The Beginnings

Indian history has many stories and that of the Jagat Seth one of the most interesting with many twists and turns. 

Hiranand Sahu was a jeweller turned money lender from Nagaur, Rajasthan from the Gailarha family of the tribe of Oswals, who moved to Patna in search of better prospects around 1650. He started as a banker and trader of Saltpetre. Patna and a neighboring town Chapra were the center for the refining of Saltpetre, an essential ingredient in making of gunpowder. Patna became a bustling financial hub as it was at the crossroads of long distance riverine and overland routes.

The Marwaris of Rajputana are legendary in the mercantile community of India and Hiranand and his descendants would have to be one the foremost families and there was a time when the richest person in the world was considered from this family. 

Hiranand had seven sons and a daughter. All other sons fell into almost total obscurity over time but the most illustrious of the all was Manik Chand that skyrocketed the family’s fortunes 

Manik Chand – The real Jagat Seth

Manick Chand moved to Dacca (modern Dhaka) which was important trade capital and almost all major European trading companies like East India Company, Vereenigde Oostindische Compagnie (VOC), also known as Dutch East India Company and others had presence. Dacca had a irresistible attractions to man like Manik Chand. At that time the grandson of Emperor Auranzeb, Azim-ush-shan was the Nazir or the Viceroy of Bengal. Due to some issues that Emperor observed with the workings of Azimu-ush-shan he introduced Diwan who was responsible to collecting the revenues and financial administration. Emperor made Kartalab Khan as the Diwan and named him Murshid Quli Khan. This step was great moment for Manik Chand. Murshid Quli Khan was made Diwan in the year of 1701 but attracted lot of enemies incliuding Azim-ush-shan and they were plotting assasninate him and hence he deserted Dacca and settled for Maksusabad which he renamed to Murshidabad on himself.

Manik Chand must have moved to Murshidabad and eventually he got the responsibility of the Mint as well. The House of Jagat Seth is still there and has been converted to museum.

Manik Chand grew in stature with Murshid Quli Khan and became the collector of revenues and treasurer and was called Nagar Seth by Mughal Emperor Farrukhsiyar. He was frequently lending large sums of money to the administration and became an integral part of governance. Manik Chand had no heir of himself and adopted his sister’s son Fateh Chand as his heir. Fateh Chand was conferred the title of Jagath Seth by the Emperor Mahmood Shah in 1723.

The Jagat Seths with their network also helped the tranfer of tributes from the states of Bengal, Odisha and Bihar to the Delhi Sultanate for a while as moving large sums of money was full of risk and many times was stranded.

The Decline

18th Century India was changing with the Mighty Mughal Empire crumbling and a new mercantile organization from Britian East India Company was keeping a close eye on all these developments and were trying out skirmishes with their armies. Since the Jagat Seth family were major force during the reign of Murshid Quli Khan, Aliverdi Khan and Siraj Ud-Daulah, the company official reached out to them.

After Fateh Chand, his grandson Mahtab Chand took over the title in 1744. He and his cousin Maharaja Swarup Chand had great influence in the time of Aliverdi Khan. His successor Siraj Ud Daulah was young and unruly and the Jagat Seths conspired with their competitor East India Company in order to overthrow him. Siraj Ud Daulah is famous for the  Black Hole massacre before the Battle of Plassey which was won by East India Company and led to Siraj Ud Daulah’s assignation eventually. Mir Jafar was made a puppet ruler by the company and Jagat Seth played the king maker but with company taking more ownership of the trades and revenue collection the power of the Jagat Seth started to decline with rising powers of Company. Mahtab Chand according to Company’s historian was richest man in the world during those days.

Mir Jafar’s successor Mir Qasim tried to bring back Mughal rule for few years and found that Jagat Seths had connived with Company. Jagat Seth was considered to be a traitor as he financed the British during the Battle of Plassey, which led to the death of Siraj ud-Daulah and the eventual start of the British Raj. Mir Qasim captured Jagat Seth Mahtab Chand and Swarup Chand and shot them dead and threw their bodies off the ramparts of the Monghyr Fort (Current City of Munger, Bihar). This happened just before the important Battle of Buxar where Company defeated the combined armies of Mir Qasim, Shuja Ud Dualah and Shah Alam II and which gave Diwani rights to Company setting up the greatest plunder by a private enterprise.

After this cruel end, the family tried to be close to the British and managed to retain their title until 1920s but all their erstwhile glory was lost and only the remnants were left. 

Learnings from the time

Private firms and people when have support the government, the power that they can derive can make them extremely powerful. The monopoly by families in these aspects creates sub-optimal situations for almost everyone. The monarchies as well private companies that are controlled by promoters due to their birth in the family and not because of the capability is a recipe of disaster.

The institutions for public good should be operated based on merit and minimum standards should be set so that private for profit enterprise fear that people can switch if they are not able to provide better than public institutions. This is true for central banks like RBI, Schools, Colleges, Hospitals, Mobile Network Operators, Power Generation and Distribution and many more. It is also very important to make sure private enterprises of today like the technology companies that are controlling the attention of people and have become attention merchants, do not convert into untamed private enterprise of 18th century.

I got inspired to write about this after reading Anarchy by William Dalrymple