Jacob sent two more telegrams to Abid, one from Bombay and another from Calcutta, when he arrived there on July 26, in both cases asking when the balance of the money owed would be sent. At first, Abid ignored the telegrams, but by the time the third one arrived, he realized he had to take them to the Nizam and ask for his instructions.
The conflicting accounts of what happened on the morning of Monday, July 27, 1891 would mean the difference between a lengthy stint for Jacob in the Presidency Jail and his vindication. At 5 a.m., an urgent telegram arrived at the Telegraph Office in Calcutta from Abid, addressed to Jacob at the Great Eastern Hotel. The telegram contained a categorical denial from Mahboob that a subsequent deal existed and a demand to return the deposit money immediately. Half an hour later, a peon knocked on the door of Jacob’s room, waking his bearer. The bearer took the telegram to Jacob who signed for it and either did not open it or chose to ignore its contents.
Jacob went to see Cheetham at 10 a.m. He told him the Nizam had initially rejected the stone but had then agreed to buy it for 4 million rupees and that the deal was confirmed at a second secret meeting. He also told him that, earlier that morning, he had received a telegram from Abid, but that he would take instructions only from the Nizam and not from some ‘valet or underling’.
Acting as if the contract still stood, Jacob asked Cheetham for the exchange rate between the rupee and the pound and was told it had gone up to 1s 5 d. By remitting the money for the diamond, Jacob stood to gain 177,131 rupees. The two men then took a carriage to the Bank of Bengal. The broker at the bank remembered Jacob arriving at 11 a.m. and instructing him to remit £150,000 to Pittar, Leverson & Co. The remittance was sent at 2 p.m. and was received at the London offices of the brokering firm a short time later.
Jacob was now legally the owner of the costliest gem stone in the world. The only problem was he didn’t want it and he was growing increasingly uncertain that he could get rid of it.
He spent much of the day in his hotel room, carefully drafting a telegram to the Nizam that would be his last chance to salvage the deal and his reputation. The telegram was so long it had to be sent in three parts. As he sat and waited for the clerk at the Telegraph Office to transmit it to Hyderabad, he fingered the pearl scarf pin he always wore on Mondays in the belief that pearls were his protector. For added luck, he had also looked at his face in the mirror of his room before he went out, another of his life-rules that changed, depending on the day of the week.
In the telegram, Jacob put on record that Mahboob Ali Khan had found out that the diamond was not worth 4.6 million rupees and that he wanted to reopen negotiations. He described talking to Abid about cutting his commission and the Nizam’s offer to buy the diamond for 4 million rupees. He reminded the Nizam about having met with him the following morning and the Nizam’s agreement to buy the stone at that price even though Jacob would be left with hardly any profit. ‘I knew Your Highness liked the diamond because you told me so, and, as I felt you were the fountain of my life because you hold my bread in your hands, I agreed to take 40 lakhs.’
Jacob then explained how people in Hyderabad were jealous of him because no other merchant was treated with such respect. ‘Even your minister hates me, though I have done him no injury. Therefore, they took the opportunity to crush me and they have done it. But my faith in you is as much as in God, and I can tell that you will not abandon me because I tried to make my living honestly and this was with your consent.’ Securing the Nizam’s goodwill, he said, was more important ‘than any money under the sky because you have been a second God to me. But should you be persuaded by my enemies to abandon me, I would be a ruined man.’ He urged the Nizam to persuade Abid to forego his commission saying, ‘I will make nothing on it. If you give me anything, I will ever pray for your long life, health and prosperity.’14
Referring to the telegram Abid had sent demanding the return of the deposit, he continued: ‘Surely, this cannot be an order from Your Highness, and if it is, then the offer of 40 lakhs could not have been with your sanction. Hence, I am deceived by him.’ Explaining that the money could not be returned because it had already been sent to England, he added: ‘I am in a fix with the bank for the balance. Unless I pay them at once they will insist on keeping the diamond and this will cripple me.’ Though this wasn’t technically true, he insisted he had put the matter honestly. ‘I trust in your justness and generosity. I feel you won’t cause my ruin for a few lakhs, for, unless you help me, I will be ruined, and for ever.’
Abid later claimed that Mahboob Ali Khan was in his zenana when the telegram arrived at the Chowmahalla Palace that evening. He started reading it out aloud but then gave it to a clerk to finish. The Nizam’s response, according to Abid was: ‘What wickedness Jacob Sahib has done, just see.’
When the initial news that the Nizam had stood by his word and rejected the diamond reached Simla on August 3, everyone concerned with trying to derail the agreement—including Philip Henderson of the Intelligence Branch—was quietly confident the worst was over. In Simla, Henry Mortimer Durand immediately sent a telegram to Fitzpatrick conveying the Viceroy’s appreciation of how he had handled the matter. ‘The Viceroy approves of what you did to stop the purchase, and His Excellency is surprised to learn that the Minister acquiesced in such a transaction not only without remonstrance but without informing you.’15
But as it became apparent that Jacob was not going to let the matter rest, the sense of relief that had swept through the Viceregal Lodge and at the Residency in Hyderabad evaporated. What Fitzpatrick was now referring to as that ‘wretched diamond affair’ was taking on a life of its own. Stopping the Nizam from buying the diamond had turned out to be the easy part, placating two powerful parties at loggerheads over the largest gem trade in history was going to be much harder to resolve.
Durand was taking no chances. A stern, cold-eyed, methodical man with a Prussian-style moustache, he was dubbed by the Spectator as ‘the strongest man in the Empire’ for his role in demarcating the Afghan frontier which is still known as the Durand Line. Used to dealing with lofty questions of empire-building, the Foreign Secretary now found himself thrust into the increasingly sordid diamond affair. Confusion swirled over Jacob’s alleged subsequent agreement with the Nizam and his threat to sell the stone to the ruler of Patiala, Rajinder Singh. Frustrated, he cabled Herbert Fanshawe, Chief Secretary to the Governor of the Punjab, asking if there was any truth in the report, and if there was, he should stop ‘Patiala from making an ass of himself’.16
Durand also inquired as to the status of Jacob’s application for naturalization. Henderson informed him that if his grandfather was an Italian, it could complicate matters. Fanshawe argued that granting naturalization would give the government greater control over Jacob, but Fitzpatrick was firmly against it, calling it ‘questionable to naturalize a man with serious criminal charges pending from a Native State’.17 Durand finally agreed with his representative in Hyderabad and ordered the naturalization process be stayed. At the same time, he told Henderson to keep a close watch on Jacob who had returned to Simla on August 1, and give ‘Hyderabad immediate notice of any appearance of absconding’.18
Fitzpatrick was growing alarmed that Jacob was stalling on returning the deposit. He sent a telegram to Durand warning him that the jeweller was trying to exploit what was a very complicated situation ‘to extort what he can from the Nizam’. He called the attempted sale of the diamond ‘one of the most audacious attempts to drive an over-reaching bargain with a Native Chief that could well be conceived’. Jacob and Abid had tried to cook up a plot to put the Nizam in a position where he could not withdraw from the deal with his honour in tact. By devising ‘this figment of a fresh bargain’, the Nizam would fall in with their arrangement
‘If it should come to fighting … it may be a troublesome business,’ the Resident continued. ‘The real danger lies in the circumstances that the diamond is probably not worth the 23 lakhs that has been entrusted to Jaco
b, and that Jacob has probably arranged to get it for several lakhs less.’ Were he to finalize the deal with the vendors, ‘the recovery of the money would be a long and difficult business, and probably could never be recovered in full’.19
On August 4, two weeks after the Nizam’s alleged refusal to buy the diamond, Asman Jah sent Jacob a strongly worded telegram, flatly denying any secret or subsequent deal. He described the allegation as a way of concocting ‘a design to put pressure on His Highness to buy the diamond’.20 However, owing to his long-standing dealings with the Nizam and His Highness’s ‘merciful and generous disposition’, he would be prepared to consider any claims for ‘trouble and expenses’—but only once the deposit was repaid. The telegram, which Fitzpatrick later admitted helping to draft, closed with an ominous warning: ‘If I do not within three days receive an intimation from the Bank of Bengal of the money having been paid back, His Highness’s Government will be compelled instantly to institute proceedings against you; and you well know what the result of that would be.’ Asman Jah added that the Resident had been provided with all the papers relevant to the case and was reporting the matter to the Government of India.
Jacob’s response, sent the next day, refuted each of the allegations. As for the deposit, it had been remitted by wire to Pittar, Leverson & Co., and therefore, a refund was impossible. Though he was not legally bound to do so, he would otherwise have returned the money, ‘for I would not offend His Highness who has been like a second God to me. I would not lose His Highness’s patronage, goodwill and kindness to me for £40,000,00, much less for 40 lakhs of rupees, in fact not for the whole; but you all seem to misunderstand my position.’21
The telegram ended with the declaration that he would have nothing more to do with the minister and described the accusation that he was involved in a conspiracy with Abid as uncalled for. ‘You ought to be careful how you express yourself,’ he warned Asman Jah. ‘I am a merchant of some standing and repute, independent and a British subject, not a Hyderabad subject. Your high position does not give you the privilege to abuse people.’22
For all of Jacob’s bravado, it was clear there was now no way the Nizam would take the diamond. Even if there had been a secret deal it had been exposed, most probably by Abid. And even if the richest ruler of India’s most powerful state wanted the diamond, he was too cowardly to override the objections of his minister and the Resident. A stone that had come out from England with no significant history just a few weeks before, was quickly acquiring one.
As the Imperial Diamond affair looked headed for the courts, the Nizam directed Asman Jah to seek legal advice from James Jardine, one of the leading members of the Bombay Bar. The advice contained in a letter dated August 13 pointed out that the 2.3 million rupees was clearly meant as a deposit with the agents of the diamond’s owners to secure the stone and show it to the Nizam who had reserved the right to refuse it. ‘If this be so, any disposal by Jacob of the monies, or any portion thereof in any other way, would be a breach of trust, and if done dishonestly would be a criminal breach of trust.’ In Jardine’s opinion, Jacob had not only retained considerable control over the monies, but ‘he has disposed of those monies in a way other than was intended’, and it was his duty to return the deposit to the Nizam.’ The story that he and Abid had received the Nizam’s agreement to buy the diamond for 4 million rupees was ‘too incredible’ to believe and would never stand up in court.23
Two days later, Fitzpatrick sent a telegram to Durand advising him that the Nizam’s government intended instituting criminal proceedings against Jacob and was ‘desirous of having him watched’.24 Durand ordered Henderson to step up surveillance, and that if Jacob left Simla, ‘he should be followed by a European police officer, who should telegraph to him daily of his movements’. Henderson responded by saying he doubted ‘that Jacob would bolt; but it is as well to take precautions’.25
Outwardly, Jacob was carrying on his business as usual, the diamond securely stowed in a safe box in the Alliance Bank in Simla. Apart from some press reports in Hyderabad, Indian newspapers had not yet picked up on the controversy. Nevertheless, he knew he had to act quickly to guard against what was rapidly developing into a full-blown attempt by his enemies in Hyderabad to bring him down. On August 27, he wrote to Durand saying that a statement of ‘the facts and arguments in the matter of the dispute between the Nizam’s people and me about the Imperial Diamond’ was now ready. He said he was prepared to submit the papers on any date that was convenient to him, adding: ‘I am extremely grateful to you for your kindness in promising to give me an opportunity to lay before you my version of events.’26
Durand’s immediate response was negative. ‘I think the case has now come to such a point that it would be useless for me to go into it. I understand that it is to be settled in a Court of Law, and, under these circumstances, the Foreign Office cannot interfere in any way until the Court has given its directions.’27 Even so, he agreed to meet with him the next day.
In his brief summary of his meeting cabled to Fitzpatrick in Hyderabad, Durand said Jacob had asked him to forward his statement to the Nizam who, he said, would then ‘acknowledge the truth of the facts stated and stop proceedings’. Durand responded that the government had no concern in his communications with Hyderabad’s ruler. He also made Jacob promise not to mention the Foreign Office ‘as in any way supporting or authorizing his actions’.28
Fitzpatrick replied that he agreed with the Foreign Secretary’s stand on the matter, but he also hinted that the whole affair might be a way of cutting the jeweller down to size. ‘I don’t think Mr Jacob is likely to trouble the Foreign Office himself, but if he should, it would be all the better for seeing that his dealings are chiefly in Native States; a strong expression of the opinion of the Foreign Office on his conduct in this matter would tend more than anything else to bring him to his bearings.’29
Fitzpatrick did not have to wait long. On Friday, September 4, the Chief Presidency Magistrate of Bengal issued an arrest warrant under sections 403, 406 and 409 of the Penal Code for the arrest of ‘Alexander Malcolm Geary Subonjee, alias Alexander Malcolm Jacob’ for criminal misappropriation and criminal breach of trust as a merchant in respect of various sums, making up the deposit of 2.3 million rupees for the Imperial Diamond. He also lodged a summons to produce the diamond and for a warrant to search Jacob’s shop and house in Simla. The complaint was signed by Albert Abid. Jacob’s closest confidant was now his potential destroyer.
Knowing it would take two days for the warrant to reach Simla before it could be served, Durand began to worry that Jacob might get word of it and leave before it arrived. At the same time, however, he was resisting getting drawn further into the controversy. ‘I don’t see this is our affair. Why should we make any preparations? We are not police officers.’30
Fanshawe, who was also insisting that the government keep Jacob at arm’s length, was alarmed at the ‘somewhat haphazard’ management of the case. He cabled William Cuningham, the Assistant Secretary in the Foreign Department in Calcutta, saying that the local District Commissioner of Police was powerless to do anything until the warrant arrived by post. He acknowledged it was ‘almost certain Jacob will get news, and if so, of course, the diamond will not be found on his premises’. In the meantime, all the government could do was keep watch. ‘There seems to be no object and considerable risks in our offices being pulled into it.’31
A clearly peeved Cuningham wrote to Henderson the following day, complaining about the course ‘this absurd case was taking’ and calling Fanshawe ‘hopeless’.32 He toned down his language somewhat later that day in a telegram to Fanshawe pointing out that he appeared to have misunderstood the Government of India’s role in the case, and it should be treated as an ‘ordinary police and magisterial action’. ‘I don’t pretend to teach you or the police your business. The police part of the case is surely not novel or unparalleled.’33
While the Government of India and the Calcutta police
swapped blows about what to do about Jacob, he was quietly making his own plans. As anticipated by Fanshawe, he heard about the warrant almost immediately after it was issued on Friday. The least of his problems was being watched by Henderson’s Intelligence Branch. The same day, he rode up the Mall to the Alliance Bank and withdrew the diamond from its safe and then went to see his old friend William Rattigan who happened to be visiting Simla.
Rattigan, a leading member of the Lahore Bar, was also the co-founder, together with James Walker, of the influential newspaper, the Civil and Military Gazette. Both men were good friends with Lockwood Kipling. It was Rattigan and the newspaper’s chairman George Allen who had conferred with Lockwood about what to do about his young son Rudyard. They had decided that, due to his poor eyesight, taking up journalism was a far better option than joining the public service.
Jacob wanted Rattigan to be his senior counsel. He had successfully represented him in the Simla jewel case against Alexander Hamilton in 1881, but he was unable to help this time as he was engaged in a hearing on the Punjab Municipal Act in Lahore. Instead, he gave some words of advice. Nothing could be worse for his reputation or business than the indignity of being arrested at his home and then taken to Calcutta, handcuffed, under a police escort. Jacob agreed.
It was the deputy commissioner William Coldstream who broke the bad news to Durand on Sunday afternoon: ‘Jacob was being watched by the police, but has, I regret to say, eluded their vigilance, and has gone to give himself up, it is said, in Calcutta.’34 He added that Jacob’s legal counsel, E.V.S. Cullen, had wired the Commissioner of Police in Calcutta that Jacob intended to surrender on his arrival there. Henderson confirmed that ‘Jacob had left Simla yesterday morning unknown to police, and was seen at Delhi last night in the mail train going to Calcutta where he should arrive tomorrow morning.’35 He said the police were being asked to send reports of his movements along the way.
The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy Page 16
