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Diamonds and pieces of eight: how Stuart England won the rough-diamond trade

Edgar Samuel

<plain_text><page sequence="1">Diamonds and pieces of eight: how Stuart England won the rough-diamond trade* EDGAR SAMUEL India was the only known source of diamonds during the Middle Ages, and merchants of Venice and Genoa controlled their importation into Europe. But when the Portuguese discovered the sea route to India in 1497 they were able to cut the Italians out of this as well as the spice trade. Most of the jewellers in Lisbon being New Christians,1 as forcibly baptized Jews were then called, they came to be the principal buyers of unpolished or rough diamonds there. Since the king of Portugal's factory or agency at Antwerp was the staple for pepper and other Portuguese colonial products In the six? teenth century, it also became a staple for rough diamonds. The economic characteristics of the diamond industry are unique. Polishing large gemstones is capital intensive and polishing small stones is labour intensive. This meant that it was profitable to polish large stones close to the market, in cities like Nuremberg, Florence, Madrid, Paris and London, but small stones in specialist centres, where low wages and the division of labour minimize the costs. Antwerp became such a centre in the sixteenth century, but this changed after 1648 when its port was closed and the Antwerp diamond-polishers' guild limited recruitment. In Amsterdam, which took over the role, the majority of gemstone merchants were Portuguese Jews. As the main buyers of rough diamonds, they financed the industry by putting their stones out to the diamond polishers, very few of whom were Jews,2 and organized the sale of polished stones to jewellers in all the capital cities of Europe. Trade in gemstones requires the facilities of a major city, low interest and insurance rates, reliable law-courts and a secure and efficient postal service. Because diamond gemstones cannot be sold by sample and take time to sell, * First presented as a Richard Barnett Memorial Lecture to the Society on 14 March 2002. 1 This is clear from the petition of the Old Christians for representation in the government of the goldsmiths' guild. Virgilio Correa (ed.) Livro de Regimentos dos Offici?es Mec?nicos da mui nobre e sempre leal cidade de Lixboa (1572) (Coimbra 1926). 2 E. R. Samuel, 'Manuel Levy Duarte (1631-1714): An Amsterdam Merchant Jeweller and his Trade with London' Trans JHSE XXVll (1984) 17. 23</page><page sequence="2">Edgar Samuel the wholesaler has to be ready to give long-term credit. In order to survive, he needs to know, without delay, of any change in the personal circum? stances of a customer which might make him no longer worthy of trust. This calls for a network of reliable gossip, which is why successful gemstone mer? chants usually come from minority communities. These form social villages within the city and are well provided with gossip. The Italians formed such urban villages in fifteenth-century Bruges, Nuremberg, Paris and London. In the seventeenth century the Portuguese Jews of Amsterdam, Hamburg, London and Venice had this characteristic. The big merchants used to assemble buying commissions from merchant jewellers, who were prepared to invest in the trade. Spanish coin would be despatched to India earmarked for the individual investors. By acting together, the competing merchants and jewellers could raise larger sums and invest them for longer than any individual merchant could afford. This induced good men to go out to India as buyers and made their businesses viable. Syndicated purchasing also reduced competition and meant that purchases could be timed for whenever prices were lowest. Buyers and merchants in India who sent diamonds to Europe were sel? dom content to restrict themselves to commission trading. As soon as they had enough capital, they engaged in the trade on their own account, but were dependent on their principals and correspondents in Europe to sell their stones to advantage. Success in the trade always depended on mutual trust and cooperation. The secure method of shipping diamonds lasted from the sixteenth to the eighteenth century. Diamonds would be placed in a small leather draw? string bag, which the English called a h?lse, packed in a box, wrapped in white Indian cotton cloth, marked with the merchant's mark and the num? ber of the consignment and sealed clearly with red seals. This would then be entrusted to the captain or purser of the East Indiaman, together with a bill of lading, to be kept in a locked desk or chest in his cabin for the dura? tion of the voyage. Transferring the bulk of the rough-diamond trade to England took place in two stages, first of all from Lisbon to London and then later from Goa to the English outposts or Factories in India. All European merchants in India bought rough diamonds from time to time, but up to the 1660s large-scale and professional diamond trading was dominated by the Portuguese and Goa was the main market for exports. The viceroys, Jesuits, ships' officers and demobilized soldiers all invested in diamonds and shipped them to Lisbon. However, the only group of merchants able to buy diamonds in large quantities at the mines and to sell them to advantage in Europe were the New Christian merchants of Goa and Lisbon, who combined technical expertise with marketing facilities. The main causes of the first of the shifts 24</page><page sequence="3">Diamonds and pieces of eight ? AGRA Figure i Map of diamond-mining areas and trading ports in India. in the trade from Lisbon to London were the weakening of Portuguese sea power and religious persecution which forced experienced Lisbon mer? chants to emigrate. In 1660 Portugal was at war with both Spain and the Dutch Republic. The Portuguese had succeeded in driving the Dutch out of Brazil, but the Dutch captured Ceylon with its cinnamon production and the Malabar Coast with its pepper output. This so damaged Portugal's Indian revenues that shipping from Goa to Lisbon ceased. The merchants of Goa persuaded Thomas Andrews, President of the English East India Company's Council at Surat, to send a consignment of diamonds in 1660 to a Jewish merchant in London, Manuel Martines Dormido.3 However, the diamond trade was within the Company's monopoly and such transactions were not encour? aged. 3 E. B. Sainsbury (ed.) A Calendar of Court Minutes ofthe East India Company (Oxford 1907 38), minutes for 27 June 1662, pp. 223 and 225. 25</page><page sequence="4">Edgar Samuel In order to protect Portugal's possessions and trade from Dutch sea power in both Brazil and India, the regent of Portugal, Queen Luisa, sought an alliance with England by arranging the marriage of her daughter Catherine to Charles II. This protection had to be bought by giving England free trade with Lisbon and Goa and possession of Tangiers and Bombay. In May 1662 Catherine of Braganza arrived in London accompanied by an experienced Lisbon merchant, Duarte da Silva, as the procurator responsible for paying her dowry.4 Two other Lisbon merchants, Fern?o Mendes da Costa and Gomes Rodrigues, also came to London with their families, to avoid arrest by the Inquisition and to trade. Duarte da Silva was born in Lisbon into a humble New Christian family from Alter do Ch?o.5 He made a fortune in the Brazil sugar trade and by 1648, when the Inquisition arrested him, he was a banker and tax farmer and a trader to both Brazil and India. He imported diamonds from Goa and had parcels in the hands of his correspondents in Hamburg, Rouen, Antwerp and Amsterdam.6 In the words of an English merchant in Lisbon, he was 'The trader held to be the greatest merchant and of the greatest credit that there was in this market'.7 Whatever his personal beliefs, the record of his trials makes it clear that he had raised his children as Catholics. The Inquisitors came very close to sentencing him to death, but his life and most of his property were saved by the intervention of the king.8 After he had been released and penanced in 1652, the king made Duarte da Silva a knight of the royal household {cavalheiro fidalgo da casa real) and two of his sons knights of the Order of Christ, Portugal's first order of chivalry. This was despite their being disqualified by reason of Jewish ancestry and con? demnation by the Inquisitors.9 By accepting the office of king of Portugal's procurator, Duarte da Silva was able to take his family and his property out of Portugal. Once in London he started negotiations to procure a General Pardon for the New Christians of Portugal and to have the Inquisition sus? pended.10 He lived as a Catholic in London and later in Antwerp, as did his son Francisco, but his grandson later joined the Amsterdam synagogue.11 Fern?o Mendes da Costa was born in Trancoso in northern Portugal and 4 Julio Firmino Justice, Collecg?o de tratados e concertos depazes II (Lisbon 1882) 288. 5 Antonio Bai?o, Episidios dramaticos da Inquisig?o Portuguesa II (3rd ed. Lisbon 1972 ) 319. 6 Ibid. 315-6. 7 Ibid. 334, 'Comerciante tido pelo mais grosso mercador e de mais credito que havia nesta praca.' 8 Ibid. 9 Ibid. 315-6. 10 Ibid, citing Corpo Diplomdtico Portugues XIV 26. 11 Cecil Roth, 'An Excursus on the History of the Capadose Family' in Isaac da Costa (ed.) Noble Families Among the Sephardie Jews (Oxford 1936)198. 26</page><page sequence="5">Diamonds and pieces of eight arrived in London with substantial capital. In April 1663 he wrote from London to his brother in Rome in support of the plan to procure a General Pardon. At the same time he reported that he had bought 1000 quintals of pepper worth some ?3,750 at auction in London and shipped it to Leghorn.12 The Lisbon Inquisition had arrested his wife and in 1664 she was burnt at the stake for Judaism.13 Fern?o and his son Alvaro da Costa hoped to return to Portugal, so they conformed to the Roman Catholic faith and did not convert to Judaism. However, their descendants all became Jews. Fern?o died in 1670 and forty-three years after his death his remains were reinterred in the Jewish cemetery.14 Another merchant in Lisbon was Gomes Rodrigues. His family came from Villa Vicosa, the seat of the Dukes of Braganza.15 English customs records show him exporting a cargo of white sugar to Bordeaux in 1662. He exported silk, cloth, stockings and hats to Lisbon.16 Unlike the other two, he joined the London synagogue, becoming its largest subscriber, under the name of Abraham Israel Sequeira.17 When he died in 1678 he left his estate to his three sons, Alphonso Rodrigues, Simon Henriques and Bartholomew Rodrigues, adjuring them to remember their 'necessitated kindred in Portugal'.18 In 1664 'the Jews' - which probably meant Duarte da Silva and his associ? ates -persuaded the East India Company to carry their bullion shipments to Goa and their returns in diamonds.19 The Company decided to throw the trade open. Freemen of the Company were to pay freights of 2 per cent of cost value and 'aliens' were to pay 2 per cent out and 4 per cent home. Buying orders had to be consigned to Sir George Oxenden, the President of the Company at Surat, who took 2 per cent commission and passed their orders on to their correspondents in Goa. Free trade was opened between Goa and Surat in 1665 and a cargo of rough diamonds costing ?2687 was sent to Surat from Goa for shipment to London in the East India Company's ships. In March 1668 a shipment of silver, coral and emeralds worth ?11,266 was sent to the diamond merchants' correspondents in Goa.20 Diamonds 12 Maurice Woolf, 'Foreign Trade of London Jews in the Seventeenth Century' Trans JHSE XXIV(1974) 50. 13 Jewish Theological Seminary Library MS Colecf?o das Noticias - Lisboa 296 'Branca Roiz, mulher de Ferna Mendes da Costa, h?rnern de negocio, natural de Guarda'. 14 As Ishac Mendes da Costa, Mise. jfHSEVI (1962) 21. 15 Trial of Sim?o Henriques, Processo 978g, Lisbon Inquisition, Portuguese National Archives. 16 Woolf (see n. 12) citing Public Record Office E190/49/2. 17 L. D. Barnett, El Libro de los Acuerdos (London 1931). 18 Public Record Office Prob 11. 19 British Library Add MSS 40,700/102. 20 The bills of lading are in the Oxenden papers in the British Library, BL MSS 40,700. 27</page><page sequence="6">Edgar Samuel costing ?17,082 were sent to London in 1669 in the Company's ships, of which 40 per cent was consigned to Jewish merchants. The next year they received 39 per cent of the total. In 1667 Nathaniel Cholmley was given permission to go out to India to buy diamonds at the Golconda mines for the directors of the East India Company. He had been apprenticed to Alderman John Austin, London's leading retail jeweller. This privilege was exceptional, since both the English and the Dutch companies prevented private merchants outside their employ from settling in their Indian trading posts. Cholmley acquired a house near the mines and bought diamonds for Sir John Banks, the Governor of the Company, and for his successor Sir Nathaniel Herne. He was also employed to buy for the Company's joint stock, but no other jew? ellers were granted such a licence. The Portuguese Crown foolishly attempted to monopolize the trade in 1674 by prohibiting all private shipments. This drove trade into the hands of the Dutch and English. A French passenger on board an English ship reported that when, in the same year, she put into Goa for fresh water and vegetables she delivered a large quantity of silver to two New Christian merchants, Antonio and Diego Martins, and took their cargo of gemstones on board.21 During the 1670s the East India Company transported large shipments to London for private buyers. The largest traders were the Company's agents at Surat and Madras, and Gomes Rodrigues and Alvaro da Costa of London. The regularity of English shipping, the licensing of the diamond trade and the presence in London of experienced diamond importers enabled London to replace Lisbon in the 1670s as the main European mar? ket for unpolished (or rough) diamonds. The receipts of 'Permission Money' recorded in the East India Company's Cash Journal make it possible to calculate the declared prime cost of the registered imports received by each consignee. Diamond imports in i6yy 6 consignees importing diamonds costing over ?2000 ?38,771 46.25% 12 consignees importing diamonds costing ?1000-^1999 ?16,991 20.27% 19 consignees importing diamonds costing ?500-999 ?13,110 15.64% 30 consignees importing diamonds costing ?200-499 ?8,813 10.5% 21 consignees importing diamonds costing ?0-199 ?6,144 7-3% Totals: 88 ?83,829 100% 21 'The travels of the Abbe Carre in India and the Near East' The Hackluyt Society XCVII 207. 28</page><page sequence="7">Diamonds and pieces of eight Importers of over ?2000 worth in i6yj Gomes and Alphonso Rodrigues ?9765 AIvaro da Costa ?955! Nathaniel and Joseph Herne22 ?6852 Andrew Duncane23 ?5177 Charles Chambrelain24 ?4X73 Thomas Gray25 ?3254 ?38,771 Importers of over ?2000 worth in 16/g Alphonso Rodrigues &amp; Co ?9612 John Bull ?7618 Sir Nathaniel Herne &amp; John Cholmley ?7618 Alvaro da Costa ?6842 Rodrigues de Seiles26 ?5119 John Cholmley &amp; Arnold Brown ?3006 (including ambergris and pearls) Michael Godfrey (including bezoar) ?2654 Christopher Boone ?2543 Francisco de Liz ?2442 William da Veiga ?2010 ?49,042 (=41% of the total) 27 The transfer of the diamond trade to the English factories In 1675 Dr John Fryer made some interesting observations about the dia? mond trade: 'I could wish for the Company's sake [it] might never be struck 22 The Hernes were major East India merchants. 23 Andrew Duncane is unknown to us. He is likely to have been the London agent of a sen? ior official in India. 24 Charles Chambrelain was a former Company agent at Fort St George, Madras. 25 Thomas Gray was probably the correspondent of Matthew Gray, the Company's agent at Surat. 26 Rodrigues de Seiles was probably a partnership between Alphonso Rodrigues &amp; Co in London and Matheus &amp; Johannes Celles of Amsterdam, where they owned a diamond sawing workshop. 27 East India Company General Cash Ledger, British Library, India Office Library L/A/G/i/i. 2Q</page><page sequence="8">Edgar Samuel out of their Indulgence allowed to their Servants: for it will never amount to Advantage in their hands, because the Jews who are the chief Chapmen in England will blow upon them, unless they come to their Prizes, when more than enough is offered them. But in particular hands the Case is otherwise, everyone snatching at a Prize, which none is sensible of but the private Buyer; but when they are publickly invoiced, it will be at their own wills to make their bargains. Withal in the Company's Servants hands, it not only keeps them Honest, but they grow rich without wronging the Company; whereas should they retract this, not only the Jews would find others to fur? nish them, as the French and the Dutch . . . but other moneyed Gentlemen in England might be tempted to set up for Interloping . . . ,'28 Then in 1680 the Company decided to monopolize the diamond trade and to prohibit all private trade. The results were exactly as John Fryer had predicted. The Company was obliged by its Charter to sell its imports by public auction. The Ledger of the East India Company29 shows quite clear? ly that at the diamond auction the professional buyers formed a ring, bought cheaply and then sold their purchases on to each other. Evidence for the existence of this dealers' ring at the September 1684 auction emerges clearly from the Company accounts, and extract of which follows.30 William Perkins' Account31 Dr 1684 Sept 30 to Diamonds for 1058 stones sold last sale ?4,282 Cr 1684 Sept 27 By cash of Nic? Maubert to clear 437 Diamonds 926 " Sam Saporta to cle: 18 ditto 195 " Joseph &amp; Ben da Costa to cle: 1 ditto 845 1 ditto 91 " Alvaro da Costa to cle: 3 diamonds 638 " Richard Hoare " 1 " 107 " John Johnson " 349 " 1,380 " David Nunes " 1 diamond_101 (807) (4,282) 28 John Fryer, 'A new account of East India and Persia, being Nine Years' Travels (1672 1681)' Hackluyt Society XIX, XX, XXXIX (1909-1915). 29 British Library, India Office Library L/A/G/1 /1. 30 East India Company Ledger, British Library, India Office Library L/A/G/1/1. 31 Ibid. 405. 30</page><page sequence="9">Diamonds and pieces of eight Robert Woolley's Account32 Dr 1684 Sept 30 to Diamonds for 1032 stones sold last sale Cr Sept 27 By cash of Nicholas Maubert to clear 29 " 30 Moses Mocatto cle: Alvaro da Costa to clear Richard Hoare to clear John Johnson to clear Peter and Pierre Henriques to clear 457 Diamonds 1 diamond 168 diamonds 16 ditto 119 ditto (1032) ?5,683 406 150 1,092 118 i,588 271 diamonds 1,636 (?5,683) Alvaro da Costa's Account Dr 1684 Sept 30 to Diamonds for 41 stones sold last sale Cr 1684 Sept 25 By cash of Joseph Cope to cle: By cash to cle:8 diamonds By cash to Richard Hoare to cle: 16 diamonds 58 17 ditto (40 ?610 410 _151 (?610) The Company's diamonds sold at a loss. Since its revenue in permission money dropped by ?2000 a year over four years, its attempt to monopolize the diamond trade lost it more than ?8000. At this point the three sons of Gomes Rodrigues (whose Hebrew name was Abraham Israel de Sequeira) - Alphonso Rodrigues, Simon Henriques and Bartholomew Rodrigues - decided to open a diamond-buying agency in India, outside the East India Company's control. In August 1682 the Constantinople, under the command of Captain John Smith, set sail for the Coromandel Coast with Bartholomew Rodrigues on board, together with his brother-in-law, Domingo do Porto, and Domingo's business partner, Alvaro da Fonseca. When the Constantinople arrived at Masulepatam, they went with the captain to ask permission to settle there, but the Company's Agent forestalled them.33 The three men then established themselves at Covelong, south of Madras.34 The business opportunities must have seemed golden. Both do Porto and da Fonseca left 32 Ibid. 295. 33 Records of Fort St George - Masulepatam Consultation Book of 1682-92 (Madras 1916) 58. 34 Ibid. 60. 3i</page><page sequence="10">Edgar Samuel Gomes Rodrigues alias Abraham Israel de Sequeira d. 1678 Alphonso Rodrigues alias Isaac Israel de Sequeira d. 1716 m. Rebecca Simon Henriques alias Joseph Henriques de Sequeira d. 1718 m. Siporah Bartholomew Rodrigues d. Madras 1692 Sarah m Domingo alias Abraham do Porto Joseph Sarah Esther Joseph Sarah Isaac Rachel Esther Jacob Figure 2 The Israel Sequeira family. their wives and children35 and a successful business in London. Do Porto never returned and da Fonseca only did so after nineteen years in India. Sir Josiah Child, in command of the East India Company, reacted very quickly. In 1682, on hearing 'That an open violacon is like to be made on that commerce by interloping ships now gone to India and otherwise',36 the directors decided to license the private trade in diamonds and other fine goods such as pearls, civet and musk, as they had done before. In the follow? ing year they instructed the Council at Fort St George to allow the Jewish diamond buyers to settle at Fort St George37 as free merchants and decided to let other private diamond buyers to go out to India too. Two more Jewish commission agents arrived at Fort St George: Salvador Rodrigues alias Isaac Salvador, brother to Francis Salvador of London, who had gone out to India by the land route,38 and Jacques de Paiva alias Moseh Sagache, who was sent to India to buy for Antonio Rodrigues Marques's syndicate.39 They were soon joined by the Huguenot Daniel Chardin and others. The heavy buying by these merchants and by the East India Company's servants diverted the supply of diamonds from Goa to Madras. In 1685 the Dutch East India Company responded by allowing the Portuguese Jewish merchants of Amsterdam to send their agents out to the Dutch factory at Surat with facilities for exporting silver to them and for bringing back diamonds on their Company's ships.40 By 1687 three men had settled in Surat under the Dutch protection; Domingo do Porto's brother, Antonio do Porto and his son Isaac41 and Pedro Pereira alias 35 L. D. Barnett, Bevis Marks Records (1940) 1:18. 36 British Library, India Office Records B37, 29. 37 Records of Fort St George - Despatches from England 1681-86 (Madras 1916) 89 para. 17. 38 Ibid. 41. 39 Samuel (see n. 2). 40 W. Coolhaas, Generale missiven van Gouverneurs Generalen en Raden aan Heeren XVII de Verenige Oostindische Compagnie (The Hague 1970-6) V458. 41 Amsterdam City Archives PA334/679/254. 32</page><page sequence="11">Diamonds and pieces of eight Moseh Pereira de Paiva.42 A fourth man, Fern?o Mendes Henriques, soon joined them. The English Company reacted to this threat of Dutch competition by halving the 4 per-cent freight charged to foreign merchants shipping dia? monds from India, so that all merchants paid the same rate. This hit at the privilege enjoyed by the Company's senior servants, so the following despatch was sent to Madras, in the unmistakable words of Sir Josiah Child: 'We have thought it our interest here, after many experiments, to make the Duty we commonly receive here upon bullion exported or dia? monds imported the same and no other to the Governor and Committees than it is to a Turk, Jew or Gentue, and if our Servants that have stocks of their own under the countenance and honour of our service, with salaries and accommodation in our houses cannot trade in India, with the liberty we give them, to as much advantage as other men that have not those priv? ileges and live upon their employments and trade, they must either be expensive prodigals or such pitiful merchants as we desire not to retain in our service.'43 This reduction in the charges to alien merchants was followed by a dou? bling and then trebling of the Company's income from its taxes on private trade. When it came to buying diamonds in India, the Portuguese Jewish merchants in London and Amsterdam were a single group of traders and played one company off against the other to gain concessions. One effect of opening up the diamond trade and settling several experi? enced jewellers at Fort St George was that the governors of Madras had access to their expertise and could therefore buy more keenly than before. Elihu Yale and Thomas Pitt became large-scale dealers both as commission agents and on their own account, culminating in Pitt's record-breaking pur? chase of a 426-carat stone on which he also made a record-breaking profit. Sir Josiah Child's Policy Sir Josiah Child's policy was to establish sovereign and defensible English bases at Bombay, Madras and later at Calcutta, to encourage Company ser? vants and other merchants to build up their Country Trade and to levy a good customs revenue from it. He sought to limit the Company's monopoly to easily managed and profitable trades between India and England, such as cotton cloth, saltpetre and pepper. He believed that establishing the Mayor's Court and the Admiralty Court at Madras, which made debts 42 Pedro Pereira left Amsterdam on 26 November 1685 and arrived in Cochin, on the way to Surat, on 21 November 1686; Moseh Pereyra de Paiva, Notisias dos Judeos de Cochin (Amsterdam 1687) 4-5. 43 Records of Fort St George (see n. 37) 82 para. 26. 33</page><page sequence="12">Edgar Samuel enforceable, and granting religious toleration would attract private mer? chants to Madras. In 1687 a Corporation was chartered for Madras. Under an English mayor, 120 burgesses and 12 aldermen were chosen by the president and council. Three leading diamond buyers, Daniel Chardin, Bartholomew Rodrigues and Domingo do Porto were among those sworn in as aldermen of Madras, together with two Portuguese Roman Catholics and three Hindu merchants.44 Cotton aldermanic robes were provided and Alphonso Rodrigues in London was prevailed on to supply a silver Corporation mace, reimbursement being made to his brother. (In the same year the Company gave Rodrigues permission to send out forty-seven chests of merchandise to open up a trade with Manila in the Philippines.)45 The Jews were also allowed to open a synagogue.46 Sir Josiah explained: 'Our design in the whole is to set up a Dutch government among the English in India (than which a better cannot be invented) for the good of posterity and to put us on an equal foot of power with them, to defend or offend, and unite the strength of our nation under one entire or absolute command.'47 In December of the same year he wrote: 'That which we promise ourselves in a most especiall manner from our now President and Council is that they will establish such a politie of civil and military power and create and secure such a large revenue to maintain both at that place, as may be the founda? tion of a large well-grounded and sure English dominion in India for all time to come.'48 Jews were not allowed to participate in municipal government anywhere in Europe and the Company was attacked in England for its liberal policy,49 but it was highly profitable. By these moves the Company secured the resi? dence of the diamond buyers at Fort St George, instead of at the French factory at Pondicherry or the Dutch one at Masulepatam, and with that, extra revenue for the Company. This also explains why it was England and not Portugal, The Netherlands or France which became the dominant power on the subcontinent by the start of the eighteenth century, for none 44 Walter J. Fischel, 'The Jewish merchant colony in Madras (Fort St George) during the 17th and 18th centuries: a contribution to the economic and social history of the Jews in India' Journal of the Economic and Social History of the Orient (i960) 177. 45 Public Records Office, India Office Records Court Minutes 34. 46 Miguel alias Daniel Levy de Barrios, Historia Real de la Gran Bretana (Amsterdam 1688) 155-6. 47 Records of Fort St George - Despatches from England 1686-1692 (Madras 1929) 92 para. 100. 48 Ibid. p. 100. 49 A reply on behalf of the present East India Company to a Paper of Complaints commonly called The Thirteen Articles delivered by their Adversaries to the Members of the Honourable House of Commons (n.d., possibly 1691). 34</page><page sequence="13">Diamonds and pieces of eight of these made such a positive attempt to attract private traders of all nations and religions, or showed as much honour to Hindu merchants as did the English Company. The three Jewish diamond buyers at Surat soon quarrelled with each other and fell out with the senior officials of the Dutch East India Company, whose goodwill it was in their interest to preserve. On 31 January 1692 the Fiscaal wrote to The Netherlands: 'The well-known Jewish merchants have been making themselves troublesome to the Director and Council because they considered that they should take care of the goods which they received from England in the Company's own ware? house, and when the Company protested that they were not allowed to engage in any trade, other than that of diamonds and jewels in return for cash, and that from the Fatherland to Ceylon and from there via the Governor to Surat, they had the impertinence to say that it was their great? est misfortune to have to work in the Fatherland and that they would not have any more goods sent to them, since this was the case, but the Jews in England would correspond with them and provide them with merchandise every year. One can certainly speculate about their objectives, but one thing is certain, the Company has nurtured these people like vipers in the bosom of the Company's trade in the Indies.'50 Pedro Pereira of Surat was the younger son of Jacob Pereira, a merchant jeweller at the Hague who became an army contractor for the United Provinces in the wars against Louis XIV as a partner in the firm of Machado and Pereira. Pedro's brother Isaac held the contracts for vict? ualling the English army in Ireland during the Boyne campaign.51 Since the Pereiras were rich and in the jewellery trade, it is not surprising to find them importing large shipments of diamonds from Surat in the late 1690s by way of the English East India Company's ships. In 1700 the cost of these totalled more than ?8000.52 During the wars with France, the East Indiamen were rerouted to Cork and Wexford in Ireland to avoid capture by the French privateers. It is likely that the Pereiras were able to receive unregistered diamond shipments there. In 1688 the Moghul's army conquered the Kingdom of Golconda and disrupted the functioning of the diamond mines. Diamond prices in India rose so high that the professional merchants stopped buying. Bartholomew Rodrigues and his partners in Madras adjusted to the situation by charter? ing the East Indiaman The Princess of Denmark for a voyage to China, send? ing one million silver pieces of eight to be exchanged for gold.53 This 50 Coolhaas (see n. 40) V, 458. 51 W. A. Shaw, Calendar of Treasury Books (1689-1700) (London 1904) passim. 52 Public Records Offlcem India Office Records Cash Journals 1694-1703 L/A/G/5/8. 53 Coolhaas (see n. 40) V, 361. 35</page><page sequence="14">Edgar Samuel enabled their business to survive and flourish until diamond production at Golconda revived. The peculiarities of the seventeenth-century rough-diamond trade were its dependency on a single source of supply; the expertise required to appraise the potential value of the stones; the long-term lock up of funds engaged in the trade and the small and localized industry, which processed all but the largest stones. These constraints kept the professional trade in few hands and made it profitable. Although the diamond trade was a Jewish speciality, it was never a Jewish monopoly, for many others engaged in the trade. The Jewish merchants' strength was at the selling end and lay in their close connection with the merchant jewellers of Amsterdam. However, because of the abundant supplies reaching London, it was that centre, and not Amsterdam, which became the staple for rough diamonds. This occurred gradually. From 1660 to 1665 tne diamond trade was officially part of the East India Company's monopoly, even though the Company did not have the tech? nique to ply it successfully. All private imports of diamonds were smug? gled. The buyers in London were partly London goldsmiths buying to supply the local retail market and partly a few foreigners buying for the pol? ishing industries of Amsterdam, Antwerp, Paris and Venice. These were mostly Portuguese Jews, and there was little competition among them. In this period most of the profits of English diamond re-exports probably went to Amsterdam. The Portuguese Marriage Treaty, combined with the persecution of suc? cessful New Christian merchants by the Lisbon Inquisition, caused a small group of experienced Lisbon diamond importers to settle in London. They persuaded the East India Company to carry their trade with Goa, which caused the Company to license the private trade in diamonds. This greatly expanded the trade, which was shared between professional merchants and the Company's servants and seamen, and increased supplies in London far beyond the needs of the English market and depressed the price of rough diamonds in London well below those prevailing in Amsterdam, Antwerp and Paris. However, to establish a market, buyers are needed as well as sell? ers. Here the toleration of Judaism in England was important, for without it fewer continental diamond buyers' agents would have settled in London and there would have been less competition among them. The next stage in the transfer of the diamond staple from Lisbon to London was the settlement of free merchants in India with the East India Company's consent. The first of these was Nathaniel Cholmley. His estab? lishment at Masulepatam, with strong mercantile backing from the Hearne family and others, started to switch trade away from Goa to the English fac? tories. The establishment of Bartholomew Rodrigues &amp; Co and other buy 36</page><page sequence="15">Diamonds and pieces of eight ers at Madras after 1683 had an even greater effect, though much of the trade plied by the buyers at the Dutch outpost at Surat must have gone to The Netherlands. The rough diamond trade was a small one, but its profits had a dispro? portionate strategic effect on Indian trade. Diamond commissions paid a large part of the real salaries of the East India Company's Presidents at Surat and Madras, at no cost to the Company. Thus they enabled the Company to improve its career structure and to attract and retain the serv? ices of able men. The diamond trade attracted experienced free merchants to the Company's Indian factories. Once settled there, they plied the coun? try trade alongside the Company's servants and helped build up the sea cus? toms and other local revenues, which enabled it to consolidate its territorial power, on which all trade depended. It is known from the quantity of silver marked at Goldsmiths' Hall that during the prosperous 1680s the demand for silver plate increased by a half. The English retail jewellery market is likely to have grown by as much. Moreover, the invention of the brilliant cut at this time made diamond gemstones much more attractive and popular. Small polished diamonds were almost certainly still being imported from The Netherlands, because the lower labour costs prevailing there more than offset their dearer raw material. One effect of the arrival in London of substantial and regular supplies of rough diamonds from India was to make its polishing industry more viable and competitive. This, together with raw-material prices perhaps 10 per cent lower than in Amsterdam, enabled the London polishing industry to expand, and by the late 1690s large dia? monds polished in London were being exported. Isaac Alvares Nunes's charming epitaph of 1683, 'His far gained knowledge in mysterious gems sparkled in European diadems', summarized the economic position of the seventeenth-century London Jewish diamond merchant. London remained the staple for rough diamonds for another 300 years, during which it greatly increased in size and in its effects on the English bal? ance of payments. The diamond trade was very small in the seventeenth century, much larger in the eighteenth century and even larger in the nine? teenth and twentieth centuries. The fact that it is a difficult trade to move, because of its dependence on established connections and expert personnel, increases the significance of the seventeenth-century shift to London. The initial cause of the transfer of the rough-diamond trade to London was a deliberately liberal immigration policy both in England and in India, designed to attract merchants of all nations and their trade. Charles II and his successors adhered to the commercial policies first pursued by the Commonwealth and Protectorate regimes. Sir Josiah Child and his succes? sors brought similar policies into effect at the Indian end of the trade from 37</page><page sequence="16">Edgar Samuel 1686 onwards. The second cause of the transfer was the strength of the English East India Company and the regularity of its shipping, government and judicial system. Each success reinforced the other. Figure 3 Diamond cuts fashionable during the seventeenth century. Thick Table Stone (side view) Table Stone (top view) Thin Table Stone (side view) Faceted Table Stone (top view) Rose (side view) Rose (top view) Peruzzi Brilliant (side view) 38</page><page sequence="17">Diamonds and pieces of eight Peruzzi Brilliant (top view) Peruzzi Brilliant (bottom view) England's capture of the diamond trade from Portugal was parallelled by the acquisition of many other trades in the same period. In this case it was the direct result of the pursuit of a rational commercial policy by both the government and the Company and its consistent pursuit over many years, after some initial blundering and hesitation. This policy recognized the value of entrepreneurial skill and private capital and sought to attract them to England and to the English colonies. The first step was religious tolera? tion. In the case of the diamond trade it was the toleration of Judaism, which attracted diamond buyers to London and Madras. Such toleration was very recent and copied from the Dutch. The second step was the removal of serious discrimination against the trade of immigrant alien mer? chants, by the ready granting of naturalization and denization, especially after 1681, and by the equalization of the Company's 'permission' charges in 1687. In each of these phases the enterprise of Portuguese Jewish mer? chants such as Duarte da Silva and Gomes Rodrigues and his sons played a key role in England's capture of the rough-diamond trade. In 1689 the land-owning gentlemen in Parliament, needing to raise rev? enue to pay for the war with France, decided to impose an annual tax of ?100,000 on the Jews of London. Antonio Gomes Serra wrote to his Antwerp correspondent, Diego Duarte, on 24 December 1689: 'Our ques? tion in Parliament is truly forbidding, seems to me evident that, because of the ill will, it will not be possible to continue here as a merchant'.54 The Jews printed a cogently worded pamphlet, 'The Case of the Jews 54 Nossa questi?o em Parlamte esta mats hem sombrada porem nao sera possivel continuar aqui pello mal vistos com a mercancia, constame evidentemte. Amsterdam City Archives P334/677/639. 39</page><page sequence="18">Edgar Samuel Stated', pointing out that their community included no more than twenty merchants of any substance and that they could not possibly carry such a tax burden. Their argument won the day. One of the paragraphs in the pamphlet stated: 'That the Market for Diamonds in the East Indies was for? merly at Goa, (belonging to the Portugueze) and by the means and industry of the Jews the Market hath been brought to the English Factories, and by that means England has in a manner the sole management of that precious Commodity, and all Foreigners bring their monies into this Kingdom to purchase the said Diamonds.'55 This was largely true, even though at that time the Golconda mines had closed down. The enterprise of Alphonso Rodrigues and his brothers in set? ting up their well-financed buying agency in Covelong in 1682, in competi? tion with the East India Company, led directly to the opening up and expansion of the English rough diamond trade. 55 por 'Xhe Case of the Jews Stated', see Trans JHSEIX (1922) 41-6. 40</page></plain_text>

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