The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy

by John Zubrzycki

  At the end of February, Abid sent a telegram to Jacob in Calcutta asking him to come to Hyderabad at once. Whenever Jacob met the Nizam he presented him with a nazar, usually a gold coin. On this visit he was careful to be particularly generous. He also showed Mahboob Ali Khan a collection of gems, jewellery and old coins, and hardly quibbled about the price he was prepared to pay. The total came to just under 200,000 rupees. He presented his bill to the Nizam who settled it immediately.

  Jacob then took the train to Bombay. This time, the model was there. He stayed just long enough to buy some more jewellery, before returning to Hyderabad. After depositing his luggage at Eden Gardens, he went to the Chowmahalla Palace. The ancestral home of the Asaf Jahi dynasty—Chowmahalla or the Palace of the Four Pavilions—was a massive complex spread out over forty acres in the heart of the old city. It was the principal residence of the Nizams from 1750 until the late nineteenth century. Architecturally, the complex was a syncretic blend of Qutub Shahi, Persian and European styles, set out around large leafy courtyards cooled by marble fountains.

  Abid was waiting at the entrance when Jacob arrived. He was curious to see the model of the diamond, but he was still not convinced the Nizam would buy it. ‘Abid, you wait here a little, I am going to the Huzur. This is a very good opportunity to show him the model,’ Jacob said, adding, ‘I am going alone into his chamber to show it to him. I myself shall make mention of this diamond to the Nizam.’26

  Jacob knocked softly at the door and went inside holding the model on a piece of black silk in his hands. Closing the door, he took a few steps forward. Mahboob Ali Khan was reclining on a cushion dressed in a silk robe richly embroidered with gold thread. Jacob salaamed, gave him the model and began what was a well-rehearsed speech.

  ‘This diamond is worth one crore and twenty lakh (12 million) rupees. At present, there is no one who can pay so much for it. Therefore, the owner of the diamond is willing to sell it at a very cheap price.’

  ‘How cheap?’ asked the Nizam.

  ‘Give me 50 lakhs (5 million rupees),’ Jacob responded.

  ‘No, make it cheaper,’ Mahboob said, his interest suddenly spurred by the drastic reduction in price.

  ‘Because of the cost of bringing it out, I have borne much expense and will have to bear much more. Therefore, give me 46 lakhs.’

  ‘Very well,’ Mahboob answered. ‘But you get it out on this condition, it must be “passand ya na passand”’, he added, using the Urdu term for approved or not approved.

  ‘Very well, I will pay the cost for bringing it out myself and show it to Your Highness. If you approve of it, well and good, if you do not approve, there will be so much loss to me. If Your Highness should buy it I shall become a great man. I will give up my business and come once a year to make you a salaam.’

  Jacob had hoped the Nizam wouldn’t insist on taking the diamond on approval, but he had prepared for this contingency. Folding his arms, he said to the Nizam, ‘The agents won’t trust me with the diamond. If you give me a deposit in my name in the bank of twenty-three lakhs, I will obtain possession of the diamond to show you. But the money must be deposited in my name.’

  ‘Very well, I shall deposit the money.’

  ‘When the diamond comes from England, if Your Highness does not approve of it, the diamond will be sent back to England and you will withdraw your money. If you do not approve of it, there would be a loss to me of 50,000 rupees, but if you approve of it and take it, then it will be very good for me.’

  ‘Remember,’ said the Nizam, signalling with a wave of his hands that the meeting was over. ‘It is upon this condition: passand ya na passand.’27

  When Jacob came out of the private chambers, Abid saw that he was smiling. ‘Come, let us go, the matter is settled,’ he said to the chamberlain, unaware that he had been eavesdropping on the entire conversation.28

  Jacob may have been an astute businessman, but he was naive enough to believe that it was possible to keep a secret in Hyderabad. There were spies in every corridor and courtyard; every piece of information, ranging from the consummation of a marriage to a royal succession, could be had for a price. The British Resident had his informants in the various palaces and the Nizam kept a close eye on potential rivals among his ministers through his network of agents.

  It was a clearly worried Jacob who wrote to Abid from Esplanade Hotel in Bombay on March 20. ‘I arrived here yesterday. I did not write to you because I wanted to see the Sardar and Chooni Lal,’ he explained referring to two of the city’s most prominent jewellers. All of Bombay seemed to know what was going on in the Chowmahalla Palace, he complained. ‘God knows how they get their news.’29

  Jacob had been shown a letter from Chooni Lal’s brother mentioning that he was selling the Nizam a very valuable diamond and its price. The letter also detailed various other transactions he had made in recent months. ‘Unless Amendchund has his paid spies in the Palace, I don’t see how he can know all these things,’ Jacob added.

  Jacob was also feeling pressure from the diamond’s agents, Pittar, Leverson & Co. Set up in 1836, the London firm was one of the oldest and largest importers of and traders in precious stones from India, Burma, Thailand and South Africa. It was no stranger to dealing in large and expensive diamonds, but the Imperial was unique. Its price tag of £150,000 put it beyond the reach of all but a handful of buyers. As a writer for the Chicago Daily Tribune asked, who in their right mind would pay even £100,000 ‘for the pleasure of possessing a useless article, usually invisible to the possessor and the world?’30

  An added disincentive for prospective buyers was its lack of history or romance. For a diamond to show its most fascinating hues, it needed secrets and ‘a dark background’,31 wrote Streeter, in his seminal work on precious stones. Even the Imperial’s quality was being questioned. As the Spectator pointed out, it was a new diamond ‘with no story attached to it and no suggestion that conveys either empire or misfortune’.32 It was rumoured that when it was shown to Queen Victoria she asked for the Kohinoor to be brought out. Though it had a slight advantage in its size, she declared that the Imperial ‘was of inferior brilliance’.33

  On April 2, 1891, Jacob received news from Pittar, Leverson & Co., stating that they had the diamond and wanted to conclude the transaction as quickly as possible. Two days later, he sent a telegram to Abid: ‘Large diamond arrived. Owners want half the money deposited in bank before sending it and if not approved must forfeit two thousand pounds. Please inform Nizam. Wire sharp if you please. They demand prompt answer, otherwise will withdraw their bargain.’34

  Jacob’s main priority was to get the Nizam to pay the deposit in his name before he changed his mind. Any delays could derail the transaction. Now that news about the diamond was spreading, other dealers had to be kept at arm’s length. Abid was just a fixer who could pay others off and act as an informant. He needed someone in Calcutta who could act on his behalf.

  Jacob left Simla for the rail head at Ambala where he boarded the train to Calcutta. As usual, he checked into the Great Eastern Hotel. The hotel manager at the time was Shirley Tremearne, a member of the Calcutta Corporation, successful entrepreneur and philanthropist. He had gone to Burma as a young man in 1870 and then moved to Calcutta where he worked as a clerk for the Chief Justice of Bengal. A Citizen Kane-like figure both in physical appearance and influence, he was known for his quick and clear judgement, his caustic pen, and his fearlessness when it came to expressing his opinion. He was also the publisher of an influential and highly profitable financial weekly, Capital, which he used fearlessly to expose scandals regardless of their repercussions. ‘He gave it form and temperament with such shrewd insight that it jumped at once into the front rank where it stands four-square to all the winds that blow,’ an early history of journalism in India stated.35

  Despite Jacob’s reputation for being a hustler and risk-taker, Tremearne had always been happy to do favours for Jacob, particularly when he could see some pecuniary advant
ages. But when his friend revealed that he wanted his help in selling a diamond worth millions of rupees and that the buyer was India’s most powerful potentate, he knew that this was no ordinary transaction. Jacob explained that the agents would give him only three months from the time the stone left London before it had to be returned in case the deal fell through. For getting the diamond to India, Jacob offered to pay Tremearne 100,000 rupees and to meet with any expenses incurred in the transaction. If the exchange rate went above one shilling and six pence to the rupee, Tremearne would receive an additional 50,000 rupees. But if the diamond were not sold he would receive nothing. The agreement was to be void after August 21, 1891.

  Shortly after the meeting, Tremearne went to see William Cheetham, a partner of the trading firm Kilburn & Co. Tremearne at first refused to say who his client was, only telling his friend that he had been asked to bring out a large diamond from England. It did not take long for Cheetham to make his own inquiries and discover that he was acting on Jacob’s behalf. He called him in to his office on April 28, to ask him who the purchaser was. Jacob refused to divulge the information, but offered 50,000 rupees as a deposit for bringing the diamond out. To Cheetham the deal seemed too risky to take on.

  Realizing that they couldn’t keep Cheetham in the dark any longer, Jacob and Tremearne went to his office two days later. Jacob told him the Nizam of Hyderabad was the purchaser and assured him he had sufficient resources to pay for the diamond. He also told him the Nizam was to appropriate one million rupees a month from the state treasury for that purpose and had already placed 500,000 rupees in Jacob’s name to secure the deal.

  He said that, after getting the Imperial from England, he would show it to the Nizam. If he disapproved, the diamond would be sent back to Kilburn & Co., and the deposit refunded to Jacob after deducting the forfeit money and the insurance. Cheetham drew up an agreement stating that if the purchase was not completed by July 31, the diamond had to be returned in perfect order.

  Pittar, Leverson & Co. had fixed the purchase price at £150,000 or 2.1 million rupees at the exchange rate of 1s 4d. Though the price was more than triple the £45,000 which the eight-person consortium had paid for the raw gem three years earlier, Jacob saw it as a bargain. The Nizam was willing to pay twice what the stone was worth. Even after spending £2000 for insurance and paying Abid and Tremearne’s commissions, Jacob stood to make more than 1.3 million rupees. Cheetham arranged for the diamond to come out on the first mail from England in June.

  As the heat in the plains grew unbearable, Jacob retreated to the coolness of Simla to await the diamond’s arrival and for everything else to fall into place. It didn’t take long for his impatience to get the better of him. On May 24, he wrote to Abid, carefully explaining that the 2.3 million-rupee deposit had to be ready in the Bank of Bengal by June 25. ‘I admit that the sum is very large to get together, but there is a whole month on hand; besides, what is twenty-three lakhs for His Highness, may God bless him.’36

  Abid’s response was reassuring. ‘Never mind if there is money in the treasury or not; if His Highness likes, he can have many lakhs in a minute. In such a state of things, what is 50 lakhs to him?’37

  An even more troubling development was the news that the jewellery firm, Cooke & Kelvey, had a model of the Imperial on display in the window of their Calcutta offices and were telling anyone who cared to know that the price was £150,000. Fearing word would reach Hyderabad, Jacob ordered Tremearne ‘to bring (Cooke & Kelvey) to book through the law for telling a falsehood to do me an injury, for I have already told them that I have bought that diamond and I have paid a portion of the price’. Added Jacob: ‘I would like you to spend four or five gold mohurs on a good lawyer’s opinion and find out how far they could be guilty and serve them notice to withdraw the model; otherwise we will run them in. I will pay all the costs.’38

  He told Tremearne he wanted to put off going to Calcutta because of the lateness of the monsoon and the unbearable heat, and to make sure the food and beverage manager did not send his Apollinaris water by the goods train. ‘Let him always send it by the passenger trains and let him send me every month eight dozen pints and two dozen quarts. I find four or five dozen pints are not enough.’39

  The telegram did little to allay Tremearne’s concerns about dealing with a businessman who was so secretive and refused to relinquish control over any aspect of his deals, besides being so pedantic. When he wrote to Jacob demanding to be put on an equal footing, he received a curt response. ‘It is against my principles to have partners in my business. The fact is I never had one in my life. Partnership will always cause a row—besides, how could you or anyone else expect me to share with them when I have to leave my business, horses and dogs at the mercy of my servants while I am burning in the heat here? Second, you are not the only one who is in this transaction; there are four more besides you and if I had to make them all partners, why, nothing would remain for me.’40

  Finally, on June 24, six months after first mentioning the Imperial Diamond to Abid, Jacob received a telegram from William Cheetham with the news he was waiting for: ‘Stone arrived, when are you coming?’

  He would have taken the first train to Calcutta but for the fact that the Nizam had still not transferred the deposit to the Bank of Bengal. Complicating matters was Abid’s absence from Hyderabad. He had taken his ailing wife Annie to convalesce in Ootacamund, a hill station in southern India, leaving Jacob to deal with the Nizam’s rather unreliable clerk, Ram Chunder Rao.

  It was another two anxious weeks before Jacob received word from the Bank of Bengal in Calcutta that the money had been transferred. He immediately made his travel arrangements and arrived in the city on July 9. He then called on Tremearne and the two men agreed to go to the bank the following day.

  Waiting for them was the bank’s Treasurer-Secretary, William Cruickshank. Cruickshank confirmed that the Bank had loaned the Nizam 2.3 million rupees based on various securities and that the money had been transferred to Jacob. As Jacob had no account at the bank, a blank cheque was filled out in his name. He then took the cheque to the teller and asked for 100,000 rupees in cash with the remainder to be transferred to the credit of Kilburn & Co. He also transferred to their account a cheque for 50,000 rupees representing his deposit on the stone.

  Jacob and Tremearne then went to Kilburn & Co. to complete the deal. Cheetham met them and prepared a letter acknowledging that Jacob had placed at their disposal 2.25 million rupees as security. Satisfied that all was in order, he opened the office safe. Jacob watched as he carefully took the Imperial Diamond out of its red velvet pouch. There was no question of damaging the world’s hardest stone, but he made an elaborate show of treating it with a reverence normally reserved for the most fragile of items. Jacob had never seen a jewel of such size and lustre. In his years as jeweller, he had seen pearls the size of quail’s eggs, the rarest rubies and the most valuable emeralds. But what he saw now exceeded all these treasures. Almost one and a half inches long and an inch thick, it was perfect in colour, clarity and cut. Its 58 facets reflected the light inwards making it appear luminescent, other-worldly and highly, highly desirable.

  After waiting for Jacob to finish examining the stone, Cheetham handed him a receipt to sign. ‘Received from Kilburn & Co., agents for Pittar, Leverson, the Imperial Diamond of 184 carats, to be returned to them in its present perfect condition at my option on or before the 31st July, 1891. Failure to return to be an acknowledgement that I have completed the purchase, and Kilburn & Co. to be at liberty to remit £150,000 placed by me at their disposal at the Bank of Bengal.’

  With thick strokes of his fountain pen, Jacob signed the receipt and put the diamond inside his waistcoat pocket. Now there was no going back.

  CHAPTER TEN

  SPY VS SPY

  COLONEL Philip Durham Henderson cast a weary eye over the file marked ‘Secret’ that had been placed on his desk that morning. He already had his hands full keeping a close watch on a
group of Wahabis posing as Afghan traders who had been staying in Simla’s native bazaar for the past two weeks, and were suspected of scouting for recruits to their cause. It was July 1891 and the hill station was overflowing with people escaping the heat of the plains.

  As head of the Thuggee and Dacoity Department in Simla, Henderson was also the Government of India’s de facto Intelligence Chief with a brief that ranged from prying into the affairs of Princely states to keeping an eye on suspicious Europeans. The meddlesome Madame Blavatsky had been one such annoying distraction and now her nemesis was taking up his time yet again.

  Ever since Lord Lytton had made his ill-advised offer to send him to Kabul as an attaché just before the outbreak of the Second Afghan War, Alexander Jacob had come to regard himself as occupying a privileged position in British Indian society. Since leaving Turkey in the early 1860s, however, he had effectively been stateless. The file that Henderson now had before him was Jacob’s application to become a naturalized British citizen.

  Normally, such an application would have gone straight to the Attorney General’s office in Calcutta for approval. But Jacob’s opaque antecedents and his unconventional activities—that ranged from dabbling in the occult to being on a retainer to some of India’s most powerful Princes—meant that the application had gone first to Henderson for assessment.

  Giving his full name as ‘Alexander Malcolm Bierry Sabunji alias Jacob’, he described himself as Italian by descent. His grandfather—he explained on the application form—had taken the family from Italy to Constantinople in the early part of the century. His father had settled in Diyarbakir and set up a soap factory. ‘Hence, the name Sabunji (Sabunwala) that he bears,’ Henderson scribbled in the margin of the file. ‘His mother is living in Beyrout. The Bierry (?Berri) is the Italian name.’1