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The Commercial Culture of the Armenian Merchant:Diaspora and Social Behaviour

Søren Mentz

Itinerario / Volume 28 / Issue 01 / March 2004, pp 16 - 28DOI: 10.1017/S0165115300019100, Published online: 22 June 2011

Link to this article: http://journals.cambridge.org/abstract_S0165115300019100

How to cite this article:Søren Mentz (2004). The Commercial Culture of the Armenian Merchant: Diaspora and SocialBehaviour. Itinerario, 28, pp 16-28 doi:10.1017/S0165115300019100

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16

The Commercial Culture of the ArmenianMerchant

Diaspora and Social Behaviour

S0RENMENTZ*

Historians have very little information about the operation of Asian commercialnetworks and the social interaction between merchants. Hampered by this lack ofdata scholars have focused on trade routes and commodities. Our knowledge ofthe Armenian trading network is more or less limited to its geographical dispersal.The network stretched from New Julfa, a suburb of the Iranian capital of Isfahan,to Amsterdam and London in Europe, and to important centres in the Levant andCentral Asia, covering the Indian Subcontinent, and extending eastwards to Manilain the Philippines. Armenian merchants were prosperous and communities werelocated in commercial towns all over the world. The brothers Khojah Joseph andKhojah Johannes Marger, for instance, established a partnership at Hyderabad in1666 with a starting capital of 27,550 rupees. Some forty years later on the deathof Joseph Marger, the trading activity of the two Armenians was worth more thantwo million rupees.1

The Armenians are examples of merchants who were better suited to conductinglong-distance trade than other commercial groups. The reason for this has been amatter of debate. Philip Curtin emphasises ethnicity as a crucial factor and makesuse of the term diaspora as an analytical tool.2 The success experienced by Britishmerchants in the early modem period has been attributed to such social phenomenaas a 'cult of commerce' or the rise of 'gentlemanly capitalism', stressing the role ofcultural aspects in the study of trade.3 I have argued elsewhere that the rise of aprivate English trading sector in Madras depended on business transactions carriedout by merchants in the City of London and servants in the East India Companyresiding in Madras who regarded each other as reliable partners. Large sums ofmoney were mutually entrusted despite the great distances involved. Trust wasessential to the establishment of a vital British commission system and such anatmosphere of interdependence was created through an accepted code of socialbehaviour, which stimulated private economy in Madras.4

The discovery of a hitherto unknown Armenian last will and testament written bythe eminent merchant Khojah Petrus Cscan, a resident of Madras, indicates thatsimilar aspects characterised the trading world of the Armenian merchant.5 Thedocument was signed and dated 19 January 1750, translated into English and exe-cuted according to the law of Madras in 1751 after the merchant's death. The testa-

Itinerario volume XXVIII (2004) number 1

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 17

ment includes an earlier draft, dated 1746, with an almost identical text, as well asa section dealing with specific business activities of that year. In total, the documentcovers more than fifty pages in the Mayor's Court Proceedings and offers a rareinsight into the mental universe of a prominent member of the Armenian community.Petrus Gscan was an honourable merchant with an urge to settle accounts beforehis death in order to secure his reputation. A study of his records reveals how culturaland social aspects influenced the global Armenian trade.

The Armenians of Madras and their Trade

Petrus Gscan was born during the 1680s in New Julfa, a suburb of Isfahan, inhabitedby the Armenian community that Shah Abbas I forcibly deported from the north-western frontiers with Turkey during the first decade of the seventeenth century.Shah Abbas relied on Armenian merchants to develop Iranian foreign trade andbecause of his political support Julfa grew into a nourishing commercial centre andthe core of the Armenian diaspora. Petrus Gscan's grandfather appears to have beena successful merchant, owning a house and several shops. After a thorough educa-tion, the young merchant left his home in 1705 and travelled to India in order tosettle in the English port town of Madras on the Coromandel Coast.

Armenians were drawn to Coromandel during the seventeenth century and foundedcommunities in a number of port towns such as Masulipatnam. Here they werewelcomed by the ruler of Golconda and encouraged to trade. Armenians ownedcommercial vessels that plied the Indian Ocean, eastward to South East Asia andwestward to the Persian Gulf and the Red Sea.6

The geographical extent of the Armenian commercial network was impressive.The ledger of the Armenian merchant Hovhannes Joughayetsi is one of the fewhistorical sources containing information on Armenian business methods. Two princi-pal merchants who demanded a quarter of the future profit provided Hovhanneswith English broadcloth and cash. After signing a contract stating the details of theagreement, the young merchant was ready to begin the journey in pursuit of pros-perity. The ledger covers the following trading venture that Hovhannes undertookbetween 1682 and 1693 travelling from New Julfa to Indian towns such as Suratand Agra, north to Nepal and eventually to Lhasa where he remained for five years.In every town, he found Armenian communities and benefited from the assistancewhich his fellow citizens were always willing to offer him.7 Petrus Gscan's journeyfollowed the same pattern although he claimed to have reached India without anydebts.8 His grandfather probably furnished him with initial capital to enable him tobegin trading in Madras, the eastern headquarters of the English East India Company.

During the first decades of the eighteenth century, Madras had expanded andbecame an important commercial centre in the Asian trading world. The town houseda number of different commercial groups including Indian merchants, Hindus aswell as Muslims, English private traders and an Armenian community. The presenceof fellow citizens helped the young man to launch his career and through the Armeniancommunities dispersed all over Asia, Petrus Gscan gained access to important mar-kets. The quarters for non-European inhabitants in Madras, called Black Town, werefortified during the 1730s, and the English Company required the Armenian com-

18 S0REN MENTZ

munity to contribute to the expenses with 600 gold pagodas, the Gujaratis with 500,the Komatis 800 and the Chettis 2,000 pagodas.9 In the following decades, thenumber of Armenian households increased as their trade and enterprises expanded.In 1781, when the British were preparing for war with the state of Mysore, the MadrasCouncil decided to borrow six lakhs (600,000) of pagodas from the inhabitants ofthe town, issuing Company bonds as security. The Council required the Armeniancommunity, consisting of seventy-three houses, to raise one lakh - an indication ofthe important position the community occupied in the town.10

Armenian merchants residing in Madras developed a lucrative trade with Manilain the Philippines, gaining access to the American silver that was being despatchedfrom Acapulco in Spanish America to Manila on a regular basis in exchange forAsian products. The English East India Company and its servants in Madras attemptedto establish contact with Manila during the second half of the seventeenth centurybut were thwarted by the rising competition from the Armenians. Complaints aboutthe Armenians began to be heard in 1710 when the Madras Council stated that 'theArmenians are become numerous and opulent, have the sole trade to Manila', whilea later report claimed that the Armenians controlled the trade from Madras to Peguand China."

Although their eastward trade was significant, Armenian merchants in Madras alsoparticipated in trade with commercial centres in India and the western part of theAsian trading world. Petrus CJscan co-operated with Armenian merchants in Bengaland dispatched goods to members of the Armenian community in cities such asJiddah in the Persian Gulf, Basra, and Bandar Abbas (Gombroon) in the Red Seaand even to Isfahan and Julfa. His correspondents were responsible for selling thegoods and arranging a suitable return cargo. The Armenian merchant was alsoinvolved in trade with precious stones to Europe. In 1738, he arranged a consignmentof rubies and sapphires to be sent to the commissioners, Abrice Ogby Chalaby andKhojah Petrus Chalaby. The two merchants lived in Smyrna and embarked on ajourney to Europe, but never reached their destination. Khojah Petrus Chalaby senta letter from Constantinople informing his principal in Madras that the market forprecious stones was bad. Instead of proceeding to Europe, they decided to returnto Smyrna.12

According to the Indian historian M.V. Seth, who studied the Armenians in India,Petrus CJscan amassed a fortune from his extensive trade with Manila and distin-guished himself as a philanthropist and civic-minded citizen. Later in life, he wasappointed a member of the Madras Council. Whenever political disagreements be-tween England and Spain prevented the Company from trading legally with Manila,he would assist the Company's supercargoes in finding ways to continue their ven-tures.13 Armenians would thus often co-operate with the Company and its servantsand performed many business transactions as joint ventures.

At the time of his death in 1751, Petrus Gscan was a prominent member of theArmenian merchant community in Madras. He had raised his social status from thatof a travelling nobody to that of a principal merchant who used travelling agentsand commercial contacts to dispatch commodities and capital all over Asia. BelowI shall focus on two important aspects in merchant networks: diaspora and trust.

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 19

Diaspora

The word diaspora means dispersion and refers to the process of broadcasting seedover a field. Applied to humans, the word refers to migration and colonisation wherenewly established societies are tied to the mother country through economic andcultural bonds.14 Therefore, a diaspora is a nation of socially interdependent butspatially dispersed communities united by mutual ethnic characteristics such aslanguage, dress, religion, and ideology. The term diaspora has been used to describethe spatial dispersion of the Jewish people, and their tendency to avoid assimilationwith the host nation. Today sociologists use the term as an analytical model toilluminate relations between emigrants and their mother country.

Historians have also used the term when describing the function performed bymerchants in international trade. The demand for goods across cultures necessitatedthe taking of initiatives by individuals and groups who could mediate between theselling and buying markets in a manner that would lead to the establishment ofpermanent commercial relationships. Trading networks emerged when an ethnicgroup established a series of settlements in commercial centres specialising in theperformance of long-distance trade. Though dispersed and remote from the mothercountry, these communities maintained their distinctive cultural character, avoidingassimilation with the host people in order to serve as cross-cultural brokers betweenthe country housing the diaspora community and their homeland.15

The anthropologist Abner Cohen has also used trading diaspora as an analyticaltool.16 Long-distance trade was a risky business. Merchants were often forced toentrust their capital to strangers living in distant towns. Diaspora was an attempt toreduce the risk of being cheated and used common ethnic background and sharedbusiness values to secure trustworthy partners for long-distance merchants. WhenJoseph Collet, the governor of York Fort, the Company's factory in Sumatra, plannedto dispatch goods to Batavia on his own account, he began by contacting an Englishseaman residing in the town and wrote: 'I am a stranger to your person but not toyour character, which is that of a fair merchant and one that negotiates several affairsfor gentlemen of the English nation.'17 Being a gentleman was a central element inthe English diaspora because such a person by definition could be trusted.18 However,if a merchant were exposed as a fraud, it would immediately affect his reputation.Information spread fast. Dishonesty was not tolerated in commercial transactions,the perpetrator was shunned, and his career was thus finished.

Diaspora merchants tried to monopolise trade in certain goods and to controlvarious trade routes. It was most important to co-ordinate internal mechanisms ofcredit, which is what Armenians did. After consolidating his position, Petrus Gscanbegan to divert some of his investments away from direct involvement in commercialventures and placed a part of his fortune in financial transactions, such as responden-tia bonds. These transactions combined a loan with a maritime insurance as themoney was only to be repaid if the goods reached their destination without damage.The interest rates were high but so were the risks. The Armenian's testament includesseveral respondentia transactions, indicating that the successful merchant had movedinto the sphere of finance. This development was a general practice in the world ofcommerce. For instance, an English private merchant, Robert Nightingale, residingin Bengal, told his London correspondent in 1708 how he began to divert his capital

20 S0REN MENTZ

away from direct investment in goods and commercial ventures and concentratedinstead on respondentias, which yielded a higher dividend.19

Prominent merchants who withdrew some of their capital from active trading andplaced it in loans performed an important role, providing the necessary initial fundsfor inexperienced merchants. Sending young Armenians abroad on commercialventures was normal practice. An English traveller, John Fryer, observed that:

young Armenians enter the theatre of commerce by means of some benefac-tor, whose money they adventure upon, and on return, a quarter part of thegain is their own: from such beginnings do they raise sometimes greatfortunes for themselves and Masters.20

In a nutshell, commercial network created an atmosphere of trust as an essentialmechanism of trade, and finance became available to merchants even though theydid not know each other personally.

The historian K.N. Chaudhuri has argued that merchants who live and operatethrough dispersed communities do not constitute a special social category, therebydismissing diaspora invalid as a theoretical proposition. Members of a trading diasporapossess a social and political organisation of an informal nature, he argues. Theyexchange commercial information through friends belonging to the same ethnicgroup, not as the outcome of spatial dispersion so much as, because it is a generalcharacteristic of human behaviour.21 A diaspora model nevertheless serves as thepoint of departure in the following analysis of the Armenian commercial network,focusing on one particular individual in Madras. In the attempt to solve the generalproblems which arose in connection with long-distance trade, merchants organisedthemselves in various ways. Diaspora represented one solution and although differentnetworks shared specific features, there were significant variations.

According to the British sociologist Robin Cohen, interaction with the mothercountry was an important aspect in a diaspora as a social structure prevented thosewho settled in foreign countries from either being creolised or assimilated with thehost society.22 Merchants who lived in foreign commercial towns would interact withthe local inhabitants in the execution of trade and daily routines and needed toprotect their cultural identity. By preserving their religion, language and habits ofdress, and through intermarriage some networks succeeded in creating a distinctdiaspora culture or 'a feeling of uniqueness not limited by spatial considerations'.23

Did the Armenian network have a core, uniting the members? Armenia, it couldbe argued, was strategically placed for overland trade between the Mediterraneanregion and the East and this geographical position had originally encouraged Ar-menians to move to Asia and to European cities. However, in the seventeenth centurythere was no political entity and no city in Armenia that could fulfil this function.24

When the Ottoman Turks invaded Armenia, then a part of Iran, Shah Abbas hadthousands of Armenians deported to his newly established capital of Isfahan wherethey were settled in the nearby suburb of New Julfa. Under the patronage of theShah, who distrusted Persian merchants, Armenians were granted trading privilegesand soon controlled the lucrative export trade in Persian silk. During the reign ofAbbas's successor, Shah Safi, the Armenians extended their influence and consoli-dated their hold on the internal trade in Iran, setting up shops in the bazaars andcreating a network of contacts throughout the country.25 The Safavid authorities

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 21

granted autonomy to the Armenians in New Julfa, creating a specific communalorganisation with roads dividing the town into twenty districts, each of which formeda parish, In each district, the inhabitants chose an official representative to representthem in the town council. The head of the council was considered the leader of thecommunity and could negotiate on behalf of all Armenians with the Shah and foreignvisitors.26

A diaspora with a strong and vital core could be very competitive. The Dutch andthe English East India Companies failed to take over the lucrative trade in silk betweenIran and Europe during the first decades of the seventeenth century due to Armenianopposition. In addition, a trading company founded in the North German duchy ofGottorp, situated in Schleswig, obtained permission from the Russian tsar to establisha trade route to Persia following the River Volga to Astrakhan and crossing theCaspian Sea into Iran. The expedition reached Isfahan in the 1630s but the leadingmerchant, Otto Briiggemann, failed to interest the Shah and left empty-handed.The famous travel account written by Adam Olearius, which contains one of the raredescriptions of Russia in the seventeenth century, was the only positive outcome ofthe expedition.27 Although Olearius did not mention Armenian merchants in hisaccount, it seems that their effort to monopolise the silk trade prevented the establish-ment of a North German route through Russia. However, during the 1660s leadingArmenian merchants in New Julfa pursued an active policy in the area of diplomacyorientated toward establishing a similar trade route. In 1667 the envoy from NewJulfa reached an agreement with Tsar Alexis Mikhailovitch permitting Armenianmerchants to travel to Western Europe via Astrakhan, Moscow and Arkhangelsk. Atreaty later supplemented the agreement with Sweden opening the port of Narva onthe Baltic Sea to the Armenians. As emphasised by Aghassian and Kevonian, 'thecapitalism of the Khodjas' can be attributed to the effectiveness of the commercialnetwork which connected New Julfa with Armenian communities on a global scale.28

The strength of the New Julfa community is also evident from the answer givento the English East India Company in 1693 when it made a final attempt to buy silkin Isfahan. The Company claimed that the Armenian merchants would benefit fromthis arrangement, but the Armenians failed to reply favourably to the English proposi-tion:

As for bringing silk to Isfahan, it is but wind, for nobody will be so mad,when we carry it to Aleppo: we have more ways than one to dispose of it:for there are English, French, Venetians and Dutch: if we can not sell themfor ready money [...] we carry it to Europe ourselves: but if we bring it toIspahan there is only you to buy it and if you won't give us a price, then wemust let you have it.29

The quotation stresses the essence of a diaspora. The chain of communities gaveArmenians access to a global market and the shared cultural values provided themerchants with trustworthy commissioners who took care of their goods. New Julfathus served a purpose. It was the centre in the Armenian trading world, shapingArmenian values and communicating them throughout the network in order tofacilitate long-distance trade.

This fact is verified by Petrus (Jscan's testament. One of the first paragraphs in

22 S0REN MENTZ

the will instructed the executors to find a European physician immediately after hisdeath, 'to take my heart out of my body and prepare it with necessary ingredientsthat it should not be corrupted and shut it up in a box'. The physician who removedhis organ would receive 100 pagodas, while the man who agreed to carry it to Isfahanfor burial would be paid 150 pagodas and have 60 tomans to cover his travellingexpenses. The body was to be buried in Madras at the church of Nosa Senhora deMilagre, erected by the Armenians. An epitaph was to be placed there, explaininghow his heart had been removed and brought home.30

Although Petrus Clscan lived in Madras for almost fifty years, he never lost contactwith his place of origin and took great interest in the well being of the town and theArmenian population. It is not known why he did not return when he had consolidatedhis position, but he evidently concerned himself with issues such as preserving thecultural identity of the Armenian people. On several occasions, Petrus Clscan sentmoney to Isfahan. He sponsored schools that taught Armenian children subjectssuch as arithmetic, clerkship, and the general rules of trade.31 Furthermore, hedesired in his will to finance a school that would educate the Armenian children inbranches of philosophy besides teaching them several languages 'for the want ofunion and harmony and zeal for the country's welfare and the love of public good'.Education provided a code of accepted social standards among Armenian merchants,which created the necessary atmosphere of trust that would enable the network topreserve its position in global trade.

If New Julfa were to be assimilated with Isfahan the most vital component in thenetwork would be lost, as the town would cease to amass commercial knowledgeand distribute it to the diaspora through young merchants who left the town bearingwith them the essential principles that had benefited generations of Armenianmerchants.

Not surprisingly, Petrus Clscan was shocked on learning that New Julfa was indanger of becoming assimilated with Isfahan. 'The scarcity of people in the upperparishes of our town [has resulted in] the Moors at present living in them and thatthey have bought for small sums of money the houses situated there.' In his opinion,the rich inhabitants of Julfa had an obligation to prevent Muslims from buying realestate within the Armenian quarters 'which will prove of very bad consequencehereafter to our people'. In order to stop this dangerous development, Petrus Clscanearmarked 2,500 Arcot rupees of his estate to a fund to which he hoped richArmenians would also contribute and use to reclaim the property that the Muslimspossessed. If no Armenian buyer could be found, the houses were to be demolishedand the land turned into public gardens.32 To give his hometown extra help, PetrusClscan donated the revenue from his real estate in Madras, which included severalproperties in Black Town, temporarily demolished after the French conquest ofMadras in 1748, as well as two houses in White Town. This sum was to be sent toJulfa together with the money from the sale of his household furniture, gold andsilver plates, jewels and household accessories that the French had removed toPondicherry during the War of the Austrian Succession but had promised to return.33

From the information in the testament it clear that Armenian merchants whosettled down permanently in distant countries remained in close contact with theirhometown. Petrus Clscan even used a part of his commercial fortune to buy realestate in Isfahan, thus securing the property which had been in the possession of

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 23

his ancestors. He owned a house, a market place, and shops. Petrus (Jscan wasapparently not on good terms with his closest relatives:

My grandfather's house with all its buildings and garden are mine the PetrusUscan's own property, no one has any concern in the same; which housewhen we divided it with Isacah we separated it with a wall which should nowbe pulled down and demolished and the new door which was made shall

. be stopped up and the grand door shall be opened and the house shallremain as in former time.34

Only his sister, Miriam, was allowed to live in the house but she could not appointan heir to the estate. The wife and children of his deceased brother Isacah were tohave no interest in the estate since they had behaved unsuitably. The only livingmale descendent of the family was a young man named Jacob John 'whom I sentback to Ispahan to live with his family, he being not fit for a merchant or any otheremployment of whom I have no hope that he will ever be of service to his family'.The house was to be sold after the death of his sister Miriam and the money givento the padres of the Church of St Bethlehem. As chief executors, Petrus (Jscan chosePadre Severine and Johannes Vangely, the latter being the merchant's factor in Ispa-han.35

Petrus (Jscan was concerned with the development in New Julfa. His businessdepended on solidarity between Armenian merchants and on using travelling factors.Even though leading merchants preferred family members to undertake a journey,trade was a regular profession and, owing to shared values of education, religionand cultural background, it was considered safe to go beyond family ties and placeone's property in the care of another member of the community.35 However, indica-tions of change were evident. Petrus Uscan's concern about Muslims settling in Julfaforeshadowed the beginning of a process of assimilation, which would weaken thediaspora. Nevertheless, other key functions in the network were neglected. 'Ourancestors dealt with integrity and brotherly affection for which reason they meriteda good name and were prosperous all their lives' wrote the old Armenian in histestament and proceeded to lament modern people's lack of integrity. Although theywere well acquainted with the affairs of the world they did not act with honour andrespect, 'for which reason their consciences are always affected1.37

Trust and Dishonour

The Armenian network gained its vitality from its cultural identity. Petrus (Jscanpreferred to dispatch his goods to foreign markets in the care of an employed factor.This was a typical feature in the Armenian network and there are several referencesto such arrangements. Khojah Cathich Aga came to India from Isfahan in the 1740scarrying goods to a value of 600 tomans. The money was raised from two merchantswho signed a contract before Cathich Aga left Iran, permitting him to trade with thecapital and to keep one third of any future dividends. After his arrival in Madras, hefound employment with Petrus (Jscan and visited markets in Bengal and Manila.36

During his working life, Petrus Gscan received many young merchants, either relativessuch as the above-mentioned Jacob John or sons of friends and business associateswhom he took under his special care in Madras and used in commercial ventures,

24 S0REN MENTZ

for instance Khojah Johannes Vangely, who borrowed 8,700 rupees from Petrus(Jscan in 1741 in order to trade according to the conditions written down in thefactorage bond. As patron, Petrus Clscan dispatched goods and capital in the careof young travelling merchants in a similar manner to that of the merchants whofinanced Hovhannes's journey from Ispahan to Lhasa. The Armenian in Madras gavedetailed instructions on how to behave during the venture. One factor was advanced6,000 Madras rupees to trade with Bengal and Basra and was advised not to proceedto Isfahan but to go instead to Baghdad and Aleppo with the principal capital andreturn goods to Madras.39

Petrus Clscan also established a network of personal contacts with Armeniansresiding in Asian commercial centres. He could draw on persons in Bengal, Mergui,Basra, Baghdad, Aleppo, and New Julfa, using them in commercial as well as infinancial transactions. His contacts in Bengal sent piece goods on board the St Cruzto Surat on his behalf and Shake Pharajula borrowed on respondentia the principalsum of 225 pagodas at 16 per cent interest on a journey to Mergui, where he aimedto settle accounts with Petrus Clscan's commercial contact residing in the town.40

As mentioned above, one of the ways Armenian merchants solved the agencyproblem was by employing travelling factors. However, using an intermediary wouldplace the principal merchant in a vulnerable position; was the factor trustworthy andwas he capable of making the right decisions in commercial matters? Petrus Clscanset a good example and behaved as a reliable and trustworthy person. In October1745, Annay, the wife of Ovanjan Coja, who lived in Isfahan, deposited one bale ofmerchandise in Petrus Clscan's care. It turned out to be impossible to sell the goodsin Madras and Clscan decided to send them to Surat, where one of the merchant'scontacts eventually sold the consignment. The dividend amounted to 451 pagodasand Petrus Gscan wrote to Isfahan and to Aga Sathur at Basra asking for instructionsas to how to remit the amount. But he received no answer. The accounts in the willshow that Petrus Clscan continued to keep track of the sum for his female client,adding an annual interest as the sum had risen to 502 pagodas in 1748.41

The persons involved in such transactions normally acted in a trustworthy manner,although a substantial part of the will deals with certain commercial ventures thathad not been conducted according to normal procedures. In these cases, PetrusGscan accused the involved factors of breaking the code of acceptable commercialbehaviour and gave a detailed description in order to safeguard his own reputation.The number of cases is small compared with the total level of business transactionsperformed by Petrus Gscan. The following examples should therefore not be seenas an argument stressing a general decline in the moral behaviour of Armenianmerchants from the 1740s. The cases demonstrate how a cross-cultural brokerhandled fraud and avoided having any dealings with dishonest factors.

A merchant named Manasacan was advanced 5,200 rupees in principal capital in1741, but after seven years Petrus Gscan had received back only 4,153. The factorhad also involved his patron in a number of business ventures, consignments, andrespondentias without giving proper information. Gscan was very disappointed withhis factor and claimed to owe him nothing although Manasacan had been in hisemployment for several years.42 Such incidences could be excused and attributedto the complicated system of transferring capital and goods over long distances, aprocess involving a considerable number of persons. Failing to keep proper accounts

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 25

was inexcusable since it was the only way to reconstruct affairs if a business transactionwent wrong. However, it was much more problematic when individuals cheateddeliberately. In 1744 the merchant Thantastical Petrus, son-in-law of Cathick Aga,an associate of Petrus Oscan, borrowed 1,000 Madras rupees and settled down inGombroon. The leading merchants apparently sent him large consignments butwere disappointed with his treatment of their affairs, tlscan stated:

It is very well known that we may pay very great confidence in any man whois able to govern himself but he, when he found that he had a great chargeentrusted to him, was puffed up, and entirely lost himself.43

The factor could not handle large sums of money; greed undermined his attitudeand he became dishonest.

Mirza, the son of Ovanjan, served the merchant in Madras until he was sent toIsfahan with goods belonging to his patron. They agreed that Mirza could stay inIsfahan for one year before returning to Madras in order to visit his parents and finda suitable wife. However, he stayed for five years without settling accounts and didnot follow his instructions. He eventually proceeded to Basra and ventured to Cochin,Negapatnam and Pulicat where Petrus Ciscan suffered economic losses as a resultof his mismanagement. Before these matters were revealed, Gscan had taken Mirza'sbrother into his service, who came, 'quite naked to live by me', only to discover thathe knew nothing about accounts and made many errors which caused losses. Amongthe more critical misdeeds of Mirza was a loan of 6,250 Arcot rupees, which he tookon an interest bond to 6 per cent in 1747. The loan expired after three years andthe account would have been cleared if Mirza had acted according to the customof the Armenian people. However, Mirza still owed a large sum of money and Petrus(Jscan wrote as follows:

It must be known to this world that men ought to be very careful how theytrust those that they have not experienced and not very well acquainted withand the said Mirza, his seven generations never saw five tomans together,therefore when he got 1,000 tomans into his hands he was certainly lostand this was my fault. I therefore manifest to this world; that they shouldnot trust such a kind of man.44

Dishonest factors were impossible to avoid. The crucial point was to limit the damageand communicate the knowledge to merchants in the network. It was difficult torecover money from untrustworthy associates. One method was to appeal to theirguilty conscience: 'If he will not pay me, I will put him into the horrible and awfultribunal of Christ who will take revenge of him because my estate must be distributedin the way of God' wrote the merchant in his testament. Normally, merchants wereforced to use sterner measures such as appointing an attorney who travelled to thetown where the fraudulent factor lived, or dispatching a letter of attorney to a localmerchant whom the merchant could trust. If an attorney could not recover themoney, the merchant could only spread the word in an attempt to stop future fraudby destroying the reputation of the untrustworthy factor. In connection with themisdeeds of two sons of an old, well-esteemed merchant, Petrus could find noremedy except stating that sons of gentlemen did not themselves have to be gentle-men, continuing: 'I say that they are the sons of rich gentlemen and I manifest their

26 S0REN MENTZ

actions and behaviour to the whole world that people may take better care of thesesorts of rich men.'45

Losses could strike a merchant at any time, either though bad investments orthrough a factor's misbehaviour. In his will Petrus Uscan focused on affairs involvingfraud or mismanagement since he was closing his account in preparation for hisdeath. The Armenian merchant had done well; it seems that most of his businesstransactions were handled professionally through factors and associates who under-stood the importance of being a trustworthy merchant with a good reputation. AtMadras, Petrus CIscan settled his accounts and estimated his estate to be worthsome 96,050 pagodas, equivalent to £38,420. His executors were to distribute thisfortune according to his last will and testament, after which the deceased merchant'sbooks, writings, papers, letters and accounts were to be placed in a sealed chestand deposited in the house of Padre Severine, the superior of the convent at Madras.

Conclusion

Armenian merchants operated through a network of dispersed communities whichwere held together by social and cultural norms. Under normal circumstances PetrusUscan could entrust his goods to complete strangers simply because they wereArmenians and thus expected to follow a set of rules in commercial behaviour. Theagent would act accordingly because personal reputation was one of the mostimportant assets in a commercial career. A reputation as a reliable and trustworthyperson helped business and ensured an income. If the trust shown by others wasmisused and then exposed, the perpetrator had few chances to improve his life. Amerchant was anxious to guard his reputation and would agree with Daniel Defoe'sobservation that a tradesman had two sorts of enemies, namely thieves breakinginto his shop and evil neighbours blackening and blasting his reputation. The latterwere worse than thieves since slander could destroy his reputation and end a trades-man's career.46

Trust was an essential factor in long-distance trade. In order to ensure that theentire network lived up to the same standards, it was necessary to have a centrethat could update the dispersed communities and maintain unity. Petrus Uscantherefore reacted expedictory when he learned that several quarters in New Julfawere being taken over by Muslims who threatened to assimilate the population withIsfahan. The town served a purpose and if New Julfa had been to disintegrate, theglobal trade of the Armenian merchants would be doomed.

Petrus Uscan's will is a valuable source in the study of Armenian commercialculture, almost as important as Hovhannes's ledger. The will provides the historianwith an understanding of how Armenians benefited from their cultural and socialunity in the conduct of long-distance trade.

THE COMMERCIAL CULTURE OF THE ARMENIAN MERCHANT 27

Bibliography of Works Cited

Primary SourcesOriental and India Office Collection P/328/60, Mayor's Court Proceedings, Madras, 113-170.Oriental and India Office Collection, MSS. EUR D 1153, Private Letter Book of Joseph Collet, vol. I, fol.

123, York Fort 13 November 1712, Collet to Capt. Colster at Batavia.Public Record Office C108/202, Correspondence of Robert Nightingale, Fort William 8 November 1708,

Robert Nightingale to Francis Chamberlaine.

BooksArasaratnam, S., Maritime India in the Seventeenth Century (Delhi, 1994).-Maritime Commerce and English Power (Southeast India 1750-1800) (Delhi, 1996).Baron, S., ed., The Travels ofOlearius in Seventeenth-century Russia (California, 1967).Cain, P.J. andA.G. Hopkins, British Imperialism: Innovation and Expansion 1688-1914 (London, 1993).Chaudhuri, K.N., Trade and Civilization in the Indian Ocean: An Economic History from the Rise of

Islam to 1750 (Cambridge, 1985).Cohen, R., Global Diasporas: An Introduction (London, 1997).Colley, L, Britons: Forging the Nation 1707-1837 (Repd., New Haven, 1992; London, 1994).Curtin, P., Cross-Cultural Trade in World History (Cambridge, 1984).Das Gupta, Uma, ed., The World of the Indian Ocean Merchant 1500-1800: Collected Essays ofAshin

Das Gupta (Delhi, 2001).Defoe, D., The Complete English Tradesman (Repd., 1726; London, 1987).Fryer, J., A New Account of East India and Persia being Nine Years' Travels 1672-81, ed. W. Crooke,

2 vols (London, 1909-1915).Furber, H., Private Fortunes and Company Profits in the India Trade in the 18th Century (London, 1997).Fukuyama, F., Trust: The Social Virtues and the Creation of Prosperity (London, 1996).Jackson, P., ed., The Cambridge History of Iran Vol. 6: The Timurid and Safavid Periods (Cambridge,

1986).Mentz, S., The Gentleman Merchant at Work: Madras and the City of London 1660-1740. (To be

published by Museum Tusculanum Press, University of Copenhagen, 2004.)Olearius, A., Vermehrte newe Beschreibung derMuscowitischen und Persischen Reyse (Repd., Schleswig

1656; Tubingen, 1971).Quiason, S.D., English Country Trade' with the Philippines, 1644-1765 (Manila, 1966).Seth, M.V., History of the Armenians in India (Calcutta, 1895).Subrahmanyam, S., ed., Merchant Networks in the Early Modern World (London, 1996).

Articles and EssaysAghassian, M. and K. Kevonian, 'The Armenian Merchant Network: Overall Autonomy and Local Integra-

tion', in Chaudhuri, S. and M. Morineau, eds. Merchants, Companies and Trade: Europe and Asia inthe Early Modern Era (Cambridge, 1999), 74-95.

Cohen, A., 'Cultural Strategies in the Organization of Trading Diasporas', in Meillassoux, C , ed., TheDevelopment of Indigenous Trade and Markets in West Africa (London, 1971), 266-281.

Das Gupta, A., 'Some Attitudes among Eighteenth-century Merchants', in Das Gupta, (J., ed., The Worldof the Indian Ocean Merchant 1500-1800. Collected Essays ofAshin Das Gupta (Delhi, 2001), 102-109.

Lovejoy, P., 'The Role of the Wangara in the Economic Transformation of the Central Sudan in theFifteenth and Sixteenth Centuries', in Subrahmanyam, S., ed., Merchant Networks in the Early ModernWorld (London, 1996), 29-49.

Khatchikian, L, 'The Ledger of the Merchant Hovhannes Joughayetsi', in Subrahmanyam, S., ed., Mer-chant Networks, 125-158.

Mentz, S., 'English Private Trade on the Coromandel Coast, 1660-1690: Diamonds and Country Trade',Indian Economic and Social History Review 33/2 (1996), 155-173.

28 S0REN MENTZ

Notes

* S0ren Mentz, born 1967, has a PhD in Historyand is curator at The National Historical Mu-seum at Frederiksborg Castle, Denmark. Hehas contributed to many scholarly journals.Amongst them are, 'English Private Trade onthe Coromandel Coast, 1660-1690: Diamondsand Country Trade1, Indian Economic and So-cial History Review 33/2 (1996), 155-173; TheGentleman Merchant at Work. Madras and theCity of London 1660-1740 (forthcoming: Mu-seum Tusculanum Press, Copenhagen Univer-sity, 2004).

1 Das Gupta, 'Some Attitudes', 104.2 Cuitin, Cross-Cultural Trade, 2-5.3 Colley, Britons, 61; Cain and Hopkins, British

Imperialism, 49.4 Mentz, Gentleman Merchant; see also Fu-

kuyama, Toist.5 The testament is preserved in the Oriental and

India Office Collection P/328/60, Mayor's CourtProceedings, Madras, 113-170.

6 Arasaratnam, Maritime India, 212.7 Khatchikian, "Ledger".8 Testament (see note 5), 116.9 Furber, 'Madras Presidency in the Mid-eigh-

teenth Century", 109.10 Arasaratnam, Maritime Commerce, 102.11 Quiason, English 'Country Trade', 88.12 Testament (see note 5), 156.13 Seth, History of the Armenians, 141.14 Cohen, Global Diasporas, ix.15 Curtin, Cross-Cultural Trade, 2-5.16 Cohen, 'Cultural Strategies', 266-267.17 Oriental and India Office Collection, MSS. EUR

D 1153, Private Letter Book of Joseph Collet,vol. I, fol. 123, York Fort 13 November 1712,

Joseph Collet to Capt. Colster at Batavia.18 Mentz, Gentleman Merchant.19 Public Record Office C108/202, Correspon-

dence of Robert Nightingale, Fort William8 November 1708, Robert Nightingale to Fran-cis Chamberlaine.

20 Fryer, A New Account of East India, 249.21 Chaudhuri, Trade and Civilization, 224-226.22 Cohen, Global Diasporas, 104.23 Lovejoy, "The Role of the Wangara', 29.24 Curtin, Cross-Cultural Trade, 187-188.25 Jackson, Timurid and Safavid, 457.26 Aghassian and Kevonian, 'Armenian Merchant

Network', 76.27 Olearius, Vermehrte newe Beschreibung; for

the Russian part of the journey see Baron, TheTravels of Olearius.

28 Aghassian and Kevonian, 'Armenian MerchantNetwork', 88-90.

29 Jackson, Timurid and Safavid, 460.30 Testament (see note 5), 117.31 Khatchikian, 'Ledger", 127.32 Ibid., 224.33 Ibid., 119.34 Ibid., 115.35 Ibid., 116.36 Curtin, Cross-Cultural Trade, 192.37 Testament (see note 5), 119-120.38 Ibid., 132.39 Ibid., 136, 140.40 Ibid., 143, 149.41 Ibid., 128.42 Ibid., 134, 140.43 Ibid., 142.44 Ibid., 166.45 Ibid., 157.46 Defoe, Complete English Tradesman, 132.