. 13, f. 262vo.
26 March 1739 Calcutta 1 md. 30 per Madras rup. Very good sort B.P.C., vol. 13, ff. 527-27vo
31 May 1739 Dhaka 9 pissary (?) per (Das Masa Fine D.F.R., vol. 2, Consult, 31 May 1739
rupee)
31 May 1739 Dhaka 9 pissary (?) per (Das Masa Ordinary D.F.R., vol. 2, Consult, 31 May 1739
rupee)
7 January 1744 Calcutta 30 seer per (Madras) rupee "Coarse Sort" B.P.C., vol. 16, f. 401vo.
7 January 1744 Calcutta 1 md __ per Arcot Coarse B.P.C., vol. 16, f. 401vo.
20 September 1751 Calcutta 35 seer per Arcot Good Nov. Sort B.P.C., vol. 24, f. 323.
20 September 1751 Calcutta 1 md 10 seer per Arcot Ordinary B.P.C., vol. 24, f. 323.
2 January 1752 Calcutta 35 seer per Arcot Good Nov. Sort Beng. Gen. Lett. Recd., vol. 22
2 January 1752 Calcutta 1 md 10 seer per Arcot Ordinary Beng. Gen. Lett. Recd., vol. 22
11 February 1753 Calcutta 23 seer per Arcot ? H.P., vol. 3, f. 68, Consult, 11 February
1753
10 June 1754 Calcutta 32½ seer per Arcot fine B.P.C., vol. 27, f. 224vo-45
10 June 1754 Calcutta 35 seer per Arcot middling B.P.C., vol. 27, f. 224vo-45
10 June 1754 Calcutta 1 md. per Arcot coarse B.P.C., vol. 27, f. 224vo-45
16 February 1756 Calcutta 37 seer per Arcot ? H.P., vol. 5, f. 712, Consult, 16 February
1756
Sources & Abbrev: D.F.R. – Dhaka Factory Records; B.P.C. Bengal Public Consultations, Beng. Gen. Latt. Recd. – Bengal General Latters
Received; H.P. – Home Public Series, National Archives of India.
was sold at 1 md. per Arcot rupee. Hence the assertion of our
authorities that the price of rice had gone up three to four times
between 1738 and 1754 is hardly tenable.
While it is evident from Table 11.5 that no clear trend in price
of rice emerges, one has to take into consideration in analysing
the table that some of the prices shown in it were during times of
scarcity and famine, and not under normal conditions. In 1738,
for example, the price was affected by the severe storm and flood
which swept Bengal in September and October 1737.68 Again,
when monsoon failed there was a famine in 1752 which resulted
in worst shortages in 60 years and consequently the price of
rice (as shown in the table) rose sharply in early 1753 to 23
seers per rupee. But Orme’s assertion69 that the price of rice in
Murshidabad rose by 6 times than its previous level seems to be
an exaggeration.70 That the abnormal price rise in early 1753
was only a temporary phenomenon and that prices came back
to their normal level in late 1753 and 1754 become clear from
this table.
The fact that the price of rice could hardly be taken as an
index of price movement because of the lack of precise data as
also the anomaly of the data available to us at this stage is amply
clear from Table 11.6 from the prices of provisions in Bengal for
three years in the early 1730s. It is really difficult to reconcile the
price of rice available in this table with the ones in Table 11.5.
This only reiterates our point that even the price of rice which is
the most important index of any price movement in our period
cannot be relied upon for the anomalies in the available data.
Hence no definitive assertion can be made as yet about the price
rise during the period under review.
Historians including the latest authorities have unduly
emphasized the effects of the Maratha invasions and the impact
of the European trade while dealing with the price movement
in Bengal.71 The report of the two English warehouse keepers,
Frankland and Manningham, came in handy to substantiate the
thesis of price rise in Bengal from 1740s.72 As we have argued
elsewhere, the report was self contradictory, motivated and writ-
ten with the ulterior objective for changing over from dadni to
Table 11.6: Price of Provisions in Dutch Sources, 1731-3
January 1730 March 1731 March 1732

Fine rice 30 seer per sicca ruppe 20 seer per sicca ruppe 20 seer per sicca ruppe
Coarse rice 1 md. per sicca ruppe 35 seer per sicca ruppe 35 seer per sicca ruppe
(grove) 5
Wheat 20 seer per sicca ruppe 30 seer per sicca ruppe 30 seer per sicca ruppe
Mustard Oil 68 lb. at Rs. 6 68 lb. at Rs. 6 68 lb. at Rs. 6
Butter 68 lb. at Rs. 8 : 8 68 lb. at Rs. 10 –
Cauri 32 puns. per current rup. 32 puns. per current rup. 32 puns. per current rup.
Source: K.A. 2045, ff. 8074-74vo; K.A. 2087 f. 430; K.A. 2133, ff. 963-4.
gomasta system.73 Hence it should be handled with more cau-

tion. Moreover the very fact that these two warehouse keepers
wrote that the ‘necessaries of life had been greatly enhanced
over the previous ten or twenty years’ only betrays the casual
nature of their assertion. As they wrote in 1753, it could have
meant price rise either from about 1733 or 1743 which is a very
curious position as our authorities assert that the sustained and
marked increase in prices took place only in early 1740s and by
implication that the price situation was completely different in
the 1730s and 1740s. Hence one part of the assertion of the two
English men (‘since last 20 years’) becomes superfluous. If the
increase in prices is to be dated from early 1740s, the report no
doubt tallies with the thesis of our authorities but, as we have
seen from our earlier analysis, that was not the case at all. So
there is hardly any justification for relying so much on the report
of Frankland and Manningham as evidence of price rise.
Like most of the modern historians, these two English men
too have attributed the alleged price increase in Bengal to a con-
dition of real scarcity following the Maratha invasions. There
is no denying the fact that the Maratha incursions resulted in
serious dislocation in the economy of some areas of Bengal. But
the impact of the invasions has been greatly exaggerated. The
Marathas caused destruction generally along the lines of their
march, leaving the remaining part of the country more or less
unaffected. Even in the affected areas as Richard Becher points
out the Marathas were obliged to return at the approach of the
rainy season and the inhabitants were again safe till January.
They immediately began to work and arranged to raise and sell
their crops before next year’s impending invasions.74 That the
country was not so much impoverished by these incursions is also
proved by the fact that the zamindars paid Alivardi Rs. 1 crore
at one time and Rs. 50 lakhs at another besides their annual rev-
enue to enable him to meet the increased military expenditure.75
The argument that many merchants in Bengal were ‘crippled by
losses and exactions’ following the Maratha invasions and that
as a result both the English and the Dutch Companies increas-
ingly turned to direct dealings with the artisans through their

agents is hardly tenable any more. As we have shown elsewhere76,
the Dutch Company made such an experiment for a few years
only from 1747 to 1749 in a particular aurung and there too it
reverted to contracts with dadni merchants from 1750 whereas
the change over in the English Company’s investment pattern
from dadni to gomasla system in 1753 was not because of any
decline of Bengal merchants but was actually the result of the
concerning private trade by cutting out the dadni merchants.
Again historians rely too much on contemporary vernacular
effects of the Maratha incursions. That these are mostly exag-
gerated accounts is clear from the very nature of the evidence.
For example, Gangaram writes: ‘rice, pulses, dal of all sorts, oil,
ghee, flour, sugar, salt began to be sold at one rupee per seer. . . ’.
All of them from the lowest to the highest, including the nawab
himself, had to subsist on boiled roots of plaintain trees.’77 It is
simply absurd that rice, oil, ghee, sugar and salt – all were sold
at one rupee per seer. Equally so is to believe that even the nawab
subsisted on roots of banana trees. Even making allowance for
the poetic effusion, the above can hardly be taken as evidence of
history. The author of Riyaz-us-Salatin refers to human beings
living on banana roots to avert death by starvation. But this was
a description mostly of Burdwan city when its granaries were
burnt down and the supply of imported grains was completely
cut off by the Marathas for a short time.78 Bharatchandra gives
an account of Malini’s shopping in Burdwan but the prices she
paid for articles though regarded ‘extraordinary’ cannot be com-
pared with earlier prices (for lack of price data) to see if they
were really so.79 The simple fact that the total investments of
the European Companies, especially the English East India Com-
pany, were not largely affected during or immediately after the
Maratha invasions is sufficient proof that these invasions had
really no disastrous effects on the overall economy of Bengal.80
The assertion of a recent authority81 that ‘prices were rising
with large scale European purchases financed by import of silver
in the decade or so before the battle of Plassey’ though in line

with the general assumption that there was a upward movement
in prices from early 1740s and the period referred to coincides
with the commencement of the Maratha invasions, can hardly
be tenable. Of the two major European exporters of Bengal
goods, the Dutch fell behind the English from about the close of
1720s. As far as the English were concerned, there was hardly
any remarkable increase in their total exports from Bengal in the
1740s as compared with the level in the 1730s which is evident
from the table below:
Table 11.7: Quinquennial Total of English Exports from Bengal 1727-55
Years Total Value Average Total Value

1727-31 £2,289,323 £457,865
1732-6 £2,046,150 £409,230
1741-5 £2,401,785 £480,357
1746-50 £2,173,524 £434,705
1751-5 £ 2,033,235 £406,648
Source: Calculated on the basis of the figures in K.N. Chaudhuri’s The Trading World
of Asia and the English East India Company, pp. 509-10.
It is clear from Table 11.7 that the European exports in the

1730s were almost at the same level as those in the ’forties and
early ’fifties. Hence the question of the ‘increasing purchasing’ of
the European Companies in the 1740s and 1750s pushing up the
prices in Bengal does not arise. Moreover, had there been even an
increase in the European export from Bengal, it would not have
necessarily resulted in a spurt in prices. As Om Prakash82 has
argued, the overall increase in the export commodities would
have constituted a clear signal for reallocating resources to
increase the output of these goods. It is beyond any doubt that
Bengal was one of the most fertile regions of Mughal India and
was the granary for not only several other parts of the country
but for quite a few neighbouring countries too. According to
the said authority, ‘the availability of a food surplus created a
margin within which a relative shift from food to commercial
crops in response to changing demand could be effected without

generating unduly severe strains.’83
However, there was an unmistakable sign of marked increase
in prices in early 1750s of one category of items in the export list
of the European Companies namely, the textiles. The contract
price of these textiles between 1741 and 1751 indicate a definite
and substantial rise during the period as will be evident from the
Table 11.8.
The somewhat marked rise in the price of the textiles in 1751
from the level of 1741 can be easily explained. These textiles are
mostly produced in Birbhum and Burdwan districts which were
worst affected by the Maratha incursions and hence the rise
in prices of the textiles manufactured in these areas. It is to be
noted here that the merchants were extremely reluctant to sup-
ply these coarsest piece-goods to the European Companies from
about mid 1740s while they were only too eager to contract for
finer varieties. Often the Companies had to impose the contract
for coarsest textiles on the unwilling merchants.
As to the impact of the imposition of abwabs and other tolls,
this may not be overemphasized. The subadari abwabs were
first imposed by Murshid Quli Khan and later on followed
by Shujauddin and Alivardi Khan. No doubt these established
dangerous precedents and though were levied from zamindars,
the latter were authorized to collect these from the raiyats. But,
as John Shore maintained, the peasants were not perhaps quite
adversely affected by these exactions. He holds that owing to
the growth of commerce and increased imports of specie, ‘the
resources of the country were at that period, adequate to the
measure of exaction.’84 Though Shore’s contention is a mere
hypothesis without any quantitative evidence, neither the prices
in Shujauddin’s time nor in Alivardi’s reign when the abwabs
were levied on a large scale85 show any remarkable increase
which only indicates that the impact of the abwabs or other
tolls was only marginal. As we have seen earlier, Shujauddin’s
reign became legendary for cheapness of provisions and the later
period of Alivardi’s rule was on the whole one of ‘unbroken
economic prosperity’.86 Regarding natural calamities like flood,
Table 11.8: Price of Coarsest Textiles 1741 and 1751: Dutch Contracts
Contract Price, 1741 Contract Price, 1751
No. of pcs. Piece goods Length & Rate Total No. of pcs. Piece goods Length & Rate Total
breadth Amount breadth Amount
60,000 Guineas 75 co x Rs. 121.8 Rs. 364500 20000 Guineas 75 co x Rs. 175 per Rs. 175,000
2¼ co per corge 2¼ co corge
– – - – – 25,000 Gerras 36 co x Rs. 84 Rs. 105,000
2¼ co per corge
80,000 Gerras 30 co x Rs. 48 Rs. 194,000 12,000 Gerras 30 co x Rs. 70 Rs. 42,000
2¼ co per corge 2¼ co per corge
– – - – – 5,000 Boureng 36 co x Rs. 50 Rs. 25,000
2¼ co per corge
– – - – – 6,000 Boureng 24 co x Rs. 70 Rs. 46,800
2¼ co per corge
50,000 Salamporis 37½ co x Rs. 60.12 Rs. 151,875 10,000 Salamporis 37½ co x Rs. 87 : 8 Rs. 43,750
2¼ co per corge 2¼ co per corge
10,000 Dongeries 27 co x Rs. 31 Rs. 15,500 10,000 Dongeries 27 co x Rs. 50 Rs. 25,000
1¾ co per corge 1¾ co per corge
Source: For 1741, V.O.C. 2537 K.A. 2429), ff. 1427-1428, Hugli to Batvia, 26 November 1741; For 1751 , V.O.C. 2783 (K.A. 2675), ff. 82-4
(pt. I), HB, 21 December 1751.
famine, drought, their impact on prices was only temporary and

often localised, and hence need not be overstressed.
Wages
If the nawabi regime in Bengal was marked by low prices, it was

a period of low wages too. A Dhaka letter of 28 August 1736
mentioned that ‘men who helped the weavers’ earned one pun
cauris a day and ‘their rice’.87 According to Taylor, the wage of
a weaver in Dhaka in mid-18th century was from one to one
and a half Arcot rupees and that of his assistant from 8 ans.
to 12 ans. per month.88 He further states that the head weaver
who buys the thread, the weaver who makes the cloth and the
journey man who assists the weaver earn about (all who work
for weaving one mulboos khas) Rs. 47 in six months working
together.89 The best spinners in Dhaka who were mostly women
earn about 12 ans. to 14 ans. per month working about 3 hours
a day on an average.90 In Calcutta there was a slight increase in
the wages of ordinary labourers in the 1750s. The Fort William
Council decided to raise wage of a coolie to 2 pun cauris per
day in March 1751 which was raised to 2 pun 10 gondas per
day in November 1751 because of dearness of rice and further
increased to 2 pun 12 gondas per day in January 1753.91 In the
charges of the Mayor’s Court, Calcutta, from November 1752
to May 1753 the peon’s wage is recorded at Rs. 2-4 ans. the
black sergeant’s at Rs. 2-4 ans. and the European sergeant’s at
Rs. 10 per month.92 The Fort William Council recorded a list of
wages93 of different types of workers in Calcutta before 1757
and in 1757 which indicate a slight increase in wages.
It seems that the income of an average person in Bengal under
the nawabs was admittedly very low. But yet the satisfaction
which a man could get for his money was considerable. As the
purchasing power of money was very high, a man could have
plenty to eat by spending only a few annas per month. A common
man in nawabi Bengal had far more to eat and his condition was
far better in the early eighteenth century than under the Com-
pany’s rule in the late eighteenth and early nineteenth centuries.
Notes
1. Abul Fazl, Ain-i-Akbari, vol. I, text ed. Blochmann, 390, trans. Jarret,
vol. II, 122-3; Al Badauni, Muntakheb-ut-Tawarikh, text ed. Maulvi
Ahmed Ali, vol. I, 349, trans. Ranking, vol. I, 458.
2. S.C. Hill, Bengal in 1756-7, vol. 3 (London, 1905), 160.
3. Ghulam Husain Salim, Riyaz-us-Salatin, text ed. Maulvi Abdul Hak
Abid (Calcutta, 1890), 4, trans. Maulavi Abdus Salam (Calcutta,
1904), 4.
4. Parliamentary Papers, House of Commons, vol. VIII, quoted in N.K.
Sinha, The Economic History of Bengal, vol. II (Calcutta, 1968), 230.
5. Verelst to Court of Directors, 5 April 1769, Bengal Public Consultations,
(B.P.C.), vol. 44, f. 324, para 6.
6. For some of the observations of the travellers in the 17th century, see
S. Chaudhuri, Trade and Commercial Organization in Bengal, 1650-
1720 (Calcutta 1975), 4-5.
7. For Dutch shipping lists, see relevant volumes in Verenigde Oost
Indische Compagnie (henceforth V.O.C.), earlier Kolonial archief
(K.A.) in Algemeen Rijksarchief, The Hague.
8. Richard Becher’s letter to Governor Verelst, 24 May 1769, quoted in
W.K. Firminger, Historical Introduction to the Bengal Portion of the
Fifth Report, rpt. (Calcutta, 1962), 183.
9. William Bolts, Considerations on Indian Affairs (London, 1772), 200.
10. Luke Scrafton, Reflections on the Government of Indostan (London,
1760), 20.
11. N.K. Sinha, Economic History of Bengal, vol. 1, 230.
12. James Rennell, Description of the Roads in Bengal and Bihar (London,
1778), 10-69.
13. James Rennell, Journals (Calcutta, 1910), 97-108.
14. Ibid.
15. K.K. Datta, Studies in the History of Bengal Suba, 1740-1770, vol. I,
(Calcutta, 1936), 391.
16. Rennell, Journals, 86-7.
17. P. J. Marshall, Bengal: The British Bridgehead (Cambridge, 1987), 13.
18. B.P.C., vol. 14, f. 313, 21 November 1739.
19. S. Bhattacharyya, The East India Company and the Economy of Bengal
(London, 1954), 47.
20. James Rennell, Memoirs of the Map of Hindustan (London, 1793),
245, 335.
21. Ibid.
22. ‘An Unpublished Letter of Major James Rennell, 31 August 1765’,
Bengal Past and Present, July-September 1933.
23. J.S. Stavorinus, Voyage in the East Indies, trans. S.H. Wilcoke, vol. I
(London, 1798), 399.
24. Alexander Dow, The History of Hindostan, vol. III, 2nd reprint (New
Delhi, 1985), lxii.
25. Marshall, Bengal, 13.
26. Ibid.
27. Marshall, Bengal, 13.
28. Ghulam Hussain Khan, Seir-ul-Mutakherin (hereafter Seir), vol. II,
(Calcutta, 1902), 377.
29. Ramprasad, Vidyasundar, 6.
29. Vijayaram, Tirthamangal, 40, 43, 62, 190, 192, 203.
30. Ibid., 39-40.
31. J.Z. Holwell, Interesting Historical Events (London, 1765), 194.
32. Ibid., 193.
34. B.P.C., Range 1, vol. 25, f. 234, Consultations, 9 October 1752.
35. Samser Gajir Punthi, Typical Selections etc., pt. II, 1853.
36. Letter of the Court of Directors to Bengal, 11 February 1756, quoted
in Datta, Bengal Suba, 462.
37. Riyaz-us-Salatin, 280-1.
38. See for example, J.N. Sarkar (ed.), History of Bengal, vol. II. (Dhaka,
1948), 424, 434, 449; Seir, vol. I, 325; Riyaz, 290-1.
39 Calendar of Persian Correspondence, vol. II, 191, 197, quoted in K.K.
Datta, Alivardi and His Times, 2nd edn (Calcutta, 1963), 140.
40. K.N. Chaudhuri, The Trading World of Asia and the English East
India Company (Cambridge, 1978), 99-104.
41. For such variation, see Table 11.4, Price of Rice, 1729.
42. For instance, see Datta, Bengal Suba, 463-9; Chaudhuri, Trading
World, 99-108.
43. See the chapter on ‘Nawab Sirajuddaula and Battle of Palashi’, in
History of Bangladesh, vol. I.
44. Om Prakash, The Dutch East India Company and the Economy of
Bengal (Princeton, 1985), 250.
45. Ibid., 251-3.
46. Chaudhuri, Trading World, 102, 108.
47. Bhattacharyya, East India Company, 206.
48. Riyaz, 280-1.
49. B.P.C., vol. 6, f. 297vo, Consultations 12 June 1727; Riyaz, 208;
Salimullah, Tarikh-i-Bangla, f. 65 b, quoted in Abdul Karim, Murshid
Quli Khan and His Times (Dhaka, 1963), 73.
50. Shore’s Minutes, 18 June 1789 in W.K. Firminger, Fifth Report, vol. II,
9.
51. J.N. Sarkar (ed.), History of Bengal, 427.
52. B.P.C., Range 1, vol. 13, 20 July 1738, vol. 13, f. 298.
53. J.C. Sinha, Economic Annals of Bengal (London, 1927), 19.
54. B.P.C., Range 1, vol. 26, (T: 152-4, 24 May 1753; ff. 336-36vo.,
19 November 1753; vol. 27, f. 181, 10 June 1754.
55. Ibid., vol. 26, IT. 336vo, 19 November 1753.

56. Chaudhuri, Trading World, 102.
57. Datta, Bengal Suba, 464, Brijen K. Gupta, Sirajuddaullah and the East
India Company (Leiden, 1962), 33.
58, P.J. Marshall, East India Fortunes (Oxford, 1976), 35; Bengal, 73.
59. Bengal and Madras Papers, vol. II, p. 34, Fort William Consultations,
11 December 1752; B.P.C., vol. 26, f. 214, Consultations, 11 December
1752; James Long, Unpublished Records of the Government, ed. M.P.
Saha (Calcutta, 1973), 40, document no. 103.
60. Chaudhuri, Trading World, 99; Marshall, Bengal, 73, 142; East India
Fortunes, 35.
61. Gupta, Sirajuddaullah, 33.
62. Marshall, East India Fortunes, 35.
63. Ibid.
64. Marshall, Bengal, 73. More significantly, Marshall states: ‘Shortages
and dislocations probably contributed to a very marked price rise
which began in western Bengal in the 1740s.’ Ibid., 73. He however
depends mostly on Chaudhuri, Trading World for such assertion.
65. Datta, Bengal Suba, 463-4; Gupta, Sirajuddaullah, 33.
66. B.P.C., vol. 26, ff. 56vo.-57, 19 February 1753; ff. 152-4, 24 May
1753; ff. 336-36vo., 19 November 1753; vol. 27, f. 181, 10 June 1754,
ff. 244vo.-245, 12 August 1754; ff. 378-78vo., 5 December 1754.
67. B.P.C., Range 1, vol. 16, f. 401vo., 7 January 1744.
68. Bhattacharyya, East India Company, 214-15; see also Hugli Faujdar
Pir Khan’s letter to the President of the Fort William Council wherein
he accused that the export of rice by the Company and Calcutta
merchants was responsible for famine and shortage of food grains,
B.P.C., Range 1, vol. 13, f. 298, Annexure to Consultations, 20 July
1738.
69. Robert Orme, Historical Fragments of the Mogul Empire (London,
1905), 405.
70. Marshall however depended on this and Holwell’s description of
the effects of the famine in Calcutta (Holwell, India Tracts, 2nd edn.
London, 1764, 165) as evidence of marked rise in food prices, see
Marshall, Bengal 18, 73.
71. Datta, Bengal Suba, 465-8; Chaudhuri, Trading World, 99-108; P.J.
Marshall, Bengal 73, 142-3.
72. Frankland and Manninghams’ report, B.P.C., Range 1, ff. 164-5,
7 June 1753. Both K.N. Chaudhuri and P. J. Marshall relied heavily on
this report; Chaudhuri, Trading World, 99, 102; Marshall, East India
Fortunes, 35.
73. S. Chaudhuri, ‘Merchants, Companies and Rulers – Bengal in the
Eighteenth, Century’, Journal of the Economic and Social History of
the Orient, Leiden, XXXI (1988), 82-9.
74. Richard Becher’s Letter to Governor Verelst, 24 May 1769, quoted in

W. K. Firminger, Fifth Report, 183-4.
75. Ibid.
76. S. Chaudhuri, ‘Merchants, Companies and Rulers’.
77. Gangaram, Maharastrapurana, 234-42.
78. Riyaz, 340.
79. K.K. Datta, Bengal Suba, 466.
80. For the investments of the Companies, see relevant chapter in this
volume.
81. P.J. Marshall, Bengal, 163-4.
82. Om Prakash, Dutch East India Company, 238, 250-1.
83. Ibid., 238.
84. W.K. Firminger, Fifth Report, vol. II, 120.
85. For details, ibid.
86. J.C. Sinha, Economic Annals of Bengal, 19.
87. B.P.C., vol. II, ff. 288vo.-289, 28 August 1736.
88. Home Misc., 456 F, f. 205.
89. Ibid., f. 145.
90. Ibid., f. 129. Taylor says that women spinners could produce quarter
of a sicca weight of thread in a month and the price of this sort of
thread was Rs. 3 to Rs. 3:8 an. per sicca weight.
91. B.P.C., vol. 24, f. 38, 22 March 1751; f. 374, 15 November 1751;
Coast & Bay Abstracts, vol. 5, f. 325, para 63, 2, January 1753.
92. B.P.C., vol. 26, f. 138vo, Mayor’s Court Account, 1st May to 1 Nov-
ember 1753.
93. B.P.C., vol. 29, f. 26, Annex, to Consultations, 13 January 1757.
chapter 12
The Traffic in ‘Drug’ in Bengal Suba

A Study of Opium Trade and Production,
1700-1757
The trade in opium from Bengal was quite lucrative in the first
half of the eighteenth century. The major exporter of the com-
modity was the Dutch East India Company while the English
and the French were also involved, though to a lesser extent,
in the trade. The Indian merchants, especially the Marwaris,
had a minor share in the opium export from Bengal. The Dutch
exported opium mainly to Batavia from where it was sent to
different parts of the Indonesian archipelago. Other Europeans
and Indian merchants traded the commodity to several parts of
India.
This paper examines the role of the Dutch and the other trad-
ers in the opium export from Bengal and in that connection tries
to look at the production side of the commodity in the Bengal
suba, in the first half of the eighteenth century. It was the Dutch
East India Company which exported a substantial amount of
opium to Batavia, and it appears that the English or the French
Company’s share in the trade was quite small in the early years.
However, a small amount of opium was exported on account
of the English and French private traders. So the Dutch Com-
pany did not face much competition from their European rivals
in opium trade as they did in the textile and silk market until
the battle of Plassey in 1757, after which the English tried to
monopolise the opium trade in Bengal. The Dutch first exported
* Presented in the Indian History Congress, 2001.

The Traffic in ‘Drug’ in Bengal Suba | 301
opium to Malabar from the Malwa region, procured at Surat.

But as the price of this variety began to increase at an alarming
rate, they turned their attention to Bengal opium.1 Though the
Dutch Company exported a large amount of opium from Bengal
to Malabar in the 1660s and 1670s, gradually it was the Indone-
sian archipelago which became the biggest consumer of Bengal
opium. A Dutch estimate of 1683 put the annual demand in the
entire archipelago at around 116,000 Dutch ponds.2
In Bengal opium was produced mainly in Bihar, though there
is reference that it was also produced in Rangpur in North
Bengal. According to an estimate of 1688, 8,700 maunds of
opium were produced in 48 parganas of Bihar in a normal year,
of which about 5,400 mds. were of very good quality. Of the
total produce, about 10 to 12.5 per cent was consumed in Ben-
gal and Bihar, 34.5 to 46 per cent sent to Agra and Allahabad
region, and the remaining 41.5 to 55.5 per cent was exported
to other national and international markets. The Dutch export
around this time amounted to 1,000 mds.3 The total production
remained more or less the same in the first half of the eighteenth
century, though the Dutch export increased considerably by this
time. The Dutch Director Sichtermann stated in his ‘Memorie’ in
1744 that if there was a good harvest, the total output would be
4,000 chests or 8,000 mds, of which 2,000 to 3,000 mds. were
bought by the Indian merchants and the rest, 5,000 to 6,000
mds., left to the Europeans, the Dutch order never exceeding
1,800 chests or 3,600 mds.4 Towards the end of our period,
Taillefert also mentioned in 1755 that in a normal year the total
production of opium in Bihar amounted to 8,000 mds. which
does not take into account the output in Bhagalpur and Purnea.
Of this amount the distribution pattern was as follows (see Table
12.1).
The best quality opium, as Taillefert reported, was produced in
the districts of Arra, Munir (Munger?), Patna, Bihar and Saran.
The seeds were generally sown in October and November, and in
a good year the yield per bigha could amount to 11 to 12 pounds,
which the opium growers made into 2 or 3 cakes. He also stated
that the opium produced in Bhagalpur and Purnea was of a bad
Table 12.1: Total Production and Distribution of Bihar Opium, 1755
Indian Merchants bought: 2,000 maunds

Local Consumption (Bengal & Bihar): 1,000 maunds
English and French bought: 1,600 maunds
Dutch bought: 3,400 maunds
Total 8,000 maunds
Source: Taillefert’s ‘Memorie’, VOC, 2849, f. 196, 27 October 1755.
quality and could not be compared with the Bihar opium.5 In his
instruction to the next Director, Sichtermann (‘Memorie’, 1755)
also advised not to buy Bhagalpur or Purnea opium.6 Later on,
in his ‘Memorie’ of 1763, Taillefert made a further categoriza-
tion of the opium produced in Bihar. The best quality opium
which was known as Bihar opium was produced mainly in the
districts of Bihar, Jahanabad, Futwari and Kashmar while the
opium from Mogra, Barbigha, Saran, and Munir was also good
but of a quality inferior to the so-called ‘Bihar’ opium.7
Though the Dutch were the main buyers of opium, it was
difficult for them to control the supply market. The competition
from other Europeans and Indian rivals often raised the price
of opium in Patna. There was also the occasional attempt by
big Indian merchants, especially those active in Bihar trade, to
monopolise the opium trade. The English Company reported
as early as 1731 that the Calcutta merchant Umichand tried to
monopolise the trade of the commodity through an ‘unlawful
grant’ from the faujdar of Rangpur.8 But it was the Armenian
merchant Khwaja Wazid of Hugli who virtually controlled the
opium trade in Bihar from at least the late 1740s. He managed
his opium business, like his saltpetre trade in the early 1750s,
through his agent Mir Afzal and his brother Khwaja Ashraf who
were operating in Bihar. The Dutch Director Huijghens reported
in 1750 that the Company could procure only 1,479 mds. of
opium at Rs. 115 per md. through a bribe of Rs. 1,000 to the
Bihar administration which prevented Khwaja Ashraf from col-
lecting all the opium he had contracted for by December the
year before. Wazid showed his displeasure over the incident
by insisting on payment by the Dutch in Patna against a bill for

Rs. 25,000.9
The main difficulty of the Dutch in opium procurement was
the shortage of liquid capital. Huijghens emphasized in his
‘Memorie’ the need for ready cash for buying opium because
it was not possible to buy it on credit due to the keen compe-
tition in Patna. Sometimes the situation was quite bad for the
Company. In January 1750 the Dutch got hold of 900 mds.
of opium but were required to pay for it in cash. Though the
Company servants got permission to draw bills of exchange for
Rs. 200,000 in the name of the Company in Hugli, they could
only collect Rs. 20,000. So the Company made a request to the
house of Jagat Seth for two bills of exchange for Rs. 100,000
and Rs. 25,000 each payable in Patna after 41 days at the rate
(‘agio’) of 3¼ per cent.10 The Dutch generally entered into con-
tract with paikars who were given an advance for buying opium.
But Sichtermann reported in 1744 that the practice was aban-
doned because of the ‘bankruptcy’ of the paikars who would
generally tend to deliver opium when it was not properly dried.
So the Company had to take the extra trouble of drying the com-
modity. From then onward, it appears that the Dutch bought
opium against ready money from the dealers in the market.11
The competition from Indian merchants and other European
rivals often raised the price of opium and stood in the way of
procurement of the full amount specified in the Dutch order
from Bengal. In 1741 the Dutch reported that they could collect
only 1,6000 mds. of opium which was only 2/3 of the amount
ordered for that year. The main reason, according to the factors,
was the purchase by the Marwari and other Indian merchants
which raised the price to about Rs. 124 per maund. But next
year when the Marwari merchants and the English were not that
active in the opium market, the price came down by 9 to 10 per
cent.12 In 1744 Sichtermann reported that the Dutch could buy
the previous year 2,600 mds. of opium for the price of 2,000
mds. which was the amount ordered, by waiting for the price to
come down and then buying in the open market. He suggested
that the best way to beat down the price was not to let the dealers
know the amount the Dutch required. If they came to know that,
they would artificially manipulate the price. The English and the
French, according to Sichtermann, exported Bengal opium to
Coromandel, Malabar, Surat and Malacca. The Dutch tried to
stop their trade but to no avail.13 The comparative position of
the different buyers in the opium trade can be gauged from a
Dutch report of 1747 which outlined the share of different rivals
in the five from 1741 to 1745.14
Table 12.2: Total Opium Production and Share of Different Buyers

(in Maunds), 1741-5
Year Total Dutch English & Indian

Production French Merchants
1741 4,280 1,600 1,725 955
1742 4,796 3,200 846 750
1743 4,516 2,600 1,316 600
1744 4,669 1,600 1,000 1 ,869
1745 3,380 1,210 240 720
Source: VOC 2661, ff. 143-4, HB 12 January 1747.
Dutch Export of Opium
Unlike most commodities in the Dutch export from Bengal, the

export of opium shows a secular upward trend from the early
1730s to early 1750s, though rising very slowly but steadily.
While the average annual export in the first five years of the
1730s amounted to 148,003 lbs. or 2,041 mds., it was 156,774
lbs. or 2,162 mds. in the first quinquennial period of the 1740s,
rising to 192,782 lbs. or 2,659 mds. in the early 1750s.
Table 12.3: Dutch Opium Export to Batavia: Quinquennial Total

and Annual Average, 1730-5
Years Total (lb.) Average (lb.) Average (md.)

1730/1-1734/5 740,015 148,003 2,041
1740/1-1744/5 783,870 156,774 2,162
1750/1-1754/5 963,911 192,782 2,659
Source: Collected and computed from export invoices in VOC records.
What emerges from Table 12.3 is quite interesting because

while the intra-Asiatic trade of the Dutch Company in general
and to Batavia in particular was marked by a gradual decline
throughout the period from 1730-55,15 the trade in opium to
Batavia was steadily increasing during the same period. This
only indicates that opium was a high profit-yielding commodity
in the intra-Asiatic trade – the reason why the English Company
and its ser vaults monopolised the opium trade after the Plassey
revolution. The Dutch Director Taillefert described in 1763 how
the British were eliminating the Indian and other European mer-
chants from the opium trade and the manner in which they were
forcing the producers and dealers to sell opium to them at a very
low price.
BPC Bengal Public Consultations, India Office Records, British

Library, London.
HR Hoge Regering van Batavia, Algemeen Rijksarchief.
VOC Verenigde Oost-Indische Compagnie, Algemeen Rijksarchief,
Den Haag.
Notes
1. Om Prakash, Dutch East India Company and the Economy of Bengal,

Princeton, 1985, p. 145.
2. Ibid., p. 153; for Dutch trade in opium in the 17th century, see, ibid.,
pp. 145-56.
3. VOC, 1454, ff. 764vo-768vo, 30 June 1688; Om Prakash, Dutch
Company, pp. 57-8.
4. Sichtermann’s ‘Memorie’, VOC, 2629, ff. 946-9, 14 March 1744.
5. Taillefert’s ‘Memorie’, VOC, 2849, f. 193, 27 October 1755.
6. Sichtermann’s ‘Memorie’, VOC, 2629, f. 949, 14 March 1744.
7. Louis Taillefert’s ‘Memorie’, HR 246, ff. 158-9, 17 November 1763.
8. BPC, vol. 8, ff. 400-400vo, 21 June 1731.
9. Huijghen’s ‘Memorie’, VOC, 2763, f. 458, 20 March 1750; VOC,
2732, f. 9vo, HB, 11 February 1750; f. 79, 27 January 1750.
10. VOC, 2732, ff. 78-9, HB, 27 January 1750.
12. VOC, 2518, f. 166vo, HB, 26 November 1741; 2556, ff. 167-9, HB,
16 December 1742.
14. The amount is given in ‘Kisten’ (chests) in the report, each ‘kisten’
weighing 2 mds., c.f., VOC, 2165, Pt. II, f. 84, HB, 30 November 1730;
2829, f. 65vo; HB, 31 August 1754.
15. For the value of the Dutch Intra-Asiatic trade from Bengal to different
parts of Asia in the first quinquennial period from 1730-55, see S.
Chaudhury, Delhi, 1995, chapter 3.
chapter 13
International Trade in Bengal Silk and

the Comparative Role of Asians and
Europeans, c. 1700-1757*
It is almost common knowledge by now, thanks to the penetrat-

ing research by several scholars in the field, that Bengal silk was
an important commodity in international trade in the seven-
teenth and eighteenth centuries. But the general assumption so
far has been that it was the Europeans rather than the Asians
who played the major role in the export of raw silk from Bengal.
As a corollary to this and taking into consideration the dominant
position of the European Companies in Bengal textile trade, his-
torians have maintained even in recent studies that around the
mid-eighteenth century, European trade was the most important
factor in Bengal’s commercial economy.1 There is no denying
the fact that the Companies were the most dominant factor in
Bengal’s seaborne trade but that does not necessarily imply that
they were far ahead of Asians in Bengals export trade as a whole.
For the above does not take into account Bengal’s export trade
by overland routes which had always been extremely significant.
It is generally assumed that with the fall of the great empires –
Mughal, Safavid and Ottoman – and the consequent decline of
ports like Surat, the overland trade was doomed. The reason for
this sort of assumption, it seems, was mainly the lack of data
regarding India’s overland trade compared to the abundance
of quantitative material in the Company archives on European
exports from Bengal. It is also possible that the fascination of
*Modern Asian Studies, 29, 2, 1995, pp. 373-86.

the sea and preoccupation with the European market, as also the
nature of the surviving evidence, have obscured the significance
of the traditional and continuing trade through the overland
route from India. Moreland thought that India’s overland trade
in the seventeenth century was of small importance and that the
important development took place at sea.2
In this paper it will be argued that the volume of silk export
by the Asian merchants from Bengal even in the mid-eighteenth
century was much larger than that of the European Companies.
From the quantitative evidence we have now, admittedly not very
exhaustive (hopefully we would be able to unearth more mate-
rial on this aspect from both European and indigenous sources),
it can be shown that the share of the Asian merchants even in
the important European export commodity, raw silk, was much
higher than that of the Europeans.
There is no dearth, actually an abundance, of qualitative evi-
dence in the European archives which indicates the Asian lead
in Bengal’s export trade over the Companies, especially in the
silk trade. Though the European Companies exported a large
amount of raw silk from Bengal, they could hardly control the
silk market in Bengal as they were only minor partners in the
field. The privilege was enjoyed by the large number of Asian
merchants active in Bengal’s silk market. The English Council at
Kasimbazar made this amply clear in several letters to Calcutta.
As early as 1733, the English Council at Kasimbazar wrote that
it is ‘not in their power to command the (silk) market which will
rise according to the demand there is’.3 Again in 1744 the Kasim-
bazar factors referred to their inability to control the silk market
in no uncertain terms: ‘though the price is so much higher than
the last year, it is not in our power to help it as we cannot com-
mand the market which has been higher lately’.4 It was in the silk
investment that the European Companies had to face the stiffest
competition from various groups of Asian merchants operating
in Bengal. Of these groups, the Gujaratis were the most impor-
tant and it can be safely asserted that their operation acted as
‘a general indicator’ of the trends in the Bengal silk market.5
In 1726 the Kasimbazar Council entered into contract with the
International Trade in Bengal Silk | 309
silk merchants in a hurry, apprehending that the extraordinary

demand of the Gujaratis would raise the price further.6
Apart from the Gujaratis, the different groups active in Bengal’s
silk market were the merchants from Lahore, Multan, Benares,
Gorakhpur, Hyderabad, Delhi (Calwars), Agra and Jangipur in
Murshidabad district, the last one acting as gomastas or agents
of Benares merchants. And of course, the Armenians too were
there, and another group referred as ‘Burdelwalis’ in records,
probably from North India, was also active in the procurement
of silk. As a matter of fact, even in the mid-seventeenth century,
the connection between North India and the Bengal silk market
was extremely close. It may be noted in this connection how
John Kenn of the English Company pointed out the close link
between the silk and money markets in Kasimbazar and those in
North India when he wrote in 1661: ‘According as this silk sells
in Agra, so the price of silk in Kasimbazar riseth and falleth. The
exchange of money from Kasimbazar to Patna and Agra riseth
and falleth as the said silk findeth a vent in Patna and Agra.’7
It is significant to note that sometimes the demand of this
group of merchants, not including the Gujaratis, had its impact
on the silk market and enhanced the price of raw silk. As a young
factor in the Kasimbazar factory, Warren Hastings reported in
1756 from Powa, one of the silk aurungs on the other side of the
river Padma, that the prices of pattani or unspun silk suddenly
rose there, not because of the purchases of Gujarati merchants
but ‘the arrival of every considerable foreign merchants at the
aurungs’. He identified these merchants as ‘Calwars’, Gorakh-
puris and Jangipuris ‘who are reported to have bought upwards
of six or seven lack (lakh = 0.1 million) of rupees for the provi-
sion of putney (pattani), especially the finest sorts which they
are daily buying up notwithstanding its dearness’.8 An intelligent
person as he was, Hastings tried to analyse as also rationalize the
behaviour of these indigenous merchants who were buying up
silk without the least regard for price. He wrote:9
For the two former [Calwars and Gorakhpuris] coming from the
distance of Dillee and Benares are in a manner necessitated by the long
journey they had taken for this commodity, to take it at such a rate
as the market affords; nor are the latter [Jangipuris] less free in this
respect, for tho Jungapoor lies but a few days’ journey from hence
yet as they are most of them gomastahs and their constituents living
likewise as far off as Benares they are obliged to comply with whatever
orders they receive from thence, let the price be ever so great.
He adds further reflecting on the remarkable behaviour of the
merchants from the Delhi-Agra region and how it affected the
silk market.10
. . . the Calwars by their eager manner of purchasing serve not a little to
encrease the expectations of the country people and consequently the
price of Putney in general tho’ they provide only the finest sorts of all,
for wherever they meet with any silk that strikes their fancy, they spare
no price for it.
If Hastings’ report is correct (we don’t see any reason why it
should not be as he collected the information on the spot), then
it is evident that Indian merchants, even excluding the Gujara-
tis who were the most important group among them, exported
silk worth Rs. 0.6 to Rs. 0.7 million from the not-so-important
silk producing centre of North Bengal only. If that is so, one
can only guess what could have been the value of the exports
by the Asian merchants from Kasimbazar, the most important
certre of silk manufacture and trade in Bengal, and where the
Asian merchants including those from Gujarat, Lahore, Multan,
Benares, Agra, Gorakhpur, etc. were vigorously active in buying
silk. A report of 1731 indicates that in Kasimbazar the Lahore
merchants bought silk worth Rs. 0.3 million and the Burdewalis
to the tune of Rs. 0.2 million by mid-March of that year.11 It is
interesting to note here that unlike the Europeans, the Asians
bought all varieties of silk from Bengal. The English factors
reported in 1741 that the price of Rangpur silk had gone up
because the Gujarati and Hyderabad merchants had bought
up a ‘great quantity’ to send up with the convoy of the King’s
treasure. Edward Eyles, a servant of the English Company, wrote
from Daudpur (in Rangpur district) in January 1742 that the
gomastas of the merchants from Gujarat, Hyderabad, Benares
and ‘other merchants’ had already bought a lot of Rangpur silk
and some of those gomastas were still ‘buying daily’.12 The silk
merchants of Kasimbazar were extremely reluctant to contract

for Rangpur silk for the Company because of the enhanced price
of the commodity resulting from the great demand of the Bena-
res merchants, ‘there being no less than eleven Families come
from thence and are buying up all the Putney they can lay their
hands on’.13
Table 13.1: Quinquennial Total of English Exports, Raw Silk, 1730s-50s
Years Total Average Average Average

(grt.lb.) (grt.lb.) (small lb.) (maunds)
1730/1-1734/5 702,907 140,581 2 10,872 2812
1735/6-1739/40 714,004 142,801 214,201 2856
1740/1-1744/5 596,051 119,210 178,815 2384
1745/6-1749/50 300,001 60,000 90,000 1 200
1750/1-1754/5 286,620 57,324 85,986 1146
Source and Note: Compiled and computed from K.N. Chaudhuri, op. cit., p. 534.
1 great lb. = 1.5 small lb. In Bengal silk was weighed in maunds and seers, 40 seers
making a maund. One Bengal maund was equivalent to 75 lbs. i.e.. lb. avoirdupois
or what was called small lb.
Now taking up the actual export of raw silk by the European

Companies, one finds that throughout the second half of the
seventeenth century the Dutch export was much larger than that
of the English. Even in the first two decades of the eighteenth
century, the Dutch lead was maintained. But as the Dutch trade
declined in general in the 1720s, the English export of raw silk
from Bengal surpassed that of the Dutch towards the end of
the 1720s.14 As a matter of fact, the English export of raw silk
reached its peak in the 1730s and Table 13.1 indicates the aver-
age annual export by the English Company which fell sharply
from around the mid-1740s, reaching its nadir in the early 1750s
in the whole period from 1730 to 1755.
It is evident from the table that the maximum annual average
of raw silk exported by the English Company was 2,856 mds.
or 0.21 trillion lbs in the peak period of the 1730s and never
crossed 3,000 mds. or 0.23 million lbs. Indeed, from the mid-
1740s till the mid-1750s, the average annual English export was
even less than half of that in the boom period of the 1730s.
Table 13.2: Quinquennial Total of Dutch Exports, Raw Silk, 1730s-50s

(Dutch lbs) (Dutch lbs) (Eng. lbs) (maunds)
1730/1-1734/5 335,319 67,064 73,100 975
1740/1 -1744/5 308,448 61,689 67,241 897
1750/1-1754/5 333,210 66,642 72,640 969
Source: Collected and computed from Bengal Export Invoices in Dutch Records,
Algemeen Rijksarchief, Den Haag.
As against this, the Dutch export of raw silk was more or

less steady from the 1730s through the 1750s, with a marginal
decline in the 1740s and recovering again in the early 1750s,
which will be apparent from Table 13.2.15
It is clear from the table that the Dutch export of Bengal raw
silk in the period between 1730 and 1755 never crossed 1,000
mds or 0.08 million lbs, though it was probably higher than
the figure for the late 1720s and certainly much lower than the
average annual export in the first two decades of the eighteenth
century.16 In other words, in the crucial period of the late 1740s
and early 1750s, the total average annual export of Bengal raw
silk by the two major European Companies which were actively
involved in Bengal trade, certainly did not exceed 2,500 mds or
0.19 million lbs, even taking the English export at 1,500 mds.
and the Dutch at 1,000 mds.17 Adding to this the export of raw
silk by other European Companies which could not have been
more than 1,000 mds. at the maximum,18 the total European
export of raw silk would have been 3,500 mds. or 0.26 million
lbs in a year on an average at the most.
The important question that crops up is what was the amount
of raw silk exported by the Asian merchants from Bengal as
against the European exports? We are fortunate enough to un-
earth a complete list of silk exports by the Asians from Bengal
from 1749 to 1767 from the records at the India Office Library.
The report was prepared by W. Aldersey, who was the chief of
Kasimbazar factory in 1769, in response to an official query as

to the causes of the decline in silk trade and industry in Bengal.
Aldersey specifically mentions that he had collected the infor-
mation from Murshidabad customs house and that it included
the raw silk exported by ‘natives only on which Duties have
been collected’.19 On the basis of his list, we present here the
quinquennial total of silk exports by the Asians from 1749 to
1758 for a comparative study of the Asian and European exports
of raw silk (see Table 13.7 and Figure 13.1), the full details of
which are given in Tables 13.4 and 13.6.
Table 13.3 clearly indicates that the Asians were far ahead of
the Europeans in the export of raw silk from Bengal. While the
export by the Asian merchants in the late ’forties and early ’fif-
ties amounted on an average to 19,803 mds. or about 1.5 million
lbs in the mid-fifties, the Europeans exported only about 3,500
mds. or 0.26 million lbs in a year on an average during the same
period. In other words, it can be said that the European export
was less than 1/5 of what was exported by the Asian merchants
around this time. Again the total value of the European export
of raw silk, taking it to be 3,500 mds. a year and at the rate of
Rs. 7 per seer (40 seers making a maund) which is the rate at
which the Asian export is valued in the said English Company
records, would have been around only Rs. 0.98 million. On the
other hand, the total value of the silk exported by the Asian
merchants is estimated at around Rs. 5.5 million on an average
during the period from 1749 to 1753 and Rs. 4.1 million in the
next five years, i.e. from 1754 to 1758. So as far as the total
value of the raw silk exported by the Europeans and Asians is
Table 13.3: Quinquennial Total of Silk Export by Asians, 1749-58
Years Total Average Average Total Value Avg. Value

(mds) (mds) (lbs) (Rs) (Rs)
1749-53 99,016 19,803 14,85,240 2,77,24,365 55,44,873
1754-8 74,692 14,938 11,20,380 2,09,13,345 44,82,669
Source: BPC, Range 1, vol. 44, Annex to Consult. 19 June 1769; for the complete list,
see Table 13.6.
concerned, the European share was thus only between 1/5 and
1/4 of the Asian share. As such, and considering the fact, attested
by many contemporaries including the Dutch Directors and
English Officials in Bengal,20 that the Asians too had to bring
in silver/cash to Bengal for buying raw silk, textiles and other
commodities, the assertion that the Europeans were the major
importers of bullion into Bengal in the pre-Plassey period can
hardly be tenable.
It would be worthwhile to investigate the direction/destina-
tion of the exports by the Asian merchants, especially of raw
silk, because it was exported in such huge quantity even in the
late 1740s and early 1750s. However, one has to keep in mind
that evidence of such nature is hard to come by in our sources.21
We are extremely fortunate to find some data regarding the
direction/destination of raw silk exports by the Asian merchants
from Bengal during 1775-7. By reading back from the evidence
of 1770s, it is possible to provide some idea of the direction/
destination of the Asian silk trade in the pre-Plassey period. One
has to remember in this connection that in the 1770s there was a
precipitate decline of the Asian merchants’ trade under the ruth-
less repression of the English Company and its servants backed
by political power – a process which started immediately after
Table 13.4: Volume and value of Raw Silk Exported by

Asian Merchants, 1759-67
Year Volume (in maunds) Value (in rupees)

1759 14,394 40,30,387
1760 13,056 36,55,791
1761 10,562 29,57,229
1762 5,953 16,66,845
1763 6,601 18,48,333
1764 8,326 23,31,193
1765 7,191 20,13,525
1766 5,180 14,50,307
1767 6,599 18,47,832
Note: The total quantity for the quinquennial period 1763-7 amounts to 33,897
maunds and the average 6779 maunds. For this table the source is the same as in
Table 6.
1757-8. The decline of the Asian merchants’ trade is evident

from the report of Aldersey which we quoted earlier and Table
13.4 from his report will bear our point.
It is apparent from this table that the average annual export of
the Asian merchants during the quinquennial period from 1763
to 1767 stood at 6779 mds. which tallies more or less with the
figure of exports from 1775 to 1777 which was on an average
7025 mds. The destination as well as the total amount of silk
export by the Asian merchants from 1775 to 1777 is recorded
in the Patna Customs House Register, and for the three years
combined the totals are shown in Table 13.5. From the table, it
is quite clear that during this period the maximum amount of
silk from Bengal went to Mirzapore which was a distribution
centre rather than a manufacturing one, and it can be assumed
that this silk was re-exported from Mirzapore in northern and
western directions. The next highest amount was destined for
Lahore while Multan and Aurangabad came third and fourth
in descending order of total quantity exported. If this was the
destination/direction of Bengal silk exported in the mid-1770s
it can be reasonably assumed that the destination/direction of
Bengal silk exported by the Asian merchants in the late 1740s to
mid-1750s would have been almost similar.
So there could be little doubt that the Asians had a pre-
dominant position in Bengal’s silk trade and that even in the
Table 13.5: Destination/Direction and Triennial Total of

Silk Exported by Asian Merchants, 1775-7
Destination/Direction (in descending order of Total Quantity

total qnty) (in maunds)
Mirzapore 12,568
Lahore 3,851
Multan 1,649
Aurangabad 1,471
Agra 598
Benares 511
Delhi 427
Note: average annual export = 7,025 mds.
Source: Board of Revenue, Misc. Proceedings, Range 98, Vols. 18, 20, 22, IOLR.
mid-eighteenth century their exports of raw silk from Bengal by

far surpassed those of the European Companies. The supremacy
of the Asian merchants is also confirmed by one Sadananda
Bandopadhyay who was the gomasta of a Gujarati merchant
in Kasimbazar and was himself in the silk business for thirty
years, who stated, referring to the 1750s in all probability, that
there were ten merchants in Murshidabad who exported Bengal
raw silk to the tune of 13,000 to 20,000 maunds annually.22 It
was Louis Taillefert, the Dutch Director in Bengal, who clearly
pointed out in 1763 that the procurement of raw silk by the
gomastas of traders from Lahore and Multan had gone up to a
great extent since the beginning of the eighteenth century.23
That Bengal’s traditional export by the Asian merchants was
extremely significant even in the pre-Plassey period, i.e. before
the mid-eighteenth century, is stated in unequivocal terms by the
Table 13.6: Volume and Value of Raw Silk Exported by Asian Merchants,
1749-58 (‘Extracts from Customs Office Receipts at Murshidabad’)
Year Volume Volume Value

(Maunds) (Eng. lbs) (Rs.)
1749 20,037 15,02,775 56,10,423
1750 19,571 14,67,825 54,79,786
1751 23,740 17,80,500 66,47,095
1752 17,615 13,21,125 49,32,221
1753 18,053 13,53,975 50,54,840
1754 15,249 11,43,675 42,69,594
1755 12,269 9,20,175 34,35,310
1756 7,635 5,72,625 21,37,762
1757 21,347 16,01,025 59,77,045
1758 18,192 13,64,400 50,93,634
Note: After this table there is a note which runs: ‘The above account includes only
the Trade on which Duties were really paid to the pachotra Daroga (Royal Customs
House) but besides this there was formerly carried on a very considerable trade in
these articles by Juggutseats House and others who had interest with the Nizamat for
these goods to pass Duty free. . . . The above is the trade of Natives only on which
Duties have been paid.’ (emphasis mine).
Source: BPC, Range 1, vol. 44, Consult. 19 June 1769, IOLR. The figures in the table
are rounded off to the nearest digit.
Company officials who were in Bengal both before and after

Plassey, though these have been overlooked by historians in gen-
eral. Harry Verelst, a responsible official of the Company, wrote
referring to Bengal in the pre-Plassey period:24 ‘Besides the large
investment of the European nations, the Bengal raw silk, cloths
etc. to a vast amount were dispersed in the West and North
inland as far as Guzzrat, Lahore and even Ispahan.’ Another
official, William Bolts stated:25
A variety of merchants of different nations and religions, such as Cash-
meerians, Multanys, Patans, Sheiks, Sunniasys, Paggayahs, Betteeas and
many others used to resort to Bengal in Caffeelabs or large parties of
many thousand together with troops of oxen for the transport of goods
from different parts of Hindustan.
In conclusion, it can perhaps be reasonably asserted on the
basis of the evidence advanced and analysis made above that
there can be hardly any doubt about the supremacy of the Asian
merchants in the export of Bengal silk even in the mid-eighteenth
century. The role of the Europeans in the international trade in
Bengal silk was important, no doubt, but the European share
in this vital sector of Bengal’s commercial economy was rather
small compared with that of the Asians. Quantitatively, the Asian
export of raw silk was around Rs. 4.8 million on an average
annually while that of the Europeans hardly exceeded Rs. 0.98
million in the mid-eighteenth century. Even in the textile export
from Bengal, the Asians had an edge over the Europeans.26 The
average annual value of the total English and Dutch exports
Table 13.7: Comparative Position of Asian and European Silk Exports

(Quantity and Value)
Years Asian Exports European Exports

Av. Qty (lbs) Av. Val. (Rs.) Av. Qty (lbs) Av. Val. (Rs)
1749-53 1.5 million 5.5 million
Source: Asian Exports computed from Table 13.6 and European Exports from
Tables 13.1 and 13.2)
Fig. 13.1. Asian and European silk exports. 1749-53: Asian exports;
1749-58: European exports; 1754-8
Source: As in Table 13.7.
(including all the commodities) in the first quinquennial period

of the 1750s was about Rs. 5.5 million while the total value of
the Asian exports of Bengal silk and textiles can be computed
at Rs. 8.5 to Rs. 10 million at the minimum.27 If that be so,
and considering the fact that both the Asians and Europeans
had to bring in silver/cash to Bengal to buy export commodi-
ties, perhaps there emerges a strong case for reconsidering the
theory that the Europeans were the major importers of bullion
into Bengal in the period prior to Plassey. Similarly, in the light
of all this evidence it is quite reasonable to argue that we need to
revise a part of the explanation advanced recently for the Brit-
ish conquest of Bengal which brought in the issue of European
trade and consequent influx of bullion.28 All this only reiterates
the point made by Thomas Naff that ‘the realities of eighteenth
century, even as we perceive them in the present limited state of
our knowledge, are far more interesting and complex than the
conventional portrait (of decline) which does not fully reveal the
interplay of countervailing forces’.29 The point to emphasize is
that it is high time that historians try to have a fresh look at
the comparative position of the European trade and the trade
of the Asian merchants operating both within and without the
Indian sub-continent. The search for more qualitative as well as
quantitative data on the Asians’ trade, especially the overland
trade, should go on, and then both the European trade and the
Asians’ trade should be placed in their proper perspective. This
will enable us to have a comprehensive picture of the trade as a
whole around the mid-eighteenth century which is so crucial for
the proper understanding of the background as also the implica-
tions of the British conquest of Bengal in 1757, and how the
Company and its servants systematically eliminated the Asian
rivals in Bengal trade in the post-Plassey period.
BPC Bengal Public Consultations, India Office Library and

Records, henceforth IOLR).
B M Addl Mss British Museum Additional Manuscripts, British
Library.
C&B Abstr Coast and Bay Abstracts, IOLR.
Fact. Records Factory Records, IOLR.
HR Hoge Regering van Batavia, Algemeen Rijksarchief,
The Hague.
Mss Eur Manuscripts European, IOLR.
VOC Verenigde Oostindische Compagnie, Algemeen Rijk-
sarchief.
Notes
India Company (Cambridge, 1978), p. 24; P.J. Marshall, Bengal –
The British Bridgehead (Cambridge, 1987), pp. 64-7; C.A. Bayly,
Indian Society and the Making of the British Empire Cambridge,
1987), pp. 49-50.
2. W.H. Moreland, India at the Death of Akbar (London, 1920), p. 218;
From Akbar to Aurangzeb (London, 1923), p. 58.
3. C & B. Abstr., vol. 3, para. 36, 26 December 1733.

4. Fact. Records, Kasimbazar, vol. 6, f. 337, 23 January 1744.
5. K.N. Chaudhuri, Trading World of Asia, p. 354.
6. BPC, Range 1, vol. 6, f. 172, 21 February 1726.
7. B. M. Addl. Mss., 34, 123, f. 42; C.R. Wilson, Early Annals of the
English in Bengal, vol. I (Calcutta, 1895), p. 376.
8. Fact. Records, Kasimbazar, vol. 12, Consult. 27 January 1756.
9. Ibid. K.N. Chaudhuri’s contention that the ‘products bought by the
Gujaratis did not directly compete with those shipped to Europe’ is
hardly tenable.
10. Fact. Records, Kasimbazar, vol. 12, Consult. 27 January 1756.
11 . BPC, vol. 8, ff. 381-81vo, 22 March 1731.
12 . BPC, vol. 15, f. 33vo, 15 January 1742.
13 . Fact. Records, Kasimbazar, vol. 6, Consult. 12 March 1744.
14 . Kristof Glamann, Dutch-Asiatic Trade, 1620-1740 (Copenhagen and
the Hague, 1958), p. 131.
15. Floretta yarn or mochta silk was not included in the computation as it
was not really regarded as raw silk, was of a much inferior variety and
cheaper quality than the varieties like tanny, adapangia, Gujarat, tanna
banna etc. Even in the sale of the different chambers in Holland, this
was not advertised as raw silk like tanny, cabessa etc. but as floretta
yarn (cf., Notice of auction, 16 September 1755, Resolutions of Heeren
XVII, VOC, 7380). Om Prakash, The Dutch East India Company and
the Economy of Bengal (Princeton, 1985), pp. 202, 218, too, dealt with
raw silk and floretta yarn separately. But even if we include floretta
yarn in our computation, it hardly alters the picture because in the
early 1740s the average annual export of floretta yarn was only 84
mds. while in the early 1750s it was 184 mds. (computed from Dutch
records) on an average in a year.
16. Prakash, The Dutch East India Company, p. 218.
17. The Dutch export of Bengal raw silk to Japan, which was an important
branch of trade of the VOC in the second half of the 17th century (see,
Om Prakash, p. 126) was only 6,154 Dutch lbs on an average in the
quinquennial period 1740-5 while in the 5-year periods from 1730 to
1735, and 1750 to 1755, it was nil. I have collected and computed all
this from the Bengal export invoices in the Dutch records in Algemeen
Rijksarchief, Den Haag.
18. Among other European Companies, only the French were of some
importance. The Ostend Company had to abandon its trade in 1744
while the Danish Company was permitted to establish its factory only
in 1755. Though the French private trade increased remarkably in the
early 1750s, the volume of their corporate trade seems to have been
much smaller than that of the English or Dutch. Even assuming, as did
P.J. Marshall (Bengal, p. 66), that the value of the French Company’s
trade was about half of that of the English or Dutch trade, the French
export of raw silk would have been around 500 mds. at the most.
And raw silk does not seem to have been a staple commodity in the
European private trade to Western India, Red Sea or Persian Gulf area
(c.f., VOC 2304, f. 211, HB, 20 November 1734). Hence it could be
reasonably assumed that the export of raw silk by other Europeans
(i.e. excluding the English and Dutch Companies) could not have been
more than 1000 mds. at the maximum on an average in a year in the
early 1750s.
19. BPC, Range 1, vol. 44, Annex to Consult. 19 June 1769. This is more
or less corroborated by other English and indigenous sources. See, for
example, Mss. Eur. D 283 f. 21, IOLR; Verelst’s letter to the Court of
Directors, 5 April 1769, Fort William – India House Correspondence
(henceforth FWIHC), vol. V, ed. N.K. Sinha (New Delhi, 1959),
pp. 18-19. For the indigenous account, see, N.K. Sinha, The Economic
History of Bengal, vol. 1 (Calcutta, 1965), 3rd edn, p. 112.
20. ‘Memorie’ of Dutch Director Taillefert, VOC, 2849 (K.A. 2741),
27 October 1755, f. 245vo; BPC, Range 1, vol. 11, ff. 288vo.-289,
28 August 1736; FWIHC, vol. V, pp. 16-18.
21. I do not think that for my present thesis it is absolutely essential to
show where the silk was exported to. Contrary to an opinion expressed
in private conversation by a distinguished historian of the period that
my thesis ‘stands or falls on this very question’ of identifying the
destination of the raw silk exported from Bengal, I maintain, as some
experts in the field do, that so long as I know the volume and value of
raw silk exported by the Asian merchants, it is more than sufficient for
my present thesis. However, I agree that it is worth investigating the
destination of the raw silk exports from Bengal so that we can have a
comprehensive idea of the silk trade as a whole.
22. Proceedings of the Board of Trade, 13 March 1791, quoted in N.K.
Sinha, Economic History of Bengal, vol. I, pp. 111-12.
23. Taillefert’s ‘Memorie’, HR, 246, f. 141, 17 November 1763.
24. H. Verelst to the Court of Directors, 2 April 1769, BPC, Range 1,
vol. 44, f. 324, para. 6.
25. William Bolts, Considerations on Indian Affairs (London, 1772),
p. 200.
26 . S. Chaudhury, ‘Sirajudaullah, the English Company and the Plassey
Conspiracy – A Reappraisal’, Indian Historical Review, XIII, nos.
1-2, pp. 126-7; ‘European Trading Companies and Export Trade
in the Eighteenth Century’, ch. 7 in History of Bangladesh, vol. II
(Dhaka, 1992), pp. 183-224; ‘The Asian Merchants and Companies
in Bengal’s Export Trade, circa, mid-Eighteenth Century’, paper
presented at the International Conference on ‘Merchants, Companies
and Trade’, held at Maison des Sciences de l’Homme, Paris, 30 May-
1 June 1990; subsequently published in S. Chaudhury, M. Morineau,

eds., Merchants, Companies and Trade: Europe and Asia in the Early
Modern Era, Cambridge, 1999.
27
. S. Chaudhury, ‘Continuity or Change in the Eighteenth Century?
Price Trends in Bengal, circa, 1720-57’, Calcutta Historical Journal,
vol. XV, nos. 1-2. July 1990-June 1991, p. 22; ‘The Asian Merchants
and Companies’, paper presented at Maison des Sciences de l’Homme.
28. Brijen K. Gupta, Sirajuddaullah and the East India Company, 1755-57
(Leiden, 1962), p. 32; P.J. Marshall, Bengal, pp. 65, 67; C.A. Bayly,
Indian Society, pp. 49-50
29. Thomas Naff and Roger Owen (eds), Studies in Eighteenth Century
Islamic History (Southern Illinois University Press, 1977), pp. 4-5
quoted in Ashin Das Gupta, ‘India and the Indian Ocean in the
Eighteenth Century’, in Ashin Das Gupta and M.N. Pearson (eds),
India and the Indian Ocean (Calcutta, 1987), p. 33.
chapter 14
Merchants, Companies and Rulers

Bengal in the Eighteenth Century*
An attempt has been made in this paper1 to analyse the trading

activities of Asian merchants, and the nature and character of
their commercial organization vis-à-vis the European Compa-
nies trading in Bengal in the first half of the eighteenth century.
The Asian merchants engaged in trade in Bengal had certain
distinct features. They often acted as brokers, agents or mer-
chants to the European Companies supplying their investments
or buying their imports. At the same time they traded with their
own capital, quite independently of the European Companies.
They were primarily merchants – buyers and sellers of differ-
ent commodities – and their operations extended to any class
of merchandise which was expected to yield a profit. They also
acted simultaneously as shroffs or money changers and bankers,
received deposits and arranged remittances by means of bills of
exchange or letters of credit on their various agents in different
trade marts of Bengal as also in other parts of India.
The term Asian merchants has been used here in preference to
Bengal merchants in view of the fact that merchants from vari-
ous parts of Asia including the Arabs, Turks, Persians, Mughals
and Armenians as also from different parts of India traded in
Bengal in the first half of the eighteenth century. From a close
and critical analysis of the trading activities of the Asian mer-
chants, we would attempt to make a few generalizations and
deductions as to whether the sum total of the activities of the
* Journal of the Economic and Social History of the Orient, vol. XXXI,
pt. 1, February 1988, pp. 74-109.
Asian merchants can be described merely as peddling trade, how

far the Asian merchant was an independent entity without a
close link with the political and ruling elite, whether the change
over in the English Company’s investment pattern from dadni to
gomasta system was due solely to the decline of the merchants
in Bengal, and whether these merchants were subservient to the
European Companies.
The first section of this essay will be mainly concerned with
the examination of the relation between the Asian merchants and
the European Companies as borne out by the investment policy
of these Companies. The second section will deal with the activi-
ties of the merchant princes namely, the Jagat Seths, Umichand
and Khwaja Wazid, and their role in the commercial sector of
Bengal’s economy. The last section will sum up the major findings
of our inquiry into the various aspects of the trading activities of
the Asian merchants, and the nature and character of their com-
mercial organization vis-avis the European Companies trading
in Bengal in the first half of the eighteenth century.
It is almost common knowledge that the European Companies

in Bengal as elsewhere in India except Madras procured their
investments through the dadni system, which rested on a con-
tractual agreement between the merchants and the Company.
The former undertook to supply the Company a specific quantity
of export commodities by a certain date and organized their pur-
chase and transport from the production centres. The Company
in return paid them a certain proportion of the total value of the
goods in advance known as dadni, the rest being paid on deliv-
ery. The risk of default of weavers, artisans or other producers
were underwritten by the merchants. At each principal factory
the Companies employed a number of Asian merchants whose
financial standing and integrity were assured in the local market.
An indigenous merchant middleman, often called broker by the
European Companies, was appointed in each factory, and he was
Merchants, Companies and Rulers | 325
responsible for money advanced to the dadni merchants as also

for the timely supply of the export commodities.
The amount of dadni or advance given to the merchants
against the contract for goods was a bone of contention between
the merchants on the one hand and the English Company on
the other throughout the period. In the first two decades of the
eighteenth century the merchants received from the Company
generally between 70 to 75 per cent of the total cost of the
investments. It appears that the full amount of the dadni was
not paid all at once but by instalments. Again, sometimes only
a part of the dadni was paid in cash, the rest by bills of debt. In
1718 the Calcutta Council reduced the dadni to 60 per cent of
the total cost of investment. It was again reduced to 50 per cent
in 1722 of which 20 per cent was paid in cash and the rest by
bills of debt.2 Other European Companies – the Dutch, French
and the Ostend Company – too paid dadni or advance to secure
their investments.3
The English Company, however, could not stick to the prin-
ciple of 50 per cent advance against contracts for goods in the
face of protest and insistence from the dadni merchants. In the
’forties the dadni was again raised to 70 per cent on the whole
quantity of goods contracted for, obviously under pressure from
the merchants.4 In 1749 the Company came to a new under-
standing with the merchants who agreed to provide one-third of
the investment for ready money and two-thirds on dadni but the
amount of dadni was raised to 85 per cent.5 The Company was
always apprehensive of the dadni merchants and tried its best
to foil any combination of them which would be detrimental
to its interests. The merchants too on their part tried to evade
the impositions of the Company and make as much profit as
possible on the procurement of investments. In order to guard
against any monopoly by merchants’ group, the Calcutta Council
took rather an unusual measure in 1733 and wrote to the Court
of Directors: ‘Finding it necessary to employ some of the poor
merchants to prevent a combination of the Rich, they thought
it for the Company’s advantage to employ them accordingly as
it prevents their going to the Dutch and French who give them
great encouragement, but at the same time give the preference to
the substantial ones, keeping both as independent of the broker
as possible’.6
The Kasimbazar merchants seem to have enjoyed more
independence vis-à-vis the European Companies than their
counterparts in Calcutta. Often they formed rings of their own
fraternity and foiled the Company’s attempt to coerce them. In
1741 the merchants refused to pay penalty for deficiency in the
previous year’s contract stating emphatically that ‘they never had
paid any penalty nor would not now’. The Kasimbazar Council
reported to Calcutta in utter frustration: ‘Having taken into con-
sideration the refusal of the merchants we are of opinion that
should they remain obstinate in their refusal to comply that it is
not in our power to force them’.7
The merchants in Kasimbazar further refused to give any
security for the dadni advanced to them. The Council’s letter
to Calcutta on 26 February 1742 brings to bold relief the inde-
pendence of the mercantile class in Kasimbazar: ‘. . . as to giving
security as demanded of them [the merchants] is what they
would not do on any account that some of them did business
for Guzzeraters, Multaners, Armenians and other merchants and
for greater amounts than with us and yet no such thing was ever
demanded of them . . . besides there were none among them but
what were esteemed men of credit and many of them substan-
tial men. . . . In short that none of them would submit to the
reproaches/as they call it/of giving security. . . .’8 Ultimately the
Council ‘finding no hope of gaining their point of getting them
to give security’, thought it better to contract with the merchants
for raw silk at the earliest.9
Despite the virtuous recommendation of the Court of Direc-
tors that ‘all manner of Combinations among the merchants
must be prevented’,10 the Kasimbazar Council had often to face
such ‘rings’ of merchants which it failed to break on most occa-
sions. It was noted in the consultation of 23 April 1743 that
when the merchants were asked to pay the previous year’s bal-
ances, eight prominent merchants told the Council ‘that they had
entered into a contract not to depart from their demands on the

Company . . . and that whoever of them makes up his account
with the Company shall forfeit 10,000 Rupees and pay the
others’ Ballances and this contract they have lodged in the hands
of Sautoo Cotma’.11 Finding the merchants ‘so obstinate’, the
Council decided to contract with other merchants.
The Kasimbazar merchants were very sensitive about giv-
ing security for the dadni paid by the Company and tried to
hold their ground against the Company as long as possible. The
Council at Kasimbazar reported on 27 January 1744 that the
merchants alleged that as several of them did business on a large
scale with traders from various parts of India and Asia, ‘having
it known they had given security would destroy all such trade
because those other merchants they did business with would look
on it that they were not responsible without it . . .’. The merchants
stood firm in their resolution not to give security and told the
Council that ‘they would not do business on such terms for even
a report that security was demanded of them would hurt their
credit abroad’.12 However the Kasimbazar Council finally suc-
ceeded in bringing the silk merchants ‘to be joined in security,
three or four of them together for the Dadney they advance
them’.13
But the Company had a limited success only since it failed
to get any security whatsoever from some prominent merchants
dealing in silk piece-goods, and who, it seems, were ready to
forgo Company’s contract rather than give security. The Cal-
cutta Council noted in 1744: ‘. . . it is impossible to get the
quantity of silk piece-goods ordered without employing many
other merchants residing at Muxidabad and Sidabad and other
places some of whom being wealthy in good credit will not be
persuaded to give any security, particularly Ram Singh, Gos-
seram and Ramnaut Echenaut, without whose assistance they
[Kasimbazar Council] fear they shall fall very short in the article
of Taffaties which the above-mentioned chiefly deal in and pro-
vide the very best and which the other merchants do not care to
meddle with as they are liable to occasion bad debts among the
weavers . . . they absolutely refused to give [security] as they are
very substantial people, and they apprehend no risque of any

money entrusted with them, and in case they throw them out of
Dadney, the Dutch and the French will gladly employ them. . . .’14
Needless to say the Calcutta Council gave its consent to Kasim-
bazar to contract with these merchants despite their refusal to
render any security for the dadni advanced.
Turning to Calcutta we find that after the abolition of the
broker’s office in 1741, the merchants there contracted with the
Company giving proper securities for the dadni advanced. But
they were not very happy with the system and in a joint petition
in 1744 informed the Council that they ‘cannot agree to this
method again when we contract for next year’s investment’.15
The Council informed the merchants on 8 March 1745 that it
would not make any change in the system. On 14 March the
Council asked the merchants to divide themselves into three
sets or groups as usual but the latter absolutely refused to do
so and insisted on dividing into six or seven sets for the security
of the Company’s dadni which was ultimately accepted by the
Council.16
The Seths and the Basaks were the most important merchant
families of Calcutta who provided the lion’s share of the Com-
pany’s investments. In fact throughout the period of our study
many members of the Seth family traditionally held the post of
broker and the great commercial influence of this family reduced
the Company’s textile merchants in Calcutta to a ‘closed cor-
poration’. Even the Court of Directors in London was aware
of the importance of and services rendered by the Seth family
and wrote to Calcutta appreciating the Seths’ assistance in the
Company’s business.17 But the Seths were shrewd merchants, not
to be satisfied only with sweet words, and ready to bargain hard
with the Company whenever the occasion arose. Indeed they
were the leaders of the Calcutta merchants who came to serious
disagreement with the Company regarding the investment and
dadni in 1747. Consequent to the disturbed political situation
in Bengal which the Maratha incursions resulted in, the Court
of Directors asked the Calcutta Council in 1746 to reduce and
if possible to dispense with the dadni payments altogether and
to provide investment with ‘ready money’ goods.18 The Calcutta

Council put the proposal before the merchants on 19 March
1747 and the latter refused ‘in a body’ to agree to it, submitting
detailed arguments for not discontinuing the dadni.19
The Kasimbazar merchants too refused to accept the new
proposals for investments of the Company. The Council at
Kasimbazar reported to Calcutta: ‘. . . to both of which proposi-
tions they are extremely averse that they think it impossible for
them ever to bring them to agree thereto’.20 Meanwhile the tussle
and bargaining went on between the merchants and the Council
in Calcutta. As for the final answer the merchants, obviously
led by the Seths, told the Council on 25 May 1747 that they
could contract ‘on no other terms’ than the following: that they
would provide one-fourth of the investments for ready money
and the rest three-fourths on dadni of which 85 per cent to be
advanced ‘as last year’. Finding the merchants ‘obstinate’, the
Council decided to try to contract with some other merchants
on better terms.21 Accordingly the Company entered into a con-
tract with sixteen merchants of whom seven were new (including
two Dutch dadni merchants, Otteram and Gosseram Occoor,
and a few Kasimbazar merchants led by the Katmas) for about
one-third of the Company’s investment amounting to about 8
lakhs of rupees.22 The Seths and other merchants gave a new
proposal that they would undertake the remaining two-thirds of
the investment on condition that 50 percent of the dadni would
be paid within August and the rest, 35 per cent, on delivery of
goods, ‘but if there are new men introduced into the Dadney
they will do no business at all’.23 The Calcutta Council noted
in utter exasperation: ‘As the Seths and other merchants obsti-
nately refuse to contract with us unless upon their own terms
and impertinently refuse to let us employ any other merchants
agreed that we look out for such as will contract.’24
The commercial organization of the Calcutta merchants was
caste-based. When asked to contract for invesment for 1748, the
Calcutta Council noted the reaction of the Seths thus: ‘The Seats
being all present . . . informs us that last year they dissented to
the employing of Tillickchund, Gosseram Occoor and Otteram
they being of a different cast[e] and consequently they could not

do any business with them upon which account they refused the
Dadney and the same objection to make they propose taking
their shares of the Dadney if we should think proper to con-
sent thereto. . . .’25 The majority of the Council was in favour of
employing the Seths and the contract was made accordingly.
But all was not well with the Company’s investment policy
and its relations with the merchants gradually deteriorated to
such an extent that there was no point of return. The Maratha
invasions and the nawab’s desperate need for resources to meet
the challenge resulted in a serious dislocation of the country’s
economy, and it seems the dadni merchants were not in a posi-
tion now to accept contract from the Company until and unless
they were commensurate with the rapidly declining profit and
the growing hazards in conducting the business in textiles. The
first serious disagreement arose in 1751 when the merchants
refused to sign the accounts as prepared by the Council wherein
the merchants were charged penalty for deficiency in delivery
of goods26. Though the Seths too refused ‘in a body’ to sign the
account, the lead this time was given by the Basaks. Sobharam
Basak, the leading member of the Basak family, refused to sign
the account, pointing out much to the chagrin of the Calcutta
Council, that ‘he esteemed his contract of no validity and paid
no regard to it’. The Council retaliated with the only measure it
could take and reported: ‘. . . Sooberam bysaack persisting in an
obstinate refusal and it appearing to us most probably from this
and some other circumstances that he had been greatly instru-
mental in working up several of the other merchants to the same
refusal . . . dismissed him from Dadney and forbid him coming to
the factory.’27 Ramkrishna Seth too refused to sign the contract
and he too was dismissed from the Company’s dadni contract
and forbidden entry to the factory. But he was soon readmitted
to the Company’s service at the request of his nephew Laksmi
Chandra Seth, and so was Sobharam Basak.28
There was a big deficiency in the investments again in 1752.
When the Council wanted an explanation from the merchants,
they replied that the shortfall in supply was ‘owing to our cut-
ting them in the prices, the dearness of cloth at the aurungs and
our sorting their goods by old musters whereby they suffered a
considerable loss . . .’.29 As a result when the Company asked the
merchants to sign their accounts, the latter objected to the man-
ner in which the account was drawn. They informed the Council
clearly and firmly that they would not undertake any business
for 1753.30 The Calcutta Council, anxious as it was to contract
for the investments for 1753, asked the merchants for their
terms. The merchants were reluctant to enter into any contract
as they had ‘suffered these three years past by the Company’s
business’. They made it amply clear that they would not on any
account undertake the investment upon the same terms they did
the previous year. But as they ‘served the Company almost from
their infancy and lived under the English protection, they would
do their utmost to forward their business’, and only as such
were willing to contract on their own terms and no others.31 The
Council regarded these terms as ‘extremely unreasonable’ and
asked the merchants if they would not recede from what they
had proposed. The reply came from Ramkrishna Seth, obviously
the leader of the dadni merchants, that he would contract only
on the terms the merchants had offered, otherwise ‘he absolutely
refused to undertake any part of the investment himself’.32
The Council acted swiftly and perhaps in utter desperation.
It noted: ‘Esteeming this preemptory behaviour of Ramkissen
Seat’s to be extremely insolent and meriting our Resentment and
as an example made of so considerable a person may have a
good effect upon the rest of the merchants and reduce them to
offer us better terms, Ramkissenseat was told we had no further
business for him as a Dadney merchant and ordered to with-
draw’.33 But this was hardly of any avail as the subsequent events
would prove. Five days later the merchants were called again
and acquainted by the Council of the Court of Directors’ orders
regarding investment.34 The merchants flatly refused contracting
on these terms. They were in an advantageous position in the
bargain inasmuch as the time factor was in their favour. It was
the beginning of June and the Council must come to an agree-
ment if it wanted to secure full investment for the year. So the
Council was almost solicitous and asked the merchants if they

could offer any other terms ‘more reasonable’ and particularly
if they would undertake the investment at an advance of dadni
of less than 85 per cent. The merchants answered in the nega-
tive. The Council had now no other alternative but to arrange
for investment by some other means. The merchants were called
again and were told ‘they were no more Hon’ble Company’s
Dadney merchants’. Thus ended the dadni system of investment
which had its life for about a hundred years and was replaced
by the gomasta system under which the gomastas (paid agents
or servants) procured the export commodities from different
aurangs or manufacturing centres.35
In his brilliant work on Asian trade and the English Company,
K.N. Chaudhuri holds that the change over from the dadni to
the gomasta system for the procurement of the English Compa-
ny’s investment was due to the decline of the Bengal merchants.
He relies for his conclusion heavily on the report of Charles
Manningham and William Frankland (1753), the two export
warehouse keepers in Calcutta, and finds corroborative evidence
in the memorie of the Dutch Director Jan Kerseboom. And he
concludes: ‘. . . the textile trade of Bengal and the merchants
connected with it were already approaching the end of the road.
That end came in 1753 . . .’.36 But a careful and critical read-
ing of the two documents mentioned by K.N. Chaudhuri hardly
justifies the conclusion that there was an absolute decline of
the merchants in Bengal that necessitated the change over from
dadni to gomasta system. It is true that in his memorie written
in 1755 Kerseboom referred to four Santipur merchants who,
as reported by a servant of the Raja of Nadia in whose territory
lay Santipur, were ruined men and no money-lenders or bankers
[wisselaars of banquiers] were willing to stand security for them.
The excuse given by these shroffs was that the trade had become
extremely hazardous and dangerous too.37 As such the Dutch
Company decided to procure their investment through gomastas
who would buy cloth at the aurangs of Santipur.38
The Dutch Company, however, found considerable difficulty
in finding a sufficient number of capable gomastas and in main-
taining uniformity of standards. This experiment which the

Company tried out from 1747 to 1749 did not work satisfactorily
and hence from 1750 the Dutch entrusted the merchants again,
both rich and poor, who were divided into five groups [vief ploe-
gen], with contracts for fine goods. The most important point
which escaped K.N. Chaudhuri’s attention was that Kerseboom
did not refer to any decline in the position of the Company’s
merchants in Chinsurah which like Calcutta for the English was
the main procurement centre of the Dutch Company. Neither did
Kerseboom’s memorie mention anything about the Kasimbazar
merchants who played an important role in the procurement of
the Company’s investments. It seems Kerseboom’s report was
mainly concerned with the Santipur merchants and the problems
arising out of procurement there.39 So to make Kerseboom’s ref-
erence to the decline of Santipur merchants a general issue and
to conclude from that a general decline of the Bengal merchants
seem hardly logical. However it should be borne in mind that in
the early ’fifties the merchants were passing through a critical
period consequent to the disruption in the economy as a result
of the Maratha invasions and the indiscriminate exactions of the
State but these did not seem to have seriously impaired either
their credit or their ability to carry on business whether for the
Europeans or other Asian merchants.
So far as the report of Manningham and Frankland is con-
cerned only a superficial reading of it would give the impression
that a change over from dadni to gomasta system was essential
because the dadni merchants were no longer capable of fulfilling
the contracts and that their credit was very much in doubt. A
careful study of the document will reveal that the change was
necessary because the merchants were reluctant to contract with
the Company except absolutely on their own terms and the
Company had no other way but to switch over to the gomasta
system, and the decline in the position of Bengal merchants
was not really the deciding factor. It was the independence, the
uncompromising attitude and the strong determination not to
recede from their terms that sealed the fate of the dadni system.
As the report notes: ‘We are by necessity obliged to have recourse
to the present method [gomasta system], as the only one left,

for whilst our merchants’ proposals are so very contrary to the
Interests and Commands of our Hon’ble Employers they render
it impossible for us to consent thereto . . . by their proposals they
seem to think we are absolutely in their hands and must submit
to their demands however extravagant, on a supposition that it
is not in our power to procure an investment without them’.40
The report however tried to make out a case that ‘the original
intent and design of conducting the Investments by means of
Dadney merchants’, which were to lessen the Company’s risk at
the aurangs and to secure a timely supply of goods etc., had now
become ineffectual. There is also a specific hint in the report that
many of the merchants were not in a position to pay back the
security money in case of their failure to supply goods against
the advance paid earlier. It is true that in the early ’fifties the mer-
chants were deficient in their supply of goods to the Company
but the deficiency in investment had nothing to do with their
financial solvency. It was only quite natural under the condi-
tion in which Bengal was passing through in the early ’fifties.
The authors of the report seem to have been confused and have
made contradictory statements in their enthusiasm for changing
over to the gomasta system which one suspects would have been
more beneficial for the Company servants’ private trade. The
report advocated the change as the dadni merchants’ terms for
investment ‘have reduced us to an absolute necessity of pursuing
other measures which can only be by a ‘new sett of merchants’
or employing gomastas. But ‘to obtain a new sett of merchants
is not in our power’. One wonders why? Was it because of the
power and influence wielded by the dadni merchants led by the
Seths and Basaks? One would like to argue if there was really
any decline of the merchants of Calcutta as suggested by K.N.
Chaudhuri, then how did the report of Manningham and Frank-
land could talk of investment by ‘new sett’ of merchants? Did the
Company’s servants want to get rid of the dadni merchants as
the latter were too powerful to be coerced to assist the servants’
private trade?
Perhaps one can reasonably suspect that the Calcutta Council

was motivated to make the change in the procurement system by
the ulterior object of augmenting the private trade interests of its
members. The Company’s servants in Calcutta were concerned
about the decline in their private trade from the early ’fifties. It
was in 1753 that Manningham and Frankland wrote to Clive:
‘. . . the situation of trade since you left us has continued so
bad’.41 So one can reasonably argue that the change over to the
gomasta system was the result of the Calcutta Council’s attempt
to resolve its commercial problems by cutting out the dadni
merchants. The abuse of dastak [permit] increased considerably
under the gomasta system and the private trade of the Com-
pany’s servants no doubt increased after the abandonment of
the dadni system.42 It is too well known a fact to emphasize how
the gomastas became the main instruments of coercion in the
post-Plassey period.
There is ample evidence to prove that there was no decline in
the position of Bengal merchants, especially the dadni merchants
of Calcutta. The Seths and Basaks were still the leading and
dominant merchant families of Calcutta in the 1750s while Hari
Krishna Roy was the influential Dutch broker at Chinsurah. The
most important thing one has to remember in this connection
is that despite all wars, depredations and troubles the credit
market in Bengal was not at all destroyed because of the great
financial resources of the Jagat Seths. It is in evidence that this
banking house used to finance extensively both the Asian and
European traders in Bengal. The financial solvency of the Jagat
Seths was never in question even in the 1750s. The house used to
finance also the dadni merchants of Calcutta.43 Moreover when
merchant princes like Omichand and Khwaja Wazid were still
operating in full swing and playing a dominant role in Bengal’s
commercial life, and who had extensive trade connections with
Calcutta merchants, the thesis of the general decline of the Ben-
gal merchants becomes wholly untenable.
The Bengal merchants divided into hereditary occupational
caste groups and it was usual for their families to serve the
European Companies for generations. Such were the Seths and
Basaks of Calcutta, the Katmas of Kasimbazar and the Mul-

licks of Jugdea. Some of these merchants rose to their positions
from weaving and other castes. It seems that because of the
caste affiliation, the merchants could organize themselves into a
strong ‘combination’ whenever necessary, especially for bargain-
ing with the European Companies or other Asian merchants.
Such ‘combination’ of merchants was to be found in all major
trading centres. After the dismissal of the dadni merchants, the
Calcutta Council noted on 23 June 1753 that ‘it is certain the
merchants have assembled themselves of a night lately’.44 In a
dispute regarding the sorting and pricing of silk in 1754, when
the Council asked the Kasimbazar merchants to give their replies,
‘they all sent us word separately that what the Punch/or Whole
Body assembled/agreed to, they would . . .’.45 The best illustration
of this sort of combination of merchants and the severe restric-
tions for adherence to the common agreement is to be found in
the Kasimbazar consultation of 21 October 1754. The Council
noted: ‘Our merchants having entered into and signed a punch
or agreement whereby they are bound not to allow of our taking
the 10 per cent penalty for the short delivery of goods in the
year 1752, and that in case of our discharging any of them from
our Employ, the whole body should quit our Business, and that
any one or more, should for private ends violate these agree-
ments, he or they should be liable to pay a penalty both to the
merchants dismissed and to the Government with several other
restrictions’.46
II
The commercial life of Bengal and, to a great extent, its economy

in the last three decades of the first half of the eighteenth century
were dominated by the merchant princes namely, the famous
banking house of the Jagat Seths, the well known Omichand and
the Armenian merchant Khwaja Wazid. The Jagat Seths played a
very prominent role in Bengal’s economy from the early decades
of the century. Omichand came into prominence in the ’thirties
and Wazid in the ’forties. These merchant princes collectively
predominated both the commerce and financial administration

of Bengal. The Bengal money market which financed both trade
and government was closely controlled by them. They were able
to dominate Bengal’s trade and industry through their farming
of leading commodities and commercial privileges. As financiers,
traders and administrators, they played a crucial role for the
European Companies. The fortunes of these merchant princes
were inextricably linked with those of the European trading
Companies. Through their control of the credit market, their
coinage of specie, provision of goods for exports and purchase
of imports, the merchant princes had a close relationship with
the Europeans. It is to be emphasized, however, that their posi-
tion depended to a very great extent upon their influence at the
nawab’s court. Their commercial farms were political in nature,
and seem to have been extended in the ’forties and ’fifties of the
eighteenth century.
The Jagat Seths were least dependent upon the European
Companies but their fortunes were closely tied to those of the
mercantile and commercial community of Bengal that relied
upon the Europeans. The only direct link between the European
Companies and the Seths arose out of the latter’s monopoly of
the mint and the former’s need for liquid capital for financing
their investments. A major source of income for the banking
house was the coining of the bullion and specie the European
Companies used to import to Bengal for paying for their export
commodities. Another good source of income for the Seths was
lending money to the Companies which were perenially in short
supply of cash. The European Companies freely borrowed money
from the Jagat Seth’s Kuthees (agencies or branches) in Calcutta,
Kasimbazar, Dacca, Hugli, Patna etc. Robert Orme who was
the English Company’s official historian and was in Bengal in
the early 1750s described the Jagat Seths as ‘the greatest shroff
and banker in the known world’.47 Captain Fenwick writing on
the ‘affairs of Bengal in 1747-48’ referred to Jagat Seth Mahtab
Rai as a ‘favourite of the Nabob and a great Banker than all in
Lombard Street joined together’.48 Luke Scrafton wrote to Clive
in 1757 that ‘Juggutseat is in a manner the goverment’s banker:
about two-thirds of the revenues are paid into his house, and the
government give their draught [draft] on him in the same man-
ner as a Merchant on the Bank . . .’.49 Referring to the merchant
princes in general and the Jagat Seths in particular, Clive wrote:
‘The city of Murshidabad is as extensive, populous and rich, as
the city of London, with this difference that there are individuals
in the first possessing infinitely greater property than any of the
last city’.50
The financial credit and prestige of the house which migrated
from Nagar in Marwar were raised to such a great height by
Manickchand and Fatechand that the Mughal emperor conferred
on the latter the title of Jagat Seth or ‘Banker of the World’ as a
hereditary distinction in 1722. The house of Jagat Seth reached
the zenith of its prestige and prosperity during the time of Fat-
echand who after wielding great influence in the commercial,
economic and political life of Bengal for nearly thirty years died
in 1744. He was succeeded by his two grandsons Jagat Seth
Mahtab Rai and Maharaja Swaroopchand.51 The major sources
of the huge income, tremendous power and great prestige of
the house of Jagat Seths were derived from their farms of Mur-
shidabad and Dacca mints, two-thirds of the province’s revenue
collection, their control over rates of exchange, interest rates,
bill-broking and the provision of credit. By 1720 the Seths had
established an absolute monopoly of the mint, obviously with
the support of Murshid Quli, the subadar of Bengal. The Fort
William Council wrote in 1721: ‘. . . Futtichund having the entire
use of the mint, no other shroff dare buy an ounce of silver . . .’.52
The English East India Company was trying for a long time to
have minting privileges and the Kasimbazar Council was asked
to secure the privileges from the nawab. The Council negotiated
with some high officials of the darbar but ‘are informed that
while Futtichund is so great with the Nabob, they can have no
hopes of that Grant, he alone having the sole use of the mint nor
dare any other shroff or merchant buy or coin a rupee’s worth
of silver’.53
As the minting of coin was a great source of income, the Jagat
Seths were determined to maintain the privilege at all cost. As
late as 1743 the Kasimbazar factors reported: ‘. . .but this [mint-
ing privilege] they can never hope while Futtichund subsists and
has that weight with the government which his usefulness to
them and great influence at Court naturally gives him . . .’. 54 The
European Companies were thus forced to sell all their treasure –
both bullion and specie – to the house of Jagat Seth, and under
the circumstances they had no other alternative but to accept
the price the banking house offered. So great was the control
and power of the Jagat Seths over Bengal’s money market that
the rates of exchange fixed by the house were accepted by all
concerned. Through his great influence on the Bengal adminis-
tration which he gained by virtue of his steady financial support
to the nawab, Fatechand could induce the government to take
such measures and pass such regulations for the rate of money
exchange as would favour the house. There are several instances
of this in the Company records.55 The batta [discount] on recoin-
age was another source of considerable profit to the house of
Jagat Seths. According to Luke Scrafton’s estimate in 1757 the
Seths coined Rs. 50 lakhs a year and the profit on this account
amounted to Rs. 3½ lakhs.56 The batta on various foreign coins
and coins from different parts of India was also a source of great
profit to the Seths. The House was the receiver and treasurer of
government revenues. It received land revenue payments made
by the zamindars and amils [collectors]. It also received other
government collections. The Jagat Seths gradually became secu-
rity for most of the renters.
The Seths charged an interest of 12 per cent per annum for the
sum they used to lend to the European Companies. On 11 Dec-
ember 1740 the Calcutta Council was informed by Kasimbazar
that the Seths would be willing to reduce the rate of interest from
12 to 9 per cent if a request from the Company was made to do
so.57 The Calcutta Council wrote to Jagat Seth on that very day
requesting a reduction in the rate of interest. On 21 December
the English at Kasimbazar borrowed Rs. 60,000 of Jagat Seth’s
house at the new rate of 9 per cent.58 From then onward the
Company borrowed money at Calcutta, Dacca, Patna etc. at
9 per cent from Jagat Seth’s house. In one day on 29 March
1742 the Company borrowed a sum of Rs. 200,000 at 9 per cent
interest of the Seths at Calcutta.59 The Dutch and the French too
borrowed freely from the Jagat Seths. That the Jagat Seths could
reduce the interest rate is an indication of their total control over
the credit market in Bengal and northern India.
The house of Jagat Seths became rather an institution at least
from the ’forties of the eighteenth century, and was a guide to
the conduct of the merchants, shroffs and bankers. The Kasim-
bazar Council reported on 7 June 1742 after Jagat Seth’s retreat
from Murshidabad because of the Maratha invasion that ‘no
merchant or shroff of any consequence will think themselves
safe in the city till Juggutseat comes to reside there’ and that
the nawab solicited Jagat Seth to return to the city, ‘his presence
being as necessary to the Nabob as to the merchants’ and ‘his
conduct being the general guide to all of them’.60 On 14 June it
noted that the merchants came back from their places of retreat
after Jagat Seth’s arrival in the city.61 Again when Fatechand left
Murshidabad in the wake of the Maratha incursion in 1743 the
Kasimbazar factors wrote to Calcutta on 6 June: ‘It is wholly
impracticable to raise money there for never was known so great
a scarcity occasioned by the retreat of Futtichund . . .’.62 They
noted on 2 July ‘. . . Futtichund is returned and money is more
plenty here . . .’.63
From the early eighteenth century the Jagat Seths were per-
manent members of the darbar and exerted such an influence
over the nawab and his administration that seems unparalleled
in the history of Bengal. It may be said that from the time of
Manickchand, the influence of the Seths ‘was of chief impor-
tance in deciding the result of every dynastic revolution, and they
were always in constant communication with the ministers of
the Delhi Court’.64 A striking example of the power of the Jagat
Seths at Delhi was the manner in which they obtained farmans
ratifying the appointment of Bengal nawabs. Fatechand did not
exert his influence in Delhi to obtain an imperial farman for
Sarfaraj, Murshid Quli’s grandson. But he supported the cause of
Shujauddin who succeeded Murshid Quli in 1727 and this facili-
tated the new nawab’s confirmation by the imperial authority.
Shujauddin was therefore more generous than Murshid Quli in
his favours to Fatechand. In 1730 when the Kasimbazar Council
tried to influence the government for the ‘currency of their trade’

through Haji Ahmed and Alumchand, the two most important
persons in the darbar besides Jagat Seth, they ‘answered the
Nawab has such a regard for Futtichund, it was out of their
power to serve us in opposition to him and continue to advise us
to make up the affair with him as well as we can’.65 Haji Ahmed
told the Kasimbazar factors in 1730 that ‘Futtichund’s Estate
was esteemed as the King’s treasure and the Nabob was resolved
to see him satisfied’.66 Fatechand was one of the prime movers
of the revolution of 1740 which brought Alivardi into power. It
is well known the Seths played a major role in the revolution of
1757 which brought about the downfall of Sirajuddaulah. Jean
Law, the chief of the French factory at Kasimbazar wrote: ‘It is
this family [Jagat Seth] who conducted all his [Alivardi’s] busi-
ness and it may be said that it had long been the chief cause of
all the revolutions in Bengal’.67
As to the wealth of the house of Jagat Seths, it is extremely
difficult to form a correct estimate. Gholam Hossein writes:
‘Their wealth was such that there is no mentioning it without
seeming to exaggerate and to deal in extravagant fables’.68 ‘As
Ganges pours its water into the sea by a hundred mouths,’ wrote
a Bengali poet, ‘so wealth flowed into the treasury of the Seths’.69
In the early ’sixties of the eighteenth century William Bolts esti-
mated that the house possessed a capital of 7 krors [70 million]
of rupees, ‘as his countrymen calculate’.70 N.K. Sinha thinks in
their hey day they must have owned at least 14 krors.71 Luke
Scrafton made the following estimate of the annual income of
the Jagat Seths in 1757:72
The Jagat Seth’s Estimated Annual Income 1757
On 2/3 of revenue at 10% Rs. 10,60,000

Interest from zamindars at 12% Rs. 13,50,000
On recoining 50 lakhs at 7% Rs. 3,50,000
Interest on 40 lakhs at 37½% Rs. 15,00,000
Interest from Batta or Exchange rates 7 to 8 lakhs Rs. 7,00,000
Rs. 49,60,000
When the Marathas, guided by Mir Habib, led a lightning

raid into Murshidabad in 1742, they succeeded in plundering
Jagat Seth’s house and carried away two krors of rupees (3 lakhs
according to Karam Ali, the author of Muzaffarnama) besides a
quantity of other goods. The translator of Seir Mutaqherin was
struck with the remarkable fact that this huge sum was all in
Arcot rupees and adds ‘so amazing a loss which would distress
any monarch in Europe, affected him so little, that he continued
to give government bills of exchange at sight of full one cror at
a time’.73
Another merchant prince, the famous Omichand, played a
major role in the commercial life of Bengal, especially in the
last three decades of the first half of the eighteenth century. An
upcountry merchant from Agra,74 on being domiciled in Bengal
in the second decade of the eighteenth century, he began his com-
mercial operations in Calcutta under the aegis of Bishnudas Seth,
a dadni merchant and also at one time the broker of the English
Company.75 He had established himself as a leading merchant
by the early 1730s. His activities were mainly in two areas, the
Bihar economy based upon Patna, and the region centred upon
Calcutta with the Company’s investments, financial activities
and country trade. In 1731 he along with the Company’s broker
Bishnudas Seth was accused of malpractice in the dadni invest-
ment. But the Council did not think it prudent to dispense with
Omichand’s services and thought it proper to give him a small
share of the dadni ‘for fear he should leave us to go to the French
or other European nations . . .’.76 In 1735 Omichand was again
accused of indulging in fraudulent practices in the investment
and the Calcutta Council decided not to ‘let him have any more
Dadney . . . and to record him disqualified ever to serve the
Company as a merchant again’.77 However he was restored as a
dadni merchant again in 1739 and provided investment for the
Company until 1753 when the dadni system was replaced by the
gomasta system. In 1747 he proposed to undertake one-third of
the Company’s total investment ‘in equal porportion for ready
money’. While most of the Council agreed to Omichand’s pro-
posal, John Jackson dissented stating that ‘he thinks it imprudent
to lift up any particular one too high above the rest’.78 In reply to
Jackson, John Forster of the Council noted that Omichand was
‘not raised above them by this contract with us but was before
their superiority, his natural and acquired capacity for business,
his extraordinary knowledge of the Inland trade and his greater
command of money all which qualities I think render him a
proper person to deal with for ready money . . .’.79 Omichand
was given a contract for one-third of the investment amounting
to about Rs. 9 lakhs.80
Omichand was not only a dadni merchant but did quite
substantial business independent of the Company. Like other
merchant princes of the time he tried to monopolize trade in
certain commodities. As early as 1731 the English factors at
Kasimbazar reported that ‘Omichund’s gomastah had by fraudu-
lent practices obtained an unlawful grant from the Phousdar of
Rungpore, for engrossing all the opium of that place . . .’. His
brother and gomasta Samjee employed vakil (political agent) of
his own at the darbar to represent their interest, and gave valu-
able presents to government officers.81 It seems that Omichand
also tried to monopolize the trade in grain.82 The Court of Direc-
tors wrote from London in 1734 that Omichand ‘is no longer
worthy of our protection’.83 But the Company could hardly
do without transacting business with Omichand, especially for
Bihar goods. He was closely connected with Alivardi Khan’s gov-
ernment at Patna from the late 1730s and in 1741 he farmed the
mint.84 His brother Deepchand controlled the faujdari of Sarkar
‘Syrang’ which was the major centre of saltpetre production in
Bihar.85 The combination of Omichand, Deepchand and Khwaja
Wazid had complete control of the Bihar trade and a similar
domination over smaller traders and contractors. Omichand
was mainly concerned with saltpetre trade and opium business
the latter of which he monopolized.86 He was a major contrac-
tor with the Company for saltpetre. Through the influence
over Bihar administration and farming of centres of saltpetre
production, Omichand and Deepchand almost monopolized the
saltpetre trade.
Omichand had a close connection with the administration at

Murshidabad. When his name was struck off the list of the Com-
pany’s dadni merchants in 1735, Haji Ahmed, Alivardi’s brother
and one of the most influential persons in the court, sent word
to the Company to reinstate Omichand as a dadni merchant and
that he (Haji) would be security for any sum advanced to him.87
Such a strong support from Haji Ahmed only indicates the great
extent of Omichand’s influence on the administration. His farm-
ing of territories producing saltpetre and the mint at Patna, his
monopoly of opium trade etc. could only be procured and main-
tained through a strong connection with the ruling elite of the
country. Clearly he was very influential at the court and could
retain the affection of Alivardi with exotic presents.88 He also
won over the confidence of the next nawab Sirajuddaulah. He
has generally been portrayed as a villain for his role in the Plassey
conspiracy. But there should be little doubt as to his capacity,
independence and business acumen as a merchant. Orme,who
knew him well, wrote: ‘Among the Gentoo merchants estab-
lished in Calcutta, was one named Omichund, a man of great
sagacity and understanding, which he had employed for forty
years with unceasing diligence to increase his fortune . . . he was
become the most opulent inhabitant in the colony. The extent of
his habitation, divided into various departments; the number of
his servants continually employed in various occupations, and a
retinue of armed men in constant pay, resembled more the state
of a prince than the condition of a merchant’.89 There can be
no doubt that Omichand was a wealthy merchant. He could
provide one-third of the Company’s investment amounting to
Rs. 10 lakhs without needing to receive any payment in advance.
In 1750 the Company owed him more than Rs. 16 lakhs.90 At
the time of Sirajuddaulah’s sack of Calcutta in 1756 an amount
of Rs. 4 lakhs in cash besides ‘many valuable effects’ were found
in his treasury.91 If the annual income of his brother Deepchund
of Patna was at least Rs. 1 lakh,92 Omichand’s earnings can only
be guessed. He was the owner of the most of the best houses
and ‘had many other interests’ in Calcutta. ‘The whole body of
Omichand’s peons and armed domestics’ numbered three hun-
dred.93 In his will after distributing about Rs. 1,60,000 among

the members of his family, he gifted away the entire residue as
debottur to Sri Govind Nanakji. After payment of Rs. 37,000 to
the Magdalen House and Foundling Hospital in England, this
estate was valued at Rs. 42 lahks.94
Like Omichand, the Armenian Khwaja Wazid played a sig-
nificant role in Bengal’s commercial life in the ’forties and ’fifties
of the eighteenth century. The Armenian merchant prince’s
commercial empire was based upon Hughli, the commercial
capital of Bengal. He had extensive business transactions with
the French and the Dutch, and through Omichand with the
English. He seems to have been extremely devious and had a
passion to extend his commercial interest at any cost. His alle-
giance was swung by the prospect of commercial advantages.
Through political influence, he seems to have consolidated his
commercial position throughout the 1740s. By virtue of his great
influence on the nawab he managed to gain virtual control over
the trade and commerce of Bihar by the late 1740s. Backed by
the court he had risen from being a leading Armenian merchant
to a monopolist in Bengal’s two major extractive commodities –
saltpetre and salt.
Wazid obtained the saltpetre monopoly in 1753. The Fort
William Council reported on 2 April 1753: ‘Coja Wazeed . . .
procured a licence to deal in saltpetre exclusive of any other pur-
chasers’.95 The monopoly in salt trade was even more lucrative
and was farmed in 1752 for Rs. 25,000 or Rs. 30,000 a year
with Wazid importing salt on favourable customs duties. Batson
wrote in 1763: ‘Coja Wazeed of Hughly had the salt farm of Ben-
gal for many years for an inconsiderable sum. . . .’96 An English
document of 1752 notes:97 ‘Salt on account of Coja Wazeed is
exempted from these duties and pays only:
Import: per 100 md. one rupee which is Rs. 0.8 per cent
Export: per 100 md. one rupee which is Rs. 0.8 per cent
Total: per 200 md. two rupee which is Rs. 1.0 per cent
Wazid was also active in maritime commerce in the 1740s and
greatly enhanced his position in the country trade by the acquisi-
tion of a fleet of trading vessels which dominated the maritime

trade of Hugli in the 1750s. The Dutch Director Kerseboom and
the Fort William Council referred to Wazid’s trading house at
Surat.98
Wazid operated his business with monopolistic design. He
had tried through his influence with Bengal administration to
monopolize the trade of Bihar suba. As a merchant his influence
and power were so great that he would never enter into any
contract which would require other merchants to stand security
for him.99 The tremendous influence Khwaja Wazid exerted in
the Murshidabad court, next only to that wielded by the Jagat
Seths, is reflected in the fact that he often acted in the role of an
intermediary between the Calcutta Council and the nawab, and
this indicated the growing importance of the merchant princes in
the Bengal politics. There is little doubt that Wazid was closely
connected to the Murshidabad darbar. In the course of the Cal-
cutta Council’s debate whether the saltpetre contract should be
made with Coja Wazid, the owner of the commodity, or Omi-
chand, Wazid’s close link with the government came out clearly.
Most of the Council members referred to him either as a darbar
official or closely connected with it.100 Orme described Wazid
as ‘the principal merchant of the Province’101 while Watts and
Collet of the Kasimbazar factory noted in 1756: ‘Coja Wazeed
the greatest merchant in Bengal . . . resides in Hughley and has
great influence with the Nabob. . . .’102 Jan Kerseboom the chief
of the Dutch factory wrote in 1755 that Khoja Wazid was lately
given the title of ‘Faqqur Tousjaar’ [Fakhr-ut-tujar] meaning
‘supporter of the treasure’. He mentioned that Wazid was truly
the maintainer of the riches of the rulers in the court of Nawab
Alivardi Khan. He gave the nawab rich presents willingly rather
than under compulsion and the Dutch chief recommended that
Wazid’s friendship should be cultivated as he could prove very
useful to the Company.103
Of the merchant princes joining the Plassey conspiracy, Wazid
was the last to join the bandwagon. He was a shrewd, talented
and unscrupulous operator who belonged to Siraj’s inner circle of
advisers. He had been a serious obstacle to the success of a coup
until May 1757. He joined the conspiracy as he badly needed

a revolution to restore the political backing for his commercial
empire. But the gamble failed. Plassey brought about the down-
fall of the merchant princes – sooner or later. After 1757 both
Khwaja Wazid and Omichand felt the consequenses of an altered
and hostile environment. With Plassey went the foundations of
their commercial empires: court backing for trade monopolies
and contracts for investments with the European Companies.
III
In his unique narrative of the trading world of Asia in the early

seventeenth century, J.C. van Leur emphasized the function per-
formed by the small trader and the pedlar in the distribution of
commercial goods. Though he carefully distinguished between
the small peddling trade and the large wholesale merchants to
be found in India and China, yet at the same time he adds: ‘But
all that does not change the fact that there appears to be only
one conclusion regarding international Asian trade. . . . It was a
small-scale peddling trade, a trade in valuable high quality prod-
ucts’.104 Niels Steensgaard, in his excellent study of the overland
caravan trade in the early seventeenth century, had reinforced
the peddler thesis of Van Leur and stressed that the ordinary
entrepreneurial character of the Asian trade was a sum of ped-
dling activities. He admits that the peddling trade could make use
of fairly sophisticated commercial methods, but he concludes:
‘Nevertheless the ordinary entrepreneur operates on the pedlar
level, and there is nothing in the sources to indicate the existence
of comprehensive coordinated organizations – of an Armenian,
Turkish or Persian version of a Fugger, Cranfield or Tripp’.105 As
has been rightly pointed out by K.N. Chaudhuri, the activities of
Armenian, Turkish or Persian merchants have not yet been stud-
ied in depth from original sources for us to believe uncritically
in such a categorical statement. It can be proved from evidence
in European sources that the existence of a man like Hovannes
or banjaras106 does not justify the conclusion that trade in India
or the Middle East was carried on only at the peddling level. In
India the true pedlars were those who were engaged mostly in
local trade. They went from village to village with their pack
bullocks collecting wares and selling those in a similar way. But
the Armenian merchants were a different category. They were a
group of ‘highly-skilled arbitrage dealers’, ready to deal in any
commodity that offered the prospect of a profit. There were
among them, as the case study of Bengal discussed earlier would
endorse, merchants whose status was equal to that of the most
successful merchant of London and Amsterdam. The case of
Khwaja Surhaud Israel107 and Khwaja Wazid, the two prominent
Armenian merchants in Bengal in the first half of the eighteenth
century, will bear the point out.
The European trading Companies in Bengal generally con-
tracted for procurement of export commodities with substantial
merchants who could handle large volumes of trade. The com-
mercial empires and the trading world of Omichand and Khwaja
Wazid, and most important of all, the business world of the
Jagat Seths – as have been examined earlier – were not ones
which correspond to the world of Hovannes but were the Indian
equivalent of the business world of the Medici family or Fuggers
or the Tripps. We have seen earlier how extensive were the trad-
ing activities of Omichand and Khwaja Wazid who monopolized
several sectors of Bengal’s economy. The Jagat Seths were the
most powerful economic force in the state. It is apparent that
the business houses headed by such wealthy and influential mer-
chants as the Jagat Seths, Omichand and Khwaja Wazid were
akin to a Fugger or Cranfield in their ability to undertake exten-
sive and organized commercial ventures. It can be safely asserted
that the Asian entrepreneurial structure included both great and
small merchants, though in its organization it was more similar
to the Venetian fraterna than the impartial business form of joint
stock Companies.
The trading activities of Asian merchants in Bengal, how-
ever, confirm Van Leur’s thesis that the merchant gentleman in
Asia was a ‘political animal’. His contention that the patrician
merchants were closely connected with the ruling hierarchy and
in some sense carried on political trade, is corroborated by the
experience of Asian merchants in Bengal. He writes: ‘. . . the

wealthy merchant class was allied to the mighty who exercises
social and political authority’.108 This observation conforms well
to the cases of the merchant princes of Bengal – the Jagat Seths,
Omichand and Khwaja Wazid. We have seen earlier how the
power and wealth of the merchant princes were closely allied
to the favour from the darbar. The sources of the immense
wealth and the great influence of Jagat Seths, as observed earlier,
were dependent on court support. So much was the ruling sup-
port necessary for the eminence of the Jagat Seths that when it
was gradually withdrawn after the battle of Plassey, the house
crashed headlong. Similar was the case with Omichand and
Khwaja Wazid. One of the main props of their rise to such a
great height to eminence in the commercial life of Bengal espe-
cially in the ’forties and ’fifties of the eighteenth century was the
darbar backing.
This close alliance between the merchant princes and the
ruling elite, and the great political influence enjoyed by them
are in flat contradiction to the findings of Michael Pearson and
Ashin Das Gupta.109 In their admirable studies of Gujarat and
Surat in the sixteenth and the first half of the eighteenth century
respectively, both portrayed the merchant as an independent
entity, with hardly any close connection with the ruling hier-
archy. But the State was quite concerned about the affairs of
the merchants. That the State cared for the merchants and that
the latter could turn to the State for redress of their grievances
will be borne out by the affairs of 1748-9. Two Armenian ships
carrying goods of the Hughli merchants from Jedda and Basra
were captured in 1748 by the English fleet. The Hugli merchants
represented the affair to Nawab Alivardi Khan who directed
the Company to compensate the merchants’ losses, and wrote:
‘The Syeds, Mogulls, Armenians &ca merchants of Hooghly have
complained. . . . These merchants are the Kingdom’s benefactors.
Their imports and exports are an advantage to all men and their
complaints are so grievous I cannot forbear any longer giving ear
to them. . . .’110 So great were the political influence and power
of the merchants that in their letter to the Calcutta Council the
Hugli merchants dared write: ‘The skirts of the government are

in our hands and we will not cease seeking their justice until we
have full satisfaction’.111
As regards K.N. Chaudhuri’s contention that the decline of
the Bengal merchants in the early 1750s forced the East India
Company to change its investment pattern from the dadni to
the gomasta system, it can be safely asserted there was really
no decline of the merchants in Bengal, and that the change in
the investment system was due to other considerations. The
prominent merchant families of Calcutta, the Seths and Basaks,
and the Katmas of Kasimbazar were still pre-eminent and quite
substantial merchants in the early ’fifties. Moreover merchant
princes like the Jagat Seths, Omichand and Khwaja Wazid were
in their heydays during these years. So long as these merchant
princes were there, Bengal’s credit market was as strong as ever,
and there was no paucity of capital for smaller merchants to
thrive on their trade. The fact of the matter was that the Calcutta
merchants were reluctant to contract for investment on earlier
terms as the prices of provisions and staples like cotton and
thread as also the wages of weavers and artisans had gone up
as a result of the devastations caused by the Maratha invasions,
and this left little profit to induce the merchants to trade with the
Company without a substantial rise in the prices of export com-
modities and an adequate advance payment to both of which the
Company’s response was in the negative. On the other hand as
the private trade of the Company’s servants was dwindling in the
early fifties, they saw an opportunity in the introduction of the
gomasta system to augment their private trade interest.
Nor were the merchants subservient in any way to the
European Companies. The Asian merchants in Bengal held fast
to their ground in the first half of the eighteenth century and
successfully resisted attempts to dictate terms to them by the
East India Companies, let alone by individual Europeans.112
Partnership or interdependence as distinct from a later period of
subjugation was the keynote of the relationship between Asian
merchants and European traders. This only confirms the views
held by historians from case studies of different parts of India.113
Throughout the first half of the eighteenth century the merchants

maintained their traditional organization of commerce without
any serious strain, though they had to extend the methods gener-
ally practiced. There was hardly any innovation to encompass
the new situation arising out of the expanded demand for Bengal
commodities from the European Companies. The commercial
aptitude of the merchants in Bengal was no less inferior to that
of the European traders. An analysis of the trading activities
and methods of these merchants reveals the keenest competition
among buyers and sellers, an eager search for exclusive informa-
tion, the organization of rings and commercial monopoly which
the European Companies tried to foil but often with little suc-
cess. But trade or business was the concern of individuals rather
than of groups acting in common interest. Men tended to act
as individual merchants, as members of families, at most one in
a group thrown together in the course of business. Impersonal
cooperation in institution of business, as had already been devel-
oped in Europe by this time, was unknown. Even cooperation
at personal level was not easy to come by. As in other parts of
India, a commercial venture was mainly the risk of the individual
merchant.
The remarkable growth of financial machinery for credit and
exchange, thanks to the house of the Jagat Seths, and the special-
ized activities of a large class of merchants, undoubtedly point
towards the fact that merchant capital and commercial organiza-
tion were highly developed in Bengal in the first of the eighteenth
century. The general picture of merchant community and com-
mercial organization that one finds in European records is one
of a long established and highly skilled tradition. The expertise
in financial and trading methods was confined to closed com-
mercial groups and was acquired through hereditary channels.
Business transactions more often than not took place within the
same caste or communal group. Even within the Hindu com-
munity, as the case of the Seths in Calcutta will bear out, one
caste group would be reluctant to do business with members
from other castes. But the main trait of a merchant for succes
in business was his honesty and integrity. It was impossible for
a merchant in the early half of the eighteenth century Bengal to

establish his name without a reputation for honesty. Omichand
was an exception, not a rule.
The European Companies no doubt dominated the markets
from time to time for particular commodities but they hardly
ever dominated the ‘commercial outlook’. That position was
held by individual Asian merchants who, it appears, through
their wealth, influence and business acumen controlled the entire
wholesale trade within the area of their operations. The afflu-
ence and wealth as also the trading and commercial empire of
the merchant princes – the Jagat Seths, Omichand and Khwaja
Wazid – compare favourably with the credit and influence of Virji
Bohra, Mulla Abdul Ghafur or the Parekhs of the seventeenth
century Surat. It is interesting to note that the merchant princes
of Surat were indigenous merchants belonging to the locality. But
the merchant princes of Bengal, like the prominent merchants in
Bengal in the second half of the seventeenth century,114 were all
outsiders, none of them belonging to the soil. This is perhaps
the historical evidence of the fact that Bengalis in general had
seldom been keen about the profession of a merchant.
Notes
1. The award of a Commonwealth Academic Staff Fellowship m 1978-9

by the Commonwealth Scholarship Commision in UK enabled me to
do most of the research for this paper in U.K.: and the Netherlands.
The research in India was possible through a grant from the Indian
Council of Historical Research, New Delhi.
2. Coast and Bay Abstract (henceforth C & B Abst.), vol. 2, f. 319, para. 55,
31 January 1722, India Office Library (henceforth IOL), London.
3. For Ostend Company, see Memorie of Alexander Hume, 1730,
Stadsarchief Antwerpen, Generaal Indische Compagnie, 5769 I am
indebted to Professor K.N. Chaudhuri for letting me have a photocopy
of this document from his own copy
4. Bengal Public Consultations (henceforth BPC), Range 1, vol. 17, f 72a,
30 April 1744, I.O.L.
5. C. & B. Abst., vol. 5, f. 193, 13 January 1750; K.K. Datta, ed., Fort
William-India House Correspondence and Other Contemporary
Papers Relating thereto [1748-57], vol. 1 (Delhi, 1958) (henceforth
FWIHC).
6. Ibid., vol. 3, f. 264, para. 124, 16 January 1733.

7. Factory Records, Kasimbazar, vol. 6, 25 December 1741, IOL.
8. Ibid., vol. 6, 26 February 1742.
9. Ibid.
10. Despatch Book (henceforth DB),vol.108,f.623,para.45,4 February 1743,
IOL.
11. Factory Records, Kasimbazar, vol. 6, 23 April 1743.
12. Ibid., vol. 6, 27 January 1744.
13. BPC, Range 1, vol. 17, f. 27a, 25 February 1744.
14. Ibid., f. 66, 23 April 1744, Factory Records, Kasimbazar, vol. 6, 19 April
1744.
15. BPC, Range 1, vol. 17, f. 119, annex, to consult., 28 May 1744.
16. Ibid., f. 482a, 8 March 1745; f. 488a, 14 March 1745; C. & B. Abst.,
vol. 5, f. 57, para. 4 & 5, 11 August 1745.
17. BPC, Range 1, vol. 19, f. 147a, 16 March 1747.
18. DB, vol. 109, f. 465, para. 33-39, 6-12 June 1746.
19. For the merchants’ arguments, see, BPC, Range 1, vol. 19, ff. 151a-152;
C & B Abst., vol. 5, para. 32, f. 108; Bengal Letter Received (IOL), vol. 21,
ff. 213-14, para. 32; FWIHC, vol. 1, pp. 190-1.
20. BPC, Range 1, vol. 19, ff. 209a-210, 22 April 1747.
21. Ibid., f. 255-55a, 25 May 1747, f. 257, 28 May 1747, Bengal Letters
Received, vol. 21, ff. 216, 218, FWIHC, pp. 92-3.
22. BPC, Range 1, vol. 19, f. 280, 13 June 1747, C & B Abst., vol. 5,
f. 109, para. 39, 13 June 1747, Bengal Letters Received, vol. 21,
ff. 220-1, FWIHC, vol. 1, p. 194.
23. BPC, Range 1, vol. 19, f. 286, 16 June 1747.
24. Ibid., f. 289a, 18 June 1747.
25. Ibid., vol. 21, f. 69, 18 May 1748; C & B Abst., vol. 5, para. 33, pp. 134-
5; FWIHC, vol. 1, p. 298.
26. For merchants’ reasons for refusing to pay penalty, see, C & B Abst.,
vol. 5, f. 303, para. 123, 20 August 1751, FWIHC, vol. 1, p. 523.
27. BPC, Range 1, vol. 24, ff. 133, 134a, 17 and 20 May 1751, C & B Abst.
vol. 5, ff. 303-4, para. 126, 20 August 1751, FWIHC, vol. 1, pp. 523-4.
28. BPC, Range 1, vol. 24, ff. 136, 137a, 23 and 27 May 1751, C & B Abst.
vol. 5, f. 304, para. 130, 128, 20 August 1751, FWIHC, vol. 1, p. 524.
29. C. & B. Abst., vol. 5, f. 354, para, 42, 18 September 1752; FWIHC, vol. 1,
p. 594.
30. BPC, Range 1, vol. 26, ff. 66a-67, 1 March 1753, C & B Abst., vol. 5,
f. 401, para. 32; FWIHC, vol. 1, pp. 680-1.
31. For the merchants’ terms, see, BPC, Range 1, vol. 26, ff. 157a-158,
31 May 1753.
32. Ibid., f. 158, 31 May 1753, C & B Abst., vol. 5, f. 425; Bengal Letters
Received, vol. 22, para. 30-1, ff. 416-17, FWIHC, vol. 1, pp. 680-1,
3 September 1753.
33. BPC, Range 1, vol. 26, f. 158, 31 May 1753, C & B Abst., vol. 5,
f. 425; Bengal Letters Received, vol. 22, f. 417, para. 31, FWIHC,
vol. 1, p. 681.
34. For these orders, see, BPC, Range 1, vol. 26, f. 161, 4 June 1753.
35. Ibid., f. 161a, 4 June 1753, C & B Abst., vol. 5, ff. 425-6; Bengal Letters
Received, vol. 22, ff. 417-19, para. 32-5; FWIHC, pp. 682-3, para. 33-
5, 3 September 1753.
India Company, 1660-1760 (Cambridge: Cambridge University Press,
1978), pp. 311-12.
37. Koloniaal Archief (henceforth KA), Algemeen Rijksarchief, The Hague,
vol. 2791, ff. 94-5.
38. That the gomasta system was not to replace dadni system as a whole,
and that gomastas were employed only in Santipur are quite evident
from Kerseboom’s report: ‘The Company decided to employ several
gomastas in this village [Santipur]. . . ’. KA 2791, f. 95vo.
39. KA 2791, ff. 93vo-96.
40. BPC, vol. 26, f. 165a, annex to consult., 7 June 1753.
41. Eur G37, Box 27 [IOL], 1 September 1755.
42. N.K. Sinha, The Economic History of Bengal, vol. 1 (Calcutta: Firma K.L.
Mukhopadhyay, 1965), pp. 8-9.
43. BPC, Range 1, vol. 12, f. 263, 26 Sept. 1737, vol. 22, f. 345a, annex,
to consult., 26 October 1749.
44. Ibid., vol. 26, f. 181a, 23 June 1753.
45. Factory Records, Kasimbazar, vol. 12, 21 February 1754.
46. Ibid., vol. 12, 21 October 1754.
47. Orme Mss., India, VI (IOL), f. 1455.
48. Ibid., f. 1525.
49. Ibid., XVIII, f. 5041.
50. Quoted in J.H. Little, The House of Jagat Seth (Calcutta: Calcutta His-
torical Society, 1967), p. 2.
51. Factory Records, Kasimbazar, vol. 7, 3 January 1745; BPC, Range 1,
vol. 17, f. 437, 4 January 1745; C & B. Abst., vol. 5, f. 28, para. 49,
9 January 1745.
52. BPC, Range 1, vol. 4, f. 462a, 9 November 1721.
53. Ibid., vol. 4, f. 438a, 28 August 1721.
54. Factory Records, Kasimbazar, vol. 6, 16 March 1743.
55. BPC, Range 1, vol. 11, f. 349, 8 November 1736; vol. 12, f. 17, 13 Dec-
ember 1736; Bengal Letters Received, vol. 21, f. 507, 13 January 1750;
BPC, Range 1, vol. 25, f. 43, 3 February 1752.
56. Orme Mss., India, XVIII, f. 5043, 17 Dec. 1757, Luke Scrafton to
Clive.
57. BPC, Range 1, vol. 14, ff. 317-17a, 11 December 1740.
58. Ibid., vol. 14, f. 337, 26 December 1740.
59. Ibid., vol. 15, f. 84a, 29 March 1742.

60. Factory Records, Kasimbazar, vol. 6, 7 June 1742; B.PC, Range 1,
vol. 15, f. 188, 10 June 1742.
61. Factory Records, Kasimbazar, vol. 6, 14 June 1742; BPC, Range 1,
vol. 15, f. 194a, 21 June 1742.
62. Factory Records, Kasimbazar, vol. 6, 6 June 1743, BPC, Range 1,
vol. 16, f. 181a, 10 June 1743.
63. Factory Records, Kasimbazar, vol. 6, 2 July 1743.
64. W.W. Hunter, A Statistical Account of Bengal, vol. IX (London: Trubner
&Co., 1875), p. 254.
65. BPC, Range 1, vol. 8, f. 260, 13 July 1730.
66. Ibid., vol. 8, f. 234a, 2 June 1730.
67. S.C. Hill, Three Frenchmen in Bengal (London, New York: Longmans,
Green and Co., 1903), p. 77.
68. Syed Gholam Hossein Khan, Seir-Mutakherin, trans. Nota Manus
[Raymond Mustafa], vol. II (Calcutta: T.D Chatterjee, 1902), p. 458.
69. Quoted in J.H. Little, op. cit., p. 3.
70. William Bolts, Considerations on Indian Affairs (London: J. Almon,
1772), p. 158.
71. J.H. Little, op. cit., p. xvii.
72. Orme Mss., India, xviii, f. 5043, Luke Scrafton to Col. Clive, 17 Dec-
ember 1757, Eur G23, Box 37 (IOL).
73. Quoted in J.H. Little, op. cit., p. 120; J.N. Sarkar, Bengal Nawabs
(Calcutta: Asiatic Society, 1952), p. 29.
74. Omichand and his brother Deepchand have been referred to as
‘Agrawallah’ dwelling in Azimabad in 1747, c.f., Factory Records,
Patna, vol. 2, 3 April 1742; in another document Omichand was
referred to as ‘formerly of Agra’, see, BPC, Range 1, vol. 17, f. 276a.
75. N.K. Sinha, op. cit., p. 6.
76. BPC, Range 1, vol. 8, f. 419, 21 July 1731, vol. 9, ff. 17a-18, 23 March
1732.
77. C. & B. Abst., vol. 4, f. 82, para. 144, 24 January 1735.
78. BPC, Range 1, vol. 19, f. 277a, 8 June 1747, Bengal Letters Received,
vol. 21, ff. 219-20; FWIHC, vol. 1, pp. 193-4.
79. BPC, Range 1, vol. 20, ff. 109-9a, 15 August 1747.
80. Ibid., vol. 19, f. 298, 25 June 1747.
81. Ibid., vol. 8, ff. 400-400a, 21 June 1731, vol. 9, f. 22a, 3 April 1732.
82. DB, vol. 105, ff. 453-54, para. 124, 11 February 1732.
83. Ibid., vol.106, f. 182, para. 39, 29 January 1734.
84. G & B Abst., vol. 4, f. 376, 11 December 1741.
85. BPC, Range 1, vol. 17, f. 769, 16 December 1744.
86. Home Misc. Series, [IOL], vol. 192, f. 64.
87. Factory Records, Kasimbazar, vol. 5, 21 January 1736.
88. S.C. Hill, Bengal in 1756-57, vol. II (London: J. Murray, 1905),

pp. 63-4.
89. Robert Orme, A History of the Military Transactions of the British
Nation in Indostan, vol. II, Sec. I (London: J. Nourse, 1768),
pp. 50-1.
90. BPC, Range 1, vol. 23, f. 186, 1 July 1750.
91. Orme, op. cit., vol. II, Sec. I, p. 78.
92. BPC, Range 1, vol. 17, f. 372a, 1 December 1744.
93. Orme, op. cit., vol. II, Sec. I, pp. 60, 128.
94. Home Misc. Series, vol. 420, ff. 25, 29; N.K. Sinha, op. cit., vol. I,
p. 245.
95. BPC, Range 1, vol. 26, f. 110, 2 April 1753, Bengal Letters Received,
vol. 22, para. 18, f. 410.
96. Orme Mss., OV 134, f. 13.
97. Mss. Eur., D 283, f. 22 [IOL].
98. KA 2791, S.C. Hill, Bengal in 1756-57, op. cit., vol. II, p. 87.
99. BPC, Range 1, vol. 26, f. 132a, 3 May 1753, C. & B. Abst., vol. 5,
f. 424, Bengal Letters Received, vol. 22, f. 412.
100. BPC, Range 1, vol. 26, ff. 131a-132a, 3 May 1753.
101. Orme, op. cit., vol. II, Sec. I, p. 58.
102. Records of Fort St. George, Diary and Consultation Book, 1756
(Madras, 1943), vol. 86, p. 32; Orme Mss., OV 19, p. 104.
103. K.A. 2791, f. 128vo.
104. J.C. van Leur, Indonesian Trade and Society, Essays in Asian Social
and Economic History (The Hague, Bandung: W van Hoeve Ltd.,
1955), pp. 132-3, 197-201, 219-20.
105. Neils Steensgaard, Carracks, Caravans and Companies: the Structural
Crisis in the European-Asian Trade in the Early Seventeenth Century
(Copenhagen: Lund Studentlittaratur, 1973), p. 30
106. Steensgaard refers to Hovannes’ journal which indicates only small
scale transaction of the Armenian merchant; banjaras were grain
merchants who traded in Indian villages while moving from one part
of the country to another and were involved in small retail trade.
107. For Khwaja Surhaud Israel, see, S. Chaudhury, Trade and Commercial
Organization in Bengal, 1650-1720 (Calcutta: Firma K.L. Mukho-
padhyay, 1975), pp. 94, 96, 124, 131, 134, 135
108. J.C. van Leur, op. cit., p. 204.
109. M.N. Pearson, Merchants and Rulers in Gujarat (Berkeley, Los
Angeles, London: University of California Press, 1976); Ashin Das
Gupta, Indian Merchants and the Decline of Surat, c. 1700-1750
(Wiesbaden: Franz Sterner Verlag, 1979).
110. BPC, Range 1, vol. 22, f. 96, annex, to consult., 9 January 1749.
111. Ibid., vol. 22, ff. 134a-135, annex, to consult., 20 February 1749.
112. For such situation in the late seventeenth and early eighteenth century,
and some of the important Bengal Merchants, see, S. Chaudhury,
op. cit., pp. 62-85; I. Ray, ‘The French Company and the Merchants
of Bengal’, Indian Economic and Social History Review (Delhi), VIII
(1971), pp. 46-8.
113. P.J. Marshall, East Indian Fortunes (Oxford: Clarendon Press, 1976),
pp. 44-5; S. Arasaratnam, ‘Trade and Political Dominion in South
India, 1750-1790: Changing British Indian Relationships’, Modern
Asian Studies (Cambridge), vol. 13, pt. 1, Febr 1979, pp. 21-2;
Holden Furber, Rival Empires of Trade in the Orient, 1600-1800,
(Minneapolis: University of Minnesota Press, 1976), pp. 315-16.
114. S. Chaudhury, op. cit., p. 98.
chapter 15
The Asian Merchants and Companies

in Bengal’s Export Trade,
c. Mid-eighteenth Century*
There has long been a surprising consensus among historians that

the European East India Companies, especially the English and
the Dutch, were the major exporters from Bengal and that they
were the principal sources through which silver entered Bengal
throughout the first half of the eighteenth century. This implies
that the exports of the Asian merchants from Bengal were not
at all significant compared with the volume of exports by the
Europeans, and hence the Asians had little role in the bullion
imports into Bengal during this period. Interestingly enough, the
increasing European trade and consequent influx of bullion are
said to have had a close connection with the British conquest
of Bengal in 1757. It has been argued that, as a result of Indo-
European oceanic trade, a ‘community of interest’ had developed
between the Hindu mercantile-banking class of Bengal and the
European Companies.1 Even the latest studies emphasize the role
of European trade as the major source of bullion imports and in
fostering close relations between the European Companies and
* The final draft and revised version of this essay was written at the
Maison des Sciences de l’Homme (MSH), Paris, in May-June 1992. I am
thankful to the MSH for the help and assistance extended to me during this
period. This was published in Sushil Chaudhury & Michel Morineau, eds.,
Merchants, Companies and Trade: Europe and Asia in the Early Modern
Era, Cambridge, 1999, pp. 300-20.
The Asian Merchants and Companies | 359
the commercial-banking class in Bengal. These authorities even

suggest that the interest of the Indian merchants, landholders
and warrior class ‘had become far too closely intertwined with
the fate of the Europeans’ so that the expulsion of the British
from Calcutta ‘could not be borne long’ by the ruling elite and
hence the Plassey revolution of 1757 which signalled the British
conquest of Bengal.2
The aim of this chapter is to re-examine the whole issue in
the light of new evidence and to try to see how far the European
trade was the most important factor in the commercial economy
of Bengal in the mid-eighteenth century – an assumption which
has been taken for granted for too long. There is no denying
the fact that the Europeans were dominant in Bengal’s seaborne
trade but that does not necessarily imply that they were far ahead
of the Asians in Bengal’s export trade as a whole or the largest
importer of bullion for that matter. For the above does not take
into account Bengal’s export trade by overland routes which
had always been extremely significant. It is generally assumed
that with the fall of the great empires – Mughal, Persian and
Ottoman – and the consequent decline of important ports like
Surat, the overland trade was doomed. The reason for this sort
of assumption, it seems, was mainly owing to the lack of data
regarding India’s overland trade compared with the abundance
of quantitative material in the Company archives on European
exports from Bengal. It will be argued in this essay that the
volume of exports by the Asian merchants from Bengal even
in the mid-eighteenth century was much larger than that of the
European Companies. From the qualitative as well as quantita-
tive evidence we have now, admittedly not exhaustive (hopefully
we will be able to unearth more material on this aspect from
both European and indigenous sources), it can be shown that
the share of the Asian merchants even in the two most important
European export commodities, namely raw silk and textiles, was
much higher than that of the Europeans.
Among recent historians, it was Sukumar Bhattacharyya who
first emphasized the overwhelming role of the European trade
in Bengal’s economy. He even went to the extent to suggest that,
around 1740, the Bengali economy became virtually dependent

on the English East India Company.3 Implied corroboration of
Bhattacharyya’s thesis is to be found in Brijen K. Gupta’s book
which was published in 1962.4 In my own work of 1975, I too
put emphasis on European trade though I was more cautious
than others.5 In his seminal study, K.N. Chaudhuri (1978)
emphasizes the major role of the Companies in Bengal’s export
trade in no uncertain terms:
The development of European trade with Bengal in the late seventeenth
century had the effect of shifting the balance radically in favour of the
seaborne trade. During the first half of the eighteenth century Europe
was unquestionably Bengal’s chief trading partner and its textile
industry had not only expanded at a rapid rate to keep pace with the
increased demand but had also fully adjusted its output to the special
specifications required for selling in Europe.6
Om Prakash’s notable contribution on the Dutch Company
(1985) also reiterates the great significance of European trade
in the Bengali economy.7 Two latest studies on the subject in the
New Cambridge History of India series, by P.J. Marshall and
C.A. Bayly, extremely commendable in many ways, also state
in unequivocal terms the major role played by the European
Companies in Bengal’s commercial economy and that the Com-
panies were the main importers of bullion into Bengal in the
mid-eighteenth century.8 Marshall writes: ‘Through their [mer-
chants’] enterprise Bengal maintained a favourable balance of
commodity trade with areas like the Middle East, the Philippines
and above all Europe which settled their deficits in bullion. The
European companies were the main importers of bullion.’9 The
main reason for such assertions is not only the lack of sufficient
information regarding the export trade of Asian merchants from
Bengal but also possibly the Eurocentric view of the historians
working in this field.
The qualitative as well as the quantitative evidence on Ben-
gal’s export trade by the Companies and Asian merchants in and
around the mid-eighteenth century will give us a rough idea of
their comparative position as far as possible within the limita-
tion of the paucity of material in general on this aspect. But first
let us see what was the situation of the Asian trade from Bengal
around 1670, i.e. prior to significant penetration of Bengal’s silk
and textile markets by the European Companies. The descriptive
material in both the Dutch and the English archives leaves little
doubt that there was a thriving trade carried on by the Asian
merchants in silk and textiles from Bengal. A Dutch report on
Malda, one of several important centres of textile production, in
1670 states that textiles worth Rs. 0.8 to 1 million were sold in
the district for export to places like Pegu, Agra, Surat, Persia, etc.
Henry Cansius, who prepared the report, gives a detailed break-
down of the aurungs or production centres in the district and the
value of the amount produced in each aurung for export.10 This
is the nearest quantitative evidence one gets in the Dutch records
of the textile export by the Asian merchants from an important
centre of textile production in Bengal before the large-scale
European participation in this sector of Bengal’s export trade.
A similar report by Richard Edwards of the English East
India Company in 1676, a few years before the establishment
of the English factory in Malda, states that the ‘chief trade’ in
the district was carried on by the ‘factors of Agra, Gujarat and
Benares merchants who yearly send them 15 to 25 pattellas [a
large flat-bottomed boat] whose lading consists of Cossaes, mul-
muls . . . mundils and elaches11 of all sorts, valued at about [Rs.]
1 lakh each pattella and about the half of that amount by land-
ing said goods and raw silk’.12 In other words, the textile export
of Asian merchants from Malda by riverine routes is estimated at
Rs. 1.5 to 2.5 million and that by land at about Rs. 0.75 to 1.25
million (including silk in the latter case).13 Even assuming that
the value of the silk export (though silk was not an important
product of Malda as compared with textiles) was half of the
total value of the export by land (i.e. the share of silk and textiles
being Rs. 0.375 to 0.625 million each), the value of the total
textile export, combining the export by riverine and land routes,
stands at between Rs. 1.9 and 3.1 million. So the value of textile
exports by Asian merchants from Malda, according to Edwards’
estimate, could have been around Rs. 2 to 3 million which is no
doubt higher than the estimate of Cansius. In the light of the two
divergent estimates, though it is extremely difficult to arrive even

at a rough figure, perhaps it would be safe to assume, on the
conservative side, that the textile export by the Asian merchants
from Malda alone could have been anything between Rs. 1 and
3 million in the 1670s.
Here one has to take note of the fact that Malda, though an
important centre of textile production, was certainly not the
major one. The honour goes to areas in and around Hughli,
Dhaka and Kasimbazar. In an account of the textile export from
Dhaka in 1747, the annual export from the district was esti-
mated at Rs. 2.85 million.14 Though Dhaka was famous from
the time of the Romans for the production of legendary muslin,
it also produced fine and ordinary calicoes in large quantities.15
Similarly Kasimbazar, though famous for its silk piece-goods,
also produced mixed piece-goods and coarse textiles. Even in the
late 1740s and early 1750s, especially in the first quinquennial
period of the 1750s, the Asian merchants exported from Bengal
silk textiles alone worth around Rs. 0.63 million a year on aver-
age.16 Besides, there were other important traditional centres of
textile production like Birbhum, Hughli, Balasore, Santipur in
Nadia and Radhanagar in Midnapore, etc. So if the value of
textiles exported by the Asians from Malda alone could possibly
be valued at Rs. 1 to 3 million in the 1670s, the value of the
total amount of textiles exported from several other important
production centres could be anybody’s guess.
Coming to the mid-eighteenth century, one finds quite a lot
of qualitative evidence in the European archives which indicates
the Asian lead in Bengal’s export trade over the Companies,
especially in the silk trade. Though the European Companies
exported a large amount of raw silk from Bengal, they could
hardly control the silk market in Bengal as they were only minor
partners in the field. The privilege was enjoyed by the large
number of Asian merchants active in Bengal’s silk market. The
English Council at Kasimbazar made this amply clear in several
letters to Calcutta.17 In 1744 the Kasimbazar factors referred to
their inability to control the silk market in no uncertain terms:
‘Though the price is so much higher than the last year, it is not in
our power to help it as we cannot command the market which

has been higher lately.’18 It was in the silk investment that the
European Companies had to face the stiffest competition from
various groups of Asian merchants operating in Bengal. Of these
groups, the Gujaratis were the most important and it can be
safely asserted that their operation acted as ‘a general indicator’
of the trends in the Bengal silk market.19 In 1726 the Kasimbazar
Council entered into contract with the silk merchants in a hurry,
apprehending that ‘the extraordinary demand of the Gujaratis
would raise the price further’.20 Apart from the Gujaratis, the
different groups active in Bengal’s silk market were the mer-
chants from Lahore, Multan, Benares, Gorakhpur, Hyderabad,
Delhi (‘Calwars’), Agra and Jangipur in Murshidabad district,
the last acting as gomastas or agents of Benares merchants. And
of course, the Armenians too were there and another group
referred to as ‘Burdelwalis’ in the records, probably from North
India, was also active in the procurement of silk.
It is significant that sometimes the demand of these groups of
merchants, even excluding the Gujaratis, had its impact on the
silk market and enhanced the price of raw silk. As a young factor
in the Kasimbazar factory, Warren Hastings, reported in 1756
from Powa, one of the silk aurungs on the other side of the river
Padma, the prices of pattani or unspun silk suddenly rose there
not because of the purchases of Gujarati merchants but because
of ‘the arrival of every considerable foreign merchants at the
aurungs’. He identified these merchants as ‘Calwars’, Gorakh-
puris and Jangipuris ‘who are reported to have bought upwards
of six or seven lack [1 lack =0.1 million] of rupees for the provi-
sion of putney [pattani], especially the finest sorts which they are
daily buying up notwithstanding its dearness’.21 An intelligent
person as he was, Hastings tried to analyse and also rationalize
the behaviour of these indigenous merchants who were buying
up silk without the least regard for price. He wrote:
For the two former [Calwars and Gorakhpuris] coming from the
distance of Dillee and Benares are in a manner necessitated by the long
journeys they had taken for this commodity, to take it at such a rate
as the market affords; nor are the latter [Jangipuris] less free in this
respect, for tho’ Jungapoor lies but a few days’ journey from hence
yet as they are most of them gomastahs and their constituents living
likewise as far off as Benares they are obliged to comply with whatever
orders they receive from thence, let the price be ever so great.22
If Hastings’ report is correct (we do not see any reason why it
should not be, as he collected the information on the spot), then
it is evident that Indian merchants, not including the Gujaratis
who were the most important group among them, exported silk
worth Rs. 0.6 to 0.7 million from the not-so-important silk-
producing centre of North Bengal only. If that is so, one can
only guess what could have been the value of the exports by the
Asian merchants from Kasimbazar, the most important centre of
silk manufacture and trade in Bengal, and where the Asian mer-
chants, including those from Gujarat, Lahore, Multan, Benares,
Agra, Gorakhpur, etc., were vigorously active in buying silk.
Now, taking up the actual export of raw silk by the European
Companies, one finds that throughout the second half of the sev-
enteenth century the Dutch export was much larger than that of
the English. Even in the first two decades of the eighteenth cen-
tury, the Dutch lead was maintained, as is apparent from Table
15.1. But as the Dutch trade declined in general in the 1720s,
the English export of raw silk from Bengal surpassed that of the
Table 15.1. Quinquennial totals of Dutch and English exports:

raw silk, 1700-20
Years Dutch exports English exports

Total Average Average Total Average
(Dutch lb) (Dutch lb) (Eng. lb) (Eng. lb) (Eng. lb)
1700/1-1704/5 754,648 150,930 164,514 476,283 95,256
1710/11-1714/15 751,054 150,211 163,730 259,292 51,858
1715/16-1719/20 625,653 208,551 227,321 635,225 127,045
(Dutch for three
years only,
1715/16-1717/18)
Sources: Prakash, Dutch East India Company and the Economy of Bengal, p. 218 for
Dutch exports; S. Chaudhury, Trade and Commercial Organization in Bengal, pp.
254-5 for English exports. All calculations are in English small pounds. The Dutch
pond is converted at rate of 1 Dutch pond = 1.09 lb avoirdupois.
Table 15.2. Quinquennial totals of English exports: raw silk, 1730s-50s

(great lb) (great lb) (small lb) (mds)
1730/1-1734/5 702,907 140,581 210,872 2,812
1735/6-1739/40 714,004 142,801 214,201 2,856
1740/1-1744/5 596,051 119,210 178,815 2,384
1745/6-1749/50 300,001 60,000 90,000 1,200
1750/1-1754/5 286,620 57,324 85,986 1,146
Source: Compiled and computed from K.N. Chaudhuri, Trading World, p. 534.
1 great lb = 1.5 small lb. In Bengal silk was weighed in maunds (mds) and seers,
40 seers making a maund. One Bengal maund was equivalent to 75 lb, i.e., lb avoir-
dupois or what were called small lb.
Dutch towards the end of the 1720s.23 As a matter of fact, the

English export of raw silk reached its peak in the 1730s. Table
15.2 indicates the average annual export by the English Com-
pany, which fell sharply from around the mid-1740s, reaching its
nadir in the early 1750s in the period 1730 to 1755. It is evident
from table 15.2 that the maximum annual average of raw silk
exported by the English Company was 2,856 mds. or 0.21 mil-
lion lb in the peak period of the 1730s and never exceeded 3,000
mds. or 0.23 million lb. Indeed, from the mid-1740s till the mid-
1750s, the average annual English export was even less than half
of that in the boom period of the 1730s. As against this, the
Dutch export of raw silk was more or less steady from the 1730s
to the 1750s, with a marginal decline in the 1740s, recovering
again in the early 1750s. This is apparent from the figures in
Table 15.3: Quinquennial totals of Dutch exports: raw silk, 1730s-50s

(Dutch lb) (Dutch lb) (Eng. lb) (mds)
1730/1-1734/5 335,319 67,064 73,100 975
1740/1-1744/5 308,448 61,689 67,241 897
1750/1-1754/5 333,210 66,642 72,640 969
Source: Collected and computed from Bengal export invoices in Dutch records,
Algemeen Rijksarchief, The Hague.
Table 16.3.24 It is clear from this table that the Dutch export
of Bengal raw silk in the period 1730 to 1755 never exceeded
1,000 mds or 0.08 million lb, though it was probably higher
than the figure for the late 1720s and certainly much lower than
the average annual export in the first two decades of the eigh-
teenth century.25 In other words, in the crucial period of the late
1740s and the early 1750s, the total average annual export of
Bengal raw silk by the two major European Companies involved
actively in Bengal trade certainly did not exceed 2,500 mds. or
0.19 million lb, even taking the English export at 1,500 mds. and
the Dutch at 1,000 mds.26 Adding to this the export of raw silk
by other European Companies, which could not have been more
than 1,000 mds. at the maximum,27 the total European export of
raw silk would have been 3,500 mds. or 0.26 million lb in a year
on average at the most.
The important question that arises is what was the amount of
raw silk exported by the Asian merchants from Bengal as against
the European export? We are fortunate to have unearthed a com-
plete list of silk exports by the Asians from Bengal from 1749 to
1767 from the records at the India Office Library. The report
was prepared by W. Aldersey, who was chief of the Kasimbazar
factory in 1769, in response to an official query as to the causes
of the decline in the silk trade and industry in Bengal. Aldersey
specifically mentions that he collected the information from
Murshidabad customs house and that it included the raw silk
exported by ‘natives only on which Duties have been collected’.28
From his list, we have computed here the quinquennial totals of
silk exports by the Asians from 1749 to 1758 for a comparative
study of the Asian and European exports of raw silk (see Table
15.10 and Figure 15.1), the full details of which are given in
Tables 15.5 and 15.7.
Table 15.4 clearly indicates that the Asians were far ahead of
the Europeans in the export of raw silk from Bengal. While the
export by the Asian merchants amounted on average to 19,803
mds. or about 1.5 million lb in the early fifties and 14,938 mds.
or about 1.1 million lb in the mid-fifties, the Europeans exported
only about 3,500 mds. or 0.26 million lb in a year on average
Table 15.4: Quinquennial totals of silk exports by Asians, 1749-58
Years Total (mds) Average Average (lb) Total value Average

(mds) (Rs.) value (Rs.)
1749-53 99,016 19,803 1,485,240 27,724,365 5,544,873

1754-8 74,692 14,938 1,120,380 20,913,345 4,182,669
Source: BPC, Range 1, vol. 44, Annex to Consultation, 19 June 1769, IOR; for the
complete list, see Table 15.7.
during the late forties through the mid-fifties. In other words,

it can be said that the European export was less than one-fifth
of what was exported by the Asian merchants around this time.
Again the total value of the European export of raw silk, taking
it to be 3,500 mds. a year and at the rate of Rs. 7 per seer (40
seers making a maund), which is the rate at which the Asian
export was valued in the said English Company records, would
have been only around Rs 0.98 million. On the other hand, the
total value of the silk exported by the Asian merchants is esti-
mated at around Rs. 5.5 million on average during the period
from 1749 to 1753 and Rs. 4.1 million in the next five years
from 1754 to 1758, i.e. Rs. 4.8 million on average during the
entire period. So as far as the total value of the raw silk exported
by the Europeans and Asians is concerned, the European share
was thus only between one-fifth and one-quarter of the Asian
share. As such, and considering the fact, attested by many con-
temporaries including the Dutch Directors and English officials
in Bengal,29 that the Asians too had to bring in silver/cash to
Bengal for buying raw silk, textiles and other commodities, the
assertion that the Europeans were the main importers of bullion
into Bengal in the pre-Plassey period can hardly be tenable.
So far as the export trade in textiles is concerned, we are
admittedly on much less firm ground than in the silk trade. Yet,
as we have seen earlier, before the penetration of the Europeans
in the textile market, Malda, one of several major textile-pro-
ducing areas – but surely not as important as Dhaka, Hughli and
Kasimbazar – alone exported textiles worth about Rs. 1 to 3 mil-
lion to its traditional markets. And as yet we have no definitive
evidence that the supply for the ‘great’ demand in the European
markets from around the 1680s seriously affected Bengal’s trad-
itional exports to other regions or that Bengal met the European
demand by diverting the supplies from her traditional buyers. So
it can be assumed that, even in the late seventeenth or first half
of the eighteenth century, Bengal continued to supply her tradi-
tional markets while at the same time meeting the new European
demand. This seems to be quite evident from the presence of
merchants from various parts of Asia in different textile aurungs
of Bengal procuring cloth side by side with the agents/merchants
of the Companies. In the European records there are regular
references to the stiff competition faced by the Companies from
Asian merchants in Bengal’s textile market. The quantitative
evidence that we have for Asian textile exports, meagre though
it is, also indicates that the Asian merchants had a definite edge
over the Companies even in this sector of Bengal’s export trade.
In an estimate of the total textile exports from Dhaka in 1747,
the Asian share – including that of the Armenians – stood at two-
thirds of the total compared with one-third for the Europeans,
including European private trade.30 The Asian lead in the textile
trade in general is confirmed by the Dutch sources which refer
to advances given for investments in textiles (which were about
50 per cent around this time31) to the tune of Rs. 7.6 million
by the Asians and Europeans excluding the Dutch, of which the
combined English and French share could not have been more
than Rs. 3 million.32 Hence the Asian share would have been
about Rs. 4.5 to 5 million. This seems quite plausible in view of
the fact that, from among several important centres, the export
by Asian merchants from only two (Malda and Dhaka for which
we have some rough quantitative data, as seen earlier) was quite
substantial. The Asian merchants, however, unlike the Europe-
ans it seems, bought quite a large amount of textiles from the
aurungs and spot markets in the same manner as they bought
most of their silk without giving out advances. So, even if we
ignore the Dutch report which is used here mainly as corrobo-
rative evidence despite its vagueness, our main hypothesis will
remain unaltered.
It would be interesting to note here that in the Danish account

of the ‘Cloth Production and Trade’ in late eighteenth-century
Bengal, when the trade of the Asian merchants declined consid-
erably for reasons explained later, the total annual production
of garahs, one of the staple piece-goods of export from Bengal,
was estimated at 400,000 pieces, of which only 160,000 pieces
were supposedly exported annually to Europe.33 The significant
fact one should remember is that areas like Hughli, Kasimbazar,
Malda and Patna actually produced more medium and ordinary
piece-goods (these were the main staples of the Bengal textile
export) than Dhaka for export to different parts of Asia and
Europe. As a matter of fact the Dutch Company (probably the
same would be the case, more or less, with the English too34)
exported more than 50 per cent of the total value of its textiles
from the Hughli area (possibly including Malda where piece-
goods were procured through dadni merchants of Hughli), 25
to 38 per cent from Kasimbazar and 8 to 12 per cent from the
Patna area while the share of Dhaka varied from 5 to 10 per
cent in the mid-eighteenth century. This will be apparent from
an analysis of Dutch textile exports for 1753-4 and 1754-5 for
which we could find area-wise breakdown.35
Fortunately we have been able to find precise information
regarding the export of silk piece-goods from Bengal by the
Asian merchants which will undoubtedly confirm the Asian lead
in textile exports. This was included in the report of W. Aldersey
on the silk trade which we have already referred to. According to
the report, the total value of silk textiles exported by the Asians
in the period between 1749 and 1753 amounted to Rs. 0.63 mil-
lion, and Rs. 0.43 million from 1754 to 1758, on average in a
year.36 It will be obvious from the computation in Table 15.9,
showing the comparative position of the Asians and Europeans
in the export of silk textiles from Bengal (piece-wise) in the first
quinquennial period of the 1750s, that the Asians had a definite
edge over the Europeans in this sector. Though the table does not
take into account the French export for lack of precise data, it
can well be assumed that the French share could not have been
more than half of the Dutch or English export,37 i.e. between
12,000 and 15,000 pieces at the uppermost limit. Thus the aver-
age annual European export of silk textiles would have been
around 67,000 to 70,000 pieces while the Asian export was
more than 91,000 pieces. It is to be noted in this connection that
silk textiles were perhaps not a staple in the Asian export from
Bengal. It was cotton piece-goods – ordinary, medium and fine
– which comprised the bulk of the Asian export to the Middle
East and Central Asia. That the demand in these areas was for
the latter categories of textiles is evident from an analysis of
the Dutch exports to the Persian Gulf region where, in the first
quinquennial periods of the 1740s and the 1750s, the share of
silk textiles was nil.38
If that is so, and considering the rough estimates of the tex-
tile export from Malda and Dhaka, and also that the Asians
advanced about Rs. 4.5 to 5 million (generally at 50 per cent) for
textiles, though they also bought a large amount from the spot
markets, perhaps the total value of the Asian textile export could
have been in the range of Rs. 9 to 10 million. That this is not an
overestimation can be established from other indirect evidence
and assumptions. If the share percentage of the textiles exported
by the Dutch and the English from Dhaka ranged between 5
and 10 per cent in the early 1750s, the share of Dhaka textiles
in the Asian exports could be assumed to have been no more
than 10 per cent.39 In the estimate of the textile export from
Dhaka in 1747, the value exclusively for the Asian export is
mentioned as Rs 1.15 million,40 which means that the total value
of the Asian textile export from Bengal could have been around
Rs. 11.5 million. Adding up the value of silk exports by Asians
(Rs. 4.8 million on average) with that of textile exports (Rs. 9 to
10 million), the total value of Asian exports of textiles and raw
silk could have been at least Rs. 13 to 14 million a year, leav-
ing aside minor exports like sugar, opium, grains, etc. As against
this, the total value of the exports by the European Companies
(including all commodities) during this period would not have
been more than Rs. 8 to 9 million at the most. One has to bear
in mind that these are crude estimates and possibly subject to a
wide margin of error. But still they give us a clear indication of
the comparative position of the Asians and Europeans in Ben-

gal’s export trade in the mid-eighteenth century. Here it has to
be emphasized that the Asian lead in silk exports was so over-
whelming that even a near-equal position in textile exports with
the Europeans would give the Asians an indisputable supremacy
in Bengal’s export trade. For example, the Asians exported the
highest amount of silk in 1751 when its value was estimated
at Rs. 6.6 million which was only a little less than the value of
the total exports (including all commodities) of the European
Companies.
That there was a big difference in the volume and value of the
export trade by the Europeans and Asians from Bengal will also
be absolutely clear from qualitative evidence in several contem-
porary sources. To cite just one, describing the European trade,
Harry Verelst, an official of the English Company, said that it
was ‘large’, but when he referred to the Asian trade, he used the
word ‘vast’. As such it can be asserted, though tentatively in view
of the paucity of quantitative evidence at our disposal at the
moment, that the export of the Asian merchants from Bengal
around the mid-eighteenth century was still larger than that of
the European Companies. And considering the fact that every-
one – whether Asians or Europeans – had to import into Bengal
bullion/cash for their purchases, the Asian import of bullion into
Bengal would have been much higher than that of the European
Companies. The Asian merchants, no doubt, imported into Ben-
gal a few commodities like cotton, salt, non-precious metals and
few luxury items, but their total value compared with the Asian
exports from Bengal was negligible.41 That bullion and specie
comprised the main bulk of the imports by Asian merchants will
be evident from contemporary observers like Verelst, Scrafton
(whom we will quote later), etc. who refer to this fact in no
uncertain terms.
It would be worthwhile to investigate the direction/destina-
tion of the exports by the Asian merchants, especially of raw silk
because it was exported in such huge quantities even in the late
1740s and the early 1750s. However, one has to keep in mind
that evidence of such nature is hard to come by in our sources.42
We were extremely fortunate to have found some data regard-

ing the direction/destination of raw silk exports by the Asian
merchants from Bengal during 1775-7. By reading back from
the evidence of the 1770s, it is possible to provide some idea
of the direction/destination of the Asian silk trade in the pre-
Plassey period. One has to remember in this connection that in
the 1770s there was a precipitate decline of the Asian merchants’
trade under the ruthless repression of the English Company and
its servants backed by political power – a process which started
immediately after 1757-8. The decline of the Asian merchants’
trade is evident from the report of Aldersey which we quoted
earlier and the table from his report (Table 15.5) will bear out
our point.
It is apparent from Table 15.5 that the average annual export
of the Asian merchants during the quinquennial period from
1763 to 1767 stood at 6,779 mds, which tallies more or less
with the export figure from 1775 to 1777 which was on aver-
age 7,025 mds. The destination as well as the total amount of
the silk export by the Asian merchants from 1775 to 1777 is
recorded in the Patna Customs House Register and, for the three
years combined, the totals are as given in Table 15.6. From this
table, it is clear that during this period the maximum amount of
silk from Bengal went to Mirzapore, which was a distribution
centre rather than a manufacturing one, and it can be assumed
Table 15.5: Volume and value of raw silk exported by

Asian merchants, 1759-67
Year Volume (mds) Value (Rs.)
1759 14,394 4,030,387
1760 13,056 3,655,791
1761 10,562 2,957,229
1762 5,953 1,665,845
1763 6,601 1,848,333
1764 8,326 2,331,193
1765 7,191 2,013,525
1766 5,180 1,450,307
1767 6,599 1,847,832
Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR.
Table 15.6: Destination/direction and triennial total of silk

exported by Asian merchants, 1775-7
Destination/direction (in descending Total quantity

order of total quantity) (mds)
Mirzapore 12,568
Lahore 3,851
Multan 1,649
Aurangabad 1,471
Agra 598
Benares 511
Delhi 427
Source: Board of Revenue, Misc. Proceedings, Range 98, vols. 18, 20, 22, IOR. Aver-
age annual export = 7,025 mds.
that this silk was re-exported from Mirzapore in northern and

western directions. The next highest amount was destined for
Lahore, while Multan and Aurangabad came third and fourth
in descending order of total quantity exported. If this was the
destination/direction of Bengal silk exported in the mid-1770s,
it can be reasonably assumed that the destination/direction of
Bengal silk exported by the Asian merchants in the late 1740s to
the mid-1750s would have been similar.
That Bengal’s traditional export by the Asian merchants was
extremely significant even in the pre-Plassey period, i.e., before
the mid-eighteenth century, is stated in unequivocal terms by the
Company officials who were in Bengal both before and after
Plassey, though these have been overlooked by historians in gen-
eral. Harry Verelst, a responsible official of the Company, wrote
referring to Bengal in the pre-Plassey period:
Besides the large investment of the European nations, the Bengal raw
silk, cloths etc. to a vast amount were dispersed in the West and North
inland as far as Guzzrat, Lahore and even Ispahan. . . . From this view
then of the state of trade heretofore in the Provinces . . . it will clearly
follow that the whole amount of the Trade of the Provinces was a clear
gain to them by an exchange of their produce for bullion. . . . If these
facts are admitted we can no longer be at a loss for the sources of the
prodigious Ancient riches of Bengal, as there flowed in every year an
increase of specie equal to the Amount of the export of the Country.43
Table 15.7: ‘Extracts from Customs Office Receipts at Murshidabad,

1749-58’, volume and value of raw silk exported
by Asian merchants
Year Volume (mds) Volume (Eng. lb) Value (Rs.)

1749 20,037 1,502,775 5,610,423
1750 19,571 1,467,825 5,479,786
1751 23,740 1,780,500 6,647,095
1752 17,615 1,321,125 4,932,221
1753 18,053 1,353,975 5,054,840
1754 15,249 1,143,675 4,269,594
1755 12,269 920,175 3,435,310
1756 7,635 572,625 2,137,762
1757 21,347 1,601,025 5,977,045
1758 18,192 1,364,400 5,093,634
Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR. After this table there
is a note which reads: ‘The above account includes only the Trade on which Du-
ties were really paid to the pachotra Daroga [Royal Customs House] but besides
this there was formerly carried on a very considerable trade in these articles by
Juggutseats House and others who had interest with the Nizamat for these goods
to pass Duty free. . . . The above is the trade of Natives only on which Duties have
been paid.’
Another official, William Bolts, stated:

A variety of merchants of different nations and religions, such as
Cashmeerians, Multanys, Patans, Sheiks, Sunniasys, Paggayahs, Betteeas
and many others used to resort to Bengal in Caffeelahs or large parties
of many thousands together with troops of oxen for the transport of
goods from different parts of Hindustan.44
That these Asian merchants bought Bengal goods with cash
brought from outside Bengal is corroborated by Luke Scrafton
who wrote:
Till of late years [meaning pre-Plassey period mainly] inconceivable
numbers of merchants from all parts of Asia in general, as well as
from the rest of Hindostan in particular, sometimes in bodies of
many thousands at a time, were used annually to resort to Bengal
with little else than ready money or bills to purchase the produce of these
provinces.45
After all this, one need not have much doubt about the exports
of Asian merchants from Bengal and their import of silver/cash
Table 15.8: ‘Extracts from Customs House Receipts at Murshidabad

from 1749 to 1757’, volume and value of silk textiles
exported by Asian merchants
Year Volume (no. of pieces) Value (Rs.)

1749 140,256 841,586
1750 77,872 467,232
1751 124,675 748,050
1752 92,475 554,850
1753 89,978 539,868
1754 74,978 449,868
1755 75,062 450,372
1756 50,532 303,192
1757 91,162 546,972
1758 65,162 390,972
Source: BPC, Range 1, vol. 44, Consultation, 19 June 1769, IOR. The note after table
15.7 is applicable to this table too.
Table 15.9: Quinquennial total and average of silk textile exports

from Bengal: comparative position of Asians and
European Companies, 1750-1/1754-5
Years Asians (pieces) European Companies (pieces)

Dutch English Total
1750-1 124,675 12,890 12,760 25,650
1751-2 92,475 39,628 20,041 59,669
1752-3 89,978 27,777 32,615 60,392
1753-4 74,978 29,029 24,663 53,692
1754-5 75,062 40,883 34,160 75,043
Total 457,168 150,207 124,239 274,446
Average 91,434 30,041 24,848 54,889
Source: Asian export, BPC, Range 1 vol. 44, Consultation, 19 June 1769, IOR; Dutch
export collected and computed from export invoices in VOC records; English ex-
port computed from data supplied by K. N. Chaudhuri.
in the mid-eighteenth century, the amount of which, as we have

argued in this chapter, was greater than that of the Europeans.
In conclusion, the main point to emphasize is that it is high
time that historians tried to have a fresh look at the compara-
tive position of the European trade and the trade of the Asian
merchants operating both within and without the Indian sub-
continent. It is important to note that even with the precipitate
decline of the Great Mughal Empire around the mid-eighteenth
century, the demand for high-quality Bengal textiles, not to speak
of the common and cheap varieties, did not show any marked
decline. The successor states and others like the Bengal nawabs,
the nawab wazir of Oudh, the Rohilla chieftains of the north
and the Nizam in the south vied with each other to make their
courts miniature replicas of the Mughal darbar. As a result, the
‘craze’ for fine Bengal textiles did not diminish to any apprecia-
ble extent which is obvious even from Taylor’s report of Dhaka
cloth manufacture in 1747. Despite wars and political instability
in the mid-eighteenth century in general, there is no positive evi-
dence that these hampered the trade of Asian merchants to any
great extent. Shrewd, efficient and well known for their ability to
thrive on a very low margin of profit and against heavy odds, the
Asian merchants seem to have kept alive their traditional trade
to western and northern India, and even to Central Asia and the
Middle East, bypassing war-torn or politically unstable areas as
and when this became necessary.46
Political instability or decay might dampen trade in general
but at the same time neither can lessen the basic needs for food
and clothing. Thus, as no alternative source of supply seems to
have emerged till the mid-eighteenth century, it is reasonable to
assume that Bengal and other production centres of the essential
items continued to supply their traditional markets through the
Table 15.10: Comparative position of Asian and European silk exports

(quantity and value), 1750s
Years Asian exports European exports

Av. qty (lb) Av. value (Rs.) Av. qty (lb) Av. value (Rs.)
Source: Asian exports computed from table 15.7 and European exports from tables
15.2 and 15.3.
Figure 15.1. Asian and European silk exports
Asian merchants operating in the overland routes which might

possibly have changed their courses in response to the exigency
of the given situation. That the overland trade was still quite
active and significant in the mid-eighteenth century is the impres-
sion one gets from a close scrutiny of the European sources.47
The search for more qualitative as well as quantitative data on
the Asians’ trade, especially the overland route, should go on,
and then both the European trade and the Asian trade should be
placed in their proper perspectives. This will enable us to have a
comprehensive picture of the trade as a whole around the mid-
eighteenth century which is so crucial for a proper understanding
of the background to, and the implications of, the British con-
quest of Bengal in 1757 (which indeed laid the foundation of the
British Empire in India), and how the Company and its servants
systematically eliminated the Asian rivals in Bengal trade and
ruined the Bengal handloom industry in the post-Plassey period.
Notes
1. Though Hill hinted at this many years ago (S.C. Hill, Bengal in 1756-7
(London, 1905), vol. I, pp. xxiii, lii), for a later version of the thesis
see Brijen K. Gupta, Sirajuddaullah and the East India Company,
1756-57 (Leiden, 1962), p. 32. Implied in the thesis is the emphasis
on the role of the Hindu/Jain banking and commercial class and hence
the indirect corroboration of the schism in the Bengali society along
communal lines which was propounded by Hill. I have tried to refute
the schism thesis in my article, ‘Sirajuddaullah, the English Company
and the Plassey Conspiracy’, Indian Historical Review, 13, nos. 1-2
(July 1986-January 1987), pp. 111-34.
2. For example, P.J. Marshall, Bengal – the British Bridgehead (Cambridge,
1987), pp. 65, 67; C.A. Bayly, Indian Society and the Making of the
British Empire (Cambridge, 1987), pp. 49-50.
3. Sukumar Bhattacharyya, The East India Company and the Economy
of Bengal, 1704-1740 (London, 1954).
4. Gupta, Sirajuddaullah and the East India Company, especially pp. 32-
4.
5. S. Chaudhury, Trade and Commercial Organization in Bengal, 1650-
1720 (Calcutta, 1975).
India Company, 1660-1760 (Cambridge, 1978), p. 24, emphasis mine.
Bengal, 1630-1720 (Princeton, 1985).
8. Marshall, Bengal, pp. 65-7; Bayly, Indian Society, pp. 49-50.
9. Marshall, Bengal, pp. 64-5, emphasis mine.
10. Report by Henry Cansius on Malda, 7 September 1670, Koloniaal
Archief (henceforth ‘KA’) 1168, ff. 2173-4, quoted in Prakash, Dutch
East India Company and the Economy of Bengal, pp. 98-9.
11. All piece-goods produced in Malda.
12. Factory Records, Miscellaneous, vol. 14, ff. 334-6, India Office
Records (henceforth ‘IOR’), London.
13. It is strange that Om Prakash makes a complete misreading of
the document. As he writes: ‘The Edwards estimate is somewhat
problematic in so far as it talks of 15 to 25 boats each carrying goods
worth about Rs. 100,000, but at the same time seems to imply that
only half of this value was accounted for by textiles and raw silk.’ Om
Prakash, ‘On Estimating the Employment Implications of European
Trade for the Eighteenth Century Bengal Textile Industry’, Modern
Asian Studies, 27, no. 2 (May 1993), p. 393. It is absolutely clear from
the report that Edwards first talks exclusively of textile exports (even
specifying the types of textiles as cossaes, mulmuls, etc.) by riverine
routes (and hence says pattellas) and then by land routes (‘landing’ is
nothing but land) as opposed to export by rivers.
14. ‘Taylor’s Report on Dhaka Cloth Production’, textile export from
Dhaka in 1747, Home Misc. Series, 456 F, f. 93, IOR. This also
indicated the value of the textiles sent for the emperor, nawab and the
Jagat Seths, amounting to Rs. 5.5 million.
15. Ibid.
16. See Table 15.8 below.
17. For example, Coast and Bay Abstracts, vol. 3, para. 38, 26 December
1733, IOR.
18. Factory Records, Kasimbazar, vol. 6, 23 January 1744, IOR.
19. Chaudhuri, Trading World, p. 354.
20. Bengal Public Consultations (henceforth ‘BPC’), Range 1, vol. 6, f. 172,
21 February 1726, IOR.
21. Factory Records, Kasimbazar, vol. 12, Consultation, 27 January 1756,
IOR.
22. Ibid.; K.N. Chaudhuri’s contention that the ‘products bought by the
Gujaratis did not directly compete with those shipped to Europe’ is
hardly tenable.
23. Kristof Glamann, Dutch-Asiatic Trade, 1620-1740 (Copenhagen, The
Hague, 1958), p. 131.
24. Floretta yarn or mochta silk was not included in the computation as
it was not really regarded as raw silk, was a much inferior variety
and cheaper quality than the varieties like tanny, adapangia, Gujarat,
tanna banna, etc. Even in the sale of the different chambers in Holland,
this was not advertised as raw silk like tanny, cabessa, etc., but as
floretta yarn (see Notice of auction, 16 September 1755, Resolutions
of Heren XVII, VOC, 7380). Prakash (Dutch East India Company and
the Economy of Bengal, pp. 202, 218) too dealt with raw silk and
floretta yarn separately. But even if we include floretta yarn in our
computation, it hardly alters the picture because in the early 1740s the
average annual export of floretta yarn was only 84 mds. while in the
early 1750s it was 184 mds. (computed from Dutch records).
25. See Table 15.1 above.
26. The Dutch export of Bengal raw silk to Japan, which was an important
branch of trade of the VOC in the second half of the seventeenth century
(see Prakash, Dutch East India Company and the Economy of Bengal,
p. 126), was only 6,154 Dutch lb on average in the quinquennial
period 1740-5, while in the periods from 1730 to 1735, and 1750 to
1755, it was nil. I have collected and computed all the above evidence
from the Bengal export invoices in the Dutch archives.
27. Among other European Companies, only the French were of some
importance. The Ostend Company had to abandon its trade in 1744
while the Danish Company was permitted to establish its factory only
in 1755. Though the French private trade increased remarkably in the
early 1750s, the volume of their corporate trade seems to have been
much smaller than that of the English or Dutch. Even assuming, as did
P.J. Marshall {Bengal, p. 66), that the value of the French Company’s
trade was about half that of the English or Dutch trade, the French
export of raw silk would have been around 500 mds. at the most.
And raw silk does not seem to have been a staple commodity in the
European private trade to Western India, the Red Sea or Persian Gulf
area (VOC, 2304, f. 211, HB 30 November 1734). Hence it could be
reasonably assumed that the export of raw silk by other Europeans
(i.e. excluding the English and Dutch Companies) could not have been
more than 1,000 mds. at the maximum on average in a year in the
early 1750s.
28. BPC, Range 1, vol. 44, Annex to Consultation, 19 June 1769. This is
more or less corroborated by other English and indigenous sources.
See, for example, Mss. Eur D 283, f. 21, IOR; Verelst’s letter to the
Court of Directors, 5 April 1769, N.K. Sinha (ed.), Fort William-India
House Correspondence (henceforth FWIHC) (New Delhi, 1959),
vol. V, pp. 18-19. For the indigenous account see N.K. Sinha, The
Economic History of Bengal (3rd edn, Calcutta, 1965), vol. I, p. 112.
29. ‘Memorie’ of Dutch Director Tailleffert, VOC, 2849 (KA 2741),
f. 245v, 27 October 1755. See also Luke Scrafton, Reflections on
the Government of Indostan (London, 1760); BPC Range 1, vol. 11,
ff. 288v.-9, 28 August 1736; FWIHC, vol. V, pp. 16-18.
30. Taylor’s Report, Home Misc. Series, 456 F, IOR. The share of the
European private trade was only about 5 per cent of the total value of
exports. So private trade does not seem to have been very significant.
31. See S. Chaudhury, ‘Merchants, Companies and Rulers’, JESHO, 31,
no. 1 (1988).
32. ‘Memorie’ of Dutch Director Taillefert, ff. 188vo-9. Taillefert talks of
Rs 6 million sent to textile centres for some years but categorically
mentions the June resolution of 1741 which referred to Rs 7.6 million
as the amount given as an advance by various buyers other than the
Dutch. We accept the latter sum because first, it seems to be in the
official resolution; secondly, Taillefert in all probability spoke of the
late 1740s and the early 1750s when textile trade and industry was to
some extent disrupted as a result of the Maratha invasions. The official
resolution of 1741 refers to the period prior to the Maratha incursions
when things were normal, and trade and industry flourished as usual.
But both could have been mere guesses.
33. Ole Feldebeck, ‘Cloth Production and Trade in Late Eighteenth
Century Bengal’, Bengal Past and Present, 86 (July-December 1967),
pp. 128-9.
34. See, for instance, the geographical analysis of orders for piece-goods
from London in the early 1680s: S. Chaudhury, Trade and Commercial
Organization, p. 201, n. 166.
35. S. Chaudhury, ‘European Companies and the Bengal Textile Industry
in the Eigh teenth Century: the Pitfalls of Applying Quantitative
Techniques’, Modern Asian Studies (May 1993), p. 339, table 3.
36. W. Aldersey’s Report, BPC, Range 1, vol. 44, Consult. 19 June 1769,
IOR.
37. P. J. Marshall also estimated on the basis of Martineau that the French
Company’s purchase may have been half of those of the Dutch and
English, Marshall, Bengal, p. 66.
38. For the percentage share of different textile categories exported to
Persia by the Dutch during 1730-50, see S. Chaudhury, From Prosperity
to Decline: Eighteenth Century Bengal (New Delhi, 1995), ch. 7, table
7.10.
39. Though the markets for the European and Asian exports were different,
the demand for the various categories of Bengal textiles in these markets
was more or less the same. The detailed analysis of the percentage
share of different categories of textiles exported by the Companies (see
S. Chaudhury, ‘Continuity or Change in the Eighteenth Century? Price
Trends in Bengal, circa 1720-1757’, Calcutta Historical Journal, 15,
nos. 1-2 (July 1990-June 1991), p. 24, Table 11) establishes that the
bulk of the exports comprised ordinary, medium and fine cotton piece-
goods. The demand in the Middle East and Central Asia, which was
the main area of Asian exports, was also for the same varieties as will
be apparent from the analysis of the Dutch textile export to the Persian
Gulf region (see n. 38).
40. Leaving aside the amount sent for the emperor at Delhi, the breakdown
of the value of the export is as follows: Upper Provinces Rs. 100,000,
Pathans Rs. 150,000, Mughals for foreign consumption Rs. 400,000,
Armenians to Basra, Mocha and Jedda Rs. 500,000.
41. Thus Om Prakash’s contention (Modern Asian Studies, 27, no. 2 (May
1993), p. 355) that ‘the bulk of the imports into Bengal was without
any question in the form of goods’ rather than precious metals is
hardly tenable.
42. I do not think that for my present thesis it is absolutely essential to
show where the silk was exported to. Contrary to an opinion expressed
in private conversation by a distinguished historian of the period that
my thesis ‘stands or falls on this very question’ of identifying the
destination of the raw silk exported from Bengal, I maintain, as some
experts in the field do, that so far as I know of the volume and value
of raw silk exported by the Asian merchants, it is more than sufficient
for my present thesis. However, I agree that it is worth investigating the
destination of the raw silk exports from Bengal so that we can have a
comprehensive idea of the silk trade as a whole.
43. H. Verelst to the Court of Directors, 2 April 1769, BPC, Range 1,
vol. 44, f. 324, para, 6, emphasis mine.
44. William Bolts, Considerations on Indian Affairs (London, 1772),
p. 200.
45. Scrafton, Reflections on the Government of Indostan, p. 20, emphasis
mine.
46. Tavernier noted in the mid-seventeenth century how merchants

abandoned the route by way of Multan and resorted to the route by
way of Kabul even though this took them ten days more. Jean-Baptiste
Tavernier, Travels in India, 1640-67, tr. V. Ball (London, 1889), vol. II,
pp. 56-8.
47. For example, on the basis of these sources, N.K. Sinha writes: ‘In spite
of occasional disturbances the cotton cloth and silk stuff of Bengal
must have sold almost as before in different parts of India and the
neighbouring regions.’ Sinha, Economic History of Bengal, vol. I,
p. 110. That the caravan trade was still flourishing in the late seven-
teenth and eighteenth centuries was reiterated by Morris Rossabi, ‘The
Decline of the Central Asian Caravan Trade’ in J.D. Tracy (ed.), The
Rise of Merchant Empires (Cambridge, 1990), p. 368. He writes that
‘the caravan trade did, in fact, prosper in the seventeenth and eighteenth
centuries. But this new commerce did not traverse . . . Persia, and the
Middle East. All of these were bypassed. . . . The caravans travelled
north through southern Siberia and northern Central Asia, as Russian
merchants dominated the trade. Russians, with the help of peddlars
from Bukhara, revived the caravan commerce.’
chapter 16
The Inflow of Silver to Bengal in Global

Perspective, c. 1650-1757*
It is common knowledge by now that the singular product for

the origin and development of world trade in the modern era
was silver. The huge demand for Indian commodities, especially
textiles and raw silk, in the world market attracted buyers from
various parts of the world, and almost all these traders had to
bring precious metals, mostly silver, to India for the procurement
of these commodities. So the influx of silver to India in the seven-
teenth and the early half of the eighteenth century resulted from
India’s favourable balance of trade with the rest of the world.
There is no doubt that as the Europeans – mainly the Dutch and
the English East India Companies – were important partners of
India’s export trade during this period they were responsible for
importing large quantities of silver into India.
In this essay one of our objectives is to explain why within
India Bengal was the main destination of most of the silver that
came through the European agencies. But the more important
question that we shall address is whether these Europeans were
the major importers of bullion/silver into Bengal. The conven-
tional wisdom1 has it that the Europeans, as major partners of
Bengal’s export trade during the period under review, were the
chief agents of the huge inflow of silver to Bengal – a hypothesis
that we shall try to refute here. Another related question is what
* Paper presented in the XIIth International Economic History Congress,

Madrid, 1998, session B-6, ‘Monetary History in Global Perspective, 1500-
1800’ and later published in Global Connections and Monetary History,
ed. D. Flynn et al., Ashgate, 2003.
was the source of silver that the Asian merchants brought to

Bengal in order to finance their exports, which far overshadowed
those of the European Companies even in the mid-eighteenth
century.2
For a proper understanding of the silver inflow to Bengal
in the global context, it is necessary to have an overview of
European trade in India, especially Bengal. The major European
Companies, especially the Dutch and the English Companies,
were interested at the beginning of their Asiatic trade only in
procuring spices in the East Indies, mainly in the Indonesian
archipelago. With silver obtained from the ‘new world’, the
Companies went to these islands to buy spices. But to their utter
astonishment, they found that it was not silver but cheap Indian
coarse textiles which were in great demand in these islands. So
they turned their attention to India for cheap, coarse piece-goods
so that they could buy spices in the Indonesian archipelago in
exchange for these Indian textiles. But since trade with Bengal
was not yet their objective, they preferred the Coromandel coast
for procuring Indian calicoes for exchange in the Spice Islands.
However, when the Coromandel trade became uncertain and
expensive because of wars, famines, and political instability, the
Companies turned their attention to Bengal. Soon they realized
that trade in Bengal had certain advantages. Bengal was the
largest producer of not only cotton piece-goods but also of high-
quality and inexpensive raw silk, which was in great demand
in Europe, replacing Persian and Italian silk. A third lucrative
item of trade for the Companies was saltpetre.3 Thus the Asiatic
trade of the European Companies, which began as a bilateral
trade between Europe and the Spice Islands, changed its charac-
ter completely in the course of time. From the original bilateral
trade, it changed to triangular trade between Europe, India (for
cheap cotton piece-goods) and the Spice Islands (where Indian
textiles were exchanged for spices to be exported to Europe).
Finally it became bilateral again, mainly between Europe and
Bengal, with the marked difference from about the 1680s that
Bengal emerged as the chief partner of the Asiatic trade of the
European Companies. By the beginning of the eighteenth century,
The Inflow of Silver to Bengal in Global Perspective | 385
Bengal supplied about 40 per cent of the average annual value of

Asian commodities the Dutch Company sent to Holland. More
than 50 per cent of the total value in textiles the Dutch exported
from Asia was in the form of Bengal textiles. Thus in the early
eighteenth century Bengal became the most important theatre of
the Dutch Company’s activity not only in India but in the whole
of Asia.4 The case of the English Company was similar. The Ben-
gal trade was often described by the English factors as the ‘best
flower of the Company’s garden’, or ‘the choicest jewel’.5
A significant feature of Bengal-Europe trade was that the
European Companies had to import into Bengal mostly treasure
to procure the export commodities. This phenomenon of West
to East flow of silver is generally seen in the global context as a
reaction to Europe’s trade deficit with Bengal, though perhaps
the cause of the trade in silver might have centred in India/Ben-
gal, as has been suggested recently by Flynn and Giraldez for the
case of China.6 Whether the demand-side causation was of Asian
origin in the case of Bengal, as it was probably in the case of
China, needs careful investigation which has not yet been done.
However, the amount of treasure imported by the Companies can
be gauged from the fact that the proportions of precious metals
to the total value imported by the Dutch in the second half of the
seventeenth and the first two decades of the eighteenth century
works out at 87.5 per cent.7 The pattern was not very different in
the case of the English Company. While the average proportion
of treasure in the total English imports into the East Indies as
a whole came to about 75 per cent, this proportion in Bengal
varied between 90 and 94 per cent in the first two decades of the
eighteenth century.8 It does not seem that the situation changed
to any significant extent for the rest of the period under review.
The main reason for this was that Bengal was highly self-suffi-
cient and as such the market for any import commodities, other
than silver, was severely restricted. In fact, Bengal was one of
the most prosperous subas (provinces) of the erstwhile Mughal
empire. From around the mid-seventeenth century, if not earlier,
it had become one of the most important centres of international
trade. Its fertile land, rich and varied agricultural output, the
high level of skill of its innumerable weavers and artisans, and

its excellent and highly developed financial and communication
networks made it the most valuable prop of the Mughal empire.
In the late seventeenth and early eighteenth century it had such
a favourable balance of trade that it earned the ill reputation of
being the ‘sink’ where everything disappeared without the least
prospect of return.9 Even earlier, the French traveller Bernier
wrote in the 1660s that ‘the rich exuberance of the country . . .
has given rise to a proverb that the Kingdom of Bengal has a
hundred gates open for entrance but not one for departure’.10
The rich prospects of trade in Bengal, and the comparative peace
and stability in the region in contrast to the disintegration of
the Mughal empire in the first half of the eighteenth century,
attracted to the province traders from different parts of India
and Asia as well as from Europe. Grose, who visited Bengal in
1756-7, noted that the ‘foreign and domestic trade of Bengal
are very considerable, as may appear from the great number of
Persians, Abyssinians, Arabs, Chinese, Gujarats, Malabarians,
Turks, Moors, Jews, Georgians, Armenians and merchants from
all parts of Asia who resort there’.11
At this stage one would like to compute the total amount of
silver imported by the Europeans into Bengal. But no such exact
computation has yet been done. If we consider this for other
regions of India, especially Gujarat, which was one of the most
important theatres of European activities in the seventeenth
century, the conclusion arrived at by a recent scholar is that the
English and Dutch imports of silver were not the principal or
even the only source of silver imported into Gujarat.12 It has
been suggested that during the last quarter of the seventeenth
century, the Red Sea and Persian Gulf trade, carried on mainly
by Asian merchants, still brought in large quantities of silver.13
Another scholar has shown recently that Gujarati ships took
Rs. 4 million worth of textiles to Mocha and Jeddah annually
at the turn of the eighteenth century.14 If this figure reflects sale
prices and the entire value was received in bullion, the annual
inflow of silver from the Red Sea to the Gujarat ports, according
to a recent calculation, should have amounted to 44.5 metric
tons – a figure far in excess of the Cape-route imports by the

Europeans. This indicates that the larger part of the silver enter-
ing Gujarat during the 1690s and later was not simply taken to
the Gujarat mints (considering the output of these mints) but a
substantial amount was also taken to inland regions.15
The issues of mints in Bengal were so few as to render implau-
sible any suggestion that these could at any time have absorbed
a large part of the bullion imported into Bengal. The total esti-
mated output of the Bengal mints in the seventeenth century
was even less than the estimated imports of silver by the English
Company alone, leaving aside the Dutch and other Europeans.16
The reason for this was perhaps that the Bengal mints were not
very popular with bullion importers. The European Companies
had serious misgivings about the exchange rates for bullion and
specie at the Bengal mints, which were much lower than those
allowed in other mints. The Companies confronted serious dif-
ficulties in converting the imported silver to local currency in the
face of the machinations of the house of Jagat Seth, the greatest
banker of the then known world.17 For all practical purpose the
Seths had the monopoly of minting coins in the imperial mint.
Although both Asian and European merchants in theory were
free to coin money at the mint by paying the requisite charges,
the Jagat Seths manipulated things in such a way that it was next
to impossible for anyone except themselves to coin money. Thus,
the European Companies were forced to sell their bullion to the
Seths, who imposed a rate much lower than the market rate.18
To obviate this sort of difficulty, the English Company began to
explore the possibility of getting its silver coined at the Madras
mint, and from 1692 it began to mint rupees at Madras for
export to Bengal.19 But since the Madras rupees were not gener-
ally accepted in Bengal, except at a disadvantageous discount,
the Company sold the treasure it imported to local merchants,
without taking it to the mint.20 Possibly these merchants, instead
of getting the silver coined in the Bengal mints, took it to the
inland mints. This seems the only persuasive explanation for the
low level of output of the Bengal mints compared to the large
quantities of silver imported into the region.
Again, it has now been suggested that the recent evidence

helps put the size and influence of the bullion received through
the English and the Dutch in a proper perspective. The transfer
of treasure to India through the activities of the Dutch and the
English Companies before 1660 was by no means substantial
when compared to the treasure imported through other chan-
nels. Even the additions to Indian silver stock made through
the Companies’ trade after 1660 were not on such a scale as
to enhance phenomenally the silver stock already accumulated
in India. Though the silver influx through the Companies cer-
tainly increased after 1675, it is difficult to subscribe to the view
expressed recently that ‘the huge influx of bullion which resulted
from the new demand was only one indication of the growth
in income and employment’.21 It is too simplistic to speak of
income benefits of bullion influx without any concrete proof of
how a mere infusion of precious metals could expand employ-
ment in India, unless India re-exported it to obtain capital or
wage-goods. It has been argued now that since silver steadily
depreciated in value, India stood to lose a great deal in the long
run by receiving and retaining that metal.22 Again, even if a
simple mercantile approach is adopted and the import of bullion
is considered virtuous in itself, it is yet to be established not only
whether the English and the Dutch Companies were the main
agents in the transfer of American silver to India, but even (in
view of the trade through the Levant) that the Companies were
the irreplaceable media by which Indian exports could reach
Europe to meet the expanding demand for them.
In this context it should be borne in mind that the inflow
of silver to Bengal was not a new phenomenon that can be
associated with the coming in of the Europeans. Even in the
pre-modern era, Bengal had a favourable balance of trade with
other regions and the traders from those places had to bring in
precious metals to meet the trade deficit on their part. As early
as 1415 we hear of Chinese trade missions bringing gold and sil-
ver to the delta for purchasing Bengal goods.23 Another Chinese
visitor remarked a decade later that long-distance merchants in
Bengal settled their accounts with tankas (silver rupees).24 The
pattern continued throughout the next century. The Venetian

traveller, Caesar de Federici, wrote in 1569, ‘Silver and Gold
from Pegu [Burma] they carried to Bengala, and no other kind of
Merchandize’.25 That Bengal’s traditional export trade was quite
substantial even in the sixteenth century (and brought in its train
large quantities of gold and silver) is evident from Ludovico di
Varthema, who wrote, ‘Fifty ships every year are laden in this
place with cotton and silk stuffs. . . . These same stuffs go through
all Turkey, through Syria, through Persia, through Arabia Felix,
through Ethiopia and through all India.’26 Another foreign trav-
eller remarked that ‘the balance of trade was against all nations
in favour of Bengal, and it was the sink where gold and silver
disappeared without the least prospect of return’27 – an observa-
tion almost similar to that of Godinho, made recently in relation
to the inflow of silver to China.28
Even in the first half of the eighteenth century when the Euro-
pean Companies’ trade reached its peak, they were not the major
importers of silver into Bengal. That honour belonged to the
Asian merchants. But the conventional wisdom has it, repeated
even in the most recent works, that it was the Europeans, as
major partners of Bengal’s export trade, who were responsible
for the huge influx of silver to Bengal and that they were the
chief importers of precious metals. Let us examine some of these
assertions. One of these authorities states categorically:
The development of European trade with Bengal in the late seventeenth
century had the effect of shifting the balance radically in favour of
the seaborne trade. . . . During the first half of the eighteenth century
Europe was unquestionably Bengal’s chief trading partner and its textile
industry had not only expanded at a rapid rate to keep pace with the
increased demand but had also fully adjusted its output to the special
specifications required for selling in Europe.29
Another scholar holds almost the same opinion: ‘Through their
[the merchants’] enterprise Bengal maintained a favourable bal-
ance of commodity trade with areas like the Middle East, the
Philippines and above all Europe which settled their deficits in
bullion. The European companies were the main importers of
bullion.’30
The main reason for such assertions is not only the lack of
sufficient information regarding the export trade of Asian
merchants from Bengal, but also the Eurocentric view of the
historians working in the field. There is no denying that the
Europeans were the dominant factor in Bengal’s seaborne trade,
but that does not necessarily imply that they were far ahead of
the Asians in Bengal’s export trade as a whole, or that they were
the largest importers of bullion. The above claims do not take
into account Bengal’s export trade by overland routes which
had always been extremely significant. It is generally assumed
that the fall of the great empires – Mughal, Persian and Otto-
man – and the consequent decline of important ports like Surat
doomed the overland trade. The reason for this sort of assump-
tion, it seems, owed mainly to the lack of data regarding India’s
overland trade compared with the abundance of quantitative
material in the Company archives on European exports from
Bengal. But from the qualitative as well as quantitative data we
have now, admittedly not very exhaustive, it can be shown that
the share of the Asian merchants even in the two most important
European export commodities, namely raw silk and textiles, was
much higher than that of the Europeans. As such, it was the
Asians and not the Europeans who were the major importers of
bullion into Bengal.
A tentative estimate of the average annual value of textile
exports by the Asian merchants shows that it could have been
in the range of Rs. 9 to 10 million, while the European export
of Bengal textiles was at the most Rs. 5 to 6 million.31 An
estimate of total textile exports from Dhaka, one of the most
important centres of textile production, especially of expensive
and fine quality muslins, indicates that the Asian share stood
at two-thirds of the total, compared to only one-third for the
Europeans, including private traders.32 The Asian lead in the
textile trade in general is confirmed by Dutch sources that refer
to advances given for investments in textiles (which were about
50 per cent around this time33) by Asian and European mer-
chants – excluding the Dutch – to the tune of Rs. 7.6 million, of
which the combined English and French share could not have
been more than Rs. 3 million.34 Hence the Asian share would
have been about Rs. 4.5 to 5 million. This seems quite plausible
in view of the fact that among several important centres, the
export by Asian merchants from only two (Malda and Dhaka,
for which we have some quantitative data) was quite substan-
tial. Moreover, the Dutch report refers to the month of June,
when most of the European Companies, who procured their
export commodities mainly through dadni (the advance system),
had already contracted for their required amount. Though the
Asians, too, bought their wares through dadni, it seems that they
collected quite a large amount of textiles on the spot markets
without giving out advances, as they did in buying most of their
silk.35 So even if we ignore the Dutch account used here (despite
its vagueness) mainly as corroborative evidence, our main
hypothesis will remain unaltered.
In the case of silk exports, where we are on a much more solid
ground than in the case of textiles, the Asians were far ahead
of the Europeans. The total value of the silk exported by Asian
merchants is estimated around Rs. 5.5 million on average in the
five years from 1749 to 1753, and Rs. 4.1 million in the next
five years from 1754 to 1758. In contrast, the total value of silk
exported by all the Europeans during this period was less than 1
million rupees.36 Thus, while the value of Asian silk exports even
in the mid-eighteenth century was to the tune of Rs. 4.8 million
a year on an average, the average annual value of the European
silk exports was only one-fifth to one-quarter of Asian exports
of the commodity.37 Adding up the average annual textile and
silk exports, the Asian share comes to around Rs. 14 to 15 mil-
lion, while the total average value of the European export of
these two commodities would have been about Rs. 6 to 7 mil-
lion. In other words, the value of exports from Bengal by Asian
merchants was more than double the value of exports by the
Europeans.
The suggestion may be made here that the Asian merchants,
unlike the Europeans, perhaps did not bring in silver/bullion for
their purchases in Bengal, but instead brought in merchandise
from other parts of Asia and raised purchasing capital by sell-
ing those goods in the local markets.38 This suggestion is wholly

untenable. True, Asian merchants brought in some commodities
from the eastern archipelago, Ceylon and elsewhere in the second
half of the seventeenth century, but the volume and value of these
goods were insignificant compared to the huge exports from
Bengal carried by Asian merchants. Second, this overseas trade
to the East dried up in the first half of the eighteenth century,
when the seaborne trade was diverted to the West, mainly under
the aegis of the servants of the English Company and private
traders. Here again the volume and value of the commodities
brought in by the Asian merchants were quite negligible. In this
context it has to be borne in mind that the goods exported by
Asian merchants from Bengal were mainly carried via the over-
land route and, as foreign travellers and Company officials of
the period attest in unequivocal terms, for this overland trade
they had to bring in silver/cash. As far as the intra-Asian trade
of the Dutch Company is concerned, as has been shown recently,
this trade declined considerably in the first half of the eighteenth
century, and hence Dutch imports of commodities were quite
negligible.39
We have enough evidence to show that the Asians, like the
Europeans, had to import into Bengal the bullion and specie
needed for procuring export goods. Indeed, all the traders even
from the pre-modern era up to the mid-eighteenth century had
to buy these commodities for export from Bengal with silver or
cash, as the evidence we have clearly shows that nothing else was
accepted. William Bolts, one of the responsible officials of the
English East India Company who lived in Bengal for many years
in the 1750s and the 1760s, stated categorically in reference to
the pre-Colonial period:
In former times it was customary for merchants from all the inland
parts of India, and from Tartary, to resort to Bengal with little else than
money or bills to purchase the commodities of those provinces. A variety
of merchants of different nations and religions such as Cashmeerians,
Multanys, Pathans, Sheiks, Suniassys and many others used to resort to
Bengal annually, in Caffeelahs or large parties, of many thousands together
(with troops of oxen for the transport of goods) from different Darts of
Hindostan; by which the inland importation of bullion into Bengal always

far exceeded the whole importation by sea from Europe and the gulfs of
Arabia and Persia.40
The above assertion of William Bolts leaves absolutely no doubt

that it was the Asian merchants and not the Europeans who
were the major importers of bullion into Bengal, and that their
imports of precious metals ‘far exceeded’ those of the Europeans.
Another Company official of about the same period who became
governor of Bengal in the 1760s wrote:
Besides the large investment of the European nations, the Bengal raw
silk, cloths, etc, to a vast amount were dispersed in the West and North
inland as far as Guzzrat, Lahore and even Ispahan. . . . From this Point
of view of the state of the trade heretofore in the provinces . . . it will
clearly follow that the whole amount of the Trade of the Provinces was
a clear gain to them by an exchange of their produce for bullion. . . . If
these facts are admitted we can no longer be at a loss for the source of
the Prodigious Ancient riches of Bengal, as there flowed in ever year an
increase of specie equal to the Amount of the export of the Country.41
That the Asian merchants bought Bengal goods with silver or
cash brought from outside Bengal is corroborated by yet another
Company official, Luke Scrafton, who was in Bengal for many
years in the mid-eighteenth century:
Till of late years (meaning the period prior to the British conquest of
Bengal in 1757] inconceivable numbers of merchants from all parts
of Asia in general, as well as from the rest of Hindostan in particular,
sometimes in bodies of many thousands at a time, were used annually
to resort to Bengal with little else than ready money or bills to purchase
the produce of these provinces.42
After all the evidence cited above, one need not have much
doubt about the exports of the Asian merchants from Bengal and
their imports of bullion or cash into Bengal even in the mid-eigh-
teenth century, the amount of which was far greater than that
of the Europeans. The question that crops up here is what were
the sources of silver with which the Asian merchants made their
purchases in Bengal. At this state of our knowledge it is not pos-
sible to give any definitive answer, and we can only make a few
tentative suggestions. There is no evidence that the traditional
trade of Bengal – before the emergence of the Europeans on

the scene – with China, Burma, and other neighbouring regions
that brought in silver and gold to Bengal either declined or was
diverted after the coming in of the Europeans. It is thus pos-
sible that the Chinese, Burmese, and other merchants from the
East continued to bring precious metals even in the seventeenth
and the early eighteenth centuries. Again, it has been suggested
recently that the route around the Cape of Good Hope was not
the only way through which silver and gold were channelled into
Asia.43 Precious metals were also exported via the Levant, the
Baltic, and Russia to the trading centres of the Red Sea and the
Persian Gulf. There was the direct link between Spanish America
and Asia that was maintained by the famous ‘Manila-galleons’
bringing silver from Acapulco to the Philippines. Silver and gold
were found in Asia as well, the most important sources being
Japan, China, and Sumatra.
However, it appears that the precious metals entering Asia
via the Middle East were the most important sources of capital
for the Asian merchants who bought Bengal commodities with
silver. Silver could be bought in Mocha, in Persia and sometimes
in Surat, whose merchants could hold their own position in com-
petition with the European Companies.44 The ups and downs of
trade in silver in this region were easily adjusted. For example,
when the Persian supply of silver failed around 1680, the Dutch
Company turned its attention to Surat, where silver rupees or
sometimes ducats could be bought for export to Bengal and the
Coromandel. But when Persia regained its position as supplier
of silver and gold, the export from Surat ceased. When Persian
trade deteriorated after 1730, other trading centres such as ‘Bus-
sorah and Khara’ were then able to deliver some silver and gold.
In the middle of the eighteenth century it would be Surat again
that would provide silver to other regions of India, including
Bengal.
In conclusion, it can be said that the great demand for Bengal
commodities in the world market brought in its train a huge
amount of silver to the province. This was because Bengal
enjoyed a favourable balance of trade throughout the period
under review and hence precious metals poured into Bengal in

exchange for its manufactures. Everyone, whether the Europe-
ans or Asians, had to bring in silver or cash to make purchases
in Bengal, as nothing else was accepted. And it was the Asians,
and not the Europeans, who were the major importers of silver
into Bengal in the seventeenth and the first half of the eighteenth
century.
Notes
1. K.R. Chaudhuri, The Trading World of Asia and the English East India
Company (Cambridge, 1978), 24; P.J. Marshall, Bengal, the British
Bridgehead (Cambridge, 1987), 64-5; C.A. Bayly, Indian Society and
the Making of the British Empire (Cambridge, 1987), 59-60.
2. S. Chaudhury, ‘The Asian Merchants and Companies in Bengal’s
Export Trade, circa Mid-Eighteenth Century’, in S. Chaudhury and M.
Morineau, eds. Merchants, Companies and Trade: Europe and Asia in
the Early Modern Era (Cambridge, 1999), 300-20.
3. For details, see S. Chaudhuri, Trade and Commercial Organization in
Bengal, 1650-1720 (Calcutta, 1975), 11-16.
Bengal (Princeton, 1985), 8.
5. Original Correspondence, 4 December 1689, no. 5686, vol. 48, India
Office Library and Records (henceforth IOL&R), London; Despatch
Book, 2 July 1684, vol. 90, f. 330, IOL&R.
6. Dennis O. Flynn and Arturo Giraldez, ‘Born with a “Silver Spoon”:
The Origin of World Trade in 1571’, Journal of World History 6.2
(1995): 202-3, 206-8.
7. Prakash, Dutch Company, pp. 65-8.
8. Chaudhury, Trade and Commercial Organization, 208; Chaudhuri,
Trading World of Asia, 512.
9. Alexander Dow, History of Hindostan (London, 1770), III: lxii.
10. Francois Bernier, Travels in the Mogul Empire, A.D. 1656-68, A.
Constable, ed. (Oxford, 1934), 440.
11. John Henry Grose, A Voyage to the East Indies (London, 1772), II: 234.
12. Shireen Moosvi, ‘The Silver Influx, Money Supply, Prices and Revenue
Extraction in Mughal India’, Journal of the Economic and Social
History of the Orient 30 (1987): 72.
13. Ibid.
14. Ashin Das Gupta, ‘Gujarati Merchants and the Red Sea Trade, 1700-
1725’, in Blair B. Kling and M.R. Pearson, eds, The Age of Partnership
(Honolulu, 1979), 124.
5. Moosvi, ‘The Silver Influx’, 56, 58, 70, Tables, 2, 3, and 6 respectively.
1
16. Ibid., 70, Table 6.
17. For the House of Jagat Seth, see S. Chaudhury, From Prosperity to
Decline: Eighteenth Century Bengal (New Delhi, 1995), 109-16.
18. For details, see ibid., 77-84.
19. Chaudhuri, Trade and Commercial Organization, 103-10.
20. Ibid., 103-7.
21. Chaudhuri, Trading World of Asia, 462.
22. Moosvi, ‘The Silver Influx’, 93.
23. W.W. Rockhill, ‘Notes on the Relations and Trade of China with the
Eastern Archipelago and the Coast of the Indian Ocean during the
Fourteenth Century’, T’oung Pao 16.2 (1915): 444; quoted in Richard
M. Eaton, The Rise of Islam and the Bengal Frontier (Delhi, 1994), 96.
24. Rockhill, ‘Notes on the Relations and Trade of China’, 437; quoted in
Eaton, The Rise of Islam, 96.
25. Quoted in Eaton, The Rise of Islam, 96.
26. Ibid., 97.
27. Dow, History of Hindostan, I: ciii.
28. Quoted in Flynn and Giraldez, ‘Born with a “Silver Spoon”’, 206.
29. Chaudhuri, Trading World of Asia, 24.
30. Marshall, Bengal, 64-5.
31. For a detailed argument for the above estimate, see Chaudhury, From
Prosperity to Decline, 202-11. Om Prakash’s contention in this respect
is hardly tenable. See Om Prakash, ‘On Estimating the Employment
Implications of European Trade for Eighteenth Century Bengal Textile
Industry – A Reply’, Modern Asian Studies 27.2 (1994): 341-56.
32. Home Miscellaneous Series, vol. 456F, ff. 93-5, IOL&R.
33. See Chaudhury, From Prosperity to Decline, 93-108.
34. Taillefert’s ‘Memorie’, Verenigde Oost Indische Compagnie (hence-

forth VOC), Algemeen Rijksarchief, The Hague, vol. 2849, 27 October
1755, ff. 188v-189. Taillefert speaks of Rs. 6 million sent to textile
centres for some years, but mentions categorically a resolution of June
1741 that refers to Rs. 7.6 million as the amount given as advance by
various buyers other than the Dutch. We accept the latter sum because,
first, it is mentioned in the official resolution; secondly, Taillefert in all
probability spoke of (while mentioning Rs. 6 million) the late 1740s
and early 1750s when textile trade and industry was to some extent
disrupted as a result of the Maratha invasions. The official resolution
of 1741, on the other hand, referred to the period prior to the Maratha
incursions when things were normal, and trade and industry flourished
as usual. It should be noted, however, that both figures could have been
mere guesses, given the diffusion of the industry and the presence of
numerous buyers in Bengal.
35. Chaudhury, From Prosperity to Decline, 145-8, 228-36.
36. Ibid., 249-54.

37. S. Chaudhury, ‘International Trade in Bengal Silk and the Comparative
Role of the Asians and Europeans, circa 1700-57’, Modern Asian
Studies 29.2 (1995): 373-86.
38. Prakash, ‘Estimating the Employment Implications of European Trade’,
341-6.
39. Chaudhury, From Prosperity to Decline, 195-202.
40. William Bolls, Considerations on Indian Affairs (London, 1772), 200;
emphasis mine.
41. Harry Verelst to Court of Directors, 2 April 1769, Bengal Public

Consultations, vol. 44, f. 324, IOL&R; emphasis mine.
42. Luke Scrafton, Reflections on the Government of Indostan (London,
1760), 20; emphasis mine.
43. Femme S. Gaastra, ‘The Dutch East India Company and Its Intra-
Asiatic Trade in Precious Metals’, in W. Fischer, R.M. McInnis, and
J. Schneider, eds, The Emergence of a World Economy (Wiesbaden,
1986), 103,
44. Ibid., 104.
chapter 17
Was there a Crisis in

Mid-eighteenth Century Bengal?*
In recent years several noted historians have propounded the

thesis that there was a ‘crisis’ in Bengal in the mid-eighteenth
century which ultimately brought in the British. Earlier the ‘cri-
sis’ was seen only in Bengal’s body-politic but it is now being said
that this was the case in the economic sphere too. The ‘crisis’ in
Bengal politics is explained with emphasis on the breakdown of
the ‘new class alliance’ of military aristocrats, merchant-bankers
and zamindars which sustained the nawabi regime from Mur-
shid Quli to Alivardi Khan. As an indication of the economic
‘crisis’, it has been pointed out that prior to Plassey (1757), eco-
nomic conditions deteriorated, trade and industry languished,
merchants were impoverished, prices of different commodities
sky-rocketed, and the exports of the English Company declined
– all presumably because of the disastrous impact of the Maratha
incursions in the 1740s. The aim of this paper† is to examine this
thesis in the light of new evidence found in European and Indian
archives.
*Richard B. Barnett, ed., Rethinking Early Modern India, New Delhi,

2002, pp. 129-52.
†
Subsequent to the presentation of this paper in the workshop at
Charlottesville, Virginia, in October 1994, my book From Prosperity to
Decline: Eighteenth Century Bengal came out in 1995 (Manohar, Delhi)
wherein I have incorporated some of the material used in the article. But
the main thrust of this paper has not been discussed in detail in the book. I
am grateful to the Maison des Sciences de l’Homme, Paris for their support
during the preparation of this paper.
Was there a Crisis in Mid-eighteenth Century Bengal? | 399
‘Crisis’ in the Body-politic?
Of late, historians are keen on explaining the origin of the

Anglo-Nawabi conflict in 1756-7 (which resulted in the Plassey
revolution and the British conquest of Bengal) in terms of one
broad generalization, namely, the breakdown of the alliance
among military aristocrats, merchant-bankers, and zamindars
that underpinned the nawabi regime from Murshid Quli till Ali-
vardi Khan. Near-contemporaneous Persian chronicles written
mostly at the behest or under the patronage of British ‘masters’
came in handy, and a selective use of European sources helped
build the general thesis that with the accession of the young
Nawab Siraj-ud-Daulah (April 1756) the ‘class alliance’ broke
down and everything began to fall apart, and that the British had
to intervene almost in a fit of ‘absent-mindedness’ in order to
avert the ‘crisis’ in Bengal’s body politic. Hence the obvious con-
clusion is that Plassey should be explained as the consummation
of an internal crisis arising out of the alienation of the dominant
ruling class by the nawab which inevitably brought in the British.
The actual role of the British in the Plassey conspiracy against
the nawab is thus conveniently lost in the maze of ‘theorization’
and the young nawab remains the villain of the piece. To use the
age-old cliche, this is nothing but old wine in new bottles – the
ghost of S.C. Hill (1905) is very much alive beneath the facade
of the broad generalization.1
There is little doubt that the appointment of Murshid Quli
as the diwan of Bengal heralded a new era in the history of
Bengal. Not only did it witness the setting up of a new pattern
of provincial administration, but it convulsed the entire Bengal
polity as well. Murshid Quli, a man of proven ability, was sent
to the province with specific instructions to try to increase the
revenue. But the process of increasing revenue collection led to
significant changes in the landholding and political structure of
Bengal resulting as they did in the ‘formation of a new, regional
group’. These changes can be described as the emergence of
big zamindaris with a consequent decline in the total number
of zamindaris, the increasing importance of larger zamindaris
in the political system of the province, the enhancement in the

power of the moneylender and banking class.2
The Mughal mansabdars who were the most dominant ruling
group earlier became less powerful in the changed circumstances
because they no longer found support or assistance from the
centre. Hence they compromised to share power with local ele-
ments. The various socio-economic groups which so far remained
subdued now got an opportunity to assert themselves. One of
these groups, especially the bigger and stronger zamindars who
emerged as a result of Murshid Quli’s revenue reorganization,
became much more powerful in the new set-up. As the demands
of revenue increased, so did the power of the zamindars. In fact,
the history of the large zamindars shows that Murshid Quli made
it a policy to increase the power of the loyal and big zamindars.
They also became partners in the new ruling group. Similarly,
the merchant-bankers who began to play a significant role in
the administrative and revenue reform of Murshid Quli were
drawn into the new ruling councils. Thus, a new power-bloc was
created in Bengal in the first half of the eighteenth century.
Yet it would not be correct to view the new ruling alliance as
a bureaucratic superstructure or as a solid bloc. It was a group
of different people with divergent interests who came close to
rally-round the nawab to enhance their own interests. In the
particular setting of Bengal politics, their policy was directed
towards strengthening his position on the one hand and their
personal interests on the other. The nawab on his part needed the
help of the insulated Mughal mansabdars, the landed magnates,
and the merchant-bankers to run the administrative machinery
and generate economic resources. Murshid Quli found a group
of people from various sections looking at him at the head of
the administration as their sole benefactor. He and his succes-
sors utilized the services of this group to fill a vacuum created
in the peculiar circumstances of the early eighteenth century. A
pyramid-type structure was evolved in Bengal with the nawab
at the apex and the members of the ruling alliance deriving their
power from him.
Moreover, there was no conscious attempt on the part of the

government to share power with the various groups so as to
forge a ‘partnership’. The emergence of the big zamindars was
the result of Murshid Quli’s prime concern – revenue reforms.
The merchant-banking class came into prominence because of
the administrative reorganization and the fostering of trade and
commerce. The Mughal mansabdars were rendered less power-
ful as a consequence of the decline of the central authority. The
relationship between the government these segmented groups
had more of a personal character, but no institutional basis.3
It was an arrangement in which new vistas of glory were open
to efficient and successful adventurers by meeting the increased
state demand. At the same time the state became assured of the
help and support of those who received the benefit of it. The
most striking example of the personalized character of the alli-
ance was the house of Jagat Seths. Starting as a mere usurer,
the house, by developing a personal relationship with the gov-
ernment became the ‘direct beneficiary’ and built up the richest
banking house in Bengal.
Since the relationship in the new alliance was based on per-
sonal vested interests, the prime concern of the various groups
was to protect and promote their own interests, even if that
meant a change in alignments. This is well illustrated through-
out the first half of the eighteenth century. After Murshid Quli’s
death, according to his wishes his grandson, Sarfaraj Khan,
became nawab. But when Sarfaraj’s father, Shujauddin, then
deputy governor of Orissa, wanted the masnad (throne) for him-
self, the former gave into the pleading of Murshid Quli’s widow,4
and there was no scope for any intervention by the new ruling
groups. Even the great banker, Jagat Seth, reported the English
factors, was not very sure in the beginning of his position in the
changed circumstances.5 That the new alliance was purely based
on personal relationships is demonstrated by the fact that the two
adventurer brothers, Haji Ahmed and Alivardi Khan, who were
to play crucial roles in Bengal politics later on, were appointed to
high posts by Shujauddin as they were his personal friends.6 Nei-
ther belonged to the important mansabdar or zamindar groups

when they were inducted into the administrative machinery.
Thus the new alliance was not a monolith. It showed definite
cracks under stress. When Sarfaraj became nawab after Shuja-
uddin’s death, he wanted to give promotions and mansabs to
his father’s old officers. But the triumvirate of Haji Ahmed,
Chand (diwan) and Jagat Seth, whom he allowed to continue
to act as councillors according to his father’s last instructions,
opposed the move. Thus, a rift was created in the court. It was
the personal intrigues of the triumvirate which brought about
the revolution of 1740 in favour of Alivardi Khan. The personal
ambition and conspiracy of a few persons resulted only in the
deposition of Nawab Sarfaraj Khan, not either the latter’s inef-
ficiency and corruption so much nor the new ruling group’s
concerted effort. The author of Riyaz writes: ‘This Revolution
in the Government threw the City (Murshidabad – the capital)
as well as the Army and the people of Bengal, into a general and
deep convulsion.’7 Even in the battle of Giria where Sarfaraj died
fighting, quite a sizeable group of important mansabdars and
zamindars like Ghaus Khan, Mir Sharifuddin, Mir Muhammed
Bakir Khan, Bijay Singh, and Raja Ghandarab Singh fought on
the side of Sarfaraj, while another group joined Alivardi’s army,
thus clearly indicating the division in the mansabdar-zamindar
alliance on personal and other considerations.8 That personal
ambition was the driving force, with little regard for cohesion,
is clearly reflected in Mir Jafar’s (the commander-in chief) con-
spiracy to assassinate Nawab Alivardi Khan in 1747.9
Thus the suggestion even in recent studies that the alienation
of the dominant ruling class by the new and young Nawab Siraj-
ud-daulah (1756-7) broke down the new ‘class alliance’ and led
to the subsequent political crisis resulting in the British conquest
is not tenable. The so-called ‘class alliance’ was in fact an exigent
arrangement at a personal level and had no institutional base,
and hence quite fragile. Moreover, there was nothing unusual
about this political situation in the mid-eighteenth century. With
every succession question since the death of Murshid Quli (1728-
9), the ruling clique was divided; so it was in 1756-7. Though a
dominant group with the active support of the British opposed

the succession of Siraj-ud-daulah, there was another group
including merchant princes, zamindars and military aristocrats
who supported the young nawab. This was the pattern in 1728-9
as also in 1739-40. So Plassey can hardly be explained as the
consummation of an internal political crisis in Bengal in 1756-7.
Economic ‘Crisis’?
It should be made clear that no one actually speaks of economic

‘crisis’ as such in the mid-eighteenth century Bengal.10 But if one
reads carefully some of the latest authorities,11 one would find
that there are explicit and positive hints on this point. The ‘crisis’
is seen in deteriorating economic conditions, a decline of trade
and industry, the impoverishment of merchants, soaring prices
of different commodities, and the decline in the exports of the
English Company in the period prior to Plassey. For all this, it is
generally presumed, the Maratha invasions of the 1740s (which,
it is argued, had disastrous effects on the Bengal economy), were
mainly responsible.
But let us first examine whether the Maratha invasions were
as disastrous in their impact on the economy as most historians
would have us believe. There is no denying the fact that they
resulted in serious dislocation in the economy of some areas of
Bengal, but the impact has been greatly exaggerated. The Marathas
caused destruction generally along the line of their march, leav-
ing the remaining part of the country more or less unaffected.
Even in the affected areas, as Richard Becher, a Company official
present in Bengal during the period, pointed out, the Marathas
were obliged to return home at the approach of the rainy season,
and the inhabitants were again safe till the following January.
So they immediately went back to work and arranged to raise
and sell their crops before the next year’s impending invasion.12
That the country was not that much impoverished is proved by
the fact that the zamindars paid Alvardi Rs. 10 million at one
time and Rs. 5 million at another, besides their annual revenue,
to enable him to meet the increased military expenditure.13 The
argument that many merchants in Bengal ‘were crippled by losses

and exactions’ following the Maratha invasions, and that, as a
result of this both the English and the Dutch Companies increas-
ingly turned to direct dealings with the artisans, is not tenable.
As we have shown elsewhere,14 the Dutch Company made such
an experiment for a few years only from 1747 to 1749 in view
of the ‘bankruptcy’ of several merchants in a particular aurung
but reverted to contracts with dadni merchants from 1750. The
change over in the English Company’s investment pattern from
the dadni to the gomasta system in 1753 was not because of any
decline of Bengal merchants, but was actually the result of the
concerning private trade by cutting out the dadni merchants.15
Again, historians rely too much on contemporary Bengali
effects of the Maratha invasions. That these are mostly exagge-
rated accounts is clear from the very nature of the evidence. For
example, the poet Gangaram wrote ‘rice, pulses, dal of all sorts,
oil, ghee, flour, sugar, salt began to be sold at one rupee per seer.
. . . All of them from the lowest to the highest, including the
Nawab himself, had to subsist on boiled roots of banana trees.’16
It is simply absurd that rice, oil, ghee, sugar, salt were all sold at
Re. 1 per seer. Equally unbelievable is the assertion that even the
nawab subsisted on roots of banana. Even making allowance for
poetic license, the above can hardly be evidence of the impact
of the Maratha invasions. The author of Riyaz refers to human
beings living on banana roots to avert death by starvation. But
if even true, this was description mostly of Burdwan city when
its granaries were burnt down and the supply of imported grains
was completely cut off by the Marathas for a short while.17
Another Bengali poet, Bharatchandra, gives an account of
Malini shopping in Burdwan but the prices she paid for different
articles, said to be ‘abnormal’, cannot be compared with earlier
prices (for lack of precise data) to see if they were really so.18 The
simple fact that the total value of the investments of the major
European Companies, especially the English and the Dutch, as
also the export by Asian merchants, was hardly affected during
or after the Maratha incursions is sufficient proof that the inva-

sions had really no long-term disastrous effects on the overall
economy of Bengal.19
That trade and industry were not seriously affected by the
Maratha inroads is evident from the level of European and Asian
exports in the mid-eighteenth century. The English Company’s
exports to Europe reached its zenith in the first quinquennial
period of the 1740s. As a matter of fact, English exports from
Bengal had increased substantially from the early 1730s. Though
there was a slight decline in the average annual value of the Eng-
lish exports between 1750 and 1755, it can be asserted that the
average annual value of the English exports did not show any
marked decline over the period from 1730 to 1755, which is
evident from Table 17.1. It is important to note that the slight
decrease in the average annual value of the English exports in
the first half of the 1750s was balanced (as far as Bengal is con-
cerned) by the increase in the value of the Dutch exports during
this period. So there is no reason to believe that the decline in
the English exports was due to any economic ‘crisis’ in Bengal.
Dutch exports in the 1720s declined to some extent but picked
up from the early 1730s. As a matter of fact, the value of Dutch
exports shows a steady increase throughout the period from the
early 1730s to the middle of the 1750s. It is interesting to note
that the Dutch, who lagged far behind the English in the early
1730s, almost caught up with them in early 1750s. Of course,
Dutch exports included those to different parts of Asia as well.
Table 17.2 will bear the point out.
As far as Asian exports are concerned, they were quite sub-
stantial even in the mid-eighteenth century. Perhaps the total
value of Asian textile exports could have been in the range of
Rs. 9 million to 10 million.20 That this is not an over estimat-
ion can be established with reference to indirect evidence and
assumptions. If the share percentage of the textiles exported by
the Dutch and English from Dhaka ranged between 5 and 10 per
cent in the early 1750s, the share of Dhaka textiles in Asian
exports could be assumed to have been no more than 10 per
cent.21 In the estimate of the textiles exported from Dhaka in
Table 17.1: Quinquennial Total and Average Annual Value of

English Exports, 1730-55
Years Total Average Florins

1730/1-1734/5 £ 2,117,689 £ 423,538 f. 5,082,453
1740/1-1744/5 £ 2,401,785 £ 480,357 f. 5,764,284
1750/1-1754/5 £ 2,033,244 £ 406,649 f. 4,879,785
Source and note: Computed from K.N. Chaudhuri, Trading World, pp. 509-10, with
a one-year lag.
Table 17.2: Quinquennial Total and Average Annual Value of

English and Dutch Exports, 1730-55
(in Florins)
Years English Dutch
Average Annual Average Annual Average Annual
Value of Exports Value of Exports Value of Total
to Europe to Europe Exports (Europe
and Asia)
1730/1-1734/5 5,082,453 2,020,460 3,489,567
1740/1-1744/5 5,764,284 2,390,558 3,475,770
1750/1-1754/5 4,879,785 3,417,306 4,480,104
Source and note: Dutch exports compiled and computed from export invoices in
VOC records. The figures for English exports calculated with one-year lag from K.N.
Chaudhuri, Trading World, pp. 510-11. The rate of conversion used is £ 1= f. 12.
1747, the value exclusively for Asian export is mentioned as Rs.

1.15 million22 which means that the total value of the Asian tex-
tile export from Bengal could have been around Rs. 11.5 million.
We are on much stronger ground so far as the Asian export
of silk is concerned. The total of silk exports by Asians can be
computed from W. Aldersey’s report as is given in Table 17.3.
Table 17.3: Quinquennial Total of Silk Export by Asians, 1749-58
Years Total Average Average Total Value Average

(mds.) (mds.) (lb.) (Rs.) Value (Rs.)
1749-53 99,016 19,803 14,85,420 2,77,24,365 55,44,873
1754-8 74,692 14,938 11,20,380 2,09,13,345 41,82,669
Source: B.P.C., Range 1, vol. 44, Annex. to Consult., 19 June 1769

Adding up the value of silk exports by Asians (Rs. 4.8 million

on an average) with that of textiles (between Rs. 9 million and
10 million), the total value of Asian exports of textiles and raw
silk could have been at least Rs. 13 million to 14 million a year,
leaving aside minor exports like sugar, opium and grains.
As regards the decline of Bengal merchants, there is ample
evidence to show that there was actually none. The Setts and
Basaks were still the leading and dominant merchant families
of Calcutta in the 1750s, while Hari Krishan Roy was the influ-
ential Dutch broker at Chinsurah. The most important thing
one has to remember in this connection is that despite all wars,
depredations and troubles, the credit market in Bengal was not
at all destroyed, largely owing to the great financial resources
of the Jagat Seths. There is evidence that this banking house
used to extensively finance Asian as well as European trade in
Bengal. The financial solvency of the Jagat Seths was never in
question, even in the 1750s. The house used to finance the dadni
merchants of Calcutta.23 Moreover, when merchant princes like
Umichand and Khwaja Wazid were still operating in full swing
and playing a dominant role in Bengal’s commercial life with
their extensive trade connections with Calcutta merchants, the
thesis of the general decline of the Bengal merchants becomes
wholly untenable.24
As regards the contention that the decline of the Bengal
merchants in the early 1750s forced the East India Company
to change its investment pattern from the dadni to the gomasta
system,25 it can be safely asserted that there was really no decline
of the merchants in Bengal, and that the change in the invest-
ment system was due to other considerations. The prominent
merchant families of Calcutta, the Setts and Basaks, and the
Katmas of Kasimbazar were still prominent and quite substantial
merchants in the early 1750s. Moreover, merchant princes like
the Jagat Seths, Umichand, and Khwaja Wazid saw their heyday
during these years. So long as these merchant princes were there,
Bengal’s credit market was as strong as ever, and there was no
paucity of capital for the smaller merchants to thrive in their
own trade. The fact of the matter was that the dadni merchants
refused to contract for investment in 1753 except absolutely on

their own terms. In view of the uncertainty of trade in the troubled
times, they rejected the Company’s terms that the dadni should
not exceed 30 per cent as opposed to 85 per cent earlier, that the
contract should be made on ‘old musters’ which were prepared
in normal times, that a penalty of 10 per cent would be levied
on any deficiency of supply26 which the merchants thought, not
without some justification, were extremely unreasonable. On
the other hand, as the private trade of the Company’s servants
was dwindling in the early 1750s, they saw an opportunity in
the introduction of the gomasta system to augment their private
trade interest.
As to the question of price trends there has been complete
unanimity among historians that from 1720 to 1760, especially
from the early 1740s, prices of commodities show ‘a fairly sus-
tained and market increase’, ‘particularly strong for raw silk and
Bengal textiles’, as also for rice.27 With the help of such sophis-
ticated devices as the ‘weighted moving-average’ of price series,
the histogram and the assessment of polynomial and linear trend
of prices of several commodities, these authorities conclude that
‘the general synchronic trends are clearly visible’ and that there
was a gradual rise in prices over the period as a whole.28 But the
general emphasis so far has been on the ‘sharp increase’ in prices
from around the 1740s.
Even assuming for the sake of argument that (he prices of
export goods such as textiles and raw silk registered a rise over
the period under review, it may be argued that ‘such a sectorial
rise might only reflect a failure of the supply of these goods to
increase as fast as the demand for them, and may not necessarily
indicate a general price rise in the economy’.29 In order to prove
the latter, we have to look for movements in the price of the so-
called wage-goods. The most important among these are staple
food items like rice and wheat. But at the present state of our
knowledge, such an exercise is fraught with the danger of a wide
margin of error because of the lack of precise information on the
numerous varieties of staple food items, especially rice. One sus-
pects that such an attempt might only lead to extremely erratic
behaviour of the prices of provisions, as has been demonstrated

in a recent study of Bengal prices on similar lines for the period
1650 to 1720.30
Even so, in order to determine whether there was any sharp
rise in prices in general one should look into the prices of major
food grains, especially rice, the staple food of Bengal, and not
at the prices of major export commodities like textiles and raw
silk where the demand for such goods on the part of Asian and
European merchants might have resulted in such a rise. But as
even the latest studies emphasize this aspect to prove a general
rise in prices and as ‘evidence of sustained and marked increase
in prices’,31 let us examine how far, or if at all, the prices of
these commodities show a secular upward trend during the
period under review. One has to take into account here that even
earlier authorities pointed out a ‘sharp increase’ in the prices of
textiles and raw silk, and asserted that between 1738 and 1754
these increased by no less than 30 per cent.32 The latest study on
the period, quoting earlier authorities, also arrived at the same
conclusion.33
The sole basis of that conclusion regarding the steep rise in the
price of textiles is a complete misreading (and out of context too)
of an entry in the Bengal Public Consultations under December
1752.34 The particular consultation refers to a letter from Dacca
of 4 December 1752 wherein the Dacca factors were trying to
answer allegations from Calcutta regarding the bad quality of
their textiles, pointing out that the sample of 1738 was not fit
standard for judging’ the quality of cloth sent from Dacca in the
former year. The reasons for the badness of the quality of cloth,
as the Dacca factors wrote, were:35
as the Copass [kapas or cotton] or country cotton has not been for the
two years past under 9 or 10 rupees and the price of rice at the same
time very dear, whereas in 1738 the Coppas did not exceed Rs. 2 or
Rs. 2-8 and the rice very cheap, mostly 2 maunds 20 seer to 3 maunds
for a rupee to which may be added which is well known to all the
purchasers of cloth that the prices of all sorts of cloths have risen near
30 per cent, some more, since the year 1738, and that they now labour
there and has done so for these two years past under the inconvenience
of a French factory continually emulating the Hon’ble Company’s

trade and have advanced the price to all cloth both coarse and fine and
obliged them to be less severe with their dellols in prizing their cloth. . . .
Clearly, this is a desperate bid on the part of the Dacca factors
– scrupulousness not being their strong point, true also of other
Company servants working in India at that time – to justify the
poor quality of the cloth and hence the emphasis on a 30 per
cent increase in its price between 1738 and 1752. As the ‘muster’
(sample) of 1738 had been the standard, so 1738 becomes the
target date and for no other reason. Moreover, if one carefully
examines the above passage, one cannot miss the stress on ‘these
two years past’ which signifies that the quality of cloth had dete-
riorated in those years and not really for the whole of the period
from 1738 to 1752. There is the specific reference to ‘near 30 per
cent’ increase in the price of cloth during the period but, if at all
true, that applies only to Dacca, and not all of Bengal. Besides,
one can rightly suspect the validity of evidence produced in
self-defense against allegations of malpractice. One who has
gone through the Company records carefully can hardly fail to
observe that throughout the period, whenever an allegation was
made regarding bad investments, the factors always answered in
the same vein – that it was because of the high price of staples
like rice and cotton, competition from other Asian and/or Euro-
pean merchants, and the general increase in the price of export
commodities. One should accept such ‘evidence’ or ‘excuses’
with caution.
However, the fact remains that a distinguished authority has
demonstrated with diagrams, polynomial and linear trends, as
also time series, that ‘a fairly sustained and marked increase (in
prices) is particularly strong for raw silk and textiles’ during
the period under review.36 How can one reconcile this with the
fact, as we shall see shortly, that the increase in prices of these
two main export commodities was not particularly spectacular.
The answer is not far to seek. The weighted average, diagrams,
polynomial and linear trend, etc. do not take into account the
most crucial factors which determined the price of either textiles
or raw silk. There were numerous varieties of textiles and even
within the same category (e.g. muslins or fine calicoes), there

were different types (e.g. in muslin, there were khasas, mulmuls,
etc.) and the price of each type (e.g. khasa) depended on size,
quality, and the aiming in which it was produced, which will be
evident in the Table 17.4.
Table 17.4: Dutch Companys Contract with Merchants

for Textiles, 24 June 1752
Name of Piece-goods No. of Pieces Length (co.) × Price per Piece

Breadth (co.) (Rs. as.)
Khasa 3,000 40 × 3 14.11
Khasa 840 40 × 2⅜ 12.11
Khasa Jagannatpur 6,000 40 × 2¼ 10.13
Khasa Hendial with gold head 2,000 40 × 2¼ 11.6
Khasa Jagannatpur 2,000 40 × 2 9.8
Khasa Hendial 2,000 40 × 2 9.8
Khasa Jagannatpur 2,960 40 × 24/5 8.7
Khasa Jagannatpur 1,200 40 × 2½ 7.6
Khasa fine Hendial with gold
head 500 40 × 3 18.15
Khasa fine Hendial with gold
head 1,500 40 × 2¼ 14.3
Khasa Nadona 1,000 40 × 2¼ 7.2
Khasa Nadona 2,000 25 × 2¼ 4.6
Khasa Bourang 4,000 38 × 1⅞ 6.10
Mulmul Fine 200 40 × 3 17.10
Mulmul fine 300 40 × 2¼ 13.11
Mulmul fine Haripal 100 40 × 2¼ 12.4
Mulmul fine Haripal 350 40 × 1¾ 10.4
Mulmul fine Haripal 50 40 × 1⅓ 8.13
Mulmul (assorted) 1,000 40 × 3 14.11
Mulmul (assorted) 400 40 × 2⅝ 12.11
Mulmul (assorted) 4,500 40 × 2¼ 10.12
Mulmul (assorted) 500 40 × 1¾ 8.7
Mulmul (assorted) 1,200 40 × 2 9.8
Mulmul (assorted) 400 40 × 1½ 6.12
Mulmul ordinary 4,000 40 × 2¼ 7.6
Mulmul ordinary 1,200 40 × 2 6.12
Source:. VOC 2821, HB, 20 Feb. 1753, ff. 91-5, Contract, dt. 24 June 1752.
The same was the case with raw silk, the price of which
depended on the particular variety (e.g. ‘Gujarat’, Kumarkhali),
fineness and racolta (band – Indian term for the harvest).37 If all
these factors are not taken into consideration in working out
the cost price, the results are bound to be misleading. Just by
deflating the total cost price by the total amount exported to
find out per unit cost price does not reveal the real picture as has
happened in this case.38 Hence even with the scientific tools of
analysis used by K.N. Chaudhuri, the results – showing a secular
upward trend – can hardly be taken for granted.
For a precise study of the movement of textile prices, one has
to take into account how many pieces of a particular type of
cloth, of what length and width, of which aurung and of what
quality were exported at what total price – from which alone
one can get the exact picture of price movements. To give an
illustration, if we are looking into the price of khasa, just taking
into account the number of exported and their total price, to
find the unit price, could be quite erroneous. We have to know
whether the khasa was ordinary, fine or superfine, whether
its measurement was 40 co. × 3 co.,39 40 co. × 2¾ co., or 40
co. × 2¼ co., and whether it was produced in Jagannatpur or
Cogmaria or Orrua (i.e. the aurung in which it was produced).
The price of khasa will depend on all these factors and hence
we have to take all these variables into consideration. This is
almost an impossible task as in all the export invoices, whether
of the Dutch or the English Company, what is given is the total
number of khasas exported, and the total cost price. There is
no mention of size, quality, or aurung. Again, if the unit price
of the textiles in a particular year is arrived at just by divid-
ing the total cost price by the total number of pieces exported
without taking into account the composition of different cat-
egories such as muslins, fine calico or ordinary calicos (which
varied over the period in the total textile export) then too the
picture of price movement could be distorted. Thus the steady
upward trend in K.N. Chaudhuri’s time series can be explained
by the fact that while the share of the more expensive category
of textiles, muslins, and silk piece-goods steadily increased in
the first quinquennial period of 1740s and 1750s, that of the

cheapest variety, ordinary calicos, remained the same,40 and not
because of any real increase in the price of textiles. That the unit
price of textiles could vary widely depending on the category of
textiles and place of procurement is amply clear from the unit
price of the textiles exported by the Dutch Company in 1753-4
for which such breakdowns are available. Thus the unit price of
textiles sent from Patna, mostly ordinary calicos, worked out at
f. 613; from Dacca, mostly muslins and fine calicos, f. 20.04;
from Hughli, mostly medium quality, f. 9.6; and from Kasimba-
zar, silk piece-goods and ordinary calicos, f. 7.85.41
The only accurate evidence of price movement in textiles is the
contract the Companies entered into with the dadni merchants
for supply of goods every year. In these contracts we find the par-
ticular details of the size, quality and the aurung of each type of
cloth which are absolutely essential for a proper scrutiny of the
movement of price of textiles. Until and unless we know these
details of the variables, nothing definitive can be said about price
movement. As is well known, the prices were arrived at after
days’ of bargaining and wrangling between the Company and
its merchants. When the Companies tried to pay lower prices for
cloth delivered by the merchants, it was mainly on grounds of
inferior quality and the original contract price was never altered.
So let us see what are the general trends, as revealed in these
contracts over the period for which we select six years, namely,
1732. 1741, 1744, 1751, 1752 and 1754. These particular years
are chosen for such an analysis because 1732 was a normal year
without political disturbance or natural calamity, 1741 was the
year just prior to the Maratha invasions, and 1744 was the year
when the impact of these incursions could be expected to be
reflected in the price movement. The Maratha invasions stopped
in 1751; 1752 was the year immediately after the peace with the
Marathas, while 1754 was the first normal year after the famine
of 1752. As such these years would give us a broad spectrum
of the period with its ups and downs, whether political or eco-
nomic. For our present analysis, we take up the Dutch contracts
for these six years to see how prices moved in the two main types
of muslins, khasas and mulmuls, which were the staples in the

export list of the Europeans (Table 17.5).42
It is evident from Table 17.5 that between 1734 and 1754
there was no increase in the price of twenty different types of
khasas and mulmuls that were noted in the list of contract,
except for khasa Nadona which seems to be, from its price, a
medium or low quality fabric. What is extremely significant, as
is apparent from this Table is that, the price of all the different
khasas and mulmuls (except khasa Nadona) actually went down
in the period 1751-4 from the level between 1732 and 1744. In
Table 17.5: Contract Price of Khasas and Mulmuls 1732-54

Textile type Measure 1732 1741 1744 1751 1752 1754

(Rs. as.) (Rs. as.) (Rs. as.) (Rs. as.) (Rs. as.) (Rs. as.)
Khasa ordn. 40 x 3 15.00 15.00 15.00 14.11 14.11 14.11
Khasa fine 40 x 3 18.00 X X X X X
Khasa ordn. 40 x 2⅝ 13.00 13.00 13.00 12.11 12.11 12.11
Khasa ordn. 40 x 2¼ 11.00 11.00 11.00 X 10.13 10.13
Khasa ordn. 40 x 2½ X X X 10.13 X X
Khasa ordn. 40 x 2 9.12 8.00 9.12 9.8 9.8 9.8
Khasa ordn. 40 x 1¾ 8.10 7.00 8.10 8.7 8,7 8.7
Khasa ordn. 40 x 1½ 7.8 X 7.8 7.6 7.6 7.6
Khasa Nadona 25 x 2¼ 3.14 3.14 3.14 4.6 4.6 4.6
Mulmul ordn. 40 x 3 15.00 15.00 15.00 X X 14.11
Mulmul fine 40 x 3 18.00 18.00 X 17.10 17.10 17.10
Mulmul ordn. 40 x 2⅝ 13.00 13.00 13.00 12.11 12.11 X
Mulmul ordn. 40 x 2¼ 11.00 11.00 11.00 10.12 10.12 10.12
Mulmul fine 40 x 2¼ 14.00 14.00 14.00 13.11 13.11 13.11
Mulmul ordn. 40 x 2 9.12 9.12 9.12 9.8 9.8 9.8’
Mulmul ordn. 40 x 1¾ 8.10 8.10 8.10 8.7 8.7 X
Muhmd ordn. 40 x 1¾ 10.8 X X 10.4 10.4 10.5
Muhnul ordn. 40 x 1½ X 7.00 7.00 X 6.14 6.14
Mulmul fine 40 x 1½ X 9.00 X 8.13 8.13 8.13
Mulmul ordn. 40 x 4¼ 7 X X 6.14 X X
Source: Contracts with Merchants, VOC 2241, ff. 649-61; VOC 2537, ff. 1427-8; VOC
2629, f. 218; VOC 2783, ff. 236-7, VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.
other words, the prices of khasas and mulmuls in the period from
1732-51 will negate the thesis of a ‘fairly marked and sustained’
increase in the prices of textiles in general during the period.
But one might argue that khasas and mulmuls were finer
varieties of calicos, and perhaps the price rise was reflected in
not-so-fine and medium types of textiles. So let us see how the
prices moved in these varieties during the years under consider-
ation. In Table 17.6 we note the contract prices for several types
of textiles coarser than muslins and which were prominent in the
export list of the Dutch Company.
The price trend that emerges from Table 17.6 is undoubtedly
different from the one in Table 17.5. Of the six types of coarse
textiles, the prices of four rose by 10 to 20 per cent while the
price of two others actually show a downward trend. Though it
is difficult to explain such mixed trends, one possible explana-
tion could be that most of these piece-goods were produced in
the areas around Hugli, which was one of the worst affected by
the Maratha raids. Secondly, the competition among the buyers,
whether Asians or Europeans, was more severe for the coarser
varieties than for finer muslins. But then we cannot explain, at
the present state of our knowledge, the slide in the prices of the
two types of ginghams. Still what is notable from the prices of
Table 17.6: Contract Prices of Coarser Textiles 1732-54

Textile Measure 1732 1741 1744 1751 1752 1754

type (in covid) Price Price Price Price Price Price
Sanoes 24x2 4.8 4.8 4.8 4.15 4.15 4.15
Kha-
radaries 18 x 2¼ 4.00 4.00 4.00 4.3 4.8 4.8
Allabanies 24 x 3 4.12 4.12 x 5,7 5.12 5.12
Ginghams
(plain.) 13 x 2¼ 3.8 3.8 3.8 3.7 3.7 3.7
Ginghams
(check) 18 x 2¼ 4.12 4.12 4.12 4.7 4.7 4.7
Source: Contracts with Merchants, VOC 2241, ff. 649-61; VOC 2537, ff. 1427-8; VOC
2629, f. 218; VOC 2783, ff. 236-7, VOC 2821, ff. 91-5; VOC 2840, ff. 715-16.
the coarser types of textiles is that there is hardly anything which

can be termed ‘a marked and sustained increase’ in prices over
the period.
So far as the price of coarsest textiles is concerned, no clear
picture emerges from the Dutch contracts (Table 17.7). Though
at the first glance ii seems that the prices went up considerably,
it is extremely difficult to measure the rise because the measure-
ment of textiles by the Dutch varied over these years, and there
is no precise data how the price of any of the coarsest textiles of
exactly the same length and width rose during the period (Table
17.7). Here it is important to note that in Bengal, the price of
the same type of textile often jumped when the traditional mea-
surement was even slightly altered – a fact which is borne at by
numerous references in the Company records. Yet, it is possible
that the price of the coarsest textiles went up to some extent
though it is not obvious from Table 17.7. The explanation for this
probable rise in the price of coarsest textiles is not obvious from
Table 17.7. The explanation for this probable rise in the price
of coarsest textiles is not far to seek. Most of these textiles were
produced in Birbhum, Burdwan and Kasimbazar areas, which
Table 17.7: Contract Prices of Coarsest and Cheapest Textiles 1732-54

Textile type Measure 1732 1741 1744 1751 1752 1754

per per per per per per
corge corge corge corge corge corge
Garras 36 x 2½ X X X 84 84 84
Garras 30 x 2½ X X X 70 70 70
Garras 30 x 2½ 45 48 X X X X
Garras 24 x 2½ X X X 56 56 56
Guinees 75 x 2½ X X X 175 175 175
Guinees 75 x 2¼ 118 121.8 X X X X
Salampuris 37½ x 2½ X X X 87.8 87.8 87.8
Salampuris 37½ x 2¼ X 60.12 X X X X
Source: As in Table 17.5 and VOC 2783, ff. 248-9; 2840, f. 680. Per corge means per
20. Generally the coarsest textiles were contracted per corge.
were the most heavily affected areas by the Maratha invasions.

Besides, as we have shown elsewhere,43 the keenest competition
in the market was for this variety, which was the reason why
the merchants were most reluctant to contract for these textiles
which, as they alleged, brought them little or no profit while they
were extremely eager to contract for finer varieties. Often the
Companies had to impose the contract for these ordinary calicos
on unwilling merchants.
Thus prices of textiles do not show a ‘sharp and marked
increase’ from an analysis of the English Company’s contracts
from 1730 to 1757.44 Similarly it can be shown that the price
of raw silk, though fluctuated a lot during the period, does not
show any secular upward trend.45
As pointed out earlier, rice is the most important food item,
the price of which should be looked into to determine any precise
price movement in Bengal during the period under review. But
the main difficulty here is the varieties of rice, and their different
prices (Table 17.8). So it is not a simple case of fine or coarse rice
only; when the price of coarse rice can vary as widely as between
4 mds. 15 seers and 7 mds. 20 seers per rupee (the difference
being about 71 per cent), there is a grave risk in taking the price
of rice as an indicator of price movements, until and unless one
can be absolutely sure of the exact quality. Otherwise the result
could be extremely erratic and gravely misleading. Yet depend-
ing on such data and sometimes fragmentary at that, recent
Table 17.8: Price of Rice 1729
Variety Mds. Seers Per Rupee

Fine Rice: Bansephool
1st sort 1-10 "
2nd sort 1-23 "
3rd sort 1-35 "
Coarse Rice: Desna 4-15 "
Coarse Rice: Poorbie 4-25 "
Coarse Rice: Munsurah 5-25 "
Coarse Rice: Kurkashalle 7-20 "

authorities made such assertions as ‘Rice which was sold at 100

to 120 seers for a rupee in 1738, was being sold only 30 seers for
a rupee’ in the mid-1740s as evidence to show that ‘production
declined and prices soared’ or that ‘by the 1740s Bengal’s advan-
tages seemed to be disappearing’.46 Basing his evidence on earlier
authorities, the most recent authority affirms that ‘between 1738
and 1754 it was thought that the price of rice in Calcutta had
risen by three or four times’ and reiterates that ‘local shortages’
led to ‘greatly increased food prices’.47 But a close scrutiny of
price of rice in Bengal shows no ‘marked and sustained’ increase
during the period.48
Thus, the thesis of the crisis in mid-eighteenth-century Ben-
gal crumbles under close scrutiny. Indeed it was not because of
any internal crisis in Bengal that the British had to intervene; it
was because of the private trade interests of Company servants.
This was the motivating force behind the conquest. The golden
days of British private trade began to decline from the late 1730;
it was facing a severe crisis in the late 1740s and early 1750s
because of a substantial increase in French private trade.49 So
the destruction of the French, to prevent any possible Franco-
Bengali alliance against the British, and the deposition of the
nawab who was threatening to stop illegal private trade and
misuse of dastaks by the British – both essential for rescuing the
battered private trade fortunes of the British – became the main
goal of the Company servants’ subimperialism.50
Notes
1. For this broad generalization, see P.J. Marshall, Bengal – The British
Bridgehead (Cambridge, 1987), pp. 56, 63; Rajat Kant Ray, ‘Colonial
Penetration and Initial Resistance’, Indian Historical Review, vol.
XII, nos. 1-2, July 1985-]anuary 1986, pp. 4, 6, 7, 14. It should not
be mis-construed that I am against any ‘theorization’ but my point
is while doing so, one should not lose sight of the specific issues
involved. Also, a recent study has pointed out (M.M. Rahman, JNU,
M.Phil., 1988) that the new class alliance or ‘compact’ had more of a
personal character to serve vested interests than any institutional basis
and hence was bound to be short-lived. For Hill’s views, see S.C. Hill,
Bengal in 1756-57 (London, 1905), vol. 1, p. lii.
2. P.B. Calkins, ‘The Formation of a Regionally Oriented Ruling Group

in Bengal’, Journal of Asian Studies XXIX, 4, 1970, p. 800.
3. M. Mazibor Rahman, ‘Nizamat in Bengal’, unpublished M.Phil, thesis
JNU, 1988.
4. Ghulam Husain Salim, Riyaz-us-Salatin (Calcutta, 1904), p. 288.
5. Bengal Public Consultations (henceforth BPC), Range 1, vol. 6, f. 490,
14 August 1727.
6. Riyaz, pp. 294-5.
7. Ibid., p. 320.
8. Ibid., pp. 311, 314-15, 319-20.
9. K.K. Datta, Alivardi and His Times (Calcutta, 1952), p. 81.
10. Only P.J. Marshall spoke about the economic ‘crisis’ in a seminar
(1988) in Calcutta.
11. For example, K.N. Chaudhuri, The Trading World of Asia and the
English East India Company (Cambridge, 1978); P.J. Marshall, East
Indian Fortunes (Oxford, 1976); Bengal – The British Bridgehead.
12. Richard Becher’s letter to Governor Verelst, 24 May 1769, quoted in
W.K. Firminger, Fifth Report, pp. 183-4.
13. Ibid.
14. See S. Chaudhury, ‘Merchants, Companies and Rulers – Bengal in the
Eighteenth Century’, Journal of the Economic and Social History of
the Orient, February 1988.
15. For details, see S. Chaudhury, From Prosperity to Decline – Eighteenth
Century Bengal (Delhi, 1995), Chapter 5.
16. Gangaram, Maharastrapurana, lines 234-42.
17. Riyaz, p. 340.
18. Bharatchandra quoted in K.K. Datta, Studies in the History of Bengal
Suba (Calcutta, 1936), p. 466.
19. For the value of Dutch and English exports, see Chapters 3, 7 and
8 and for Asian exports, Chapters 7 and 8 of S. Chaudhury, From
Prosperity to Decline.
20. For detailed reasoning for this assumption, see S. Chaudhury, ‘Asian
Merchants and Companies in Bengal’s Export Trade, circa 1700-
1757’, paper presented at the International Conference on ‘Merchants,
Companies and Trade – the Asian and European Scene, 16th-18th
Century’, Paris, 1990; in S. Chaudhury and M. Morineau (eds.),
Merchants, Companies and Trade (Cambridge, 2000).
21. Though the markets for the European and Asian exports were
different, the demands for the various categories of Bengal textiles in
these markets were more or less the same. The detailed analysis of
the percentage share of different categories of textiles exported by the
Companies (see S. Chaudhury, ‘Continuity or Change in the Eighteenth
Century? Price Trends in Bengal, circa 1720-1757’, Calcutta Historical
Journal, vol. XV, nos. 1-2, July 1990-June 1991, p. 24, Table 11)
establishes that the bulk of the exports comprised ordinary, medium

and fine cotton piece-goods. The demand in the Middle East and
Central Asia which was the main area of Asian exports was also for the
same varieties as will be apparent from the analysis of the Dutch textile
export to the Persian Gulf region (see, S. Chaudhury, From Prosperity).
22. Leaving aside the amount sent for the emperor at Delhi, the breakdown
of the value of the export is as follows: Upper Provinces Rs. 1,00,000,
Pathans Rs. 1,50,000, Mughals for foreign consumption Rs. 4,00,000,
Armenians to Basra, Mocha and Jeddah Rs. 5,00,000.
23. BPC, vol. 12, f. 263, 26 September 1737; vol. 22, f. 345vo, Annex. to
Consult., 26 October 1749.
24. For details, see S. Chaudhury, From Prosperity to Decline, Chapter 5.
25. K.N. Chaudhuri, Trading World, pp. 311-12
26. BPC, Range 1, vol. 26, f. 164, Annex. to Consult, 7 June 1753.
27. For example, see K.K. Datta, Bengal Suba, pp. 463-9; Brijen K. Gupta,
Sirajuddaullah and the East India Company (Leiden, 1962), p. 33;
K.N. Chaudhuri, Trading World, pp. 99-108; P.J. Marshall, East Indian
Fortunes, p. 35; Bengal, pp. 73, 142-3, 163-4, 170.
28. K.N. Chaudhuri, Trading World, pp. 99-108, 159.
29. Om Prakash, Dutch East India Company and the Economy of Bengal
(Princeton, 1985), p. 250.
30. Ibid., pp. 251-3. K.N. Chaudhuri, however, shows with histogram a
steady increase in the price of rice during the period under review.
31. K.N. Chaudhuri, Trading World, p. 102: following him, P.J. Marshall,
Bengal, p. 73. Chaudhuri depends on polynomial and linear trend of
textile and silk prices (pp. 103-4, 107-8) which shows a ‘strong and
gradual’ rise in prices but as we shall see the method followed is subject
to a wide margin of error.
32. K.K. Datta, Bengal Suba, p. 464; Brijen K. Gupta, Sirajuddaullah,
p. 73,
33. P.J. Marshall, East Indian Fortunes, p. 35; Bengal, p. 33.
34. BPC, vol. 26, f. 214, Consult., 11 December 1752; Bengal and Madras
Papers, vol. II, p. 34; James Long, Selections from Unpublished Records
(Calcutta, rpt., 1973), p. 40, doc. no. 103.
35. All emphasis mine.
36. K.N. Chaudhuri, Trading World, pp. 100-8, 533-4, 544-5.
37. See S. Chaudhury, From Prosperity, Chapter 8.
38. K.K. Chaudhuri, Trading World, pp. 506, 546.
39. co. is covid, measuring 18 inches.
40. See S. Chaudhury, From Prosperity, Chapter 7, Table 7.7 and Figure
7.5.
41. Collected and computed from export invoices in VOC records,
Verenighdc Oost-Indische Compagnie (henceforth VOC), 2811, ff.
6vo-7, 20-20vo, 46-46vo, 99-99vo; 2821. ff. 635-6; 2840. ff. 39,
141-2.
42. For the wide variation in the price of the same type of textiles,
e.g. khasa and mulmul, depending on size, quality and aurung, sec
Table 17.4.
44. Ibid., Chapter 10.
45. Ibid.
46. Brijen K. Gupta, Sirajuddaullah, p. 33; P.J. Marshall, East Indian
Fortunes, p. 35.
47. P.J. Marshall, Bengal, p. 73; East Indian Fortunes, p. 35.
49. The Dutch shipping records in the VOC archives will bear this out.
50. See S. Chaudhury, ‘Trade Bullion and Conquest – Bengal in the
Eighteenth Century’, Presidential Address, Medieval India Section,
Indian History Congress, Golden Jubilee Session, 1989.
Index
Abyssinians 386 15, 117-21; merchants 111-13,

Achee Beagnes 15 115-16, 120, 132, 136-7
Achin 12, 27, 42-3, 131, 134, 136-7 banana roots 181, 291, 404, see also
Adams, Abraham 78, 253 famine
Afzal, Mir 302 Bandar-Abbas 1
Agra factors 23, 62, 93, 361 Bandopadhyay, Sadananda 316
Ahmed, Haji 341, 344, 401-2 Barbosa, D. 131, 189
Akbar, Ali 123 Basak, Gangacharan 220
Aldersey, W. 312, 366, 369 Basak, Paramananda 221
Ali, Karam 277, 342 Basak, Sobharam 330
‘AlichYarCawn’ 27 Basaks 216, 328, 330, 334-6, 350,
Alumchand 341 407
Amphora 15 Basra 1, 12, 80, 129, 349
Anandchand 238 Batavia 16, 42-3, 152, 154, 197, 300,
Arabs 23, 323, 386 305
Arasaratnam, S. 143 batta 68, 244, 245, 249-50, 339, 341
Arcot rupees 178, 249-51, 254, 286, battle of Plassey 31, 182, 184, 245,
288, 295, 342 264, 266 292, 300, 349
Armenians 7, 23, 27-8, 31, 123, Bauher, Hakeem Mohamed 27
309, 323, 326, 347, 363, 368; Bayly, C.A. 360
merchants as 27, 129, 135, 140, Beard, John 53, 217
345, 348 Becher, Richard 180, 264, 290, 403
arrack 135, 138, see also opium Beg, Ahmed 25, 136
artisans 97, 98, 103, 181, 215, 291, Beg, Hakim 238-9
324, 350, 386, 404; Bengali 99 Benares merchants 24, 93, 309,
Ashraf, Khwaja 302 311, 361, 363, see also Bengal,
Assomies 155, 156 merchants of
Aurangabad 315, 373 Bengal Agency 63, 78, 131
Aurangzeb 1, 52, 56, 58, 263 Bengal Council 22, 57, 67, 74, 77-8,
Azam, Muhammed 55 122-6, 247
Azim-us-Shan 26, 155 Bengal Nawabs 14, 30
Bengal Suba 85
Babu, Nainsook 233 Bengal: coastal trade of 13-14;
Balasore 13-15, 18-20, 24, 26, 87-8, commercial exports and imports
109-13, 115-21, 132, 136-9, 269; commodities 27, 70, 351,
142-3; factors 56, 72, 112, 114- 394; communication system in
424 | Index
267 (see also under nawabs); Bowrey, Ini 24, 26, 53, 131, 137,
domestic trade of 386; export 139, 196
trade of 307, 308, 359-62, 368, Bowrey, Thomas 24, 139, 196
371, 383, 389, 390; factors of Bridgman, James 53
31, 42, 62, 64, 68, 71, 74, 79, Brimstone 15
89, 91, 92; handloom industry Brindabandas 80
of 189, 377; import to 10, 15, brokers 108-9, 111-12, 115, 117,
25, 337; indigenous merchants 122, 124, 127, 214-29, 250,
trading in 109; investment in 254, 323-4, see also merchant-
226; merchants of 24, 26, 27, middlemen
63, 95, 108-9, 119-21, 129-31, Brookhaven, Captain 53
134-40, 144, 328-9, 332-5, 350, Bulchand 57, 67
407; money market in 247, 339; bullion 20, 21, 60-3, 66-70, 162-4,
natural products of 1, 41, 264; as 229, 245-50, 275, 318, 358-60,
Paradise of Nations 1, 263; rice 386-90, 392, 393; Asian import of
exports of 1, 41, 264; royal port 371; influx of 388
of 2, 13; seaborne trade and 307, Bullubdas 127
359, 390; silk market of 308, 309, Burcoordar, Malik 120, 137
362, 363 Burdelwalis 309, 363
Bengal-Europe trade 385 Burdwan 181, 291, 404
Bengal-Persia trade 79 Burma 389, 394
Bengal-Surat trade 135 butter 15, 17, 42-4, 135
Bengal-Surat-Persia sector 251 Bysacks 31
Bernier, F. 1, 41, 103, 189
Beschryvinge van de Oost-Indische Cabral, Portuguese missionary 12
Compagnie 193 Caffeelahs 265, 374, 392
betelnuts 15 Calcutta Council 216-26, 234, 235,
Betteeas 265, 317, 374 241, 243-4, 246-9, 252, 325,
Bharatchandra 181, 291, 404 327-31, 335, 336, 339, 346
Bhattacharyya, Sukumar 359 calicoes 16, 86-7, 89, 91-2, 95, 169,
Bhirguram 232 202, 280, 415; coarse 172, 192,
Bihar trade 302, 343 197, 202; fine 166-7, 196, 199,
bilateral trade 384 202, 204, 411
Bills of Debt 231 Calicut 42, see also Malabar
Bittaldas 127 Calwars 309, 310, 363
Bohra, Virji 352 Cambay 24, 131
Bolts, William 265, 317, 374, 392, Cansius, Henry 361
393 carpets, of Junapoore 10
Bombay 42, 250 Carteret, Edward 220
Boremull [Puranmall?] 112, 138 Cary, J. 89
borrowing money 25, 71-5, 111, Cashmeerians 265, 317
128, 130, 140, 231, 233-7, 242-3, ‘Catoene Lijwaten’ 194
253-4, 339-40 Ceylon 1, 9, 16, 24, 41-3, 131, 134,
Boughton, Gabriel 52-3, 56 155, 392
Bourchier 219 chanck 15
Index | 425
Chandernagore 229, 233 cowries 119, 121, 135

Charan, Hari 138 credit: market 60, 74, 76, 231, 234,
Charnock, Job 57, 122, 128 237, 239-41, 251, 254, 335, 407;
Chaudhuri, Indranarain 229 mechanism 220
Chaudhuri, K.N. 161, 166-7, 332-4, customs duties 10, 11, 28, 54, 57,
347, 350, 360, 412 58, 345
chief merchants 118-19, 121-2, 124,
130, 214, 217, 254 Dacca/Dhaka 63, 64, 71, 93, 94,
China 7, 9, 11, 23, 57, 347, 385-6, 122-3, 164-5, 177, 205-6, 223-5,
389, 394-5; trade missions of 388 243-4, 409-10; cloth manufacture
Chittagong 7, 266, 268 of 195; factors of 57, 94, 164-5,
cinnamon 9, 16, 135 177, 242-3, 278-9, 286, 409-10
Clive, Col. 184, 233, 335, 337-8 dadney system 97, 103, 126, 214-15,
cloth 2, 9, 69, 88, 89, 99, 164-6, 168, 222-5, 230-1, 250-1, 324-35, 342,
278-80, 331-2, 409-13; quality of 391, 407, 408; merchants of 167,
279, see also textiles 181, 206, 214-16, 291, 325, 330,
cloves 9, 15 331, 333-6, 342-4, 404, 407
Cobido 192-6, 200 Das, Jadu 156
Cochin 10, 25, 136 Das, Purusuttom 156
Colchester 28, 80 Datta, Burro 226
Cole, Humphrys 220 Datta, K.K. 161, 278, 286
Colombo 25, 136 Derrickson 78
commodities 2, 8, 9, 20-3, 25-6, Domurmal 129
39-44, 61, 62, 110-12, 123, 155- Dorill, Captain 125-7
7, 161, 162, 273-4, 391-2 Dow, Alexender 270
Company: debt 71, 72, 231, 234; Durlabh, Rai 184
factors 40, 55, 57, 63, 65, 69, 75, Dutch East India Company 12, 76,
114, 127; imports into Bengal 158, 213, 265, 280, 300; export
114, 136; investments 76, 112, to Holland 158
114-17, 119, 124, 127, 215-16, Dwarakadas 127
219, 228, 233, 328, 329
contract prices 168-9, 174, 280, 293, East Indies 9, 14, 42-3, 61, 270, 384-
413, 415 5; the Dutch factories in 14
Copass (kapas, cotton)165, 278, 409 Echenaut, Ramnaut 327
copper 15-16, 21, 67, 110, 135 Edwards, Richard 93, 361
cordage 15 elephants 15, 25, 135, 136
Coromandel 16, 40, 42, 87, 143, elephants’ teeth 15
152-3, 304, 394 Ellis, Agent 124
Coronne, Sultan 12 England 19, 21-2, 61-2, 69-0, 75,
Cotma, Sautoo 327 77-9, 89-93, 95, 143, 152-4, 253
cotton piece-goods 9, 16, 86-8, 90, English East India Company 10-11,
110, 216, 370, 384 15-17, 20-3, 29, 43-4, 51, 53,
Council at Kasimbazar 233, 308, 55-7, 60, 111, 360-1; borrowed
327, 329, 362 money 233-4, 253; exports 96,
Covid 192-4, 196 182, 312, 366, 369, 405; factors
426 | Index
8, 11, 13-15, 17, 39-40, 47, cows’ 54; travellers 1, 2, 6, 41,

54, 76, 127-28, 139, 156-57; 264, 389, 392
Interlopers of 117; investment Forster, John 343
pattern 181, 291, 324, 404; Fort St. George 68, 124, 135
manufactures 61, 69-70; trading Fort William 18, 78, 249
in Bengal 13, 20, 60, 108; ships Fort William Consultations 230
25, 137 Fort William Council 181, 253, 286,
English: merchants 16-17; silk 291, 295, 338, 345, 346, 404
industry 92; silver 246; trade 12, Franco-Bengali alliance 418
15, 29, 112, 157, 200; trade in Frankland, Henry 78, 179, 180, 253,
Bengal 17, 51, 109 288, 290
European: bound ships 62, 153, 229; Frankland, William 332, 333, 335
exports 183, 292, 312-13, 359, freedom of trade 14, 55
366-7, 390-1; exports of raw freight voyages 79, 251-2, 254
silk 205, 312-13, 366-7; imports fruits 6, 26, 138
in Bengal 60; investments 40; Fryer 215
markets 61, 85, 86, 98, 308, 368; Fuggers 347, 348
trade 110, 162-4, 179, 183, 191, Futtichund 220, 235, 248, 249, 338,
204, 254, 275, 276, 318, 319, 340; Estate of 341
358-60, 376-7; trading in Bengal
14, 16-17, 152, 214, 323-4, 348 Gaffur, Abdul 135, 139, 144
exports: Asian 313, 367, 370-1, 391, Gale 42, 134-7
405, 407; European 18, 183, 292, Gambroon 28, 129, 137-8
312-13, 359, 366-7, 390-1 Gangaram 181, 291, 404
external trade of Bengal 4, 14, 26 Ganges 2, 3, 11, 153-4, 268-70
gaunce (ganja) 15
factories: in East Indies 14; at Hugli Georgians 386
14, 18-19, 22-3, 51, 63, 66, 112; Ghafur, Mulla Abdul 352
at Malda 18 ghee 9, 135, 181, 264, 272, 291, 404
famine 9, 17, 168, 179, 277, 288, ginghams 9, 15, 22, 87, 112, 116,
295, 384, 413 170, 415
Farrukhsiyar, Emperor 52, 68, 267 Giraldez 385
Fatechand, Jagath Seth 129, 225-6, Goa 1, 14, 41-2, 135
233, 235, 244, 246-7, 249, 250, Goculchand 66, 126
338-41 gold 10, 15, 47, 61-6, 121, 135, 184,
faujdars 28, 30, 115, 123, 136, 138, 388-9, 394; from Japan 15
302; of Balasore 115, 138; of gomasta system 179, 181, 225, 290,
Hugli 25, 26, 28, 120, 123, 136-7, 324, 332-5, 342, 350, 404, 407-8
140 Gossairam 127, 327, 329
Fazlullah, Agha 24 Govindji 122
Feake, Samuel 253 Grant, Charles 263
Federici, Caesar 2, 5, 8, 9, 389 Griffith 27
Fenwick, Captain 224, 233, 337 Gujarat 12, 87, 144, 152, 166,
Flynn, D. 385 193, 196, 310, 349, 364, 386-7;
foreign: merchants 2, 272, 309, 363; merchants 75, 93, 309, 363; ships
trade 2, 26, 132; traders, as ‘milch of 386
Index | 427
gumlac 62 investments 60-4, 69-71, 110-19,

gunpowder 152-3, 155 181, 213-17, 219-27, 229-30,
Gupta, Ashin Das 349 233-5, 323-5, 328-34 , 350, 407;
Gupta, Brijen K. 161, 278, 286, 360 at Balasore 112, 116-17, 120; in
Calcutta 215-16; of Company 21,
Halifax, voyage of 252 110-11, 116; for Europe-trade
Hamilton, Alexander 28, 41 110, 125
Haridas 66 Israeli, Khaja Sarhaud 80, 129, 138
Harinath 218 Italian silks 89, 384
Hason, Samuel 20
Hastings 309, 310, 363-4 Jackson, John 342-3
Hathu (Huttoo) 226 Jadu 232
Hedges, Robert 78, 217-18, 253 Jafar, Mir 402
hemp 15 Jaffer, governor 25, 136
Hill, S.C. 399 Jaffnapatnam 42, 134, 136
Hindu mercantile-banking class of Jahan, Shah 4-5, 8, 11-14, 53-5;
Bengal 358 external trade of 12
Hobson-Jobson 193 Janardan 216-17
Hossein, Gholam 341 Japan 11, 15-16
Hughes 10 Jafar, Mir 184
Hugli Council 26, 63, 69, 72, 114-15, Jeddah 131, 252, 386
117-20 Jews 386
Hugli: factories 14, 18-19, 22-3, 51, joint stock 122, 129-30, 143;
63, 66, 112; port 3-4, 5, 7, 17, 19, associations 143; companies 143;
23, 28-31 of merchants 74, 130-1
Huijghens 303 Juggutseat 337, 340
Hume, Alexander 233, 244 Jumla, Mir 26, 55, 155
Hunter 8
Hussain, Ghulam 277 Kantu 225-6
Karim, Abdul 12
Indian cotton goods 61 karkhanas 103
Indian merchants 13, 23, 27, 41-3, Kartick 232
115, 189, 280, 300-3, 310, 359, Kashmiri, Khwaja Mohammed Fazel
364 26
indigo 9, 15 Kasimbazar 65-7, 71-2, 74-5, 128-9,
Indo-European: oceanic trade 358; 220-2, 224-6, 233-7, 245-9, 267,
trading voyages 137 308-11, 326-9; Council 222,
Indonesian archipelago 85, 300-1, 226-27, 235, 239-42, 244, 246,
384 248-51, 308, 326-7, 338, 340;
inland trade 4, 8-10, 134, 139, 343 factors 63, 65, 71, 73-4, 76, 122,
inter-Asiatic: commerce 79; trade 226, 234, 308-9, 340, 341, 362-3;
16-17, 23, 78, 79, 110 merchants 72, 127, 231, 311,
Interlopers 65, 117, 119-20, 122-5, 326-7, 329, 333, 336; price of 248
140, 156 Katma, Bally [Balai ? Balaram ?]
intra-Asiatic trade 14, 251-2, 254, 226-7
305, 392 Katma, Benode 227
428 | Index
Katma, Hathu 226 Lahori, Abdul Hamid 4, 5, 8, 12

Katma, Nidhi 226 de Laval, Pyrard 1, 9, 24, 41, 131
Katma, Raghunath 94 Law, Monsieur Jean 1
Katmas 216, 226, 232-3, 329, 336, Lethieulier, John 76, 77
350, 407 Linschoten 9
Kenn, John 65, 309 loan, short-term 254, see also
Kerseboom, Jan 332-3, 346 borrowing money
Khan, Alivardi 180, 241, 264, 274, Luillier 103
277-8, 290, 293, 341, 343, 344,
398, 399, 401-2 mace 9, 15
Khan, Asad 52 machine-made fabrics 189, see also
Khan, Buzurg Umeed 26, 136 textiles
Khan, Ghaus 402 Madras rupees 68, 178, 244, 249-51,
Khan, Haji Safi 57, 58 254, 286-7
Khan, Krishna Chandra 220 Mahmudi 27
Khan, Mir Muhammed Bakir 402 Malabar 1, 9, 16, 24, 41, 131, 301,
Khan, Murshid Quli 68, 264, 293 304, 386
Khan, Nasib 137 Malacca 7, 14, 23, 24, 43, 131, 304
Khan, Nawab Shaista 136 Malda 18, 67, 88, 93, 119, 123, 128,
Khan, Nawajish 136 190, 205, 206, 361-2, 367-70;
Khan, Nurullah 26, 136 factories 66, 110
Khan, Qasim 8, 11, 13 Maldives 1, 24, 25-7, 41-2, 121, 131,
Khan, Ramkrishna 218 134, 136-7
Khan, Rashid 117, 139 Malini 291, 404
Khan, Safi 55, 57-8, 112 malmal 194, 197, 200-2, 204
Khan, Safshi 112, 138 malpractices 165, 217, 223, 273,
Khan, Sarfaraj 340, 401, 402 279, 342, 410
Khan, Shaffat Ahmed 91 ‘Mamaruck Ellie’ 27
Khan, Shaista 26, 28, 43, 47, 55, 136, Manickchand 223, 228-9, 338, 340
155, 277 Manila 7, 23, 42, 226
Khan, Shuja 137 Manningham, Charles 179, 180, 288,
Khan, Shujauddin 264, 274, 277, 290, 332-5
293, 340-2 Manrique 6, 8-10, 12
Khan, Zulphicar 135 Mansingh, Raja 115
khasas 166-9, 171-2, 197, 200-2, Mansookray, Lahorimall 232
204, 411-12, 414-15 manufacturing centres 266-7, 332
Khedda 136 Maratha 30, 162, 163, 168, 170-1,
Khemchand 47, 111-22, 128, 130, 179-83, 240-1, 274, 275, 290-3,
132, 134-5, 138-9, 141-4 340, 403-5, 413; invasions of 162,
Khwajah Phanoos Kalantar 27 168, 171, 179-83, 240, 274, 275,
Kissendeb 238, 239 280, 288, 290-2, 403-4, 413
Koning, Martinus 195 Maricha 268
Kumarkhali silk 176 maritime trade 13, 24, 346
Kunja 232 markets 60-1, 69, 70, 85-6, 98-9,
Kuthees 237, 271, 337 102-3, 156-7, 254, 265, 270-4,
Index | 429
308-10, 367-8; Asian and North mulmul 87-8, 93, 166-9, 171-2, 361,
African 189; Bengal’s silk and 411, 414-15; price of 415
textile 361; of Bhagwangola 272 Multan 309-10, 315-16, 363-64,
Marshall, P.J. 161, 271, 286, 360 373
Marwaris 300, 303 Multanys 265
Master, Streynsham 18 Muluckchand 156
Masulipatnam 12, 16-17, 41-3, 154 Murshidabad 68, 93, 179, 233, 245,
Mathuradas 63, 80, 94, 121-7, 129- 250, 252, 266, 271, 278, 338
30, 135, 140 Muslim: merchants of Hugli 14, 24,
Mayaram, Dayaram 237 131; ships 131, 252; vessels to
Medici family 348 Khedda 136
Meer Ellie Yaree 27 Muttoh Ellic 27
merchant-banking class 401 Muzaffarnama 342
merchant-middlemen 97-8, 156, 214
merchants: Asian 163, 189-90, 204-5, Nabakrishna, Raja 184
308, 312-17, 323-4, 358-64, 366- Nagar 66, 338
9, 371-4, 376, 377, 389-94; of Nalini 181
Bengal 24, 26, 131; in Hugli 24, Nanakji, Sri Govind 345
63, 123; in Madras 130; princes Nathaniel 20
as 4, 144, 184, 324, 335-8, 342, natural calamities 168, 275, 276,
343, 346-7, 349-50, 352, 403, 293, 413
407; behaviour of 310 nawabs 56, 57, 122, 123, 138-40,
Middle East 347, 360, 370, 376, 389, 181, 241, 249, 250, 263, 264,
394 266, 338-41, 345, 346, 399-402;
mints: Bengal 387; Murshidabad Bengal under 265; communication
244, 250 system of 266, 271; of Cuttack
Mirabalans 2 138; of Orissa 138; of Patna 136
Mirzapore 315, 373; silk from Bengal Nicholson, Captain 121
went to 372 Norris, William 41, 43
Mocha 42, 75, 386, 394 nutmeg 9, 15, 135
Mohammed, Haji 25, 26, 137
Mohun, Richard 77 oil 15, 42, 44, 135, 181, 272, 291,
Moluccas 1, 6, 9-11, 16, 41-2 404
Moor merchants 24, 26-7, 31, 252, O’Malley 8
386 Omichand 335, 336, 342-50, 352
Moreland, W.H. 196 Onupchand 232
Mornett, Captain 27 opium 15, 16, 135, 300-5, 343-4,
movement of prices 95, 161-2, 174, 370, 407; of Bengal 301; of Bihar
186, 274, 280 302
Mughal attack on Hugli 24, 131 Ossonee 27
Mughal mansabdars 400-1 overseas trade 4, 12-13, 24-6, 28, 55,
Mughal Suba of Bengal 109; as 109, 131-2, 134-7, 392
Zannatabad 263
Mukundaram 2 Padroes, Khoja 80
mulberry plantation 176, 285 Paggayahs 265, 317, 374
430 | Index
Paran 127, 232 Prananath 126

Parekhs 352 precious metals 16, 61, 63, 66-7,
Parrack family 144 69-70, 184-5, 276, 383, 385,
Pathans 265, 392 388-9, 393-5
Patna 9-10, 18, 64-5, 73, 87, 128, prices 103; Bengal 163, 276, 409; of
153-7, 266-8, 301-3, 342-4; export commodities 183; of goods
gunpowder factory 153 74, 94, 123; of khasa 166-8, 172,
Patna Customs House Register 315, 204, 412, 415; movements 94-5,
372 162, 166-8, 174, 176, 179, 274-5,
Pearson, Michael 349 280, 285, 288, 412-13, 417; of
Pegu 17, 24, 62, 131, 136, 361, 389 opium 302, 303; of raw silk 44,
Pepper 9, 15-16, 85, 135 174, 176, 280, 309, 363, 417;
Persia 1, 12, 16, 17-19, 23, 25-8, 30, of rice 43, 165, 176-9, 277, 278,
79-80, 110, 136, 138, 393, 394; 285-6, 288, 409, 417, 418; rise
trade with 42 in 161-4, 169, 175, 179-80, 184,
Persian Gulf 386, 394; silk textiles 275, 276, 278, 280, 288, 290,
for 370 408-9; of textiles 94, 164, 166,
Persians 7, 23, 24, 323, 347, 359, 169, 174, 278, 409, 412, 415, 417
386, 390 private trade 17, 181, 223, 291, 300,
petremen 155-6 334-5, 350, 390, 392, 404, 408
Phanous, Khoja 80
Philippines 11, 360, 389, 394 Qassem, Mirza Malik 25-6, 115,
piece-goods 17, 63, 86-7, 89, 91, 136-8
93-5, 112-13, 192, 197-98, 200-2, Quick silver 15, 110
204; price of 202 quilts 86, 90-1
Pipli 24, 26, 132, 154 Quli, Murshid 28-9, 43-4, 68, 264,
Pires, Tome 189 273-4, 277, 293, 338, 340,
Pitt, Thomas 26, 27, 42, 124, 135 398-402
Plassey 31, 182, 184, 245, 292, 300,
317-18, 347, 349, 398-99, 403, Rafiuzzaman 67
see also battle of Plassey Rai, Jagat Seth Mahtab 239, 240,
plushes 86, 90 247, 248, 337
Poddar, Sibram 76 Rajah, Allie 26
Pollexfen 90 Ram Singh 327
porcelain 9, 135 Ramdas 135
ports: of Aden 24, 131; of Bengala Ramnarain Raghunath & Company
24, 131; of Jedda 24, 349 94, 143
Portuguese: export 9-10; export Ramnath 232
from Bengal 9; at Hugli 8, 11-13, Ramprasad 272
import to Bengal 10; merchants Rangpur silk 310-11
99, 102; porto piqueno 2, 3, 5, Rannie, Captain 252
7; trade 2, 8, 10-11, 14; trade in raw silk 122-4, 163, 164, 174, 274-6,
Bengal 8, 10-11, 17 278-80, 307-9, 311-14, 316-17,
Prakash, Om 191-201, 204, 292, 361-7, 370-3, 407-10
360; classification on Textile 197 Red Sea 12-13, 17, 24, 131, 386, 394
Pramanick, Balaram 220 Rennell, James 266-9
Index | 431
revenue: reforms 400, 401; system 40 Seth, Baranasi 138, 217-21, 226,
Rewadass & Company 117, 118, 143 228-9
rice 1-2, 8-9, 15-17, 41-4, 162-5, Seths 216-19, 233, 235, 240-1, 245,
176-9, 274-9, 285-6, 288, 408-10, 247-50, 328-30, 334-5, 337-41,
417-18; coarse 176, 178, 275, 350-1
285-6, 417; to St. Helena from Setts 31, 224, 407
Bengal 43 Shah, Chintaman 111-22, 130, 132,
Riyaz-us-Salatin 23, 30, 44, 274, 277, 134-5, 141-4
291 Shah, Fatechund 75
Roe, Sir Thomas 11, 12 Shah, Jairaj 112, 138
Roy, Hari Krishan 229, 335, 407 Shah, Khemchand 47
Roy, Kalyan 115 Shah, Paramanand 128
Ruidas 240 Shah, Chaturmal 66, 67, 122, 127-9
Shah, Sukanand 66, 73, 115, 122,
Sabra 228 127-8
saffron 135 Sharifuddin, Mir 402
saltpetre 9, 15, 18, 21-2, 110, 152-9, Sheek Sallahy Cungee 27
268, 302, 343-6, 384; varieties Sheak Sallee 27
of 153 Sheiks 265, 317, 374, 392
Samser Gazir Punthi 273 shells 9
Samsundar 229 ship: Arabella 80; Aun 79; Compton
sandalwood 9, 16 252; Hertford 252; of individual
Sarhad, Khwaja 27 merchants 25, 137; Kempthorne
Sarhaud, Khoja 80 80; Sallah 27; St. Augustin 10; St.
Sarkar, J.N. 51, 57 George 252
Satgaon 2-8, 11, 28, 31 Shore, John 277, 293
satins 9, 90 Shroff, Futtichund 244
Scrafton, Luke 265, 337, 341, 374, Shroffs 65, 66, 68, 71, 74, 127, 128,
393 219, 220, 235-7, 239-43, 246,
Seir-ul-Mutaqherin 227, 277, 342 247, 338, 340
Seth, Bishnudas 219, 221, 224, Shuja, Shah 19, 24-6, 52-5, 136
228-9, 238, 342 Siam 16, 42, 117, 136-7
Seth, Fatechand 225, 244, 246, 247, sicca rupees 65-6, 246-8, 250
250 Sichtermann 301-4
Seth, Jagannath 220 silk 2, 9, 44-6, 86-8, 90-2, 175-6,
Seth, Jagat 184, 232-5, 239, 240, 308-10, 361, 363, 364, 371-3,
242, 244-50, 254, 335-42, 348- 391; from Bengal 86, 89, 155,
52, 387, 401-2, 407 265, 307-11, 313, 315-18, 362-4,
Seth, Janardan 27, 75, 80, 138, 140, 366, 372-3; cloth 15; exports 205,
216 308, 312-15, 361, 366-7, 370-2,
Seth, Kunjabehari 220 391, 407; manufacture 92, 310,
Seth, Ramkrishna 218, 224, 238, 364; market 300, 308-10, 362-3;
330-1 piece-goods 86, 91, 93, 167, 197-
Seth, Rashbehari 238 9, 327, 362, 369, 412-13; prices
Seth, Samsundar 220-1, 223-4, 228 46, 61, 86, 91, 93, 167, 174, 176,
432 | Index
197-9, 327, 412-13; textiles 194, textile industry 44-5, 85, 98, 190-1,
198, 369-70; trade 308, 313-14, 196, 360, 389; production 85, 98,
362, 366-67, 369, 372; wrought 265, 361-2, 390;
15 textile market 190, 367; Asian
silver 10, 39, 40, 47, 61-8, 75, 128, merchants in Bengal 368
184, 246-8, 338, 383-9, 392-5; textiles 91-6, 163, 164, 166-72, 192-
from Acapulco 394; influx 388; 3, 195-8, 274-6, 278-80, 367-70,
rials 63, 65 407-10, 412-17; Bengal 85, 88,
Singh, Bijay 402 93, 98, 162, 189-92, 194, 198,
Singh, Raja Ghandarab 402 205, 376, 385; categories of 197;
Sinha, N.K. 266, 341 coarsest 170-1, 293, 416; English
Siraj-ud-Daulah 344, 399, 402, 403 export of 201; price of 167; trade
Smith, Adam 140 85, 95-8, 368, 390
Society 20 Thevenot 152
Spanish America 394 tin 16, 129, 135; from Malaya 15
spelters 135 trade: in Bengal 7, 8, 10-11, 13-17,
Stapel, F.W. 193 20-1, 27, 51-6, 60, 61, 76-7, 85,
Stavorinus 269 109-11, 384-6; of the Hollanders
Steensgaard, Niles 347 15; of Hugli 8, 15, 18; marts 14,
subadars of Bengal 24, 26, 28, 52, 68, 266, 270; in textiles 85, 367; with
136, 338 Western India 42, see also
sugar 2, 8, 9, 15-17, 21-5, 42, 79, Gujarat
181, 291, 404; investment in 23, Trevisa, Jonathan 55
62 Tripps 347, 348
Sumatra 1, 9, 24, 41, 131, 394 Tuckee, Mahmood 26
Sunniasys 265, 317, 374, 392 Tumerick 15
Surat 10, 11, 30, 56-7, 73-4, 79-80, Turks 323, 386
110, 138, 139, 144, 251-3, 394; Tuttenag 15
factory at 62; merchants 135 Tutucurim 9
Surhaud, Cojah 28
Swaroopchand, Maharaja 247, 338 Udaychand 129
Udaycharan 126
taffetas 22, 86, 89, 91 Umichand 184, 219-21, 224, 302,
Taillefert, Louis 198, 316; list of 324, 407
198-9
Tarikh-i-Mansuri 184 van Dam, Pieter 193
Tavernier 10, 154, 189 van Leur, J.C. 347, 348
Taylor 195, 295 Varthema 189, 389
Teakchand 232 Velters, Jan 76
Tenassary 42 velvets 9, 86, 90
Tenasserim 121, 131, 134, 136-8; Verelst, Harry 263, 317, 371, 373
nawab’s vessels to 136 vermilion 15, 21, 110
textile exports 89, 92, 96, 190, 205-6, Verona, Cussa Muddo 130
317, 361-2, 368-71, 390, 405; vessels 3, 7, 8, 12, 15, 19, 20, 23, 25,
Asian 368, 370, 405; by Asians 29, 31, 136, 153, see also ships
190; from Dhaka 362, 370 Vijayaram, Tirthamangal of 272
Index | 433
villain 120, 216, 344, 399, see also weavers 17, 48, 63, 69, 90, 93-4,
malpractices 97-9, 103, 119, 215-16, 295;
Vincent, Mathias 94, 117 Bengali 99, 216
Vohra, Virji 139, 144 Willem, Otto 195
Williamson 20
wage-goods 163, 276, 388, 408 woollen cloth 110, see also velvets
war (1686-8) in Bengal 137 wrought silks 92
Wastell 219
Yenkatadry, Pedda 130
wax 8-9, 16
Wazid, Coja 302, 336, 345-6 zamindars 135, 180, 184, 273, 275,
Wazid, Khwaja 184, 302, 324, 335-6, 290, 293, 339, 341, 398-403
343, 345-50, 352, 407 zijdestoffen 194, 197

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Sushil Chaudhury

Companies, Commerce and Merchants

10. European Companies and Pre-Modern South

I had been contemplating for some time to bring out a collection

have resisted this except reluctantly in correcting some factual

The Rise and Decline of Hugli

‘The Paradise of Nations’ – thus Aurangzeb is said to have styled

industries of Bengal. ‘In regard to valuable commodities of a

and preserved, long Pepper, Oyle of Lerzeline and many other

Not only the Portuguese, even the merchant princes of Satgaon,

first Portuguese settlement in Western Bengal. Hugli could not

some acid tests. It is very strange that the Kavikankan Chandi of

firmed by ‘Akbarnama’ which records that in 1580 Mirza Najat

In the absence of sufficient materials, it is not possible to give

(i.e. Borneo, Moluccas, Sumatra etc.) were a large amount of

two or three voyages to China, Japan, Philippines and Moluccas

after inflicting a crushing defeat on them. Many reasons have

ties of Goa. The Portuguese viceroy of India expressed his anxiety

Paul Waldegrave and Thomas Stevenson at Balasore, wrote on

obtained generally from Patna where the Dutch refined it and

tained for the enlargement of their trade. The change of policy

his account of the trade of Hugli, writes in 1676: ‘Hugli having

deered’ by the local governors or nawabs for their own purposes,

directed the Hugli factors to remit Rs. 50,001 annually to Patna

8000 cloth coullers without mixture, according to sample

The English East India Company also traded with differ-

and Turan, besides Europeans and ‘wealthy Moguls’ traded at

own ships engaged in overseas trade. He took active part in trade

an undertaking that his master would pay the Hugli Council

During the season 1705-06 (September 1705-February 1706), as

troubles to the Company in the matter of freight. The Company

what is carried to neighbouring countries in small vessels’.141

the Marathas and the Nawabs of Bengal. Moreover, the position

Court of Directors was particular about the point and insisted

2. S.C. Hill, Bengal in 1756-57, vol. III, London, 1905, p. 160.

Historians, vol. VII, London, 1877, p. 31; Sarkar, op. cit., vol. 2,

66. Translations of Portuguese Records, Book of the Monsoons, Book 30

117. Raychaudhuri, op. cit., p. 76.

names a ship ‘Sarah’ belonging to Sabh-al-Din but the consultation

Prices of Provisions in Bengal

Moreland’s thesis1 that ‘prices on the Hooghly’ in the second half

*Proceedings of the Indian History Congress, Jabalpur, 1970, pp. 387-97.

Bengal’s richness was legendary, and the cheapness of provi-

them. The main provisions in the export list of the merchants

much rice as possible and also to persuade Indian merchants to

Table 2.1: Prices of Raw Silk in Bengal

Years Price (in Rs.) Years Price (in Rs.)

production. This obviously points to the existence of a possible

Table 2.2: Contracts with Calcutta merchants showing the different

1710 1713 1716 1719

period under review. It might well be assumed that if the prices of

impact on the economy as a whole? Besides the European ‘free’

thousand rupees’ which, it can well be assumed, were transferred

Manuscript Sources and Abbreviations

AGD Accountant General’s Department, Range 11, India

DB Despatch Book, India Office Library

1. W.H. Moreland, From Akbar to Aurangzeb, London, 1923, pp. 178-

24. Salimullah, Tarikh-i-Bangala, tr., Gladwin, Calcutta, 1788, p. 112;

The Myth of the English East India

Most writers on the early annals of the English trade in Bengal

The problem of securing trading privileges, as the Company

of the meaning of the farman, to exempt the English from paying

of the Balasore factory, wrote – ‘It’s wonder that after so many

exempt the English in Bengal from customs duties was confirmed

Historians, vol. VII, London, 1877, p. 31; Sarkar, op. cit., vol. 2,

117. Raychaudhuri, op. cit., p. 76.