The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy

by John Zubrzycki

  For his part, Jacob had underestimated Asman Jah’s influence over Mahboob and was mistaken about the special relationship he thought he enjoyed with the Nizam because of his earlier business dealings. His over-reliance on Abid to keep him abreast of the various behind-the-scenes intrigues had left him dangerously exposed.

  His hubris would prove to be his undoing. He knew the Nizam had the money and was convinced that he would stand by his word. Just a few days earlier, after the surety of 2.3 million rupees was paid into the Bank of Bengal and he had received the diamond in exchange, he was so confident that everything was going smoothly that he had spent 100,000 rupees on pieces of jewellery at Hamilton & Co.’s auction sale in Calcutta. He intended to sell them to the Nizam and add to his already enormous profit at the same time as concluding the diamond deal.

  ‘His Highness has given me the greatest honour a chief can give by trusting me with 23 lakhs hard cash against nothing,’ he wrote to Abid at the time. ‘A brother would not trust his own brother, a father would not trust his own son, and he trusted me with such a large sum of which few men in this world can stand the temptation. I again say may he live 120 years with the blessing of God on him and his family.’23

  On Saturday, July 18, Jacob boarded the train from Calcutta to Hyderabad with the diamond wrapped in a cloth and hidden under some sawdust at the bottom of an ice-box. He was quietly confident that the Nizam’s weakness for ‘sparkling vanities’ and his own powers of persuasion would prove irresistible. He was wrong. The lion’s jaws were about to close and there was no escape.

  CHAPTER ELEVEN

  A PIECE OF SPARKLING VANITY

  THE gilded horse-drawn carriage made its way through the gates of the old city and down Patthargatti, the broad avenue that runs from the Musi River to the graceful minarets of the Charminar. Washed clean by a night of monsoon showers, the granite cobblestones glistened in the early morning sun. An elephant swayed rhythmically as it picked its way through the crowds, expertly guided by a bare-chested mahout. Rohilla warriors in dark blue caftans jostled for space with fierce-looking Pathan tribesmen and Parsi merchants wearing oilskin hats. Emaciated fakirs with figments of beards begged for alms. Lining the avenue were the shops of goldsmiths making bracelets, nose-rings and necklaces for the women of the zenana; sellers of pearls, vendors of perfume, spice merchants and silversmiths.

  Jacob was wearing a waistcoat and a white duck jacket. A piece of coral set on a gold pin was fastened to his coloured silk cravat. When the carriage passed the Mecca Masjid, the city’s main mosque, he made a brief salutation and then touched the amulet he was wearing. Though a Christian by religion, he believed that a man’s destiny lay not only in the hands of his God, but also in the hidden powers of the cosmos. Today, he was taking no chances.

  Concealed in a secret pocket inside his waistcoat, was the Imperial. Wrapped in a white silk handkerchief, Jacob could feel it pressing against his chest. In less than an hour, if everything went to plan, the diamond would have a new owner. The deal of the century would be successfully concluded and he would be wealthy beyond his dreams.

  After making its way past the Charminar, the carriage turned down Lad Bazaar with its tiny shops selling bangles and brightly coloured wedding trousseaus. He could already see the walls surrounding the Chowmahalla, the seat of power of India’s largest Princely state. As the sun bore down on the carriage, he was sweating profusely. It was mid-July and the heaviness of the monsoon lay like a wet sponge over the city.

  Everything had been planned meticulously. It had to be. The deal was as risky as it was audacious. The insurance on the stone alone cost £2000 and the interest on the loans was running at 10 per cent. But the profit, if the sale went through, would be enormous. Even after paying commissions and agent’s fees, he stood to gain at least 1.3 million rupees on the deal, more than £8 million in today’s currency.

  He knew he was taking a huge gamble. India’s Princes were, for all practical purposes, above the law. If they reneged on a deal or refused to pay for an item of jewellery, there was very little recourse other than to seek the permission of the Viceroy to sue, something that occurred only in the most extreme circumstances. The British considered the Princes too powerful to be put off-side by intervening in a petty commercial squabble between a merchant and a Maharaja.

  Though it commanded the highest rank of India’s four largest princely states, Hyderabad had a reputation for being ‘a sink of iniquity’ and ‘a refuge for all the cutthroats in the country’. Its nobility were accused of being ‘petty kings within their own walls. They can hang, shoot, torture or flog at their own sweet will, and give protection to any ruffians who may fly to them for refuge against vengeance or justice,’ reported one newspaper. ‘They are without education or worldly knowledge, spending their lives in debauchery.’1

  As the carriage pulled up next to the Durbar Hall, Albert Abid stood waiting. One week earlier, on July 14, Jacob had sent him a telegram requesting a dozen policemen under a European officer to escort him for the final part of the train journey. ‘It is not easy to travel on that line with such a large and valuable stone in my pocket. Those Arabs will kill me if they were to know what I have got with me; especially as the train passes that part of the country at night.’ Such precautions were worth the effort, Jacob insisted. ‘The diamond stands as the first stone in the whole world; wait till you see it. All the first-class jewellers here, European as well as Native, whoever sees it goes down on his knee and kisses it, and all say they never saw such a thing or even heard of such a stone.’2

  Jacob, however, knew that the deal was far from sealed. He had sensed trouble was brewing when he had shown the Nizam a facsimile of the diamond. Although the latter had agreed on the price, he had insisted that the transaction be on a passand ya na passand basis. If he liked the diamond he would simply say passand, meaning approved. By saying na passand—he didn’t want it—the deal would be over and he would get his deposit back. Jacob would then be left with a diamond that would be almost impossible to sell and with the massive expenses he had incurred insuring the diamond and bringing it out. To find another buyer would mean reducing the price, thereby eating away into his profits. ‘Fear is coming upon me,’ he said, when he told Abid of the condition. ‘May it please God that the Nizam shall take the diamond.’3

  Jacob had not insisted on a written contract. ‘He had always treated me so well, and being the Nizam of Hyderabad, I could not think of asking him for an agreement,’ he said later.4 In any case, he was convinced that greed would ultimately get the better of the Nizam. Indian Princes ‘had no scope for ambition except to spend large sums upon jewels’, one astute observer noted. ‘In the case of this Prince, the diamond at once captivated his fancy.’5

  Jacob said nothing as Abid led him through the Durbar Hall with its Belgian crystal chandeliers reflecting their light off the cool marble floors. He felt as if he were being watched by a hundred eyes hidden behind the heavy silk curtains that lined the galleries on the upper floor. Only he and Abid knew the purpose of the meeting with the Nizam—or so he thought.

  As he entered the Nizam’s private chambers, Jacob found Mahboob Ali Khan slouching on a mattress covered with rich silk embroidery, looking as though he had just woken up. His heavy eyes betrayed a long night in the zenana and the opium which he took in doses that would leave most men barely able to function.

  Though Mahboob Ali Khan was a young ruler, he ‘was not a child, or an unusually foolish person’, the Spectator said. It listed among his attributes an ‘athletic persuasion’ and being ‘the best and boldest driver in Asia’. His reason for wanting the diamond, the magazine speculated, was simple: ‘All Asia hears reports of wonderful jewels, and to be the possessor of the most wonderful is, to an Asiatic sovereign, to possess a new title of honour, a concrete proof visible to his subjects on great occasions that no one is greater, or richer, or more successful in the world than he.’6

  The Nizam sat down beside a low table
Abid had put in the room and beckoned to his guest to do the same. From an inner pocket in his vest, Jacob took a red velvet cloth and placed it on the table. From the same pocket he produced a package wrapped in white silk. He unfolded it carefully until he came to a parcel of red tissue paper. Abid stood to one side, closely watching the ceremonial unwrapping and trying to gauge the Nizam’s reaction.

  As Jacob parted the folds of the tissue paper, the diamond came into view. He silently placed it on the red velvet cloth and waited for the Nizam’s next move. Mahboob had been given a model of the stone, but it was like a piece of ordinary glass compared with the glittering jewel now before him. He picked it up and turned it over and over again with his fingers. He put it up to the light, placed it against his shirt, felt its weight in his hand. For a brief moment, he could imagine the jealousy of his fellow Princes when they heard he possessed such an extraordinary stone. And then he remembered that this meeting was all for show. Putting the diamond back on the cloth, he turned to Jacob and said: ‘Na passand.’

  The most audacious diamond deal in history had just gone horribly wrong, and the world of India’s most successful jeweller and gem trader was about to come crashing down.

  At first Jacob could not believe what he was hearing. The crowning moment of his career had been destroyed with two short words—not approved. Instead of handing over the Imperial to Nizam and walking out of the Chowmahalla Palace, a rich and contented man, he felt as if he had been shaken by an earthquake.

  After collecting himself with some difficulty, Jacob pleaded: ‘I shall suffer a great loss if you do not take it. The Raja of Patiala is ready to buy it for 40 lakhs.’ He reminded the Nizam about the diamond’s qualities, the sensation it had created when it was exhibited in Paris and how, as the possessor of this unique gemstone, he would be the envy of India’s Princes, but his entreaties were to no avail. ‘I have made up my mind not to buy,’ Mahboob Ali Khan said, signalling that the meeting was over.7

  As he bowed and shuffled out of the private chamber, Jacob felt humiliated and confused. Sweating profusely, he stopped at the top of the stairs trying to control the impulse to turn around and make one final appeal, but he knew it was too late.

  He went over the events of the last two months, wondering where and when things had started to go wrong. Had his enemies in the palace persuaded the Nizam not to buy the stone, or had he himself tempted fate one time too often? Had he misjudged the ruler’s character or had he brought misfortune on himself by bragging about being able to retire once the diamond was sold? He had naively believed he could keep the deal secret, when news about the diamond was already circulating among the native jewellers of Bombay as early as March. He should have realized the Nizam would know the true value of the stone.

  As Jacob struggled to regain his composure, Abid emerged from the Nizam’s chambers and announced: ‘The order of the Huzur is that you must speedily return the 23 lakhs of rupees that were deposited.’8

  Jacob’s version of what happened next would be argued over in courts, dissected in secret cables and analysed at the highest levels of the Government of India for years to come. Without witnesses, it would come down to Jacob’s word against that of Abid, his wife Annie and the Nizam.

  According to Abid’s account, Jacob reluctantly agreed with the request to return the deposit, saying: ‘The diamond is with me, the money is in Calcutta, how can I return the money? It will take three days to go there. After going there, I will give back the diamond and then I will return the money to His Highness.’9

  Jacob later denied making such a commitment and his subsequent actions suggest that he was still counting on finding a way out of his predicament—one that would avoid handing back the diamond to the agents in Calcutta and repaying the Nizam, while keeping his reputation intact.

  Instead of returning to his bungalow at Eden Gardens, he went straight to Abid’s mansion to see his wife Annie. Jacob looked shaken as he entered the drawing room.

  He sat down and began beating his head with his hands. ‘Oh, Mrs Abid, I am a ruined man. His Highness has not only rejected the diamond, but has refused to buy any of the other things I have brought up with me, and that hurts me more than his refusal to buy the diamond.’

  Annie claimed she tried to placate him, saying that he was not the only jeweller whose wares were rejected by the Nizam recently, to which he responded by saying, ‘Mrs Abid, I am afraid there has been something going on,’ adding that he had fallen foul of a plot hatched by Asman Jah.

  ‘If it is not that, it is an unlucky word I spoke the last time I was up here.’ Jacob explained that he had told the Nizam that if he bought the diamond he would never have to do another day’s work. ‘You know he has got a clever head of his own, and I am afraid he has been thinking about it.’ Putting his hands to his head he said: ‘Oh it is my luck, it is my luck.’

  ‘If I am worthy to advise you, Mr Jacob, I should not worry about it now,’ she told him. ‘When you come next to Hyderabad, as I suppose you will do in four or five months’ time, if you bring a nice letter or petition with you and present it to His Highness, you know how kind-hearted he is, I think he may do something for you.’

  ‘I can only do it with the help of your good husband,’ he replied.

  ‘You surely know him well enough to know that he is always ready and willing to help anyone in trouble,’ Annie responded.

  Jacob mumbled, ‘Yes, yes,’ before rising from the sofa. ‘However, Mrs Abid, His Highness will never see the diamond again, for the moment I set foot in Calcutta, it goes to Patiala, he is the only other man in India rich enough to buy it. As soon as he heard the diamond had arrived in India, he deposited 40 lakh rupees in the bank so that he might take it if the Nizam did not. If you doubt my word, wire the Alliance Bank.’

  ‘If that is the case, Mr Jacob, I don’t see what you have got to fret about so much. You won’t be much of a loser.’

  Instead of placating him, Annie’s response angered Jacob. ‘It is bad for me and for you too,’ he told her as he prepared to leave. ‘Had I sold the diamond I would have given your husband a handsome commission.’

  Jacob then phoned her husband and asked to meet him in the Durbar Hall. According to Albert Abid’s version of what happened next, Jacob told him he couldn’t return the Nizam’s entire 2.3 million-rupee deposit because he had spent 25,000 rupees buying jewellery at the Hamilton & Co. auction. ‘I have not got any money to make up the amount I have drawn. I have got articles of jewellery. I don’t know whether I can get purchasers to buy them from me so that with the sale proceeds I might make up the amount I have taken.’

  What he did not tell Abid was that he had spent 100,000 rupees at the auction on items he had expected the Nizam to buy. He then went to the telegraph office and wired William Cheetham at Kilburn & Co. in Calcutta. ‘Diamond rejected. There has been foul play here. Leaving tomorrow.’

  But Jacob had not given up yet. That evening, he returned to the Chowmahalla Palace to plead his case with Abid for a third time. ‘The loss I have suffered is very great, what am I to do?’ he asked. ‘When I came here, I had great hopes; please make a representation to His Highness and see what he can do.’ Jacob claimed that Abid admitted it was Asman Jah who had scuttled the deal by telling the Nizam he was being overcharged for the diamond.10 The Resident too had found out about the transaction and persuaded him to change his mind. That much was certainly true.

  What is contentious was Jacob’s claim that Abid then told him the Nizam’s rejection was merely a ruse to keep Asman Jah and Dennis Fitzpatrick in the dark. He wanted the diamond very badly, but at a reduced price. He was prepared to offer 4 million rupees. Abid was willing to reduce his commission from 500,000 rupees to 200,000 rupees and broker a new deal.

  Prepared to do anything he could to sell the diamond to the Nizam, Jacob agreed to the new terms. But there were complications. Abid told him the balance of 1.7 million rupees could not be paid straight away because the Nizam wanted th
e deal to be kept secret for as long as possible. ‘The money will be sent to Calcutta. His Highness will not ask the Minister for this money but will pay a portion from the seven lakhs I have of his and the balance from Bara Begum Sahiba’s money,’ Abid allegedly told him, referring to money left to Mahboob by his deceased mother.11

  Jacob claimed he went to see Mahboob early the following morning, ostensibly to show him a drawing of a coloured gem stone that he wanted to sell him. ‘I am surfeited with your first dish, and already you are preparing another,’ the Nizam allegedly told him.12 The rest of the conversation was never revealed, though Jacob insisted that Mahboob confirmed he would buy the diamond at the reduced price, on condition that the transaction remained confidential. When the matter reached the courts, Abid and the Nizam would both insist there had been no new deal or undertaking of any kind after the Imperial was rejected.

  From the Chowmahalla Palace, Jacob took a carriage to the railway station and boarded a train to Bombay, the diamond again securely hidden in an ice-box. Three hours into the journey, the train made a lengthy stop at Gangeswaram, giving him enough time to send a telegram to Cheetham informing him of the alleged new arrangement with the Nizam. He instructed Cheetham to secure a draft for the 2.3 million rupees if the exchange rate was favourable and if not, to await his return. ‘Nizam cut me six lakhs. Reply Bombay,’ he wrote, referring to the subsequent deal. He then sent a second telegram to Abid. ‘I trust you to arrange that matter as soon as possible, otherwise, I will be in difficulty.’13