Buying Time. Thomas F. McDow
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firm paid an advance to the ruler and then kept all customs revenue for themselves. His son Jairam took over this duty from Shivji, and although they paid increasingly higher prices for the privilege, Jairam and his family firm held this vital (and remunerative) position for fifty years. The family firm also maintained branches in Muscat, Bombay, and Kutch.6
From the 1830s until his retirement in 1853, Jairam remained focused on his firm’s revenue and the customs house in Zanzibar. As a Kutchi merchant, this was not unusual. An observer noted in 1836 that the port of Mandvi, in Kutch, was connected to the entire western Indian Ocean: “From Manda-vee a maritime communication is kept up from Zanguebar and the whole east coast of Africa, with the Red Sea and Arabia, with the Persian Gulf, Mekrom, and Sinde, and with India as far as Ceylon.”7 Jairam’s commitment was legendary. In 1837, a visitor who called on him when he was ill noted that Jairam had ivory stored under his sickbed. This was evidence of his “ruling passion,” which remained “strong in sickness.”8
Jairam did indeed indulge his ruling passion for finance. An American merchant in Zanzibar estimated that Jairam Shivji earned $100,000 profit in 1839.9 One historian guessed that Jairam had thirty million dollars in a Bombay bank.10 While this may be exaggerated, he was the wealthiest man in East Africa, in part because of his extensive commercial network. From his post in Zanzibar, Jairam controlled customs collectors in many of the major ports on the Swahili coast. Thus, he was well informed about prices and news from every part of the sultan’s realm. His financial heft and his intelligence networks made him a formidable ally and daunting foe. Foreign merchants were keenly aware of the importance of staying on Jairam’s good side. One foreign merchant noted Jairam’s ominous power over traders in 1842: “Refuse to comply with his terms and they would be driven from the market with doing little or nothing.”11 The ruler and the foreign merchants in Zanzibar were indebted to him, and they needed his capital to run their ventures.
CREDIT AND STATECRAFT IN EARLY BUSAIDI RULE IN EAST AFRICA
The availability of credit was essential to the commercial expansion of Zanzibar. This credit, largely supplied by Indian Ocean commercial firms originating in India, financed the expansion of American and European firms in East Africa and of the Arab state in Zanzibar.12 The wealthiest Indian merchants at Zanzibar provided staggering amounts of credit.13 In 1849, Jairam Shivji, the customs master and head of his eponymous firm, was “the best and only certain way of obtaining a supply of cash for immediate service.”14 Shivji stood out among merchants of that time. The other merchants and traders required fifteen to twenty days to collect MT$300,15 whereas Jairam could secure MT$5,000 in a matter of hours.16 His firm used its substantial wealth to dominate Zanzibar for the first three quarters of the nineteenth century. Jairam Shivji’s firm advanced huge sums to foreign trading interests to finance their operations in Zanzibar. Jairam had three main groups of debtors: the Arab rulers of Zanzibar, American and European trading firms, and a large group of everyday people, including Indians, Arabs, and Swahilis in Zanzibar and on the mainland.
Jairam Shivji’s firm advanced large sums of money to the al-Busaidi rulers in Zanzibar. The al-Busaidi state in Oman and Zanzibar had a long history of relying on credit from Hindu Banyan commercial houses. In the eighteenth century, firms from Kutch, in western India, lent the Omani ruler Sultan bin Ahmad al-Busaidi warships in exchange for protection and favorable commercial treatment.17 As Zanzibar grew in commercial importance, however, the customs duties collected on imports and exports had high income potential. Because the al-Busaidi rulers had relatively little wealth, they sought cash up front by farming the customs to powerful, cash-rich firms like Jairam Shivji’s. This practice—functionally the same as tax farming—was a very common way to raise cash for Muslim rulers or state treasuries.18 Tax farming entailed selling the right to collect taxes over a specific time period to an individual or private firm. The person or firm who collected the taxes kept them as profit. Jairam Shivji farmed the customs both in Zanzibar (after 1819) and on the mainland (after 1837).19 The sultan had the guaranteed income, and Jairam and his firm enforced the customs collection and kept the profits.
During al-Busaidi rule, the finances of the ruler and the state were intimately connected, and the customs master was central to providing credit to the sultan and his government. When Said bin Sultan needed to raise additional funds to pacify resistance to his rule in Oman, he turned to the customs master. In 1851, Jairam Shivji gave Said a year’s advance against the customs receipts, and Said went to Muscat with MT$500,000. He later wrote to Jairam for an additional MT$50,000.20 Said used these funds to raise forces to quell the rebellion and to buy the loyalty of various leaders. These debts passed on to Seyyid Said’s heirs, and they would be one source of ongoing tension between Zanzibar and Muscat after his death.
American and European merchants also depended on credit in Zanzibar to finance their trading ventures. American whalers’ early efforts at trading in Zanzibar floundered because of the poor circulation of credit. They could not secure cargoes because they had no way to advance capital to themselves. By the 1840s, however, Indian firms like that of Jairam Shivji provided capital to American and European merchants on a regular basis. These loans were unsecured, but they had generous interest rates to provide Jairam Shivji and other lenders with good returns on their investments.21 In 1851, an experienced American agent explained to his superior back in Massachusetts why he had decided to keep MT$25,000 of Jairam Shivji’s money on a permanent loan. First, he considered the capital an “absolute necessity” to have funds on hand, and second, he noted that borrowing it from the powerful customs master would bring certain commercial advantages in Zanzibar, including collecting on debts and finding suitable business partners.22 They believed that the customs master would have a strong interest in the firm’s success. By the 1860s and early 1870s, Jairam Shivji’s firm had advanced loans of MT$665,000 to American, British, and French companies.23 These infusions of credit went along with commercial treaties and informal alliances between commercial houses to help build international trade in Zanzibar. The cloth and beads coming from North America, Europe, and South Asia were necessary to meet the demands of the East African market. The peddlers, traders, and commodity producers in these markets were not foreign merchants or state officials, but a diverse group of Africans, Arabs, and Indians who were part of an expanding Indian Ocean world in the 1840s.
The 1840s was a dynamic period in the economic history of Zanzibar. Seyyid Said bin Sultan signed commercial treaties with the United States (1833), Great Britain (1839), and France (1844) that resulted in each sending consuls to represent their national and trading interests at Seyyid Said’s court in Zanzibar. In this period after the Napoleonic Wars, the British and the French were engaged in strategic maneuvering in the western Indian Ocean, and they also heralded more forceful global approaches to so-called free trade, as best exemplified in the first Opium Wars (1839–1842). The letters and records that these consuls created are invaluable historical sources for Zanzibar and the western Indian Ocean, but they emphasize diplomatic and commercial relations of the powerful, and obscure the actions of the Africans, Arabs, and Indians that made up most of the population of Zanzibar.
A trove of Arabic-language documents in the Zanzibar National Archive provides important sources for the history of East Africa. These materials demonstrate how credit markets in Zanzibar connected much of the western Indian Ocean, from the interior of Oman to the interior of East Africa. These documents—preserved for more than one hundred years—reveal important new details about the Indian Ocean past. They record thousands of sales, loans, and transactions between Africans, Arabs, and Indians. These documents present multiple variations on the complex financial transactions that allowed people to buy time: they underwrote the ivory trade; and they mortgaged property in Arabia, on the east African coast, and in the interior of Africa. These sources are unparalleled in their listing of individual names, genealogies, statuses, and clan names of a wide variety of people (Africans, Indians, and Arabs; men and women; free and slave) who bought, sold, and mortgaged property in the nineteenth century. They also provide insight into the world of the judges, scribes, and clerks who created them. Finally, the individuals who created these documents did so outside of any colonial or European-influenced sphere. As noted earlier and explained in Chapter