The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy

by John Zubrzycki

  Jacob’s boast about being a superior practitioner of the occult would come back to haunt him. In 1913, Theosophy Magazine published a stinging attack on the Simla jeweller. Had it not been for Jacob’s ‘extraordinary assertions as to his own importance’ he would have been a complete nobody. ‘We must be permitted to express our doubts,’ the anonymous writer continued. ‘An indifference to worldly possessions—even to diamonds of fabulous size—may be described as the kindergarten stage of an occult education, and therefore it is to be feared that Mr Jacob, so far from being a teacher of occultism, is wholly ignorant even of its alphabet. It may be added incidentally that a somewhat full acquaintance with all that is known of Madame Blavatsky’s career fails to disclose any trace of Mr Jacob’s benign intervention in that career. Mr Jacob has leave to amend his plea.’25

  CHAPTER NINE

  THE LION’S JAWS

  AS Simla’s golden autumn made way for its bitter winter, Jacob joined the annual exodus to the plains. Only the hill station’s toughest residents stayed on after November. There were few traders bringing their wares and even fewer customers. ‘November, December and January are the only months when I make my living,’ he once remarked. ‘There is nothing in Simla. I have to earn three months and eat nine months.’1

  Jacob used the winter months to stock up on jewels and antiques, traversing the subcontinent by train, stopping in the royal courts and the great metropolises like Calcutta and Bombay. He also spent time in his shop in Delhi opposite Maidens Hotel, the lodging of choice for well-heeled European travellers.

  Ever since he had embarked on his career as a gem merchant/jeweller and ‘indefatigable bric-à-brac hunter’, India’s largest and richest state had been off limits to him. Why he was kept out of Hyderabad when he could move freely among the other Princely states remains a mystery. The notoriously unreliable Pall Mall Gazette cited the feud over the succession from the fifth to the sixth Nizam as the reason for his exile. ‘Mindful of his Hyderabad experiences (Jacob) religiously kept away from the Deccan,’ the paper reported. But the lure of profiting from the Nizam’s extravagance was to prove too strong. ‘His anxiety to share in the immense sums he was squandering on jewellery’ finally led him ‘to put his head between the lion’s jaws’.2

  In 1886, Jacob received permission from Colonel Marshall, Private Secretary to the Nizam, to expand his business to Hyderabad. The state’s ruler, Mahboob Ali Khan, received 10 million rupees in income from his crown lands alone and if he felt the urge to splurge, the Constitution allowed him to draw on the state treasury. Much of this income went on maintaining his household guards, officials, servants and vast harem, but there was still plenty left over for him to indulge in his passion for gems and jewellery. ‘Personally, he is very wealthy and the jewels and precious stones preserved at his palace excite the admiration of European Princes and everyone who had the good fortune to see them,’ wrote a contemporary chronicler, K. Krishna Swamy Mudiraj.3

  Indian historian Usha Bala Krishnan attributes the Nizam’s reckless expenditure and caprice to lack of adult guidance. Mahboob Ali Khan was not even three when his father died in 1869. A regent was appointed to administer Hyderabad until he turned eighteen and could assume his full powers.4

  In the secret India Office cables that ran between Hyderabad and the Foreign Office after Mahboob was enthroned in 1883, the British Resident, Richard Meade, reported he was still coming to grips with his duties as a ruler. Orders of the state were often written on scraps of stationery left over from his childhood, bearing pictures of Little Red Riding Hood. Decision-making was impulsive and orders often not followed through.5 He was also extravagant to the point of recklessness.

  The Nizam’s spending sprees also worried Meade’s successor, Sir Dennis Fitzpatrick. In appearance, Fitzpatrick resembled a Scottish Terrier, with a great protruding moustache that was out of proportion with the rest of his thin lanky frame. Described by Lord Dufferin as a ‘hot-tempered, peppery fellow’, 6 the Dublin-born Fitzpatrick passed his examination for the Indian Civil Service in 1858 and was posted to Delhi the following year as Assistant Magistrate. A series of rapid promotions followed, culminating in the position of Secretary of the Punjab in 1876. An official history of the Punjab noted that he had a reputation for efficiency above creativity. ‘His salutary influence was lessened, however, by his habit of recording his orders, as well as his reasons for them, at utmost length.’7

  Even though Mahboob already owned more pearls, precious stones and diamonds than the rest of India’s Princes put together, the twenty-six-year-old’s insatiable appetite for what Fitzpatrick called ‘pieces of sparkling vanity’,8 was bleeding the state’s already depleted and mismanaged treasury dry. The Pall Mall Gazette found his taste for ‘guillotines, meretricious works of art … (and) senseless gewgaws’9utterly appalling.

  The young Nizam shared the placid eyes and protruding ears of his predecessors. He also sported a pair of wispy sideburns that extended to the lapels of his jacket. He was renowned for his physical prowess and mystic powers as well as for dressing up in disguise and wandering the streets at night to find out what people thought of him. As the ruler of a kingdom the size of France with a population of ten million that had changed little since the days of the Mughals, he shouldered a great deal of responsibility. He had inherited dozens of palaces, forts, mosques, bazaars, vast tracts of land and numerous buildings. He had also taken possession of the largest hoard of jewels ever amassed in India. The safes and storerooms of his palaces were brimming with diamonds from the mines of Golconda, Colombian emeralds, Burmese sapphires and ropes of Basra pearls. One vault contained the largest coin ever minted, a dinner-plate-sized solid gold mohur weighing 12 kg that had once belonged to the Mughal Emperor Jehangir. Other vaults were strewn with diamond-encrusted turban ornaments, necklaces, armbands and bracelets. The coffers were swollen by the custom of nazar, whereby gifts of gold or jewellery were offered to the ruler for the honour of a royal audience.

  ‘He entertains on a marvellous scale, and his wealth is lavished in every direction,’ the correspondent of the San Francisco Chronicle wrote in 1891. ‘He is the mightiest of all Indian Princes, and nobles of absolute power in their own provinces compose his Court. The banquets which he loves to give are of singular magnificence. The service is of solid gold. The surroundings are of Oriental splendour. The guests are robed in the finest of silks and adorned with jewels, any one of which is worth a fortune. The Nizam’s own robe eclipses them all. Made of snow-white silk, it glistens with hundreds of jewels. Ropes of pearls are about his neck and arms. Precious stones and strings of emeralds adorn his dress. The buttons are immense pearls set in diamonds. His presence seems to take one back to the times of the Arabian Nights. He lives for pleasure alone. The immense revenues, six millions in sterling, which every year their subjects give, are pocket money. His existence is one of enjoyment.’10

  Within a few months of being granted access to Hyderabad, Jacob had elbowed out a number of Indian traders and was indulging the bulk of the Nizam’s bejewelled fantasies. By 1888, he was making two or three trips a year selling him millions of rupees’ worth of gems and jewellery. Jacob was even being sent money to buy pieces ‘to please the Nizam’s taste’.11 If he needed more, it would be deposited in the Alliance Bank, Simla, for him to draw on.

  Unlike many Princes, Mahboob Ali Khan was a reliable client, settling his bills in four or five days and meeting with Jacob’s travel costs to and from Simla. ‘When he fancied a jewel I had, not only would he pay full price for it, but even his own Government’s customs duty,’ Jacob later bragged.12

  The royal treatment continued when he arrived in Hyderabad. A luxurious bungalow was put at his disposal in Eden Gardens, with an entourage of servants, a cook to cater to Jacob’s strict vegetarian diet and a cool room stacked with boxes of Apollinaris water. To Jacob, the Nizam was nothing short of ‘a second God, the fountain of his life, one to who he was more obliged than to his creator.’13r />
  Overseeing this royal treatment was the Nizam’s chamberlain Albert Abid. The Persian-born Armenian Jew occupied the most coveted and lucrative position in the palace. ‘Every time Mahboob Ali Pasha unfastened a button or changed a garment, Abid was there. He had to be there. His Highness could not do without him,’14 wrote Hyderabad historian Dosoo Framjee Karaka. He was also a one-stop shop for greasing the many palms that gave Jacob unrivalled access to the Nizam.

  A portrait of Abid taken in the 1890s by the court photographer Raja Deen Dayal shows a man of medium stature, wearing a slightly oversized double-breasted jacket. His short stubby fingers rest on a book that lies on a side table. He has a self-satisfied smirk and sharp oriental features accentuated by his sallow cheeks and prominent eyebrows.

  Abid had worked for various British army officers, managing their servants and keeping an eye on their financial affairs. His work had taken him to Zanzibar, Kabul and Kandahar, Bombay and Calcutta. During a trip to England as an interpreter to the Shah of Iran, he met Annie Evans who was working as a governess for Meade’s wife. The couple married in 1882 and went to Hyderabad. Abid worked for Vicar-ul-Umra, the Nizam’s brother-in-law, before entering Mahboob’s service in 1886.

  Jacob had grown up in the Armenian quarter of Diyarbakir and attended the community school. He was also fluent in Persian, Abid’s mother tongue. Jacob developed a close bond with the couple. He was made godfather to their second child after correctly prophesying it would be a boy. He lavished gifts on the family, including a pet monkey and a horse-drawn carriage, prompting Annie to write a letter to him thanking him for his generosity: ‘May God bless you for your liberality and send you tenfold in return.’15 Jacob also helped boost the family finances. In the first four months of 1891, he paid 89,000 rupees in commissions to Albert Abid for jewellery he sold the Nizam.

  Abid’s duties included looking after the Nizam’s clothes, shoes, watches, jewellery and a myriad other accessories. Except for formal occasions, Mahboob preferred European dress and was frequently photographed wearing specially tailored suits with glossy gold buttons, riding boots and imported French silk socks which he discarded after only one use. Ten or twelve servants were needed when the Nizam got dressed and Abid’s job was to supervise them. Because he never wore the same suit twice, his collection of clothes grew so large that he ordered a wardrobe 176 feet long to be built in the Purani Haveli palace.

  Besides taking hefty commissions from traders on any transaction, Abid devised numerous ways of fleecing his boss, including laundering the discarded socks, reaffixing their French labels, pretending they were new and selling them back to his master. With his substantial income, the couple invested in a shop run by Annie on a piece of prime Hyderbadi real estate that catered mainly to the city’s European population and Muslim nobility, as well as a dress-making business. The Nizam was her best customer spending upwards of 100,000 rupees a year.16

  In January 1891, Jacob checked into Watson’s Hotel in Bombay. Waiting for him was Abid who had just returned from Persia. Abid had written to Jacob in September asking him to accompany him on the journey. His response was revealing.

  ‘With regard to your journey, I would give anything to go, but how am I to do it, because I still owe money to the banks and if I leave India they may fancy I am running away and may stop me. This will disgrace me. Besides, what is the good for me to go to Persia empty-handed. I would not go for pleasure, I would only go for business—to buy things there and bring them to India to sell: this requires at least 30,000 or 40,000 rupees to do it, and where am I to get it?’17

  It would not be the last time Jacob pretended to be hard up. He never ceased complaining about the risks of doing business with India’s fickle Princes or having to protect himself against the designs of unscrupulous merchants. In reality, there was almost nothing he could not afford. If he had to raise funds at the Alliance Bank he always had more than enough collateral and promptly repaid any loans he took out. Like all good traders, he also kept his deal-making private—until it suited him.

  The same was the case with not going to Persia. While Abid was visiting his family in Isfahan, Jacob was preparing the ground for what would be the biggest deal of his career—the sale of the Imperial Diamond to Mahboob Ali Khan.18

  A few days earlier, Jacob had written to Abid mentioning the existence of a diamond ‘like no other’.19 Not only was it ‘the finest stone in the world’, it was also the largest. ‘I want you to assist me by making mention of it to His Huzur and get it sold to him,’ he wrote, using the Nizam’s formal title. The asking price was a staggering 12 million rupees. Abid responded that he thought the price was too high but Jacob insisted that if the Nizam saw it ‘he would take a fancy to it’.20 ‘It would be to your benefit as well,’ he added, hinting at the large commission Abid could make on the transaction. ‘If you come with me I will show you the model. It is in the office of David Sassoon.’21

  Jacob’s asking price was clearly a ploy to get the Nizam interested in owning the stone while leaving plenty of room for the inevitable bargaining that would follow. Weighing 184 carats, the Imperial may have been the largest brilliant cut diamond in the world, but its arrival coincided with a glut of stones from the Kimberley mines in South Africa. Between 1871 and 1885, a massive 17.5 million carats of diamonds valued at £26 million was exported from South Africa mainly to Europe. At the same time, a trade depression—the worst of the century—was sweeping the industrialized world. Diamond prices were plummeting.

  Jacob knew the market had bottomed out. In 1888, Cecil Rhodes, the fifth son of a Scottish parson who, as a young boy, had been sent to South Africa to cure his asthma, had just amalgamated the De Beers mines under his control. A ruthless businessman and ardent racist who once famously said, ‘I prefer land to niggers’, Rhodes immediately set about regulating the supply of diamonds leading to a spike in their price. The news that the US was going to impose a high tariff on cut and uncut stones led to a further price increase.

  Unknown to Abid, for the past six months, Jacob’s agents in London had been negotiating a price for the Imperial that was closer to 2.1 million rupees or £150,000. Even in a depressed market that was still a staggering amount. The highest price ever paid for a diamond in India until then was a reputed £80,000 for the 128-carat Star of the South bought by the Gaekwar of Baroda, Mulhar Rao.

  Normally, Jacob paid Abid a 10 per cent commission on every transaction. This time, he offered him a flat rate of 500,000 rupees, more money than the chamberlain had ever seen in his life.22 He then gave him a written history of the diamond, explaining that, compared with the value of other celebrated diamonds it was worth £800,000. He asked Abid to leave it where the Nizam could not fail to notice it.

  Jacob was under no illusion as to the risks he was taking by trying to sell the Imperial to the Nizam. If the deal fell through, he would be left with a stone so valuable he would be unable to dispose of it without incurring a huge loss for himself. He had one big advantage. Since there was no other diamond to compare it to, no price tag would seem too exorbitant. But he knew that he could never sell the diamond on its reputation alone, so he arranged for its agents, Pittar, Leverson & Co., to send a facsimile of the stone via the Peninsular and Oriental Steam Navigation Company to the office of David Sassoon.

  Sassoon was a Baghdadi Jew turned industrialist whose family owned the shipping line, as well as interests in a number of cotton mills in Bombay. His father, whose name was also David Sassoon, had come to India from Baghdad in 1841. Sassoon rapidly built a powerful industrial empire by ruthlessly undercutting his rivals and cornering the opium trade with China. He ploughed the profits of those sales into buying goods for the British markets, then used that capital to bring cotton to India from the mills of Lancashire. The younger David and his brother Elias owned the Alexandra Spinning & Weaving Mills.

  Jacob felt a sense of euphoria as he and Abid took a carriage to the Fort area of Bombay where Sassoon’s offices were l
ocated. Just fifteen years earlier, he had wandered along the same streets confused and penniless—a young boy in a strange land with no idea of what fate would bring. He had slept on the steps of a mosque, narrowly avoided jail and been forced to depend on the charity of strangers. But he was fortunate. Guided by his business acumen, his charm, his contacts and superior knowledge of precious stones, India’s Princely courts had opened their doors to him, the great merchant houses of Bombay, Calcutta and Madras had accepted him as their equal, and the most powerful in the land were doing business with him or seeking his advice. Now, he travelled in first-class carriages and stayed in the best hotels. He counted among his clients the rulers of Hyderabad, Jaipur, Baroda and Patiala. His fame had spread to Europe and beyond.

  When they reached Sassoon’s offices, Jacob told Abid to wait downstairs. ‘I am going up and will bring the model down here. If you go up, the people there will come to think you are the Nizam’s man.’23

  A short time later, he returned empty-handed. ‘The model is not here. It has been taken away by some person. Never mind, I shall send a letter to France and get another model,’ he said.24 Jacob never explained what happened to the diamond but it’s possible he got cold feet about the deal. To his highly superstitious mind, greed and taking money for granted were considered evil. He hinted as much shortly afterwards in a letter to Abid. ‘As he is a great King, he does not know what misery poor merchants suffer in such a time, he wrote referring to the Nizam. ‘My heart has been on fire for the last two months and nobody knows it.’25