Tea: Fancy a Cuppa?

Land girls enjoy a hot cup of tea after a hard day of rat-catching on a Sussex farm during 1942. Source: Ministry of Information via Wikimedia Commons

A few weeks ago, a southern African friend of mine was dropping me back home after a thirsty morning of shopping. It was a hot afternoon, and we were gasping for some refreshments. I invited my friend in for a ‘cuppa’ (British English for a cup of tea). "Iced tea?", she queried hopefully. To her disappointment, my considerable collection of tea solely consisted of the hot beverage kind. She exclaimed: "You're so British! Whoever heard of drinking hot tea on a day like this!"

The Bazaar: Not a Quaint Market

Bazaar of Athens during the Ottoman Empire. Source Edward Dodwell, Views in Greece, 1821, via Wikimedia Commons.

The Eastern notion of the Bazaar was not just a marketplace, but also a nexus for craftsmen and merchants, where interest rates on credit, and currency trading values were set, much like a stock exchange.These rates and values could differ quite radically from one bazaar to another, which is why arbitrage often took place. However, distances between bazaars, and the hardship and danger involved with getting from one bazaar to another, could make arbitrage very complex.

 Bazaars were, in other words, wholesale hubs for commerce and they provided key arteries for the flow of capital across trading routes around the globe. This is important because it would indicate that West or East Asian capital had vast linkages that were not defined by European colonial capital alone. These bazaars were also not 'informal' although colonial authorities were often keen to describe them as such. In India for example, the most important mercantile communities would report their monthly bazaar rates to monetary authorities of British India. These bazaar rates would have a significant influence on official bank rates. If you are interested in a more detailed academic account of this see Rajat Kanta Ray's influential article: 'Asian Capital in the Age of European Domination: The Rise of the Bazaar, 1800-1914.'

Hundi for Payment of a Ransom

A hundi used by the English explorer William Moorcroft (1767-1825), to pay for a ransom. Source: World Digital Library  via Wikimedia Commons

Hundis were used for a variety of purposes, including payment of ransoms. It is not clear what ransom was being paid here. This hundi, to the value of Rs 11,000, was written in both Persian and English and signed by the English explorer and William Moorcroft on December 20, 1824, possibly in Central Asia or within the borders of what is now known as Afghanistan and Pakistan.

The Pepper Trade

14th Century Painting, Harvesting of Pepper in Coilum (Quilon/Kollam) in Southern India. Source: Wikimedia Commons

"Worth its weight in gold" was not just a figurative expression when it came to pepper in history. It might be your standard table fixture today, but back in medieval times, black pepper was the height of luxury. Native to the Malabar coast of south west India, in the state known as Kerala today, black pepper was the most important spice in the world during this period. A pound of pepper could literally rival the value of a pound of gold. Arab mariners travelled to the Malabar coast to procure the lucrative pepper and other spices (such as cardamom, cloves, cinnamon, and many more) for many centuries, long before the arrival of Europeans. The Mappilah (Mappila, Moplah) muslims who live in Kerala today are the intermarried descendants of these Levantine traders.

What on Earth is Hundi? The foibles of 'informality' and 'indigeneity'.

It is perhaps ironic that an ancient South Asian banking system which had earned a reputation for trust should today be widely regarded as an opprobious marker of the black market economy. Also known as hawala, havala, or havale, hundi's disrepute is relected in the in the many villainous descriptions awash in the in the international press: 'illegal financial transactions market', 'black money' and 'drug money', 'system of tax evasion', illegal transfers of foreign exchange', 'illegal money laundering network' and Hindi word meaning 'providing a code'. In a similar vein, the descriptions of hawala and hundi as informal  or alternative  have developed because they are perceived as both unofficial and lacking in legal accountability. The confusion does not cease there; there is not universal agreement over whether hundi and hawala are in fact the same, and just as press descriptions have been wildly different, this uncertainty has much to do with diverging opinions of what hundi and hawala respectively are.

The Political Economy of Merchants

 

Merchants operating in foreign countries could face a variety of challenges. The receptiveness of the host government was one such issue. If the host country's government was hostile to foreign mercantile activity, laws could be created to prevent entry to the country. In some cases, the immigration laws were worded in such a loose fashion that the government could arbitrarily choose to eject any undesirable immigrants. 

Formality, Informality and the Grey Zone

This week I am redirecting you to a post entitled: 'Between Informality and Formality: Hundi/Hawala in India', which I wrote for the 'India at LSE' blog. The article discusses how a South Asian indigenous financial institution known as hundi  or hawala - a living institution - often occupies uneasy ground between the 'black' economy, the grey middle zone, and an older more formal past, due to the changing nature of laws and financial culture.

Did you Know that Hundi was Used by the East India Companies to Expand their Influence?

A Hundi in the Vernacular. Copyright: British Museum Trustees

The best known indigenous South Asian credit institution is 'hundi'. For hundreds of years, this system was used by merchants to remit money from one place to another, and to make payments like a bill of exchange. While I am loathe to put a square peg around hundi, some kind of approximation of hundi is necessary. My rough approximation of hundi is two-fold: a South Asian bill of exchange, and remittance system. So, hundi was both an instrument and a system. The mercantile networks which supported the use of hundis were often so well-established and pervasive that hundis were used in other parts of Asia, and even in distance locations like Africa where South Asian commerce had taken root. Over the course of the 16th, 17th, 18th and 19th centuries, even the Portuguese, Dutch, French and British East India companies used hundis to expand their own commercial and military presence in South Asia. Forming alliances with affluent South Asian merchants, and being able to tap into their networks was a significant factor in the British East India Company's ultimate hegemony over the other European companies.