Henderson could find no reason for turning down the application. Despite putting him under periodic surveillance, the government had never uncovered any real evidence to question Jacob’s loyalty to the Crown. He had acted as mediator in disputes between the Raj and the Princely states, and had provided the British with intelligence that had helped them win one of the crucial battles of the Afghan campaign. From collecting prizes at summer dog shows for his brood of Tibetan terriers to his annual antique auctions, Jacob was a regular fixture on Simla’s busy social scene. His jewellery and curio business was thriving and his shop on the Mall was a must-see for any visitor to the hill station. Henderson’s superior, Foreign Secretary Henry Mortimer Durand, had purchased jewellery from Jacob for his wife only recently. The last Viceroy, Lord Dufferin, used to visit his residence once a week for Persian lessons.
As he signed the application with a note to the Lieutenant Governor for it to be favourably assessed, Henderson was hoping that by clearing the way for his naturalization, Jacob might somehow become less of a burden for his overstretched department. Little did he know that the matter of ‘Mr A.M. Jacob, jeweller and curio dealer of Simla’ was about to become far larger and more sensitive than any other case that had passed through his desk.
The bolt-upright Henderson was one of those characters that, every now and then, illuminate an aspect of the Raj that has been completely overlooked in history books. Details of his early life are sketchy but, by the time he was assessing Jacob’s application, he had been in India for a quarter of a century. At the age of just sixteen, he had made a landfall—as almost everyone did in those days, at Bombay—in 1856, the year before the Mutiny. Although he didn’t earn a place in the pantheon of heroes of the Great Indian Uprising he was clearly a man of considerable talent. He spoke Hindustani, Persian and Arabic fluently and had a keen understanding of the strategic environment at a time when the Great Game was preoccupying policymakers in London and India.2
Coming from a military family (his father had been a major-general in the British Army), Henderson rose quickly through the ranks, being appointed Under-Secretary to the Government of India in 1873 and Superintendent of the Thuggee and Dacoity Department in 1880. The department had been established in 1830 by Lord Bentinck who was Governor General of India, with William Sleeman as its first superintendent. It was Sleeman, as a Magistrate in the district of Narsinghpur in central India from 1822–24, who had first recognized the threat posed by the Thuggees, a fraternity of robbers who strangled their victims with a cloth containing a coin dedicated to the goddess Kali knotted into it.
The Thuggee and Dacoity Department was the first organized intelligence-gathering effort in British India. It relied on information from Thuggees-turned-informers and, in the first five years of its operations, succeeded in the conviction of 3000 criminals, and effectively broke the back of a network that was killing up to 30,000 people a year. But British satisfaction with restoring law and order in its territories was short-lived. The outbreak of the Mutiny had revealed the paucity of the Raj’s intelligence network. Bereft of informants in the army and wider society, it missed every vital signal about the trouble that was brewing.
After the Mutiny was suppressed, it was decided to widen the department’s brief to include collecting ‘secret and political’3 information, but it remained chronically understaffed. A number of provinces had no officials tasked with the duty of collecting or distributing ‘confidential or secret communications on subjects of political or military importance’.4 Nor were there any recognized channels for transmitting intelligence back to the Government of India.
When Lytton was made Viceroy in 1876, he was dismayed by this state of affairs. ‘We were more completely ignorant of its (India’s) interior than we are now of the centre of Africa,’ he later wrote.5 Inspired by the example of the Punjab which had set up a Special Branch, he urged local governments to appoint an officer to handle secret information and communicate with the central authorities through the Thuggee and Dacoity Department.
By the time Henderson took up his post, the Thuggee menace was largely confined to the Princely states. Lytton extended the department’s brief to paying attention to ‘all sources of information regarding foreign emissaries, intrigues, or unusual political or social phenomena’. Henderson’s priorities included monitoring ‘intrigues’ between ‘Constantinople and Mohammedans in India’, a remit that would have brought to his attention the activities of Jacob’s brother, John Louis Sabunji, whose anti-Turkish and pro-Arab newspapers were circulating in India.
London had alerted its missions in South and Central Asia to maintain a close watch on Turkish nationals under their jurisdiction. India, with its large Muslim population, was of particular concern. The Sunni-ruled Ottoman Empire had been mainly preoccupied with defending itself against Russia and suppressing rebellions in the Balkans. But, towards the end of the nineteenth century, it was beginning to present itself as a protector of India’s Muslims as a way of subverting Britain’s Indian Empire.
Henderson envied Jacob’s extensive network of informants inside India’s royal courts and the knowledge it gave him of the most intimate details of the lives of the Princes, ranging from sexual preferences to their political loyalties. His fledgling department was forced to rely on the local police who, in turn, depended on their agents. It was often impossible to distinguish real intelligence from information that was planted to deceive or that had been poorly interpreted. Jacob utilized scouts who conveyed all information that might be deemed useful to further his business interests. The handsome commissions he paid kept this network well-oiled and highly efficient. The secret service fund of Henderson’s department amounted to less than 300 rupees a year or hardly one per cent of its annual budget.
Under reforms introduced by Lord Dufferin, Henderson’s department was reorganized and strengthened by the addition of an Assistant General Superintendent and a three-man office staff. Henderson was now head of the Central Special Branch of the Thuggee and Dacoity Department, which was effectively the Raj’s official intelligence office. His brief, too, was extended. The responsibilities of the Special Branch now included keeping the government informed of all political movements and sects, their leaders and propaganda activities, ‘the arrival, sojourn, departure and proceedings generally of suspicious characters and foreigners, special attention being paid to foreign emissaries; and to the movements of wandering gangs of criminals’,6 rumours that might disturb the peace, religious excitement, illegal arms trade and frontier affairs. In short, it was a remit that was impossible for a small department like his to fulfil in a country as vast as India.
Of all the Indian Princely states, the two that gave Henderson the most headaches were the Punjab and Hyderabad. The situation in Punjab had settled down now that its deposed ruler Dalip Singh had chosen self-imposed exile in the French enclave of Pondicherry. But, Hyderabad kept living up to its reputation as ‘the greatest hotbed of intrigue in India’.7
He therefore felt a sense of deep trepidation when a file containing a copy of a letter marked confidential from Dennis Fitzpatrick, the British Resident at Hyderabad, to Durand, reached his desk on July 13, 1891, linking Jacob ‘to the intended purchase of a valuable diamond by the Nizam’.8
That Mahboob Ali Khan was Jacob’s best customer was no surprise, given his recklessness when it came to spending on jewels he clearly didn’t need with funds he didn’t have. ‘The fact is that Hyderabad would do very well, were it not that sums amounting to the revenues of whole districts are paid away in order that a few handfuls of bright pebbles (probably worth considerably less than what is given for them) may find their way into the palace,’ one exacerbated official wrote when reporting on the state of the kingdom’s finances.9
In recent months, Henderson had heard rumours that the vast amount of money Jacob was being paid during his frequent visits to Hyderabad was for political services to the Nizam’s Government. The idea that Jacob could lobby the Vicero
y on behalf of the Nizam seemed ludicrous to him but, given the access Jacob enjoyed at the highest levels of the Raj, he couldn’t discount it either. The more likely scenario was that Jacob was taking advantage of the Nizam’s gullibility and exaggerating his own importance.
Despite Hyderabad’s being the most strategically important state in India, the Special Branch office in Hyderabad was grossly understaffed with more employees sweeping the floors than doing actual intelligence-gathering. The single British officer stationed there had six clerks, an ‘executive branch’ consisting of nine Inspectors and Deputy Inspectors, and a twenty-one-man ‘menial establishment’.10
It was not surprising, therefore, that news of the sale of the diamond had eluded them until it was nearly too late. ‘I always get information from one quarter or another of what is going on, and it seemed to me impossible that anything could be done in such a large transaction of that kind without my having notice,’ said Fitzpatrick’s letter that Henderson had before him. ‘In this, as it turns out, I was mistaken. The negotiations about the big diamond had then, as a matter of fact, reached an advanced stage, but everything was done so quietly that I knew nothing of the matter till last Friday.’11
Fitzpatrick was looking forward to returning to England in a few months’ time at the end of a three-year posting when the diamond case erupted. Though he abhorred over-interference in the affairs of Hyderabad, and considered ‘nothing connected with the purchase of ornaments for His Highness’s use can be deemed a matter of State’,12 the purchase of this particular diamond from this particular dealer was in a different league altogether.
Fitzpatrick immediately asked his deputy J.A. Crawford to find out what he could about the stone. He confirmed that ‘a large sum of money had actually been deposited in Calcutta as security, with a view to the diamond being sent out for His Highness’s inspection’.13 The Nizam’s minister, Asman Jah, had directed that 2.3 million rupees be deposited in the Bank of Bengal, but subject to the condition that the money not be drawn without the minister’s sanction. The bank had refused this condition and the money now stood in the bank ‘absolutely at Jacob’s disposal’, he wrote, before adding disparagingly: ‘I have always thought Asman Jah a miserably weak creature, but I had no idea he was as weak as that.’14
That may have been the view within the British Residency, but in the royal court, Asman Jah was a man to be feared. Like the bulk of Hyderabad’s nobility, he belonged to the Paigahs, traditionally, the private cavalry of the Nizams. According to the Hyderabad correspondent of the Hindu newspaper, he stood at the pinnacle called ‘a clique bent on self-aggrandizement’15. He saw the smooth functioning of the state as dependent on his knowing every detail of what was being whispered in the endless corridors and multiple rooms of the Nizam’s many palaces. As the fumbling Fitzpatrick would soon find out, the baby-faced minister with the massive walrus moustache and a penchant for gold braid was much smarter and stronger than he gave him credit for.
‘He excused himself … by saying he was ill at the time, and did not quite see the effect of what he was doing,’ Fitzpatrick continued in his letter to Henderson. ‘But I need not tell you, the truth is that he was afraid of incurring the Nizam’s displeasure if he remonstrated, and he was similarly afraid of mentioning the matter to me, as he knows I would remonstrate with the Nizam, and the Nizam would be down on him for telling me.’
When Fitzpatrick found out that the stone in question was the Imperial Diamond, his first reaction was that it was too late to stop the sale. ‘At present, the Nizam is seized with a mania for jewels just as he was sometime ago seized with a mania for old swords, and before that other manias of a more singular sort and, on the possession of this particular diamond, he has completely set his heart.’16
Nevertheless, the Resident knew that if he didn’t intervene, the result could be a disaster for Britain’s ‘most faithful ally’. He had recently inspected Hyderabad’s finances and was shocked at what he saw. The state was in debt to the tune of 10.5 million rupees and barely able to make repayments. If the Nizam went ahead with the purchase of the diamond it could potentially tip the balance towards insolvency. A poor start to the monsoon had increased the prospect of another famine.
But the main reason for trying to scuttle the deal was his unwavering view that Jacob was a man who could not be trusted, particularly with such a large amount of money. The Resident viewed him not only as an unscrupulous merchant, preying on the gullibility of others but as a potential security threat. Fitzpatrick was afraid that he would use his influence over the Nizam to derail the delicate state of relations between the Raj and Hyderabad. Adding to his concerns were the rumours circulating around the royal court that Jacob was spying for the Russians and channelling funds to the Czar’s agents in Persia using Abid as a go-between.17 Fitzpatrick also heard reports that he had used hypnotism to trap the Nizam into buying jewellery.
Fitzpatrick’s request for an audience with the Nizam was granted for the following day. Arriving in his carriage at the Chowmahalla Palace, he was ushered in to his private chambers. Strict rules of etiquette meant that he remained standing for the entire meeting while Mahboob sat in a chair observing him closely.
Fitzpatrick got straight to the point, telling him he had an urgent matter to discuss which was causing him great anxiety. ‘I said he was intelligent and sensible, but that his experience of the world was small, while I was old like his father and had considerable experience and that, in this matter, neither I nor the Government of India had any object but his good,’ he wrote of the meeting in a secret cable to Durand.18
Before the meeting, Fitzpatrick had decided that the best way to scuttle the diamond sale was to attack Jacob’s character and credibility. Feigning concern about the exorbitant prices Jacob was charging him for jewellery and his own reluctance to intrude in such matters, he then accused the former of falsely offering assistance to the Nizam’s government. Jacob was nothing but an ‘impudent liar, for it was ridiculous to suppose that the Foreign Secretary or anyone else with the Government of India would let him talk about political matters to them’.
While Fitzpatrick was gently reminding him that he could not afford to purchase the diamond, Mahboob interjected saying that the sale was not concluded ‘and it would be possible to set it aside’. Somewhat relieved at this early breakthrough, but still taking no chances, Fitzpatrick then outlined why he thought it was necessary to stop the transaction entirely. If the Nizam bought his jewels through a great mercantile house, ‘they would take their commission and expenses only and not cheat you; but a small hungry man, like Jacob, would appropriate at least a third of the purchase money, and might possibly make away with the money altogether’, he told the young ruler in fluent Hindustani. ‘Moreover, if you wanted to see the jewel, a great firm would get it out and send it to you by their own man, and there would be no mention of security, whereas, a small man, like Jacob, could not get it out until the Nizam gave security, which involved a damage to your high position and dignity.’
To Fitzpatrick’s surprise, ‘not a shade of annoyance crossed the Nizam’s face’, while he delivered his homily. ‘When I concluded, he repeated that I might feel complete confidence that he would not buy the diamond, adding, “I promise this on my honour”, introducing the English word and laying emphasis on it. I then reverted to the danger of leaving the money in Jacob’s credit, and asked whether it would be got back. He replied: “I assure you I can get it back and will do so. You need have no fear.”’
Fitzpatrick concluded his account of the meeting by writing to Durand that, despite the huge amount of money now at stake, even ‘a man of Jacob’s class’ was unlikely to keep it. ‘It seems best to let the Nizam take his own way of getting it back; as the only means of getting it back available to anyone else but him would probably be to institute a suit and obtain an injunction which would take many days, and meantime, Jacob would hear of the thing, and, if he meant to fight or appropriate the money, would of
course draw it and place it in safety, goodness knows where.’
Fitzpatrick never explained his deep distrust of Jacob, but he clearly considered him to be a cheat. The local agent for the respected jewellery firm, King & Co., had told him the ‘asking price’ for the Imperial Diamond in England was £150,000 and that it could probably be obtained for much less. Jacob’s price for the brilliant was more than twice that amount. Trying to sell the diamond to the Nizam ‘was one of the most audacious attempts to drive an overarching bargain with a Native Chief that could well be conceived’, he wrote later.19
Fitzpatrick resented the easy access ‘such a low creature’20 had to the most senior Prince in India, and that he himself had no control over what went on between the two men behind closed doors. He also begrudged the influence Abid had over the Nizam and his cosy relationship with Jacob.
As Fitzpatrick bowed deeply and left the Princely chambers, he felt the meeting had gone far better than he had expected. Mahboob had not only changed his mind about buying the diamond, he was also confident about getting his deposit back. Jacob was due in Hyderabad any day and would be making his informants work overtime to keep abreast of any developments regarding the purchase. But, as the meeting between the Resident and the Nizam had been held in private, there was little chance that he would find out what had transpired. The costliest deal of Jacob’s career had been thwarted, or so he believed, thanks mainly to his diplomatic skills and a not inconsiderable amount of scaremongering.
Unknown to Fitzpatrick, however, Asman Jah had beaten him at his own game. He had already urged Mahboob Ali Khan not to take the diamond. When the Nizam had ordered the deposit to be paid into the Bank of Bengal, he had arranged an urgent meeting and told him that the stone was worth only about 2.1 million rupees or 200,000 rupees less than the deposit. The minister’s motives had little to do with saving the state’s budget. He wanted to reassert his control over the Royal Court and shared Fitzpatrick’s dislike of Abid whom he considered ‘a political eel who could not be relied on’.21 Jacob’s easy access to the Nizam and his increasing influence over him had raised fears ‘that he would in course of time rise to be powerful enough to endanger those in authority’.22 If he could neutralize Jacob as a political player by sabotaging the diamond deal, the pesky Turk or Italian or Jew or whatever he was, might take his business and interference elsewhere.
The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy Page 14
