Monday, May 10, 2021

Jagat Seth - Worlds Richest Family from 18th Century India | Popularly unpopular

Popularly Unpopular is a new series by me that would cover some very popular faces from the past who are little known today.  

In the first post of the series, we are writing about "Jagat Seth's" who were often recognized as the richest family of their time. His name literally meant "Banker of the World" and was the title given to him and his family by the then Bengal king.

Jagat Seth world's richest man from Murshidabad bengal india
Jagat Seth - The Marwadi who lend money to the kings

This is the story of a Jain Jeweller "Hiranand Sahu" from Nagaur, Rajashthan belonging to a marwadi family who left his hometown Nagaur in 1650 to make a better living. He initially moved to Patna, a prosperous province and an important trading hub where he started off with moneylending and trading business. He made an initial fortune there in money lending and trading "Saltpetre (potassium nitrate)" which was in huge demand in European countries as it was an ingredient used in the gun powder.

Hiranand Sahu soon became a popular banker and earned fame and rose to riches. To further expand his business he sent his sons to various cities. His Son Manik Chand was sent to Dhaka which was the then capital of (undivided) Bengal with the purpose to expand the existing family banking business and tapping into the lucrative Dhaka market which was popular for trades of silk, cotton and opium. 

From there the family business grew and accumulated gold and silver beyond imaginations. It was a popular quote at that time that the family had so much gold and silver that they can use it to stop the flow of the Bhagirathi river using it.

Jagat Seth's family was considered as the richest family in the world and was quoted the same by an East India Company historian "Robert Orme".

Manik Chand (son of Hiranand Sahu) became close to the diwan of Bengal, "Murshid Kuli Khan".  Later when Aurangzeb passed away, the power of the Mughals started to fall; and the Jagat Seth family became one of the closest allies of the nawab. The family advised Nawab on matters related to finance, revenue, taxes and treasury. 

Jagat Seth's soon controlled the flow of money in the majority of Indian cities including Delhi and Dhaka. They controlled the then money markets. Not only this they also used to print money for the nawabs.

They set the first example of modern-day core banking

In the 17th century, sending revenue and taxes from one state to the capital Delhi was a risky business. The Nawabs of Bengals used to send the taxes on horses and elephants from Bengal to Delhi and during this long journey often a major portion of the money was lost or stolen.

Jagat Seth's changed the whole system to fix this. At their peak, Jagat Seth's had acquired so much wealth that they were able to create a system of money transfer from one city to the other.

The branches in Murshidabad used to receive the whole amount of taxes which was deposited in their personal treasuries and then a letter was sent to the Delhi branch confirming the receipt of treasuries with a stamp on it. When the letter was received in Delhi then as per instructions the equal amount was released from Jagat Seth's treasury in the Delhi branch. Thus, creating a modern banking kind of system in the then 17th century.

The deals with the British, French and the Dutch.

When the British, French and the Dutch were establishing businesses in India and wanted to control the Bengal and the Indian sub-continent Jagat Seth's found an even bigger opportunity by lending money to these colonial powers to support their wars. In return, Jagat Seth's earned more interests, higher control and power over the money markets. At that point in time in 1750 the British historian "Robert Omre" noted that "Madhab Rai" the then head of the "Jagat Seth's family" was the richest man on earth.

The fall of Jagat Seth's empire

As British East India company started gaining significant control over the Bengal, the control of Jagat Seth's family over the money market started diminishing. Also, the later heads of the family started living extravagant lifestyles. Their expenses kept on increasing even when the business was falling. By the early 1900s, the Jagat Seth family became insignificant.

We hope you liked the first edition of "Popularly Unpopular". 

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Best Regards,
Navneet Singh Chauhan

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