and moneylenders did not charge interest in the Indian Ocean?
While European observers in the nineteenth century claimed that merchants charged exorbitant interest rates—up to 100 percent—this was not true. The nature of the transactions, however, and the surviving documents make it difficult to determine the actual rates with precision. Certainly European traders paid interest at a rate that was eventually standardized to 9 percent in the 1860s.30 When financiers like Ladha Damji lent money to Muslims like Juma bin Salim, however, the interest was obscured through two separate transactions, both of which were legal. To begin, the financier advanced a certain value of trade goods—merikani cloth, trade beads, and other goods. In a separate transaction, like the one Juma bin Salim completed, the debtor acknowledged that he would deliver a certain value of goods at a future date. The “interest” was thus the discount between the value of goods advanced and the value of the payment promised. In the late 1850s Burton noted that secured loans included interest of 15 to 20 percent, and Livingstone reported in the 1870s that the rates were between 20 and 25 percent.31 Stanley, also writing in the 1870s, claimed that the effective interest was between 50 and 70 percent.32 The initial agreement may have been negotiated orally, and only the second contract was written down. In these cases, the “interest” was charged initially on the transaction so there was no compounding over time, and the debt could be ongoing.
Another common way to avoid the sin of interest was through a set of incomplete sales that created debt. These included optional sales (bay‘ al-khiyār) in which the seller could undo the sale by returning the sale price, and sales with pledged property (rahnan maqbuḍ). In both cases, the creditor would retain the right to the property sold, such as a house or a farm, and would profit from the rent on the house or the produce of the farm. One common version of this arrangement included the debtor renting his own house back from the creditor. In this case, the sale of the house from A to B would be written in one contract, and a separate contract would be issued for B to rent the house from A at a fixed rate each month. In this case, the “interest” was the rent and could, in theory, continue indefinitely. These optional sales, bay‘ khiyār, became a way for many different actors with even a small amount of property to leverage themselves into positions to participate in and profit from the lucrative trade booms of the Indian Ocean world.
In all of these cases, indebtedness created a set of obligations that mirrored patron-client relationships elsewhere in the Islamic world. In the western Indian Ocean, as on the caravan trails of the Sahara, commercial dealings did not depend entirely on faith or ethnicity.33 The portfolios of merchants represented the diversity of peoples present in port cities. In Zanzibar, debtors included Arabs of many social strata, Hindu and Muslim Indians, indigenous Zanzibaris, Swahili, mainland Africans, and enslaved people. In this sense, debts created overlapping networks of obligation that implicated both sultans and slaves. The sultans in Oman and Zanzibar were, after all, chronically in debt to their customs masters. Within these networks of patronage and obligation, creditors cultivated clients to build their own reputations and firms while clients and debtors sought to balance powerful patrons with their own autonomy.34
When the autonomy of clients as debtors threatened to undercut the loan, Indian Ocean creditors did not rely solely on reputation mechanisms.35 One reason Hindu creditors like Ladha Damji followed Islamic contractual prescriptions was so that they could appeal to jurists (qadis) to help enforce their claims. Qadis themselves sometime turned to the local rulers for enforcement. Punishments included fines, confiscations, and imprisonment.36 In the second half of the nineteenth century, however, British consular courts in Indian Ocean port cities came to assume an outsized role in settling disputes that involved Indian merchants, which eventually reshaped commercial law and practice in the Indian Ocean by the early twentieth century.37 These enforcement mechanisms, however, depended on the debtors being close at hand. Debtors could escape enforcement in a region marked by mobility.
MOBILITY
Time, debt, and mobility expanded the boundaries of the Indian Ocean world in the nineteenth century, and mobility features as the third major theme of this book. The Indian Ocean was a world in motion from earliest times because monsoon winds made long-distance travel possible. Jewish merchants in old Cairo traded and settled in western India in the eleventh century, Ibn Batuta sailed the breadth of the ocean in the fourteenth century, and Vasco da Gama found mariners on the East African coast who could guide him to western India at the end of the fifteenth. From the Hadhramaut in southern Arabia, generations of sayids traveled and settled as teachers, scholars, and advisors at court in distant Malaysia and Indonesia.38 From Malacca to Kilwa, cosmopolitan port cities have long been a hallmark of the region.
The nineteenth century, however, introduced new forms of mobility and new circuits of movement that disrupted people at every rank in Indian Ocean societies, from sultans to slaves. The introduction of steamships and opening of the Suez Canal increased the speed and routes of sea travel in the Indian Ocean, but older forms of transport persisted and allowed poorer people to cover great distances. Juma bin Salim was born in the Omani interior and died on the banks of the Congo River. Although it is difficult to reconstruct his early movements with precision, travel from Nizwa to Muscat required a hundred-mile trek walking or on camelback, sailing more than 2,500 nautical miles from Muscat to Zanzibar, and, once he reached the African continent, another eight-hundred-mile trek on foot to his settlement in the Congo. For his part, Ladha Damji had been born impoverished in Kutch on the west coast of India before making his way to Zanzibar and clawing his way to the top of the region’s financial elite. One Omani sultan moved his capital to Zanzibar, and his heirs went as far as Bombay and London as exiles and supplicants, biding their time in pursuit of succeeding him. The slave trade forced Africans from the interior to the Indian Ocean islands, Arabia, India, and even the Americas, and indenture transported Indians to the Mascarene islands and southern Africa. In turn, many freed slaves managed their own mobility, and their skillful manipulations of debt and time made them part of a larger group of Indian Ocean actors who populated the East African interior.
Juma bin Salim was part of a much larger movement that made upland East Africa a far shore of the Indian Ocean. Classic histories of the Indian Ocean have marginalized Africa in the early modern period, but it is impossible to overlook the movement of people into and out of Africa in the nineteenth century. The pursuit of ivory and slaves attracted traders from Arabia and the coast most prominently, but Comorians, Baluchis, and even Khojas traveled and lived in the new commercial centers that sprang up in this period on the eastern African plateau, near the Great Lakes, and on the Congo River.
The mobility of Indian Ocean actors in the African interior has had profound long-term consequences across the region, yet scholars have given inadequate attention to this process. While debt enabled their mobility to far-flung destinations, they did not always return to repay their creditors. Scholars have frequently fallen prey to a kind of coastal chauvinism that privileges the coast in the Indian Ocean world. Accounts frequently assume that all those who traveled to the interior did so to enrich themselves and return to their own distant homes or at least the shores of the Indian Ocean. These circumstances were true for a small subset of successful migrants, and it is clear that others repatriated wealth or invested in their home areas. But these cases overshadow the degree to which Indian Ocean actors were able to establish themselves in the trading depots of East Africa or in small settlements along the caravan routes and achieve a degree of wealth and autonomy that would not have been possible at home. By building local allegiances and marrying African women, Indian Ocean men became heads of polygynous households with many clients and agricultural holdings. Some enjoyed privileged access to trade, and many of those of lower status in Indian Ocean hierarchies—recently freed slaves, nonsheikhly Arabs, former Baluchi mercenaries—found greater degrees of freedom. While they might move beyond the reach of their creditors, they remained part of an expanding Indian Ocean milieu, and some status distinctions—like the Arab disdain of nontribal bayāsirah—traveled too. Nineteenth-century mobility and the commodity-focused credit that underwrote it brought Indians, Arabs, and Africans to
