The Marwaris Read online

  Princely rulers devoted considerable attention to attracting rich merchants, as did their counterparts in other parts of the world. In fact, their activities would be considered standard in any area trying to promote its economic development. The Switzerland or Singapore strategy for promoting development, at least part of it, is providing a safe haven in a hostile region. It was not only Indian businessmen who operated in British India but also the Sassoons from Baghdad, and the Aga Khans from Persia who fled to Bombay because of their precarious situation as minority-community merchants in the Persian Gulf region. They found India to be a good place to run their businesses—just as today some businessmen prefer to work out of Dubai and Bahrain at the one end of the South Asia region, and Singapore and Hong Kong at the other end, to circumvent government regulations and taxation laws. If such businessmen are not fleeing turmoil and disquiet today, they are searching for a more propitious place from where to do business, for reasons of tax, infrastructure or business environment as the jargon now has it.

  *

  Shekhawati continues to be a backwater and off the beaten path, though Rajasthan has recently participated in the renewed economic growth of Shining India; migrant Marwari business groups and non-Marwari groups as well have participated in the ‘shining’ of contemporary Rajasthan. The Punjab Haryana Delhi Chamber of Commerce informs us that Rajasthan’s income grew annually on an average by 7.4 per cent between 2004 and 2011 and it was considered among India’s fastest-growing states. However, Rajasthan is still ranked twelfth among India’s states in terms of GDP per capita. Of course, the heavy investments by large Marwari groups are in areas where the economy dictates they should be—big cities, near natural resources and so forth—and not necessarily in the owners’ former home villages. Churu and Jhunjhunu were still reported as India’s dirtiest cities in a recent ‘National Policy Exercise’10

  Despite their general backwardness, Shekhawati towns have benefited from their historic role. For centuries, these towns have been home to successful businessmen—this is evidenced by the enormous empty palaces or ‘havelis’ that they had built there, which because of their elaborate wall murals have now become places of pilgrimage for those interested in the art and architecture they represent.11 Amar Nath and F. Wacziarg, in Rajasthan: The Painted Walls of Shekhavati, document these havelis at length. The authors of this book have created a chain of non-hotel hotels, ‘Neemrana’, which includes the havelis of the Piramals in Bagar as one of its high points. Wikipedia carries references to havelis located in other small Rajasthani towns such as Ramgarh, Fatehpur and Churu. Several old merchant havelis now offer themselves as heritage hotels for those who wish to taste what life was at home for earlier generations of wealthy merchants. There is a write-up12 on a Welcome Group hotel in Phalodi which belonged to the Dadda bankers who came from that place. The travelogue informs us that the haveli has been ‘lovingly restored’ by a current descendant and even comes with a neighbouring jewellery shop owned by the hereditary jewellers to the Daddas, now based in Chennai, who retain an outpost at their home in Phalodi. In this transformation of merchant havelis we see a similarity, though on a much larger scale, with Rajput aristocrats turning their palaces into heritage hotels. Not only did the migrant merchants build mansions, they also set up schools, hospitals, wells and tanks, and other public facilities.13

  After more than a hundred years of migration to Calcutta and other destinations, in many instances young Marwaris have never been to Rajasthan, let alone their traditional home villages, and a number of mansions lie abandoned. However, many families still retain their roots in Rajasthan by maintaining their havelis and the temples and charities connected with them. The Birlas are reported to have family records going back to the nineteenth century at their Pilani haveli. They have set up a large educational complex there, centred around the well-known Birla Institute of Technology & Science, a leading technological university.

  Apart from the Shekhawatis, there are important groups of businessmen who hail from the neighbouring areas of western Rajasthan such as Bikaner, Jodhpur and Bhiwani (now in Haryana). The steel magnates, the Mittals for example, come from Sadulpur in Bikaner. ‘Mittal’ is an Aggarwal subcaste or ‘gotra’ name and common to several prominent business communities, Marwari and non-Marwari. The Mittals who own the giant mobile services company are apparently Punjabis. The same is the case with the Jindals, another prominent steel family. As was observed, the Jagat Seths came from Jodhpur state, and among the large banking families, the Daddas from Phalodi, the Dagas from Bikaner and the Malpanis from Jaisalmer.

  Western Rajasthan

  Not to scale

  There were a large number of old Great Firms with their origins in Rajasthan which gave rise to many successor firms. Most Marwaris are both related to, and have families who were involved with, these firms. Sargandhas Dadda of Phalodi in Jodhpur, who lived in the mid-seventeenth century, may have as many firms stemming from him as Bhagoti Ram of Ramgarh, the progenitor of Tarachand Ghanshyamdas, discussed at length later in this book. Like the Poddars in Ramgarh, the Daddas created a merchant city state in Phalodi. Like them, their ancestral home has become a heritage hotel, as we’ve noted earlier. The older branch of the Daddas, Udaymal Chandmal, had offices in Hyderabad, the Deccan and Calcutta. Many of the Great Firms were in the business of banking and moneylending with feudal rulers as clients. The Daddas were prominent in Jodhpur, Bikaner, Indore, Hyderabad and Jaisalmer; the Bapnas of Pathua in Indore, Kota and Jaisalmer; the Lodhas in Jaipur, Jodhpur, Kishengarh and Shahpura; the Pittys and Ganeriwalas in Hyderabad. Many of these family firms went on to serve the British as well, as we shall see with the Dagas of Bikaner and the Malpanis of Jabalpur.

  *

  Merchant families were amorphous and physically mobile. Sadulpur, from where the Mittals came, was only settled by migrants from elsewhere in the last two centuries. Everybody came from somewhere and went somewhere else. Their names indicate their places of origin. Just as European Jews with names like Wiener (Vienna), Berliner, Krakauer, Frankfurter, Hamburger, Wilner (Vilna), and others signifying more obscure places typically lived somewhere else in Europe, Marwaris too with names like Jhunjhunwala, Singhania, Jaipuria and so forth had moved from those places to somewhere else. In the name-town itself, the names do not serve to differentiate their bearers from everyone else in the town. Other Marwari names refer to ancestors. The Jalans and Tulsians are descended from the brothers connected with the founding of the Rani Sati temple in Jhunjhunu.14

  2. The Beginning of the Bazaar Economy

  Historians of medieval and ancient India have documented large-scale transportation of goods by merchants over long distances. These merchants did not only finance trade but also funded states and kings, and in general operated in a long-distance, large-scale ‘bazaar’ economy.

  Rajat Ray explains that there were three levels, as he describes them, in the emerging world economy of the nineteenth century. These were: the metropolitan economy, the local economies, and the ‘bazaar’ economy.1 The bazaar economy was a phenomenon which existed independently of the colonial metropoles and the local economy but operated in both. The bazaar economy handled the internal flow of goods across the Indian Ocean and the Bay of Bengal, as also the long-distance transportation of goods and commodities in India. This could include horses from Arabia, pearls from the Persian Gulf, slaves from Africa, opium and cloth from India, and tea and silk from China, as well as to-and-fro transit from Europe. The denizens of the bazaar economy were members of those family firms and business communities that had the necessary commercial systems and tools such as accounting, financial and insurance services, and the logistics to manage the flow of goods. Often, the indigenous people from an area did not have the required skill and acumen which other, often non-European, firms had.

  The international bazaar economy was staffed by Baghdadi Jews, Gujarati Hindus and Muslims, Armenians, Greeks, Iranians, Chinese a
nd Portuguese; traditionally the Marwaris limited their involvement to the flow of goods within India.

  *

  From the sixteenth century onwards, there was an increasing number of European merchants entering the Indian economy, and thereby interacting with the bazaar economy. Portuguese, Dutch, French and, finally dominating the scene, English merchants, in particular the East India Company, made their presence felt. They found various partners in the bazaar economy and among these were some Marwaris. The Marwari Jagat Seths constituted a critical part of this bazaar economy.

  The Jagat Seths and the early Aggarwals of Varanasi are reported to have arrived in the trail of the Mughal armies in the seventeenth century. The Jagat Seths and most of their contemporary Marwari firms in Bengal were Oswals from Jodhpur. These Bengal Oswal families initially settled in Murshidabad (the then capital of Bengal) and its suburbs, Azimganj and Jiaganj. They continued to be particularly prominent in Assam and Bengal and in the jute trade. In Burdwan, the Marwari community was part Oswal and part Aggarwal. By the nineteenth century, the earlier Oswal migrants, now called Murshidabadis, were often large landholders or ‘zamindars’, having converted their mercantile wealth into land. Particularly in central India, other Marwaris too became zamindars, a fact noted with some alarm by the British at the time because the new merchant-wealth-based landowners were seen as displacing the more ‘legitimate’, established aristocratic landlords. The large state bankers, the Malpanis in Jabalpur, owned 158 villages. In the late eighteenth and nineteenth centuries, after the establishment of the new British land revenue systems, much of the land changed hands as the old feudal classes often could not manage to pay the taxes; merchants, including the Marwaris, with newfound wealth decided to invest in land which was seen as a safe asset class. In the nineteenth century, the British were so alarmed by the commercial dominance of the Marwaris and other business communities, and the extent to which they were acquiring land, that laws were passed in several provinces prohibiting ‘non-agricultural communities’ from acquiring land in rural areas, as also other legislations to curtail the dominance of moneylenders. The British also set up protective regimes like the ‘Court of Wards’ to protect the indebted zamindars and the larger feudal lords from losing their land.

  N.K. Sinha in his 1967 introduction to the reprint of J.H. Little’s The House of Jagatseth (which originally appeared in the journal Bengal Past and Present in 1920-21) blamed Vallal Sen, who ruled Bengal between 1150 and 1179, for the dominance of big non-Bengali merchants in Bengal.2 In Sen’s canonical establishment of caste precedence in Bengal, he placed the Subarnabanik bankers (literally ‘gold traders’) low because they did not advance him the amount of money that he wanted. Whether this should have been dispositive for all time is for the reader to decide.

  The founder of the Jagat Seth house, Hiranand Sahu, came from Nagaur in Marwar to Patna in 1652 and lent money to local rulers as well as to foreign traders there. Manik Chand, his eldest son, moved to Dhaka in the late seventeenth century (the then capital of Bengal and always a key commercial centre) where he was an important commodity trader as well. When Murshid Quli Khan moved the capital of Bengal to Murshidabad (named after him), Manik Chand moved with him. The firm had branches in Hooghly, Calcutta and Varanasi and eventually in Delhi as well. They were, of course, not the only firms there, Marwari or otherwise. In 1789, there were thirteen Armenian, seven Muslim and thirteen ‘upcountry Hindu’ merchants (like the Jagat Seths) in Dhaka. On his death in 1714, Manik Chand was succeeded by Fateh Chand who was given the title of ‘Jagat Seth’ by the Mughal emperor in 1722. In 1717, Fateh Chand took charge of the Murshidabad mint, and from that time onwards controlled a great deal of the money economy of Bengal. He financed both local rulers and the major foreign trading companies and was the state treasurer, receiving and allocating public revenues. Between 1718 and 1730, the East India Company took an average credit of Rs 4 lakh per year from the Jagat Seth firm. As late as 1757 they were lending Rs 4 lakh per year to the Dutch East India Company and Rs 15 lakh to the French East India Company.3

  Though the Jagat Seths supported the British in the politics around the Battle of Plassey in 1757 which firmed British control of Bengal, their position began to decline rapidly as the British took over many of the functions from which the Jagat Seth firm had made money. Their prestige too declined as Calcutta became the commercial centre of Bengal. The firm was not able to successfully enter new areas such as inland trade in which others did well. Further, splits in the family led to long and costly litigations and the firm was partitioned. Even in Murshidabad, by 1791 the largest firm was Manohar Das Dwarka Das, a Varanasi Aggarwal firm which was also a leading banking firm in Surat around the same period. By the nineteenth century the Jagat Seths were forced to request and receive a pension from the British though they continued to be leaders of the Oswal Jain community from which they originated. Sinha concludes his piece with a reference to a discussion with the head of the Jagat Seth family in his reduced state after Independence, presumably in the 1940s or 1950s. He did not have the funds to repair his large palace which was in ruins and had to make do with a smaller one.

  3. The Marwaris, the Bazaar Economy and the British Raj

  As the British established their political control in India especially during the century after the Battle of Plassey, in which they eliminated French competition and secured the control of eastern India, they expanded and reorganized their trading. From being a monopoly affair of the East India Company, the British end of trade itself changed so that it was handled by numerous private trading houses. These trading houses needed partners from the bazaar economy. Initially they dealt with numerous Bengali and other local firms, but as the century progressed Marwari firms spread throughout the hinterlands of Calcutta and to a lesser extent to Bombay and expanded their role as direct intermediaries for the British.

  Calcutta has several hinterlands: Assam, to where the British advanced in the early nineteenth century and developed tea plantations; East Bengal, from which they eventually drew jute; and the Ganga–Yamuna valley and central India, from which came a variety of goods, especially opium. Through Bombay, the British also traded in cotton and opium. In all areas, the Marwaris traded in imported products like cotton textiles.

  Among the prominent firms in Assam, Mahasingh Rai Meghraj Bahadur, which was founded by an Oswal family, descended from the diwans, or prime ministers, of Jaisalmer and Jodhpur. The founder mortgaged his house in Ghertsar in Bikaner to move to Azimganj in 1812. A local Oswal firm then sent him as a clerk to Assam. Mahasingh, the founder of the firm, asked his younger brothers to join him and started his own business. The firm’s Calcutta office appears to date from the 1820s. Mahasingh’s son, Meghraj (1849–1901), invested in urban real estate and established stores in leading tea plantations and provided banking services as well. At its peak, the firm had eighty-two branches.

  The Oswal Jain Dalchand Singhi’s family of Azimganj owned Harisingh Nihalchand, a leading jute trading firm in the early twentieth century. Sevairam Singhi came to Azimganj in 1792 and established a firm in Goalpara, then bordering Assam. His son, Raisingh (also known as Harisingh, 1772–1843), was the founder of the main firm. Harisingh’s sister was married to the last of the Jagat Seths, Indrachand. The firm eventually acquired several thousand acres of zamindari. Harisingh’s great-grandson Dalchand Singhi (1870–1927) was the first president of the Jute Balers’ Association. Together with his manager and later partner, Bhairodan Chopra from Gangashahr in Bikaner, Dalchand expanded the firm’s activities. In the 1930s, the firm was divided among branches of the family.

  Other Oswals and Khandelwal Jains in the jute trade came from Ladnu, Sujangarh, Bidasar and Chapra. Prominent among these were the Bhutorias, originally from Murshidabad. A glance at the ledgers for 1906 of one Bhutoria branch shows a small moneylending business yielding Rs 7500 in interest per year, and trade in cloth, gold and silver, and grain amounting to Rs
3800. Needless to say, with inflation, these would be worth several hundred times that amount today. But these Ladnu Oswals belonged to a different sect of Jains (Digambar and Shvetambar) from the Jagat Seth Oswal group and were clearly separate. The leading Ladnu jute trader Jivanmal Bengani (died 1917), who founded Jivanmal Chandanmal in 1900, was one of the leading jute traders in East Bengal. He was reported to be the first Oswal worth more than one crore rupees and owned a jute mill and markets outside of Calcutta. There were also Oswals from Sardarshahr and Shekhawati who were prominent in Calcutta and in eastern India. Other Oswals were earlier active in Bihar and Orissa.

  From the early nineteenth century, Shekhawatis were also prominent in Bihar and Orissa. The Aggarwal Rajgarhias who were major mica dealers moved from Fatehpur Shekhawati to Rajgarh in Bikaner in the middle of the eighteenth century. By 1878, Ganpatrai Rajgarhia (died 1918) had moved to Calcutta. Rajgarhia started dealing in other commodities but an American, at a chance meeting, suggested mica. Rajgarhia quickly established several mines in Bihar. Besides his mica business, his eldest son had a jute mill in 1930. Ganpatrai’s younger brother, Juharmal (died 1904), started in the mica business but soon branched out on his own in Raniganj in Bengal, and opened his first mica mine in 1881. By the early 1940s, the Rajgarhias had 8000 employees and offices in London (1912) and elsewhere around the world.