1'.AYMUNU VKhW ERlC R. WOLF SYLVJA L. THRUPP ARAM A. YENGOYAN ALBERT FEUERWERKER SJR MOSES FJNLEY CHARLES GIBSON JACOB M. PRICE GAVIN WRIGHT BERNARDS. COHN NATALIE Z. DAVIS S. N. EJSENSTADT CLIFFORD GEERTZ JACK GooDY OLEG GRABAR DAVID GUTMANN DAVID HERLIHY JOHN HIGHAM GEORGE KUBLER GE RH A RD LENSKI CLAUDE LEVI-STRAUSS EMMANUEL LE ROY LA DURIE JUAN LINZ HANS MEDICK ALFRED G. MEYER NEIL SMELS-ER CHARLES TILLY Anthropology umversn:y or ivucn1gan Herbert H. 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For all other use, permission should be sought from the Cambridge or New York Offices of the Press. © 1981 Society for the Comparative Study of Society and History Indigenous Banking Firms in Mughal India: A Reply KAREN LEONARD University of California, Irvine In the April 1979 issue of CSSH I proposed a theory: The financial services of leading indigenous banking firms were indispensable to the Mughal state, and the diversion by these firms of resources, both credit and trade, from the Mughals to other political powers in the Indian subcontinent contributed to the downfall of the Mughal empire (p. 152). John F. Richards's article in the present issue takes exception to that theory, challenging the evidentiary basis for my assertions. While stating that further research was admittedly neces- sary to test and fully substantiate the theory, I certainly offered evidence that these banking firms supplied working capital to the empire and its officials for military campaigns, trade, construction, karkhanah (workshop) production, and personal loans. I also discussed the bankers' regulation of the valuation, exchange, and circulation of currency, and particularly the hundi system of bills of exchange. The political potential of these financial services - of their performance or nonperformance, and on what terms - is obvious. Indeed, I cited instances of political interactions between bankers and officials. Richards concedes that my analysis of the eighteenth-century activities of banking firms - their migration from Mughal-controlled urban centers to others; their extension of credit and trade to new regional powers, including the European trading companies; their involvement in the collection of land revenue - is accurate. He attacks the theory, however, by stating that he cannot find "sufficient" evidence to support my assumptions about the ser- vices and importance of the banking firms in the sixteenth and seventeenth centuries. He also attacks the theory by stressing the empire's accumulation of permanent capital, although I did not contend that the empire depended upon the private sector for long-term financing in those centuries. Richards puts forward a ''state finance'' model of the Mughal economy. In this formal, bureaucratic model, the state somehow controls the bulk of the profits from the expansion of trade, along with other accumulated resources (plunder, tribute, land revenue), and it also controls the minting and circula- tion of currency. are three problems with this. In terms of economic I want to thank John Leonard for his comments on this es'say. 0010-4175/81/2793-4333 $2.00 © 1981 Society for Comparative Study of Society and History 309