Tuesday, September 18, 2012

Indian 'forex war' against Mahmud Ghazni!!

While we are aware of the fact that Mahmud of Ghazni made as much as 17 plundering raids into India and looted much of the wealth of Somnath temple, temples in Mathura, Kanauj among other places. But little does one know of the fact that a lot of the money was in fact retrieved. Not by physical exertion but by the sharp mind of the Hindu traders.

In a contemporaneous 10th century historical manuscript titled Jawami u'l Hikayat Lawami u-l Riwayat 'Collection of stories and illustrations of history' written by Maulana Nuru-d din Muhammad U'fi smarting under losses caused by plundering raids of Mahmud of Ghazni some smart traders to make good their losses hatched a ingenious plan. 

The Hindu traders of Gujarat introduced into the market a new 'coin' of great purity in the form of gold dirhams. The coin was much in demand owing to it's purity and quickly gained currency. In fact it became the standard currency for international trade. Merchants coming from the middle east, especially Khurasan i.e. the border area of present day Iran and Afghanistan and Ghazni found great profit in buying silver and gold from other parts of the world and selling it for this new 'pure coin' in India. Indian traders paid more for gold and silver using this coin which further increased import of gold and silver from the middle east. But somewhere in between the Indian traders started debasing the standard of the coin gradually, that after a period the coin was mere brass and copper. This went on undetected for many decades.

The problem was so big that the defrauded traders approached their king Alau-d Daulah or Masud III the successor of Mahmud many time removed, for a solution and the king finding no recourse ordered the traders be compensated from the royal treasury. A sum of 100 million gold dirham was paid out.

By the time the traders from middle east, Khurasan and Ghazni had realised the magnitude of the fraud that was perpetrated on them more than 91 long years if not more, had elapsed. This is calculated by taking 1024 (as per details given by author) as the starting point when this elaborate 'forex war' was planned to 1115 when Masud III gave the order for compensating the traders. Considering the long period compared to the amount paid as compensation it will be safe to assume the 100 million gold dirham is a very conservative estimate of the losses suffered. 

Whether it was enough to compensate for the losses suffered by India? In my estimate, no. One cannot put a price on the lives of countless men, women and children slaughtered by the predatory visitations of Mahmud of Ghazni.

Source: Jawami u'l Hikayat Lawami u-l Riwayat 
History of India as told by its historians by Henry Mier Elliot, volume II

PS: This was not the only time India sucked up worlds gold. Roman records are replete with reference to how Rome was drained off gold by India due to balance of trade in India's favour.

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