The establishment of the British ‘monopoly’ on the trade to the ‘Gulphs’

The man who first sought to establish the British hegemony in Surat, namely Brabazon Ellis, the East India Company's top official in that same city during 1755–58, enticed Richard Bourchier, the governor of Bombay, to take up the project, by pointing out the private gains that he (Bourchier) could secure through the control of the Surat sea trade to Middle East.Footnote ²⁴ Bourchier and Ellis were conspicuous ship-owning merchants, and, as mentioned earlier, Company officers in India had no qualms in making use of their political power in order to promote their own interest. Thus it is somewhat surprising that, in the two years following the conquest of the Surat Castle and the establishment of the EIC hegemony over the city, the existing liberty of trade to the Gulfs appears to have been untouched. A possible explanation is that, soon after the conquest of the Surat Castle, the East India Company sent some of its ships to take freight at Surat for the Gulfs.Footnote ²⁵ One might hypothesise – and there is no indication to the contrary in the surviving documentation – that the Governor of Bombay and the Surat Chief decided not to send their ships to the ‘Gulphs’ in order not to enter in direct competition with the Company's business, which would have exposed them to the displeasure of their ‘Hon'ble Masters’ in London. However, in the following years, the EIC stopped sending its ships to the Gulfs, which left the field open for the top officials of the Bombay Presidency to exercise their own political power in order to appropriate for themselves a conspicuous share of the commercial wealth flowing along the Surat-Gulfs route.

When and how the Bombay Presidency's top officials imposed their political control on the Surat trade to the Gulfs is not totally clear, but, as detailed below, by 1762 it appeared to be firmly in place.Footnote ²⁶ As at its beginning, the whole business had no legal sanction on the part of the Company's directors, it should not come as a surprise that any information regarding it was studiously kept out from those official records which were the main source of information for the Court of Directors on the happenings in India. Yet, to cite Ashin Das Gupta's words quoted earlier, in Surat not only “the rules of the game” had changed, as far as the trade to the Gulfs was concerned, but this change, which involved what still was one of the principal ports in the Indian Ocean, could not but provoke some kind of visible backlash. In turn, this was bound to make the whole affair emerge in British records.

The first clue that not all was well for the Indian shipping merchants trading to the Gulfs can be gathered from an official account presented in September 1762 by Daniel Draper to the Bombay Government. In it, Draper – an official of the Company who, in due course, was to become a member of the Bombay Government and a Chief of Surat – related his activities as “supracargo” (supercargo)Footnote ²⁷ of one of the Company's ships, the Boscawen, during her stay in Jiddah (Jeddah). The Boscawen had been sent to Jiddah in 1762, carrying freight, mostly owned by Surat merchants, and with the aim to procure coffee for the Company. On his arrival there, Draper had been treated “with great civility” by the Vizier, acting on behalf of the Sharif of Mecca. Then, quite suddenly, the Vizier's behaviour had undergone a total alteration for the worse, as he had started requesting additional sums of money, far beyond the amount which, according to Draper's information, was customarily paid by foreign merchants (and which, indeed, Draper had already disbursed).Footnote ²⁸

This abrupt change of heart on the part of the local authorities at Jiddah and Mecca – of course, the Vizier's actions had the Sharif's full support – was not so strange, however, as Draper made it to appear in his report. Rather, it was an understandable response to the news that, during that year, no Indian ship from Surat would be forthcoming, as all Surat ships were “being detained by the Chief and Council”. As the custom taxes paid by the Surat ships made up a significant share of the Sharif's income, the Sharif and his government were unsurprisingly concerned by this sudden development. Apart from this, another cause of the stand so abruptly taken by the Sharif and his government was no doubt related to the fact that some of the Surat ship-owning merchants carrying trade to the Middle East had strong connections with the local authorities. This was the case of the Chellabis, an influential merchant clan of ‘Turkish’ originFootnote ²⁹ that, at the time, included some of the most influential merchants in Surat.Footnote ³⁰ A branch of the family also continued to live in the Asian domains of the Sublime Porte.Footnote ³¹ The Surat Chellabis themselves, who by then had been Surat residents for some seventy years, claimed to be Turkish subjects when it turned to their advantage.Footnote ³² Accordingly, there is reason to think that the Sharifian and Turkish authorities in Mecca were spurred to action not only by strictly economic reasons, but also by their personal connections with the Chellabis.

All this explains why, as already mentioned, the Sharif, personally and through his Vizier, started to systematically harass Draper, demanding of him the payment of further sums of money besides the usual baksheesh that was expected by any merchant and that the British “supracargo” had already turned in. In order to give additional strength to his request, the Sharif resurrected a claim to a tanka, or stipend, that, since the early years of Muhammad Shah's reign (namely, since the 1720s), had been paid to him by the Surat Nawabs.Footnote ³³ With much effort, and thanks to the mediation of a newly arrived Turkish Pasha, Draper was somehow able to extricate himself and complete his commercial mission, paying only a fraction of the additional sum requested by the Sharif.

One might plausibly conclude, albeit without documental evidence,Footnote ³⁴ that the Sharif and the Pasha acted in concert, with the former playing an aggressive and uncompromising role and the latter the accommodating mediator,Footnote ³⁵ in order to stress the difficulties awaiting British trade if the Surat ships did not reappear the next year. Even the requests for a renewal of the stipend formerly paid by the Surat Nawabs to the Sharif does not seem anything different from an easily expendable bargaining chip in a game where the continuation of the Indian trade from Surat was the main stake. In fact, the Sharif and the Pasha appear to have played a finely balanced act: they wanted to intimidate Draper, and through him his superiors in Bombay, but without triggering any kind of armed reaction, as they must have been well aware of the military might of the ‘Hon'ble Company’ and the dangers of a possible naval blockade.

In fact, when the Bombay Government discussed Draper's account, one of the first options to be considered was the “stoppage” of trade “both up and down the Gulph as likewise their supplies of grain from Suez”Footnote ³⁶ The only problem was that such an action could cause some unpleasant diplomatic backlash in Europe, triggering a formal protest on the part of the Sublime Porte to His Majesty's Government. Wisely, the members of Bombay Government decided not to take any rash steps but, for the time being, to simply limit themselves to notice their “Hon'ble Masters” in London to the “material parts” of Draper's account.Footnote ³⁷ Neither the Governor, nor any of his fellow Councillors, uttered a single word on the causes of the disappearance of the Surat ships from the Red Sea ports. This suggests that the Bombay Government, while knowing such causes only too well, were not particularly eager to bring this topic up in the official proceedings, a copy of which was to be sent to the Company's Court of Directors.Footnote ³⁸ In fact, in the letter dispatched by the Bombay Government to the Court of Directors, the “material part” of Draper's report was cogently summed up by the statement that,

The first round of the struggle against the monopoly and its legalisation

The understandable desire of the Bombay Government not to kick up any fuss concerning the preclusion of the Surat ships from the Middle East trade was, however, based upon unrealistic expectations. In fact, even as Draper was navigating back to Bombay, the Sharif of Mecca's protest against the British embargo was on its way to the Sublime Porte. By the beginning of 1763, the protest was forwarded by the British ambassador in Constantinople to his superiors in London, who, in turn, asked for some explanation from the Court of Directors at the EIC. At the beginning of January 1764, a letter from the Court of Directors was received by the Bombay Government, in which the latter was “positively ordered to enter upon an immediate and strict examination” of the whole affair. The letter ended with the Directors' “express command that you [the Bombay Government] are to take the utmost care to prevent any obstacle or interruption being given to the . . . trade which it is alleged the Turks have enjoyed from time immemorial”.Footnote ⁴⁰

It is doubtful that the Directors really thought that the whole diplomatic fuss kicked up by the Sublime Porte only concerned Turkish merchants. In their letters to Bombay, they sometimes appear quite knowledgeable about the minutiae of politics and commerce in Surat. This is to be expected because, apart from the Bombay and Surat records, they could have further input on the situation from returning officers. And one can remember that such a knowledgeable person as Brabazon Ellis – the former Surat Chief who had conceived the take-over of the Surat Castle – was by that time back in England. Regardless, those familiar with the situation in Surat could not but be fully aware that what the ‘Turks’ alluded to could only be the Chellabis and, possibly, some other shipping merchants residing in Surat, such as Salim and Hadji Mahomet Baghdadi, who, although possibly not Turks ethnically, had migrated to Surat from the domains of the Sublime Porte.Footnote ⁴¹

A few days before the date under which the Company's letter is inserted in the diary recording the public transactions of the Bombay Government, two letters were recorded on the same topic discussed by the Directors. One had been written by the Pasha of Baghdad and Basra and the other, giving cover and support to the first, by Salah Chellabi.Footnote ⁴² The Pasha, claiming somewhat grandly that Chellabi's ships were his own, asked the British to allow them to come freely to his “side” of the Indian Ocean. Likewise Chellabi asked for the Bombay Government's protection in dispatching his ships every year and claimed that similar letters from the Pasha were on their way to Calcutta and Madras.

It was at this point that the Bombay Government contacted the Surat Chief, asking for his versions of the facts. The incumbent Chief, Thomas Hodges, was not unduly worried about the threatening letter from London. In his answer he claimed that no Turkish subject lived in Surat and traded to the Middle East, as all the shipping merchants in Surat had been subjects of the Great Mughal for several decades. In addition, he freely admitted that, in the previous years, only British-owned bottoms – among which was his own vessel, but he was shy enough not to point it outFootnote ⁴³ – had gone to the Gulfs. However, according to Hodges, this had been in accordance with the merchants’ own wishes, as the bulk of them were not ship owners, and when looking for ships to carry their goods, always chose British ships. This was no wonder because, claimed Hodges, not only were British ships faster than those owned by Indians, but they never “lost the passage” – in other words, they always sailed in time to reach the opposite side of the ocean before the turning of the monsoon. Moreover, the British, he explained, being honest men, never entered in devious schemes aimed at defrauding the freighting merchants. Hodges recalled the notorious case of one of Salah Chellabi's ships who, according to a popular rumour, had purposely been run aground in the Shatt-al-Arab, in order to have the goods on board divided between Chellabi himself and the local Turkish authorities.Footnote ⁴⁴ Furthermore, Hodges pointed out that the proof that all he claimed was the plain truth was given by a statement that he enclosed within his letter. This was a declaration expressing approval for Hodges's behaviour, duly certificated by the Qazi, signed by a group of 59 people who, according to Hodges, were the “principal freighters” in the city.Footnote ⁴⁵

However, the fact that the signatories of the 1764 certificate really were the “principal freighters” in Surat appears to be of questionable veracity; indeed not one of them is ever to be found in any of the British records either before or after that episode. For example, none of the 59 supposed principal freighters in Surat appears among the 49 merchants who, only a few years before, in 1759, freighted their goods on the Company's ship Harcourt, bound for Mocha.Footnote ⁴⁶ In other words, these 59 merchants, like a falling star, seem to have crossed the sky of Surat only once. This is in stark contrast with the examples of other Surat merchants, whose names continue to appear both in the Bombay and Surat records, and, often, in the Mayor's Court proceedings. In fact, a close evaluation of the many petitions by the Surat merchants included in the British records show that the “principal freighters” in Surat were themselves ship owners,Footnote ⁴⁷ which means that, at the time of the 1764 certificate, they would uniformly have opposed the British monopoly on the trade of the Gulfs.Footnote ⁴⁸

When all the above is taken into consideration, it does not seem credible that the 59 signatories of the certificate of 1764 really represented either the bulk of the Suratis involved in the freighting business or the “principal freighters” in the city. But the members of the Bombay Government did not have any of the above expressed doubts; on the contrary, they found Hodges's answer and the enclosed certificate absolutely satisfactory. No doubt, they had good reasons to accept the certificate at face value: even if it is impossible to pinpoint the exact moment when that had happened, surviving documents show that, by then, the Governor of Bombay, the Chief of Surat, and the Agent in Basra had established their control on the Surat trade to the Middle East and were sharing the money accruing from it.Footnote ⁴⁹ More precisely, from the ships bound for the Red Sea, two-thirds of the earnings accruing from the monopoly went to the Governor of Bombay and one third to the Chief of Surat, while from the ships bound for the Gulf of Persia the split was identical, unless the Agent had the rank of member of the Bombay Government, in which case the gains were split in three equal parts.Footnote ⁵⁰ All this means that the monopoly was the preserve of the most powerful institutional figures in the Bombay presidency, which would have made it risky to defy their will. On the other hand, as the future Governors of Bombay, Chiefs of Surat and, sometimes, Agents in Basra were chosen from among the Bombay councillors, each councillor could at least entertain the hope to become, in future, a co-sharer in the considerable economic gains coming from the monopoly. Finally, some of the members of the Bombay Government must have known that, as was to become clear to all only a few years later, Hodges was extremely well connected with the Company Directors, which, quite apart from his institutional charge, made him a very dangerous person to challenge.Footnote ⁵¹

The end result of all this was that, from 1764 onward, both Hodges's letter and, most particularly, the certificate with the 59 names provided the justificatory warrant for the British to openly admit to their monopoly and to flaunt it as a beneficial service rendered to the citizens of Surat, securing them from the supposed predations of their (ship-owning) countrymen. This had the side-effect of forestalling any objections if the Chief of Surat, the Governor of Bombay, and the Agent in Basra benefitted personally from the arrangement while performing their protective function. Accordingly, as neatly recalled in 1796 by the last Surat Chief, in an official letter:

The co-opting of the main Indian merchants into the system

The final outcome of that first round of the struggle against the Company's monopoly was, rather ironically, that the British sanctioned it as perfectly legal. However, one may assume that the reason why, in the following years, the system worked fairly smoothly was that some kind of settlement had been worked out between Hodges on one side and the principal shipping merchants in Surat on the other. In 1762 no Surat ship had gone to the Red Sea, and the same likely holds true as far as the Persian Gulf is concerned. But in the following years, things changed. Records show that many ships belonging to several Surat shipping magnates were sent to the Gulfs. Among these magnates were Salah and Ibrahim Chellabi, and two wealthy Parsi merchants, namely Dadabhai Manokji, who was Hodges's personal protégé, and Dunjishaw Munjishaw, a man who was strictly related to some other main British officials in Bombay and Surat.Footnote ⁵³ This shows that the system created by Hodges was flexible; the right to send ships to either the Red Sea or the Persian Gulf could be sold to the highest bidder, who, in turn, was bound to be one of the principal shipping merchants in town. In these circumstances Salah and Ibrahim Chellabi, still among the wealthiest merchants in Surat, must not have had any particular problem in buying the right to send their ships to the Middle East.Footnote ⁵⁴

No doubt, some people were penalised by this system. One such person was Mancherji Carsetji, who, although still a conspicuous ship-owing merchant, was now excluded from the trade to the Gulfs.Footnote ⁵⁵ This was unsurprising, however, as he was a “Dutch protected” merchant and an old enemy of the EIC, whose past hostility had not been forgotten by the British.Footnote ⁵⁶ Besides Mancherji – who seems to have been the only pre-1759 shipping magnate to be penalised by the new system – the British monopoly shunted out the minor ship owners who did not have the money and the connections necessary to buy the right to proceed to the Gulfs. The reverse side of the coin was that those major ship owners who were successful in buying the right to sail were themselves protected from the competition of their lesser brethren and, one can assume, at liberty to pass over the additional cost to their freighters.Footnote ⁵⁷

Ironically enough, the category of merchants most disadvantaged by the monopoly was exactly that to which the signatories of the certificate of 1764 allegedly belonged. The monopoly raised the cost of freighting goods, as the freighters had now to pay both the Company's top officials and the Indian ship owners. But that was not all. After the establishment of the monopoly, only a limited number of ships were allowed to go to the Middle East, which made that branch of trade riskier for the freighters. Before the monopoly, the freighters could limit the danger of losses, due to natural disasters or human predators, by spreading their goods across several vessels. Now this became impossible. To the contrary, given the limited number of vessels now allowed to sail to the Gulfs, freighted goods had to be so tightly packed into the holds of ships that bales of textiles were often cut to facilitate their storage, meaning that the content of the bales was itself cut and damaged. Even more costly was that the concentration of all wares on a few vessels forced the freighters to take respondentia – namely a form of maritime insurance – on a regular basis. This, in turn, made respondentia rates soar. As selling respondentia was a quite profitable business, the Surat Chief and the Bombay Governor soon monopolised it, as far as the traffic to the Gulfs was concerned. By doing so, they were at liberty to further hike up the rates, and, by the beginning of the 1770s, when respondentia on both legs of a voyage for any other maritime route could be got for 9 or 10% of the value of the insured goods, the rates on the goods sent to the Gulfs on the onward voyage reached 28.5%. Moreover, by then the purchase of respondentia on the goods carried on the freight ships to the Gulfs was not optional any more. Even those merchants who would have preferred to run the risk to go without respondentia were now forced to take it, on pain of having their goods refused transport on Gulfs-bound ships. Again, it was the freighters who had to bear the additional burden of the enhanced respondentia rates.Footnote ⁵⁸

Yet, when all this is said, it is worth noting that in a situation characterised by rather inelastic markets, such as the one then typical at the time of West and South Asia, most of the additional costs generated by British control were eventually passed on to the final buyer of the goods. In sum, the monopoly system could work because the main shipping merchants were co-opted into it, and the additional costs to the freighters could be passed over to the (Middle Eastern) consumer.

The second phase of the struggle against the monopoly

The monopoly system continued smoothly while Thomas Hodges was Chief in Surat. However, in 1766, when he was replaced by William Andrew Price, himself a conspicuous merchant and ship owner, things started to go wrong. Price farmed out the right to access the monopoly, but, at the same time, made use of his political clout to send his own vessels to the Gulfs in advance, delaying the departure of the official freight ships. Moreover, he prevented the Chellabis from freighting their own wares, in spite of the fact that some of the Chellabis' ships had been chosen as official freight ships.Footnote ⁵⁹ Finally, he started to prevent certain merchants trading to Basra – most of them merchants under British protection – from sending their goods there, even if that meant that the Basra-bound ships were not dispatched at full cargo.Footnote ⁶⁰

There are some plausible hypotheses that can be given as to the reasons for Price's decisions. As previously noted, sometime during the period under review, the Surat Chiefs monopolised the right to give respondentia on the goods sent to the Gulfs and, additionally, made it compulsory for the merchants to purchase it. Our sources are silent on the exact moment when this happened, but, as shown below, this system was already well established in 1770. As the monopoly on respondentia on the goods sent to the Gulfs was one of the factors making its rates skyrocket, the change from voluntary to obligatory respondentia purchasing would likely have been resisted by the Surat merchants. Given this, it is likely that, in 1766 and 1767, Price started to make the taking of respondentia on the trade to the Gulfs compulsory by preventing those who were recalcitrant from sending their wares there.

The same hypothesis explains Price's decision to prohibit the Chellabis from transporting their goods on official freight ships — ships which, incidentally, belonged to the head of their own clan, Salah Chellabi.Footnote ⁶¹ In other words, it would appear that the Chellabis were being penalised for their unwillingness to take respondentia on their goods bound to the Gulfs. What is perplexing, however, is that British members of the Surat and Bombay governments, Price included, must have known that Salah Chellabi had the capability to make his own complaints heard directly by His Majesty's Government, through the diplomatic mediation of the Sublime Porte. Therefore, Price's decision to displease the Chellabis appears peculiar. One possible explanation is that that Price counted on Hodges's protection; after all, as discussed earlier, Thomas Hodges, as Chief of Surat, had already weathered the consequences of Salah Chellabi's previous protests.

But this possible explanation appears to be contradicted by Price's much more curious decision to detain the official freight ships in order to send first his own ships. This, of course, gave a considerable commercial advantage to Price, as the freighters were bound to prefer sending their goods in advance, rather than have their expedition delayed with the official freight ships. This, in turn, while greatly advantaging Price, was bound to cut in the earning of the Governor of Bombay and the Agent in Basra, as their gain was related to the value of the cargoes on the official freight ships. And risking the wrath of his direct superior, the Governor of Bombay, was, for Price, extremely dangerous.

Hence Price's decisions had a high probability of provoking reactions from several powerful men, which was exactly what happened. Already in 1766, as soon as Price started to operate as Chief of Surat, new complaints were forwarded by the Sharif of Mecca through the usual diplomatic channel and eventually reached London. The Sharif protested about “the inhabitants of Mecca and Medina and other Mahometans suffering great trouble and uneasiness in their trade and otherwise since the government of Bender Surat [had] devolved in the hands of the English”.Footnote ⁶² The Sharif was likely aggrieved by the fact that those small Arab ship owners, who had previously taken part in the Surat-Jiddah run, were now excluded from it by the new system. In 1768, a more specific complaint was forwarded by the Pasha of Baghdad to Constantinople. In a letter to the Grand Vizier, the Pasha pointed out that,

The Pasha – who, evidently, was both a compassionate Muslim and a believer in the benefits of free trade – went on in a later letter stressing that “this transaction, besides cutting off the means of life and support from Mussulman merchants leads in consequence to the prejudice and ruin of the customs of Bussora and Babylow”.Footnote ⁶⁴

This time, the Grand Vizier, in forwarding the Pasha's letter to the British ambassador, made it clear that the Sublime Porte expected a more substantial response than the vague excuses received in connection with the previous remonstrance. This was duly notified to the Court of Directors, who shortly before had received a similar complaint through a different channel, namely their own top representative in the Persian Gulf, the Agent in Basra.Footnote ⁶⁵ In fact, while the Chellabis were contacting their relatives and friends in Basra and Baghdad, another group of merchants, mostly under British protection, had complained in a petition to the Basra Agent how Price, allegedly under orders from the Governor of Bombay, had prevented their correspondents in Surat from sending goods to Basra.Footnote ⁶⁶ The Agent, perhaps because he was a honest man much aggrieved by the bad behaviour of his fellow officials in Surat and Bombay, or perhaps because he was annoyed by the fact that Price and, possibly, Hodges's conduct cut into his own share of the monopoly dividends, ensured that the merchants' complaint was heard in London.Footnote ⁶⁷ He did so by sending the petition both to Bombay and to London, instead of forwarding it – as he was supposed to do – to his direct superior only, the Governor of Bombay, and only through him to the Court of Directors.Footnote ⁶⁸

Hodges's regulations

When Hodges received a copy of the Basra petition and the news that another copy had been sent to the Directors, he immediately swung into action. He wrote back to the Agent stating his absolute non-involvement in the abuses committed by Price who, Hodges added ominously, would be called upon to answer for his conduct. Finally, the Governor announced his intention to rectify things “to prevent all complaints of the kind in future”.Footnote ⁶⁹

In fact, the relationship between Hodges and Price was too close to allow either of the two to break it lightly.Footnote ⁷⁰ But by the end of August 1769, the Bombay Government had received precise orders from the Court of Directors, ordering the removal of Price from both his post as Surat Chief and the service of the Company.Footnote ⁷¹ The reason of the decision was clearly stated as arising from the fact that Price's behaviour had been “highly injurious to the Company as well as oppressive to the merchants and trade of the place”.Footnote ⁷²

Price's dismissal was as clear an indication as any that, this time, the Directors meant to assert significant control. Such being the situation, Hodges decided that the best tactic to cope with the forthcoming crisis was to pre-empt any possible action by London. Accordingly, by the beginning of October 1769, he enacted a set of regulations concerning the official freight ships going to the Middle East.Footnote ⁷³ While the regulations were presented by Hodges as directed at redressing the merchants' grievances, clearly their main purpose was to prevent any of the partners in the monopoly from betraying or compromising the others. Accordingly, as far as the merchants’ complaints were concerned, the regulations enjoined that particular care should be taken that “no undue preference” would be shown to freighters taking respondentia vis-à-vis those who chose otherwise. But the regulations left a way open for the reintroduction of discrimination by immediately adding that “this is not meant to exclude the owners of the ships [from] their right of chusing [sic] such goods to be laden on them which may be most advantageous to themselves in point of the freight”. Another useful provision for the merchants was that the regulations, in order to prevent ships from being withheld until too late in the season, fixed the deadlines by which the freight ships had to be dispatched. But the rules with real impact were the fixing of the geographical areas to which the monopoly applied and the shares pertaining to the Governor, the Chief and the Agent.Footnote ⁷⁴ In doing this, the regulations established that,

As shown by the above passage, the rules proscribing swindling of monopoly partners by other monopoly partners – or rather, by the Surat Chief, as he was the partner well positioned to deceive the others – were the only regulations that carried some real threat of sanction. Likely, what Hodges had in mind, beyond preparing an alibi for himself as proof against the possible wrath of the Company's directors, was to guarantee his own interests as the main co-sharer of the monopoly business.

The Surat merchants' statement of 1770

Hodges's actions were taken on the eve of the arrival of a new threatening letter from the Court of Directors, which had been sparked by the latest round of complaints from the Porte and the receipt of the petition from the Basra merchants. In the letter, the Directors ordered an immediate enquiry into the grievances of the Surat merchants, to be conducted through an official sent for that purpose from Bombay, who was empowered to suspend any servant of the Company found guilty of abuses, pending a final decision from the Directors themselves.Footnote ⁷⁶

These new orders arrived at the end of a period that saw the management of the monopoly at its worst. The late 1760s were characterised by a slump in the Middle East markets,Footnote ⁷⁷ which, by itself, made things difficult for anybody involved in that branch of trade. It was against this background that many freight ships experienced several ‘losses of passage’. The nadir was reached when, in 1768, Hodges's famed ship, the Crescent, lost her passage to the Red Sea. Soon after, the ship was sold, which makes one suspect that, by then, she had become too old. In substitution of the Crescent, Hodges and Price chartered another ship, the Dadabhoi, belonging to the Parsi merchant Danjishaw Manjishaw. The Dadabhoi embarked with the goods originally freighted on the Crescent and, in 1769, sailed to the Red Sea. Yet the Dadabhoi too lost her passage. She reached Mocha, but arrived too late to proceed to Jiddah. The captain, an Englishman, could have remained in Mocha, waiting for the change of the monsoon, which – at least – would have allowed the Dadabhoi to reach Jiddah early in the following season. That had always been the norm, but the captain decided otherwise and went back to Bombay, in spite of the protests of the merchants. As each loss of passage cost the payment of double freight plus a 25% extra premium, the unfortunate freighters of the Crescent and Dadabhoi paid hugely inflated freight charges for a cargo that reached its destination more than two years after having been despatched.Footnote ⁷⁸

It was against this background that the enquiry ordered by the Court of Directors was eventually carried out. In the merchants' own words,

The merchants took some three weeks to respond, and when they did so, it was through a statement couched in artfully diplomatic language. This was unsurprising, as their protest against the monopoly, in order to be routed to the Directors, had to be presented to the same people who were responsible for imposing and managing it. As the merchants knew all too well, those were people able and willing to ruin any Indian, no matter how influential, who presumed to challenge them too openly.

The petition itself, duly certified by three principal Sayyids, contained eleven points: the first ten listed the merchants' grievances, while the last expressed the hope that the Company would heed their complaints and redress them. The merchants described the rise in the risks connected to the trade to the Gulfs caused by the concentration of all goods in a few vessels, which in turn had made the respondentia rates skyrocket. Then, the merchants described how the need to cram all goods meant for the Gulfs into a limited space sometimes resulted in damage to the goods themselves. The merchants complained about the fact that official freight ships – navigated by supposedly skilled British officers – frequently lost their passage, which resulted in the merchants paying outrageously high freight rates. The merchants even went so far to give a watered down version of the Dadabhoi affair, and protested that ships owned by British merchants – unnamed, but who could by logic only be either the Governor of Bombay or the Chief of Surat – left early, while the official freight ships were detained.Footnote ⁸⁰ The merchants made other, smaller complaints too. One concerned the difficulties and delays that they experienced when reclaiming and re-coining the bullion brought back from the Gulfs. While the merchants were too prudent to dwell on who bore responsibility of this state of affairs, the cause of this problem had been Hodges, who had intervened in the management of the Surat mint in pursuit of personal advantages.Footnote ⁸¹ Finally, the merchants quoted a specific instance in which certain goods meant for Muscat, the duty for which had already been paid at one of the Mughal custom houses, had been seized by the British and charged duty again at the British custom house.Footnote ⁸²

Apart from these complaints, which were closely related to trade, the letter contained two additional points. One concerned the Muslim pilgrims going to the Hajj. Before the British monopoly, the needy among them had been carried without charge, but this practice had been discontinued by the British. The other concerned the fact that the merchants from Jiddah and Basra, who formerly used to come to Surat to buy goods to bring back to the Middle East, weren't coming anymore, due - in the Suratis' opinion – to the impediments brought about by the monopoly system.

As noted earlier, the statement of 1770 by the Surati merchants was couched in diplomatic and prudent language. The nearer it went to asking for the outright abolition of the monopoly – likely the only realistic solution to the kind of problems that were the focus of the merchants’ complaints - was when, in the statement final article, the hint was offered that the Surat trade could be revived “by the [listed] above impediments being removed and everyone [being] permitted to send his goods when and where he pleases”.Footnote ⁸³ Yet, for all its caution and mild tone, the statement was a very damaging document. What made it so was not only its content, but the fact that it represented a cogent expression of the concern of the whole body of the Surat merchants.

In fact, the statement of 1770 was a much more significant document than the certificate of 1764. It is true that we do not know the exact list of the signatories, but every clue that we have points to the fact that the statement was signed by most of the principal Surat merchants and that the signatories represented both the ship owners and the freighters, along with a wide cross-section of the various ethnic communities. What appears at the close of the statement is the indication: “Surat, [. . .] 23rd February 1770. Signed Mulna Fackorudeen and many other principal merchants at Surat”. On the other hand, from the already quoted opening of the statement, it is clear that its authors claimed to be “all the merchants, owners of ships, Moormen, Armenians and Gentoos”. This is a claim that could be contradicted by pointing out that, apart from the one by Mulla Fakhruddin, no other name is appended to the statement, and thus there is no proof that the statement represented the whole Surat merchant class. On the contrary, it could be argued that the (unknown) merchants who signed the statement of 1770 were only a section of the Surat merchants, very possibly those Muslim shipping merchants, of whom Mulla Fakhruddin was a typical example.Footnote ⁸⁴ But, had there been even the remotest possibility that the signatories of the statement were only a section of the merchant class, the Bombay Government would have gladly denied the social and, therefore, political relevance of the protesters. They did not do this here, though as shall be discussed presently, this did occur on a different occasion, when the Bombay Government discussed a petition that, although with a similar heading, could be indeed dismissed as signed by a section only of the Surat merchant class.Footnote ⁸⁵

In fact, the members of the Bombay Government – and, one would assume, Hodges in particular – were fully aware of the fact that the statement might result in some kind of unpleasant decision on the part of their ‘Hon'ble Masters’ in London. For this reason, they examined and commented on it before forwarding it to Europe. While their comments on any single point were designed to convince the Directors that all was well, and that what was not well had already been corrected, the fact that the signatories truly made up a fully representative cross-section of the Surat merchant class never came up for criticism. Rather, the Bombay Government, in an effort at damage minimisation, laid the responsibility for the specific abuses listed in the statement mainly at Price's door, and explained away the case of the Dadabhoi as “entirely owing to an omission at Surat in the orders usually given to the commanders of all freight ships”. Apart from that, the Bombay Government confessed ignorance in the case of the double custom paid on the goods for Muscat, promised a further enquiry on the specific case, put down the disappearance of the merchants coming from Jiddah and Basra to “the general decline of trade”, and magnanimously declared that those pilgrims going to Mecca who were a “real object [of charity]” would be received on board “without any [financial] consideration”. More generally, the bulk of the Bombay Government comments praised the benefits of the freight system - the famous certificate of 1764 was duly quoted – and noted the fact that any malfunction in its working would speedily be corrected by those regulations that Hodges had just enacted.Footnote ⁸⁶

The continuation of the merchants' troubles

Hodges's protests that he wanted to put the trade to the Gulfs on fairer bases were soon shown to hold little in the way of committed will. During roughly the same period when the Bombay Government was examining and commenting on the Surat merchants' statement, Hodges ordered that all ships coming from the Gulfs – many of whom used to put into Bombay harbour before proceeding to Surat – were to have the bullion that they carried landed and re-coined at the Bombay mint. This was to be done regardless of its owners’ wishes.

The motive behind Hodges's orders was once again the accumulation of personal wealth. As Governor, he was entitled to a fee on the bullion coined at the Bombay mint. Yet Hodges's decision damaged the Asian merchants whose bullion was being re-coined. In Surat, the custom was that if the bullion was not re-coined in 25 days, the owners were entitled to the payment of interest. In Bombay, no similar regulation existed, which, together with the unusual amount of bullion brought in because of Hodges's orders, delayed the re-coining of the money for more than three months.Footnote ⁸⁷

This was to be Hodges's last show of high-handedness towards the merchants, as he died in February 1771. Yet the cavalier attitude he showed towards the Indian merchants was by no means unique to him. It is significant that the promised enquiry into the double duty paid on the goods bound to Muscat was never carried out. Even more significant, by April 1771, the Court of Directors arrived at the unanimous conclusion that poor Price had already been punished enough. Consequently, orders were sent to re-admit him to the Company's service and to give him a seat in the Bombay Government, with the same rank and seniority that he held at the time of his dismissal.Footnote ⁸⁸ Not long after the receipt of those orders, Price was back in Surat as Chief.Footnote ⁸⁹ A final demonstration of the low priority that the Surat merchants’ problems had among the preoccupations of the Directors is that after the burst of energy that had led to Price's dismissal and the beginning of an enquiry in Surat, the Court took no further action. One would expect that, after the Directors' threatening language of their letter of March 1769 and the damaging document produced by the principal merchants of Surat, a swift retribution would follow. But, for a period of some five years, no decision related to the Gulfs’ trade was produced by the Directors in London.

Yet, during this period, among the top crust of the Bombay officials there must have been some uneasiness as far as the right of monopoly was concerned. All the fuss made by the Directors – whose intervention had been brought about by the involvement of both the Sublime Porte and His Majesty's Government – seemed to indicate that, sooner than later, London would officially and explicitly put an end to the right of monopoly. The result was that, whereas the incumbent Governors, Chiefs and Agents went on extracting protection money from the merchants trading to the Gulfs, the justification for doing it changed.

This transformation of the ideological underpinning for the right of monopoly emerged during the long-drawn case brought against Mulla Fakhruddin by Hodges's heirs. In 1770, Mulla Fakhruddin had bought the right to send two ships to Mocha and Jiddah during the following season. As was usual in these cases, he had entered into a verbal contract with the incumbent Surat Chief, the latter acting for himself and the Governor of Bombay. The business had gone on as normal, and Mulla Fakhruddin had paid the first instalment of the sum agreed upon to the Chief, who was that same Daniel Draper already mentioned for his role as “supracargo” of the Boscawen. However, when Hodges died (22 February 1771), the new Governor, William Hornby, claimed the payment of the fee previously agreed between Hodges and Mulla Fakhruddin for himself. The Bohra merchant prince had little choice but to acquiesce to Hornby's request, and discontinued the payment of the remaining and major part of the agreed fee to the representative of Hodges's estate, namely Draper himself. The result of this development was that the attorneys of Hodges's estate and Daniel Draper brought a suit against Mulla Fakhruddin in the Bombay Mayor's Court, accusing him to have broken his contract with Hodges. Draper's claim was that the money that Fakhruddin had engaged to pay was not paid because of any presumed monopoly right. In fact, according to the pleading by Draper – who acted as attorney – and the lawyers of Hodges's estate, a right of monopoly did not even exist and, if it had ever existed, had been abolished by the latest directions from the Court of Directors. Rather, he claimed when ships “so well fitted out and ably commanded” as those of the former Governor and Chief were put up for freight, freighters simply preferred them to any vessel belonging to native merchants. Accordingly, the contract between Mulla Fakhruddin and Draper – the latter acting on his own and Hodges's behalf – was to the effect that those two gentlemen would refrain from putting up their own ships for freight, leaving the field clear for Fakhruddin. If Fakhruddin had paid a further sum to William Hornby, that was his own business and did not exempt him from paying the agreed amount of money to Hodges's heirs.Footnote ⁹⁰

This position was highly questionable from a legal standpoint. Mulla Fakhruddin argued that the right of monopoly did exist and the contract entered by him was with Hodges and Draper in their official capacities as Governor of Bombay and Chief of Surat. He even recalled a similar case that had occurred in 1766, when Hodges, then Chief of Surat, had been removed from his position by the Bombay Government, following accusations of misconduct by some Councillors. That had happened in February, just on the eve of the departure of the ships to the Gulfs. Hodges, who as Chief, had charged merchants for access to the monopoly, now claimed as his own the Chief's share. He had been rebuffed as the contract had been entered with the Chief and Governor in their official capacity, and Hodges, having been suspended from the Company's service, had lost any right to that fee.Footnote ⁹¹

Mulla Fakhruddin was able to convince the Mayor's Court to dismiss the case against him. Yet, as Fakhruddin was soon to learn himself, it was extraordinary and exceptional for an Indian litigant to get the upper hand against an Englishman. Less than one year after the conclusion of the first case, the Court of Appeal overturned the Mayor's Court decision and ordered Mulla Fakhruddin to pay whatever Draper and the attorneys of Hodges's estate had requested from him.Footnote ⁹²

Leaving apart Fakhruddin's personal predicament, what matters here is that the court's judgement established that, legally, the right of monopoly did not exist. What did exist was a private agreement between ship owners. The fact that one of the parties had the political means to destroy the other was apparently irrelevant to the ruling on the case.

The Court of Directors' regulations of 1775

The trial involving Mulla Fakhruddin had just drawn to its conclusion when, in June 1775, the long awaited response by the Court of Directors to the Surat merchants' official grievances finally arrived. Dated 12 April 1775, it included a set of regulations prepared with the declared aim “to prevent the operation of all undue influence on the part of the Governor of Bombay and the Chief of Surat, or any other person” on the trade to the Gulf of Persia and the Red Sea.Footnote ⁹³

The first item of the 1775 regulations stated that “all Merchants whatever whether Mahomettans, Gentoos, Parsees, English or others will be permitted to put up their ships to freight for the Gulf of Persia and the Red Sea”. The second stated that when the Governor of Bombay and the Chief of Surat, “put up their ships for freight”, definite dates were to be fixed for the beginning and end of operations of cargo and for the dispatch of the ships.Footnote ⁹⁴ In case of delays, the responsible party, be it the owners of the ships or the freighting merchants, would be “made liable to proper penalties”. The third item of the regulations established that any agreement concerning the freight ships should be “reduced to writing”, and a “copy of every instrument entered in a book to be kept separately for that purpose, and copy thereof [. . .] sent for our [the Directors’] information”. The fourth item set down rules to be followed by the Chief and Council, “in Council assembled”, in the case that the freight ship belonged to “the Governor and Chief, or any other British subject”. The fifth item established that “these Regulations be forthwith translated into the Country Languages and that copies under the Company's seal be distributed among the Merchants of Bombay and Surat”. The sixth and final item proclaimed that: “Neither the Governor of Bombay nor the Chief of Surat shall send any freight ships whatever to the Gulf of Persia or to the Red Sea, but on terms and conditions herein directed to be observed and complied with, on pain of dismission [sic] from the service”.Footnote ⁹⁵

On the whole, there is no doubt that the Directors did intend to put an end both to the power of monopoly on the sea trade to the Middle East and to any possible lingering political influence on that branch of trade by the Governor of Bombay and the Chief of Surat. As the Directors stated in the letter including the regulations: “We flatter themselves the above regulations will [. . .] render all persons on that equal and fair footing which is so essentially necessary for the encouragement of commerce in general”.Footnote ⁹⁶ The problem was that, as already noted, the Directors had insufficient independent sources of information on what their subordinates in India were doing. In the case of the 1775 regulations, the only effective control on their correct application could be exercised through the implementation of the directive included in the third item. As above mentioned, this required the maintenance of written records on the freighting of the ships bound for the Gulfs, to be collected “in a Book to be kept separately for that purpose”, copy of which was to be sent to London for the Directors’ information.Footnote ⁹⁷ However, these books do not appear to have ever been kept; certainly they are not either in the Maharashtra State Archives or at the India Office.

Of course, by itself, the fact that the books, including the written records concerning the freight ships to the Gulfs, are not available now does not necessarily mean that they have never been written, as a major portion of the Company's documents (including its original charter) were either destroyed or dispersed once the Crown took over. However, when the problem of the monopoly resurfaced again in 1796, and became the subject of extensive discussion in the ruling circles in Bombay, Surat and Calcutta, not even a single indirect reference to the freight ships books and their contents ever emerged in British records. It thus appears that the only directive which, if implemented, could have put an end to the self-serving behaviour of the top Company officials in the Bombay Presidency vis-à-vis the Surat merchants remained a dead letter. More generally, all the monopoly-related orders from the Directors either remained unimplemented or were applied to the limited extent that they suited the Governor of Bombay and the Chief of Surat. After 1775, the Directors, possibly under the impression that they had put an end to the scandal of the monopoly once and for all, never took any further interest in the matter. Perhaps their attention – and that of their servants on the West Coast, who were supposed to prepare the freight ships books – was distracted by the more momentous events that, in those years, saw the Company go to war against the Marathas. Regardless, the monopoly continued, even if, for reasons unrelated to the Directors' efforts, it underwent some changes that made it somewhat less odious than before.

The transformation of the monopoly

The main change which transformed the structure of the monopoly was that, after Price's death, on the 11 March 1774, no ship owner was ever again Chief of Surat. Likewise, Thomas Hodges had been the last Governor of Bombay in the shipping business. Therefore, starting with the 1775 season, the Chief's role became that of a sort of super-broker mediating between the freighters and the ship owners, in exchange for a significant commission.

Another change was that the monopoly privileges were consolidated in the hands of the Chief. By the mid-1770s the Turks had lost Basra to the Persians and the British had withdrawn their Agency. The trade itself was at a standstill for some years. Eventually it resumed and the British sent their representatives back to the city. But the Basra Agency was downgraded to a residency, whose head did not enjoy that monopoly privilege that had been part of the Basra Agent's emolument in previous times. Apart from that, by the mid-1780s, all the emoluments pertaining to the Governor of Bombay were cancelled in exchange for a much more substantial salary than before. Accordingly, “the advantages of the freight ships became, by and with the consent of the Governor, solely those of the then Chief, Mr. Ramsay”.Footnote ⁹⁸ Because no ship owner ever wielded the monopoly right again, the claim that it really consisted in a private agreement between ship owners was discretely discarded. As a consequence, when, between the autumn of 1795 and the beginning of the 1796, three different Chiefs alternated in Surat, the economic advantages arising from the monopoly were shared among them, without any adverse consequence for the merchants.Footnote ⁹⁹

Up to 1775 the method for organising the yearly voyages to the Gulfs had been that the freight ships were chosen either from among those belonging to the Chief and Governor, or from among those owned by some private Indian ship owners who paid a substantial sum for that privilege. At that point, the owners of the freight ships – be they the Chief or the merchants who had bought access to the monopoly – got in touch with the freighters. To facilitate this, one or more assemblies were convened by the Chief, who, as a rule, acted through a broker of his own choosing. It was during these assemblies that an agreement was reached concerning the different freight rates for the various goods which were to be shipped. Of course, either the broker who represented the Chief or the same shipping merchants who had bought access to the monopoly were able to wring out of the freighters assent for the highest rates possible.Footnote ¹⁰⁰

After Price's death, this method of fixing the freight rates was reversed, which effectively put a ceiling to freighting costs. The system was described by William Ewer, a former Director who visited the West Coast of India in the second half of the 1790s. According to him, when the time came to prepare the yearly voyages to the Gulfs,

Hence, during the last quarter of the century, the unfair competition by the top British officials of the East India Company in Bombay and Surat came to an end, and access to the monopoly was farmed out to private shipping merchants. Although during Griffith's chiefship (2 April 1787 – 4 March 1795) that right was sometimes sold to British merchants, as a rule the privilege to go to the Gulfs was sold on a more or less regular basis to the Chellabis, Mulla Fakhruddin and, after the latter's death, his son Mulla Waliuddin.Footnote ¹⁰² Sometimes that prize went to Arab merchants, which means that the Arabs, who had for some time deserted Surat during the period when the monopoly was at its worst, were now back. Moreover, beginning with the second half of the 1780s, the ruling Nawabs joined in that branch of trade.Footnote ¹⁰³

One final note: even if it cannot be verified, one might plausibly assume that the cost of the voyages to the Gulfs had now gone down. And whereas the Chief went on lending respondentia on a large scale, that right was not exclusively his own any more.Footnote ¹⁰⁴ This, in turn, must have brought the respondentia rates down.

Tahar Chellabi's gamble

In sum, the monopoly as it had evolved after 1774 was a much less odious system for the Surat merchants than during its initial phase. It still implied an extra cost, nearing 3% of the freighted goods;Footnote ¹⁰⁵ however, although by stretching the truth a little, that charge could be justified as a fair payment for some useful functions performed by the Chief. According to Daniel Seton, the last Surat Chief (1796-1800), these allegedly useful functions were basically three. The first consisted in protecting the freighters against any possible imposition and fraud by the ship owners. This was because the existing system allowed the Chief to exclude from the Gulfs business those - such as, allegedly, the Arab ship owners – who, according to Seton, made a living, or would have liked to, by “designedly run[ning their ships] on shore and [having] the goods of the freighters plundered”.Footnote ¹⁰⁶ Apart from protecting the gullible Surat freighters from the rapacious Arabs, the Chief ensured that the freighters were protected from “. . . possible losses of passage and cutting of bales in order to cram them in less space”.Footnote ¹⁰⁷ Both justifications appears rather unconvincing, as the Surat freighters were smart operatives, who certainly did not need any outside help in guarding their own interest; on the other hand, as noted above, losses of passage and the cutting the bales had been the by-product of the imposition of the monopoly. More convincing was the third justification offered by Seton, who vindicated the Chief's role in writing annually and sending “considerable presents” to the Governor of Mocha and the Sherif of Mecca, “recommending the ships and the freighters as his own [the Chief's] concern”.Footnote ¹⁰⁸

This agreeable state of affairs was suddenly disturbed in 1796 by a quarrel between Tahar Chellabi – the man who had succeeded as head of the Chellabi clan in Surat after Saleh's death – and Daniel Seton, who had just taken charge as Surat Chief. That season, two of the several ships that had been chosen as official freight ships bound for the Gulfs belonged to Tahar Chellabi. Yet, before Tahar's ships could be laden, rumours made the rounds of the city that a hostile French squadron had been seen off Diu. The freighters, panic-stricken, petitioned Seton to be allowed to spread their wares on as many ships as possible, as a form of insurance against the danger of all their goods or most of them being lost in the capture of a single ship. Seton, acquiescing to what appeared to be a reasonable request, issued an official proclamation straight away, giving leave to the freighters to do as they wanted. That was a decision that “gave general satisfaction to all the merchants”.Footnote ¹⁰⁹

However, this arrangement was certainly not to the satisfaction of Tahar Chellabi; after all, he had entered into a regular contract – and undoubtedly dearly paid for it – in order to be sure to have a full freight for his ships to the Gulfs. In response, Tahar wrote to the Governor of Bombay, Jonathan Duncan, complaining about the right of monopoly and asking to be allowed to take up the freight for his ships without paying the Chief's share.Footnote ¹¹⁰ While Tahar tried to strengthen his petition by getting other merchants to sign it, he was not too successful: besides that of Tahar himself, the other signatures appended to his appeal were those of 16 Arab and 2 Jewish merchants. According to Seton, all these men were agents of Arab ship owners and did not represent the Surat freighters who, on the contrary, were so happy with the existing situation that many of them, when approached, had turned down Tahar Chellabi's request to sign his petition.Footnote ¹¹¹

Nevertheless, whatever Seton might have claimed to the contrary, there is some reason to believe that the merchants would have been pleased should Tahar's rash response have resulted in the unmaking of the monopoly. In 1764, in a similar case, Thomas Hodges had pulled out of his hat the famous certificate sanctioning the right of monopoly. Now, some months after Tahar's petition, a considerable body of 40 merchants, including a Chellabi and Mulla Waliuddin, addressed another document to the Governor. In it they stated that in the previous petition – namely the one sent by Tahar – “there was no complaint against any individual”, and stressed how “exceedingly happy and content” they all were under Seton. Yet, what was left unspoken was more significant than was what said: not a single explicit word was spent in defence of the monopoly.

The sudden demise of the monopoly

We have no way to assess if, after so many failed attempts to put an end to the monopoly, Tahar Chellabi thought he had any real hope of success. It seems more likely that he was venting his anger and seeking to embarrass Seton. Nevertheless – and, perhaps, to the surprise of practically everybody – Tahar's gamble seemed to pay off.

What followed stems from both the personality of the incumbent Governor of Bombay, Jonathan Duncan, and the reforms that, during the previous years, had changed the internal organization of the Company government in India. Duncan, unlike his predecessors, was a man who had made his career outside the Bombay Presidency, namely in Bengal and Banaras. In 1792 he had been appointed Commissioner in the newly conquered British domains in Malabar. Then, in 1796, to the astonishment and resentment of the Bombay Company officials, he had been designated Governor, thanks to Cornwallis's patronage. His involvement in the matter of the monopoly, following Tahar Chellabi's petition, was one of his first acts as Governor. Duncan was unencumbered by either any personal interest in the monopoly business or any close personal connection with the Company's servants in Bombay and Surat. Moreover, he had a reputation for honesty, which he was no doubt anxious to preserve.Footnote ¹¹² Whereas he was basically a weak and gullible person who ended up consorting with and being exploited by unsavoury characters, there is no doubt that – with some justification – he thought of the Bombay Presidency as akin to the Augean stables and – with much less justification – thought of himself as playing the role of Heracles, who had succeeded in the supposedly impossible task of cleaning them. Accordingly, Duncan decided to act on Tahar's petition: he wrote to Surat in order to have the Chief and Council's version of Tahar's complaint and an account of the whole monopoly business, and started a further correspondence on the case with the Supreme Government in Calcutta.

By then the internal organisation of the Company in India had been overhauled, and the Bombay and Madras Presidencies brought firmly under the control of the Calcutta Government. Accordingly, this time, the matter of the monopoly, instead of being referred to the far away Court of Directors, was brought to the attention of the Governor General and his Council. In presenting the case, Duncan made it clear that his own position was against the maintenance of the monopoly, even in the diminished form that it had now assumed. In this, his views coincided with those of the Supreme Government in Calcutta, which came down heavily not only against the maintenance of the monopoly but against the continuation of any trading privileges for the person of the Surat Chief. In unambiguous terms, the Governor General stated that the Chief of Surat “should be restricted from all commercial concerns, except on account of the Company, as well as from lending respondentia on any ship belonging to, or carrying freight to or from Surat, or any goods exported or imported”.Footnote ¹¹³

By November 1796 the decision taken by the Governor General was duly communicated to the Surat Chief and, on the 23^rd of that month it was publicly announced to the inhabitants of Surat.Footnote ¹¹⁴ Yet the merchants' unexpected victory was less than a complete one. In his correspondence with Bombay, the incumbent Chief, Daniel Seton, had pithily vindicated his official role in the Gulfs business. He had pointed out that the consideration paid to the Chief by the merchants could not be equated to an “amercement” (namely an arbitrary fine) – as it had been labelled by Tahar Chellabi – but, rather, to a fair compensation for the Chief's role of mediation and protection of the rights of all categories of merchants involved in that branch of trade. Seton had also drawn the attention of his superiors to the fact that the Chief's role in the Gulfs business gave him some additional leverage that could be used to the Company's advantage. These arguments did not cut much ice with either Bombay or Calcutta, but another one did: the salary given to him by the Company, amounting to 10,000 Rupees per year, was so pitiful as to be scarcely enough to cover expenditures for the Chief's household. This is hardly surprising when one remembers that the Surat Chief, in order not be outshone by the Nawab and his nobles, lived in considerable splendour. This being the situation, the bulk of the Chief's earnings came from his role as manager of the trade to the Gulfs, which, in 1796, gave him an yearly income of 60,800 Rupees, a sum that, once added to what he got from the respondentia business, went up to 79,420.Footnote ¹¹⁵

The Supreme Government, when confronted with this problem, acknowledged the legitimacy of Seton's preoccupation. Eventually, the remedy suggested by Calcutta was that the additional money needed to pay the Chief could be found “by a slight duty on the Gulph trade. . . or by any other arrangement which may appear to you preferable, and that can be adjusted to the satisfaction of the merchants and without burthening the trade”.Footnote ¹¹⁶ Consequently, and rather ironically, on the same day on which it was publicly and solemnly announced that the infamous monopoly had finally been dismantled, the merchants were “requested to decide for an alternative duty”.Footnote ¹¹⁷

The resurrection and transmutation of the monopoly

Not surprisingly, the first reaction of the Surat merchants to this request was one of disbelief and unwillingness to pay any further tax.Footnote ¹¹⁸ Pressured by the British, they eventually split into two parties. Whereas one did not want to pay anything, the other eventually volunteered to accept a 2% extra custom on the goods imported and exported from and to the Gulfs and a 1% custom on the bullion carried from there. The Surat Chief and Council were both unenthusiastic about the proposed solution. They were afraid that the resulting income would not be sufficient to fully close the gap created in the Chief's earnings by the abolition of the monopoly. Yet, as the offer made by the more accommodating party of merchants was the only one that seemed to offer a solution, the Surat Council and, in due course, the Bombay Government, opted for it.Footnote ¹¹⁹

The transactions related to the search for the Chief's new source of income took quite some time, dragging along for two years. This, in itself, is as clear an indication as any that the Surat merchants were unenthusiastic about putting out the money needed for the Chief. Meanwhile, the merchants had to cope with an additional problem. Britain and France were once again at war – and, as noted above, the chain of events leading to the abolition of the monopoly had been started by the threat of a French squadron. Once again, the ships of the Surat merchants were in the eye of the storm and, soon enough, they started to fall prey to the European foes of the British. It is true that, in 1796, taking the cue from the fact that two British warships were on their way to the Red Sea, Seton arranged that they escorted Tahar's ships bound there. But nothing like a regular convoy service was ever arranged and, in the following seasons, the losses of the merchants began to pile up.Footnote ¹²⁰ On one hand, this made the merchants at large still more unwilling to pay any further tax; on the other, it offered the British an inducement to convince the merchants to accept the new toll. After some forty years of overlordship on Surat, and after the innumerable losses that it had caused to the Surat shipping because of the activities of French privateers, the Bombay Government offered that a convoy could be organised on a regular basis – subject to the request of the merchants – in order to protect the Surat ships plying along the Middle East route. It was by making use of this promise that the Nawab – following British instructions – officially announced the imposition of the new custom on the sea trade to the Middle East.Footnote ¹²¹

The new custom was introduced on the 1st November 1798 and, the next year, true to their word, the British introduced the convoy system.Footnote ¹²² But, by then the losses of the Suratis at the hands of the French privateers had reached a record high.Footnote ¹²³